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Diena v. McS Claim Services, Inc.

United States District Court, D. New Jersey

October 2, 2014

DANIEL DIENA, Plaintiff,



This matter comes before the Court upon Plaintiff Daniel Diena's ("Plaintiff" or "Diena") motion seeking the entry of a default judgment against Defendant MCS Claim Services, Inc. ("Defendant" or "MCS") on his claim that MCS violated the Fair Debt Collection Practices Act ("FDCPA"), 15 U.S.C. § 1692, et seq. [Docket Entry No. 5]. Diena's motion arises out of MCS's failure to appear, answer or otherwise respond to Diena's Complaint, which was filed on October 3, 2013. [Docket Entry No. 1]. In addition to seeking the entry of default judgment, via the instant motion, Diena also seeks an Order awarding statutory damages in the amount of $1, 000, $400 in filing fees, $150 for service of process fees, $18.50 in FedEx fees as well as attorneys' fees in the amount of $4, 475. Thus, the total damages claimed by Diena is $6043.50.

The Honorable Joel A. Pisano, U.S.D.J., referred Diena's motion for a default judgment to the undersigned for Report and Recommendation pursuant to 28 U.S.C. § 636(b)(1)(B). The Court considered Diena's motion on the papers according to L.Civ.R. 78.1(b). For the reasons set forth more fully below, the Court respectfully recommends that Diena's motion seeking the entry of a default judgment against MCS be granted. The Court further recommends that damages in the amount of $5293.50 be awarded.

I. Background and Procedural History

As noted above, Diena filed his Complaint against MCS on October 3, 2013. As alleged in the Complaint, MCS, "on behalf of a third-party or itself as purchaser of the debt, began efforts to collect an alleged consumer debt from Plaintiff." (Complt. ¶9). MCS "began its collection efforts and campaign of communications with the Plaintiff, in or about February, 2013 by sending a letter to the Plaintiff." ( Id. ¶10). MCS then sent a letter to Diena dated March 29, 2013. ( Id. ¶11). This letter stated, "UNLESS WE RECEIVE YOUR CHECK IN THE ENVELOPE PROVIDED, OR HEAR FROM YOU WITHIN THIRTY (30) DAYS WE WILL RECOMMEND TO OUR CLIENT FURTHER ACTION BE TAKEN." ( Id. ¶12). Diena did not contact MCS within thirty days. Instead, "[a]pproximately sixty days later, on May 21, 2013, Plaintiff placed a telephone call to Defendant and spoke with a representative[.]" ( Id. ¶13). During the call, Diena in particular questioned the representative of MCS regarding the specifics of "the action' that would be recommended to their client, pursuant to [MCS's] letter of March 29, 2013." ( Id. ) MCS's "representative responded, We didn't recommend anything.'" ( Id. ¶14).

In his Complaint, Diena alleges that MCS violated the FDCPA, 15 U.S.C. §1692e, "when it falsely and deceptively threatened in its letter dated March 29, 2013 that it would recommend further action to its client if Plaintiff did not place a check in their envelope and send it to Defendant or contact them within thirty days when approximately sixty days later, Defendant's representative expressed no knowledge of any recommendation and in fact, denied that any recommendation occurred." ( Id. ¶17). Section 1692e prohibits a debt collector from using "any false, deceptive, or misleading representation or means in connection with the collection of any debt."

Diena also argues that MCS violated the FDCPA, 15 U.S.C. §1692f, "by its unfair, unconscionable and misleading representation in its letter to Plaintiff that Plaintiff had a choice of sending money to, or contacting Defendant in order to prevent Defendant from recommending some unnamed action' when Defendant's representative confirmed that they did not ever recommend anything." ( Id. ¶19). Diena claims that MCS's "threat with a vague reference to action' was made solely to unfairly intimidate Plaintiff by implying legal action would ensue if he did not comply with their demands." ( Id. ) Section 1692f prohibits a debt collector from using "unfair or unconscionable means to collect or attempt to collect any debt."

The Docket in this matter reflects that MCS was served with the Complaint on October 16, 2013. [Docket Entry No. 3]. According to Rule 12(a)(1)(A)(i), a defendant must file a responsive pleading "within 21 days after being served with the summons and complaint." It does not appear that MCS has filed a responsive pleading to Diena's Complaint or otherwise appeared in the timeframe allowed by the Rules. Further, nothing indicates that MCS sought an extension of time to answer. On February 6, 2014, Diena requested that the Clerk of the Court enter default against MCS based on its failure to respond to the Complaint. [Docket Entry No. 4]. The Clerk of the Court entered default on February 7, 2014. On February 13, 2014, Diena filed the instant motion for default judgment. [Docket Entry No. 5]. Included with the motion was an Affidavit of Service, indicating that the motion had been served on MCS. [Docket Entry No. 5-5].

II. Discussion

A. Legal Standard for Entry of Default

Rule 55 governs the entry of default and default judgment. Before default judgment can be entered, a plaintiff must first obtain an entry of default from the Clerk of the Court, as Diena has done so here. See Rule 55(a). Where a plaintiff's claim is not for a sum certain or a sum that can be made certain by computation, a request for default judgment must be made to the court. Rule 55(b)(2). Whether to grant a motion for default judgment is committed to the Court's discretion. Tozer v. Chars A. Krause Milling Co., 189 F.2d 242, 244 (3d Cir. 1951).

Before entering default judgment, the Court must first determine whether the "unchallenged facts constitute a legitimate cause of action" so that default judgment would be permissible. DirecTV, Inc. v. Asher, 03-cv-1969, 2006 WL 680533, at *1 (D.N.J. Mar. 14, 2006) (citing Wright, Miller, Kane, 10A Federal Practice and Procedure § 2688, at 63 (3d ed. 1998)). "A defendant is deemed to have admitted the factual allegations of the Complaint by virtue of his default, except those factual allegations related to the amount of damages." Id. (citing Wright, Miller, Kane, 10A Federal Practice and Procedure § 2688, 58-59). The Court, however, need not accept the moving party's legal conclusions "since a party in default does not admit mere conclusions of law.'" Id. (quoting Wright, Miller, Kane, 10A Federal Practice and Procedure § 2688, at 63). Assuming a legitimate cause of action exists, the Court examines the following three factors in determining whether a default judgment should be entered: "(1) whether the party subject to default has a meritorious defense, (2) the prejudice suffered by the party seeking default, and (3) the culpability of the party subject to default." U.S. Small Business Admin. v. Azarel Inc., Civ. No. 14-888 (KM)(MAH), 2014 WL 4211269, at *4 (D.N.J. Aug. 25, 2014) (citing Doug Brady, Inc. v. N.J. Bldg. Laborers Statewide Funds, 250 F.R.D. 171, 177 (D.N.J. 2008).

B. Analysis

Accepting the factual allegations as true, the Court finds that Diena has stated a claim under the FDCPA. The FDCPA, 15 U.S.C. § 1692, et seq., regulates debt collection practices. In order for the provisions of the FDCPA to apply, the alleged violations must have been undertaken in furtherance of a defendant's efforts to collect a debt. A "debt collector" is defined in § 1692a(6) as "any person who uses any instrumentality of interstate commerce or the means in any business the principal purpose of which is the collection of any debts, or who regularly collects or attempts to collect, directly or indirectly, debts owed or due or asserted to be owed or due another." In addition, a "debt" is defined in § 1692a(5) as "any obligation or alleged obligation of a consumer to pay money arising out of a transaction in which the money, property, insurance, or services which are the subject of the transaction are primarily for personal, family, or household purposes, whether or not such obligation has been reduced to judgment." The term consumer is defined in § 1692a(3) to mean "any natural person obligated or allegedly obligated ...

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