United States District Court, D. New Jersey
For ANGELA MARUCCI, GIUSEPPE MARUCCI, on behalf of themselves and others similarly situated, Plaintiffs: JEANNE LAHIFF, LEAD ATTORNEY, BERGER LAW GROUP, TAMPA, FL.
CAWLEY & BERGMANN, LLP, FIF-ACM OPPORTUNITY FUND VI, LLC, Defendants: DONALD S. MAURICE, JR., THOMAS R. DOMINCZYK, LEAD ATTORNEYS, MAURICE & NEEDLEMAN, PC, FLEMINGTON, NJ.
Kevin McNulty, United States District Judge.
This matter comes before the court on the motion (ECF No. 9) of the defendants, Cawley 86 Bergmann, LLP (" Cawley" ) and FFIR-ACM Opportunity Fund VI, LLC (" Fund" ) to dismiss the Complaint (ECF No. 1) of plaintiffs Angela and Giuseppe Marucci (" Maruccis" ). The Maruccis filed this class action complaint seeking damages for alleged violations of the Fair Debt Collection Practices Act (" FDCPA" ), 15 U.S.C. § 1692 et seq.
For the reasons set forth below, the motion to dismiss is denied.
The plaintiffs, Angela and Giuseppe Marucci, bring a class action lawsuit on behalf of themselves and similarly situated consumers, within the meaning of 15 U.S.C. § 1692a(3), who received debt collection letters from defendant Cawley. (Compl. ¶ ¶ 4, 15, 28, ECF No. 1). Defendant Fund is in the business of buying and liquidating consumer debt. It has hired defendant Cawley to attempt to collect such debts by mail and telephone. ( Id. 6-9, ¶ ¶ 13). Cawley and the Fund are debt collectors within the meaning of 15 U.S.C. § 1692a(6). ( Id. ¶ ¶ 7, 9).
The Maruccis allegedly owe a debt arising from a Best Buy credit card (the " Debt" ). [ Id. ¶ 11). Best Buy sold the Debt to the Fund, which hired Cawley to collect it. ( Id. ¶ 12). On August 13, 2012, Cawley sent the Maruccis an initial collection letter (" Letter" ) stating that the amount of the Debt was $1,984.37. ( Id. ¶ ¶ 15-16, Ex. A, ECF 1-1). The Letter made no statement regarding interest; it did not disclose, for example, whether interest was accruing, the interest rate, or the portion of the total Debt that was attributable to accrued interest or other fees. ( Id. ¶ 17). The Maruccis allege upon information and belief that the Debt is in fact accruing interest. They cite a collection letter from Praxis Financial Solutions, Inc., sent on October 24, 2011, which shows that as of that earlier date the amount of the debt was only $1,894.75. ( Id. ¶ 18 (citing Ex. B)).
The Maruccis allege that the Cawley Letter would lead the least sophisticated consumer to believe that payment of the amount stated in the letter would satisfy the Debt, when in fact interest is accruing and the consumer may still owe additional accrued interest. ( Id. ¶ 20). Thus, the Maruccis claim that by failing to disclose interest charges in the Letter, Cawley and the Fund violated (1) 15 U.S.C. § 1692e(2)(A), which prohibits falsely representing the character, amount, or legal status of the debt; and (2) 15 U.S.C. § 1692g(a)(1), which requires debt collectors to state the amount of the debt. ( Id. ¶ ¶ 21-23).
Defendants Cawley and the Fund now move under Federal Rule of Civil Procedure 12(b)(6) to dismiss the Complaint for failure to state a claim.
II. APPLICABLE STANDARDS
a. Rule 12(b)(6)
Rule 12(b)(6) provides for the dismissal of a complaint, in whole or in part, if it fails to state a claim upon which relief can be granted. The defendant, as the moving party, bears the burden of showing that no claim has been stated. Animal Science Products, Inc. v. China Minmetals Corp., 654 F.3d 462, 469 n. 9 (3d Cir. 2011). For the purposes of a motion to dismiss, the facts alleged in the complaint are accepted as true and all reasonable inferences are drawn in favor of the plaintiff. N.J. Carpenters & the Trustees Thereof v. Tishman Const. Corp. of N.J., 760 F.3d 297, 302 (3d Cir. 2014).
Federal Rule of Procedure 8(a) does not require that a complaint contain detailed factual allegations. Nevertheless, " a plaintiffs obligation to provide the 'grounds' of his 'entitlement to relief requires more than labels and conclusions, and a formulaic recitation of the elements of a cause of
action will not do." Bell A. Corp. v. Twombly, 550 U.S. 544, 555, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007). Thus, the complaint's factual allegations must be sufficient to raise a plaintiffs right to relief above a speculative level, so that a claim is " plausible on its face." Id. at 570; see also Umland v. PLANCO Fin. Servs., Inc., 542 F.3d 59, 64 (3d Cir. 2008). That facial-plausibility standard is met " when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Ashcroft v. Iqbal, 556 U.S. 662, 678, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009) (citing Twombly, 550 U.S. at 556). While " [t]he plausibility standard is not akin to a 'probability requirement'. . . it asks for more than a sheer possibility." Iqbal, 556 U.S. at 678.
Congress enacted the FDCPA " to eliminate abusive debt collection practices by debt collectors." 15 U.S.C. § 1692(a). To effectuate that purpose, the Act allows for a private cause of action by debtors against debt collectors. See 15 U.S.C. § 1692k. " When such a suit is filed, courts within this Circuit evaluate collection letters and notices for compliance with the Act 'from the perspective of the least sophisticated debtor.'" Smith v. Lyons, Doughty & Veldhuis, P.C., No. CIV.A. 07-5139, 2008 WL 2885887 at *3 (D.N.J. July 23, 2008) (quoting Wilson v. Quadramed Corp., 225 F.3d 350, 354 (3d Cir. 2000) (internal quotation and citation omitted)). The Third Circuit has explained how this standard is applied:
The basic purpose of the least-sophisticated debtor standard is to ensure that the FDCPA protects all consumers, the gullible as well as the shrewd. . . . [T]he least sophisticated debtor standard is lower than simply examining whether particular language would deceive or mislead a reasonable debtor. In other words, this standard is less demanding than one that inquires whether a particular communication would mislead or deceive a reasonable debtor. Nevertheless, the standard does not go so far as to provide solace to the willfully blind or non-observant. The debtor is still held to a quotient of reasonableness, a basic level of understanding, and a willingness to read with care, and the debt collector accordingly cannot be held liable for bizarre or idiosyncratic interpretations. For example, even the least sophisticated debtor is expected to read any notice in its entirety.
Caprio v. Healthcare Revenue Recovery Grp., LLC, 709 F.3d 142, 149 (3d Cir. 2013) (internal quotations and citations omitted).
Often, the parties do not dispute the actual contents of a collection letter, but the legal consequences thereof. A Rule 12(b)(6) motion may thus be a suitable vehicle for a court to decide whether the least sophisticated debtor would be deceived or misled by the debt collector's communications. See id. at 147 (" whether language in a collection letter contradicts or overshadows the validation notice is a question of law." ); Wilson, 225 F.3d at 353 n.2 (" The majority of courts to have considered this question have . . . held that this determination involves a question of law." ); Smith, 2008 WL 2885887 at *3 (" whether the least ...