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Arango v. GMA Investments, LLC

United States District Court, D. New Jersey

April 30, 2019

FRANCY ARANGO, Plaintiff,
v.
GMA INVESTMENTS, LLC dba SUMMIT RECEIVABLES, and JTM CAPITAL; MANAGEMENT, LLC Defendants.

          OPINION

          JOSEPH H. RODRIGUEZ U.S.D.J.

         This matter is before the Court on Defendant JTM Capital's Motion to Dismiss pursuant to Fed.R.Civ.P. 16 (b). The Court has considered the written submissions of the parties without oral argument pursuant to Fed.R.Civ.P. 78 (b). For the reasons stated below, Defendant's motion is denied.

         Background

         Plaintiff Francy Arango contends that she is alleged to owe a consumer debt to Defendant JTM Capital (“JTM”). JTM hired Defendant Summit Receivables (“Summit”) to collect the Arango debt. Plaintiff claims that Summit's collection efforts violate the Fair Debt Collections Practices Act (“FDCPA”), 15 U.S.C. § 1692 et seq. and seeks to hold JTM vicariously liable for Summit's violations. JTM argues that because it is not a debt collector as defined by FDCPA, Plaintiff's claims must be dismissed.

         Motion to Dismiss Standard

         Federal Rule of Civil Procedure 12(b)(6) permits a motion to dismiss “for failure to state a claim upon which relief can be granted[.]” For a complaint to survive dismissal under Rule 12(b)(6), it must contain sufficient factual matter to state a claim that is plausible on its face. Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)). A claim is facially plausible “when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.” Id. Further, a plaintiff must “allege sufficient facts to raise a reasonable expectation that discovery will uncover proof of her claims.” Connelly v. Lane Const. Corp., 809 F.3d 780, 789 (3d Cir. 2016). In evaluating the sufficiency of a complaint, district courts must separate the factual and legal elements. Fowler v. UFMC Shadyside, 578 F.3d 203, 210-11 (3d Cir. 2009) (“Iqbal ... provides the final nail-in-the-coffin for the ‘no set of facts' standard that applied to federal complaints before Twombly.”). The Court “must accept all of the complaint's well-pleaded facts as true, ” Fowler, 578 F.3d at 210, “and then determine whether they plausibly give rise to an entitlement for relief.” Connelly, 809 F.3d at 787 (citations omitted). Restatements of the elements of a claim, however, are legal conclusions and, therefore, not entitled to a presumption of truth. Burtch v. Milberg Factors, Inc., 662 F.3d 212, 224 (3d Cir. 2011).

         FDCPA

         Congress enacted the FDCPA “to eliminate abusive debt collection practices, to ensure that debt collectors who abstain from such practices are not competitively disadvantaged, and to promote consistent state action to protect consumers.” Jerman v. Carlisle, McNellie, Rini, Kramer & Ulrich LPA, 559 U.S. 573, 577 (2010) (citing 15 U.S.C. § 1692(e)). The FDCPA is remedial legislation and “must be broadly construed in order to give full effect to these purposes.” Douglass v. Convergent Outsourcing, 765 F.3d 299, 302 (quoting Caprio v. Healthcare Revenue Recovery Grp., LLC, 709 F.3d 142, 148 (3d Cir. 2013)).

         The term “debt collector” is defined by the FDCPA as follows:

The term “debt collector” means any person who uses any instrumentality of interstate commerce or the mails 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.

15 U.S.C. § 1692a (6) (emphasis added). “The statute thus provides two separate paths to establishing an entity's status as a ‘debt collector.'” Barbato v. Greystone All., LLC, 916 F.3d 260, 265 (3d Cir. 2019) (citing Henson v. Santander Consumer USA Inc., 137 S.Ct. 1718, 1721 (2017).

         ANALYSIS

         JTM argues that because it is a passive debt purchaser and not an entity that actively collects debt it does not meet the statutory definition of a debt collector under either prong of the definition. The Court disagrees.

         Recently, the Third Circuit considered whether an entity that meets the principal purpose definition is a debt collector as defined by the FDCPA even when that entity hires a third party to collect the debt. Barbato, 916 F.3d at 267-68. The Appellant in Barbato, Crown Asset Management, was a purchaser of the debts on which a consumer has stopped making payments. Id. at 262. In certain cases, including Barbato's case, Crown itself did not collect on the debt and referred the charges to a third-party for collections. Id. Barbato filed a state court action against Crown's third-party servicer, Greystone Alliance, LLC, alleging that Greystone violated the FDCPA in its attempt to ...


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