Potvin et al v. Paul Law Office, PLLC
Filing
15
ORDER denying 14 Motion for Default Judgment. So Ordered by Magistrate Judge Landya B. McCafferty.(gla)
UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF NEW HAMPSHIRE
Joseph Potvin and
Janice Potvin
v.
Civil No. 11-cv-308-LM
Paul Law Office, PLLC
O R D E R
Joseph and Janice Potvin have sued Paul Law Office, PLLC
(“PLO”), in three counts.1
They seek statutory damages under:
(1) the federal Fair Debt Collection Practices Act (“FDCPA”), 15
U.S.C. § 1692 (Count I); (2) the New Hampshire statute
prohibiting unfair collection practices, N.H. Rev. Stat. Ann.
(“RSA”) ch. 358-C (Count II); and (3) New Hampshire’s Consumer
Protection Act, RSA ch. 358-A (Count III).
The Potvins’ claims
arise out of “several” telephone calls that, according to the
Potvins, PLO made to them and to the parents of one of them, in
an attempt to collect a debt.
default was entered against it.
When PLO failed to appear,
See doc. no. 13.
Before the
court is the Potvins’ motion for default judgment pursuant to
Rule 55(b)(2) of the Federal Rules of Civil Procedure.
1
For the
Does 1-10, identified as defendants in the Potvins’
complaint, have been voluntarily dismissed. See doc. no. 12.
reasons that follow, the Potvins’ motion for default judgment is
denied.
The Legal Standard
“Because default has entered, the defendant[ ] [is] ‘taken
to have conceded the truth of the factual allegations in the
complaint as establishing the grounds for liability.’”
S.E.C.
v. New Futures Trading Int’l Corp., No. 11-cv-532-JL, 2012 WL
1378558, at *1 (D.N.H. Apr. 20, 2012) (quoting Ortiz-Gonzalez v.
Fonovisa, 277 F.3d 59, 62-63 (1st Cir. 2002)).
Moreover,
“[w]here a court has jurisdiction over the subject matter and
parties, the allegations in the complaint state a specific,
cognizable claim for relief, and the defaulted party had fair
notice of its opportunity to object, the court has the
discretion to order default judgment ‘without a hearing of any
kind.’”
Banco Bilbao Vizcaya Argentaria v. Family Rests., Inc.
(In re The Home Rests., Inc.), 285 F.3d 111, 114 (1st Cir. 2002)
(quoting HMG Prop. Investors, Inc. v. Parque Indus. Rio Canas,
Inc., 847 F.2d 908, 919 (1st Cir. 1988)).
However, while “a
defaulting party admits the factual basis of the claims asserted
against it, the defaulting party does not admit the legal
sufficiency of those claims.”
10 James Wm. Moore, Moore’s
Federal Practice § 55.32[1][b] (3d ed. 2011) (citing Quirindongo
2
Pacheco v. Rolon Morales, 953 F.2d 15, 16 (1st Cir. 1992)).
Rather, “[t]he claimant must state a legally valid claim for
relief,” 10 Moore’s, supra, and “[a] court may grant judgment by
default only for relief that may lawfully be granted on the
well-pleaded facts alleged by the claimant,” id. (emphasis
added).
In other words, “a district court may, after entry of
default, still conclude that a complaint fails to state a
claim.”
Feliciano-Hernández v. Pereira-Castillo, 663 F.3d 527,
537 n.5 (1st Cir. 2011) (citing Ramos-Falcón v. Autoridad de
Energía Eléctrica, 301 F.3d 1, 2 (1st Cir. 2002)).
Discussion
In their motion for default judgment, the Potvins argue
that their complaint states legally valid claims for relief
under the FDCPA as well as the New Hampshire statutes on which
they base Counts II and III.
After carefully examining the
complaint, the court does not agree; none of the Potvins’ claims
adequately “state a specific, cognizable claim for relief,”
re Home Restaurants, 285 F.3d at 114.
In
In the discussion that
follows, the court begins by describing the factual allegations
in the complaint, and then examines each of the Potvins’ claims.
3
A. Factual Allegations
The core factual allegations of the Potvins’ complaint are
these:
Plaintiff incurred a financial obligation (the
“Debt”) to an original creditor (the “Creditor”).
The Debt arose from services provided by the
Creditor which were primarily for family, personal or
household purposes and . . . meets the definition of a
“debt” under 15 U.S.C. § 1692a(5).
The Debt was purchased, assigned or transferred
to [PLO] for collection, or [PLO] was employed by the
Creditor to collect the Debt.
The Defendants attempted to collect the Debt and,
as such, engaged in “communications” as defined in 15
U.S.C. § 1692a(2).
Compl. ¶¶ 8-11.
The complaint then alleges that PLO “placed
several calls to Plaintiffs, and to Janice Paul’s [sic] parents
who are uninterested third parties, in an attempt to collect the
Debt,” id. ¶ 12, and that PLO “regularly leaves voicemails with
Plaintiff and Plaintiff’s parents about a ‘legal matter,’” id. ¶
16.
Finally, the complaint alleges:
Plaintiff asked [PLO] [if] it was a debt
collector. [PLO] stated that it was not.
Plaintiff sent a letter to [PLO] via certified
mail requesting that [PLO] cease placing calls to
either Plaintiff or any third parties in an attempt to
collect the Debt.
[PLO] signed for and received Plaintiff’s letter
on April 1, 2011.
4
[PLO] placed a subsequent call to Plaintiff’s
parents on April 29, 2011.
To date, [PLO] has not sent any written
validation to Plaintiff despite [P]laintiff’s request
for a statement indicating who the original creditor
is.
[PLO] has not provided the plaintiff with [a]
“mini-miranda”.
Compl. ¶¶ 17-22.
Several things are notable about the Potvins’ factual
allegations.
First, while paragraph eight mentions generally a
financial obligation, and paragraph nine describes that debt as
meeting the relevant statutory definition, the complaint
includes no further factual allegations about the debt.
Similarly, the Potvins assert that “the Debt is past the statute
of limitations under New Hampshire State Laws,” Compl. ¶ 16, but
without any factual allegations concerning the debt, such as
when it was incurred, the assertion that it lies outside the
statute of limitations is a mere legal conclusion worthy of no
consideration.
See United Auto. Workers of Am. Int’l Union v.
Fortuño, 633 F.3d 37, 41 (1st Cir. 2011) (quoting Ashcroft v.
Iqbal, 556 U.S. 662, 678 (2009)); Plumbers’ Union Local No. 12
Pension Fund v. Nomura Asset Acceptance Corp., 632 F.3d 762, 771
(1st Cir. 2011).
Beyond that, while the Potvins allege that PLO
5
was a debt collector, and was attempting to collect a debt from
them, the complaint makes no allegations about the content of
any of PLO’s communications, other than mentioning “voicemails
. . . about a ‘legal matter.’”2
Thus, based on the allegations
in the complaint, this is not a case such as Clayson v. Rubin &
Rothman, LLC, in which “anyone who overheard the messages that
[the defendant] left on plaintiff’s mother’s answering machine
would know that [the plaintiff] owed a debt that was being
collected by” the defendant.
751 F. Supp. 2d 491, 495 (W.D.N.Y.
2010) (internal quotation marks omitted).
As for the calls
themselves, the complaint alleges their number and frequency
only in the vaguest terms.
As for their timing, it indicates
the date of only one call, the one allegedly made to the parents
of Janice Potvin (“Janice”) on April 29, 2011.
The Potvins also
make no allegations about when, during the day, they received
any of PLO’s telephone calls.
2
The Potvins go a step further in the memorandum of law in
support of their motion for default judgment, arguing that
“[d]espite speaking to Plaintiffs on numerous occasions, not a
single time did Paul Law Office state that they were debt
collectors calling to collect the debt.” Pls.’ Mem. of Law
(doc. no. 14-1), at 5. If PLO never told the Potvins it was
attempting to collect a debt, that would seem to undermine the
allegation in their complaint, that PLO “attempted to collect
the Debt and, as such, engaged in ‘communications’ as defined in
[the FDCPA].” Compl. ¶ 12.
6
B. Count I
In Count I of their complaint, the Potvins assert that PLO
committed six violations of the FDCPA.3
law, they address four of the six.4
In their memorandum of
Notwithstanding the very
thin factual pleading in the complaint, and the Potvins’ curious
statement in their memorandum of law that PLO never identified
itself as a bill collector, the allegations in paragraphs nine
through eleven of the complaint are sufficient, if barely, to
establish that PLO was a debt collector, and attempted to
collect a debt from the Potvins.
Even so, all six of the
Potvins’ claims under the FDCPA fail as a matter of law.
1. 15 U.S.C. § 1692b(3)
The Potvins first assert that “[t]he Defendants’ conduct
violated 15 U.S.C. § 1692b(3) in that Defendants contacted third
parties in regards to the Plaintiff’s debt on numerous
3
Paragraphs twenty-seven through thirty-six purport to
describe ten separate FDCPA violations, but paragraphs thirtytwo through thirty-six each arise out of 15 U.S.C. § 1692g(a),
which requires that debt collectors provide consumers with five
separate pieces of information within five days after initial
contact. In addition, the Potvins suggest, in their memorandum
of law, that PLO violated § 1692a(6). Section 1692a(6),
however, is a part of the FDCPA’s definition section, rather
than a provision that establishes a cause of action.
4
The Potvins’ memorandum of law does not mention their
claims under §§ 1692c(a)(1) and (c).
7
occasions, without being asked to do so [and] willfully and
knowingly contacted third parties after specifically being told
in writing not to do so.”
Compl. ¶ 27.5
Section 1692b is titled
“Acquisition of location information,” and it prescribes the
manner in which a debt collector must acquire information about
the location of a consumer from a third party.
The specific
portion of § 1692b on which the Potvins rely provides as
follows:
Any debt collector communicating with any person
other than the consumer for the purpose of acquiring
location information about the consumer shall—
. . . .
(3) not communicate with any such person
more than once unless requested to do so by such
person or unless the debt collector reasonably
believes that the earlier response of such person
is erroneous or incomplete and that such person
now has correct or complete location information.
15 U.S.C. § 1692b(3).
The claim asserted in paragraph twenty-seven fails for
reasons that will become a familiar refrain in the balance of
this order: a lack of adequate factual allegations.
The only
factual allegation in the Potvins’ complaint concerning the
5
While it is not perfectly clear, this appears to be the
claim that the Potvins describe in their memorandum of law as
arising under § 1692a(6), the FDCPA provision that defines the
term “debt collector.”
8
contents of the communications directed toward Janice’s parents,
the only third parties mentioned anywhere in the complaint, is
that PLO left voicemail messages about a “legal matter.”
That
is not a fact that, if proven, would subject PLO to liability
for contacting Janice’s parents for the purpose of collecting
location information about her, which is the conduct regulated
by § 1692b.
The Potvins also allege that PLO has placed “several” calls
to them and to Janice’s parents, “in an attempt to collect the
debt.”
Compl. ¶ 12.
Again, without allegations concerning
precisely what PLO said to whom, the Potvins have not made a
factual allegation but, rather, they have drawn a legal
conclusion.
See United Auto. Workers, 633 F.3d at 41
(explaining that mere legal conclusions do not state a claim);
10 Moore’s, supra (explaining that defaulting party does not
admit the legal sufficiency of the claims asserted against it).
Moreover, even if the Potvins had properly alleged
communications directed toward Janice’s parents by PLO in
connection with the collection of a debt, conduct of that sort
falls outside the ambit of § 1692b, and is governed, instead, by
§ 1692c(b), one of the few FDCPA provisions the Potvins have not
invoked in either their complaint or their motion for default
9
judgment.
Obviously, the court cannot grant relief on claims
the Potvins have not brought.
2. 15 U.S.C. § 1692c(a)(1)
According to the Potvins’ complaint, “[t]he Defendants’
conduct violated 15 U.S.C. § 1692c(a)(1) in that Defendants
contacted the Plaintiff at a place and during a time known to be
inconvenient for the Plaintiff.”
Compl. ¶ 28.
The statute on
which the Potvins rely bars a debt collector from, among other
things, communicating with a consumer at “a time or place known
or which should be known to be inconvenient to the consumer.”
15 U.S.C. § 1692c(a)(1).
Sections 1692c(a)(1) and (3) describe
the statutory presumptions about convenient times and places.
Because the complaint includes no allegations about when or
where PLO contacted the Potvins, and includes no allegations
about what times and places PLO knew to be inconvenient to the
Potvins, the FDCPA violation asserted in paragraph twenty-eight
is merely a “naked assertion[ ] devoid of further factual
enhancement [which] need not be accepted.”
Plumbers’ Union, 632
F.3d at 771 (quoting Maldonado v. Fontanes, 568 F.3d 263, 266
(1st Cir. 2009)); see also United Auto. Workers, 633 F.3d at 41
(“[a] pleading that offers ‘labels and conclusions’ or ‘a
formulaic recitation of the elements of a cause of action will
10
not do.’”) (quoting Iqbal, 556 U.S. at 678).
Accordingly, the
Potvins have failed to state a claim under § 1692c(a)(1).
3. 15 U.S.C. § 1692c(c)
The Potvins’ complaint next asserts that “[t]he Defendants’
conduct violated 15 U.S.C. § 1692c(c) in that Defendants
contacted the Plaintiff after having received written
notification from the Plaintiff to cease communication.”
¶ 29.
Compl.
The statute on which the Potvins rely bars communications
from a debt collector to a consumer after the consumer has
notified the debt collector of his or her desire not to be
contacted.
But, the only communication the complaint alleges
that postdates the Potvins’ notification to PLO is a telephone
call to Janice’s parents, who are not consumers, as that term is
defined by the statute, see 15 U.S.C. § 1692c(d) (“For the
purpose of this section, the term ‘consumer’ includes the
consumer’s . . . parent (if the consumer is a minor) . . .”).
Because the Potvins have not adequately alleged any
communication from PLO after April 1, 2011, that was directed
toward them, they have failed to state a claim under § 1692c(c).
11
4. 15 U.S.C. § 1692e(10)
The Potvins’ fourth FDCPA claim is that “[t]he Defendants’
conduct violated 15 U.S.C. § 1692e(10) in that Defendants
employed false and deceptive means to collect a debt.”
30.
Compl. ¶
The statute on which they rely bars “[t]he use of any false
representation or deceptive means to collect or attempt to
collect any debt or to obtain information concerning a
consumer.”
15 U.S.C. § 1692e(10).
The problem with the
Potvins’ claim under § 1692e(10) is that they do not adequately
allege any false representation or deceptive means that was
employed by PLO.
The closest they come is their allegation that
PLO left voicemails saying it was calling about a “legal matter”
but has never sued them.
That is insufficient, as a matter of
law, to make PLO’s reference to a “legal matter” a false
representation actionable under § 1692e(10).
In short, as with
the claim asserted in paragraph twenty-eight, this claim is
nothing more than “a formulaic recitation of the elements of a
cause of action,” United Auto. Workers, 633 F.3d at 41 (citation
omitted), that is insufficient to state a claim.
5. 15 U.S.C. § 1692e(11)
The Potvins’ penultimate FDCPA claim is that “[t]he
Defendants’ conduct violated 15 U.S.C. § 1692e(11) in that
12
Defendants failed to inform the consumer that the communication
was an attempt to collect a debt.”
Compl. ¶ 31.
Under the
statutory provision on which the Potvins rely:
[T]he following conduct is a violation of this
section:
. . . .
The failure to disclose in the initial
written communication with the consumer and, in
addition, if the initial communication with the
consumer is oral, in that initial oral
communication, that the debt collector is
attempting to collect a debt and that any
information obtained will be used for that
purpose, and the failure to disclose in
subsequent communications that the communication
is from a debt collector . . . .
15 U.S.C. § 1692e(11).
Here, the Potvins accuse PLO of failing
to inform them that “the communication was an attempt to collect
a debt,” Compl. ¶ 31, but they do not further identify or
describe “the communication” on which they base their claim.
Nor do they identify or describe the initial communication from
PLO, which is the factual baseline for determining liability
under § 1692e(11).
Finally, if the Potvins intend for the term
“the communication” to refer to all the communications from PLO,
an interpretation that is supported by their memorandum of law,
see doc. no. 14-1, at 5, that raises yet another issue: if PLO
never told the Potvins it was attempting to collect a debt, it
13
is difficult to see the basis for their allegation that PLO is,
in fact, a debt collector.
In any event, as with several of the
Potvins’ other asserted violations of the FDCPA, this one is too
conclusory and too devoid of factual development to adequately
state a claim.
See United Auto. Workers, 633 F.3d at 41;
Plumbers’ Union, 632 F.3d at 771.
6. 15 U.S.C. § 1692g(a)
The Potvins’ final FDCPA claim, which arises under §
1692g(a), is also infirm.
That section provides:
Within five days after the initial communication
with a consumer in connection with the collection of
any debt, a debt collector shall, unless the following
information is contained in the initial communication
or the consumer has paid the debt, send the consumer a
written notice containing—
(1) the amount of the debt;
(2) the name of the creditor to whom the
debt is owed;
(3) a statement that unless the consumer,
within thirty days after receipt of the notice,
disputes the validity of the debt, or any portion
thereof, the debt will be assumed to be valid by
the debt collector;
(4) a statement that if the consumer
notifies the debt collector in writing within the
thirty-day period that the debt, or any portion
thereof, is disputed, the debt collector will
obtain verification of the debt or a copy of a
judgment against the consumer and a copy of such
14
verification or judgment will be mailed to the
consumer by the debt collector; and
(5) a statement that, upon the consumer’s
written request within the thirty-day period, the
debt collector will provide the consumer with the
name and address of the original creditor, if
different from the current creditor.
Id.
In paragraph twenty-one of their complaint, the Potvins
allege that they have never received a “written validation” from
PLO containing the information listed in §§ 1692g(a)(1)-(5).
But, they have made no allegations about their initial
communication from PLO, including the form it took, i.e., oral
or written.
Their failure to make factual allegations about
their initial communication, in turn, is a significant omission,
because a failure to provide the written notice required by §
1692g(a) is a violation of the FDCPA only if the information
described in §§ 1692g(a)(1)-(5) was not provided to the consumer
in the initial communication.
The Potvins’ allegation that they
never received the written notice required by § 1692g(a) is
insufficient to support a claim under that provision because, as
the FDCPA recognizes, a debt collector’s initial communication
may be oral.
See 15 U.S.C. § 1692e(11).
Absent an allegation
that PLO did not provide the required information in its initial
communication, the Potvins have failed to state a claim under §
1692g(a).
15
B. Count II
In Count II of their complaint, the Potvins assert that PLO
committed three separate violations of RSA chapter 358-C.
Their
memorandum of law, however, addresses only one of their three
RSA 358-C claims, the second of the three discussed below.
In
any event, the Potvins have failed to state a claim under any of
the three theories advanced in their complaint.
1. RSA 358-C:3, I(a)
The Potvins’ complaint first asserts that “[t]he
Defendants’ conduct violated RSA 358-C:3 (I)(a) in that
Defendants caused the Plaintiff’s phone to ring repeatedly and
engaged the Plaintiff in telephone conversations at unusual or
inconvenient times with the intent to abuse, oppress or harass.”
Compl. ¶ 43.
As with the Potvins’ claim under the analogous
federal statute, this claim is too conclusory and too lacking in
factual allegations to adequately state a claim on which relief
can be granted.
See United Auto. Workers, 633 F.3d at 41;
Plumbers’ Union, 632 F.3d at 771.
2. RSA 358-C:3, IV(c)(2)
The Potvins next assert that “[t]he Defendants’ conduct
violated RSA 358-C:3, IV(c)(2) in that Defendants contacted
16
third parties in regards to the Plaintiff’s debt on numerous
occasions, without being asked to do so.”
Compl. ¶ 44.
The
statute on which the Potvins rely provides:
For the purposes of this chapter, any debt
collection or attempt to collect a debt shall be
deemed unfair, deceptive or unreasonable if the debt
collector:
. . . .
IV. Communicates or threatens to communicate,
except by proper judicial process, the fact of such
debt to a person other than the person who might
reasonably be expected to be liable therefor; provided
that the provisions of this paragraph shall not
prohibit a debt collector from:
. . . .
(c) Communicating information relating to
the debt to the debtor’s spouse or, if the debtor
is a minor, to the parents or guardians of the
debtor where the purpose of the communication is
solely to locate the debtor; provided that:
. . . .
(2) the debt collector, having once
communicated with any of said persons, shall
not again attempt to locate the debtor by
communicating with said person;
. . . .
RSA 358-C:3, IV.
Based on the statutory language quoted above, the court is
somewhat confused by the way in which the Potvins have pled
17
their second claim under chapter 358-C.
While they rely on RSA
358-C:3, IV(c)(2), that provision does not describe a prohibited
act, but, rather, is one component of an exception to the
prohibition on communicating with third parties stated in
paragraph IV.
Turning, then, to the provision on which the
Potvins apparently meant to base this claim, the complaint says
nothing about the content of PLO’s alleged communications with
Janice’s parents except that those communications referred to a
“legal matter.”
Compl. ¶ 16.
Thus, the Potvins have failed to
adequately allege that PLO communicated “the fact of [a] debt”
to Janice’s parents, which is the conduct prohibited by RSA 358C:3, IV.
Moreover, having made no allegations about the debt
itself, there are no facts in the complaint which, if proven,
would demonstrate that Janice’s parents were not persons who
might reasonably be expected to be liable for the debt.
See id.
Thus, the Potvins have failed adequately to allege a violation
of RSA 358-C:3, IV.
3. RSA 358-C:3, VII
Finally, the Potvins assert that “[t]he Defendants’ conduct
violated RSA 358-C, VII in that Defendants falsely represented
the character, extent or amount of the debt or its status in any
legal proceeding.”
Compl. ¶ 45.
18
Under RSA 358-C:3, VII, it is,
indeed, unlawful for a person to “[m]ake[ ] any material false
representation or implication of the character, extent or amount
of [a] debt, or of its status in any legal proceeding.”
But,
because the Potvins have made no allegations concerning any
representations made by PLO concerning the character, extent,
amount, or legal status of any debt, and have made no
allegations about the debt itself against which the truth or
falsity of any representation could be evaluated, the Potvins
have necessarily failed to state a claim under RSA 358-C:3, VII.
C. Count III
The Potvins base Count III on RSA 358-C:4, VI, which
provides that “[a]ny violation of the provisions of this chapter
shall also constitute an unfair and deceptive act or practice
within the meaning of RSA 358-A:2 . . .”
Because the Potvins
have failed to state a claim under chapter 358-C, they have also
failed to state a claim under chapter 358-A.
Conclusion
After carefully evaluating the Potvins’ factual allegations
against the various causes of action they have asserted, the
court concludes that their complaint fails to state any claim on
19
which relief can be granted.
Accordingly, their motion for
default judgment, document no. 14, is denied.
Even in a case with an absent defendant, the court has an
obligation to grant default judgment only on claims that are
supported by adequate factual allegations.
Restaurants, 285 F.3d at 114.
See In re The Home
Because none of the claims
asserted in this case is so supported, the Potvins are not
entitled to the imprimatur of legitimacy that would be conferred
by a default judgment in their favor.
See Feliciano-Hernández,
663 F.3d at 537.
SO ORDERED.
__________________________
Landya McCafferty
United States Magistrate Judge
May 25, 2012
cc:
James D. Kelly, Esq.
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