OGBIN et al v. GE MONEY BANK et al

Filing 18

OPINION. Signed by Judge Noel L. Hillman on 06/13/2011. (tf, )

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF NEW JERSEY
MICHAEL AND LYNN OGBIN,
Plaintiffs,
CIVIL NO. 10-5651(NLH)(AMD)
v.
GE MONEY BANK, T.J. KELLEY,
INC., and PORTFOLIO RECOVERY
ASSOCIATES, LLC,
Defendants.

OPINION

APPEARANCES:
LEWIS G. ADLER
ROGER C. MATTSON
LAW OFFICE OF LEWIS ADLER
26 NEWTON AVENUE
WOODBURY, NJ 08096
Attorneys for plaintiffs
DONALD S. MAURICE , JR.
RACHEL FRANCESCA MARIN
THOMAS R. DOMINCZYK
MAURICE & NEEDLEMAN, PC
5 WALTER E. FORAN BOULEVARD
SUITE 2007
FLEMINGTON, NJ 08822-4672
Attorneys for defendant Portfolio Recovery Associates, LLC
HILLMAN, District Judge
Plaintiffs, Michael and Lynn Ogbin, have filed this putative
class action case claiming that defendants violated several laws
when they improperly contacted plaintiffs in early 2009 regarding a
debt that plaintiffs paid off in October 2001.

Defendant Portfolio

Recovery Associates, LLC has moved to dismiss plaintiffs’ claims

for their failure to state any cognizable claim.1

For the reasons

expressed below, defendant’s motion will be granted.
BACKGROUND
Plaintiffs claim that Portfolio Recovery Associates, LLC
(“PRA”) is a debt collector that in early 2009 sent plaintiffs a
notice concerning an outstanding bill in the amount of $686.04.
Plaintiffs claim that in April 2009, they told PRA that the debt
had been previously satisfied in October 2001 and requested that
PRA verify the debt.

Plaintiffs allege that PRA failed to verify

the debt and has continued to conduct business in New Jersey as a
debt collector without having posted the required bond.

Plaintiffs

claim that PRA’s conduct has violated the Fair Debt Collection

1

By stipulation, plaintiffs have dismissed their claims
against defendant GE Money Bank. (Docket No. 14.) With regard
to defendant T.J. Kelly, Inc., it appears that entity, which does
business as Kelly Karpets, was served while this case was pending
in New Jersey Superior Court. The president of T.J. Kelly, Inc.
provided his consent to the removal of the case to this Court,
which was effected on October 30, 2010. (Docket No. 1-2.) To
date, no appearance by counsel on behalf of T.J. Kelly, Inc. has
been entered, and the time for T.J. Kelly, Inc. to answer or
otherwise respond has passed. See Fed. R. Civ. P. 81(c)(2). The
only claim alleged by plaintiffs against T.J. Kelly, Inc. is that
it, along with GE Money Bank, “had an illegal collection agency,
Portfolio, to send out collection notices,” in violation of New
Jersey’s Consumer Fraud Act. (Compl. ¶ 23.) Because the Court
has found in this Opinion that plaintiffs have not asserted any
cognizable claim against Portfolio, plaintiffs’ claim against
T.J. Kelly, Inc. also fails. Thus, regardless of T.J. Kelly’s
failure to appear in this action, plaintiffs’ claim against it
must be dismissed. See Bryson v. Brand Insulations, Inc., 621
F.2d 556, 559 (3d Cir. 1980) (holding that a “district court may
on its own initiative enter an order dismissing the action
provided that the complaint affords a sufficient basis for the
court’s action”).
2

Practices Act (FDCPA), 15 U.S.C. § 1962, et seq., the Truth-inConsumer Contract and Warranty and Notice Act (TCCWNA), N.J.S.A.
56:12-14, and the Consumer Fraud Act (CFA), N.J.S.A. 56:8-1 et seq.
Plaintiffs purport to bring these claims on their behalf and on
behalf of similarly situated individuals.
Defendant has moved to dismiss plaintiffs’ claims on several
bases.

Plaintiffs have opposed defendant’s motion.
DISCUSSION

A.

Jurisdiction
PRA removed this case from state court on the basis that this

Court has jurisdiction over this matter pursuant to 28 U.S.C. §
1332(d)(2), the Class Action Fairness Act (CAFA).

Jurisdiction may

also be premised upon 28 U.S.C. § 1331 for plaintiffs’ federal
claim, and 28 U.S.C. § 1367 for plaintiffs’ state law claims.
B.

Standard for Motion to Dismiss
When considering a motion to dismiss a complaint for failure

to state a claim upon which relief can be granted pursuant to Fed.
R. Civ. P. 12(b)(6), a court must accept all well-pleaded
allegations in the complaint as true and view them in the light
most favorable to the plaintiff.
351 (3d Cir. 2005).

Evancho v. Fisher, 423 F.3d 347,

It is well settled that a pleading is

sufficient if it contains “a short and plain statement of the claim
showing that the pleader is entitled to relief.”
8(a)(2).

Fed. R. Civ. P.

Under the liberal federal pleading rules, it is not
3

necessary to plead evidence, and it is not necessary to plead all
the facts that serve as a basis for the claim.
Oil Corp., 562 F.2d 434, 446 (3d Cir. 1977).

Bogosian v. Gulf
However, “[a]lthough

the Federal Rules of Civil Procedure do not require a claimant to
set forth an intricately detailed description of the asserted basis
for relief, they do require that the pleadings give defendant fair
notice of what the plaintiff’s claim is and the grounds upon which
it rests.”

Baldwin County Welcome Ctr. v. Brown, 466 U.S. 147,

149-50 n.3 (1984) (quotation and citation omitted).
A district court, in weighing a motion to dismiss, asks “‘not
whether a plaintiff will ultimately prevail but whether the
claimant is entitled to offer evidence to support the claim.’”
Bell Atlantic v. Twombly, 127 S. Ct. 1955, 1969 n.8 (2007) (quoting
Scheuer v. Rhoades, 416 U.S. 232, 236 (1974)); see also Ashcroft v.
Iqbal, 129 S. Ct. 1937, 1949 (2009) (“Our decision in Twombly
expounded the pleading standard for ‘all civil actions’ . . . .”);
Fowler v. UPMC Shadyside, 578 F.3d 203, 210 (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.”).
Following the Twombly/Iqbal standard, the Third Circuit has
instructed district courts to engage in a two-part analysis in
reviewing a complaint under Rule 12(b)(6).

First, the factual and

legal elements of a claim should be separated; a district court
4

must accept all of the complaint's well-pleaded facts as true, but
may disregard any legal conclusions.
(citing Iqbal, 129 S. Ct. at 1950).

Fowler, 578 F.3d at 210
Second, a district court must

then determine whether the facts alleged in the complaint are
sufficient to show that the plaintiff has a “‘plausible claim for
relief.’”

Id. (quoting Iqbal, 129 S. Ct. at 1950).

A complaint

must do more than allege the plaintiff's entitlement to relief.
Id.; see also Phillips v. County of Allegheny, 515 F.3d 224, 234
(3d Cir. 2008) (stating that the “Supreme Court's Twombly
formulation of the pleading standard can be summed up thus:
‘stating . . . a claim requires a complaint with enough factual
matter (taken as true) to suggest’ the required element.

This

‘does not impose a probability requirement at the pleading stage,’
but instead ‘simply calls for enough facts to raise a reasonable
expectation that discovery will reveal evidence of’ the necessary
element”).

A court need not credit either “bald assertions” or

“legal conclusions” in a complaint when deciding a motion to
dismiss.

In re Burlington Coat Factory Sec. Litig., 114 F.3d 1410,

1429-30 (3d Cir. 1997).

The defendant bears the burden of showing

that no claim has been presented.

Hedges v. U.S., 404 F.3d 744,

750 (3d Cir. 2005) (citing Kehr Packages, Inc. v. Fidelcor, Inc.,
926 F.2d 1406, 1409 (3d Cir. 1991)).
Finally, a court in reviewing a Rule 12(b)(6) motion must only
consider the facts alleged in the pleadings, the documents attached
5

thereto as exhibits, and matters of judicial notice.

Southern

Cross Overseas Agencies, Inc. v. Kwong Shipping Group Ltd., 181
F.3d 410, 426 (3d Cir. 1999).

A court may consider, however, “an

undisputedly authentic document that a defendant attaches as an
exhibit to a motion to dismiss if the plaintiff’s claims are based
on the document.”

Pension Benefit Guar. Corp. v. White Consol.

Indus., Inc., 998 F.2d 1192, 1196 (3d Cir. 1993).

If any other

matters outside the pleadings are presented to the court, and the
court does not exclude those matters, a Rule 12(b)(6) motion will
be treated as a summary judgment motion pursuant to Rule 56.

Fed.

R. Civ. P. 12(b).
C.

Analysis
PRA has moved to dismiss all claims in plaintiffs’ complaint

pursuant to Federal Rule 12(b)(6) for their failure to state any
cognizable claim.

First, PRA argues that plaintiffs’ FDCPA claim

fails for two reasons: (1) their claim was not brought within one
year from the date of the allegedly improper notice as required by
the Act, and (2) plaintiffs have failed to allege that the debt at
issue was an obligation of a consumer to pay money arising out of a
transaction that was primarily for personal family or household
use.

Next, PRA argues that plaintiffs’ TCCWNA claim fails because

plaintiffs have not pleaded the required elements that (1) PRA
entered into a written contract with them, (2) PRA gave or
displayed any written consumer warranty, notice or sign to them, or
6

(3) PRA violated a provision in any warranty, notice or contract.
Finally, PRA contends that plaintiffs’ CFA claim fails because the
CFA does not apply to debt collectors, and plaintiffs’ claims
against PRA otherwise do not pertain to the purchase of merchandise
or real estate.
The Court agrees with PRA that plaintiffs have failed to state
any viable claim.

Addressing plaintiffs’ CFA claim first, “to

state a cause of action under the CFA, a plaintiff must allege the
commission of a deception, fraud, misrepresentation, etc., ‘in
connection with’ the sale of merchandise or services.”

Castro v.

NYT Television, 851 A.2d 88, 95 (N.J. Super. Ct. App. Div. 2004)
(citing N.J.S.A. 56:8-1).

To satisfy this requirement, “‘[t]he

misrepresentation has to be one which is material to the
transaction . . . made to induce the buyer to make the purchase,’”
id. (quoting Gennari v. Weichert Co. Realtors, 691 A.2d 350, 366
(N.J. 1997), and the complaint must allege an “‘ascertainable loss
of moneys or property, real or personal,’” id. (citing N.J.S.A.
56:8-19) (other citation omitted).
In their opposition to PRA’s motion, plaintiffs focus on the
elements of proving a CFA claim, see Cox v. Sears Roebuck & Co.,
647 A.2d 454, 462-63 (N.J. 1994) (explaining that the elements of a
CFA claim are: (1) unlawful conduct by the defendant; (2) an
ascertainable loss on the part of the plaintiff; and (3) a causal
relationship between the defendant’s unlawful conduct and the
7

plaintiff’s ascertainable loss), but side-step PRA’s argument that
the CFA does not apply to debt collectors.

Regardless of

plaintiffs’ ability to fit their allegations into the elements of a
CFA claim, their CFA claim fails because the Act does not apply to
a debt collector’s efforts to collect a debt.

See Boyko v.

American Intern. Group, Inc., 2009 WL 5194431, *4 (D.N.J. 2009)
(explaining that the defendant debt collector could not be held
liable under the CFA because it did not sell any merchandise, real
estate, or debt to the plaintiff when it sent notices to plaintiff
regarding the debt) (citing Hoffman v. Encore Capital Group, Inc.,
No. A-3008-07T1, 2008 WL 5245306, at *3 (N.J. Super. Ct. App .Div.
Dec.18, 2008) (holding collection activities did not involve sale
of merchandise to consumers), cert. denied, 198 N.J. 316, 966 A.2d
1080 (N.J. 2009); Joe Hand Promotions, Inc. v. Mills, 567 F. Supp.
2d 719, 724 (D.N.J. 2008) (holding letter claiming money owed for
sale of pay-per-view program did not involve the sale of
merchandise)).

Plaintiffs have not articulated any rebuttal to the

application of this view of the CFA to their case.2
With regard to plaintiffs’ TCCWNA claim, that Act protects
consumers by requiring that consumer contracts be clearly written
and understandable.

Barrows v. Chase Manhattan Mortgage Corp., 465

2

Plaintiffs simply state that PRA’s citation to the Boyko
case “missed the mark” because evidence may show that PRA owned
the debt. (See Op. at 5-6.) Even if that were true, plaintiffs
have not alleged that PRA attempted to sell the debt to
plaintiffs.
8

F. Supp. 2d 347, 362 (D.N.J. 2006) (citing Alloway v. General
Marine Industries, L.P., 695 A.2d 264, 274 (N.J. 1997)).

The

TCCWNA prohibits a “seller, lessor, lender, or bailee” from giving
a written notice to a consumer, defined as “any individual who
buys, leases, borrows, or bails any money, property, or service
which is primarily for personal, family, or household purposes,”
that includes a provision that violates state or federal law.
N.J.S.A. 56:12-15.

The terms “seller, lessor, lender, or bailee”

are not defined by statute, and to define those terms, a reviewing
court must rely on the plain language of the statute and give the
language its ordinary meaning.

See Barrows, 465 F. Supp. 2d at 362

(citing Miah v. Ahmed, 846 A.2d 1244, 1249 (N.J.2004)).
Plaintiffs do not allege that PRA is “seller, lessor, lender,
or bailee” of their debt.

They also do not claim that they bought

leased, borrowed, or bailed any money, property, or service which
is primarily for personal, family, or household purposes from PRA.
As pleaded by plaintiffs, PRA acted as a debt collector to collect
on a debt that plaintiffs incurred through the other defendants.
Thus, plaintiffs’ TCCWNA claim against PRA fails.

See Boyko, 2009

WL 5194431 at *5 (dismissing TCCWNA claim because plaintiff did not
allege that the defendant was a seller, lessor, lender, or bailee
and because the defendant did not sell, lease, lend or bail any
money or property to the plaintiff).
Finally, with regard to plaintiffs’ FDCPA claim, plaintiffs
9

argue that their claim should not be dismissed for failure to
comply with the one-year filing deadline because PRA sent them
another communication in July 2010, which is within one year of the
filing of their complaint.

Plaintiffs argue that they should be

permitted to amend their complaint to include allegations
concerning that communication, as well as to clarify that they are
consumers who borrowed money for personal use.3
Even if plaintiffs were permitted to amend their complaint to
include allegations concerning PRA’s July 2010 letter, plaintiffs’
FDCPA claim would still fail.4

The FDCPA proscribes that a “debt

collector may not use unfair or unconscionable means to collect or
attempt to collect any debt.”

15 U.S.C. § 1692f.

One way for a

debt collector to use “unfair or unconscionable means” to collect a
debt is to not cease its collections efforts once a consumer has
notified the debt collector in writing that he disputes the debt.
3

Plaintiffs also argue that PRA’s motion is premature
because discovery needs to be undertaken to develop “key facts.”
A plaintiff’s request for discovery cannot serve as a basis to
deny a defendant’s motion to dismiss, as the filing of such a
motion serves to protect a defendant from being subjected to
discovery, during which a plaintiff hopes that facts will be
unearthed to support plaintiff’s speculation. See, e.g.,
Giovanelli v. D. Simmons General Contracting, 2010 WL 988544, *5
(D.N.J. 2010) (“Discovery cannot serve as a fishing expedition
through which plaintiffs search for evidence to support facts
they have not yet pleaded.”); Ogbin v. Citifinancial Mortg. Co.,
Inc., 2009 WL 4250036, *2 (D.N.J. 2009) (same).
4

An amendment may only be permitted in the absence of undue
delay, bad faith, dilatory motive, unfair prejudice, or futility
of amendment. Grayson v. Mayview State Hosp., 293 F.3d 103, 108
(3d Cir. 2002) (citing Foman v. Davis, 371 U.S. 178, 182 (1962)).
10

The FDCPA specifically provides, “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
shall cease collection of the debt, or any disputed portion
thereof, until the debt collector obtains verification of the debt,
. . . and a copy of such verification . . . is mailed to the
consumer by the debt collector.”

15 U.S.C. § 1692g(b).

Plaintiffs in this case claim that PRA violated § 1692g(b)
because even after they notified PRA in April 2009 that they
disputed PRA’s collection efforts, PRA failed to obtain
verification of the debt.5

(Compl. ¶¶ 13-14.)

This allegation

fails to state a claim for a § 1692g(b) violation for several
reasons.

First, plaintiffs do not allege that they notified PRA in

5

Plaintiffs also claim that PRA violated N.J.S.A. 45:18-1,
which provides, “No person shall conduct a collection agency,
collection bureau or collection office in this state, or engage
therein in the business of collecting or receiving payment for
others of any account, bill or other indebtedness, . . . unless
such person . . . has on file with the secretary of state
sufficient bond as hereinafter specified.” Plaintiffs have not
asserted an independent claim for a violation of N.J.S.A.
45:18-1, and instead it appears that plaintiffs have claimed that
PRA’s alleged failure to comply with N.J.S.A. 45:18-1 serves as
evidence that PRA committed acts prohibited under the FDCPA,
TCCWNA, and CFA. Even if the bond requirement could serve as a
predicate for liability under any of these statutes, plaintiffs’
claims fail for other reasons as explained in this Opinion.

11

writing of their dispute over the debt.

Plaintiffs’ state that in

April 2009 they “told” PRA that the debt had been paid, and
“requested” that PRA verify the debt.

(Compl. ¶ 8.)

requires that such notice be in writing.

The FDCPA

15 U.S.C. § 1692g(b).

Plaintiffs’ allegation that they “told” PRA about their dispute is
not sufficient under the Act.
Relatedly, the FDCPA requires that plaintiffs’ written notice
disputing the debt be provided to PRA within 30 days of PRA’s
written notice of the debt to plaintiffs.

Id. § 1692g(a).

Plaintiffs claim that PRA “sent a notice” to them “on or about the
beginning of 2009.”

(Compl. ¶ 7.)

Even though plaintiffs claim

they disputed the debt in April 2009, plaintiffs have failed to
allege that their dispute was provided within the 30-day window, as
it is unclear whether the “beginning of 2009" means March 2009.
Finally, to bring a claim for such a violation, the FDCPA
instructs, “An action to enforce any liability created by this
subchapter may be brought in any appropriate United States district
court without regard to the amount in controversy, or in any other
court of competent jurisdiction, within one year from the date on
which the violation occurs.”

15 U.S.C. § 1692k(d).

Even if

plaintiffs satisfied the 30-day written notice requirement, and
even if PRA thereafter failed to provide plaintiffs with
verification of the debt, plaintiffs did not bring their claim for
this alleged violation within one year of PRA’s alleged violation.
12

In order to prevent the application of the one-year time limit
to their claim, plaintiffs have asked for leave to amend their
complaint to include allegations regarding a July 16, 2010 letter
from PRA to plaintiffs.

In that letter, PRA states that “it is our

understanding that you are disputing the balance of this account,”
and it instructs plaintiffs to “provide all details in writing,
including supporting documentation, to our office for review.”
(Docket No. 13-2.)

Plaintiffs thus argue that if they were

permitted to amend their complaint to assert allegations based on
this letter, they would properly state a claim for a violation of §
1692g within the applicable limitations period.
Even if the Court were to allow plaintiffs to amend their
complaint, allegations concerning this letter would not save
plaintiffs’ FDCPA claim.

Although the FDCPA contemplates a 30-day

window for a consumer to challenge the debt and request a
verification, the FDCPA is not clear on when the debt collector
must provide the verification requested by the consumer.

The FDCPA

simply instructs that the debt collector “cease collection of the
debt, or any disputed portion thereof, until the debt collector
obtains verification of the debt.”

15 U.S.C. § 1692g(b).

Here, if

plaintiffs had alleged that they provided the proper written notice
to PRA within their 30-day deadline, and PRA has still failed to
provide that verification, perhaps plaintiffs’ claim may not be
time-barred, as it could be argued that the July 2010 letter
13

evidences that PRA has improperly continued its collection
efforts.6

Plaintiffs, however, have not alleged facts to show that

they complied with their obligations under the FDCPA to properly
dispute the debt.7

Therefore, they have failed to state a claim

6

It is questionable whether the July 2010 letter shows that
PRA has continued its collection efforts, as it states, “You must
provide all requested information to our company at the address
listed below no later than 20 days from the date of this letter.
This information is needed in order to close the investigation
concerning this account in a timely manner. Your failure to
supply this information may result in the investigation being
terminated and the account being returned to the floor for
collection.” (Docket No. 13-2.)
It is also questionable whether plaintiffs’ April 2009
“telling” to PRA that they disputed the debt is what prompted
PRA’s July 2010 letter, as it states, “We are in receipt of your
recent dispute concerning the account referenced below.” (Id.
(emphasis added).)
7

PRA argues that the one-year clock began when plaintiffs
received PRA’s collection letter in “early 2009,” and that the
July 2010 letter cannot extend the clock past “early 2010" to
cause plaintiffs’ October 2010 complaint to be timely, because
the continuing violation doctrine does not apply to FDCPA claims.
If it were plaintiffs’ claim that PRA’s initial collection letter
to them violated the FDCPA because PRA sent the letter without
complying with New Jersey’s bond requirement, see supra note 5,
then PRA’s position is correct. It would be the early 2009 PRA
letter that violated the FDCPA, and that discrete act would be
time-barred. Plaintiffs would then have to advance a separate
and independent FDCPA violation based on the July 2010 letter to
save any FDCPA claim. Plaintiffs, however, are not claiming that
the July 2010 letter constitutes a separate and independent
violation of the FDCPA.
The Court views plaintiffs’ complaint, and their attempt to
amend their complaint, to instead claim that rather than the 2009
debt collection letter itself being the triggering violation, it
is PRA’s continuing failure to provide a verification and cease
debt collection activities that violates the FDCPA. As explained
above, if plaintiffs had complied with the FDCPA’s requirements
to challenge the debt, and PRA continued its efforts to collect
the debt without providing verification, such a claim would not
14

that PRA has violated the FDCPA by not heeding the FDCPA’s commands
that debt collectors cease collection activity for a properly
disputed debt.
CONCLUSION
For the reasons expressed above, defendant’s motion to dismiss
will be granted, the claims against the two remaining defendants
dismissed.

An appropriate order will be entered.

Date: June 13, 2011

s/ Noel L. Hillman

At Camden, New Jersey

NOEL L. HILLMAN, U.S.D.J.

be time-barred, as PRA’s FDCPA-violative conduct would still be
occurring. As also explained above, however, plaintiffs’ failure
to provide written notice of its dispute cuts off such a claim.
15