AFFINITY FEDERAL CREDIT UNION v. ALLSTAR CONTRACTING, LLC et al
Filing
8
OPINION. Signed by Judge Esther Salas on 12/1/11. (dc, )
NOT FOR PUBLICATION
UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF NEW JERSEY
__________________________________________
:
AFFINITY FEDERAL CREDIT UNION,
:
:
Plaintiff,
:
v.
:
CIVIL ACTION NO. 11-2423 (ES)
:
ALLSTAR CONTRACTING, LLC and
:
OPINION
HASSAN ABDUS-SALAAM
:
:
Defendants.
:
_________________________________________ :
SALAS, District Judge.
Now pending before this Court is Plaintiff Affinity Federal Credit Union (“Plaintiff”)
motion to dismiss the counterclaim of Defendants Allstar Contracting LLC (“Allstar”) and
Hassan Abdus-Salaam (“Defendants”) pursuant to Fed. R. Civ. P. 12(b)(6) for failure to state a
claim upon which relief can be granted. Defendant failed to file an opposition to the motion. The
Court has considered Plaintiff’s moving papers and decides this matter without oral argument
pursuant to Rule 78 of the Federal Rules of Civil Procedure. For the reasons set forth below,
Plaintiff's motion to dismiss is granted and Defendant’s counterclaim is dismissed without
prejudice.
I.
BACKGROUND
On October 27, 2010, Plaintiff filed the instant action in the Superior Court of New
Jersey Law Division. On March 3, 2011, Plaintiff was served with a Counterclaim alleging that
Plaintiff violated the Fair Debt Collection Practices Act (“FDCPA”), 15 U.S.C. § 1692, et seq.
Subsequently, Plaintiff properly removed this action to this Court pursuant to 28 U.S.C. §§ 1331
and 1441 because Defendants’ counterclaim presents a federal question.
Defendants’ counterclaim does not contain a statement of facts, but generally alleges that
Defendants agreed to pay Plaintiff for an auto loan and that Plaintiff violated certain provisions
of the FDCPA when collecting on said loan. The loan constitutes the underlying debt in this
action. (See Def.’s Answer).
II.
LEGAL STANDARD
On a motion to dismiss pursuant to Rule 12(b)(6), “courts are required to accept all well-
pleaded allegations in the complaint as true and draw all reasonable inferences in favor of the
non-moving party.” Phillips v. County of Allegheny, 515 F.3d 224, 234 (3d Cir.2008). But,
“[f]actual allegations must be enough to raise a right to relief above the speculative level.” Bell
Atl. Corp. v. Twombly, 550 U.S. 544, 555, 127 (2007). Courts are not required to credit bald
assertions or legal conclusions draped in the guise of factual allegations. See In re Burlington
Coat Factory Sec. Litig., 114 F.3d 1410, 1429 (3d Cir. 1997). A pleading that offers “labels and
conclusions” or a “formulaic recitation of the elements of a cause of action will not do.” Ashcroft
v. Iqbal, ––– U.S. ––––, ––––, 129 S.Ct. 1937, 1949, 173 L.Ed.2d 868 (2009) (quoting Twombly,
550 U.S. at 555). Thus, “ ‘stating ... a claim requires a complaint with enough factual matter
(taken as true) to suggest’ the required element[s].” Wilkerson v. New Media Tech. Charter Sch.
Inc., 522 F.3d 315, 322 (3d. Cir.2008) (quoting Twombly, 550 U.S. at 556).
III.
ANALYSIS
Defendants’ counterclaim, as a pleading that states a claim for relief, is required to
include “a short and plain statement of the claim showing that the pleader is entitled to relief” as
required by Fed. R. Civ. P. 8(a)(2). A court can dismiss a claim sua sponte if it is insufficiently
plead under Rule 8(a)(2). See Hines v. Rimtec Corp., Docket No. 07-966, 2007 WL 2332193, *1
(D.N.J. Aug.13, 2007) (“However, to the extent that such a claim exists, the Court will dismiss it
sua sponte because it is insufficient under Rule 8(a)(2)”); 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”). Here, Defendants’ counterclaim fails to include a short plain statement that Defendants
are entitled to relief under the FDCPA. As such, Defendants counterclaim is dismissed without
prejudice and Defendants will be given leave to amend their Complaint to reassert these claims
in a more definite manner.
That being said, even assuming arguendo that Defendants answer complied with Rule 8,
based on a reading of the facts gleaned from the individual counts of the counterclaim itself,
Defendants’ answer would not withstand the instant motion for two reasons. First, the FDCPA is
inapplicable to the collection of commercial debts. See Staub v. Harris, 626 F.2d 275, 278 (3d
Cir.1980); Lyon Financial Services, Inc. v. Woodlake Imaging LLC, 2005 WL 331695 *6
(E.D.Pa.); Sheehan v. Mellon Bank, 1995 WL 549018 *2 (E.D.Pa.). The FDCPA provides a
remedy for consumers who have been subjected to abusive, deceptive, and unfair debt collection
practices by debt collectors. 15 U.S.C. § 1692. The FDCPA defines the term “debt” 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.” 15 U.S.C. § 1692a(5). (emphasis added). A “consumer” is defined as “any natural
person obligated or allegedly obligated to pay any debt.” 15 U.S.C. § 1692a(3). By its terms
then, the FDCPA applies to only consumer debt for personal, family or household purposes and
not to commercial debt. See Zimmerman v. HBO Affiliate Group, 834 F.2d 1163, 1168–69 (3d
Cir.1987).
Here, Defendants’ counterclaim alleges that “on or about May 3, 2007, DefendantCounterclaimants [Allstar Contracting, LLC and Hasson Abdus-Salaam] agreed to pay Plaintiff a
monthly amount for an auto loan.” (Answer, Counterclaim ¶ 1). Thus, to the extent that the debt
at issue is between Plaintiff and a commercial entity, namely Allstar Contracting, LLC, the
FDCPA does not apply.
Moreover, the FDCPA’s provisions generally apply only to “debt collectors.” FTC v.
Check Investors, Inc., No. 03-2115, 2003 U .S. Dist. LEXIS 26940, at *25 (D.N.J. July 29,
2003). The FDCPA defines a debt collector, in part, as: “Any person who uses any
instrumentality of interstate commerce or the mails in any business the principal purpose of
which is the collection of 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); see
also Check Investors, 2003 U.S. Dist. LEXIS 26940, at *30 (citing Staub, 626 F.2d at 277) (“The
Third Circuit[ ] ... made clear that the FDCPA is directed at those persons who engage in
business for the principal purpose of collecting debts.”) Here, Defendants counterclaim alleges
that the underlying debt was an auto loan made by Plaintiff to Defendants. Therefore, as the
facts are alleged, Plaintiff acted as both the creditor and the debt collector. “The [FDCPA] does
not apply to persons or businesses collecting debts on their own behalf.” Staub, 626 F.2d at 277.
Simply stated, as the facts are alleged, the FDCPA does not apply to Plaintiff because it is a
business collecting a debt on its own behalf.
IV.
CONCLUSION
For the foregoing reasons, Plaintiff's motion to dismiss is granted. Defendants’
counterclaim for violations of §§ 1692-1692p of the FDCPA is dismissed without prejudice.
Defendants have thirty (30) days in which to amend their answer to cure the pleading
deficiencies addressed herein. Failure to amend within this time period will result in this action
being remanded to New Jersey state court as there will no federal claims remaining. An
appropriate order shall accompany this opinion.
/s/ Esther Salas____________
United States District Judge
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