LOPEZ v. LAW OFFICES OF FALONI & ASSOCIATES, LLC et al
Filing
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OPINION. Signed by Judge Susan D. Wigenton on 9/14/2016. (seb)
NOT FOR PUBLICATION
UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF NEW JERSEY
Civil Action No. 16-cv-01117-SDW-SCM
VICTORIA LOPEZ,
Plaintiff,
v.
OPINION
LAW OFFICES OF FALONI &
ASSOCIATES, LLC et al,
September 14, 2016
Defendants.
WIGENTON, District Judge.
Before this Court is the Motion to Dismiss of Defendants Alegis Group, LLC (“Alegis”);
David A. Faloni, Sr.; David A Faloni, Jr.; Law Offices of Faloni & Associates, LLC; LVNV
Funding LLC (“LVNV”); Resurgent Capital Services, L.P. (“Resurgent”); and Sherman
Originator, LLC (“Sherman”) (collectively “Defendants”); for failure to state a claim upon which
relief can be granted pursuant to Federal Rule of Civil Procedure 12(b)(6). Jurisdiction is proper
pursuant to 28 U.S.C. § 1331. Venue is proper pursuant to 28 U.S.C. § 1391. This opinion is
issued without oral argument pursuant to Federal Rule of Civil Procedure 78.
For the reasons stated herein, Defendant’s Motion to Dismiss is GRANTED in part and
DENIED in part.
I.
BACKGROUND
Plaintiff Victoria Lopez (“Plaintiff”) alleges that Defendants (a law firm, two of its
attorneys, and four other entities) violated the Fair Debt Collection Practices Act, 15 U.S.C.
1
§ 1692, et seq. (“FDCPA”). (See generally Am. Compl.) The alleged violations arise from a
complaint filed on behalf of Defendant LVNV (the “collection complaint”) in a debt collection
action against Plaintiff in the Superior Court of New Jersey, Law Division, Special Civil Part. (Id.
¶ 45.) Plaintiff brings this action on behalf of herself and all others similarly situated. (Id. ¶ 104.)
According to Plaintiff, Defendant LVNV is a consumer debt collection agency which,
acting along with Defendants Alegis, Resurgent, and Sherman (collectively “Purchasing
Defendants”), purchased a consumer debt (the “Debt”) Plaintiff had originally owed to non-party
Credit One Bank, N.A. (Am. Compl. ¶¶ 17-30.) At some point after purchasing the Debt, 1 the
Purchasing Defendants, acting through their then-counsel, Law Offices of Faloni & Associates,
LLC, filed the collection complaint in New Jersey state court. (Id. ¶¶ 35-45.) Plaintiff now asserts
that Defendants’ representations in the collection complaint violated the FDCPA in four ways.
Plaintiff first claims that because the Law Offices of Faloni & Associates, LLC and two of
its attorneys, David A. Faloni, Sr. and David A Faloni, Jr. (collectively the “Law Firm
Defendants”), filed 195 complaints 2 on the same day as the collection complaint, it would have
been “impossible or highly improbable” for the Law Firm Defendants to have meaningfully
reviewed the collection complaint. (Am. Compl. ¶¶ 45-81.) As a result, Plaintiff claims,
Defendants violated sections 1692e, e(2)(a), e(3), e(10), and 1692f of the FDCPA. (Id. ¶ 128.)
In addition to claiming that Defendants violated the FDCPA by failing to meaningfully
review the collection complaint, Plaintiff also alleges that Defendants attempted to collect the Debt
without a license required by the New Jersey Consumer Finance Licensing Act (“NJCFLA”), N.J.
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Plaintiff neither states the amount of the debt at the time Purchasing Defendants acquired it, nor the
approximate date on which Purchasing Defendants acquired it.
2
The number of complaints the Law Firm Defendants filed on the same day as the collection complaint
varies throughout Plaintiff’s Amended Complaint and Brief in Opposition to Defendants’ Motion to
Dismiss (“Pl.’s Br. Opp.”). For the purposes of this Opinion, this Court assumes the Law Firm Defendants
filed 195 complaints on that day.
2
State. Ann. (“N.J.S.A.”) § 17:11C, et seq., (Am. Compl. ¶¶ 82-86.), and reported the debt to
Equifax, Experian, and TransUnion (collectively “credit reporting agencies”), (Am. Compl. ¶¶ 9294), all in violation of FDCPA sections 1692e, e(2)(a), e(5), e(10)), 1692f, and f(1). (Am. Compl.
¶ 129.)
Defendants filed the Motion to Dismiss now before this Court on May 25, 2016. (Dkt. No.
21.) Plaintiff filed a brief in opposition (“Pl.’s Br. Opp.”) on July 5, 2016. (Dkt. No. 28.)
Defendants filed their brief in reply (“Defs.’ Br. Reply”) on July 12, 2016. (Dkt. No. 29.)
II.
LEGAL STANDARD
In considering a motion to dismiss under Federal Rule of Civil Procedure 12(b)(6), a court
must “accept all factual allegations as true, construe the complaint in the light most favorable to
the plaintiff, and determine whether, under any reasonable reading of the complaint, the plaintiff
may be entitled to relief.” Phillips v. Cty. of Allegheny, 515 F.3d 224, 231 (3d Cir. 2008) (quoting
Pinker v. Roche Holdings Ltd., 292 F.3d 361, 374 n. 7 (3d Cir. 2002)) (internal quotation marks
omitted). However, “the tenet that a court must accept as true all of the allegations contained in a
complaint is inapplicable to legal conclusions. Threadbare recitals of the elements of a cause of
action, supported by mere conclusory statements, do not suffice.” Ashcroft v. Iqbal, 556 U.S. 662,
678 (2009). Iqbal held, “to survive a motion to dismiss, a complaint must contain sufficient factual
matter . . . to state a claim to relief that is plausible on its face . . . . The plausibility standard is not
akin to a probability requirement, but it asks for more than a sheer possibility that a defendant has
acted unlawfully.” Id. at 678 (internal citations omitted).
In Fowler v. UPMC Shadyside, the Third Circuit devised “a two-part analysis.” 578 F.3d
203, 210 (3d Cir. 2009). First, the court must separate the complaint’s factual allegations from its
legal conclusions. Id. at 210-11. Having done that, the court must take only the factual allegations
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as true and determine whether the plaintiff has alleged a “plausible claim for relief.” Id. (quoting
Iqbal, 566 U.S. at 679).
III.
DISCUSSION
Section 1692e of the FDCPA prohibits a debt collector from “us[ing] any false, deceptive,
or misleading representation or means in connection with the collection of any debt.” In addition,
section 1692f prohibits debt collectors from using unfair or unconscionable means of collecting a
debt. In order to have stated a claim under either of these sections, Plaintiff’s Amended Complaint
must have sufficiently alleged that “(1) [Plaintiff] is a consumer, (2) the defendant[s are] debt
collector[s], (3) the defendant[s’] challenged practice involves an attempt to collect a ‘debt’ as the
[FDCPA] defines it, and (4) the defendant[s have] violated a provision of the FDCPA in attempting
to collect the debt.” Douglass v. Convergent Outsourcing 765 F.3d 299, 303 (3d Cir. 2014) (citing
Piper v. Portnoff Law Assocs., Ltd., 396 F.3d 227, 232 (3d Cir. 2005)). Defendants challenge
Plaintiff’s Amended Complaint for failing to sufficiently allege the second and fourth elements.
A. Whether Defendants are “Debt Collectors”
Under the second element of an FDCPA claim, a plaintiff must establish that a defendant
is a “debt collector” as defined section 1692a(6) of the FDCPA. The FDCPA’s definition of “debt
collector” includes:
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). The FDCPA also excludes from this definition:
any person collecting or attempting to collect any debt owed or due or asserted to
be owed or due another to the extent such activity . . . concerns a debt which was
originated by such person [or] . . . which was not in default at the time it was
obtained by such person . . . .
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Id. § 1692a(6)(F).
Plaintiff has alleged that the Debt was in default at the time the Purchaser Defendants
acquired it from the original creditor. (Am. Compl. ¶¶ 30-34.) In addition, Plaintiff has alleged
that the Purchaser Defendants are in the business of purchasing and attempting to collect chargedoff debts like Plaintiff’s. (Id. ¶¶ 16-35.) Defendants do not deny either of these contentions. (See
Defs.’ Br. Supp. 7-8.) Rather, Defendants claim that the Purchaser Defendants are not debt
collectors, as defined by the FDCPA, because they did not directly communicate with Plaintiff
and, instead, had the Law Firm Defendants communicate with Plaintiff, through the collection
complaint, on their behalf. 3 (Id. at 8.) However, a defendant need not communicate directly with
a consumer in order to be considered a debt collector for purposes of the FDCPA: section 1692a(6)
includes “any person . . . 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). As
a result, this Court finds that the Amended Complaint sufficiently alleges that the Defendants are
debt collectors.
B. Whether the Amended Complaint Sufficiently Alleges a Violation of the FDCPA
As discussed above, Plaintiff puts forth essentially four bases on which she believes
Defendants violated the FDCPA. This Court will address each in turn.
a. Misrepresentation of Attorney Involvement in Filing the Collection Complaint
As the court recognized in Bock v. Pressler & Pressler, LLP, “[a] civil complaint . . . may
be misleading within the meaning of FDCPA if it implies attorney involvement, but such
involvement is lacking.” 30 F. Supp. 3d 283, 299 (D.N.J. 2014), as corrected (July 1, 2014), as
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Defendants’ Motion does not challenge Plaintiff’s assertion that the Law Firm Defendants are debt
collectors.
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corrected (July 7, 2014). Accordingly, Plaintiff claims that Defendants violated FDCPA sections
1692e and 1692f by filing the collection complaint “without first having an attorney individually
review the file, make the appropriate inquiry, and exercise professional judgment . . . .” (Am.
Compl. ¶ 128.) In support of this allegation, Plaintiff claims the Law Firm Defendants filed 195
complaints on the same day they filed the collection complaint. (Compl. ¶¶ 45-81.) In addition,
Plaintiff contends that a lack of meaningful attorney involvement is shown because the collection
complaint includes the following two allegedly contradictory statements:
1. Defendant is indebted to the original creditor, LVNV Funding LLC, in the
amount of $1,000.48 after failing to make agreed upon payments on his/her credit
card . . . .
4. There is now due and owing to Plaintiff the sum of $1,010.48 plus costs of suit.
(Am. Compl., Ex. B.) In response, Defendants contend that Plaintiff has not alleged sufficient
factual content to plausibly claim the collection complaint was filed without meaningful attorney
involvement. (Defs.’ Br. Supp. 9-16.) This Court agrees.
Although Plaintiff contends that Defendants misrepresented the level of attorney
involvement in creating and filing the collection complaint, Plaintiff does not provide any
information in the Amended Complaint as to (1) the number of attorneys employed by the Law
Offices of Faloni & Associates, LLC, (2) the number of attorneys who actually reviewed the
collection complaint, or (3) over what period of time the collection complaint was drafted and
reviewed. (See Am. Compl.) Without these details, Plaintiff’s allegations regarding attorney
involvement are speculative and do not support a plausible claim for violation of the FDCPA based
on a lack of meaningful attorney involvement. Bell Atl. Corp. v. Twombly, 550 U.S. 544, 545
(2007) (“Factual allegations must be enough to raise a right to relief above the speculative level.”);
see, e.g., Morales v. Pressler & Pressler LLP, No. CIV.A. 15-236 JLL, 2015 WL 1736350, at *3
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(D.N.J. Apr. 16, 2015) (dismissing an attorney involvement FDCPA claim for failure to state a
claim); Barata v. Nudelman, Klemm & Golub, P.C., No. CIV. 2:13-4274 KM, 2015 WL 733628,
at *4 (D.N.J. Feb. 19, 2015) (dismissing an attorney involvement FDCPA claim when “[t]he only
factual basis for [the] allegation [was] the ‘number of collection letters’ sent by [the defendant], a
circumstance that supposedly implies that meaningful attorney review was ‘impossible.’”). 4 As a
result, Plaintiff’s FDCPA claims based on lack of attorney involvement in filing the collection
complaint must be dismissed.
b. Attempting to Collect the Debt Without a License to Purchase the Debt
Plaintiff’s second claim is, in essence, that New Jersey law required the Purchaser
Defendants to obtain a license before purchasing the Debt, that the Purchaser Defendants did not
obtain such a license, and that, therefore, the Defendants’ made false or misleading representations
in attempting to collect the Debt through the collection complaint, in violation of FDCPA sections
1692e (2)(A) and (e)(10). 5 (Am. Compl. ¶¶ 3, 82-86, 129.) In other words, Plaintiff contends
that Defendants violated the FDCPA by misrepresenting that they had the right to collect payment
on the Debt when, in fact, they did not. (Id. ¶¶ 82-86, 129.)
Under the New Jersey Consumer Finance Licensing Act, “consumer lenders;” defined as
“a person licensed, or a person who should be licensed, under [N.J.S.A §§ 17:11C et seq.] to
engage in the consumer loan business; are prohibited from “engag[ing] in business as a consumer
4
Although Plaintiff alleges in the Amended Complaint that Defendants violated FDCPA sections 1692e
(including subsections e(2)(a), e(3), and e(10)) and 1692f by filing the collection complaint without
meaningful attorney involvement, dismissal is appropriate as to each of these claims because the Amended
Complaint does not contain sufficient factual allegations to support Plaintiff’s claim that the collection
complaint was, in fact, filed without meaningful attorney involvement.
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Although Plaintiff also lists section 1692e(5) in paragraph 129 of the Amended Complaint, Plaintiff does
not appear to provide any factual support for such a claim in the Amended Complaint and makes no mention
of section 1692e(5) in her Opposition. Such a “[t]hreadbare recital[] of the elements of a cause of action,
supported by mere conclusory statements, do[es] not suffice.” Iqbal, 556 U.S. at 678. Accordingly, Plaintiff
failed to state a plausible claim for relief under Section 1692e(5).
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lender or sales finance company without first obtaining a license or licenses under this act”
N.J.S.A. § 17:11C-3. Moreover, the NJCFLA specifies that “[a]ny person directly or indirectly
engaging in the business . . . of buying, discounting or endorsing notes, or of furnishing, or
procuring guarantee or security for compensation in amounts of $50,000 or less, shall be deemed
to be engaging in the consumer loan business.” Id. § 17:11C-2. Based on these criteria, Plaintiff
claims, and Defendants do not appear to deny, that Defendants are “consumer lenders” under the
NJCFLA. (Am. Compl. ¶¶ 82-86.) In addition, Plaintiff claims, and Defendants do not deny, that
Defendant’s did not obtain the license the NJCFLA requires. (Id.) Rather, Defendants contend
that their lack of a consumer lender license “is of no moment” because a debt collector’s violation
of state law does not, by itself, violate the FDCPA. (Defs.’ Br. Reply 9.) However, this argument
misses the point. Plaintiff does not contend that Defendant’s lack of a consumer lender license
itself violates the FDCPA. Instead, Plaintiff argues that Defendants misrepresented the legal status
of the Debt and used false or deceptive means to attempt to collect the Debt, by filing the collection
complaint when they were not licensed to purchase the debt in the first place.
Although Defendants contend filing the collection complaint when they lacked a consumer
lender license could not have violated the FDCPA, this argument conflicts with the FDCPA’s
broad remedial purpose of eliminating abusive debt collection practices. See Allen ex rel. Martin
v. LaSalle Bank, N.A., 629 F.3d 364, 367 (3d Cir. 2011) (“The FDCPA is a remedial statute, and
we construe its language broadly so as to effect its purposes.”) (citing Brown v. Card Serv. Ctr.,
464 F.3d 450, 453 (3d Cir. 2006)). Instead, a debt collector’s representation in a collection
complaint that it had the right to collect a debt when, in fact, it lacked the license required to
initially purchase the debt, would violate, at minimum, FDCPA section e(10). See, e.g., Veras v.
LVNV Funding, LLC, No. CIV. 13-1745 RBK/JS, 2014 WL 1050512, at *6 (D.N.J. Mar. 17, 2014)
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(“Plaintiff's allegation that Defendants attempted to collect Plaintiff’s debt in contravention of the
NJCFLA is sufficient to at least support his claim under section 1692e(10), that Defendants used
a false representation or deceptive means to collect or attempt to collect Plaintiff’s debt.”).
Moreover, as U.S. District Judge Robert B. Kugler explained in Veras v. LVNV Funding, LLC, “it
would strain logic to conclude that if a debt collector is prohibited from engaging in debt collection
activity in a state, he avoids the risk of liability under the FDCPA so long as he conceals this fact
and does not make any representation that he actually has debt collection authority.” 2014 WL
1050512, at *5. Accordingly, dismissal of Plaintiff’s claims under sections 1692e(2)(A) and
(e)(10), based on the Purchaser Defendants’ lack of a license required by NJCFLA, is inappropriate
at this time. 6
c. Charging Unauthorized Interest
In addition to Plaintiff’s contentions regarding the NJCFLA licensing requirement
discussed above, Plaintiff also claims that Defendants’ attempt to collect the Debt without first
obtaining a license violated FDCPA section 1692f(1), which prohibits “[t]he collection of any
amount (including any interest, fee, charge, or expense incidental to the principal obligation)
unless such amount is expressly authorized by the agreement creating the debt or permitted by
law.” 15 U.S.C. § 1692f(1). (Am. Compl. ¶¶ 82-91, 129; Pl.’s Br. Opp. 30-31.) However,
Plaintiff’s allegations under Section 1692f(1) concentrate on the fact that Defendants were not
licensed to collect consumer debt rather than on the amount Defendants sought in the collection
complaint. (Am. Compl. ¶¶ 82-91; Pl.’s Br. Opp. 30-31.) Moreover, Plaintiff does not provide
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Having found that Plaintiff sufficiently pled a claim for violation of section 1692e(10), this Court need
not consider whether Plaintiff also sufficiently pled a claim under Section 1692e(2). See Veras, 2014 WL
1050512, at *6 n.8.
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any details as to the agreement which created the Debt and whether, as Defendants contend, that
agreement allowed a debt collector to charge interest on the Debt. (See Am. Compl.) As a result,
Plaintiff has failed to state a plausible claim for relief under Section 1692f(1). See, e.g., Chulsky
v. Hudson Law Offices, P.C., 777 F. Supp. 2d 823, 832 (D.N.J. 2011) (holding that a plaintiff failed
to sufficiently allege a claim under section 1692f(1) when the complaint “focus[ed] on [the
defendant’s] inability to legally purchase the debt under [state law] . . . . [and did] not speak to the
amount sought . . . .”)
d. Reporting the Debt to Credit Reporting Agencies
Plaintiff’s fourth claim is that the Purchaser Defendants “communicated credit information
regarding [the Debt] to . . . consumer reporting agencies balances [sic] higher than the original
balances on multiple occasions.” (Am. Compl. ¶ 93.) The Amended Complaint provides no
further detail on what was reported to the credit reporting agencies, when it was reported, or how
what was reported was inaccurate. Moreover, although Plaintiff contends in her Opposition that
this behavior violated 15 U.S.C. § 1962e(8) (this Court assumes Plaintiff actually intended to claim
a violation of section 1692e(8)), she did not specify in the Amended Complaint which section of
the FDCPA this behavior allegedly violated.
Nonetheless, in an effort to add further factual support for her claim, Plaintiff’s Opposition
states: “If a complaint contains three different balances for the alleged debt, then, by logic whatever
[sic] information that is [sic] furnished to the credit reporting agency as to the alleged debt balance
will differ from at least two of the stated balances.” (Pl.’s Br. Opp. 32.) However, this contention
does not cure the deficiencies in the Amended Complaint: Plaintiff did not provide any detail as
to what information Defendants provided to the credit reporting agencies. As a result, Plaintiff
has not alleged sufficient factual matter to support her claim that Defendants “communicated to
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any person information which is known or which should be known to be false . . . .” 15 U.S.C. §
1692e(8) (emphasis added). Accordingly, Plaintiffs claim under FDCPA section 1692e(8) must
be dismissed.
IV.
CONCLUSION
For the reasons set forth above, Defendants’ Motion to Dismiss is GRANTED in part and
DENIED in part. An appropriate order follows.
s/ Susan D. Wigenton
SUSAN D. WIGENTON
UNITED STATES DISTRICT JUDGE
Orig:
cc:
Clerk
Steven C. Mannion, U.S.M.J.
Parties
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