MIGDAL v. PORTFOLIO RECOVERY ASSOCAITES, LLC

Filing 22

OPINION. Signed by Chief Judge Jose L. Linares on 7/19/17. (sr, )

NOT FOR PUBLICATION
UNITED STATES DISTRICT COURT
DISTRICT OF NEW JERSEY
DEBORAH MIGDAL on behalf of herselfand
those similarly situated,

Civil Action No.: 16-4750 (JLL)
Plaintiff,
OPINION
V.

PORTFOLIO RECOVERY ASSOCIATES, LLC,
Defendant.
LINARES, Chief District Judge.
This matter comes before the Court by way of Defendant Portfolio Recovery Associates,
LLC’s Motion to Dismiss and Compel Arbitration pursuant to federal Rule of Civil Procedure
12(b)(6). (ECF No. 12-1). Plaintiff has opposed this motion (ECF No. 18), to which Defendant
has replied. (ECF No. 21). The Court has considered the parties’ submissions and decides this
matter without oral argument pursuant to Rule 78 of the Federal Rules of Civil Procedure. For the
reasons set forth below, the Court denies Defendant’s Motion to Dismiss.
I.

BACKGROUND’

Plaintiff Deborah Migdal is a New Jersey citizen who resides in Bergen County, New
Jersey. (ECF No. 1 (“Compl.”) at ¶ 4). Defendant Portfolio Recovery Associates, LLC, is a debt
collector located in Virginia. (Id. at

¶

5). Plaintiff brings this action asserting that Defendant

violated the Fair Debt Collection Practices Act (“FDCPA”) when Defendant contacted her seeking
to collect on an allegedly overdue debt.

This background is derived from Plaintiffs Complaint, which the Court must accept as true at this stage of the
proceedings. See Aiston V. Countiywide fin. Corp., 585 f.3d 753, 758 (3d Cir. 2009). (ECF No. 1).

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Specifically, on August 5, 2015, Defendant sent Plaintiff a letter stating that it was a debt
collector and sought to recover monies in connection with Plaintiffs overdue Banana Republic
Credit Card. (Id. at

¶

14). Said account is a retail account that can only be used at select stores

and cannot be used to obtain cash advances. (Id. at JJ 18-22). The underlying financial institution
for the account was GE Money Bank. Plaintiff made her last payment to GE Money Bank on
September 18, 2009 and defaulted on the account in October 2009. (Id. at

¶ 25-27).

Defendant

later purchased the defaulted account and began its attempts to collect the outstanding debt. (Id.
at ¶ 31; Exhibit A).
Plaintiff brings this putative class action against Defendant for attempting to collect timebarred debts from New Jersey consumers in violation of the FDCPA. (Compi.

¶

1; 15 U.S.C.

§

1692). She alleges that the statute of limitations for the sale of goods is four years and had run by
the time Defendant contacted her. (Id. at

¶J 33-34).

She further contends that Defendant’s letter

failed to disclose the statute of limitations and its language falsely implies that the accounts are
legally enforceable. (Id. at

¶J 43-47).

On April 28, 2017. Defendant filed the subject Motion to

Dismiss and Compel Arbitration. (ECF No. 12-1).
II.

LEGAL STANDARD

To withstand a Motion to Dismiss for failure to state a claim, “a complaint must contain
sufficient factual matter, accepted as true, to ‘state a claim of relief that is plausible on its face.”
Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Att. Corp. v. Twomblv, 550 U.S. 544,
570 (2007)). “A claim has facial plausibility when the plaintiff pleads factual content that allows
the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.”
Iqbal, 556 U.S. at 678 (citing Twombly, 550 U.S. at 556). “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.
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To determine the sufficiency of a complaint under Twombly and Iqbal in the Third Circuit,
the Court must take three steps: first, the Court must take note of the elements a plaintiff must
plead to state a claim; second, the Court should identify allegations that, because they are no more
than conclusions, are not entitled to the assumption of truth; finally, where there are well-pleaded
factual allegations, a court should assume their veracity and then deternine whether they plausibly
give rise to an entitlement for relief. See

Connellv

Lane constr. Corp., $09 F.3d 780, 787 (3d

Cir. 2016) (citations omitted). “In deciding a Rule 12(b)(6) motion, a court must consider only
the complaint, exhibits attached to the complaint, matters of the public record, as well as
undisputedly authentic documents if the complainant’s claims are based upon these documents.”
Mayer v. Beticlzick, 605 F.3d 223, 230 (3d Cir. 2010).
III.

ANALYSIS

Defendant contends that the Court should dismiss Plaintiff’s complaint and compel
arbitration.

It argues that by using a “Synchrony” credit card, Plaintiff accepted the Retail

Installment Credit Agreement (“Credit Agreement”) as set forth in Exhibit A of Defendant’s
Motion. (ECF No. 12-2 at 17).2 Specifically, Defendant asserts that the arbitration provision,
choice of law provision, and class action waiver contained in the Credit Agreement apply to the
present dispute.

(Id. at 15).

In opposition, Plaintiff refutes the applicability of the Credit

Agreement to her 2009 transactions through GE Money Bank.3 (ECF No. 18). Tn response to
Plaintiffs opposition, Defendant raises the additional argument that Plaintiff cannot rely on the

Terms and Conditions of her Banana Republic Account to bring this claim while simultaneously

The Court notes that Defendant’s Motion to Dismiss does not attack the sufficiency of Plaintiffs allegations, and
relies solely on its argument in favor of compelling arbitration.
Plaintiffs argument regarding inadmissibility of the “Business Records Affidavit,” (ECF No. 12-1, exhibit C),
pursuant to Federal Rule of Evidence 802, (ECF No. 18 at 10), is not applicable at this stage of the litigation, as the
Court may only rely on Plaintiffs Complaint and any relevant attachments thereto. See n. 1, supra.

2

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denying that there is a contract between her and Defendant. (ECF No. 21 at 5). However, since
Defendant did not raise this argument in its original motion, and Plaintiff did not broach this
subject in her opposition, Rule 7 of the Federal Rules of Civil Procedure dictates that the Court
cannot consider this argument as it exceeds the scope of the original Motion and Plaintiffs
Opposition. See also Local Rule 7.1. When reviewing the Complaint, and accepting all the
allegations therein to be true, the Court finds that the Defendant has failed to show that the Credit
Agreement governs the matter sub judice, and Plaintiff has alleged sufficient allegations to
overcome Defendant’s Motion to Dismiss.
While it is true that written arbitration provisions are normally binding, the enforceability
of an arbitration clause is a matter of law for courts to decide. See AT&T Techs. v. Commc ‘ns
Workers ofAm., 475 U.S. 643, 649 (1986). “Unless the parties clearly and unmistakably provide
otherwise, the question of whether the parties agreed to arbitrate is to be decided by the court, not
the arbitrator.” Id. “[A] party cannot be required to submit to arbitration any dispute which he has
not agreed so to submit.” United Steelworkers ofAm. v Warrior & GulfNay. Co., 363 U.S. 574,

582 (1960). Therefore, the Court cannot compel a plaintiff to submit to arbitration unless she had
previously agreed to do so.
While Defendant relies on the Credit Agreement in support of such consent, there is not
even a scintilla of evidence that Plaintiff herself received the Credit Agreement, let alone signed
it. Defendant has not established that Plaintiff was a party to the Credit Agreement or that the
Credit Agreement was applicable to her 2009 transactions through GE Money Bank. For one
thing, the Credit Agreement is clearly attributable to “Synchrony Bank,” but Defendant fails to
show any connection between “Synchrony Bank” and GE Money Bank. Defendant relies on a
“Business Records Affidavit” made by Ms. Marie Moua to show that on June 2, 2014 GE Capital

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___________________

Retail Bank formally changed its name to Synchrony Bank. (ECF No. 12-2, exhibit C at 2).
However, Defendant has not shown that GE Capital Retail Bank has any connection to, let alone
is the same institution as, GE Money Bank. Accordingly, the Court is not convinced, at this
juncture, that Plaintiff was ever a party to the Credit Agreement, and, therefore, will not dismiss
her Complaint pursuant to same.
Even if one supposed that GE Capital Retail Bank and GE Money Bank are the same,
Defendant does not offer evidence that the attached agreement was in effect in 2009. Moreover,
even if the Agreement in question was in effect at the time of the debt, Defendant has not shown
that Plaintiff received the tents of the Agreement prior to using the credit card, or that the credit
institution used said agreement for Plaintiffs account.

Additionally, the Credit Agreement

attached to Defendant’s motion does not contain Plaintiffs name or signature, nor is there any
other infonriation included that would indicate Plaintiff agreed to be governed by said agreement.
As a result, there is no evidence that the Agreement governs the parties’ relationship and thus the
arbitration agreement is unenforceable at this phase of the litigation.
Since Defendant has failed to establish that the Credit Agreement governs the relationship
between Plaintiff and GE Money Bank, the Court need not address Defendant’s arguments
regarding the choice of law provision and class action waiver contained in said agreement.
IV.

CONCLUSION

F or the reasons above, the Court denies Defendant’s Motion to Dismiss and Compel
Arbitration. An appropriate Order accompanies this Opinion.

DATED:

July,

2017

J%SE L. LTNARES
,‘thief Judge, United States District Court

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