CARIERI v. MIDLAND CREDIT MANAGEMENT, INC. et al
OPINION. Signed by Chief Judge Jose L. Linares on 6/26/2017. (JB, )
NOT FOR PUBLICATION
UNITED STATES DISTRICT COURT
DISTRICT OF NEW JERSEY
CIVIL ACTION NO. 17-0009 (JLL)
MIDLAND CREDIT MANAGEMENT, INC.,
LINARES, Chief District Judge
The plaintiff, Vincent Carieri, brought this action to recover damages for an
alleged violation of the Fair Debt Collection Practices Act (hereinafter, “the FDCPA”) by
the defendant, Midland Credit Management, Inc. (hereinafter, “MCMI”). (See ECF No.
1.) MCMI now moves for judgment on the pleadings pursuant to Federal Rule of Civil
Procedure (hereinafter, “Rule”) 12(c). (See ECF No. 10 through ECF No. 10-10; ECF
No. 15 through ECF No. 15-4.) Carieri opposes the motion. (ç ECF No. 14.)
The Court will resolve the motion upon a review of the papers and without oral
argument. See L.Civ.R. 78.1(b). The Court presumes the familiarity of the parties with
the factual context and the procedural history of the action. For the following reasons,
the motion is granted.
Carieri incurred a debt of $4,491.47 that MCMI acquired by assigmTlent. (See
ECF No. 1 at 5—6.) MCMI sent a notice (hereinafter, “the Notice”) to Carieri that
contained the following offer to extinguish his debt:
AVAILABLE PAYMENT OPTIONS
Option 2: 20% OFF Over 12 months
Option 3: Monthly Payments As Low As: $50 per month
Call today to discuss your options and get more details.
Benefits of Paying Yotir Debt
Save $1,796.58 if you pay by 06-24-2016
- Put this debt behind you
- No more communication on this account
- Peace of mind
After receiving your final payment, we will consider the account paid.
(ECF No. 1 at 13.)
furthermore, the Notice included a payment certificate at the bottom, which: (1)
set forth instructions on how to pay the debt; and (2) contained the following language
directed at Carieri: “I would like to take advantage of this offer and save 40%.” (çi)
Carieri alleges in the complaint that the Notice ran afoul of the FDCPA because
MCMI failed to advise Carieri “that the $1,796.58 savings may cause a tax consequence
thereby reducing the actual savings amount that EMCMI] specifically represented.” (ECF
No. 1 at 8.) In other words, Carieri alleges that MCMI violated the FDCPA by failing to
advise him that the amount that he saved could have an impact on his taxes, because that
amount could be treated as taxable income. (See ECF No. 1 at 9.)
Pursuant to Rule 12(c), the movant for judgment on the pleadings must establish:
(1) that no material issue of fact remains to be resolved; and (2) the entitlement to
judgment as a matter of law. See Rosenau v. Unifund Corp., 539 F.3d 218, 221 (3d Cir.
2008) (citing Jablonski v. Pan Am. World Airways, Inc., 863 F.2d 289, 290—91 (3d Cir.
1988)). In resolving a motion made pursuant to Rule 12(c), the Court must view the facts
in the pleadings and the inferences therefrom in the light most favorable to the non
movant. See Rosenau, 539 F.3d at 221. Furthermore, even though a motion for
judgment on the pleadings is appropriate after the pleadings have been closed, such a
motion is reviewed under the same standards that apply to a motion to dismiss made
under Rule 12(b)(6). See Szczurek v. Prof 1 Mgrnt. Inc., 627 Fed.Appx. 57, 60 (3d Cir.
2015) (citing Revell v. Port Auth. ofN.Y. & N.J., 598 F.3d 128, 134 (3d Cir. 2010)).
MCMI argues in support of its motion for judgment on the pleadings that the
FDCPA does not impose a duty upon a debt collector to notify a debtor of the potential
tax consequences for settling a debt at a discount. (See ECF No. 10-1.) In opposition,
Carieri argues that MCMI’s failure to include such guidance in the Notice is misleading,
and is thus violative of the FDCPA. (See ECF No. 14.) The Court is not persuaded by
Carieri s arguments.
The Court is unaware of any opinions issued by either the Third Circuit Court of
Appeals or the district courts within the District of New Jersey that have addressed this
issue. (See ECF No. 10-1 at 9 (MCMI arguing, “No court in New Jersey has ruled on
whether a settlement offer that does not disclose theoretical tax consequences violates the
FDCPA. In fact, no court in this Circuit has addressed this issue.”); ECF No. 15 at 6
(MCMI stating that “Courts in the Third Circuit have not [been] confronted with this
However, the Court is persuaded by the opinions issued by other federal courts
that have specifically held that the FDCPA does not impose a duty on a debt collector to
advise a debtor of the tax consequences of accepting a debt settlement.
J.C. Christensen & Assocs., Inc., 786 F.3d 191, 194 (2d Cir. 2015) (holding that a debt
collection letter did not violate the FDCPA, even though the letter did not warn of
potential tax consequences when it set forth the percentage that would be saved against
an outstanding balance if the debtor paid a certain discounted amount); Smith v. Nat’l
Enter. Sys., Inc., No. 15-451, 2017 WL 1194494, at *3 (W.D. Okla. Mar. 30, 2017)
(holding the fact that a debtor might owe income tax on a forgiven debt “simply does not
make tthe debt collector’s] representations of savings from the outstanding balance false,
deceptive, or misleading” under the FDCPA); igerman v. Forster & Garbus LLP, No.
14-1805, 2015 WL 1223760, at *4_6 (E.D.N.Y. Mar. 16, 2015) (holding that the FDCPA
does not require a debt collector to instruct a debtor as to the potential tax consequences
of accepting a settlement offer); Landes v. Cavalry Portfolio Servs., LLC, 774 f.Supp.2d
800, 804—05 (E.D. Va. 2011) (holding that the FDCPA contains no language that
mandates an affirmative disclosure to a debtor of the tax consequences of settling a debt
with a debt collector); Schaefer v. ARM Receivable Mgrnt., Inc., No. 09-11666, 2011
WL 284776$, at *5 (D. Mass. July 19, 2011) (holding that the “language of the FDCPA
does not require a debt collector to make any affirmative disclosures of potential tax
consequences when collecting a debt”).
Carieri primarily relies upon Ellis v. Cohen & Slarnowitz, LLP, 701 F.Supp.2d
215, 219—20 (N.D.N.Y. Mar. 26, 2010), which held that the failure of a debt collector to
warn a debtor about the tax consequences of a forgiven debt could constitute a claim
under the FDCPA. (See ECF No. 14 at 11—12.) However, the Second Circuit Court of
Appeals, which oversees the Northern District of New York, subsequently detenriined the
holding in Ellis to be “unpersuasive.” See Altman, 786 F.3d at 194. This Court also
finds the holding in Ellis to be unpersuasive, and declines to follow it.
Carieri also raises a second violation of the FDCPA for the first time in his
opposition brief, i.e., that the Notice does not make it clear that he was limited to
selecting only “Option 1” in order to receive a discount of $1,796.58 on his debt. (See
ECF No. 14 at 6.) However, Carieri did not assert that allegation in the complaint, and he
is barred from attempting to amend his claim by including new arguments in a brief in
opposition to a dispositive motion. See Corn, of Pa. ex rel. Zimmerman v. PepsiCo, Inc.,
836 f.2d 173, 181 (3d Cir. 1988) (noting that it “is axiomatic that the complaint may not
be amended by the briefs in opposition to a motion to dismiss”); see also Scott v. Cohen,
52$ Fed.Appx. 150, 152 (3d Cir. 2013) (holding that it is a basic principle that a
complaint may not be amended by the briefs in opposition to a motion to dismiss);
Warfield v. SEPTA, 460 Fed.Appx. 127, 132 (3d Cir. 2012) (holding that a “plaintiff may
not amend a complaint by raising arguments for the first time in a brief in opposition to a
motion for summary judgment”); Bell v. City of Philadelphia, 275 Fed.Appx. 157, 160
(3d Cir. 200$) (holding that a plaintiff may not amend the complaint by raising new
arguments in the brief in opposition to a motion for summary judgment). In any event,
the least sophisticated consumer, after reading the Notice in its entirety, would be
expected to understand that the $1,796.52 savings applies to Option 1 alone. See Dixon v.
Stern & Eisenburg, PC, 652 fed.Appx. 128, 131 (3d Cir. 2016) (holding that a debt
collector cannot be found liable under the FDCPA for “bizalTe or idiosyncratic
interpretations of collection notices”); Campuzano-Burgos v. Midland Credit Mgmt..
Inc., 550 F.3d 294, 299 (3d Cir. 200$) (holding that it is assumed that the least
sophisticated consumer will exhibit the “rational” characteristic of reading a collection
notice in its entirety).
Therefore, the Court grants MCMI’s motion for judgment on the pleadings.
For the aforementioned reasons, the Court grants MCMI’s motion for judgment on
the pleadings. The Court will enter an appropriate order and judgment.’
Judge, United States District Court
In granting “a motion for judgment on the pleadings pursuant to Fed.R.Civ.P.
12(c), the [Court’s] order should enter judgment in favor of [MCMI] instead of dismissing
[Carieri’s] claims.” Dukes v. Lancer Ins. Co., 390 Fed.Appx. 159, 163 (3d Cir. 2010)
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