COLES v. ZUCKER GOLDBERG & ACKERMAN et al
OPINION filed. Signed by Judge Freda L. Wolfson on 7/29/2015. (kas, )
*NOT FOR PUBLICATION*
UNITED STATES DISTRICT COURT
DISTRICT OF NEW JERSEY
Civil Action No. 14-1612(FLW)
ZUCKER GOLDBERG & ACKERMAN, et
WOLFSON, District Judge:
Plaintiff Egenious Cole (“Plaintiff” or “Coles”) brings the
instant suit, alleging that Zucker, Goldberg and Ackerman, LLC
(“ZGA”), Ballard Spahr (“Spahr”) and PNC Bank, N.A. (“PNC”), who
(“National City”) 1, (collectively “Defendants”), violated the Fair
Debt Collection Practices Act (“FDCPA”), 15 U.S.C. § 1692-1692(p),
when Defendants allegedly wrongfully commenced a state foreclosure
action against Coles in 2009 and fraudulently misrepresented that
National City was the creditor-plaintiff.
In the present matters,
ZGA, as well as PNC and Spahr, move separately for a dismissal of
the one-count Amended Complaint. For the reasons set forth herein,
The Court will refer to National City and PNC interchangeably.
dismissed without prejudice.
For the purposes of these motions, the Court recounts the
allegations in the Amended Complaint and takes them as true.
or about December 28, 2004, Plaintiff obtained a mortgage in the
amount of $584,910.00 from National City concerning real property
located in Plainfield, New Jersey. Pl.’s Am. Compl. ¶¶ 10-12. The
Mortgage Note required Plaintiff to make monthly payments in
connection with the subject residential home. Plaintiff paid the
mortgage payments until March 1, 2009. Id. at ¶ 14. On or about
April 1, 2009, National City declared the mortgage in default. Id.
at ¶ 15. A Notice of Intention to Foreclose was issued to Plaintiff
on May 28, 2009, naming National City as the lender. Id. at ¶¶ 1315.
Notably, Plaintiff does not dispute that she was in default
on the loan.
Subsequently, on August 5, 2009, defendant ZGA, as counsel
for National City, filed a foreclosure action against Plaintiff in
the Superior Court of New Jersey, Chancery Division, Union County.
Id. at ¶ 15. On October 19, 2009, Coles filed an answer to the
state court complaint contesting the foreclosure. Id. at ¶ 16.
December 2009, during the discovery phase of the state court
proceedings, Coles’ counsel served several interrogatories on ZGA.
Id. at ¶ 22. Specifically, Coles inquired about National City’s
“role and/or connection with regard to the Note and Mortgage.”
Id. at ¶ 25.
Prior to answering these interrogatories, Spahr
substituted as counsel for National City, and in August 2010,
provided responses to Coles’ interrogatories. See Id. at ¶¶ 23,
24. National City expressly stated that “[t]he Plaintiff, National
City Mortgage Co. d/b/a Eastern Mortgage Services originated the
loan at issue. The Note and Mortgage have not been assigned.” Id.
interrogatory regarding possession of the mortgage by stating that
“National City has possession of the Note originally executed by
the Defendant.” Id. at ¶ 27.
Furthermore, when asked if the
mortgage/note had been included or incorporated into any type of
Trust, National City responded by stating “National City objects
to this request as not relevant to the subject matter of this
litigation. The Note and Mortgage have not be assigned.” Id. at ¶
On September 13, 2013, the state foreclosure action was
prosecution. Id. at ¶ 40; Am. Compl., Ex. J. However, on that same
day, ZGA issued a notice to Plaintiff informing her that PNC, the
successor-in-interest to National City, intended to revive the
dismissed-foreclosure action and apply for a final judgment of
complying with U.S. Bank, N.A. v. Guillaume, 209 N.J. 449 (2012),
Intention to Foreclose to Plaintiff. Am. Compl., ¶ 43. That Notice
named Wilmington Trust Company, not in its individual capacity,
but solely as Successor Trustee to U.S. Bank National Association,
as Trustee, for MASTR Alternative Loan Trust 2005-4 (“Wilmington
Trust Company”), as the holder of Coles’ mortgage as of June 25,
Id. at ¶ 37.
See Assignment of Mortgage dated June 25,
According to Plaintiff, she did not become aware that
Wilmington Trust Company was the holder of her mortgage until she
was served with the revised notice on December 31, 2013. Id. ¶¶ at
Subsequently, on March 13, 2014, Plaintiff initiated this
Following this Court’s Order, dated November 16, 2014,
Plaintiff filed an Amended Complaint, alleging that Defendants
collectively violated: (1) 15 U.S.C. § 1692(f)(1) by using unfair
involvement in collection activities and communication during the
30-day period inconsistent with and overshadowing her rights and,
consequence of which is to harass, oppress, or abuse Plaintiff by
continuing to pursue the collection of a disputed and unverifiable
debt, filing suit on an invalid debt, and forcing Plaintiff to
defend against an invalid action. Id. at ¶¶ 61- 65.
The gravamen of Plaintiff’s claim is her allegation that the
assignment of her mortgage is “rigidly governed and controlled by
the Pooling and Servicing Agreement dated as of May 1, 2005 that
pertains to MASTR Alternative Loan Trust 2005-4 along with Mortgage
Pass-Through Certificates, Series 2005-4.” Id. at ¶ 49. Plaintiff
alleges that based on certain terms of that Pooling Agreement, all
mortgage, had a “Closing Date” of May 27, 2005.
Id. at ¶ 50.
Based on that “Closing Date,” Plaintiff avers that the assignment
of her mortgage must have taken place sometimes prior to May 27,
2005, which date is before the 2009 state foreclosure action.
Id. at ¶ 56.
In that connection, Plaintiff claims that the alleged
transfer of her mortgage on June 25, 2013, could not have occurred
since the loan was assigned prior to May 2005.
Plaintiff, not only did Defendants misrepresent National City as
the creditor in the 2009 state foreclosure action, but Defendants
also purposely concealed the transfer of the loan by listing an
incorrect, later date of June 2013 on the Assignment of Mortgage. 2
Plaintiff also alleges that the June 25, 2013 assignment was
“invalid.” However, Plaintiff’s theory of liability under the
FDCPA is that Defendants fraudulently concealed the true holder of
her mortgage in the 2009 state court foreclosure action, which
assumes that the transfer occurred prior to 2009, in 2005.
Therefore, it cannot also be Plaintiff’s position that the
assignment of her loan to Wilmington Trust Company in 2013 was
Indeed, if such a transfer was invalidated, National
City/PNC would have been not only the owner of the loan in 2009,
Id. at ¶ 42. Taken together, Plaintiff avers, the 2005 foreclosure
action filed by National City was “...flatly a ‘sham,’ ‘a piece of
frivolous litigation’ and ‘a fraud on the court and all involved
parties’” in violation of the FDCPA.
Id. at ¶ 59.
Plaintiff’s claims on various grounds, including timeliness and
failure to state a claim under the FDCPA.
Standard of Review
In reviewing a motion to dismiss on the pleadings, the court
complaint, the plaintiff may be entitled to relief.” Phillips v.
Cnty. Of Allegheny, 515 F.3d 224, 233 (3d Cir. 2008) (citation and
quotations omitted). As such, a motion to dismiss for failure to
state a claim upon which relief can be granted does not attack the
merits of the action but merely tests the legal sufficiency of the
complaint. Fowler v. UPMC Shadyside, 578 F.3d 203, 210 (3d Cir.
2009) (internal quotations omitted); see also Fed.R.Civ.P. 8(a)
(2) (“[a] pleading that states a claim for relief ... must contain
a short and plain statement of the claim showing the pleader is
entitled to relief”). In other words, to survive a Fed R. Civ P.
but would still be the owner of her loan, and there could be no
FDCPA claim related to the 2009 state foreclosure filing.
12(b)(6) motion to dismiss for failure to state a claim, “a
complaint must contain sufficient factual matter, accepted as
true, to ‘state a claim for relief that is plausible on its face.’”
Id. (quoting Bell Atlantic Corp. v. Twombly, 550 U.S. 554, 570
However, “the tenet that a court must accept as true all the
allegations contained in the complaint is inapplicable to legal
conclusions. Threadbare recitals of the elements of a cause of
suffice.” Id. (citing Twombly, 550 U.S. at 555). Plaintiff need
not meet any particular “probability requirement” but must show
that there is “more than a sheer possibility that the defendant
Moreover, “context matters in notice pleading” and a complaint
will fail to state a claim if the “factual detail in the claim is
so underdeveloped that it does not provide a defendant with the
8.” Phillips, 515 F.3d at 232.
When presented with a motion to dismiss, the court should
engage in a two-part analysis. Fowler, 578 F.3d at 210. First, the
claim. Id. It must accept all of the complaint's well-pleaded facts
as true, but may disregard any legal conclusions.” Id. at 210–11
(citing Ashcroft v. Iqbal, 556 U.S. 662, 667 (2009)). Second, the
court must determine whether the facts alleged are “sufficient to
show that the plaintiff has ‘a plausible claim for relief.’” Id. at
reviewing court to draw on its judicial experience and common
sense.” Iqbal, 556 U.S. at 679. In other words, for the plaintiff
to prevail, the “complaint must do more than allege the plaintiff's
entitlement to relief;” it must “‘show’ such an entitlement with
its facts.” Fowler, 578 F.3d at 211 (citing Phillips, 515 F.3d at
Basketball Officials, 710 F.3d 114, 118 (3d Cir. 2013) (“[A]
claimant does not have to ‘set out in detail the facts upon which
he bases his claim.’ ... The pleading standard ‘is not akin to a
‘probability requirement,’ ‘... to survive a motion to dismiss, a
Statute of Limitations
Under 15 U.S.C. § 1692k of the FDCPA, a plaintiff must bring
a claim within one year from the date on which the violation
Plaintiff’s claims are barred by the statute of limitations because
Plaintiff had only one year to commence this action after National
City filed a state foreclosure complaint on August 5, 2009.
limitations began to run on the date when National City commenced
the state action because that is the date on which Plaintiff claims
the alleged violation occurred – filing the complaint in the name
of National City when it was not a mortgagor on that date.
Wilmington Trust Company.
Therefore, Plaintiff contends that,
under the doctrine of equitable tolling, the statute of limitations
did not begin to run until December 31, 2013, when she was served
with the revised Notice of Intention to Foreclose, which named
Wilmington Trust Company as the holder of Plaintiff’s mortgage.
The doctrine of equitable tolling is only applicable when
inequitable circumstances, and in that regard, equitable tolling
should be sparingly applied by courts. 3
559 F.3d 189, 197 (3d Cir. 2009);
Santos v. United States,
Parker v. Pressler & Pressler,
LLP, 650 F. Supp.2d 326, 340 (D.N.J. 2009); see Glover v. F.D.I.C.,
698 F.3d 139, 151 (3d Cir. 2012); Seitzinger v. Reading Hosp. &
The Court notes that the Third Circuit has not had the
occasion to address the question whether the FDCPA's statute of
limitations is jurisdictional.
Some circuits, like the Eighth
Circuit, have found that the statute of limitations under the FDCPA
is indeed a jurisdictional inquiry, see Mattson v. U.S. West
Communications, Inc., 967 F.2d 259, 262 (8th Cir. 1992), and
therefore, the FDCPA is “not subject to waiver or tolling.” See,
e.g., Zhang v. Haven-Scott Assocs., No. 95-2126, 1996 U.S. Dist.
LEXIS 8738, at *34 (E.D. Pa. Jun. 21, 1996). As discussed infra,
the Court need not decide this question here.
Med. Ctr., 165 F.3d 236, 240 (3d Cir. 1999).
That said, a
plaintiff may be entitled to equitable tolling if the conduct of
viability of his or her claim within the limitations period. Kliesh
v. Select Portfolio Servicing Inc., 419 Fed. Appx. 268, 271 (3d
Cir. 2011). To properly plead fraudulent concealment, a plaintiff
must allege: (1) that the defendant actively misled the plaintiff,
(2) which prevented the plaintiff from recognizing the viability
of his or her claim within the limitations period, (3) where the
plaintiff’s ignorance is not attributable to his or her lack of
reasonable due diligence in attempting to uncover the relevant
facts. Mathews v. Kidder, Peabody & Co., Inc., 260 F.3d 239, 256
(3d Cir. 2001); see Forbes v. Eagleson, 228 F. 3d 471 (3d Cir.
Importantly, these factors must be pled with particularity
pursuant to Rule 9(b). Kontonotas v. Hygrosol Pharm. Corp., 424
Fed. Appx. 184, 187 (3d Cir. 2011); Fuqua v. Bristol-Meyers Squibb
Co., 926 F.Supp.2d 538 (D.N.J. 2013).
Equitable Tolling as to ZGA
Plaintiff maintains that her claims against ZGA should be
affirmative acts to conceal the transfer of Plaintiff’s loan to
Wilmington Trust Company, prior to 2009.
However, ZGA contends
Plaintiff also argues that the discovery rule tolls the
FDCPA’s statute of limitations. For one, it is not clear that the
that, based on the allegations, ZGA was not involved in any act
that mislead Plaintiff. 5
Indeed, the Amended Complaint only
attributes two affirmative acts to ZGA: (1) the filing of the
initial foreclosure complaint in 2009, and (2) the issuance of a
corrected Notice of Foreclosure and Order to Show Cause in December
2013. Compl. ¶¶ 20, 46-47.
I do not find that equitable tolling
applies to the claim asserted against ZGA.
As to the filing of the 2009 state court complaint, Plaintiff
alleges in a conclusory manner that Defendants, including ZGA,
collectively concealed the fact that National City was not the
holder of Plaintiff’s loan.
However, Plaintiff fails to allege,
under the heightened pleading requirements, that ZGA was aware of
the fact that Plaintiff’s loan was assigned to Wilmington Trust
Company prior to filing the state court foreclosure action. Absent
concealed the fact that National City was not the holder of
See Warner v. Ross, 164 Fed. Appx. 218, 220
(3d Cir. 2006); Parkhill v. Gordon, 80 Fed. Appx. 223, 226-27 (3d
discovery rule applies in the context of the FDCPA. See Goodson
v. Bank of Am., N.A., 600 Fed. Appx. 422, 427 (6th Cir. 2015);
Mattson, 967 F.2d at 262.
Even if the discovery rule applies,
Plaintiff’s entire argument on tolling is premised on an active
concealment theory, rather than the discovery rule. Therefore, I
will only address Plaintiff’s tolling arguments in the context of
Unlike Spahr and PNC, ZGA does not dispute that it is a debt
collector for the purposes of the FDCPA.
Cir. 2003); Bynum v. Trs. of the Univ. of Pa., No. 15-1466, 2015
unintentional, but mere mistake, misunderstanding, or lack of
knowledge is insufficient.”).
Therefore, because there are no
allegations that ZGA had any knowledge that National City was not
the true holder of Plaintiff’s mortgage, Plaintiff has failed to
allege that the filing of the state court complaint is an act of
concealment on the part of ZGA.
Next, contrary to Plaintiff’s arguments, the revised Notice
of Intention to Foreclose sent by ZGA in December 2013 was also
not an act of concealment. Instead, that Notice actually provided
Plaintiff with the information that Wilmington Trust Company was
allegedly the owner of Plaintiff’s loan, albeit the Notice did not
indicate the date on which the assignment of Plaintiff’s mortgage
In fact, Plaintiff’s reasoning for the application of
Plaintiff’s mortgage and that there was no assignment; it is not
answering of those interrogatories.
In sum, because Plaintiff fails to allege that ZGA actively
Accordingly, Plaintiff’s claim against ZGA is time barred since
this action was filed against ZGA in March 2014, more than three
years after the statute of limitations ran in connection with ZGA’s
filing of the 2009 foreclosure complaint.
Equitable Tolling as to Spahr and National City
Unlike ZGA, Plaintiff’s theory for fraudulent concealment
against Spahr and National City is more compelling.
In support of
Plaintiff, Plaintiff points to the 2009 Interrogatories, in which
Spahr, as counsel for National City, represented, and Plaintiff
was led to believe, that National City was the owner of Plaintiff’s
debt and that her loan had not been assigned.
In that connection,
Plaintiff alleges that she was prevented from recognizing any
available defenses during the state foreclosure action, such as
lack of standing or frivolous litigation. Furthermore, Plaintiff
claims that she was prevented from bringing her FDCPA claim within
the limitations period because she did not learn of the assignment
until December 31, 2013.
Finally, Plaintiff alleges that she
exercised sufficient due diligence before concluding that the
mortgage had not been assigned by explicitly asking National City
and Spahr, during the foreclosure action, whether the mortgage had
been assigned and for the name and address of the lender.
It is a close question whether these allegations, which form
Plaintiff’s bases for the application of equitable tolling as to
claims asserted against Spahr and National City, are sufficient
under Rule 9(b).
I, nevertheless, need not decide this issue
because I find, based on the Amended Complaint’s allegations, that
National City and Spahr are not debt collectors under the FDCPA.
The purpose of the FDCPA is to protect consumers from debt
collectors by eliminating abusive debt collection practices. See
15 U.S.C. § 1692(e). As a threshold determination under the FDCPA,
a defendant entity, such as a law firm, must be a “debt collector”
as defined within the statute.
Indeed, the FDCPA proscribes that
“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 to another” is a “debt collector.”
15 U.S.C. §
1692(b). This provision of the FDCPA has been interpreted to apply
to entities and persons that collect debts on behalf of others;
attempting to collect debts on their own behalf. See Staub v.
Harris, 626 F.2d 275, 277 (3d Cir. 1980) (“The [FDCPA] does not
apply to persons or businesses collecting debts on their own
behalf.”); Schaffhauser v. Citibank (S.D.) N.A., 340 Fed. Appx.
128, 130 n. 4 (3d Cir. 2009).
Here, Plaintiff alleges that National City violated the FDCPA
when it commenced the 2009 state foreclosure action.
contends that National City assigned the mortgage to Wilmington
Trust prior to the initiation of the foreclosure action, and
therefore, National City was not the true creditor during the time
the state lawsuit commenced.
In that regard, Plaintiff maintains
that National City’s attempt to collect a debt which it no longer
owned makes National City a debt collector.
In the same vein,
Plaintiff asserts that National City was at the very least a
servicing agent that “acted expressly in the capacity of a debt
collector in connection with the state court foreclosure action.” 6
collector,” a plaintiff must allege facts that the defendant
regularly collects or attempts to collect debts. Courts have
debated what constitutes “regularity” under the FDCPA, and have
set forth two different frameworks. The “aggregate” framework
aggregate,” and “establishe[s] threshold percentages of how much
debt collection activity qualifies as ‘regular’ and how little
National City argues that it is not a debit collector because
it brought the foreclosure action against Plaintiff as a creditor.
However, on this motion, the Court has to take as true Plaintiff’s
allegation that her loan was assigned to Wilmington Trust Company
prior to the commencement of the 2009 state lawsuit and that
National City misrepresented itself as a creditor in that lawsuit.
Nevertheless, National City is not a debt collector for the reasons
does not.” Oppong v. First Union Mortg. Corp. 407 F. Supp. 2d 658,
664 (E.D. Pa. 2005) (vacated in part on different grounds). On the
other hand, the “frequency” approach focuses on the regularity of
the defendant’s debt collection, regardless of its relation to the
defendant’s other business activities. Id. at 662. Indeed, while
the Third Circuit has not explicitly adopted a particular approach,
it has cited approvingly cases from the Ninth and Second Circuits,
which have adopted the “frequency” approach. See Oppong v. First
Union Mortg. Corp., 215 Fed. Appx. 114, 119 (3d. Cir. 2007)(citing
Romine v. Diversified Collection Services, Inc., 155 F.3d 1142,
1146 (9th Cir. 1998) and Goldstein v. Hutton, Ingram, Yuzek,
Gainen, Carroll, & Bertolotti, 374 F. 3d 56, 62–63 (2d Cir. 2008)).
A determination under the frequency approach is a “fact
intensive inquiry.” Greaves v. Ann Davis Associates Inc., 2015 WL
668227, *4 (D.N.J. Feb. 17, 2015). There are a number of factors
that a plaintiff may allege to sufficiently plead the regularity
litigation matters pursued, over the relevant period(s),
(2) the frequency of such communications and/or
litigation activity, including whether any patterns of
such activity are discernable, (3) whether the entity
has personnel specifically assigned to work on debt
collection activity, (4) whether the entity has systems
or contractors in place to facilitate such activity, and
(5) whether the activity is undertaken in connection
with ongoing client relationships with entities that
have retained the lawyer or firm to assist in the
collection of outstanding consumer debt obligations.”
Goldstein, 374 F. 3d at 62 (2d Cir. 2008); Greaves, 2015 WL 668227,
National City is a “debt collector” within the meaning of the
statute. While Plaintiff avers that National City could not have
been the creditor of the mortgage when Plaintiff’s loan defaulted,
that assertion – alone – is not sufficient to plead that National
City is a debt collector.
When applying the Goldstein factors,
Plaintiff’s Complaint does not allege facts indicating the number
of debt collection communications issued, or the frequency of such
indicate in her Complaint whether PNC has personnel specifically
assigned to work on debt collection activity, or whether they have
systems in place or hired any contractors to complete such tasks.
In regards to the final factor, Plaintiff does not allege that
National City or PNC has any on ongoing client relationship with
Simply, Plaintiff only alleges that National City sent her
communications during the state foreclosure proceedings that were
intended to collect solely her debt. Allegations of communications
sent to Plaintiff alone are insufficient to demonstrate that
National City is a “debt collector” because they fail to meet the
Indeed, the Third Circuit has held that
“the requirement that debt collection be done ‘regularly’ would
exclude a person who collects debt for another in an isolated
instance . . . .” See Siwulec v. J.M. Adjustment Services LLC, 465
Fed. Appx. 200, 203 n.3 (3d Cir. 2012) (quoting S.Rep. No. 95–382,
95th Cong. 1st Sess. 2 (1977), reprinted in 1977 U.S.C.C.A.N. 1695,
1697–98); see also Heredia v. Green, 667 F.2d 392, 399 (3d Cir.
1981); Silva v. Mid Atlantic, 277 F.Supp.2d 460, 464 (E.D. Pa.
In that connection, one instance of debt collection on the
part of National City is insufficient to plead that National City
National City is a “debt collector” under the FDCPA, Plaintiff’s
claim against National City is dismissed without prejudice.
For similar reasons, the Court finds that Plaintiff has not
sufficiently alleged that Spahr is a debt collector under the
In her Amended Complaint, Plaintiff avers, in a conclusory
manner, that Spahr is a debt collector.
The Supreme Court has
collectors” if they regularly engage in consumer debt collection
activities, including litigation. See Heintz v. Jenkins, 514 U.S.
291, 293 (1995); see also Romea v. Heiberger & Associates, 163
F.3d 111, 117 (2d Cir. 2004) (finding that notices issued by a law
firm may constitute debt-related communications and preparation of
such notices constitutes debt collection activity within the scope
of the FDCPA); Sayyed v. Wolpoff & Abramson, 485 F.3d 226, 230
developed any factors in determining whether a law firm is a debt
collector, other circuits have held that a plaintiff must plead,
at a minimum, that the law firm collects debts as a matter of
course, or as a substantial part of its practice.
See Schroyer v.
Frankel, 197 F.3d 1170, 1176 (6th Cir. 1999) (finding that the
factors to consider in determining whether a law firm regularly
activities, frequent use of debt collection letters, and the
relationship between attorney and the collection agency); Silva,
277 F.Supp.2d at 466.
Here, Plaintiff does not sufficiently allege that Spahr is
a debt collector.
Plaintiff has failed to plead any facts that
would even suggest that Spahr collects debts as a matter of course
or as a substantial part of its practice.
Plaintiff does not include any allegations regarding the volume of
Spahr’s collection activities.
Nor does Plaintiff allege that
Spahr has any relationship with collection agencies.
her allegations against National City, Plaintiff only provides
allegations are insufficient to establish that Spahr regularly
engages in the practice of debt collection.
dismissed without prejudice.
July 29, 2015
/s/ Freda L. Wolfson
Freda L. Wolfson
United States District Judge
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