Strobel v. RJM Acquisitions LLC
Filing
33
MEMORANDUM & ORDER re: 12 Motion for Judgment on the Pleadings is GRANTED. The claim regarding BBB accreditation and rating is DISMISSED WITH PREJUDICE. The claim regarding a notice of assignment is DISMISSED WITHOUT PREJUDICE and with LEAVE TO REP LEAD. If Plaintiff intends to file an Amended Complaint, she must do so within thirty (30) days of the date of this Order. If she does not do so, the Complaint will be dismissed with prejudice in its entirety. Ordered by Judge Joanna Seybert on 2/6/2014. (Nohs, Bonnie)
UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF NEW YORK
----------------------------------------X
BROCHA STROBEL, individually and on
behalf of a class,
Plaintiff,
MEMORANDUM & ORDER
13-CV-2467(JS)(AKT)
-againstRJM ACQUISITIONS LLC,
Defendant.
----------------------------------------X
APPEARANCES
For Plaintiff:
Abraham Kleinman, Esq.
Kleinman, LLC
626 RXR Plaza
Uniondale, NY 11556
For Defendant:
Shelby K. Benjamin, Esq.
Mel S. Harris & Associates, LLC
5 Hanover Square, 8th Floor
New York, NY 10004
SEYBERT, District Judge:
Currently pending before the Court is defendant RJM
Acquisitions,
pleadings.1
LLC’s
(“Defendant”)
motion
for
judgment
on
For the following reasons, Defendant’s motion is
GRANTED.
There are also several discovery-related motions pending in
this action, including a motion for sanctions, which have been
addressed to Magistrate Judge A. Kathleen Tomlinson. The
instant Memorandum and Order will address only Defendant’s
motion for judgment on the pleadings.
1
the
BACKGROUND2
Plaintiff Brocha Strobel, individually and on behalf
of a class (“Plaintiff”) commenced this action on April 23, 2013
for alleged violations of the Fair Debt Collection Practices
Act, 15 U.S.C. § 1692 et seq. (“FDCPA”).
Plaintiff alleges that Defendant “broadcasts” that it
is a Better Business Bureau (“BBB”) accredited business with an
A+ rating.
(Compl. ¶¶ 6, 10.)
On April 27, 2012, Plaintiff--an
individual consumer--received a collection letter (the “Letter”)
from Defendant containing the BBB rating.3
(Compl. ¶¶ 4, 8, 10.)
The Letter stated, in relevant part: “As you recall, [Defendant]
has
purchased
your
account.”
(Compl.
Ex.
A.)
Defendant
purchased this account from Doubleday Book Club (“Doubleday”)
and sought to collect debt incurred for a personal, family, or
household use.
letter
violates
(Compl. ¶¶ 9, 11.)
the
FDCPA
“by
Plaintiff maintains that the
misrepresenting
that
it
is
a
communication from a properly accredited entity, when in fact
the A+ accreditation is paid for and deceptive in light of the
The following facts are taken from Plaintiff’s Complaint and
are presumed to be true for the purposes of this Memorandum and
Order.
2
Plaintiff has attached the Letter as Exhibit A to her
Complaint.
3
2
529 complaints against the debt collector.”4
(Compl. ¶ 13.)
She
also asserts that the Letter “is deceptive in that [Defendant]
cannot be the creditor of [Plaintiff], as the Doubleday Book
Club has not provided [Plaintiff] with a Notice of Assignment.”
(Compl. ¶ 14.)
Plaintiff further alleges that the Letter is a form
letter and she brings this action as a purported class action
because “there are more than 50 natural persons with addresses
in New York who were sent a letter on the same letterhead as
Exhibit A . . . .”
(Compl. ¶¶ 12, 18.)
Defendant now moves for judgment on the pleadings.
DISCUSSION
The
Court
will
first
address
the
applicable
legal
standard before turning to Defendant’s motion more specifically.
I. Legal Standard
The standard for evaluating a motion for judgment on
the
pleadings,
pursuant
to
Rule
12(c),
is
the
standard for a motion to dismiss under Rule 12(b).
same
as
the
See Karedes
v. Ackerley Grp., Inc., 423 F.3d 107, 113 (2d Cir. 2005).
In
deciding Rule 12(b)(6) motions to dismiss, the Court applies a
“plausibility
standard,”
which
is
guided
by
“[t]wo
working
principles.”
Ashcroft v. Iqbal, 556 U.S. 662, 678, 129 S. Ct.
In support, Plaintiff attaches as Exhibit B a printout from the
BBB website entitled “BBB Business Review,” showing a review of
Defendant.
4
3
1937, 173 L. Ed. 2d 868 (2009); accord Harris v. Mills, 572 F.3d
66, 71-72 (2d Cir. 2009).
First, although the Court must accept
all allegations as true, this “tenet” is “inapplicable to legal
conclusions;” thus, “[t]hreadbare recitals of the elements of a
cause of action, supported by mere conclusory statements, do not
suffice.”
72.
Iqbal, 556 U.S. at 678; accord Harris, 572 F.3d at
Second, only complaints that state a “plausible claim for
relief” can survive a Rule 12(b)(6) motion to dismiss.
556 U.S. at 679.
Iqbal,
Determining whether a complaint does so is “a
context-specific task that requires the reviewing court to draw
on
its
judicial
experience
and
common
sense.”
Id.;
accord
Harris, 572 F.3d at 72.
Furthermore, in deciding the current motion, the Court
is
confined
to
“the
allegations
corners of [the] complaint.”
Shield,
152
interpreted
Complaint,
Complaint
F.3d
broadly
any
by
67,
to
71
reference,
(2d
Cir.
or
any
within
the
four
Pani v. Empire Blue Cross Blue
include
statements
contained
any
1998).
This
document
attached
to
the
incorporated
in
the
documents
document
on
which
the
has
been
Complaint
heavily relies, and anything of which judicial notice may be
taken.
See Chambers v. Time Warner, Inc., 282 F.3d 147, 152-53
(2d Cir. 2002) (citations omitted); Kramer v. Time Warner Inc.,
937 F.2d 767, 773 (2d Cir. 1991).
4
II. Defendant’s Motion
Plaintiff
brings
her
claim
pursuant
to
the
FDCPA,
which Congress enacted in 1977 “‘to protect consumers from a
host
of
unfair,
harassing,
and
deceptive
debt
collection
practices without imposing unnecessary restrictions on ethical
debt collectors.’”
CV-8302,
2001
Arroyo v. Solomon & Solomon, P.C., No. 99-
WL
1590520,
at
*4
(E.D.N.Y.
Nov.
16,
2001)
(quoting S. Rep., No. 95-382, at 12 (1977), reprinted in 1977
U.S.C.C.A.N. 1695, 1696).
To that end, the FDCPA provides that
“[a]
not
use
or
means
debt
collector
misleading
may
representation
collection of any debt.”
any
false,
in
deceptive,
connection
with
or
the
15 U.S.C. § 1692e; see also id. §
1692e(10).
To
determine
whether
a
debt
collector
has
violated
Section 1692e, courts use “an objective standard, measured by
how
the
notice
‘least
[received
sophisticated
from
the
consumer’
debt
would
interpret
collector].”
Soffer
the
v.
Nationwide Recovery Sys., Inc., No. 06-CV-435, 2007 WL 1175073,
at *3 (E.D.N.Y. Apr. 19, 2007) (citing Greco v. Trauner, Cohen &
Thomas, L.L.P., 412 F.3d 360, 363 (2d Cir. 2005); Russell v.
Equifax
A.R.S.,
74
F.3d
30,
34
(2d
Cir.
1996);
Jackson, 988 F.2d 1314, 1318-19 (2d Cir. 1993)).
Circuit
has
described
the
“least
sophisticated
Clomon
v.
The Second
consumer”
standard as “an objective analysis that seeks to protect the
5
naive from abusive practices while simultaneously shielding debt
collectors
from
liability
for
bizarre
interpretations of debt collection letters.”
363
(2d
Cir.
2005)
(internal
quotation
or
idiosyncratic
Greco, 412 F.3d at
marks
and
citations
omitted).
Plaintiff’s claims--and thus those of the purported
class--center
around
two
issues:
(1)
rating, and (2) a notice of assignment.
BBB
accreditation
and
The Court will address
each in turn.
A. Plaintiff’s Allegations Regarding BBB Accreditation and
Rating
Plaintiff alleges that the Letter violates Sections
1692e
and
1692e(10)
“by
misrepresenting
that
it
is
a
communication from a properly accredited entity, when in fact
the A+ accreditation is paid for and deceptive in light of the
529 complaints against the debt collector.”
(Compl. ¶ 13.)
Defendant moves for dismissal of this claim primarily because
Plaintiff
statement.
has
not
pled
a
materially
false
or
misleading
The Court agrees.
Although the Second Circuit has yet to definitively
rule on the issue, other circuits and district courts within
this Circuit have “held that the least-sophisticated-consumer
standard also encompasses a materiality requirement; that is,
statements
must
be
materially
6
false
or
misleading
to
be
actionable under the FDCPA.”
Walsh v. Law Offices of Howard Lee
Schiff, P.C., No. 11-CV-1111, 2012 WL 4372251, at *3 (D. Conn.
Sept.
24,
2012)
(emphasis
in
original)
(collecting
cases);
accord Sussman v. I.C. Sys., Inc., 928 F. Supp. 2d 784, 795
(S.D.N.Y. 2013) (collecting cases); see Lane v. Fein, Such &
Crane, LLP, 767 F. Supp. 2d 382, 389 (E.D.N.Y. 2011) (collecting
cases); see also Gabriele v. Am. Home Mortg. Servicing, Inc.,
503 F. App’x 89, 94 (2d Cir. 2012) (“Although ‘[i]t is clear
that Congress painted with a broad brush in the FDCPA [,]’ not
every
technically
false
representation
by
a
debt
collector
amounts to a violation of the FDCPA.” (quoting Pipiles v. Credit
Bureau
of
Lockport,
Inc.,
886
F.2d
22,
27
(2d
Cir.
1989)
(alterations in original)).
Here, Plaintiff argues that the Letter’s inclusion of
an A+ rating from the BBB bolsters Defendant’s reputation and
decreases the likelihood that the least sophisticated consumer
would
question
the
validity
Docket Entry 16, at 15.)
statement
is
of
the
debt.
(Pl.’s
Opp.
Br.,
While Plaintiff has alleged that this
misleading,
it
is
not
disputed
indeed has an A+ rating from the BBB.
that
Defendant
Plaintiff’s opposition,
however, makes a number of statements regarding a “pay for play”
scheme--in
higher
which
rating
reference
to
some
through
a
businesses
payments
Federal
Trade
7
have
to
purportedly
the
BBB--as
Commission
obtained
a
well
a
as
investigation
of
Defendant.
(Pl.’s Opp. Br. 13-15.)
Other than stating that
Defendant paid for the BBB rating, none of these allegations are
contained in the Complaint.
In any event, they are not directly
relevant to how, if at all, a BBB accreditation and rating would
impact the least sophisticated consumer.
The Court agrees with Defendant that there is only one
way to read the representations at issue--that Defendant has an
A+ rating from the BBB.
This statement carries no connotation
regarding the character, amount, or legal status of any debt or
Plaintiff’s
rights
regarding
any
such
debt.
Nor
does
a
statement regarding the BBB indicate that Defendant is in any
way affiliated with any governmental entity.
The Court fails to
see how a BBB accreditation and rating suggests any relevant
meaning whatsoever.
not material.
To the extent that it does, however, it is
See Walsh, 2012 WL 4372251, at *4 (“[I]mmaterial
statements, by definition, do not affect a consumer’s ability to
make
intelligent
decisions
concerning
an
alleged
debt.”
(internal quotation marks and citation omitted)); see also Lane,
767 F. Supp. 2d at 389 (“[R]eferences to the laws of the United
States . . . . merely explain BMC’s place of incorporation and
licensing
.
.
.
[they
do]
not
suggest,
even
to
an
unsophisticated consumer, that BMC is acting on behalf of the
United States.”) (emphasis omitted)).
8
Moreover,
standard
itself
and
as
the
connotes,
least
the
idiosyncratic interpretations.
sophisticated
FDCPA
does
See supra pp. 5-6.
consumer
not
protect
Accordingly,
Defendant’s motion for judgment on the pleadings in this regard
is GRANTED.5
B. Plaintiff’s Allegations Regarding a Notice of Assignment
Plaintiff further alleges that “the collection letter
is
deceptive
[Plaintiff],
[Plaintiff]
in
that
as
the
with
a
[Defendant]
Doubleday
Notice
of
cannot
Book
be
Club
Assignment.”
the
has
creditor
not
of
provided
(Compl.
¶
14.)
Defendant maintains that dismissal of this claim is appropriate,
and the Court agrees.
Before the Court addresses the heart of Plaintiff’s
claim, there are several points worth noting.
First, Defendant
asserts--and Plaintiff apparently concedes--that the “notice of
assignment” to which Plaintiff refers is a requirement under New
York law, not the FDCPA.
7-11.)
Specifically,
(See Def.’s Br., Docket Entry 12-1, at
Section
5019(c)
of
New
York’s
Civil
Practice Law and Rules provides:
Change in judgment creditor. A person other
than the party recovering a judgment who
becomes entitled to enforce it, shall file
in the office of the clerk of the court in
In making this determination, the Court concludes that it was
not necessary to consider any documents outside of the
pleadings, and thus both parties’ arguments regarding potential
conversion to a motion for summary judgment are irrelevant.
5
9
which the judgment was entered . . . a copy
of the instrument on which his authority is
based, acknowledged in the form required to
entitle a deed to be recorded, or, if his
authority is based on a court order, a
certified copy of the order.
N.Y. C.P.L.R. § 5019(c).
As the statute, and precedent, make
clear, a notice of assignment becomes relevant in the context of
either a debt that has been reduced to judgment or--at the very
least--a
creditor’s
attempt
to
reduce
the
debt
to
judgment.
Musah v. Houslanger & Assocs., PLLC (“Musah II”), --- F. Supp.
2d
----,
2013
WL
4516786,
at
*3
(S.D.N.Y.
Aug.
26,
2013)
(finding that there was a potential FDCPA violation where the
defendant’s client attempted to collect on a judgment where the
plaintiff
was
not
notified
of
the
assignment);
South
Shore
Adjustment Co. v. Pierre, 32 Misc.3d 1227(A), *2, 936 N.Y.S.2d
61 (N.Y. Civ. Ct. 2011) (addressing notice of assignment where
creditor attempted to reduce debt to judgment).
Neither of
those situations is directly on point here, where there have
been no allegations that Defendant has received a judgment or
even attempted to bring suit.
Second, New York law requires that the assignor (i.e.,
Doubleday) provide the debtor with a notice of assignment, not
the assignee (i.e., Defendant).
(See Pl.’s Opp. Br. at 15-16
(citing Chase Bank USA v. Cardello, 27 Misc.3d 791, 896 N.Y.S.2d
856 (N.Y. Civ. Ct. 2010) for the proposition that “[n]otice of
10
assignment must be provided to the consumer from the assignor.”
(emphasis in original)).)
Thus, case law supports Defendant’s
argument that there is no valid cause of action under the FDCPA
for any purported failure by Defendant to provide the notice of
assignment to Plaintiff, at least in this context.
See Shetiwy
v. Midland Credit Mgmt., --- F. Supp. 2d ----, 2013 WL 5328075,
at *5 (S.D.N.Y. Sept. 20, 2013) (finding that the plaintiff had
not provided any legal support for the notion that “collection
actions are invalid unless the original creditor for a debt
provides prior notice to the debtor of the assignment of the
debt, with a variety of documentation . . . .” (emphasis in
original)).
However,
as
Plaintiff
asserts,
her
claim
somewhat more nuanced than Defendant’s argument suggests.
Pl.’s
Opp.
Br.
at
17-19
(arguing
that
Defendant’s
is
(See
arguments
regarding Doubleday are irrelevant).)
To
reiterate,
the
Complaint
alleges
that
“the
collection letter is deceptive in that [Defendant] cannot be the
creditor of [Plaintiff], as the Doubleday Book Club has not
provided [Plaintiff] with a Notice of Assignment.”
(emphasis
added).)
In
opposing
Defendant’s
(Compl. ¶ 14
motion,
however,
Plaintiff subtly attempts to amend her allegation, essentially
breaking
it
down
into
two
components:
(1)
that
Defendant
attempted to “confuse and mislead the Plaintiff into assuming
that Defendant has in fact purchased Plaintiff’[s] alleged debt”
11
and (2) “that Plaintiff was in fact previously and properly
notified of the assignment when no such notice had ever been
given.”
(Pl.’s
Plaintiff,
Opp.
though,
opposition brief.
Br.
may
at
not
17
amend
(emphasis
the
in
original).)
pleadings
through
an
See Fadem v. Ford Motor Co., 352 F. Supp. 2d
501, 516 (S.D.N.Y. 2005) (“It is long-standing precedent in this
circuit that parties cannot amend their pleadings through issues
raised solely in their briefs); O’Brien v. Nat’l Prop. Analysis
Partners,
719
F.
Supp.
222,
229
(S.D.N.Y.
1989)
(“[I]t
is
axiomatic that the Complaint cannot be amended by the briefs in
opposition to a motion to dismiss.”).
The allegation that the
Letter is deceptive in that Defendant cannot be the creditor of
Plaintiff
because
assignment
is
Doubleday
different
did
from
not
the
provide
allegation
the
that
notice
of
Defendant
misled Plaintiff into assuming that it had in fact purchased
Plaintiff’s
debt.
sophisticated
The
consumer
former
would
be
relates
to
deceived
whether
into
the
thinking
least
that
Defendant is the creditor, when this “cannot” be the case due to
a lack of notice of assignment; the latter relates to whether
the least sophisticated consumer would be misled as to whether
Defendant “purchased” the debt, and Plaintiff has not clarified
whether any such allegation would be contingent upon a proper
notice of assignment.
12
Moreover, relevant case law suggests that a technical
failure to comply with the requirements of Section 5019(c) does
not
invalidate
the
assignment.
See
Musah
v.
Houslanger
&
Assocs., PLLC (“Musah I”), No. 12-CV-3207, 2012 WL 5835293, at
*3 (S.D.N.Y. Nov. 16, 2012) (“[S]ection 5019(c) does not require
assignments to be recorded in order for those assignments to be
deemed valid, and the assignee of a judgment may attempt to
enforce that judgment and collect from the debtor even if the
filing requirement of 5019(c) has not been satisfied.” (internal
quotation marks and citation omitted)).
Thus, there was nothing
deceptive about any apparent statement that Defendant is the
creditor flowing from Doubleday’s alleged failure to provide a
Notice of Assignment.
As
to
Plaintiff’s
allegation
that
the
Letter
is
deceptive insofar as it suggests that Plaintiff was previously
and properly notified of the assignment when no such assignment
took place, again such claim fails.
consumer
standard
serves
dual
The least sophisticated
purposes--“the
need
to
protect
unsuspecting consumers from unscrupulous debt collectors and the
need
to
ensure
that
debt
collectors
unreasonable misinterpretations.’”
are
held
liable
‘for
Walsh, 2012 WL 4372251, at
*3 (quoting Clomon, 988 F.2d at 1319).
It does not protect the
consumer who would have to reject common sense and personal
experience in order to be potentially deceived.
13
See Clomon, 988
F.2d at 1319 (the least sophisticated consumer “can be presumed
to
possess
world”).
a
rudimentary
Additionally,
the
amount
of
notice
of
information
assignment
about
the
requirement
under New York law was designed to protect the assignee, not the
debtor.
Musah I, 2012 WL 5835293, at *3 (Section “5019(c) is
not meant to benefit the debtor, should the assignment not be
recorded, but rather is clearly intended for the benefit of the
assignee, being designed to protect him against payment of the
judgment
to
the
wrong
party.”
(internal
quotation
marks
and
citation omitted)).
Finally, any perceived deception regarding receipt, or
lack thereof, of the notice of assignment would not be material.
See Corazzini v. Litton Loan Servicing LLP, No. 09-CV-0199, 2010
WL 6787231, at *7 (N.D.N.Y. June 15, 2010) (“[E]ven if defendant
did
provide
a
false
statement
in
one
or
more
of
its
communications with plaintiff, plaintiff has failed to establish
that the alleged false statement was material to her decision to
pay her debt or that it impaired her ability to challenge the
debt.”).
Accordingly, Defendant’s motion for judgment on the
pleadings on this claim is GRANTED.
III. Amendment
Although
Plaintiff
has
not
specifically
sought
to
amend her Complaint, the Second Circuit has stated that “[w]hen
a motion to dismiss is granted, the usual practice is to grant
14
leave to amend the complaint.”
F.3d
42,
53
(2d
Cir.
Hayden v. Cnty. of Nassau, 180
1999),
overruled
on
other
grounds
by
Gonzaga v. Doe, 536 U.S. 273, 122 S. Ct. 2268, 153 L. Ed. 2d 309
(2002); see also FED. R. CIV. P. 15(a)(2) (“The court should
freely
give
leave
[to
amend]
when
justice
so
requires.”).
“However, a district court has the discretion to deny leave to
amend where there is no indication from a liberal reading of the
complaint
that
a
valid
claim
might
be
stated.”
Perri
v.
Bloomberg, No. 11-CV-2646, 2012 WL 3307013, at *4 (E.D.N.Y. Aug.
13, 2012) (citing Chavis v. Chappius, 618 F.3d 162, 170 (2d Cir.
2010)).
Here,
the
Court
finds
that
leave
to
replead
Plaintiff’s claim regarding the BBB’s accreditation and rating
would be futile as Plaintiff’s reading proffers an idiosyncratic
interpretation of the Letter and any statement in this regard is
not materially false or misleading.
DISMISSED WITH PREJUDICE.
Accordingly, such claim is
However, the Court GRANTS Plaintiff
leave to replead her claim regarding the notice of assignment.
While it is unclear whether Plaintiff can successfully state a
claim for an FDCPA violation, the Court cannot say definitively
that amendment would be futile.
If Plaintiff intends to file an Amended Complaint, she
must
do
so
within
thirty
(30)
15
days
of
the
date
of
this
Memorandum and Order.
If she does not do so, her Complaint will
be dismissed with prejudice in its entirety.
CONCLUSION
For
the
foregoing
reasons,
Defendant’s
motion
is
GRANTED.
The claim regarding BBB accreditation and rating is
DISMISSED
WITH
assignment
is
PREJUDICE.
DISMISSED
The
WITHOUT
claim
regarding
PREJUDICE
and
a
with
notice
of
LEAVE
TO
REPLEAD.
If Plaintiff intends to file an Amended Complaint, she
must
so
do
within
Memorandum and Order.
thirty
(30)
days
of
the
date
of
this
If she does not do so, the Complaint will
be dismissed with prejudice in its entirety.
SO ORDERED.
Dated:
/s/ JOANNA SEYBERT______
Joanna Seybert, U.S.D.J.
February
6 , 2014
Central Islip, NY
16
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