Calton v. Pressler & Pressler, LLP et al
MEMORANDUM AND ORDER: For the reasons discussed above, Calton fails to allege any misleading or deceptive acts by any of the Defendants. Calton also fails to allege that the conduct was directed at anyone other than himself. Calton's state law claims are therefore dismissed. For the above reasons, Defendants' motion to dismiss pursuant to Rule 12(b)(6) are granted. (Signed by Judge Lawrence M. McKenna on 8/2/2011) (mbe)
UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK
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DAVID CALTON, on behalf of
himself and all others
10 Civ. 2117 (LMM)
PRESSLER & PRESSLER,LLP;
PALISADES COLLECTION, LLC; and
JP MORGAN CHASE & CO.,
MEMORANDUM AND ORDER
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David Calton (“Calton”) brought this action against
Collection, LLC (“Palisades”), and JP Morgan Chase & Co.,
of the Fair Debt Collection and Practices Act (“FDCPA”),
New York CPLR § 5222(j), and New York General Business Law
Defendants move to dismiss Calton’s claims pursuant
to Rule 12 of the Federal Rules of Civil Procedure, or in
the alternative pursuant to Rule 56 of the Federal Rules of
motions to dismiss pursuant to Rule 12(b)(6) are GRANTED.
On or about February 4, 2010, Pressler, a law firm, on
behalf of its client, Palisades, a debt collection agency,
served Chase with a restraining notice to enforce a default
judgment obtained against Calton in Palisades Collection
LLC v. Calton, New York City Civil Court, index number
48954-05 (the “Restraining Notice”).
(See Compl. ¶¶ 11,
13, 15; Decl. of Sheri Lambert in Supp. of Chase’s Mot. to
Dismiss (“Lambert Decl.”) Ex. E (“Restraining Notice”).)
Calton does not dispute the validity of the New York Civil
On or about February 11, 2010, Chase notified Calton
that it had placed a hold on his accounts, including two
accounts that he had opened at a Chase branch in New York
(containing $303.85 and $73.34) and two accounts that he
$1,541.43 and $91.46).
Compl. ¶¶ 16-18; Decl. of
David Calton in Supp. of Pl.’s Opp’n to Chase’s Mot. to
Dismiss Ex. A (“Chase Letter”).)
Chase charged Calton a
Legal Processing fee of $125 for servicing the Restraining
(See Compl. ¶ 19; Chase Letter.)
instructed Chase to release $350 from Plaintiff’s account
to resolve the dispute.
(See Chase’s Mem. in Supp. of Its
Mot. to Dismiss (“Chase’s Mem.”) at 5; Lambert Decl. Ex.
On March 10, 2010, Calton filed a complaint against
Pressler and Palisades.
On April 2, 2010, Calton amended
U.S.C. §§ 1692e and 1692f because they failed to inform
Calton also alleges that Chase violated New York CPLR §
5222(j) when it charged Calton a legal processing fee in
connection with servicing an unlawful restraint.
(Compl. ¶¶ 37-40.)
On April 22, 2010, Palisades moved to dismiss Calton’s
complaint pursuant to Rules 12(b)(1) and 12(b)(6) of the
Federal Rules of Civil Procedure.
Pressler joined this
complaint pursuant to Rule 12(b)(6) of the Federal Rules of
Civil Procedure for failure to state a claim upon which
judgment pursuant to Rule 12(d) and Rule 56 of the Federal
Rules of Civil Procedure.
A. Motion to Dismiss Standard
When deciding a motion to dismiss pursuant to Rule
In re Parmalat Sec. Litig., 501 F.
Southbrook Int'l Invs., Ltd., 263 F.3d 10, 14 (2d Cir.
plaintiff must provide the grounds upon which [the] claim
rests through factual allegations sufficient ‘to raise a
Comm'ns, Inc. v. Shaar Fund, Ltd., 493 F.3d 87, 98 (2d Cir.
2007) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544,
“[O]nce the claim has been adequately stated
it may be supported by showing any set of facts consistent
Twombly, 550 U.S. at 562).
Thus, “if it is clear that no
relief could be granted under any set of facts that could
be proved consistent with the” plaintiff’s allegations then
the complaint should be dismissed.
Swierkiewicz v. Sorema
N. A., 534 U.S. 506, 514 (2002)(internal quotation marks
and citations omitted).
B. Calton’s FDCPA Claims (Counts I and II)
Defendants should have informed Chase that: 1) under New
York state law Chase could not lawfully restrain Calton’s
out-of-state accounts and (2) under New York CPLR § 5222(i)
Chase could not lawfully restrain any of Calton’s accounts
(See Pl.’s Opp’n to Palisade’s Mot. to Dismiss
Calton alleges that as a result of these omissions,
misleading representations or means in connection with the
collection of any debt” and “unfair or unconscionable means
to collect or attempt to collect any debt” in violation of
15 U.S.C. §§ 1692e and 1692f, respectively.
(See Compl. ¶¶
21-31; Pl.’s Opp’n to Palisade’s Mot. to Dismiss at 9.)
Calton’s FDCPA claims thus hinge on the premise that
Calton’s out-of-state accounts and the premise that under
New York CPLR § 5222(i), Chase could not lawfully restrain
Calton’s accounts because the balance in his accounts was
below the statutory threshold.
Calton’s understanding of
1. Restraint of Out-of-State Accounts
In Koehler v. Bank of Bermuda, Ltd., 12 N.Y. 3d 533
(N.Y. 2009), the New York Court of Appeals held that New
York CPLR Article 52 post-judgment enforcement mechanisms
Specifically, the court held that “a court sitting in New
York that has personal jurisdiction over a garnishee bank
can order the bank to produce [property] located outside
New York, pursuant to CPLR 5225(b).”
Thus, under the
Court of Appeal’s holding in Koehler, where a bank does
jurisdiction of New York courts, it is “permissible for [a
judgment creditor and a judgment creditor’s bank] to issue
and honor [a] restraining notice served pursuant to New
York CPLR Section 5222.”
F. Supp. 2d 265,
McCarthy v. Wachovia Bank, N.A.,
plaintiff’s due process claim because it was based on the
property was impermissible under CPLR § 5222).1
Here, Chase does business in New York and in fact,
subject to the jurisdiction of New York Courts and Chase
under New York law.
2. New York CPLR § 5222(i)
Next, Calton’s assertion that Chase could not lawfully
New York CPLR § 5222(i) provides that a restraining
notice “shall not apply to an amount equal to or less than
[$1,740 (which is equal to 240 times the greater of the
applicable state or federal minimum wage)].”
If “an account contains an amount equal to or
The cases cited by Calton to argue that a restraining notice cannot be
used to restrain property outside of New York are inapposite.
Union Fire Ins. Co. of Pittsburgh, Pa. v. Adv. Employment Concepts,
Inc., 703 N.Y.S.2d 3 (N.Y. App. Div. 1st Dep’t 2000), was decided
before the Court of Appeal’s ruling in Koehler and John Wiley & Sons,
Inc. v. Kirstaeng, 2009 WL 3003242 (S.D.N.Y. Sept. 15, 2009), involved
a pre-judgment attachment under New York CPLR Article 62, which is
governed by different legal principles than those that apply to Article
52 post-judgment enforcement mechanisms. See McCarthy, 759 F. Supp. 2d
at 275 (“[i]n issuing its decision [in Koehler], the Court of Appeals
went to great lengths to differentiate pre-judgment attachment, which
is governed by CPLR article 62, from post-judgment enforcement”(citing
Koehler, at 12 N.Y. 537)).
less than ninety percent of [$1,740], the account shall not
be restrained and the restraining notice shall be deemed
void, except as to those funds that a court determines to
judgment debtor and his or her dependents.”
provisions were added to New York CPLR Article 52 to ensure
that “a certain threshold of funds [was] available to meet
the account holder’s basic living expenses.”
Queens County, Jul. 21, 2009); see also Portfolio Recovery
Assocs., LLC v. Calderia, 881 N.Y.S.2d 870, 874 (N.Y. Sup.
Ct., Nassau County, June 3, 2009).
Calton does not dispute that the balance in his Chase
section 5222(i) should be applied separately to each of his
four Chase accounts.
Dismiss at 4-6.)
Therefore, Calton argues, even though the
(See Pl.’s Opp’n to Chase’s Mot. to
stated legislative purpose of New York CPLR § 5222(i).
fact, Calton’s proposed interpretation would to much more
than ensure access to a minimum safety net by enabling a
that a bank served with a restraining notice leave $1,740
available to the judgment debtor regardless of the total
amount in the judgment debtor’s account.
to Chase’s Mot. to Dismiss at 5-6.)
(See Pl.’s Opp’n
Again, Calton points
New York CPLR § 5222(i) prohibits only the restraint of “an
account [that] contains an amount equal to or less than
ninety percent of [$1,740].”
N.Y. CPLR § 5222(i).
Calton’s Chase accounts had an total balance of $2,010.08,
which was above the statutory threshold, and thus, Chase’s
restraint of Calton’s accounts did not run contrary to New
York CPLR § 5222(i).
Moreover, Creditor-Defendants fully apprised Chase of
Restraining Notice (citing to New York CPLR § 5222(i))) and
advised Chase to act in a way that violates New York CPLR
§ 5222(i) fails as a matter of law.2
Calton’s FDCPA claims, therefore, are dismissed.
C. Calton’s State Law Claims (Counts III and IV)
Next, this court has discretion under 28 U.S.C. § 1367
remaining state law claims.
See Nowak v. Ironworkers Local
6 Pension Fund, 81 F.3d 1182, 1187 (2d Cir. 1996)(“[T]he
supplemental jurisdiction over state law claims even where
it has dismissed all claims over which it had original
It is appropriate to exercise supplemental
jurisdiction where, as here, the state law claims arise out
of the same set of facts as the federal claims and like the
federal claims, lack merit.
Pu v. Charles H. Greenthal
further waste of judicial resources,” the court dismisses
Chase attached a copy of the Restraining Notice to its moving papers.
This Court may consider the Restraining Notice in deciding this motion
-- Calton had actual notice of the Restraining Notice, which was
attached to the Chase Letter that notified Calton his accounts had been
frozen (see Chase Letter at 1), Calton relied on the terms and effect
of the Restraining Notice in framing his complaint, and further, Calton
does not dispute the authenticity of the document.
See Chambers v.
Time Warner, Inc., 282 F3d 147, 153 (2d Cir. 2002)(holding that “where
plaintiff has actual notice of all the information in [documents
attached to the movant’s papers] and has relied upon these documents in
framing the complaint the necessity of translating a Rule 12(b)(6)
motion into one under Rule 56 is largely dissipated” and the court may
consider such documents).
dismissing the plaintiff’s federal claims).
In Count III, Calton alleges that Chase violated New
York CPLR § 5222(j) by charging Calton a legal processing
fee in connection with servicing the Restraining Notice.
(See Compl. ¶¶ 28-31.)
New York CPLR § 5222(j) prohibits a
banking institution from charging a fee if “a restraint is
placed on judgment debtor’s account in violation of any
section of [CPLR Article 52].”
N.Y. CPLR § 5222(j).
accounts was not in violation of any provision in CPLR
charge plaintiff a legal processing fee in connection with
servicing the restraint.
connection with the attempted collection of Calton’s debt
General Business Law § 349.
(See Compl. ¶¶ 37-40.)
state a claim under New York General Business Law § 349, a
plaintiff must allege that: (1) the defendant’s act was
misleading in a material way; (2) the act was directed at
consumers; and (3) the plaintiff has been injured as a
result of the deceptive act.
See Stutman v. Chemical Bank,
95 N.Y.2d 24,
Cal ton fails
to allege any misleading or deceptive
acts by any of the Defendants.
Calton also fails to allege
conduct was directed at anyone other than himself.
Calton's state law claims are therefore dismissed.
For the above reasons!
motions to dismiss
pursuant to Rule 12(b) (6) are GRANTED.
Lawrence M. McKenna
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