United States District Court, E.D. North Carolina, Western Division
TIMOTHY P. DANEHY, Plaintiff,
JAFFE & ASHER, LLP; LAWRENCE M. NESSENSON, and WILLIAM J. ALLEN, Defendants.
LOUISE W. FLANAGAN, District Judge.
This matter is before the court on defendants' motion to dismiss for lack of personal jurisdiction and failure to state a claim upon which relief can be granted, under to Federal Rules of Civil Procedure 12(b)(2) and 12(b)(6). (DE 13). Pursuant to 28 U.S.C. § 636(b)(1) and Federal Rule of Civil Procedure 72(b), United States Magistrate Judge Kimberly A. Swank issued a memorandum and recommendation ("M&R"), (DE 22), wherein it is recommended defendants' motion be granted. Plaintiff timely filed objections and defendant has responded. In this posture, the issues raised are ripe for ruling. For the reasons stated more specifically herein, the court adopts the M&R and grants defendants' motion to dismiss.
Plaintiff commenced this action against defendants Jaffe and Asher, LLP ("J&A"), a New York law firm acting as a debt collector on behalf of American Express Bank, FSB ("American Express") and seeking to collect a debt of $18, 110.28 allegedly owed to American Express by plaintiff, and William J. Allen ("Allen"), a North Carolina attorney hired by defendant J&A to collect plaintiff's debt for American Express, on February 4, 2014. (Compl., DE 1). In the complaint plaintiff alleged defendants violated the Fair Credit Reporting Act ("FCRA"), 15 U.S.C. § 1681 et seq., the Fair Debt Collection Practices Act ("FDCPA"), 15 U.S.C. § 1692 et seq., and the Telephone Consumer Protection Act ("TCPA"), 47 U.S.C. § 227 while attempting to collect the debt. (Compl., at 5-12).
On April 21, 2014, plaintiff filed amended complaint, adding as a defendant Lawrence M. Nessenson ("Nessenson"), an attorney allegedly operating as a debt collector for defendant J&A. In the amended complaint, plaintiff asserts three claims against defendant J&A. First, plaintiff asserts defendant J&A obtained his consumer report without a permissible purpose, in willful violation of the FCRA, pursuant to 15 U.S.C. §§ 1681b(f) and 1681n ("Count 1"). Next plaintiff contends defendant J&A obtained his consumer report without a permissible purpose in negligent violation of the FCRA, pursuant to 15 U.S.C. §§ 1681b(f) and 1681o ("Count 2"). Finally, plaintiff alleges defendant J&A committed a number of violations of the FDCPA, including making a prohibited third-party communication, in violation of 15 U.S.C. § 1692c(b); making false representations or deceptive means to collect a debt, in violation of 15 U.S.C. § 1692e(10); and failing to send notice to plaintiff within five days of the initial debt collecting communication, in violation of 15 U.S.C. § 1982g(a)(1)-(5) (collectively "Count 3").
Plaintiff also asserts two claims against defendant Allen. First, plaintiff alleges defendant Allen violated the FDCPA in myriad ways, including failure to communicate a disputed debt to a credit reporting agency, in violation of 15 U.S.C. § 1692e(8); failure to disclose that subsequent communications were from a debt collector, in violation of 15 U.S.C. § 1692e(11); failure to validate a debt and attempting to collect a debt before validation was given, in violation of 15 U.S.C. § 1692g(b); using false or deceptive means to collect a debt, in violation of 15 U.S.C. § 1682e(10); and making false representations about the character, amount, and legal status of plaintiff's debt by initiating a collection proceeding in North Carolina state court, in violation of 15 U.S.C. § 1692e(2)(A) (collectively "Claim 4"). Plaintiff also contends defendant Allen violated the TCPA by making phones to plaintiff's cell phone using an automatic telephone dialing system ("ATDS"), in violation of 47 U.S.C. § 227(b)(1)(A) ("Count 5"). Finally, plaintiff asserts one claim against defendant Nessenson for violation of the FDCPA. (Am. Compl., DE 6).
On May 5, 2014, defendants filed a motion to dismiss the complaint, pursuant to Federal Rules of Civil Procedure 12(b)(4), 12(b)(5), and 12(b)(6), for insufficient process, insufficient service of process, and failure to state a claim upon which relief could be granted. (DE 13). Therein, defendants argued both Counts 1 and 2 must be dismissed, because plaintiff's complaint evidences defendant had a permissible purpose for requesting his consumer report, review in preparation for collection of the disputed debt. In addition, defendants contended Count 3 failed, because defendant J&A's communication with a credit reporting agency was not prohibited by law, was not false, and did not trigger any duty to provide plaintiff with notice of the impending collection of his account.
Defendants also argued that Counts 4 and 5, against defendant Allen, should be dismissed. With regard to Count 4, defendants argued defendant Allen was under no duty to communicate plaintiff's disputed debt to any credit reporting agency, satisfied the notice requirement for subsequent communications, properly validated plaintiff's debt, did not used false or deceptive means to collect plaintiff's disputed debt, and did not make any false statement about the character of plaintiff's debt. Defendants also argued Count 5 failed to meet the pleading standard required by Federal Rule of Civil Procedure 8(a). Finally, defendants suggested the court lacked personal jurisdiction over defendant Nessenson, because process, as well as service of process, were insufficient.
Defendants' motion to dismiss was referred for M&R on June 18, 2014, and M&R issued on January 30, 2015. The M&R recommends granting defendants' motion to dismiss. With regard to defendant J&A, the M&R recommends dismissing Counts 1 and 2, because plaintiff's pleading belies his allegations of lack of permissible purpose for accessing his consumer report. In addition, the M&R recommends dismissing Count 3, because defendant J&A's request for plaintiff's consumer report was authorized by law, and the report was not obtained by a false representation.
The magistrate judge also recommended dismissing Counts 4 and 5 asserted against defendant Allen. Specifically, the M&R recommended Count 4's dismissal, because defendant Allen (1) did not have a duty to communicate plaintiff's disputed debt to American Express; (2) complied with the required notice provisions, giving sufficient information to reveal his identity as a debt collector; and (3) did not attempt to institute collection proceedings prior to providing the verification demanded by plaintiff. Moreover, the magistrate judge recommending dismissal because certain portions of Count 4 failed to satisfy the Rule 8(a) pleading standard. With respect to Count 5, the magistrate again determined plaintiff had failed to plead sufficient facts under Twombly and Iqbal. Finally, the M&R recommends construing defendants' Rule 12(b)(4) and 12(b)(5) motions, addressing defendant Nessenson, together as a motion to dismiss made pursuant to Federal Rule of Civil Procedure 12(b)(2) for lack of personal jurisdiction and granting the motion.
Plaintiff's objections followed. Plaintiff first objects to the M&R's recommendation Counts 1 and 2 be dismissed, because he asserts he does not own the account defendant J&A sought to collect. Next, plaintiff objects to the M&R's recommendation Count 3 be dismissed, because, he contends, defendant J&A's request for plaintiff's consumer report from a credit reporting agency constituted an initial communication between he and defendant J&A. Third, plaintiff argues Count 4 should not be dismissed insofar as it alleges defendant Allen failed to communicate a disputed debt to American Express, because the FDCPA imposed upon defendant Allen an affirmative duty to do so. Fourth plaintiff objects to the recommended dismissal of Count 4, where subsequent communications from defendant Allen explicitly do not employ the term "debt collector." Fifth, plaintiff argues the magistrate erred in recommending dismissal of Count 4, because defendant Allen utilized a false or misleading communication regarding the character, amount, or legal status of plaintiff's debt, when he instituted a debt collection proceeding in North Carolina state court, attempting to collect a debt on an account plaintiff does not own. Finally, plaintiff contends the magistrate erred in recommending dismissal of Count 5, because the magistrate incorrectly concluded plaintiff had failed to plead sufficient facts, by virtue of the magistrate's erroneous construction of the TCPA.
On February 5, 2013, defendant J&A requested plaintiff's TransUnion credit report, on behalf of American Express. (Am. Compl. ¶15). On February 8, 2013, defendant Allen sent plaintiff a "dunning letter, " claiming money owed to American Express on an account ending in the numbers "1001." (Id. ¶18). Plaintiff does not have an account with American Express ending in the numbers "1001." (Id. ¶26).
Subsequently, on February 17, 2013, plaintiff sent defendant Allen a letter disputing the debt and demanding "validation" of the debt. (Id. ¶20). Included in the letter was a statement plaintiff did not wish to communicate regarding the dispute debt via telephone. (Id.). Upon receipt of the letter, defendant Allen did not communicate the disputed nature of plaintiff's debt to American Express. (Id. ¶21). Rather, on March 6, 2013, defendant Allen sent plaintiff a letter providing verification of the debt. (Id. ¶22 & Ex. B). Thereafter, on March 17, 2013, plaintiff responded to defendant Allen's March 6 correspondence, stating that defendant Allen had failed to provide appropriate "validation" of the debt and that defendant Allen's letter was otherwise unsatisfactory. (Id. ¶24 & Ex. C).
On March 25, 2013, defendant Allen, on behalf of American Express, commenced an action in North Carolina state court seeking satisfaction of the disputed debt owed on the account ending in "1001." (Id. ¶25).
In October, November, and December 2013, defendant Allen made several calls to plaintiff's cell phone. (Id. ¶¶ 28, 73). These calls took place despite the fact plaintiff's name appears on the national "do-not-call registry." (Id. ¶28).
A. Extrinsic ...