Balon v. Enhanced Recovery Co.

190 F.Supp.3d 385

Kariann Balon, Plaintiff,

v.Enhanced Recovery Company, Inc., Defendant.

CIVIL ACTION NO. 3:16-CV-0410

United States District Court, M.D. Pennsylvania.

Signed June 2, 2016

Carlo Sabatini, Brett M. Freeman, Sabatini Law Firm, LLC, Dunmore, PA, for Plaintiff.

Richard J. Perr, Fineman Krekstein & Harris, P.C., Philadelphia, PA, for Defendant.

MEMORANDUM

William J. Nealon, United States District Judge

Plaintiff, Kariann Balon, filed a complaint against Defendant, Enhanced Recovery Company, Inc., alleging that Defendant violated the Fair Debt Collection Practices Act, 15 U.S.C. § 1692, et seq. ("FDCPA"). (Doc. 1). On March 16, 2016, Defendant filed a motion to dismiss the complaint pursuant to Federal Rule of Civil Procedure 12(b)(6) and brief in support. (Docs. 3,4). On April 1, 2016, Plaintiff filed her brief in opposition. (Doc. 6). To date, Defendant has not filed a reply brief, and the deadline for filing such has passed. See M.D. Pa. L.R. 7.7. On May 2, 2016, Plaintiff filed a notice of supplemental authority, which identified Velez v. Enhanced Recovery Company, LLC, 2016 U.S. Dist. LEXIS 57832 (E.D. Pa. May 2, 2016), as a recent decision that "denied a motion to dismiss in a case where the plaintiff complained of the exact same language that is also at issue in this case." (Doc. 8, p. 1). For the reasons set forth below, Defendant's motion to dismiss the complaint will be denied.

I. STANDARD OF REVIEW

Defendant's motion is brought pursuant to Federal Rule of Civil Procedure 12(b)(6), which "provides for the dismissal of a complaint, in whole or in part, if the plaintiff fails to state a claim upon which relief can be granted." Suessenbach Family v. Access Midstream, 2015 WL 1470863, at *1, 2015 U.S. Dist. LEXIS 40900, at *2 (M.D.Pa.2015) (Mannion, J.). The moving party bears the burden of showing that no claim has been stated. Hedges v. United States, 404 F.3d 744, 750 (3d Cir.2005). All factual allegations are accepted as true and all inferences are construed in the light most favorable to the non-moving party. Kaymark v. Bank of Am., N.A., 783 F.3d 168, 174 (3d Cir.2015) (citing Fleisher v. Standard Ins. Co., 679 F.3d 116, 120 (3d Cir.2012) ).

"Federal notice and pleading rules require the complaint to provide ‘the defendant fair notice of what the ... claim is and the grounds upon which it rests.’ " K.E. v. Dover Area Sch. Dist., 2016 WL 2897614, at *2, 2016 U.S. Dist. LEXIS 65241, at *6 (M.D.Pa. May 18, 2016) (Conner, J.) (quoting Phillips v. Cnty. of Allegheny, 515 F.3d 224, 232 (3d Cir.2008) ). "[D]ismissal is appropriate only if, accepting all of the facts alleged in the complaint as true, the plaintiff has failed to plead ‘enough facts to state a claim to relief that is plausible on its face.’ " Suessenbach Family, 2015 WL 1470863, at *1, 2015 U.S. Dist. LEXIS 40900, at *2 (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007) ). To state a claim to relief that is plausible on its face the non-moving party's allegations must be sufficient to "raise a right to relief above the speculative level."

Twombly, 550 U.S. at 544, 127 S.Ct. 1955. "This requirement ‘calls for enough fact[s] to raise a reasonable expectation that discovery will reveal evidence of’ necessary elements of the plaintiff's cause of action." Suessenbach Family, 2015 WL 1470863, at *1, 2015 U.S. Dist. LEXIS 40900, at *2–3 (quoting Twombly, 550 U.S. at 544, 127 S.Ct. 1955 ). "Furthermore, in order to satisfy federal pleading requirements, the plaintiff must ‘provide the grounds of his entitlement to relief,’ which ‘requires more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do.’ " Id.(quoting Phillips. 515 F.3d at 231 ). The United States Court of Appeals for the Third Circuit has stated that:

Twombly and Iqbal require [a court] to take the following three steps to determine the sufficiency of a complaint: "First, the court must take note of the elements a plaintiff must plead to state a claim. Second, the court should identify allegations that, because they are no more than conclusions, are not entitled to the assumption of truth. Finally, where there are well-pleaded factual allegations, a court should assume their veracity and then determine whether they plausibly give rise to an entitlement for relief."

Connelly v. Steel Valley Sch. Dist., 706 F.3d 209, 212 (3d Cir.2013) (quoting Burtch v. Milberg Factors. Inc., 662 F.3d 212, 221 (3d Cir.2011) ). Additionally, since Plaintiff attached the letter at issue as an exhibit to her complaint, it will be treated as part of the pleading. FED. R. CIV. P. 10(c).

II. FACTUAL ALLEGATIONS

Plaintiff's complaint makes the following factual allegations: Defendant has attempted to collect a debt from Plaintiff on an "account that was identified by a number ending in 2418." (Doc. 1-1, p. 2). "On or about February 9, 2015, [Defendant] caused to be mailed a letter addressed to Plaintiff." (Id.). "The letter was an attempt to collect on the Account." (Id.). The letter states, in part, that "any indebtedness of $600.00 or more, which is discharged as a result of a settlement, may be reported to the IRS as taxable income pursuant to the Internal Revenue Code 6050 (P) and related federal law." (Id.). "The amount of the alleged debt at the time that the letter was sent was $798.67 .... [and] [t]he offer to settle was for $638.94." (Id.). "[T]he amount of savings if the offer was accepted would be $159.73." (Id. at pp. 2-3).

III. DISCUSSION

Prior to the enactment of the FDCPA, Congress discovered "abundant evidence of the use of abusive, deceptive, and unfair debt collection practices by many debt collectors." 15 U.S.C. § 1692(a). Further, Congress also found that "[a]busive debt collection practices contribute to the number of personal bankruptcies, to marital instability, to the loss of jobs, and to invasions of individual privacy." 15 U.S.C. § 1692(a).

In 1977, Congress enacted the FDCPA:

to eliminate abusive debt collection practices by debt collectors, to insure that those debt collectors who refrain from using abusive debt collection practices are not competitively disadvantaged, and to promote consistent State action to protect consumers against debt collection abuses.

15 U.S.C. § 1692(e). To accomplish these goals, Congress created "a private right of action against debt collectors who fail to comply with [the FDCPA's] provisions." Grubb v. Green Tree Servicing, LLC, 2014 WL 3696126, at *4, 2014 U.S. Dist. LEXIS 100886, at *9 (D.N.J.2014) (citing 15 U.S.C. § 1692k ; Marx v. Gen. Revenue Corp., ––– U.S. ––––, 133 S.Ct. 1166, 1171 n. 1, 185 L.Ed.2d 242 (2013) ; Brown v. Card Serv. Ctr., 464 F.3d 450, 453 (3d Cir.2006) ). Additionally, "as remedial legislation, the FDCPA must be broadly construed in order to give full effect to these purposes." Caprio v. Healthcare Revenue Recovery Grp., LLC, 709 F.3d 142, 148 (3d Cir.2013).

The United States Court of Appeals for the Third Circuit has stated that to prevail on an FDCPA claim a plaintiff must prove that:

(1) she is a consumer, (2) the defendant is a debt collector, (3) the defendant's challenged practice involves an attempt to collect a "debt" as the Act defines it, and (4) the defendant has violated a provision of the FDCPA in attempting to collect the debt.

Douglass v. Convergent Outsourcing, 765 F.3d 299, 303 (3d Cir.2014) (citing Piper v. Portnoff Law Assocs., Ltd., 396 F.3d 227, 232 (3d Cir.2005) ). At issue is whether Defendant has violated a provision of the FDCPA in attempting to collect the debt. In particular, Plaintiff claims that Defendant violated section 1692e of the FDCPA when it sent a letter dated February 9, 2015, in connection with the collection of a debt, which allegedly contained a false, deceptive, or misleading statement. (Doc. 1-1, pp. 2-3). Defendant argues that Plaintiff s claim should be dismissed pursuant to Federal Rule of Civil Procedure 12(b)(6) because the challenged language in the letter does not violate the FDCPA. (Doc. 4, pp. 5-13). Specifically, as discussed in more detail below, Defendant contends that the challenged language does not violate the FDCPA because it is true, is neither deceptive nor misleading, and is immaterial. See(Id.).

Section 1692e of the FDCPA is "the provision of the law dealing with communications from debt collectors to debtors." Jensen v. Pressler & Pressler, 791 F.3d 413, 419 (3d Cir.2015). Under section 1692e, "[a] debt collector may not use any false, deceptive, or misleading representation or means in connection with the collection of any debt." 15 U.S.C. § 1692e. "The sub-parts of § 1692e comprise a non-exhaustive list of debt collection practices that violate the prohibition on false or misleading representation." Jensen, 791 F.3d at 418 n. 2 (citing 15 U.S.C. § 1692e ). The sub-part alleged to have been violated here is section 1692e(10), which prohibits a debt collector from using "any false representation or deceptive means to collect or attempt to collect any debt or to obtain information concerning a consumer." 15 U.S.C. § 1692e(10). In particular, Plaintiff alleges that the letter's challenged statement is false, deceptive, and misleading because "the statement could mean that the amount of any savings caused by a settlement offer would be the amount that was discharged," (Doc. 1-1, p. 2), or, alternatively, "could instead mean that the entire debt that is being resolved as a result of the settlement is the amount that is ‘discharged.’ " (Id. at p. 3).

Defendant argues that the challenged language is not false because it "is consistent with the federal statute requiring the filing of an information return when a debt is cancelled, consistent with the Treasury regulation that requires Form 1099-C's use, and consistent with IRS instructions to creditors regarding the use of Form 1099-C." (Doc. 4, p. 6). More simply, Defendant argues that "the sentence is accurate." (Id.).

Defendant identifies 26...