Flamm v. Sarner & Associates, P.C., Civil Action No. 02-4302 (E.D. Pa. 11/6/2002)

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MARA FLAMM, Plaintiff, v. SARNER & ASSOCIATES, P.C., et al., Defendant.

Civil Action No. 02-4302.

United States District Court, E.D. Pennsylvania.

November 6, 2002.

MEMORANDUM

LOWELL A. REED, District Judge.

This action arises out of the efforts of defendants to collect a debt from plaintiff. Plaintiff has brought suit against her physician Jodi Brown, M.D. ("Dr. Brown"), her physician's attorneys Joshua and Leonard Sarner and their firm of Sarner & Associates, P.C. (collectively, "Sarner Defendants"), and process server John Matusavage ("Mr. Matusavage"). Plaintiff alleges claims under the Fair Debt Collection Practices Act ("FDCPA"), 15 U.S.C. § 1692 et seq., as well as under Pennsylvania state law for violations of the Unfair Trade Practices and Consumer Protection Law ("UTPCPL"), 73 Pa. C. S. § 201-1 et seq., intentional infliction of emotional distress, defamation and civil conspiracy. Defendants have moved to dismiss the FDCPA claim asserted for failure to state a claim under Federal Rule of Civil Procedure 12(b)(6). They have further moved to dismiss the remaining claims for lack of jurisdiction. For reasons articulated below, the motions to dismiss will be granted in part and denied in part.¹

Factual Background²

Plaintiff Mara Flamm ("Ms. Flamm") was sued by Dr. Brown in the Municipal Court of Philadelphia County for $5000. On or about April 4, 2001, the Municipal Court of Philadelphia County entered a default judgment in favor of Dr. Brown and against Ms. Flamm in the amount of $6,215 plus $65 in costs. On or about October 26, 2001, Mr. Matusavage served a Notice of Deposition in Aid or Execution ("Notice") on plaintiff by leaving a copy with plaintiffs supervisor at Peirce College where plaintiff was employed. Mr. Matusavage informed plaintiffs supervisor that plaintiff owed a large debt to a doctor.

On January 25, 2002, Mr. Matusavage again appeared at Peirce College and demanded to see plaintiff, plaintiffs supervisor, the Dean of the College, and their secretaries.³ Camita Rutling ("Ms. Rutling"), an administrative assistant of Peirce College, spoke with the process server at the request of campus security. Mr. Matusavage asked Ms. Rutling to accept a package on behalf of plaintiff and further requested to speak with Ms. Rutling in private. Upon following her to a room near by, he began to yell in a loud and aggressive tone. Mr. Matusavage stated, "I don't know what type of sneaky little thieves you hire, but Mara Flamm stole thousands of dollars from a doctor and hasn't paid." lie complained that he and the Sarner Defendants had been going to Peirce College for over two years and that plaintiff was always unavailable. When Ms. Rutling advised Mr. Matusavage that the information was none of her business, and that he should contact plaintiff at home, Mr. Matusavage remarked that plaintiff had given them a false home address and phone number. He further stated that plaintiff had received services for which she refused to pay and that she failed to appear in court. Mr. Matusavage then reiterated that plaintiff was a thief, and that if plaintiff was the type of person Peirce College had working for them, the school was in trouble. Finally, he requested that Ms. Rutling inform plaintiff that the next time they had to go to her place of employment, they would bring a sheriff and have plaintiff arrested.

Legal Standard

Rule 12(b) of the Federal Rules of Civil Procedure provides that "the following defenses may at the option of the pleader be made by motion:. . . (6) failure to state a claim upon which relief can be granted." In deciding a motion to dismiss under Rule 12(b)(6), a court must take all well pleaded facts in the complaint as true and view them in the light most favorable to the plaintiff. See Jenkins v. McKeithen, 395 U.S. 411, 421, 89 S.Ct. 1843 (1969). Because the Federal Rules of Civil Procedure require only notice pleading, the complaint need only contain "a short and plain statement of the claim showing that the pleader is entitled to relief" Fed.R. Civ. P. 8(a). A motion to dismiss should be granted only if "it is clear that no relief could be granted under any set of facts that could be proved consistent with the allegations." Hishon v. King & Spalding, 467 U.S. 69, 73, 104 S.Ct. 2229 (1984).

Analysis

A. Count I — FDCPA Claims

The stated purpose of the FDCPA is "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). It is uncontested that the money owed by Ms. Flamm constitutes a "debt" as defined in 15 U.S.C. § 1692a(5). In Count I of the complaint, plaintiff claims that the acts of defendants were abusive debt collection practices within the meaning of the statute. Defendants have moved to dismiss by contesting the allegation that they were "debt collectors" as defined by the FDCPA.

1. Dr. Brown

Dr. Brown asserts that because she is a "creditor" rather than a "debt collector" as defined in the FDCPA, she is not subject to its dictates.⁴ A "debt collector" is defined by the FDCPA, in relevant part, as

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 another. Notwithstanding the exclusion provided by clause (F) of the last sentence of this paragraph, the term includes any creditor who, in the process of collecting his own debts, uses any name other than his own which would indicate that a third person is collecting or attempting to collect such debts. For the purpose of section 1692f of this title, such term also includes any person who uses any instrumentality of interstate commerce or the mails in any business the principal business of which is the enforcement of security interests. The term does not include —

(A) any officer or employee of a creditor while, in the name of the creditor, collecting debts for such creditor;

(B) any person while acting as a debt collector for another person, both of whom are related by common ownership or affiliated by corporate control, if the person acting as a debt collector does so only for persons to whom it is so related or affiliated and if the principal business of such person is not the collection of debts;

(C) any officer or employee of the United States or any State to the extent that collecting or attempting to collect any debt is in the performance of his official duties;

(D) any person while serving or attempting to serve legal process on any other person in connection with the judicial enforcement of any debt;

(B) any nonprofit organization which, at the request of consumers, performs bona fide consumer credit counseling and assists consumers in the liquidation of their debts by receiving payments from such consumers and distributing such amounts to creditors; and

(F) any person collecting or attempting to collect any debt owed or due or asserted to be owed or due another to the extent such activity (i) is incidental to a bona fide fiduciary obligation or a bona fide escrow arrangement; (ii) concerns a debt which was originated by such person; (iii) concerns a debt which was not in default at the time it was obtained by such person; or (iv) concerns a debt obtained by such person as a secured party in a commercial credit transaction involving the creditor.

15 U.S.C. § 1692a(6) (emphasis added).

Generally the FDCPA does not govern the activities of a creditor attempting to collect on debts owed directly to themselves. See Gary v. Goldman & Co., 180 F. Supp.2d 668, 672 (E.D. Pa. 2002) (citing Pollice v. National Tax Funding. L.P., 225 F.3d 379, 403 (3d Cir. 2000). This is likely because "creditors are generally presumed to restrain their abusive collection practices out of a desire to protect their corporate goodwill . . . ." Aubert v. American Gen. Fin., Inc., 137 F.3d 976, 978 (7th Cir. 1998) (quoted in Pollice, 225 F.3d at 403). Nevertheless, under the statute, the term "debt collector" includes creditors "who, in the process of collecting his own debts, uses any name other than his own which would indicate that a third person is collecting or attempting to collect such debts by indicating that a third person was collecting or attempting to collect such debts." 15 U.S.C. § 1692a(6). In her response to Dr. Brown's motion, plaintiff maintains that Dr. Brown used the name of the Sarner defendants to collect on her own debt, and thus falls within the definition of "debt collector."

A creditor collects its own debts by using a different name, implying that a third party was the debt collector, when the creditor either used an alias, see Pressman v. Southeastern Financial Group. Inc., No. CIV. A. 94-5244, 1995 U.S. Dist. LEXIS 17961 (E.D. Pa. Nov. 30, 1995), or "controlled almost all aspects of debt collection." Harrison v. NBD Inc., 968 F. Supp. 837, 843 (E.D.N.Y. 1997). For example, a creditor was found to be a "debt collector" where the creditor, and not its attorney, operated an automated system that selected the defaulted accounts, mailed and printed the attorney's letters from its office, and received and handled any responses or payments elicited from those letters with the attorney through communication channels maintained by the creditor. See Young v. Citicorp Retail Servs., 3:95 CV15O4, 1997 U.S. Dist. LEXIS 22669, at *10 (D. Conn. May 20, 1997), aff'd No. 97-9397, U.S. App. LEXIS 20268 (2d Cir. June 29, 1998). This prohibited practice is known as "flat-rating," in which a collection agency receives a flat fee based on the number of demand letters sent bearing the collection agency letterhead, but is otherwise not...