Wong v. Alt. Claims Mgmt., LLC

JOSHUA WONG, for himself and all others similarly situated, Plaintiff, v. ALTERNATIVE CLAIMS MANAGEMENT, LLC, Defendant.

17 Civ. 3133 (ER)

UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF NEW YORK

November 21, 2017

OPINION AND ORDER

Ramos, D.J.:

Joshua Wong ("Plaintiff" or "Wong") brings a class action against Alternative Claims Management LLC ("ACM" or "Defendant") alleging violations of the Fair Debt Collection Practices Act, 15 U.S.C. § 1692 et seq. ("FDCPA"). Before this Court is Defendant's motion to dismiss the First Amended Complaint ("FAC") in its entirety pursuant to the Federal Rule of Civil Procedure 12(b)(6) for failure to state a claim.

For the reasons set forth below, Defendant's motion is GRANTED in part and DENIED in part.

I. BACKGROUND

A. Factual Background¹

On June 25, 2016, Wong rented a 2016 Cadillac XTS (the "Vehicle") at Los Angeles International Airport from Sixt Rent A Car, LLC ("Sixt"). FAC ¶ 8 & Ex. A. This rental was subject to a standard form car rental agreement. Id. ¶ 9. On July 2, 2016 at 12:07 p.m., Wongreturned the Vehicle, and examined it with a Sixt attendant for any damage. Id. ¶¶ 10-11. At that time, they determined that there was no new damage to the vehicle, and Wong was not charged for any damages. Id. ¶ 11. Later that day, Wong received an automated email from Sixt, which confirmed the Vehicle's return and attached a receipt indicating that the total due was $497.56. Id. ¶¶ 12-13.

On July 21, 2016, almost three weeks after Wong returned the Vehicle, Sixt sent him an email stating, inter alia: "After your drop off it has been noted/you have informed us that the vehicle you rented had sustained a new damage." Id. ¶ 14. The next day, Sixt emailed Wong a "Return Checksheet," purporting to show the damage the Vehicle incurred while it was in his possession. Id. ¶ 15. Specifically, it listed six existing scratches or dents and eleven new scratches or dents to the Vehicle. See FAC Ex. A ("Checksheet"). This Checksheet was dated July 2, 2016, but Wong alleges that he was not previously shown the Checksheet and that the date is "mistaken."² FAC ¶ 16.

Wong asserts that Sixt initiated at least two additional communications with him regarding the purported damage to the Vehicle in July 2016 and again in October 2016, seeking to collect money or obtain information to submit an insurance claim, but does not further allege the exact content of those communications. Id. ¶ 17. He claims that he refused to cooperate with Sixt on the grounds that he was not responsible for any damage to the Vehicle. Id. ¶ 18.

Thereafter, Wong received a letter from ACM dated March 28, 2017 regarding damage to the Vehicle ("March Letter"). Id. at ¶ 19. Wong avers that ACM is a "debt collector" as defined in Section 1692a(6) of the FDCPA, and that ACM presented itself as such to him. Id. ¶¶ 6, 21. In the March Letter, ACM stated that it had been retained by Sixt to handle the processing of aclaim concerning damage to the Vehicle. March Letter at 1. It further stated that according to its information, the Vehicle was in Wong's possession on the date of the loss. Id. ACM then asked Wong to pay the total amount due or to report the claim to his insurance company. Id. Specifically, ACM sought $3,352 for the car's repair, and $150 as an administrative fee. Id. Attached to the March Letter was an estimate from a repair shop which listed 32 line items of repair that needed to be performed on the Vehicle. Id. at 2-4. Notably, this estimate was dated March 10, 2017—eight months after Wong had returned the Vehicle to Sixt. Id. at 2. The March Letter also included the following language:

Pursuant to 15 USC Section 1692g, be advised that Alternative Claims Management is attempting to collect a debt and any information obtained will be used for that purpose. Within thirty (30) days after receipt of this notice you must dispute the validity of this debt, or any portion thereof, or this debt will be assumed to be valid by the debt collector. Upon your written request within thirty (30) days after receipt of this notice, we will furnish you with the name and address of the original creditor, if different from the "Creditor/ACM Client" listed above. If you notify us, in writing, within thirty (30) days after receipt of this notice that the above debt, or any portion thereof, is disputed, we will obtain verification of the debt and a copy of such verification will be mailed to you.

Id. at 1.

Wong does not allege that he disputed the debt to ACM within thirty days after he received the March Letter. Instead, he disputes for the first time in the instant action that he is responsible for the damage and notes that even Sixt's Checksheet conflicts with the March Letter. Id. ¶ 22. For example, amongst the thousands of dollars of damages ACM sought were hundreds of dollars for labor to repair the rear bumper, but the Checksheet expressly noted that no damage occurred to the rear bumper during Wong's rental. Id.

B. Procedural Background

On April 28, 2017, Plaintiff filed the Complaint against ACM and Sixt, alleging that ACM violated the FDCPA and that both ACM and Sixt violated the Florida Deceptive and UnfairTrade Practices Act.³ Doc. 1. On July 20, 2017, Plaintiff voluntarily dismissed Sixt from the instant action with prejudice. Doc. 15. On July 31, 2017, Plaintiff filed the FAC, alleging that Defendant violated Sections 1692e(2)(A), 1692e(10) and 1692f of the FDCPA. Doc. 17. On August 28, 2017, Defendant filed the instant motion to dismiss. Doc. 18.

II. LEGAL STANDARD

A. Motion to Dismiss

Under Rule 12(b)(6), a complaint may be dismissed for "failure to state a claim upon which relief can be granted." Fed. R. Civ. P. 12(b)(6). When ruling on a motion to dismiss pursuant to Rule 12(b)(6), the Court must accept all factual allegations in the complaint as true and draw all reasonable inferences in the plaintiff's favor. Koch v. Christie's Int'l PLC, 699 F.3d 141, 145 (2d Cir. 2012). However, the Court is not required to credit "mere conclusory statements" or "[t]hreadbare recitals of the elements of a cause of action." Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (citing Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007)). "To survive a motion to dismiss, a complaint must contain sufficient factual matter . . . to 'state a claim to relief that is plausible on its face.'" Id. at 678 (quoting Twombly, 550 U.S. at 570). A claim is facially plausible "when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Id. (citing Twombly, 550 U.S. at 556). If the plaintiff has not "nudged [his] claims across the line from conceivable to plausible, [the] complaint must be dismissed." Twombly, 550 U.S. at 570.

B. FDCPA

The FDCPA is "primarily a consumer protection statute." Avila v. Riexinger & Assocs.,LLC, 817 F.3d 72, 75 (2d Cir. 2016) (quoting Jacobson v. Healthcare Fin. Servs., Inc., 516 F.3d 85, 95 (2d Cir. 2008)). It was enacted in 1977 "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 establish a violation of the FDCPA, a plaintiff must satisfy three elements: (i) the plaintiff must be a "consumer;" (ii) the defendant must be a "debt collector;" and (iii) the defendant must have committed some "act or omission in violation of FDCPA requirements." See Okyere v. Palisades Collection, LLC, 961 F. Supp. 2d 508, 514 (S.D.N.Y. 2013) (quoting Schuh v. Druckman & Sinel, L.L.P., 751 F. Supp. 2d 542, 548 (S.D.N.Y. 2010)).

Debt collectors are subject to strict liability for violations of the FDCPA. Ellis v. Solomon & Solomon, P.C., 591 F.3d 130, 135 (2d Cir. 2010) (citing Bentley v. Great Lakes Collection Bureau, Inc., 6 F.3d 60, 63 (2d Cir. 1993)). Moreover, to determine whether a communication violates the FDCPA, the Second Circuit applies the "least sophisticated consumer" standard. See id. In applying this standard, courts "ask how the least sophisticated consumer . . . would understand the collection notice" at issue. Avila, 817 F.3d at 75 (citation omitted). Under this test, a violation of the FDCPA is established if the conduct at issue "could mislead a putative-debtor as to the nature and legal status of the underlying debt, or [ ] could impede a consumer's ability to respond to or dispute collection." Gabriele v. Am. Home Mortg. Servicing, Inc., 503 F. App'x 89, 94 (2d Cir. 2012).

III. DISCUSSION

Wong alleges that he is a consumer, that ACM is a debt collector, and that ACM violated Sections 1692e(2)(A), 1692e(10) and 1692f of the FDCPA. ACM does not argue that Wong hasinadequately pled the first two elements. Accordingly, the only element at issue is whether Wong adequately alleged that ACM violated Sections 1692e(2)(A), 1692e(10) and 1692f to survive a motion to dismiss.

A. Section 1692e

Section 1692e(2)(A) prohibits debt collectors from making a "false representation of—the character, amount, or legal status of any debt," and Section 1692e(10) prohibits them 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(2)(A); 15 U.S.C. § 1692e(10). Wong alleges that ACM violated Sections 1692e(2)(A) and 1692e(10) when it asserted in the March Letter that he owed a debt—payment for damage to the Vehicle—that he does not in fact owe, and by misrepresenting the date on which the Vehicle was damaged. FAC ¶¶ 27-31. ACM argues that it did not make any misrepresentations because it accurately relayed what Sixt alleged was owed by Wong. Therefore, the Court must first determine whether liability under the FDCPA may attach to a debt collector that correctly conveyed to a debtor what the...