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Lawn v. Enhanced Service Billing

July 8, 2010


The opinion of the court was delivered by: Joyner, J.


Before the Court is Defendant Internet Business Advisors Inc.'s Motion to Dismiss or in the Alternative, for Summary Judgment (Doc. No. 11). For the reasons set forth in this Memorandum, Defendant's Motion is granted in part and denied in part.


This dispute arises out of charges placed on Plaintiff Robert J. Lawn's Verizon telephone bill by Defendants Enhanced Service Billing, Inc. ("ESBI") and Internet Business Advisors, Inc. ("IBA"). Defendant ESBI is a "billing aggregator" that arranges for local telephone companies to collect payments on behalf of third-party vendors and then forwards those payments to the vendors, collecting a commission on all transactions. Defendant IBA provides a web hosting service and employs Defendant ESBI to collect its fees. Beginning in August of 2008, ESBI placed a monthly charge of $21.15 ($19.95 plus $1.20 sales tax) on Plaintiff's Verizon telephone bill at the behest of IBA. Plaintiff paid this monthly charge through September of 2009, at which point Plaintiff contacted Verizon to inquire about the additional charges. Verizon then advised Plaintiff to contact Defendant IBA, which Plaintiff did to dispute the charges. IBA agreed to refund two months of charges but refused to issue refunds dating back to August of 2008. IBA issued a refund of $42.30 on Plaintiff's October bill, but also charged Plaintiff $21.15 for an additional month of service. Plaintiff contends that he never ordered nor received any services from Defendants. Defendants, however, contend that Plaintiff's wife, Kimberly Lawn, ordered the services using an online authorization form.

In Count I Plaintiff charges Defendants with conversion for the unauthorized taking of his money. Count II charges Defendants with violating Pennsylvania's Unfair Trade Practices and Consumer Protection Law for its deceptive billing practices. Count III seeks to recover the funds paid to Defendants under a theory of Unjust Enrichment. Finally, Count IV asks for Injunctive Relief.

Standard of Review

Under Federal Rule of Civil Procedure 12(b)(6), a complaint should be dismissed if the plaintiff has failed to state a claim on which relief can be granted. In evaluating a motion to dismiss, the court must take all well-pleaded factual allegations as true, but it is not required to blindly accept "a legal conclusion couched as a factual allegation." Papasan v. Allain, 478 U.S. 265, 283 (1986); Phillips v. County of Allegheny, 515 F.3d 224, 233 (3d Cir. 2008). Although a plaintiff is not required to plead detailed factual allegations, the complaint must include enough facts to "raise a right to relief above the speculative level." Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007).

Additionally, under Federal Rule of Civil Procedure 9(b), pleadings alleging fraud must "state with particularity the circumstances constituting fraud or mistake." Fed. R. Civ. P. 9(b). Rule 9(b) requires the plaintiff to go beyond the minimal pleading requirements of Federal Rule of Civil Procedure 8(a) when pleading fraud. Under Rule 9(b) the plaintiff must plead either the date, place, or time of the fraud or give precision and some measure of substantiation to his allegations of fraud through alternative means. Lum v. Bank of America, 361 F.3d 217, 224 (3d Cir. 2004).


Voluntary Payment Rule

Before addressing Plaintiff's claims, we must first examine Defendant's contention that Plaintiff's suit is barred by the Voluntary Payment Rule. The Voluntary Payment Rule is a common law doctrine that precludes actions from being brought to recover money that was voluntarily paid. In order to implicate the Voluntary Payment Rule, however, the payment must truly have been voluntary and made with an unadulterated understanding of all of the elements of the payment. Ochiuto v. Prudential Ins. Co., 52 A.2d 228, 230 (Pa. 1947).

The Voluntary Payment Rule does not preclude any of Plaintiff's claims in this case. Plaintiff's Complaint alleges that payments were made to Defendants because unauthorized and misleading charges were placed on Plaintiff's telephone bill. At this stage of the proceedings, the depth of Plaintiff's knowledge regarding the Verizon bill is unclear. Looking at Plaintiff's Verizon bill, the exact nature of Defendants' charges are not clear until the fifth page of a six-page bill. On the first page, which states the total balance owed by Plaintiff, neither Defendant is mentioned by name; rather, the bill has two specific charges from Verizon and then a third charge from "other providers." Further, before getting to page five, Plaintiff would have to read page two, which contains various means of contacting Verizon but no contact information for Defendants, and pages three and four, which contain details and charges relating to Plaintiff's phone use but not any information on Defendants' services or fees. In fact, we have found no mention of Defendant IBA anywhere on Plaintiff's Verizon bill and it is not until the fifth page that Defendant ESBI is mentioned by name. Under these circumstances, it is plausible that the payment to Defendants for IBA's web hosting service was not truly voluntary in the sense necessary to implicate the Voluntary Payment Rule. Plaintiff very well might not have fully understood to whom he was making payments, given that Defendant ESBI's name is not mentioned until page five, or for what services he was being charged, given that Defendant IBA's name never appears on the bill. Under these circumstances, we cannot conclude that Plaintiff had an unadulterated understanding of his payments to Defendants and the Voluntary Payment Rule cannot provide the ground for dismissing this action.

Count I

Turning to Plaintiff's Complaint, Count I is a claim for conversion. "A conversion is the deprivation of another's right of property in, or use or possession of, a chattel, or other interference therewith, without the owner's consent and without lawful justification." Stevenson v. Econ. Bank of Ambridge, 197 A.2d 721, 726 (Pa. 1964) (citing Gottesfeld v. Mech. & Traders Ins. Co., 173 A.2d 763 (Pa. Super. Ct. 1961)). Under Pennsylvania law, money is ...

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