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Lynch v. Capital One Bank USA, N.A

United States District Court, Third Circuit

June 14, 2013

BRIAN T. LYNCH, Plaintiff,
CAPITAL ONE BANK USA, N.A., et al., Defendants.


Mitchell S. Goldberg, J.

This case stems from allegedly fraudulent actions taken by Defendants, Capital One Bank (USA), N.A., Capital One Services, LLC (collectively, “Capital One”) and Capital One’s collection attorneys against Plaintiff Brian T. Lynch in a collection lawsuit within the Bucks County Court of Common Pleas. Capital One filed a motion to dismiss Plaintiff’s second amended complaint on September 6, 2012. For the reasons that follow, we will grant Capital One’s motion, and provide Plaintiff with leave to amend.


Plaintiff opened a credit card account with Capital One on or about September 25, 2006. (2d Am. Compl. ¶ 46; Ex. A, ¶ 4.) On July 6, 2011, Capital One, through its attorneys Paul J. Klemm, Robert L. Baroska and Nudelman, Klemm & Golub, P.C., filed a complaint in Bucks County against Plaintiff, seeking payment on delinquent credit card bills. (Id. at Ex. C.) Capital One filed an amended complaint on January 20, 2012, attaching as an exhibit the Customer Agreement purported to govern Plaintiff’s credit card account. (Id. at ¶¶ 39-40, Ex. B.) The Agreement attached to the amended complaint has a copyright date of 2010 and reads as an original agreement as opposed to an amendment or modification.[2] (Id. at Ex. B, p. 6.) Capital One’s amended complaint sought to collect interest and reasonable attorney’s fees “pursuant to the terms of the agreement.” (Id. at Ex. A, ¶ 15.)

Plaintiff initiated the federal court matter currently before us on February 24, 2012 and filed a second amended complaint on August 23, 2012. The second amended complaint alleges that Capital One, along with all collection attorneys for Capital One Bank, has intentionally and fraudulently presented inapplicable Customer Agreements in collection actions as the operative agreement, and that such conduct constitutes: (1) violations of the Racketeer Influenced and Corrupt Organizations Act (“RICO”), 18 U.S.C. § 1961, et seq. by all Defendants (“Count I”); (2) a violation of the Fair Debt Collection Practices Act (“FDCPA”), 15 U.S.C. § 1692a, et seq. by Capital One’s collection attorneys[3] (“Count II”); (3) a violation of Pennsylvania’s Unfair Trade Practices and Consumer Protection Law (“UTPCPL”), 73 P.S. § 201-1, et seq. by all Defendants (“Count III”); and (4) a breach of contract by Capital One Services, LLC (“Count IV”).[4] Further, Plaintiff seeks to bring his claim as a class action on behalf of “[a]ll persons who have been the subject of collection law suits [sic] brought by Defendants for which the Defendants attach as corroborative exhibits and/or as evidence written agreements . . .” which are inapplicable. (Id. at ¶ 36.)

Capital One filed a motion to dismiss the second amended complaint on September 6, 2012. The motion is now fully briefed and ready for disposition.


To survive a motion to dismiss pursuant to Federal Rule of Civil Procedure 12(b)(6), a complaint must “contain sufficient factual matter, accepted as true, to ‘state a claim for relief that is plausible on its face.’” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 570 (2007)). The plausibility standard requires more than a “sheer possibility that a defendant has acted unlawfully.” Id. To determine the sufficiency of a complaint under Twombly and Iqbal, the Court must take the following three steps: (1) the Court must “tak[e] note of the elements a plaintiff must plead to state a claim;” (2) the court should identify the allegations that, “because they are no more than conclusions, are not entitled to the assumption of truth;” and (3) “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.” Burtch v. Milberg Factors, Inc., 662 F.3d 212, 221 (3d Cir. 2011) (citations omitted).


1. Count I - RICO Claims

In their motion, Capital One argues that Plaintiff’s RICO claims, pursuant to 18 U.S.C. §§ 1962(c) and (d) are deficiently pled because Plaintiff does not assert facts that would establish that Plaintiff relied on the allegedly fraudulent representation, nor does he assert that he suffered any cognizable damages. Capital One urges that Plaintiff’s statement in the second amended complaint that he relied on Capital One’s fraudulent representation-i.e. the 2010 Agreement- when he hired counsel to defend the collection action is undermined by the complaint and exhibits attached thereto. Specifically, Capital One argues that Plaintiff hired an attorney to reduce his financial exposure, not as a result of the alleged fraud. Thus, Capital One posits that Plaintiff did not rely on the 2010 Agreement, nor did he suffer any damages as a result of the alleged misrepresentation.

Section 1962(c) of the RICO statute provides:

It shall be unlawful for any person employed by or associated with any enterprise engaged in, or the activities of which affect, interstate or foreign commerce, to conduct or participate, directly or indirectly, in the conduct of such enterprise’s affairs through a pattern of racketeering activity[5] or collection of unlawful debt.

18 U.S.C. § 1962(c). In order to state a claim under § 1962(c), the complaint must allege “(1) conduct (2) of an enterprise (3) through a pattern (4) of racketeering activity.” Sedima, ...

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