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Keller v. Gc Services, Lp

United States District Court, Third Circuit

June 26, 2013

GC SERVICES, L.P. et al. Defendants.


WILLIAM H. YOHN, District Judge.

Plaintiff, Melissa Keller, brings this action against defendants, American Education Services[1] ("AES")-a fictitious name owned by the Pennsylvania Higher Education Assistance Agency ("PHEAA")-and GC Services, L.P. ("GCS"), alleging violations of the Fair Debt Collection Practices Act ("FDCPA"), [2] 15 U.S.C. §§ 1692 et seq., the Pennsylvania Fair Credit Extension Uniformity Act ("FCEUA"), 73 Pa. Cons. Stat. Ann. §§ 2270.1 et seq., and Pennsylvania's Unfair Trade Practices and Consumer Protection Law ("UTPCPL"), 73 Pa. Cons. Stat. Ann. §§ 201-1 et seq., in connection with the defendants' collection of Keller's defaulted student loans. Currently before me is PHEAA's motion to dismiss for failure to state a claim under Rule 12(b)(6) of the Federal Rules of Civil Procedure. For the following reasons, I will grant PHEAA's motion to dismiss.


Like many people who attend college, Keller received student loans to cover the cost of her school's tuition, as well as various fees and expenses. PHEAA[3] served as the guarantor of Keller's various student loans, which she acquired through the Federal Family Education Loan Program ("FFELP"). (Mot. to Dismiss, Ex. 1, at 2.) Pursuant to her master promissory note, Keller was to begin repaying her loans six months from the date of graduation, or six months from the time she ceased to be enrolled "at least half time at an eligible school." ( Id., Ex. 1, at 15.)

Keller was unable to make her repayments, however, and as a result defaulted on her student loans. (Compl. ¶ 7.) Upon default, she contacted PHEAA and attempted to establish a payment plan, wherein she offered to pay fifty dollars per month toward the balance of her loans. ( Id. ¶ 9.) PHEAA rejected the offer on the ground that the repayment amount was insufficient. ( Id. ¶ 10.)

On August 9, 2012, Keller received a letter from PHEAA stating that unless she paid the loan balance in full-$6, 803.92, excluding collection costs and other fees for which she was responsible to pay-the Department of Education would request an offset through the Treasury Department of any federal or state tax returns. ( Id., Ex. A.) Keller contacted GCS, PHEAA's collection agent, to establish a payment plan, at which point she was notified that her loan balance was $8, 108.06-substantially more than the amount indicated in the letter. ( Id. ¶ 13.) A GCS agent told Keller that if she entered into a loan rehabilitation program, the Treasury Department would not garnish her tax refund. ( Id. ¶ 15.) On November 8, 2012, Keller signed a contract with GCS, in which she agree to pay eighty-seven dollars per month. ( Id. ¶ 16.) Keller made her first payment to GCS on November 14, 2012.[4] ( Id., Ex. E.)

Keller continued to make timely monthly payments according to the loan rehabilitation program, which required her to make nine voluntary, reasonable, and affordable payments within a ten-month period. ( Id., ¶¶ 17, 20.) Nevertheless, in February 2013, Keller received a letter from the Internal Revenue Service that stated $2, 500 had been "deducted from her 2012 tax return." ( Id. ¶ 21 (presumably meaning that it had been deducted from her "tax refund" and applied to her loan obligation).)

On March 29, 2013, Keller filed a complaint alleging violations of the FCEUA and UTPCPL against AES (in actuality and as explained above, against PHEAA) and GCS, and a violation of the FDCPA solely against GCS. Subsequently, PHEAA filed a motion to dismiss.


In deciding a motion to dismiss under Rule 12(b)(6), courts must "accept all factual allegations as true, construe the complaint in the light most favorable to the plaintiff, and determine whether, under any reasonable reading of the complaint, the plaintiff may be entitled to relief." Phillips v. Cnty. of Allegheny, 515 F.3d 224, 233 (3d Cir. 2008) (internal quotation marks and citation omitted). The pleading standard of Rule 8 "demands more than an unadorned, the-defendant-unlawfully-harmed-me accusation." Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). "Threadbare recitals of the elements of a cause of action, supported by mere conclusory statements" will not suffice. Id. at 678 (citing Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007)). The complaint must contain sufficient factual matter to be plausible on its face. See id. "A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged"; a sheer possibility that a defendant acted unlawfully is not sufficient. Id. Therefore, to survive a motion to dismiss, a plaintiff must allege facts sufficient to "nudge[] [his or her] claims across the line from conceivable to plausible." Twombly, 550 U.S. at 570.

When faced with a motion to dismiss, "courts generally consider only the allegations in the complaint, exhibits attached to the complaint[, ] and matters of public record." Pension Benefit Guar. Corp. v. White Consol. Indus., Inc., 998 F.2d 1192, 1196 (3d Cir. 1993). The Third Circuit has held, however, that "a court may consider an undisputedly authentic document that a defendant attaches as an exhibit to a motion to dismiss if the plaintiff's claims are based on the document." Id. If such practice were not allowed, "a plaintiff with a legally deficient claim could survive a motion to dismiss by failing to attach a dispositive document on which it relied." Id. Accordingly, I am free to consider Keller's master promissory note, which the defendant has attached to its motion.


Keller asserts two claims against PHEAA: a violation of the FCEUA (count II) and a violation of the UTPCPL (count III). Additionally, though not listed as separate counts in her complaint, Keller cursorily levies allegations of invasion of privacy and emotional distress-allegations repeated in her response brief.[5]

Assuming, arguendo, that Keller intended to bring charges of intentional infliction of emotional distress ("IIED") and false light invasion of privacy against PHEAA, those claims are dismissed as they are simply legal conclusions. Keller's complaint is completely devoid of facts to support either claim; it contains only bald assertions that PHEAA has committed violations of state law, without the slightest attempt at stating a plausible claim entitling Keller to relief, let alone offering an explanation as to how PHEAA's actions fit the elements of the alleged violations. "When a plaintiff does not seek leave to amend a deficient complaint after a defendant moves to dismiss it, the court must inform the plaintiff that [s]he has leave to amend within a set period of time, unless amendment would be inequitable or futile." Grayson v. Mayview State Hosp., 293 F.3d 103, 108 (3d Cir. 2002). "Where a claim is frivolous, amendment is necessarily futile and, thus, leave to amend is not warranted." Thompson v. Police Dep't of Phila., No 10-6083, 2011 WL 4835831, at *2 (E.D. Pa. Oct. 12, 2011) (citing Grayson, 293 F.3d 112-13). "A claim is frivolous when it lacks an arguable basis in either law ...

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