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Friend v. Financial Recoveries Limited

United States District Court, M.D. Pennsylvania

August 28, 2017

RONALD FRIEND, Plaintiff
v.
FINANCIAL RECOVERIES LIMITED, et al., Defendants

          MEMORANDUM

          William J. Nealon United States District Judge.

         Plaintiff, Ronald Friend, filed a complaint against Defendants Financial Recoveries Limited (“Financial Recoveries”), John Does 1-10, and Corporations X, Y, Z. (Doc. 1). On March 10, 2017, Financial Recoveries filed a motion to dismiss the complaint pursuant to Federal Rule of Civil Procedure 12(b)(6) and its brief in support. (Docs. 3, 4). On March 31, 2017, Plaintiff filed an amended complaint. (Doc. 5). Plaintiff alleges that Defendants violated the Fair Debt Collection Practices Act, 15 U.S.C. § 1692 et seq. (“FDCPA”), as well as a number of state-law claims.[1] (Id.).

         On April 14, 2017, Financial Recoveries filed a Rule 12(b)(6) motion to dismiss the amended complaint and its brief in support. (Docs. 7-8). On May 22, 2017, the Court ordered that either Plaintiff file a brief in opposition to Financial Recoveries' motion to dismiss the amended complaint on or before June 5, 2017, or risk, inter alia, the granting of that motion without a merits analysis. (Doc. 12). On June 5, 2017, Plaintiff filed a brief in opposition. (Doc. 13). On June 19, 2017, Financial Recoveries filed a reply. (Doc. 14). As a result, Financial Recoveries' motion to dismiss the amended complaint is ripe for disposition. For the reasons set forth below, Financial Recoveries' motion to dismiss the amended complaint, (Doc. 7), will be granted.

         I. STANDARD OF REVIEW

         As stated, Financial Recoveries' motion to dismiss the amended complaint is brought pursuant to Federal Rule of Civil Procedure 12(b)(6). See (Docs. 3, 4). “This rule provides for the dismissal of a complaint, in whole or in part, if the plaintiff fails to state a claim upon which relief can be granted.” Suessenbach Family v. Access Midstream, 2015 U.S. Dist. LEXIS 40900, at *2 (M.D. Pa. Mar. 31, 2015) (Mannion, J.). The moving party bears the burden of showing that no claim has been stated. Hedges v. United States, 404 F.3d 744, 750 (3d Cir. 2005). All factual allegations are accepted as true and all inferences are construed in the light most favorable to the non-moving party. Kaymark v. Bank of Am., N.A., 783 F.3d 168, 174 (3d Cir. 2015) (citing Fleisher v. Standard Ins. Co., 679 F.3d 116, 120 (3d Cir. 2012)). “[D]ismissal is appropriate only if, accepting all of the facts alleged in the complaint as true, the plaintiff has failed to plead ‘enough facts to state a claim to relief that is plausible on its face.'” Suessenbach Family, 2015 U.S. Dist. LEXIS 40900, at *2 (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544 (2007)). The non-moving party's allegations must be sufficient to “raise a right to relief above the speculative level.” Twombly, 550 U.S. at 544. “This requirement ‘calls for enough fact[s] to raise a reasonable expectation that discovery will reveal evidence of' necessary elements of the plaintiff's cause of action.” Suessenbach Family, 2015 U.S. Dist. LEXIS 40900, at *2-3 (quoting Twombly, 550 U.S. at 544). “Furthermore, in order to satisfy federal pleading requirements, the plaintiff must ‘provide the grounds of his entitlement to relief, ' which ‘requires more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do.'” Id. (quoting Phillips v. Cnty. of Allegheny, 515 F.3d 224, 231 (3d Cir. 2008)).

         “Generally, the court should grant leave to amend a complaint before dismissing it as merely deficient.” Aspinall v. Thomas, 118 F.Supp.3d 664, 670-71 (M.D. Pa. 2015) (Mannion, J.) (citing Fletcher-Harlee Corp. v. Pote Concrete Contractors, Inc., 482 F.3d 247, 252 (3d Cir. 2007); Grayson v. Mayview State Hosp., 293 F.3d 103, 108 (3d Cir. 2002); Shane v. Fauver, 213 F.3d 113, 116-17 (3d Cir. 2000)). “Dismissal without leave to amend is justified only on the grounds of bad faith, undue delay, prejudice, or futility.” Alston v. Parker, 363 F.3d 229, 236 (3d Cir. 2004). When faced with a motion to dismiss, district courts should freely give leave to amend, even when the plaintiff does not seek leave to amend, “when justice so requires, including for a curative amendment unless such an amendment would be inequitable or futile.” Free Speech Coal., Inc. v. Att'y Gen., 677 F.3d 519, 545 (3d Cir. 2012).

         II. FACTUAL ALLEGATIONS

         Pursuant to the above-discussed motion to dismiss standard of review, all facts are taken from Plaintiff's amended complaint, (Doc. 5), unless otherwise noted.

         Financial Recoveries, a company that “does extensive business in the Commonwealth” of Pennsylvania, reported four (4) of Plaintiff's accounts “as delinquent, with derogatory information therein.” (Id. at pp. 3-4). “[U]pon discovering the aforementioned derogatory information on [his] credit report, Plaintiff sent Defendant letter(s) both disputing the high balance of each account and requesting cop[ies] of the original contracts.” (Id. at p. 4). “Said account was used for Plaintiff's personal, family and household purposes.” (Id.). According to Plaintiff, “[p]rior to the commencement of this action, Defendant caused certain information about the alleged accounts . . . to be placed on Plaintiff's consumer report.” (Doc. 5, p. 4). “Such information, ” Plaintiff alleges, “was updated by Defendant to the Credit Reporting Agencies . . . on a regular basis, and are reflected on Plaintiff's Consumer Credit Report.” (Id.). “The inaccurate information negatively reflects upon Plaintiff, Plaintiff's credit repayment history, Plaintiff's financial responsibility as a debtor and Plaintiff's credit worthiness.” (Id.). Plaintiff contends that:

[a]t the time of the commencement of this action, Defendant continued to report and update the information about the account to those Credit Reporting Agencies, but failed to either communicate to the [Credit Reporting Agencies] any changes to the account, including the deletion of the trade line.

(Id.).

         Plaintiff alleges that “Defendant had actual and/or constructive notice that Plaintiff asked for the account to be verified because” Plaintiff sent “[l]etters . . . to Defendant regarding the aforementioned accounts, requesting both an accounting of the debts, as well as the underlying contracts regarding said debts” and “[t]he lack of any Response letters from Defendant.” (Id. at pp. 4-5). “Notwithstanding such actual or constructive notice of Plaintiff's request(s) for verification regarding the alleged debt, ” Plaintiff continues, “said derogatory information was not updated, and Defendant continued to constructively, if not actively report and update the account information on Plaintiff's consumer report without either reinvestigating said derogatory information or notating on the report that the account was disputed.” (Doc. 5, p. 5).

         III. DISCUSSION

         To survive a motion to dismiss for failure to state a claim under the FDCPA, a plaintiff must allege the following: (1) plaintiff is a “consumer, ” (2) defendant is a “debt collector, ” (3) defendant's challenged practice involves an attempt to collect a “debt, ” and (4) the defendant violated a provision of the FDCPA in attempting to collect the “debt.” Jensen v. Pressler & Pressler, 791 F.3d 413, 417 (3d Cir. 2015). According to Financial Recoveries, “[i]t is the last two critical elements that are detrimental to Plaintiff's claims.” (Doc. 8, p. 9). As a result, Financial Recoveries argues, Plaintiff's complaint should be dismissed because it fails to state a claim upon which relief may be granted. See (Docs. 7, 8).

         As stated, Plaintiff alleges that Financial Recoveries violated section 1692g(a) and (b) of the FDCPA. (Doc. 5). In particular, Plaintiff claims that Financial Recoveries failed to “issue the notifications required by” the FDCPA in “direct violation of” section 1692g(a).[2] (Doc. 5, p. 7). As for the claim based on section 1692g(b), Plaintiff claims that Financial Recoveries violated that section because it continued collection activity, “including but not limited to the placing of derogatory information on Plaintiff's consumer credit report, without verifying the debt in question to the consumer . . . .” (Id. at p. 8).

         Financial Recoveries argues that Plaintiff's section 1692g(a) claim fails to state a claim upon which relief may be granted because “the act of reporting Plaintiff's consumer debt to a [Credit Reporting Agency] does not constitute an ‘initial communication with a consumer' under the FDCPA.” (Doc. 8, p. 5). “Therefore, no duties were triggered or violated by Financial Recoveries.” (Id.).

         In response, Plaintiff begins by noting that this matter only includes “causes of action . . . as related to the FDCPA.” (Doc. 13, p. 5). According to Plaintiff, the amended complaint “pointedly excluded any language ...


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