JOSEPH A. DICKSON, District Judge.
This matter comes before the Court upon Plaintiffs Betty Cuoco and Victor Cuoco Sr.'s ("Plaintiffs") Motion for Leave to File an Amended Complaint. (ECF No. 59). Pursuant to Rule 78 of the Federal Rules of Civil Procedure, the Court did not hear oral argument on Plaintiffs' application. Upon careful consideration of the parties' submissions, and for the reasons stated below, Plaintiffs' Motion to Amend, (ECF No. 59), is
The original Plaintiff Victor Cuoco ("Plaintiff") commenced this matter on July 14, 2014 by filing a Complaint in the United States District Court for the Southern District of New York against Defendants Palisades Collection, LLC ("Defendant Palisades") and Pressler & Pressler, LLP ("Defendant Pressler"), (collectively "Defendants"), alleging violations of the Fair Debt Collection Practices Act ("FDCPA") and asserting claims of negligence and recklessness, and invasion of privacy. (Compl., ECF No. 39-1). Plaintiff died on September 27, 2013, and a Suggestion of Death was filed on his behalf on October 23, 2013. (ECF No. 8). On October 24, 2013, the matter was transferred to this Court pursuant to 28 U.S.C. § 1404(a). (ECF No. 10). On December 27, 2013, a Motion to Substitute the Decedent's parents as Plaintiffs in this matter was filed. (ECF No. 15). Although Defendants jointly opposed that Motion, (ECF No. 20), the Court granted Plaintiffs' request on March 11, 2014. (ECF No. 35).
Plaintiffs assert that Defendant Palisades, a limited liability company whose principal purpose "is the collection of consumer debts on behalf of others", attempts to collect on defaulted debts for a profit. (Compl., ECF No. 39-1, at 3, ¶¶ 7, 12). In the course of Defendant Palisades business, it purchased a portfolio of debt from the phone company Verizon, which contained Plaintiff's alleged debt. (
On September 27, 2007, Defendants obtained a default judgment against Plaintiff in the amount of $990.33.
Plaintiffs further allege that Defendant Palisades, used a separate debt collection company, Plaza Associates, and offered a settlement to the Plaintiff for the debt owed on both accounts. (
Plaintiffs contend that despite having resolved the alleged debt, Defendants repeatedly attempted to collect the money owed, without reducing the amount of the Judgment. (
Plaintiffs maintain that the alleged obligation was resolved, and that "the Defendants added amounts to the debt that were never agreed to by the Plaintiff nor authorized by law." (
On December 23, 2014, Plaintiffs filed a Motion to Amend the Complaint. (Pl. Br., ECF No. 59-1). Plaintiffs maintain that the proposed Amended Complaint does not add any additional claims, but rather removes one claim, and "explicates and clarifies others based upon new information just obtained." (
Federal Rule of Civil Procedure 15(a) governs requests for leave to amend, allowing a party to amend its pleadings after obtaining the Court's leave or the written consent of its adversary. Under this liberal rule, the Court must "freely give leave when justice so requires." Fed.R.Civ.P. 15(a)(2);
The decision to grant or deny leave to amend under Rule 15(a) is "committed to the sound discretion of the district court."
Here, Defendants challenge Plaintiffs' proposed amendments on "futility" grounds. A proposed amendment "`is futile if the amended complaint would not survive a motion to dismiss.'"
The Court notes that Defendants bear the burden of establishing that Plaintiffs' proposed amendments are futile, and that, "given the liberal standard applied to the amendment of pleadings," that burden is a "heavy" one.
In its opposition to Plaintiffs' Motion to Amend, Defendant Palisades argues that while Plaintiffs allege that no additional claims have been added to the proposed Amended Complaint, that is not entirely accurate. (Def. Br., ECF No. 64-2, at 3). Defendant Palisades argues that because Plaintiffs' proposed Amended Complaint raises the Entire Controversy Doctrine and New Jersey Rule of Civil Procedure 4:30A "as additional theories of liability as to why Defendants were allegedly required to bring any and all claims related to Plaintiff's financial obligations for certain telephone numbers recited in Plaintiff's Proposed Amended Complaint in one lawsuit . . . Plaintiff is attempting to expand his liability theories presented in the original Complaint with reference to a lawsuit filed in an underlying State Court Action". (
Defendant Palisades also takes issue with Plaintiffs attempting to "incorporate the findings in the case of []
In addition to addressing several of the same arguments, Defendant Pressler takes the position "that the five claims articulated by Plaintiffs are futile and, since Plaintiffs claim that the amendment only clarifies the claims in his original complaint, any findings of futility should result in the outright dismissal of that particular claim." (Def. Br., ECF No. 65, at 1). This Court shall address both Defendants' arguments in detail below.
Both the original Complaint and the proposed Amended Complaint allege that Defendants attempted to collect a settled debt in violation of the FDCPA. (Compl., ECF No. 39-1, ¶¶ 23-30, 35-37; Proposed Amended Complaint, ECF No. 59-2, ¶¶ 36, 45-49). This Court notes that all specific violations of the FDCPA alleged in the proposed Amended Complaint were already pled in the original Complaint. (
Although not many facts were pled in the original Complaint to support the claims asserted, the claims of specific FDCPA violations were included. Plaintiffs seem to be adding facts to bolster those claims. To require Plaintiffs to take those claims out of the proposed Amended Complaint would ignore well established rules of pleadings and motion practice.
Additionally, Defendant Palisades argues that the enclosed Exhibits reveal that "the other accounts Plaintiff had with Verizon were unrelated to the account at issue in Plaintiff's original Complaint, two of which were resolved in settlement and the remaining account permanently retired." (Def. Br., ECF No. 64-2, at 8). As is the case throughout Defendants' papers, this argument is better suited for a summary judgment motion, not a motion to amend. This Court shall not, at this juncture, attempt to determine what the Exhibits do and do not prove. The Court need only consider whether or not Plaintiffs' proposed amendments are futile under the Rule 12(b)(6) standard.
Plaintiffs seek to amend the Complaint to include claims regarding the Entire Controversy Doctrine and New Jersey Rule of Civil Procedure 4:30A, which Defendants categorize as a new legal theory. (
(Proposed Amended Complaint, ECF No. 59-2, ¶ 27). New Jersey Civil Practice Rule 4:30A provides, in part: "[n]on-joinder of claims or parties required to be joined by the entire controversy doctrine shall result in the preclusion of the omitted claims to the extent required by the entire controversy doctrine". New Jersey Civil Practice Rule 4:30A (1997).
Plaintiffs maintain that when Defendants sued their son for his alleged obligation, "that lawsuit defined the entire controversy between the parties." (Pl. Br., ECF No. 59-1, at 5). Plaintiffs further argue that once "judgment against [Plaintiff] was obtained," all of Plaintiff's obligations were merged with the judgment under the Entire Controversy Doctrine. (Pl. Br., ECF No. 59-1, at 6). As a result, it is Plaintiffs' position that any attempt to collect after Plaintiff paid the judgment is a violation of the FDCPA. (
Defendant Palisades argues that the Entire Controversy Doctrine has no relevance in this case. (Def. Br., ECF No. 64-2, at 10). Ultimately, Defendant Palisades maintains that Defendant "Pressler brought the underlying State Court Action in an attempt to enforce a Judgment entered against Plaintiff . . . thereafter serving an initial Information Subpoena . . . The account at issue arising from the underlying State Court Action was unrelated to the other accounts which are identified in Palisades Answers to Plaintiffs Request for Production of Documents which were either previously settled or not pursued." (
Similarly, Defendant Pressler argues that Plaintiffs' assertions regarding the Entire Controversy Doctrine are "entirely unsupported by law." (Def. Br., ECF No. 65, at 4). Defendant Pressler further argues that because the state court action resulted in the entry of default against Plaintiff, that judgment was a "binding judicial determination of the rights and duties of the parties to that action." (
Plaintiffs attempt to rebut Defendants' arguments by asserting that the wording of the Entire Controversy Doctrine and New Jersey Rule of Court 4:30A "does not limit its application" to lawsuits.
This Court shall not expand the underlying purpose of the Entire Controversy Doctrine, as Plaintiffs suggest this Court do. The Third Circuit has noted that "the objectives behind the doctrine are threefold: (1) to encourage the comprehensive and conclusive determination of a legal controversy; (2) to achieve party fairness, including both parties before the court as well as prospective parties; and (3) to promote judicial economy and efficiency by avoiding fragmented, multiple and duplicative litigation."
Plaintiffs misapply the doctrine and attempt to utilize it in an inappropriate fashion. "The entire controversy doctrine is an affirmative defense, waived if not pleaded or otherwise timely raised."
In addition, both Defendants argue that the Rooker-Feldman doctrine bars Plaintiffs' proposed amendments to the original Complaint. (Def. Br., ECF No. 64-2, at 10-11; Def. Br., ECF No. 65, at 5-6). "The Rooker-Feldman doctrine . . . is confined to cases . . . brought by state-court losers complaining of injuries caused by state-court judgments rendered before the district court proceedings commenced and inviting district court review and rejection of those judgments."
Plaintiffs maintain, however, that the Rooker-Feldman doctrine is inapplicable because Plaintiffs are not attacking the state court judgment, but rather relying on it. (Pls. Br., ECF No. 67, at 5). Additionally, Plaintiffs maintain that they are not "questioning the judgment," nor do they "want it reviewed." (
Additionally, Defendant Palisades argues that the FDCPA "has a strict one-year statue of limitations" and therefore, "[a]ny events which occurred prior to July 31, 2012 are outside the one year statute and therefore should be deemed irrelevant and outside the scope of the instant litigation." (Def. Br., ECF No. 64-2, at 11). Defendant Palisades did not provide the Court with any additional information or case law to support its position. This Court, therefore, will not address this argument further because Plaintiffs' proposed amendments are either granted or denied on other grounds. This Court shall not endeavor to assume what Defendant Palisades attempt to argue and what specific proposed amendments it seeks to have this Court deny.
Next, both Defendants argue that Plaintiffs' proposed amendments regarding the information subpoena and its alleged violation of the FDCPA are futile for several reasons. (
First, Defendant Palisades asserts that "Plaintiff has no factual and/or legal basis to assert that there was no attorney meaningful review of the information subpoena and therefore the proposed Amended Complaint is futile." (Def. Br., ECF No. 64-2, at 11). Similarly, Defendant Pressler argues that "Plaintiffs fail to allege any facts to support the claim that there was no meaningful attorney involvement with respect to the information subpoena." (Def. Br., ECF No. 65, at 6).
The original Complaint, however, states the following: "[o]n information and belief no attorney meaningfully reviewed Exhibit H, nor the information contained therein, prior to Exhibit D being sent to the Plaintiff. As such, Exhibit D falsely indicates that the document had been created and approved by an attorney." (Compl., ECF No. 39-1, at 6, ¶ 32). Plaintiffs' proposed Amended Complaint is identical in this regard, with the exception of the lettered exhibits. (
Additionally, both the original Complaint and Plaintiffs' proposed Amended Complaint alleged that the information subpoena "does not contain an actual signature of an attorney. Instead Exhibit I contains a type written `S/' signature of an attorney. On information and belief no attorney meaningfully reviewed Exhibit I, nor the information contained therein, prior to Exhibit I being sent to the Plaintiff. As such, Exhibit I falsely indicates that the document had been created and approved by an attorney." (Proposed Amended Complaint, ECF No. 59-2, at 9, ¶ 43). The proposed Amended Complaint adds, "Exhibit I also includes an S/signature from the Court clerk. Defendants actions in this regard violate" several sections of 15 U.S.C. § 1692. (
Plaintiffs further argue that "the Defendant's computer system included the name of the state court clerk on the document giving the least sophisticated consumer the false impression that the state court had giving [sic] its approval to this computer generated subpoena." (Pl. Br., ECF No. 59-1, at 8). To that effect, Defendant Pressler argues that "[i]t is a long-established procedure in the State of New Jersey court system that an attorney can issue a subpoena in the name of the clerk of the court." (Def. Br., ECF No. 65, at 8). It appears, again, that Plaintiffs' proposed amendment regarding the "S/signature from the Court clerk" is simply an addition of a fact, which is entirely permissible.
Defendant Pressler also argues that Plaintiffs offer no support for their contention that it is "impermissible for an attorney to utilize an electronic signature on a document". (Def. Br., ECF No. 65, at 7). Defendant Pressler further notes that "[a]n `s/' is generally recognized as an electronic signature." (
Both Defendants argue that "the information subpoena does not require the notice provided by 15 U.S.C. § 1692e(11) and is a form document that cannot be changed." (Def. Br., ECF No. 65, at 9) (
Aside from the different exhibits listed, Plaintiffs' proposed Amended Complaint adds the specific alleged violations of the FDCPA. The original Complaint, however, specifically alleges violations of all those sections of 15 U.S.C. § 1692, and more. While it may be repetitive to allege the same violations in more than one section of the proposed Amended Complaint, this Court finds that there is in fact no new information added.
Additionally, both Defendants take issue with Plaintiffs' assertion that the language on the information subpoena violates several sections of 15 U.S.C. § 1692. Specifically, Defendants assert that the language was mandatory and therefore, including the specific language is futile. (Def. Br., ECF No. 65, at 11). The original Complaint states, "Despite the fact that the alleged debt was paid, in or around February 14, 2013, Pressler & Pressler, on behalf of Palisades, sent the Plaintiff an information subpoena demanding information and threatening the Plaintiff that if he does not respond to the subpoena he could be arrested." (Compl., ECF No. 39-1, at 6, ¶ 31). Plaintiffs' proposed Amended Complaint states,
(Proposed Amended Complaint, ECF No. 59-2, at 8, ¶ 42).
As previously stated, preexisting claims cannot be attacked on futility grounds in a motion to amend. The addition of the specific language of the information subpoena is simply the addition of facts, and therefore, is not futile. In addition, as was the case with several of Plaintiffs' other proposed amendments, the specific mention of alleged violations of 15 U.S.C. § 1692 is simply repetitive and not a new allegation. It is merely a restatement of a preexisting claim relocated in the proposed Amended Complaint.
Defendant Palisades argues that the Damages section of Plaintiffs' proposed Amended Complaint, (Proposed Amended Complaint, ECF No. 59-2, ¶ 65), "should not be permitted as there is no basis in fact and/or law presented for it and the amendment is therefore futile." (Def. Br., ECF No. 64-2, at 13). The original Complaint, however, states the following:
(Compl., ECF No. 39-1, at 10, ¶ 74). Plaintiffs' proposed Amended Complaint removes "worry; humiliation; weight gain; sleeplessness; mental distress; physical pain; and other emotional distress; along with pre-litigation costs." (
Defendant Palisades argues that "the claimed damages are futile because there is absolutely no evidence presented nor can there be any evidence to support these claims as Plaintiff is deceased." (Def. Br., ECF No. 64-2, at 13). It appears, however, that Defendant Palisades misapplies the standard necessary to deny a motion to dismiss. Plaintiffs need not present evidence supporting these claims, like Defendants suggest. Rather Plaintiffs' Complaint must simply "contain sufficient factual matter, accepted as true, to `state a claim to relief that is plausible on its face.'"
In addition, Plaintiffs seek to include factual findings that the Court noted in
(Proposed Amended Complaint, ECF No. 59-2, at 4, ¶ 14). Federal Rule of Civil Procedure 8(a) requires that Plaintiffs' Complaint contain "a short and plain statement of the claim showing that the pleader is entitled to relief." Fed. R. Civ. P. 8(a)(2). Plaintiffs' factual allegations regarding Defendant Pressler's operations will not be stricken from the Amended Complaint. It is not necessary to decide whether or not
Finally, Defendant Pressler takes issue with the fact that Plaintiffs assert "the Defendants added money to the amount of judgment that they were not permitted to add." (Pl. Br., ECF No. 59-1, at 14). Specifically, Plaintiffs' proposed Amended Complaint states, "[n]ot only did the Plaintiff already resolve the alleged obligation, but the Defendants added amounts to the debt that were never agreed to by the Plaintiff nor authorized by law." (Proposed Amended Complaint, ECF No. 59-25, at 9, ¶ 45). Defendant Pressler argues that "[t]his assertion is made without any factual basis as to what the correct balance should be." (Def. Br., ECF No. 65, at 11).
Defendant Pressler points the Court to the content of the information subpoena, which states, in relevant part,
(Proposed Amended Complaint, ECF No. 59-2, Exhibit I).
Defendant Pressler notes, "[i]t is not Defendants responsibility to disprove the unsubstantiated claim of Plaintiffs. Until Plaintiffs can identify any amount of `interest' a `fee'' or `charge' that is improper, they have failed to state a claim for relief that there was an attempt to collect money neither agreed to by Plaintiff nor authorized by law." (Def. Br., ECF No. 65, at 12) (emphasis in original). This argument may be made during summary judgment or at the trial. Therefore, this proposed amendment shall be permitted.
Based on the foregoing, Plaintiffs' Motion to Amend, (ECF No. 59), is