DALZELL, District Judge.
Plaintiffs Murray H. and Dolores T. Kimmel (collectively, "the Kimmels") bring suit against defendants Phelan Hallinan & Schmieg, PC ("PHS"), Deutsche Bank National Trust Company ("Deutsche Bank"), and America's Servicing Co. ("ASC"), alleging federal law violations of the Fair Debt Collection Practices Act ("FDCPA"), 15 U.S.C. § 1692, et seq., and the Racketeering Influenced and Corrupt Organizations Act ("RICO"), 18 U.S.C. § 1961, et seq., as well as state law violations of the Pennsylvania Fair Credit Extension Uniformities Act ("FCEUA"), 73 Pa. Stat. § 2270.1, et seq., the Pennsylvania Unfair Trade Practices and Consumer Protection Law ("UTPCPL"), 73 Pa. Stat. § 201-1, et seq., and common law claims for fraud and negligent misrepresentation. The Kimmels' suit arises out of efforts by defendants to collect a debt the Kimmels allegedly owed on a mortgage and note for a property located in Brigantine, New Jersey.
Defendant PHS filed a motion to dismiss this action for improper venue, to which ASC and Deutsche Bank added a motion to dismiss for failure to state a claim that PHS later joined.
In considering a motion to dismiss for failure to state a claim under Fed.R.Civ.P. 12(b)(6),
According to the Kimmels, they both reside in Huntington Valley, Pennsylvania. PHS, which handles debt collection matters, has its headquarters in New Jersey. Deutsche Bank and ASC handle debt collection matters at their headquarters in South Carolina. Pls.' Compl. ¶¶ 6, 8-10. The Kimmels allege, conclusorily, that they are "consumers" and the defendants are "debt collectors" under the FDCPA, and that the defendants sought to collect "consumer debt" from the Kimmels. Id. ¶¶ 7, 11.
The Kimmels aver that in December of 2008, PHS and Deutsche Bank filed a complaint in foreclosure against them in the Chancery Division of the Superior Court of New Jersey for Atlantic County seeking to collect an allegedly defaulted debt owed on a mortgage and note for the property. Id. ¶¶ 13-15. In their complaint, PHS and Deutsche Bank pled that WMC had assigned the mortgage and note on the property to Deutsche Bank on December 15, 2008, so that Deutsche Bank was now the owner and/or holder of the mortgage and note and certain amounts were owed to it as the mortgagee. Id. ¶¶ 19-20. The Kimmels maintain that (1) WMC was the mortgagee on December 16, 2008, (2) no assignment from WMC to Deutsche Bank had been recorded as of that date, and (3) such assignment was filed only on January 12, 2009.
As for the January 12, 2009 assignment, it was signed by "`Judith T. Romano' as `Assistant Secretary and Vice President' of Mortgage Electronic Registration Systems Inc. as a nominee for WMC Mortgage Corp. its successors and assigns," id. ¶ 22 (quoting Ex. B to Pl.'s Compl.), though plaintiffs allege that Romano did not actually occupy this position and was instead merely an attorney with PHS. Id. ¶ 23.
On January 29, 2009, PHS sent two letters to the Kimmels with conflicting information. Though both letters stated that plaintiffs owed legal fees and costs of $1,931.68 and additional fees of $90.00 (albeit without describing how those amounts had accrued), one letter identified late charges amounting to $855.68 and an escrow balance of $0.00, while the other described late charges in the amount of $641.76 and an escrow balance of $903.03. Id. ¶¶ 46-48. The loan number referred to in each letter was not that associated with the Kimmels' mortgage and note with
On or about May 5, 2010, Deutsche Bank filed for summary judgment in its foreclosure action against the Kimmels, relying on a note and mortgage plaintiffs allegedly signed that the Kimmels claim include certain discrepancies regarding the dates of signing and notarization. Id. ¶¶ 51-54. Deutsche Bank also relied upon a "`Certification of Amount Due and Non-Military Service'" by Herman John Kennerty, the Vice-President for Loan Documentation for Wells Fargo Bank N.A., id. ¶ 58 (quoting Ex. D to Ex. F to Pl.'s Compl. ("Deutsche Bank's MSJ")). Kennerty's certification, however, did not set forth the personal knowledge he had of plaintiffs' loan and lacked certain supporting documentation. Id. ¶¶ 59-64. Despite ASC's January 29, 2009 letters to the Kimmels, Deutsche Bank's motion suggested that no late charges were owed and that late charges would not accrue beyond the date of the complaint's filing. Id. ¶¶ 55-56. On June 25, 2010, the Superior Court denied the motion for summary judgment, and in September of 2010 PHS and Deutsche Bank's complaint was dismissed without prejudice. Id. ¶¶ 67-68.
On October 6, 2010, PHS sent a letter on behalf of Deutsche Bank and ASC to the Kimmels' attorney that set forth a payoff balance. That letter referenced a different account number than that corresponding to the mortgage plaintiffs had taken with WMC, id. ¶¶ 69-70, and showed that plaintiffs owed $4,353.56 in late charges and $1,331.25 for "`Property Inspections/BPO,'" though no explanation was provided for how these charges had accrued. Id. ¶¶ 71-73 (quoting Ex. J to Pl.'s Compl.).
On October 7, 2010, PHS sent a letter to the Kimmels on behalf of ASC and Deutsche Bank entitled "`Notice of Intent to Foreclose,'" id. ¶ 75 (quoting Ex. K to Pl.'s Compl.). This letter stated that although Deutsche Bank held a mortgage on the property, payments should be made to ASC. Id. ¶ 76. The letter repeated that plaintiffs owed $4,532.30 in late fees and $1,331.25 in "`other charges'" to "`secure property,'" id. ¶ 78 (quoting Ex. K to Pl.'s Compl.), but the October 6, 2010 letter had stated that these charges were for "`Property Inspections/BPO,'" id. ¶ 78 (quoting Ex. J to Pl.'s Compl.), and Kennerty's certification had set forth charges of only $521.25 for "`advances to winterize and/or secure property.'" Id. ¶ 79 (quoting Ex. H to Pl.'s Compl.). PHS's letter threatened legal action if the default amount was not paid within thirty-three days. Id. ¶ 81.
On November 15, 2010, Deutsche Bank and PHS filed another foreclosure complaint against the Kimmels in the Chancery Division of the Superior Court of New Jersey for Atlantic County. Id. ¶ 82. The complaint referenced a note with an initial annual interest rate of 10.75%, but the Kimmels contend that they never took out a mortgage at that rate, and Deutsche Bank and PHS failed to attach any documentation that would permit the Kimmels to determine if this was in fact their note. Id. ¶¶ 83-84.
The Supreme Court has explained that "only a complaint that states a plausible claim for relief survives a motion to dismiss" pursuant to Rule 12(b)(6), leading a reviewing court to engage in a "context-specific" inquiry that "requires [it] to draw on its judicial experience and common sense." Ashcroft v. Iqbal, 556 U.S. 662, 129 S.Ct. 1937, 1950, 173 L.Ed.2d 868 (2009).
Defendants advance four arguments under Rule 12(b)(6), to wit: (1) this matter should be dismissed pursuant to New Jersey's Entire Controversy Doctrine
Before examining these arguments, we will first consider PHS's motion to dismiss for improper venue under Rule 12(b)(3), which employs a somewhat different standard.
Fed.R.Civ.P. 12(b)(3) provides that "a party may assert the following defenses by motion: ... (3) improper venue." In ruling on a Rule 12(b)(3) motion, "[w]e accept as true all of the allegations in the complaint, unless those allegations are contradicted by the defendants' affidavits." Bockman v. First Am. Mktg. Corp., 2012
In its motion, PHS explains that "[a]s is set forth in the accompanying certification of Vladimir V. Palma, Esq., a partner in PHS-NJ, PHS-NJ is a New Jersey professional corporation which handles matters exclusively in New Jersey and whose only offices are in New Jersey." PHS's Br. in Supp. of Mot. Dismiss ("PHS's Br.") at 1. According to PHS, it "has no contacts with Pennsylvania, and most assuredly does not reside in Pennsylvania," and "[o]ne can scour the complaint looking for any reference to PHS-NJ even doing anything in Pennsylvania, but to no avail." Id. at 3. PHS further avers that "the real property in question is located in New Jersey, as are the mortgage and the foreclosure action, and ... the putative causes of action are based on events alleged to have occurred or originated in New Jersey." Id. at 4. PHS thus concludes that "venue lies in New Jersey" and "dismissal is an appropriate remedy here, where the impropriety of the venue is manifest." Id.
The Kimmels respond that PHS did have at least five contacts with Pennsylvania. They are
Under 28 U.S.C. § 1391(b),
Section 1391(d) further provides that
As Judge Baylson has explained, "Pennsylvania has more than one district. Therefore, to determine if venue is proper in this Court, one must analyze whether, treating the Eastern District of Pennsylvania as though it were its own state, the Eastern District of Pennsylvania could exercise personal jurisdiction over [the defendant]." Dellget v. Wolpoff & Abramson, L.L.P., 2007 WL 4142769, at *2 (E.D.Pa.2007). Our Court of Appeals has summarized the personal jurisdiction inquiry as follows:
D'Jamoos ex rel. Estate of Weingeroff v. Pilatus Aircraft Ltd., 566 F.3d 94, 102 (3d Cir.2009) (brackets, quotation marks, and internal citations omitted).
In this case, three of the five contacts that the Kimmels point to do not support personal jurisdiction over PHS in this District: PHS cannot be said to have "purposefully directed its activities" toward this forum merely because it twice relied upon communications that another party — ASC — directed here, or because its letterhead included the statement "Representing Lenders in Pennsylvania and New Jersey." But PHS did purposefully direct its activities toward this District by serving a complaint upon the Kimmels in Huntington Valley, Pennsylvania, and by executing in Philadelphia the assignment of a mortgage the Kimmels executed. Furthermore, these activities give rise (in part) to the Kimmels' claims under federal and state law and were sufficiently substantial as to make the exercise of jurisdiction "comport with fair play and substantial justice." Id. at 102. Based on the allegations in plaintiffs' complaint and supporting documents, we are satisfied that if this District were a State, we would have personal jurisdiction over PHS. We will consequently deny PHS's motion to dismiss for improper venue pursuant to Rule 12(b)(3).
Deutsche Bank and ASC explain in their motion to dismiss, Deutsche Bank & ASC's Mem. in Supp. of Mot. Dismiss ("Deutsche/ ASC's Mem.") at 5-6, that
PHS joins in Deutsche Bank and ASC's motion to dismiss. PHS's Suppl. Br. in Supp. of Mot. Dismiss ("PHS's Suppl. Br.") at 2 n. 1.
The Kimmels respond that the entire controversy doctrine does not apply here because "[t]he facts Defendant Deutsche needs [sic] to prove on behalf of its client, Deutsche, in the state-court foreclosure action are not the same facts Plaintiffs have to prove to satisfy their claims ... growing out of Defendants Deutsche and ASC's deceptive, harassing and unfair collection practices." Pls.' Mem. II at 7; see also Pls.' Br. in Resp. to PHS's Suppl. Br. ("Pls.' Mem. III") at 5 (same regarding claims against PHS). The Kimmels further aver that the doctrine is inapposite because "the Third Circuit has invariable [sic] held that the Entire Controversy Doctrine does not apply when multiple cases involving the same or related claims are pending simultaneously." Pls.' Mem. II at 8 (internal quotation marks omitted).
In response, PHS recently sent us a letter in which it claims that
PHS's Letter, Jan. 11, 2012 ("PHS's Letter") at 1.
Our Court of Appeals has observed that "[a]lthough sometimes approached as if they belong to two different families, New Jersey's Entire Controversy Doctrine and traditional res judicata principles are blood relatives. The Entire Controversy Doctrine is essentially New Jersey's specific, and idiosyncratic, application of traditional res judicata principles." Rycoline, 109 F.3d at 886. The doctrine "is an extremely robust claim preclusion device that requires adversaries to join all possible claims
The entire controversy doctrine is codified at New Jersey Rule of Court 4:30A, which provides that
Leaving aside the exception for foreclosure actions — to which we will turn in a moment — "[i]n determining whether successive claims constitute one controversy for purposes of the doctrine, the central consideration is whether the claims against the different parties arise from related facts or the same transaction or series of transactions." DiTrolio, 662 A.2d at 502. However, "[t]he entire controversy doctrine does not require commonality of legal issues. Rather, the determinative consideration is whether distinct claims are aspects of a single larger controversy because they arise from interrelated facts." Id. at 504. Since "[t]he polestar of the application of the rule is judicial fairness," id. at 505 (quotation marks omitted), the doctrine "does not apply to unknown or unaccrued claims," id. Instead, a court should "focus[] on the litigation posture of the respective parties and whether all of their claims and defenses could be most soundly and appropriately litigated and disposed of in a single comprehensive adjudication." Id. at 507. Furthermore, "[a]s an equitable doctrine, [the doctrine's] application is flexible, with a case-by-case appreciation for fairness to the parties", Paramount Aviation, 178 F.3d at 137.
Rule 4:64-5, for its part, provides that
In construing an earlier version of this rule, the Superior Court of New Jersey explained in 1975 that "[t]he use of the word `germane' in the language of the rule undoubtedly was intended to limit counterclaims in foreclosure actions to claims arising out of the mortgage transaction which is the subject matter of the foreclosure action." Leisure Tech.-Ne., Inc. v. Klingbeil Holding Co., 137 N.J.Super. 353, 349 A.2d 96, 98 (1975). But the court also noted that the "doctrine to which we have referred above requires a liberal rather than a narrow approach to the question of what issues are `germane.'" Id. at 99.
The parties have not briefed us on the appropriate law they believe should apply to this case. The Kimmels apparently assume that Pennsylvania law applies. Deutsche Bank and ASC note only that "[w]ith respect to the elements of the common law claims, because there is no actual conflict between Pennsylvania and New Jersey law, the Court need not engage in a choice-of-law analysis," Deutsche/ASC's Mem. at 8 n. 7 — thus forgetting that the Kimmels have also asserted claims under Pennsylvania's UTPCPL
The Kimmels spill much ink attempting to convince us that their claims in this suit do not constitute part of the same controversy as the claims in the suits Deutsche Bank and PHS allegedly filed against them in the New Jersey Chancery Division in December of 2008 and November of 2010. They largely ignore the special test — based on whether claims are "germane" — that should be applied to foreclosure actions under the entire controversy doctrine. Thus, the Kimmels aver that
Pls.' Mem. II at 7 (citations omitted). Notwithstanding the Kimmels' (largely conclusory) reasoning, it appears to us that their claims here do form part of the same controversy as the claims defendants have asserted in the New Jersey courts and, in fact, are "germane" under Rule 4:64-5 and Leisure Technology-Northeast.
As that decision explained, claims are "germane" to the extent they "aris[e] out of the mortgage transaction which is the subject matter of the foreclosure action." Leisure Technology-Northeast, 349 A.2d at 98. The Kimmels appear to believe that claims predicated upon a debt collector's allegedly deceptive communications cannot arise out of the same set of facts as a mortgage foreclosure action, arguing that "[p]ractices utilized by a debt collector in seeking to collect a debt can not be said to be the same facts as defaulting on a mortgage and note." Pls.' Mem. I at 13. Decisions from the District of New Jersey make plain that this is not true. See, e.g., Venner v. Bank of Am., 2009 WL 1416043 (D.N.J.2009) (Simandle, J.) (applying entire controversy doctrine to bar FDCPA claim based upon defendant's alleged demand for excessive mortgage fees following foreclosure); Oliver v. Am. Home Mortg. Servicing, Inc., 2009 WL 4129043 (D.N.J.2009) (Hillman, J.) (applying entire controversy doctrine to bar FDCPA claim based upon defendant's alleged demand for excessive reinstatement fees during foreclosure proceedings).
While the Kimmels' claims appear to be germane to the controversy between the parties in New Jersey's Chancery Division, we cannot apply the entire controversy doctrine to foreclose these claims due to the status of the proceedings in that court. Applying principles analogized from the doctrine of res judicata, our Court of Appeals has squarely held that "the Doctrine does not preclude the initiation of a second action while a prior action is still pending." Rycoline, 109 F.3d at 884. As the Court explained, id. at 889,
District courts have thus asserted that to apply the entire controversy doctrine, "`the judgment in the prior action must be valid, final, and on the merits.'" Venner, 2009 WL 1416043, at *2 (D.N.J.2009) (quoting Stolinski v. Pennypacker, 2008 WL 5136945, at *13 (D.N.J.2008)) (quoting Watkins v. Resorts Int'l Hotel & Casino, Inc., 124 N.J. 398, 591 A.2d 592, 599 (1991)).
It is important to recall that Watkins and Stolinski described the elements of claim preclusion under federal and New Jersey law. Though these courts noted the relationship between res judicata and the entire controversy doctrine, they never stated that the two doctrines were identical. Stolinski, 2008 WL 5136945, at *13; Watkins, 591 A.2d at 598-99. The requirement that a prior judgment be "on the merits" appears to contradict the New Jersey Supreme Court's conclusions in DiTrolio, 662 A.2d at 507 (quoting Cogdell v. Hosp. Ctr. at Orange, 116 N.J. 7, 560 A.2d 1169, 1177 (1989)), where it held that "mandatory joinder is appropriate to further `[j]udicial economy and efficiency — the avoidance of waste and delay.'... [T]he consideration of inefficiency and waste of judicial resources is not negated by the fact that a prior action did not proceed to trial or a judgment on the
According to plaintiffs' complaint, PHS and Deutsche Bank filed a complaint in foreclosure against them in the Superior Court of Atlantic County, Chancery Division, on December 16, 2008, Pls.' Compl. ¶ 14; Ex. A to Pls.' Compl. This complaint was dismissed without prejudice in September of 2010. Id. ¶ 68. Then, on November 15, 2010, PHS and Deutsche Bank filed another foreclosure complaint against the Kimmels in the same court. Id. ¶ 83; Ex. L to Pls.' Compl. According to PHS, that action "was recently dismissed without prejudice to refiling a new foreclosure case at any time provided that certain discovery is first provided to Kimmel. (It is anticipated that foreclosure litigation will resume shortly.)" PHS Letter at 1. PHS attaches to this letter an Order of Dismissal from the Superior Court of Atlantic County, Chancery Division. In that Order, the Honorable William C. Todd, III, on November 29, 2011, held that "Plaintiff's Complaint is dismissed without prejudice based upon plaintiff's repeated failure to comply with the Court's prior Orders requiring the production of written discovery," and that "[t]he dismissal noted above is without prejudice to plaintiff's right to file a new Complaint for foreclosure at any time," provided that PHS first certifies that it has provided all court-ordered discovery and certifications. Ex. 1 to PHS's Letter ¶¶ 1-2. The Kimmels appear to concede that PHS and Deutsche Bank's foreclosure suit had been dismissed in state court, see Pls.' Mem. III at 6, so that we may consider this fact as an undisputed matter of public record.
But even upon consideration of this recent development in the state court litigation, it remains true that these proceedings fail to demonstrate the degree of finality that Rycoline demands as a predicate for application of the entire controversy doctrine. Judge Todd's Order makes clear that the action between the parties may resume at any time, and PHS itself suggests that litigation "will resume shortly." Though the precise requirements a prior judgment must satisfy to apply the entire controversy doctrine may be unclear, there can be no doubt that — despite Judge Todd's dismissal without prejudice — the prior proceedings between PHS and Deutsche Bank and the Kimmels in state court have not been resolved with anything approaching the finality Rycoline demands.
PHS argues that the November 29, 2011 dismissal without prejudice brings the facts of this case close to those in Coleman. In that case, our Court of Appeals noted that "the Chancery Court entered a judgment of dismissal without prejudice in the foreclosure action." 446 Fed.Appx. at 470. But the procedural history of that case was complex and the Court "discuss[ed] the facts only to the extent necessary for the resolution of the issues raised on appeal," id., so that it is difficult to determine just how analogous the facts here are to those in Coleman. Importantly, our Court of Appeals reported that "the foreclosure action became final on January 20, 2006," id. at 472, suggesting that the prior proceeding there had been resolved with a finality that readily distinguishes Coleman from this case. In any event, Coleman is a non-precedential opinion. To the extent it conflicts with Rycoline's finality
Because the prior proceedings between the parties in New Jersey state court have not resulted in a final resolution, we decline to apply the entire controversy doctrine to preclude the Kimmels' claims in this action.
Deutsche Bank and ASC next argue that "because Plaintiffs were served no later than February 29, 2009" in the underlying state proceedings, Deutsche/ASC's Mem. at 9, "[p]laintiffs' claims against Deutsche Bank and ASC are barred by the FDCPA's one year statute of limitations." Id. at 10. They further assert that the Kimmels' "FCEUA, fraud and negligent misrepresentation claims ... arose in 2008 when the Kimmels received the Notices," id. at 10-11, so that those claims are barred by the applicable two-year statute of limitations. Finally, Deutsche Bank and ASC suggest that "the Kimmels cannot allege a continuing violation of the FDCPA with respect to the foreclosure actions in order to bring their claims within the statute of limitations." Id. at 10. Because these arguments fail comprehensively to address the Kimmels' allegations of wrongdoing or the complexities of the continuing violations doctrine, we decline to dismiss any claims on these bases.
To begin, the Kimmels have alleged that PHS, Deutsche Bank, and ASC committed a number of acts within the one- and two-year statute of limitations. ASC and Deutsche Bank do not bother to consider these acts, instead pretending that the only actionable allegations in the Kimmels' complaint regard notices sent or proceedings instituted in 2008 and 2009, and that plaintiffs' claims should be wholly dismissed as a result. It is certainly possible that claims based on acts that allegedly took place outside the statute of limitations period may be subject to dismissal. But we will not carry the burden for ASC and Deutsche Bank to identify which actions may have fallen outside the limitations period and hence which parts of which counts should be dismissed.
More importantly, the interaction of the FDCPA and the continuing violations doctrine in this Circuit is complex. Our Court of Appeals has explained that under the continuing violations doctrine, "when a defendant's conduct is part of a continuing practice, an action is timely so long as the last act evidencing the continuing practice falls within the limitations period; in such an instance, the court will grant relief for the earlier related acts that would otherwise be time barred." Brenner v. Local 514, United Bhd. of Carpenters & Joiners of Am., 927 F.2d 1283, 1295 (3d Cir.1991). But ASC and Deutsche Bank cite Schaffhauser v. Citibank (S.D.) N.A., 340 Fed. Appx. 128, 131 (3d Cir.2009), in which our Court of Appeals explained that the plaintiffs had "offer[ed] no support for their contention that participation in ongoing debt collection litigation qualifies as a `continuing violation' of the FDCPA," so that the Court "decline[d] to extend the doctrine to the circumstances of this case." More recently, in Peterson v. Portfolio Recovery Assocs., 430 Fed.Appx. 112, 115 (3d Cir.2011), our Court of Appeals suggested that "[w]ithout commenting on any implications that § 1692g(a) claims, standing alone, might have for § 1692g(b) claims, we do not believe that the former are subject to a so-called `continuing violations' rule."
Our Court of Appeals's jurisprudence thus suggests only that participation in debt collection litigation does not qualify as a continuing violation under the FDCPA; it does not hold that the continuing violations doctrine is inapplicable to all
ASC and Deutsche Bank have focused their statute of limitations arguments on a narrow subset of the acts the Kimmels allege. These defendants assert that (1) the Kimmels' claims arise only from the mailing of notices to plaintiffs and the institution of actions against them in 2008 and 2009, and (2) the Kimmels could only conceivably toll the FDCPA's statute of limitations by making the legally insupportable claim that the continuing violations doctrine applies to the prosecution of a foreclosure action. But these arguments fail to consider the full breadth of the Kimmels' complaint. We also note that the parties have not briefed us in any way on how the continuing violations doctrine might apply to the Kimmels' FCEUA, fraud, and negligent misrepresentation claims. Given the incomplete nature of the briefing we have received, we will not at this time dismiss any of the Kimmels' claims based on the applicable statutes of limitations.
Deutsche Bank and ASC also assert that the Kimmels' FDCPA claims should be dismissed for failure to state a claim. They advance two grounds: (1) "the Kimmels have failed to plead the requisite facts to establish that the debt at issue qualifies as a debt under the FDCPA," Deutsche/ASC's Mem. at 16; and (2) "Plaintiffs have failed to allege requisite elements ... and the requisite facts to support those claims." Id. at 29.
With respect to the first argument, Deutsche Bank and ASC contend that to plead a claim under the FDCPA, "a debtor must aver that the debt is one that arises out of a consumer transaction `in which the money, property, insurance, or services which are the subject of the transaction are primarily for personal, family, or household purposes, whether or not such obligation has been reduced to judgment.'" Id. at 16 (quoting Kimmel v. Cavalry Portfolio Servs., LLC, 2011 WL 2039049, at *2 (E.D.Pa.2011) (Buckwalter, J.) (quoting 15 U.S.C. § 1692a(5))).
It is true that nowhere in their complaint do the Kimmels concretely
Pls.' Mem. II at 22-23 (citing Ex. G to Pls.' Compl. at 25-26). We may consider the "Second Home Rider" to which the Kimmels refer as a document of undisputed authenticity upon which they relied (if implicitly) in their complaint. It provides that
Ex. G to Pls.' Compl. at 25. Murray M. Kimmel (and his counsel) have made this type of argument before, contending in Kimmel, 2011 WL 2039049, at *3, that "the restrictions contained in the credit card agreement are evidence of his purpose — rather than the lender's purpose." Judge Buckwalter rejected that argument, explaining that "the terms of the agreement and the manner in which the card was actually used are two separate issues," id. at *4. We similarly conclude that the terms of the Second Home Rider and the use to which the property in Brigantine, New Jersey was actually put are distinct from one another.
As the complaint currently stands, it fails to allege that the obligation at issue here was a "debt" within the FDCPA's ambit. We will accordingly grant Deutsche Bank and ASC's motion to dismiss Count I. Were the Kimmels to amend their complaint to allege that they used this property exclusively as a vacation home, they would satisfy this element of the FDCPA for pleading purposes. We will grant them leave to do so.
Such amendment would only address the complaint's deficiency with respect to pleading the nature of the underlying obligation, however. Regarding Deutsche Bank and ASC's second argument — that the Kimmels have failed adequately to allege a violation of the FDCPA — the Kimmels respond that they "have properly alleged the requisite elements of each of their causes of action and the requisite facts to support those claims." Pls.' Mem. II at 40. It is true that the Kimmels' complaint does not present the usual deficiencies that often prompt dismissal under Iqbal and Twombly. Many of their factual allegations are concrete, rather than "[t]hreadbare recitals of the elements of a cause of action, supported by mere conclusory statements." Iqbal, 129 S.Ct. at 1949. But the Kimmels simply recite an array of factual allegations and then declaim that "[i]n its actions to collect a disputed debt, Defendant violated the FDCPA in one or more of the following ways," Pls.' Compl. ¶ 86, before listing eleven provisions of the FDCPA that defendants allegedly violated.
As our Court of Appeals has explained, a plaintiff must "provide a defendant the type of notice of claim which is contemplated by Rule 8," Phillips, 515 F.3d at 232. A plaintiff does not meet this requirement by propounding a mass of factual allegations and then enumerating a laundry list
Finally, Deutsche Bank and ASC claim that "Plaintiffs' claims for violation of the Pennsylvania UTPCPL, fraud and negligent misrepresentation should be dismissed for failure to allege justifiable reliance," Deutsche/ASC's Mem. at 24, and that with respect to the Kimmels' RICO claims
Pls.' Mem. II at 38 (internal citations omitted).
There can be little doubt that the Kimmels' UTPCPL, fraud, and negligent misrepresentation claims oblige them to allege justifiable reliance upon wrongful conduct or a misrepresentation. Indeed, the Kimmels concede this point. See Pls.' Mem. II at 28 (describing justifiable reliance element of UTPCPL claim), id. at 32 (describing justifiable reliance prong of common law fraud claim), id. at 34 (describing justifiable reliance requirement of negligent misrepresentation claim). See also Yocca v. Pittsburgh Steelers Sports, Inc., 578 Pa. 479, 854 A.2d 425, 438 (2004) ("To bring a private cause of action under the UTPCPL, a plaintiff must show that he justifiably relied on the defendant's wrongful conduct or representation."); Colaizzi v. Beck, 895 A.2d 36, 39 (Pa.Super.2006) ("[T]o establish common law fraud, a plaintiff must prove ... justifiable reliance by the party defrauded upon the misrepresentation."); Gibbs v. Ernst, 538 Pa. 193, 647 A.2d 882, 890 (1994) ("The elements which must be proven for [negligent misrepresentation] to be shown [include].... [that] injury must result to the party acting in justifiable reliance on the misrepresentation.").
As for RICO claims predicated upon alleged mail fraud, Judge Robreno has insightfully canvassed the caselaw from this and other Circuits on the proximate causation element of such claims. As he observed, "[w]hether reliance is necessary to establish proximate cause continues to be unsettled law," but "the majority
The Kimmels suggest that they have alleged justifiable reliance on defendants' alleged misrepresentations and wrongful actions because they were confused by their conduct, which led them to retain an attorney.
While "confusion" may describe the emotion the Kimmels felt upon receiving communications from the defendants, it does not describe what they then did. Their actions are the focus of the "justifiable reliance" prongs of the UTPCPL, RICO, and the law of fraud and negligent misrepresentation. When we focus on the Kimmels' documented actions it becomes plain that, far from relying on the defendants' alleged misrepresentations and wrongful conduct, they instead contested these representations in court, so far with success.
The Kimmels have thus failed to allege justifiable reliance as their UTPCPL, RICO, fraud, and negligent misrepresentation claims require. In light of their own account of their actions, it is clear that it would be futile for them to attempt to amend the complaint to remedy this defect. We will thus grant Deutsche Bank
And now, this 28th day of February, 2012, upon consideration of plaintiffs Murray H. and Dolores T. Kimmel's ("the Kimmels'") complaint (docket entry # 1), defendant Phelan Hallinan & Schmieg, PC's ("PHS's") motion to dismiss for improper venue (docket entry # 4) and supplemental brief in support thereof (docket entry # 10), defendants America's Servicing Co. ("ASC") and Deutsche Bank National Trust Company's ("Deutsche Bank's") motion to dismiss (docket entry # 5), the Kimmels' responses in opposition to defendants' motions to dismiss (docket entries # 11 and 12), PHS's January 11, 2012 letter, and the Kimmels' memorandum in opposition to PHS's supplemental brief (docket entry # 14), and upon the analysis set forth in the accompanying Memorandum, it is hereby ORDERED that:
1. Defendant PHS's motion to dismiss for improper venue (docket entry # 4) is DENIED;
2. Deutsche Bank and ASC's motion to dismiss, in which PHS joined (docket entry # 5), is GRANTED IN PART;
3. Count I of the Kimmels' complaint (docket entry # 1) is DISMISSED as to all defendants;
4. Counts III, IV, V, and VI of the Kimmels' complaint are DISMISSED WITH PREJUDICE as to all defendants; and
5. By March 9, 2012, the Kimmels are GRANTED LEAVE TO FILE an amended complaint asserting revised claims under the FDCPA and FCEUA only, to which defendants shall RESPOND by March 23, 2012.
