Plummer v. Atlantic Credit & Finance, Inc.

66 F. Supp. 3d 484, 2014 U.S. Dist. LEXIS 170006, 2014 WL 6969546
District Court, S.D. New York·Decided December 8, 2014·No. No. 13 Civ. 7562(AT)·Published·Cited by 20 cases

Opinion

OPINION AND ORDER

AN ALISA TORRES, District Judge:

In.this proposed class action, Plaintiff, Patrick Plummer, alleges that Defendants, Atlantic Credit & Finance, Inc. (“Atlantic Credit”), Capital Management Services, LP (“Capital Management”), and Velocity Investments, LLC (“Velocity”) violated provisions of the Fair. Debt Collection Practices Act (“FDCPA”), 15 U.S.C. §§ 1692 et seq. Velocity moves to dismiss the complaint pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure on the ground that it is not a “debt collector” under the FDCPA. For the reasons stated below, the motion is DENIED.

BACKGROUND

The following facts are taken from the amended class action complaint (the “complaint”) and are accepted as true for the purposes of this motion. See ATSI Commc’ns, Inc. v. Shaar Fund, Ltd., 493 F.3d 87, 98 (2d Cir.2007).

Plaintiff incurred credit card debt to Union Plus Credit Card/HSBC. Am. Compl. ¶¶ 5, 35. Plaintiff made his last payment on the account no later than September 2006, after which HSBC alleged that Plaintiffs debt fell into default. Id. ¶¶ 36-37. Atlantic Credit subsequently purchased Plaintiffs credit card debt from HSBC. Id. ¶ 38. Atlantic Credit placed the debt with various debt collectors for the purpose of collecting from Plaintiff. Id. ¶ 39. Beginning no later than 2007, several debt collectors, on behalf of Atlantic Credit, sent collection letters to Plaintiff. Id. ¶¶ 40-42. Plaintiffs attorney responded to each debt collector, informing them that Plaintiff was disputing the debt and that Plaintiff was represented by counsel and should not be contacted directly. Id. ¶¶ 43-46.

By letter dated February 7, 2011, Plaintiffs attorney sent a dispute and representation letter to Atlantic Credit. Id. ¶¶ 58-59. Atlantic Credit responded to counsel on February 15, 2011, acknowledging receipt of Plaintiffs attorney’s letter and providing “purported verification” of the debt. Id. ¶¶ 60-61. Atlantic Credit’s letter indicated that Plaintiffs last payment to HSBC was on September 21, 2006. Id. ¶ 61.

Atlantic Credit subsequently sold the debt to Velocity, Id. ¶¶ 66-67, a New Jersey limited liability company, with a principal business described as “the purchase of defaulted consumer debts originally owed or due or alleged to be originally owed or due to others.” Id. ¶¶23, 28. Velocity “regularly collects or attempts to collect such debts either through itself or through [487] others.” Id. ¶ 26. Velocity placed Plaintiffs debt with Capital Management for the purpose of collection. Id. ¶ 65. Atlantic Credit had informed Velocity that Plaintiff disputed his debt and was represented by counsel. Id. ¶ 121. Plaintiff alleges that, upon placing the debt with Capital Management for collection, Velocity failed to provide this information to Capital Management. Id. ¶¶ 106, 122-25. Plaintiff alleges, in the alternative, that Velocity did inform Capital Management that Plaintiff disputed his debt and was represented by counsel. Id. ¶ 107.

On October 24, 2012, Capital Management sent a collection letter to Plaintiff, stating that Capital Management was collecting on behalf of Velocity. Id. ¶¶ 62-64. The letter demanded $744.82 as settlement for a debt balance of $3,724.12. Id. ¶¶ 68-69. The letter was sent more than six years after the date of Plaintiff’s last payment on the account, id. ¶¶ 61, 70, and failed to inform Plaintiff that the applicable six-year statute of limitations had expired and that any payment by Plaintiff would revive the statute of limitations, Id. ¶¶ 71-74.

Plaintiff alleges that Capital Management, in sending letters to collect on his debt, was acting as an agent of Velocity and that Velocity “exercised control or had the right to exercise control over the collection" activities of Capital Management.” Id. ¶¶ 30-31. Plaintiff claims that Velocity used Capital Management in order to shield itself from liability under the FDCPA. Id. ¶ 32. Plaintiff alleges that Atlantic Credit, Capital Management, and Velocity are each debt collectors within the meaning of the FDCPA, 15 U.S.C. § 1692a(6). Id. ¶¶ 8,16, 21.

DISCUSSION

I. Standard of Review

To survive a Rule 12(b)(6) motion to dismiss, a plaintiff must plead sufficient factual allegations in the complaint that, accepted as true, “ ‘state a claim to relief that is plausible on its face.’ ” Ashcroft v. Iqbal, 556 U.S. 662, 678, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007)). A plaintiff is not required to provide “detailed factual allegations” in the complaint, but must assert “more than labels and conclusions! ] and a formulaic recitation of the elements of a cause of action.” Twombly, 550 U.S. at 555, 127 S.Ct. 1955. In-addition, the facts pleaded in the complaint “must be enough to raise a right to relief above the speculative level.” Id. On such a motion, the court may consider only the complaint, documents attached to the complaint, matters of which a court can take judicial notice, or documents that the plaintiff knew about and relied upon. See Chambers v. Time Warner, Inc., 282 F.3d 147, 153 (2d Cir.2002). A district court considering a Rule 12(b)(6) motion must accept all factual allegations in the complaint as true, while also drawing all reasonable inferences in favor of the nonmov-ing party. ATSI Commc’ns, Inc., 493 F.3d at 98.

II. Claims Under the FDCPA

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Plummer v. Atlantic Credit & Finance, Inc., 66 F. Supp. 3d 484, 2014 U.S. Dist. LEXIS 170006, 2014 WL 6969546 (S.D.N.Y. 2014).

66 F. Supp. 3d 484 (Plummer v. Atlantic Credit & Finance, Inc.) — published by Counsel Stack Legal Research, free access to 12M+ legal documents.

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