Opinion
No. CV 09 5010045
June 5, 2009
MEMORANDUM OF DECISION Facts and Procedural History
In the present action, the plaintiff, Unifund CCR Partners, is attempting to collect debt allegedly owed by the defendant, Carole A. Coyle. The plaintiff filed a complaint on January 8, 2009 alleging the following. The defendant made purchases using a credit card issued by Citibank South Dakota, N.A., which she agreed to pay back in accordance with the credit card agreement. The plaintiff is now the owner of the debt. The defendant failed to make payments in accordance with the terms of the credit card agreement and is in default. The plaintiff has declared the balance due and payable in the amount of $17,584.77, as of September 5, 2008. Demand has been made, but the defendant has refused and/or neglected to pay the amount due.
The defendant filed a motion to dismiss on February 2, 2009 on the ground that this court lacks subject matter jurisdiction. The defendant argues that the plaintiff is a consumer collection agency, registered with the State of Connecticut since February 2006, and that General Statutes § 36a-805(a)(3) "prohibits consumer collection agencies from purchasing or receiving assignment of claims and instituting suit thereon." Therefore, the plaintiff lacks standing to bring the present action, depriving the court of subject matter jurisdiction.
General Statutes § 36a-800(1) states: "'Consumer collection agency' means any person engaged in the business of collecting or receiving for payment for others of any account, bill or other indebtedness from a consumer debtor or engaged in the business of collecting or receiving for payment property tax from a property tax debtor on behalf of a municipality, including any person who, by any device, subterfuge or pretense, makes a pretended purchase or takes a pretended assignment of accounts from any other person or municipality of such indebtedness for the purpose of evading the provisions of sections 36a-800 to 36a-810, inclusive. It includes persons who furnish collection systems carrying a name which simulates the name of a consumer collection agency and who supply forms or form letters to be used by the creditor, even though such forms direct the consumer debtor or property tax debtor to make payments directly to the creditor rather than to such fictitious agency. 'Consumer collection agency' further includes any person who, in attempting to collect or in collecting such person's own accounts or claims from a consumer debtor, uses a fictitious name or any name other than such person's own name which would indicate to the consumer debtor that a third person is collecting or attempting to collect such account or claim. 'Consumer collection agency' does not include (A) an individual employed on the staff of a licensed consumer collection agency, or by a creditor who is exempt from licensing, when attempting to collect on behalf of such consumer collection agency, (B) persons not primarily engaged in the collection of debts from consumer debtors who receive funds in escrow for subsequent distribution to others, including, but not limited to, real estate brokers and lenders holding funds of borrowers for payment of taxes or insurance, (C) any public officer or a person acting under the order of any court, (D) any member of the bar of this state, and (E) a person who services loans or accounts for the owners thereof when the arrangement includes, in addition to requesting payment from delinquent consumer debtors, the providing of other services such as receipt of payment, accounting, record-keeping, data processing services and remitting, for loans or accounts which are current as well as those which are delinquent. Any person not included in the definition contained in this subdivision is, for purposes of sections 36a-645 to 36a-647, inclusive, a 'creditor,' as defined in section 36a-645."
The plaintiff filed its memorandum in opposition on February 13, 2009. The plaintiff contends that it has standing because it is the owner of the debt. General Statutes § 52-118 "gives an assignee the right to a cause of action." The plaintiff admits it is a consumer collection agency, but argues that it is bringing suit in its capacity as the owner of the debt and not in its capacity as a consumer collection agency.
Discussion
"A motion to dismiss . . . properly attacks the jurisdiction of the court, essentially asserting that the plaintiff cannot as a matter of law and fact state a cause of action that should be heard by the court . . . A motion to dismiss tests, inter alia, whether, on the face of the record, the court is without jurisdiction." (Internal quotation marks omitted.) Beecher v. Mohegan Tribe of Indians of Connecticut, 282 Conn. 130, 134, 918 A.2d 880 (2007); Pedro v. Miller, 281 Conn. 112, 116, 914 A.2d 524 (2007). "When a . . . court decides a jurisdictional question raised by a pretrial motion to dismiss, it must consider the allegations of the complaint in their most favorable light . . . In this regard, a court must take the facts to be those alleged in the complaint, including those facts necessarily implied from the allegations, construing them in a manner most favorable to the pleader." (Internal quotation marks omitted.) Cogswell v. American Transit Ins. Co., 282 Conn. 505, 516, 923 A.2d 638 (2007); Cox v. Aiken, 278 Conn. 204, 211, 897 A.2d 71 (2006); Filippi v. Sullivan, 273 Conn. 1, 8, 866 A.2d 599 (2005).
"The issue of standing implicates subject matter jurisdiction and is therefore a basis for granting a motion to dismiss." St. George v. Gordon, 264 Conn. 538, 544, 825 A.2d 90 (2003). "If a party is found to lack standing, the court is without subject matter jurisdiction to determine the cause . . . A determination regarding a trial court's subject matter jurisdiction is a question of law . . . Subject matter jurisdiction involves the authority of the court to adjudicate the type of controversy presented by the action before it . . . [A] court lacks discretion to consider the merits of a case over which it is without jurisdiction . . . The objection of want of jurisdiction may be made at any time . . . [a]nd the court or tribunal may act on its own motion, and should do so when the lack of jurisdiction is called to its attention . . . The requirement of subject matter jurisdiction cannot be waived by any party and can be raised at any stage in the proceedings . . . Standing is not a technical role intended to keep aggrieved parties out of court; nor is it a test of substantive rights. Rather it is a practical concept designed to ensure that courts and parties are not vexed by suits brought to vindicate nonjusticiable interests and that judicial decisions which may affect the rights of others are forged in hot controversy, with each view fairly and vigorously represented . . . These two objectives are ordinarily held to have been met when a complainant makes a colorable claim of direct injury [that] he has suffered or is likely to suffer, in an individual or representative capacity. Such a personal stake in the outcome of the controversy . . . provides the requisite assurance of concrete adverseness and diligent advocacy . . . The requirement of directness between the injuries claimed by the plaintiff and the conduct of the defendant also is expressed, in our standing jurisprudence, by the focus on whether the plaintiff is the proper party to assert the claim at issue . . ." (Internal quotation marks omitted.) Carrubba v. Moskowitz, 274 Conn. 533, 550-51, 877 A.2d 773 (2005).
The defendant argues that General Statutes § 36a-805 prohibits the plaintiff from bringing this action. Section § 36a-805(a)(3) states: "No consumer collection agency shall . . . purchase or receive assignments of claims for the purpose of collection or institute suit thereon in any court." The plaintiff concedes that it is a consumer collection agency, but argues that as the owner of the debt it is entitled to bring this action pursuant to § 52-118, which states: "The assignee and equitable and bona fide owner of any chose in action, not negotiable, may sue thereon in his own name. Such a plaintiff shall allege in his complaint that he is the actual bona fide owner of the chose in action, and set forth when and how he acquired title."
"Standing is established by showing that the party claiming it is authorized by statute to bring suit or is classically aggrieved The fundamental test for determining aggrievement encompasses a well-settled twofold determination: first, the party claiming aggrievement must successfully demonstrate a specific, personal and legal interest in [the subject matter of the challenged action] . . . Second, the party claiming aggrievement must successfully establish that this specific personal and legal interest has been specially and injuriously affected by the [challenged action] . . . Aggrievement is established if there is a possibility, as distinguished from a certainty, that some legally protected interest . . . has been adversely affected." (Citation omitted; internal quotation marks omitted.) AvalonBay Communities, Inc. v. Orange, 256 Conn. 557, 568, 775 A.2d 284 (2001). Furthermore, "[t]he assignee of a chose in action stands in the shoes of the assignor . . . A valid assignment transfers to the assignee exclusive ownership of all of the assignor's rights to the subject assigned and extinguishes all of those rights in the assignor." (Citation omitted; internal quotation marks omitted.) Mall v. LaBow, 33 Conn.App. 359, 362, 635 A.2d 871 (1993), cert. denied, 229 Conn. 912, 642 A.2d 1208 (1994).
Here, the complaint states: "The Plaintiff is now the owner of the debt." In its brief, the plaintiff argues that it became the owner of the debt through an assignment agreement. The court has yet to be provided with such an agreement, which would presumably detail the assignment of the defendant's debt from the original creditor to the plaintiff. When deciding a motion to dismiss, this court is bound by the allegations in the complaint. Thus, it is sufficient that the plaintiff has alleged he is the owner of the debt.
In determining whether a trial court properly struck a plaintiff's complaint brought pursuant to § 52-118, the Supreme Court stated: "[A] plaintiff asserting a cause of action as an assignee under § 52-118 need only allege the facts necessary to bring himself within the terms of the statute . . . thus apprising the court and the defending party of the assignment relied upon and showing the plaintiff's right to sue upon the chose in action acquired thereby." Bouchard v. People's Bank, 219 Conn. 465, 471, 594 A.2d 1 (1991). The court further stated: "[T]he plaintiff pleaded a dated transaction resulting in his acquisition of validly assignable choses in action, and vesting him with an ownership status equivalent to that obtained by an assignee pursuant to an effective assignment. If proven, therefore, the facts set forth in the plaintiff's complaint would have entitled him to sue the defendant in his own name as an assignee under § 52-118. The plaintiff thus framed his complaint in a manner legally sufficient to state a cause of action under the statute. Accordingly, the trial court should not have stricken the complaint." Id., 473.
In Household Finance Corp. III v. Leslie, Superior Court, judicial district of Tolland, Docket No. CV 05 4001821 (August 19, 2005, Scholl, J.), the defendant moved to dismiss for lack of subject matter jurisdiction arguing that the plaintiff, by attempting to collect a debt, was acting as a consumer collection agency within this state and in violation of General Statutes § 36a-801. The defendant claimed that the plaintiff in the action was really "Household Recovery Services Corporation," which was allegedly a collection agency, and not the named plaintiff, "Household Finance Corporation III." See id. The court, however, found that the facts alleged supported the plaintiff's standing. See id. Specifically, the plaintiff alleged that it entered into a line of credit agreement with the defendant and made advances to the defendant pursuant to such credit agreement, which were not repaid in accordance with the agreement. See id. Considering these allegations in a light most favorable to the plaintiff, the court stated: "This is sufficient to support the Plaintiff's standing. Hearsay evidence submitted by the defendant that his account may be administered by another entity is insufficient to defeat these allegations. In addition, creditors are not consumer collection agencies within the meaning of General Statutes § 36a-800 et seq., requiring licensure as a consumer collection agency." Id.
Proof of the valid assignment of the defendant's debt from its original owner to the plaintiff will likely have to be produced in order for the plaintiff to successfully pursue this action. See Bouchard v. People's Bank, supra, 219 Conn. 471-73; see also Middlesex Mutual Assurance Co. v. Travelers Ins. Co., Superior Court, judicial district of Middlesex, Docket No. 60094 (May 6, 1993, Higgins, J.) (8 C.S.C.R. 555-56) (finding factual allegations in plaintiffs' complaint legally insufficient to state a claim upon which relief can be granted because plaintiffs failed to specifically allege when and how they acquired title to the chose in action as required under § 52-118). At this point, however, the court is bound by the complaint, which alleges that the plaintiff is the owner of the debt. As an aggrieved party, the plaintiff has standing.
The court notes that this case may be more appropriately disposed of through a motion to strike because the plaintiffs have failed to fully comply with the provisions of § 52-118, which requires an assignee to specifically allege when and how they acquired title to the action. See Middlesex Mutual Assurance v. Travelers Ins. Co., supra, 8 C.S.C.R. 555; see also Practice Book § 10-72 ("Where the assignee and equitable and bona fide owner of any chose in action, not negotiable, sues thereon in his or her own name, such party shall in the complaint allege that he or she is the actual bona fide owner thereof, and set forth when and how such party acquired title thereto"). The plaintiff may, however, rectify this defect by filing an amended complaint.
Conclusion
The defendant's motion to dismiss for lack of subject matter jurisdiction is hereby denied.