Anderson v. Hill Wallack Llp et alREPLY BRIEF to Opposition to MotionD.N.J.December 12, 2016UNITED STATES DISTRICT COURT DISTRICT OF NEW JERSEY KAREN ANDERSON, : Plaintiff, : : v. : Civil Action No.: 16-cv-02437-BRM-LHG : HILL WALLACK LLP; SENECA : MORTGAGE SERVICING, LLC; BSI : FINANCIAL SERVICES a/k/a SERVIS : ONE, INC.; OHA NEWBURY : Motion Return Date: December 19, 2016 VENTURES, L.P.; GOSHEN : MORTGAGE LLC; JOHN DOES I-X, : Defendants. : DEFENDANT BSI FINANCIAL SERVICES A/K/A SERVIS ONE, INC.’S REPLY BRIEF IN FURTHER SUPPORT OF ITS MOTION TO DISMISS PLAINTIFF’S COMPLAINT PURSUANT TO F.R.C.P. 12(B)(6) Hill Wallack LLP 21 Roszel Road Princeton, NJ 08540 Attorneys for Defendant, BSI Financial Services Case 3:16-cv-02437-BRM-LHG Document 52 Filed 12/12/16 Page 1 of 18 PageID: 494 i TABLE OF CONTENTS TABLE OF AUTHORITIES ............................................................................................... ii, iii PRELIMINARY STATEMENT ...............................................................................................1 ARGUMENT .............................................................................................................................2 A. The Statute of Limitations for Any FDCPA Claim is One Year .............................2 B. Plaintiff has Failed in Every Regard to State a Viable Claim BSI Violated the FDCPA ................................................................................................3 1. 15 U.S.C. § 1692c ..............................................................................................4 a. Regulation X Compliance is Not Optional ............................................9 2. 15 U.S.C. § 1692d ..............................................................................................9 3. 15 U.S.C. § 1692e ............................................................................................11 a. The Court May and Should Consider BSI’s Exhibits as Plaintiff’s 15 U.S.C. § 1692e Claim is Based on the Document ...............................11 b. Any Alleged Statements by Non-Employee Kevin Martin Were Not Material ................................................................................................12 CONCLUSION ........................................................................................................................14 Case 3:16-cv-02437-BRM-LHG Document 52 Filed 12/12/16 Page 2 of 18 PageID: 495 ii TABLE OF AUTHORITIES Cases Page Block v. Seneca Mortg. Servicing No. CV160449FLWLHG, 2016 WL 6434487, at *21 (D.N.J. Oct. 31, 2016) ............... 2, 7 Burlington Coat Factory Sec. Litig. 114 F.3rd 1410, 1426 (3d Cir. 1997) ................................................................................. 11 Burton v. Nationstar Mortg. LLC No. CIV.A. 14-5059, 2015 WL 1636956, at *6 (E.D. Pa. Apr. 13, 2015) ................... 3, 12 Campuzano–Burgos v. Midland Credit Mgmt., Inc. 550 F.3d 294, 298–99 (3d Cir.2008) ................................................................................... 3 Donohue v. Quick Collect, Inc. 592 F.3d 1027, 1034 (9th Cir.2010) .................................................................................. 12 Gabriele v. Am. Home Mortg. Servicing, Inc. 503 Fed.Appx. 89, 95 (2d Cir.2012) ................................................................................... 3 Glover v. F.D.IC. 698 F.3d 139, 148 (3d Cir. 2012) ........................................................................................ 2 Grden v. Leikin Ingber & Winters PC 643 F.3d 169, 173 (6th Cir. 2011)....................................................................................... 7 Hahn v. Triumph P'ships LLC 557 F.3d 755, 758 (7th Cir.2009) ................................................................................ 12, 13 Jensen v. Pressler & Pressler, LLP No. 13–1712, 2014 WL 1745042 (D.N.J. Apr. 29, 2014) ................................................. 12 Lightfoot v. Healthcare Revenue Recovery Grp., LLC No. CIV 14-6791 JEI/AMD, 2015 WL 1103441 (D.N.J. Mar. 11, 2015) ........................ 10 McDermott v. Nationstar Mortg., LLC 143 F. Supp. 3d 290, 302 (E.D. Pa. 2015) ........................................................................... 5 McLaughlin v. Phelan Hallinan & Schmieg, LLP 756 F.3d 240, 245-46 (3d Cir.), cert. denied, 135 S. Ct. 487, 190 L. Ed. 2d 360 (2014) . 5, 6 Rogozinski v. NCO Fin. Sys., Inc. No. 11–2594, 2012 WL 5287896 (E.D.Pa. Oct. 25, 2012) ............................................... 13 Rush v. Portfolio Recovery Assocs. 977 F.Supp.2d 414, 429 (D.N.J.2013) ............................................................................... 10 Case 3:16-cv-02437-BRM-LHG Document 52 Filed 12/12/16 Page 3 of 18 PageID: 496 iii Sutton v. Ocwen Loan Servicing, LLC No. 16-CV-81234, 2016 WL 4417688, at *3 (S.D. Fla. Aug. 19, 2016) ........................ 8, 9 Turner v. Prof'l Recovery Servs., Inc. 956 F. Supp. 2d 573 (D.N.J. 2013) ...................................................................................... 3 Vilinsky v. Phelan Hallinan & Diamond PC, 640 F. App'x 139 (3d Cir. 2016) ................................................................................... 8 Wallace v. Wash. Mut. Bank, F.A. 683 F.3d 323, 326 (6th Cir.2012) ...................................................................................... 12 Warren v. Sessoms & Rogers, P.A. 676 F.3d 365, 374 (4th Cir.2012) ...................................................................................... 12 Wilson v. Quadramed Corp. 225 F.3d 350, 354–55 (3d Cir.2000) .................................................................................. 3 Rules 12 CFR § 1024.36 ........................................................................................................................ 5, 9 Codes 15 U.S.C. § 1692(c) ................................................................................................... 1, 3, 5, 6, 9, 14 15 U.S.C. § 1692(d) ............................................................................................... 2, 3, 9, 10, 11, 14 15 U.S.C. § 1692(e) ............................................................................................. 2, 3, 11, 12, 13, 14 Case 3:16-cv-02437-BRM-LHG Document 52 Filed 12/12/16 Page 4 of 18 PageID: 497 1 Defendant BSI Financial Services a/k/a Service One, Inc. (“BSI”) hereby submits its response to Plaintiff’s Opposition (the “Opposition”) (ECF No. 40) and its reply brief in further support of its Motion to Dismiss Plaintiff Karen Anderson’s (“Plaintiff”) Complaint. PRELIMINARY STATEMENT Using the shield as a sword, Plaintiff’s Complaint amounts to nothing more than a targeted effort to exploit the Fair Debt Collections Practices Act (“FDCPA”), a law specifically enacted to protect financial consumers from abusive lending practices. Patently lacking from the instant matter, however, are the abusive lending practices required to allege a violation under the FDCPA, leaving only facts that signify Plaintiff’s willful attempt to bait BSI into a FDCPA violation. Plaintiff alleges violations of the FDCPA on the basis of three (3) subparts of the statute, however, each lacks support in fact and law and, accordingly, fails to state a claim upon which relief can be granted. Five (5) days before Plaintiff’s counsel filed Plaintiff’s answer to the Foreclosure Complaint, Plaintiff sent BSI (not BSI’s counsel) a correspondence requesting BSI inform her of the amount necessary to reinstate or payoff her loan, provide her an accounting of all payments received and credited against her account/escrow account, and apprise her of all loss mitigation options available. It is BSI’s answer to these and three (3) other requests that Plaintiff now alleges violate 15 U.S.C. § 1692c. Notably, however, such responses cannot be considered violations of 15 U.S.C. § 1692c, and, further, the appropriate means to request such information was through discovery in the pending foreclosure action. Plaintiff makes equally unfounded and unsupported claims that BSI violated 15 U.S.C. §§ 1692d and e, by inflating the number of telephone calls she could have received from BSI Case 3:16-cv-02437-BRM-LHG Document 52 Filed 12/12/16 Page 5 of 18 PageID: 498 2 within the applicable limitations period, and asserting that an individual, who was not an agent or employee of BSI, improperly contacted Plaintiff. ARGUMENT A) The Statute of Limitations for Any FDCPA Claim is One Year As an initial matter, Plaintiff does not deny part of her claim is based on alleged conduct occurring outside the applicable limitations period of one year. Plaintiff instead asserts—with no legal underpinning—that because her claim is based on a pattern of conduct, actions occurring outside the statutory bar should be considered. Plaintiff ignores, however, the statutorily-established limitations period set forth for all FDCPA claims in 1692k: (d) An action to enforce any liability created by this subchapter may be brought in any appropriate United States district court without regard to the amount in controversy, or in any other court of competent jurisdiction, within one year from the date on which the violation occurs. 15 U.S.C. § 1692k(d) (emphasis added). The one-year limitations period is well established within the Third Circuit. See Glover v. F.D.I.C., 698 F.3d 139, 148 (3d Cir. 2012); see also Block v. Seneca Mortg. Servicing, No. CV160449FLWLHG, 2016 WL 6434487, at *21 (D.N.J. Oct. 31, 2016) (“15 U.S.C. § 1692k(d) provides for a one year statute of limitations for any FDCPA claim. . . . this Court holds that any communications or conduct occurring more than a year prior to the date of filing cannot serve as the basis for FDCPA claims.”).1 The alleged conduct that forms the basis of any FDCPA claim has no bearing on the applicable limitations period and certainly does not expand the one year period as Plaintiff suggests. Indeed, the case Plaintiff cites in support of her proposition that an aggregate view 1 Plaintiff’s counsel should be fully aware of the applicable statute of limitations as counsel for Plaintiff in this matter represented the plaintiff in Block v. Seneca. Case 3:16-cv-02437-BRM-LHG Document 52 Filed 12/12/16 Page 6 of 18 PageID: 499 3 of 15 U.S.C. § 1692d claims necessitates expansion of the period does not even mention § 15 U.S.C. § 1692k(d) and/or the limitations period. See Turner v. Prof'l Recovery Servs., Inc., 956 F. Supp. 2d 573 (D.N.J. 2013). The applicable limitations period is uniform and well- settled—accordingly, only those alleged actions occurring on or after April 29, 2015 may be considered. B) Plaintiff has Failed in Every Regard to State a Viable Claim BSI Violated the FDCPA Plaintiff’s allegation BSI violated 15 U.S.C. §§ 1692c, d, and e, lack any legal foundation and all factual support. Plaintiff’s failure to state a claim under each FDCPA provision is further apparent when viewing Plaintiff’s claims under the applicable FDCPA standard, which weeds out frivolous claims and attempts to impose liability based on the willful actions of a debtor like Plaintiff’s. Plaintiff is correct in her assertion FDCPA claims are viewed through the lens of the “least sophisticated debtor”; however, while the “standard protects naive consumers, it also ‘prevents liability for bizarre or idiosyncratic interpretations of collection notices by preserving a quotient of reasonableness . . . . .’” Wilson v. Quadramed Corp., 225 F.3d 350, 354–55 (3d Cir.2000) (citation omitted); see also Campuzano–Burgos v. Midland Credit Mgmt., Inc., 550 F.3d 294, 298–99 (3d Cir.2008) (same). Said differently, the least sophisticated debtor standard does not extend to “provide solace to the willfully blind or non-observant.” Campuzano–Burgos, 550 F.3d at 299. Further, the standard may be raised in instances where the plaintiff is represented by counsel. See Burton v. Nationstar Mortg. LLC, No. CIV.A. 14-5059, 2015 WL 1636956, at *6 (E.D. Pa. Apr. 13, 2015); Gabriele v. Am. Home Mortg. Servicing, Inc., 503 Fed.Appx. 89, 95 (2d Cir.2012). Case 3:16-cv-02437-BRM-LHG Document 52 Filed 12/12/16 Page 7 of 18 PageID: 500 4 Thus, the standard is not designed to protect a debtor like Plaintiff, who rather than naïve and unsophisticated, was knowledgeable, willful, and targeted. The least sophisticated debtor does not—armed with an attorney—send Qualified Written Requests seeking information which would be otherwise be produced in discovery.2 Plaintiff’s situation presents the exact “bizarre or idiosyncratic interpretation[] of collection notices” the Third Circuit sought to protect against in Wilson. Simply put, Plaintiff is not the least sophisticated debtor, and Plaintiff was required, yet failed to act with a quotient of reasonableness. Accordingly, as set forth more fully below, in light of the applicable standard Plaintiff cannot argue BSI has violated any FDCPA provision. 1) 15 U.S.C. § 1692c To begin, Plaintiff distorts the nature and timing of Defendant’s Qualified Written Responses to create the appearance Defendant, on its own, wrote Plaintiff multiple letters seeking payment under the terms of the Note and Mortgage. In reality however, what Plaintiff couches as three (3) separate communications sent for debt collection purposes, was one response to Plaintiff’s letter dated April 29, 2015. To be sure, all three Qualified Written Responses Plaintiff received were dated even date—May 13, 2015—and accurately, completely, and fully answered Plaintiff’s detailed qualified written requests and requests for information, which included the following demands: 2 It cannot be disputed that Plaintiff’s counsel would have been entitled to discovery of the information sought in the Qualified Written Requests in the ordinary defense of the foreclosure action. The fact that the Plaintiff sought information after the commencement of litigation and days prior to the filing of an Answer on her behalf while represented by sophisticated counsel in the prosecution of FDCPA violations should lead this Court to the conclusion that the Qualified Written Request was a tactic used by Plaintiff to force a violation of the FDCPA rather than a legitimate search of information. Thus the Plaintiff used the FDCPA as a sword to almost compel a violation rather than a shield to protect herself from wrongful collection efforts. Case 3:16-cv-02437-BRM-LHG Document 52 Filed 12/12/16 Page 8 of 18 PageID: 501 5 1. Pursuant to 12 CFR § 1024.36 I request that you, as servicer, provide to me my entire servicing file, including but not limited to all written records in the file and recordings of all telephone or other oral communications between the loan servicing company and me. This is a Request for Information and a Qualified Written Request. 2. Pursuant to my rights, I request to know the identity of the owner of my loan, the creditor to whom my debt is owed, the investor of my loan and the current servicer(s) of my loan. 3. Pursuant also to my rights, I request to know the identities of all past owners and servicers of my loan and the dates upon which transfers of rights occurred. This is a request for information and a Qualified Written Request. 4. I also demand to know all of my loss mitigation options available to me. This is a Request for Information and a Qualified Written Request. 5. I also request to know the amount necessary to reinstate my loan and to pay off my loan in its entirety. 6. Finally, I also request that you provide me an accounting of all payments received and credited against the account and an accounting of the escrow statement and all payments made and credited against the escrows on the property. See Complaint, Exhibit “1” at p. 2. Importantly, 15 U.S.C. § 1692c is only violated when a debtor is represented by counsel and a communication is in connection with the collection of a debt. 15 U.S.C. § 1692c. Plaintiff’s argument BSI’s Qualified Written Responses were “in connection with the collection of a debt” rests nearly entirely on the fact that BSI’s written correspondences contained formulaic language stating “[t]his is an attempt to collect a debt,” or a similar variation thereof. However, such an argument fails as the inclusion of such language alone does not render a communication “in connection with the collection of a debt”; rather the finding is based on whether the communication was sent with the “intent to induce payment.” See McLaughlin v. Phelan Hallinan & Schmieg, LLP, 756 F.3d 240, 245-46 (3d Cir.), cert. denied, 135 S. Ct. 487, 190 L. Ed. 2d 360 (2014); see also McDermott v. Nationstar Mortg., Case 3:16-cv-02437-BRM-LHG Document 52 Filed 12/12/16 Page 9 of 18 PageID: 502 6 LLC, 143 F. Supp. 3d 290, 302 (E.D. Pa. 2015) (boilerplate provisions that lay out the general consequences of non-payment are insufficient to establish a letter sent to plaintiff is “in connection with the collection of a debt.”). Plaintiff misstates the Third Circuit’s holding in McLaughlin v. Phelan Hallinan & Schmieg, LLP and relies on her flawed interpretation in asserting BSI violated 15 U.S.C. § 1692c. In Plaintiff’s Opposition, Plaintiff asserts the McLaughlin Court held that a debt- collector’s letter was sent in connection with the collection of a debt “because it plainly stated the collector is a ‘debt collector attempting to collect a debt.’” Opposition, p. 12. This is palpably incorrect as the Third Circuit, in reasoning the defendant’s letter was sent in connection with the collection of a debt, found compelling the entirety of the document, which in addition to the boilerplate language “provide[d] an invoice-like presentation of the amount due...” and “inform[ed] the recipient how to obtain ‘updated ... payoff quotes,’ meaning how to obtain current information about the amount that would have to be paid to satisfy the debt.” McLaughlin v. Phelan Hallinan & Schmieg, LLP, 756 F.3d 240, 246 (3d Cir.), cert. denied, 135 S. Ct. 487, 190 L. Ed. 2d 360 (2014). The Third Circuit, citing the inclusion of such information found the letter was “part of a dialogue to facilitate satisfaction of the debt and hence can constitute debt collection activity.” Id. at 245–46. Not only does McLaughlin fail to stand for what Plaintiff suggests, the case is factually distinguishable from the instant matter. In McLaughlin, the plaintiff fell behind on mortgage payments and his account was referred to a collections law firm, which, on its own accord, sent a letter stating the amount due under the terms of the plaintiff’s obligation and included a further breakdown of other fees and costs sought under the obligation. Id. at 240-43. However, unlike the letter in McLaughlin, which the plaintiff received without any solicitation Case 3:16-cv-02437-BRM-LHG Document 52 Filed 12/12/16 Page 10 of 18 PageID: 503 7 from the defendant, Plaintiff in the instant matter specifically requested BSI (and not its counsel) provide her an accounting of all payments received and credited against her account/escrow account, and apprise her of all loss mitigation options available. See Complaint, Exhibit 1 at p. 2. Moreover, as the foreclosure complaint had already been filed and Plaintiff was represented by counsel at the time the requests were made, the most appropriate method to obtain the information Plaintiff sought was through discovery, not a Qualified Written Request. Third Circuit courts have recently rejected labeling similar baited communications as “in connection with the collection of a debt.” In Block v. Seneca, the plaintiff (represented by Plaintiff’s counsel in the instant matter) alleged a mortgage servicer violated provisions of the FDCPA when an agent of the servicer, in response to a communication initiated by the borrower, indicated the servicer would provide the borrower certain documents it later failed to provide. The alleged FDCPA violation turned on whether the telephone call could be considered a communication in connection with the collection of a debt. The District of New Jersey, citing the Sixth Circuit in Grden v. Leikin Ingber & Winters PC, held that because the communication was initiated by the debtor, it could not be said the servicer was seeking to induce payment, and accordingly dismissed plaintiff’s claims related to the telephone call. Block v. Seneca Mortg. Servicing, No. CV160449FLWLHG, 2016 WL 6434487, at *17 (D.N.J. Oct. 31, 2016); see also Grden v. Leikin Ingber & Winters PC, 643 F.3d 169, 173 (6th Cir. 2011) (“The telephone call did not give rise to an FDCPA claim because the debtor had initiated the call, and the statements by the person answering were ‘merely a ministerial response to a debtor inquiry, rather than part of a strategy to make payment more likely.’”). Case 3:16-cv-02437-BRM-LHG Document 52 Filed 12/12/16 Page 11 of 18 PageID: 504 8 Thus, Plaintiff’s assertion BSI’s Qualified Written Responses are communications in connection with the collection of a debt because BSI’s Responses included “a detailed itemization of the amount owed to payoff the loan,” “the unpaid principal balance, interest, late charges, and other fees,” and “instructions for making payments on the loan” is a non- sequitur. See Opposition, p. 13-14. The same information Plaintiff maintains was sent to Plaintiff for collection purposes was requested by Plaintiff. Indeed, each Response sent to Plaintiff included the following, or similar statement: “I am writing in response to your inquiry concerning the above referenced account.” (emphasis added) See Complaint, Exhibits “2,” “3,” and “4.” What’s more, BSI’s Insurance Notification sent to Plaintiff (and the QWR Responses for that matter) is akin to the notice of assignment sent to the plaintiff in Vilinsky v. Phelan Hallinan & Diamond, which the Third Circuit held was not a communication in connection with the collection of a debt. PC, 640 F. App'x 139 (3d Cir. 2016). Just as the content of the letter in Vilinsky demonstrated that the letter’s sole purpose was to provide the plaintiff with specific information—plaintiff’s mortgage had been assigned, the content of the Insurance Notification demonstrates the document was sent solely to notify Plaintiff BSI would no longer be collecting a monthly escrow payment for insurance premiums. a) Regulation X Compliance is Not Optional Simply stating a statutory requirement is “nothing more than fantastical legal ‘argle- bargle’” does not relieve BSI of its duty to comply with the requirements of Regulation X. The plain language of 12 C.F.R. § 1024.36(c) requires a response to a Request for Information be sent to the borrower. Thus, providing responses to requests for information to anyone other than the borrower, including borrower’s counsel, could have exposed BSI to liability under 12 C.F.R. § 1024.36(c). While the court in Sutton v. Ocwen Loan Servicing, LLC did Case 3:16-cv-02437-BRM-LHG Document 52 Filed 12/12/16 Page 12 of 18 PageID: 505 9 not address interplay between Regulation X and the FDCPA, the court’s decision is instructional as the court found full compliance with 12 C.F.R. § 1024.36(c) where responses to requests for information were sent directly to a borrower, rather than a borrower’s counsel. Sutton v. Ocwen Loan Servicing, LLC, No. 16-CV-81234, 2016 WL 4417688, at *3 (S.D. Fla. Aug. 19, 2016). Accordingly, Plaintiff has failed to state a claim under 15 U.S.C. § 1692c upon which relief can be granted. 2) 15 U.S.C. § 1692d Plaintiff next contends with respect to her claim against BSI for violation of 15 U.S.C. § 1692d, “BSI frequently called Plaintiff in pursuit of debt collection efforts.” Yet, as BSI noted in its moving papers, far fewer calls than Plaintiff alleges could have occurred during the relevant period, and any calls that may have occurred were insufficient in number and lacked the requisite intent to establish a claim under 15 U.S.C. § 1692d. Plaintiff’s allegations in support of her 15 U.S.C. § 1692d claim are based on the assertions that “[i]n total, BSI Financial Services left more than 45 messages on Plaintiff’s answering machine,” and “[b]etween February 23, 2015 and May 10, 2015 BSI Financial Services left at least eleven messages on Plaintiff’s answering machine . . .” relating to Plaintiff’s debt. However, as discussed infra a significant portion of Plaintiff’s calls do not fall within the applicable statute of limitations period and thus cannot be considered. While Plaintiff’s alleged eleven calls were received over nearly a three month period, only alleged calls occurring in the eleven day period April 29, 2015 to May 10, 2015 can be considered. Further Plaintiff’s allegation she received forty-five calls from BSI does not even specify a time- frame—the calls could have been received over the entire length of time BSI serviced Case 3:16-cv-02437-BRM-LHG Document 52 Filed 12/12/16 Page 13 of 18 PageID: 506 10 Plaintiff’s mortgage, including during Plaintiff’s initial default, and various attempts of workout. Nonetheless, Plaintiff’s allegations are insufficient to state a cause of action under 15 U.S.C. § 1692d. While Plaintiff notes the court in Rush v. Portfolio Recovery Assocs. asserted the question of whether a debt collector engages in harassing or abusive conduct is ordinarily a question for the jury, the court went on to note plaintiff must plead sufficient facts for a reasonable juror to conclude there has been a violation of the FDCPA. 977 F.Supp.2d 414, 429 (D.N.J. 2013). As Plaintiff more fully set forth in BSI’s moving papers, this court recently dismissed an alleged violation of 15 U.S.C.§ 1692d for failure to state a claim finding two calls insufficient to indicate intent to harass, annoy, or abuse. See Lightfoot v. Healthcare Revenue Recovery Grp., LLC. No. CIV 14-6791 JEI/AMD, 2015 WL 1103441 (D.N.J. Mar. 11, 2015). Eliminating calls outside of the applicable limitations period, there is a likelihood the amount of alleged calls Plaintiff received is around the same number (two to three) the plaintiff in Lightfoot received, which was insufficient to establish the requisite intent to state a claim under 15 U.S.C. § 1692d, and far fewer than the scores of calls other plaintiffs received, which were insufficient to establish a violation of 15 U.S.C. § 1692d. Accordingly, Plaintiff has failed to state a claim against BSI for violation of 15 U.S.C. § 1692d. 3) 15 U.S.C. § 1692e Finally, Plaintiff has failed to state a claim against BSI under 15 U.S.C. § 1692e, Kevin Martin was not an agent or employee of BSI at the time of the alleged conduct. To begin with, Plaintiff is blatantly wrong in her assertion BSI “does not claim the phone calls and messages did not occur.” Opposition, p. 22. Contrary to Plaintiff’s assertion, BSI specifically asserts in its Motion to Dismiss Plaintiff’s Complaint, “the telephone call could not have occurred.” As the Wenk Certification establishes, Kevin Martin was not an Case 3:16-cv-02437-BRM-LHG Document 52 Filed 12/12/16 Page 14 of 18 PageID: 507 11 employee of BSI and therefore, in alleging Kevin Martin failed to make certain disclosures to Plaintiff, Plaintiff has failed to state a claim against BSI. Further, even if this Court considers the communication, the alleged statements are not material and thus cannot form the basis of a violation of U.S.C. § 1692e. a. The Court May and Should Consider BSI’s Exhibits as Plaintiff’s 15 U.S.C. § 1692e Claim is Based on the Document The Wenk Certification sets forth the employment status of Kevin Martin, which is “integral to” Plaintiff’s Complaint and, thus should be considered in the Court’s determination of the merits of BSI’s Motion to Dismiss. Plaintiff has alleged BSI violated 15 U.S.C. § 1692e by the act of a specific agent or employee of BSI—Kevin Martin—leaving a telephone message regarding Plaintiff’s obligations under her note and mortgage. Importantly, Plaintiff seeks relief against BSI; and thus, if Kevin Martin was not an agent or employee of BSI at the time Plaintiff claims she received the purported call from Kevin Martin, BSI could not have violated 15 U.S.C. § 1692e. The Wenk Certification can and should be considered by the Court in its determination of BSI’s Motion to Dismiss, because, as Plaintiff acknowledges in her Opposition, documents outside the pleadings may be considered in a motion to dismiss when the document is “integral to” the allegations of the Complaint. See In re Burlington Coat Factory Sec. Litig., 114 F.3rd 1410, 1426 (3d Cir. 1997). The certification is integral to Plaintiff’s allegations since Plaintiff specifically asserts BSI, through the actions of Kevin Martin, violated 1692(e). If Kevin Martin was not an employee of BSI at the time Plaintiff purports she received the telephone calls from Kevin Martin, Plaintiff has failed to state a claim against BSI. Case 3:16-cv-02437-BRM-LHG Document 52 Filed 12/12/16 Page 15 of 18 PageID: 508 12 b. Any Alleged Statements by Non-Employee Kevin Martin Were Not Material Even if the Court does not consider the Wenk Certification, Plaintiff’s allegation BSI violated 15 U.S.C. § 1692e on the basis that a representative of Plaintiff did not specify he was a debt collector should not be considered a violation of 15 U.S.C. § 1692e. The allegation is premised on three alleged telephone messages Kevin Martin left Plaintiff, which Plaintiff contends occurred on April 28, May 4, and May 10 of 2015 in which Kevin Martin did not state the calls were made in connection with the collection of a debt. A growing number of courts impose a “materiality requirement” for 15 U.S.C. § 1692e violations, under which allegedly false or misleading statements must be material to be actionable. See, e.g., Wallace v. Wash. Mut. Bank, F.A., 683 F.3d 323, 326 (6th Cir.2012) (“[A] statement must be materially false or misleading to violate Section 1692e.”); Warren v. Sessoms & Rogers, P.A., 676 F.3d 365, 374 (4th Cir.2012) (“Although Congress did not expressly require that any violation of § 1692e be material, courts have generally held that violations grounded in ‘false representations' must rest on material misrepresentations.”); Donohue v. Quick Collect, Inc., 592 F.3d 1027, 1034 (9th Cir.2010) (“[F]alse but nonmaterial misrepresentations are not likely to mislead the least sophisticated consumer and therefore are not actionable under § 1692e.”); Hahn v. Triumph P'ships LLC, 557 F.3d 755, 758 (7th Cir.2009) (“A statement cannot mislead unless it is material, so a false but non-material statement is not actionable.”). While the Third Circuit has not specifically adopted a “materiality requirement,” courts within the Third Circuit have. See, e.g., Burton v. Nationstar Mortg. LLC, No. CIV.A. 14-5059, 2015 WL 1636956, at *6 (E.D. Pa. Apr. 13, 2015); Jensen v. Pressler & Pressler, LLP, No. 13–1712, 2014 WL 1745042 (D.N.J. Apr. 29, 2014); Souders v. Bank of Am., No. Case 3:16-cv-02437-BRM-LHG Document 52 Filed 12/12/16 Page 16 of 18 PageID: 509 13 12–1074, 2013 WL 5937324 (M.D.Pa. Nov. 4, 2013); Rogozinski v. NCO Fin. Sys., Inc., No. 11–2594, 2012 WL 5287896 (E.D.Pa. Oct. 25, 2012). The reasoning behind the materiality requirement is best stated by the 7th Circuit in Hahn v. Triumph P'ships LLC, where the Court explained a statement “cannot mislead unless it is material, so a false but nonmaterial statement is not actionable,” because “[i]f a statement would not mislead the unsophisticated consumer, it does not violate the FDCPA—even if it is false in some technical sense.” 557 F.3d 755, 758 (7th Cir.2009). While no court within the Third Circuit has addressed materiality in terms of an alleged violation of 15 U.S.C. § 1692e(11), such an application is a logical extension of the § 1692e blanket requirement set forth by courts within the Third Circuit and other jurisdictions. Simply put, it cannot be said the alleged actions of Kevin Martin—i.e. failing to state three calls were in reference to the collection of a debt—were materially misleading to Plaintiff, who again under the applicable standard, was required to act with a quotient of reasonableness. Plaintiff had been in default under the terms of her note and mortgage since October 1, 2011 and BSI had been servicing Plaintiff’s mortgage since approximately March of 2014. Plaintiff was fully aware of what any alleged call from BSI could have related to, including, inter alia, the payoff figures, accounting, or mitigation options Plaintiff requested at the same time of the alleged calls (the calls purportedly occurred between April 28, 2015 and May 10, 2015, the Qualified Written Requests and Responses were transmitted between April 29, 2015 and May 13, 2015). Compounding the situation, Plaintiff was represented by counsel for at least two of the three calls (potentially all three depending on when Plaintiff retained counsel); accordingly, any argument Plaintiff was materially misled by an alleged Case 3:16-cv-02437-BRM-LHG Document 52 Filed 12/12/16 Page 17 of 18 PageID: 510 14 omission of debt-collector status is meritless. As such, Plaintiff has substantially failed to state a claim under 15 U.S.C. § 1692e. CONCLUSION Because Plaintiff has failed to allege BSI has violated 15 U.S.C. § 1692c, d, or e, BSI respectfully asks the Court to grant its motion and dismiss Plaintiff’s claims against BSI. HILL WALLACK LLP Dated: December 12, 2016 /s/ Brett M. Buterick Michael J. Shavel, Esq. Eric P. Kelner, Esq. Brett M. Buterick, Esq. 21 Roszel Road Princeton, New Jersey 08540 Tel: (609) 924-0808 Fax: (609) 452-1888 Attorneys for BSI Financial Services a/k/a Servis One, Inc. Case 3:16-cv-02437-BRM-LHG Document 52 Filed 12/12/16 Page 18 of 18 PageID: 511 HILL WALLACK LLP 21 Roszel Road Princeton, NJ 08543 Attorneys for Defendant, BSI Financial Services UNITED STATES DISTRICT COURT DISTRICT OF NEW JERSEY KAREN ANDERSON, : Plaintiff, : Civil Action No.: 16-cv-02437-BRM-LHG : v. : Return Date: December 19, 2016 : HILL WALLACK LLP; SENECA : MORTGAGE SERVICING, LLC; BSI : FINANCIAL SERVICES a/k/a SERVIS : ONE, INC.; OHA NEWBURY : VENTURES, L.P.; GOSHEN : CERTIFICATE OF SERVICE MORTGAGE LLC; JOHN DOES I-X, : Defendants. : I HEREBY CERTIFY that on this 12th day of December, 2016, I caused a copy of the following on behalf of Defendant, BSI Financial Services (“Defendant”) to be served electronically on all counsel of record through the electronic filing system: • Defendant BSI Financial Services a/k/a Servis One, Inc.’s Reply Brief in Further Support of its Motion to Dismiss Plaintiff’s Complaint pursuant to F.R.C.P. 12(B)(6) I certify that on this same date, I sent via New Jersey Lawyers Service courtesy copies of these papers to the chambers of the Honorable Brian Martinotti, U.S.D.J. I further certify that on this same date, I arranged for delivery of these papers to all counsel of record at the following addresses by First Class Mail: Case 3:16-cv-02437-BRM-LHG Document 52-1 Filed 12/12/16 Page 1 of 2 PageID: 512 Adam Deutsch, Esq. Denbeaux & Denbeaux 366 Kinderkamack Road Westwood, New Jersey 07675 Attorney(s) for Plaintiff Laura K. Conroy, Esquire Diane A. Bettino, Esquire Reed Smith LLP Princeton Forrestal Village 136 Main Street Princeton, New Jersey 08543 Attorneys for Defendant Seneca Mortgage Servicing, LLC Pursuant to 28 U.S.C. § 1746, I certify under penalty of perjury that the foregoing is true and correct. I am aware that if any of the foregoing statements made by me are willfully false, I am subject to punishment. Hill Wallack LLP By: /s/ Jayne S. Hanley Dated: December 12, 2016 Jayne S. Hanley Case 3:16-cv-02437-BRM-LHG Document 52-1 Filed 12/12/16 Page 2 of 2 PageID: 513
