United States District Court, S.D. New York
December 7, 2005.
LORI JO VINCENT, RUTH ANN GUTIERREZ, LINDA U. GARRIDO, and JOHN GARRIDO on behalf of themselves and all others similarly situated, Plaintiffs,
THE MONEY STORE, TMS MORTGAGE, INC., HOMEQ SERVICING CORP., and MOSS, CODILIS, STAWIARSKI, MORRIS, SCHNEIDER & PRIOR, LLP, Defendants.
The opinion of the court was delivered by: JOHN SPRIZZO, District Judge
MEMORANDUM OPINION AND ORDER
Plaintiffs Lori Jo Vincent, Ruth Ann Gutierrez, Linda U.
Garrido, and John Garrido ("plaintiffs") bring the
above-captioned action on behalf of themselves and all others
similarly situated against defendants The Money Store, TMS
Mortgage Inc., HomEq Servicing Corp.*fn1 ("The Money
Store"), and Moss, Codilis, Stawiarski, Morris, Schneider &
Prior, LLP ("Moss Codilis") (collectively "defendants"), alleging
violations by The Money Store of the Fair Debt Collection
Practices Act ("FDCPA") and the Truth-in-Lending Act ("TILA"),
and asserting various state law claims against both The Money
Store and Moss Codilis. Defendants move to dismiss plaintiffs'
complaint pursuant to Federal Rule of Civil Procedure 12(b)(6).
For the reasons that follow, the Court converts The Money Store
defendants' motion to dismiss plaintiffs' FDCPA claim into a
motion for summary judgment, and grants such motion. The Court
further denies defendants' motions to dismiss plaintiffs'
remaining claims. DISCUSSION
The FDCPA claim in this case presents an almost identical
situation to that in Mazzei v. The Money Store,
349 F. Supp. 2d 651 (S.D.N.Y. 2004), a case this Court previously decided. In
that case plaintiff brought an FDCPA claim against his creditor,
The Money Store, claiming The Money Store should be considered a
debt collector under the false name exception found in the FDCPA,
15 U.S.C. § 1692a(6). Plaintiff argued that the law firm hired by
The Money Store to assist in the debt collection process, Moss
Codilis, exercised no legal judgment in generating breach letters
sent to plaintiff and thousands of others, thereby rendering
creditor The Money Store the true debt collector under the false
name exception contained in the FDCPA. Mazzei,
349 F. Supp at 654. The Money Store moved for summary judgment, and the Court
granted its motion on the FDCPA claim, holding that "plaintiff
does not sufficiently allege that The Money Store used Moss
Codilis' name to collect its debts, pretended to be Moss Codilis
or used an alias to that effect, or that The Money Store
`controlled almost every aspect' of Moss Codilis' debt collection
practice, rendering Moss Codilis defendants' alter ego," as is
required to fit within the FDCPA false name exception. Id. at
661. This Court concluded "as a matter of law that The Money
Store is not a debt collector." Id. The Second Circuit denied
plaintiffs' motion for leave to file an interlocutory appeal of
In the current case, plaintiffs likewise bring an FDCPA claim
against The Money Store, alleging that "The Money Store
Defendants are debt collectors within the meaning of
15 U.S.C. § 1692a because, in the process of collecting their own debts, they
used a name other than their own to indicate that a third person was
collecting or attempting to collect such debts." Compl. ¶ 43.
More specifically, the Complaint alleges that "Defendants sought
to convey the false impression that [Moss Codilis] was
significantly involved in attempting to collect the debt on its
behalf, when in reality Money Store was attempting to collect its
own debts. . . ." Compl. ¶ 20. The plaintiff in Mazzei made the
The Money Store moved to dismiss this claim. Both parties in
this action attach, in support of their motion papers, documents
and depositions obtained from discovery in the Mazzei action.
See Defs.' Notice of Mot. for Summ. J., dated May 7, 2003;
Pls.' Decl. in Opp'n to Defs.' Mot. to Dismiss, dated Nov. 12,
2003. It is therefore appropriate for the Court to construe such
motion as a motion for summary judgment, and the parties are
presumed to be aware of the possibility of conversion where the
non-moving party submits matters outside the pleadings in
response to the motion to dismiss. See Chambers v. Time
Warner, Inc., 282 F.3d 147, 152-53 (2d Cir. 2002) (converting
motion to dismiss to motion for summary judgment appropriate
where extra-pleading material is considered).
The Court has previously considered the argument made by
plaintiffs in the same context and determined as a matter of law
that The Money Store does not qualify as a debt collector under
the FDCPA's false name exception. Therefore, for the reasons
already stated in this Court's decision in Mazzei,
349 F. Supp. 2d 651, the Court grants summary judgment to The Money Store as
to plaintiffs' FDCPA claim.
Defendants also move to dismiss plaintiffs' remaining claims for violations of TILA and the California Business and
Professional Code, common law fraud, unjust enrichment, and
breach of contract. In considering a motion to dismiss, a court
must accept as true all factual allegations set forth in the
complaint and draw all reasonable inferences in favor of the
plaintiff. Rombach v. Chang, 355 F.3d 164, 169 (2d Cir. 2004).
Dismissal is only appropriate where it "appears beyond doubt that
the plaintiff can prove no set of facts which would entitle him
or her to relief." Sweet v. Sheahan, 235 F.3d 80, 83 (2d Cir.
Plaintiffs assert that The Money Store defendants violated TILA
by charging unauthorized fees and expenses in excess of that
permitted under California law, and failing to "credit Plaintiffs
for such excess charges in violation of 15 U.S.C. § 1666d and
12 CFR § 226.21." Compl. ¶ 48. 15 U.S.C. § 1666d and 12 CFR § 226.21
only apply where there is a credit balance in excess of $1 in the
debtor's account. Defendants argue that because plaintiffs failed
to allege that there was ever a credit balance in their accounts,
the TILA claim is "necessarily baseless." See The Money Store's
Mot. to Dismiss, dated Oct. 15, 2003, at 11.
The Complaint, however, clearly alleges that the Money Store's
failure to credit plaintiffs for the excess charges amounted to a
violation of 15 U.S.C. § 1666d and 12 C.F.R. § 226.21. The
allegation that there was a credit balance over $1 in their
accounts is thus implicit in plaintiffs' TILA claim. Plaintiffs
are not required to plead this cause of action with any greater
specificity. See Conley v. Gibson, 355 U.S. 41, 45-46 (1957).
Examining the complaint liberally and drawing all reasonable
inferences in favor of the non-moving party, plaintiffs have stated a valid claim under TILA. The Court therefore denies
defendants' motion to dismiss plaintiffs' TILA claims, without
prejudice subject to being renewed upon completion of discovery.
State Law Claims
At this time the Court further denies each of the defendants'
motions to dismiss plaintiffs' remaining state law claims without
prejudice subject to being renewed upon completion of discovery.
For all of the aforementioned reasons, the Court grants The
Money Store Defendants' Motion for Summary Judgment as to the
FDCPA claim, and denies defendants' motions to dismiss all
All discovery pertaining to plaintiffs' TILA claim against The
Money Store shall be completed no later than ninety (90) days
from the entry of this Memorandum Opinion and Order. Discovery on
plaintiffs' state law claims against both parties shall be and
hereby is stayed. A Pre-Trial Conference in this action shall
occur on December 19, 2005 at 3:00 p.m. in Courtroom 705, 40
It is SO ORDERED.
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