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David Calton, On Behalf of Himself and All Others Similarly Situated v. Pressler & Pressler

August 3, 2011

DAVID CALTON, ON BEHALF OF HIMSELF AND ALL OTHERS SIMILARLY SITUATED, PLAINTIFF,
v.
PRESSLER & PRESSLER,LLP; PALISADES COLLECTION, LLC; AND JP MORGAN CHASE & CO., DEFENDANTS.



The opinion of the court was delivered by: McKENNA, D.J.

MEMORANDUM AND ORDER

David Calton ("Calton") brought this action against Pressler & Pressler, LLP ("Pressler"), Palisades Collection, LLC ("Palisades"), and JP Morgan Chase & Co., ("Chase") (collectively "Defendants") alleging violations of the Fair Debt Collection and Practices Act ("FDCPA"), New York CPLR § 5222(j), and New York General Business Law § 349. Defendants move to dismiss Calton's claims pursuant to Rule 12 of the Federal Rules of Civil Procedure, or in the alternative pursuant to Rule 56 of the Federal Rules of Civil Procedure. For the foregoing reasons Defendants' motions to dismiss pursuant to Rule 12(b)(6) are GRANTED.

BACKGROUND

On or about February 4, 2010, Pressler, a law firm, on behalf of its client, Palisades, a debt collection agency, served Chase with a restraining notice to enforce a default judgment obtained against Calton in Palisades Collection LLC v. Calton, New York City Civil Court, index number 48954-05 (the "Restraining Notice"). (See Compl. ¶¶ 11, 13, 15; Decl. of Sheri Lambert in Supp. of Chase's Mot. to Dismiss ("Lambert Decl.") Ex. E ("Restraining Notice").) Calton does not dispute the validity of the New York Civil Court Judgment.

On or about February 11, 2010, Chase notified Calton that it had placed a hold on his accounts, including two accounts that he had opened at a Chase branch in New York (containing $303.85 and $73.34) and two accounts that he had opened at a Chase branch in Michigan (containing $1,541.43 and $91.46). (See Compl. ¶¶ 16-18; Decl. of David Calton in Supp. of Pl.'s Opp'n to Chase's Mot. to Dismiss Ex. A ("Chase Letter").) Chase charged Calton a Legal Processing fee of $125 for servicing the Restraining Notice. (See Compl. ¶ 19; Chase Letter.)

On February 19, 2010, Calton and the creditors instructed Chase to release $350 from Plaintiff's account to resolve the dispute. (See Chase's Mem. in Supp. of Its Mot. to Dismiss ("Chase's Mem.") at 5; Lambert Decl. Ex. F.)

On March 10, 2010, Calton filed a complaint against Pressler and Palisades. On April 2, 2010, Calton amended his complaint adding new claims and naming Chase as a defendant.

Calton alleges that Pressler and Palisades (collectively, the "Creditor-Defendants") violated 15 U.S.C. §§ 1692e and 1692f because they failed to inform Chase of certain monetary and geographic restrictions imposed under New York law regarding the issuance of restraining notices and as a result, Chase unlawfully restrained Calton's accounts. (See Compl. ¶¶ 21-31.) Calton also alleges that Chase violated New York CPLR § 5222(j) when it charged Calton a legal processing fee in connection with servicing an unlawful restraint. (Compl. ¶¶ 32-36.) Finally, Calton alleges that Defendants' conduct violated New York General Business Law § 349. (Compl. ¶¶ 37-40.)

On April 22, 2010, Palisades moved to dismiss Calton's complaint pursuant to Rules 12(b)(1) and 12(b)(6) of the Federal Rules of Civil Procedure. Pressler joined this motion.

On June 4, 2010, Chase moved to dismiss Calton's complaint pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure for failure to state a claim upon which relief can be granted, or alternatively, for summary judgment pursuant to Rule 12(d) and Rule 56 of the Federal Rules of Civil Procedure.

DISCUSSION

A. Motion to Dismiss Standard

When deciding a motion to dismiss pursuant to Rule 12(b)(6) for failure to state a claim, "the Court ordinarily accepts as true all well-pleaded factual allegations and draws all reasonable inferences in the plaintiff's favor." In re Parmalat Sec. Litig., 501 F. Supp. 2d 560, 572 (S.D.N.Y. 2007) (citing Levy v. Southbrook Int'l Invs., Ltd., 263 F.3d 10, 14 (2d Cir. 2001)).

To survive a 12(b)(6) motion to dismiss, "the plaintiff must provide the grounds upon which [the] claim rests through factual allegations sufficient 'to raise a right to relief above the speculative level.'" ATSI Comm'ns, Inc. v. Shaar Fund, Ltd., 493 F.3d 87, 98 (2d Cir. 2007) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007)). "[O]nce the claim has been adequately stated it may be supported by showing any set of facts consistent with the allegations in the complaint." Id. (citing Twombly, 550 U.S. at 562). Thus, "if it is clear that no relief could be granted under any set of facts that could be proved consistent with the" ...


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