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Theresa M. Spencer v. Arizona Premium Finance Co.

September 24, 2011


The opinion of the court was delivered by: William M. Skretny Chief Judge United States District Court



Plaintiff, Theresa Spencer, alleges that Defendant, Arizona Premium Finance Co., Inc. ("Arizona"), violated the Credit Repair Organization Act, 15 U.S.C. §§ 1679, et seq. ("Credit Act"), the Telephone Consumer Protection Act, 47 U.S.C. § 227 ("Telephone Act"), and New York's General Business Law § 349 ("GBL § 349"). Spencer further alleges that Arizona is liable for intentional infliction of emotional distress.*fn1 Presently before this Court is Arizona's motion to dismiss each of Spencer's claims.(Docket No. 22). For the following reasons, Arizona's motion is granted.


A. Facts

Much of the relevant background in this case is disputed. According to Theresa Spencer, on January 12th and August 2nd of 2004, she contracted for automobile insurance with All American Insurance ("All American"). (Plaintiff's Second Amended Complaint ¶ 22; Docket No. 21.) On both occasions, she financed this insurance through Arizona, an insurance premium finance company. (Id. ¶ 23.) For its part, Arizona states that it has three accounts bearing the name "Theresa Spencer." (Rosenblum Affidavit ¶ 3; Docket No. 22-2.) Arizona has an account for a "Theresa Spencer" located in Landsdown, Pennsylvania, and two accounts for a "Theresa Spencer" located in Franklinville, New York. (Id.) Spencer states that she lives in Franklinville and that she has never resided in Pennsylvania. (Spencer Affidavit ¶¶ 2-3.)

In any event, Spencer claims that, at the latest, she cancelled and fully paid all of the premiums on both of her policies with All American as of May 30, 2005. (Plaintiff's Second Amended Complaint ¶ 28.) However, about a month later, in June of 2005, she alleges that she began to receive pre-recorded calls on her home telephone*fn2 from Arizona, indicating that she was delinquent on her obligation to Arizona, that her delinquency had been reported to credit bureaus, and that to repair her credit, she should pay her debt. (Id. ¶ 29.) All the messages were substantially similar to the following:

This is a recorded message from Arizona Premiums concerning the cancellation of your car insurance. After cancellation [a] balance remains of $55.71. Since there has been no reply to our letters, this balance has been reported to the credit bureau. To repair your credit, do not avoid this check. It continues to grow until paid. You may call 602-992-9898 Monday through Friday, 9 AM to 7 PM Eastern time. Visit our website at Protect your credit by paying $55.71 today. (Plaintiff's Call Transcripts; Docket No. 24-8.)

Spencer claims she took several steps to stop the calls, including calling Arizona, calling her insurance agent, and personally visiting her insurance agent. (Id. ¶ 32-34.) Yet, according to Spencer, the calls did not stop until this litigation was commenced on March 16, 2006. She claims to have received approximately 1,000 phone calls from Arizona in the meantime. (Id. ¶ 31.)

Although Arizona admits that it uses a computer system to place phone calls to customers with outstanding balances, it denies every other allegation and maintains the following: it keeps thorough records of the all calls it makes to customers; it made only seven calls to the account based in Landsdown, Pennsylvania; it made no calls to the other two "Spencer" accounts. (Rosenblum Affidavit ¶ 4-5.) Further, Arizona asserts that it received a call from a man identifying himself as Spencer's stepfather on March 30, 2005. He indicated that she no longer lived at that address and requested that the calls stop. (Id. ¶ 5.) With that, Arizona claims, it deleted the number from their system and made no further calls. (Id.)

B. Procedural History

Spencer commenced this action on March 16, 2006 by filing a complaint in this Court. (Docket No. 1.) She filed an Amended Complaint on June 5, 2006, and pursuant to Leave granted by this Court (Docket No. 20), filed a Second Amended Complaint on December 30, 2008. (Docket No. 21.) In granting Spencer Leave to File her Second Amended Complaint, this Court also denied Arizona's previous Motion to Dismiss (Docket No. 13) as moot.


A. Legal Standard

Rule 12 (b)(6) allows dismissal of a complaint for "failure to state a claim upon which relief can be granted." Fed. R. Civ. P. 12 (b)(6). Federal pleading standards are generally not stringent: Rule 8 requires only a short and plain statement of a claim. Fed. R. Civ. P. 8 (a)(2). But the plain statement must "possess enough heft to show that the pleader is entitled to relief." Bell Atl. Corp. v. Twombly, 550 U.S. 544, 127 S.Ct. 1955, 1966, 167 L.Ed.2d 929 (2007).

When determining whether a complaint states a claim, the court must construe it liberally, accept all factual allegations as true, and draw all reasonable inferences in the plaintiff's favor. ATSI Commc'ns, Inc. v. Shaar Fund, Ltd., 493 F.3d 87, 98 (2d Cir. 2007). Legal conclusions, however, are not afforded the same presumption of truthfulness. See Ashcroft v. Iqbal, 556 U.S. __, 129 S.Ct. 1937, 1949, 173 L.Ed.2d 868 (2009) ("The tenet that a court must accept as true all of the allegations contained in a complaint is inapplicable to legal conclusions.").

"To survive a motion to dismiss, a complaint must contain sufficient factual matter, accepted as true, to 'state a claim to relief that is plausible on its face.'" Iqbal, 129 S.Ct. at 1945 (quoting Twombly, 550 U.S. at 570). Labels, conclusions, or a "formulaic recitation of the elements of a cause of action will not do." Twombly, 550 U.S. at 555. Facial plausibility exists when the facts alleged allow for a reasonable inference that the defendant is liable for the misconduct charged. Iqbal, 129 S.Ct. at 1949. The plausibility standard is not, however, a probability requirement: the pleading must show, not merely allege, that the pleader is entitled to relief. Id. at 1950; Fed. R. Civ. P. 8 (a)(2). Well-pleaded allegations must nudge the claim "across the line from conceivable to plausible." Twombly, 550 U.S. at 570.

Courts therefore use a two-pronged approach to examine the sufficiency of a complaint, which includes "any documents that are either incorporated into the complaint by reference or attached to the complaint as exhibits." Blue Tree Hotels Inv. (Can.), Ltd. v. Starwood Hotels & Resorts Worldwide, Inc., 369 F.3d 212, 217 (2d Cir. 2004). This examination is context specific and requires that the court draw on its judicial experience and common sense. Iqbal, 129 S.Ct. at 1950. First, statements that are not entitled to the presumption of truth - such as conclusory allegations, labels, and legal conclusions - are identified and stripped away. See Iqbal, 129 S.Ct. at 1950. Second, well-pleaded, nonconclusory factual allegations are presumed true and examined to determine whether they "plausibly give rise to an entitlement to relief." Id.

B. Arizona's Motion to Dismiss

Arizona moves to dismiss Spencer's complaint, arguing that it is not a credit repair organization and, as a result, the Credit Act does not govern its actions. It further argues that it complied with the Telephone Act and, in any event, is exempt from its provisions. Finally, it argues that it did not violate GBL ยง 349 and ...

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