United States District Court, S.D. New York
SCAROLA MALONE & ZUBATOV LLP, and RICHARD J.J. SCAROLA, Plaintiffs,
VERIZON COMMUNICATIONS, INC., and McCARTHY, BURGESS & WOLFF, Defendants.
MEMORANDUM AND ORDER
P. KEVIN CASTEL, District Judge.
Plaintiffs Scarola Malone & Zubatov LLP ("SMZ"), proceeding pro se, and Richard J.J. Scarola ("Scarola") bring this action against defendants Verizon Communications, Inc. ("Verizon") and McCarthy, Burgess & Wolf ("McCarthy"). Plaintiffs assert a breach of contract claim and a cause of action under N.Y. General Business Law § 349 against Verizon and claims under the Fair Debt Collection Practices Act ("FDCPA"), 15 U.S.C. § 1692 et seq, against McCarthy. The claims arise out of defendant Verizon's attempts, through defendant McCarthy, to collect on a terminated telecommunications service contract between SMZ and Verizon.
Defendants now move separately to dismiss the claims asserted against them pursuant to Rule 12(b)(6), Fed.R.Civ.P. (Docket # 30, 34.) McCarthy also requests an award of costs and fees under 15 U.S.C. § 1692k(a)(3). For the reasons explained below, McCarthy's motion to dismiss is granted on the FDCPA claim, the Court denies McCarthy's request for fees and costs, and the Court declines to exercise supplemental jurisdiction over plaintiffs' remaining state law claims.
I. Factual Background
The following facts are taken from the Further Amended Complaint. (Docket # 29.) SMZ is a New York Limited Liability Partnership and a law firm. (F. Am. Compl't at 1.) Plaintiff Scarola is a member of SMZ. (Id.) Verizon provided certain telecommunications services to SMZ until late May 2012 when SMZ moved their offices to a new location and cancelled services with Verizon. (F. Am. Compl't ¶ 4.) SMZ asserts that it "took all necessary steps to give effective notice to cancel all such services." (F. Am. Compl't ¶ 7.) Plaintiffs emphasize that Verizon provided services to SMZ or its predecessors in name, but services were not provided to or paid by Scarola individually. (F. Am. Compl't ¶ 4.)
After SMZ cancelled services with Verizon, plaintiff Scarola nevertheless continued to receive "numerous monthly invoices in increasing amounts and other communications demanding payments" from Verizon. (F. Am. Compl't ¶ 9.) The invoices and requests for payment referenced Account No. XXXXXXXXXX (the "Verizon Account"), an account which SMZ maintained with Verizon for the telecommunications services Verizon had provided to SMZ for their offices prior to May 2012; however, these demands for payment were addressed to and in the name of Scarola personally. (F. Am. Compl't ¶¶ 1, 9.) Plaintiffs attempted to contact Verizon numerous times by telephone and in writing regarding the demands for payment, but Verizon did not respond to plaintiffs' inquiries. (F. Am. Compl't, ¶¶ 10-12.)
Due to Verizon's persistent demands for payment on the Verizon Account and Verizon's failure to respond to plaintiffs' inquiries, "plaintiffs saw no recourse but to commence legal action against Verizon." (F. Am. Compl't ¶ 13.) SMZ filed a complaint, dated April 5, 2013, in the Civil Court of the City of New York, County of New York seeking monetary damages and a declaration that no amounts were owed to Verizon pertaining to Account No. XXXXXXXXXX. (Summons & Compl't, Scarola Malone & Zubatov, LLP v. Verizon Communications, Inc., 9119 NCV 2013 (N.Y. Civ. Ct. Apr. 5, 2013.)) In late July 2013, the parties settled. (F. Am. Compl't ¶ 14.) In a written agreement dated July 25, 2013, (the "Settlement Agreement"), Verizon agreed to pay $9, 232.00 to SMZ, "zero-out" any remaining balance on the Verizon Account, and close the Verizon Account. (Dec. of William D. Christ in Supp. of Def. Verizon of New York Inc.'s Motion to Dismiss Pls' F. Am. Compl't, Ex. B.) (hereinafter "Settlement Agreement.")
After SMZ and Verizon finalized the Settlement Agreement, Scarola nevertheless continued to receive demands for payment from Verizon and defendant McCarthy. (F. Am. Compl't ¶¶ 16-17.) Although the Complaint does not specify the number of communications Scarola received from Verizon and McCarthy, the demands for payment were addressed to and in the name of Scarola, personally, and they demanded payment in "continually increasing amounts of no conceivable origin or basis." (F. Am. Compl't ¶¶ 16-17.) Scarola received written demands at an address at which he had previously received "virtually all of his personal and financial correspondence" from the late 1990s until 2012. (F. Am. Compl't ¶ 18.) McCarthy also called Scarola's home, sometimes multiple times on the same day and often beginning at or around 8:00 a.m. (F. Am. Compl't ¶ 21.) Furthermore, Scarola received communications demanding payment at his office, including e-mail communications and numerous telephone calls. (F. Am. Compl't ¶¶ 23, 26.) "[O]n at least one occasion, the caller was told to cease and that no further contact should be made." (F. Am. Compl't ¶ 26.) The Complaint asserts that, rather than emailing Scarola at his SMZ e-mail address, which was publically available, McCarthy "called the SMZ receptionist for the address and made arrangements to send future e-mail communications for delivery to plaintiff Scarola by transmittal to SMZ's receptionist." (F. Am. Compl't ¶ 23.) Plaintiffs describe these communications as "tacitly threatening" and assert that the communications often included seventy to eighty pages of allegedly unpaid, but false, invoices demanding payment from Scarola. (F. Am. Compl't ¶ 23.) The demands did not mention or recognize SMZ but referenced a relationship between Scarola and an entity called "Verizon-West." (F. Am. Compl't ¶ 24.)
II. Procedural Background
On May 1, 2014, SMZ filed a summons and complaint in Civil Court of the City of New York, County of New York, seeking a declaratory judgment against Verizon that SMZ did not owe any amounts to Verizon on the Verizon Account. (Dec. of Concepcion A. Montoya in Supp. of MB&W's Motion to Dismiss, Ex. 2.) (hereinafter "Endorsed Complaint.") SMZ also sought an award of money damages under the Fair Debt Collection Practices Act against Verizon and McCarthy. (Id.) On June 23, 2014, Verizon removed the action to this Court (Docket # 2) and subsequently filed a pre-motion letter requesting leave to file a motion for a more definite statement under Rule 12(e), Fed. R. Civ. P., arguing that plaintiff failed to allege facts sufficient to state a cause of action under the FDCPA. (Docket # 3). By order dated July 1, 2014, the Court granted Verizon's request, specifying that the proper vehicle to challenge a complaint that does not comply with Rule 8, Fed. R. Civ. P., is a motion to dismiss the complaint under Rule 12(b)(6), Fed.R.Civ.P. (Docket # 7). Subsequently, the Court granted leave to SMZ to amend the complaint to take account of Verizon's arguments and include Scarola as an individual plaintiff. (Docket # 9). Plaintiffs then filed an Amended Complaint on August 1, 2014 (Docket # 14), adding Scarola as a plaintiff, and Verizon and McCarthy filed pre-motion letters requesting leave to file a motion to dismiss the amended pleading. (Docket # 19, 24). Following a pretrial conference on September 19, 2014 and with the consent of the parties, the Court entered a declaratory judgment in favor of plaintiff and against defendant Verizon on Count I of the Amended Complaint, declaring that plaintiffs owe no amounts to Verizon in connection with the Verizon Account. (Docket # 28). The Court also granted leave to plaintiffs to again amend their pleadings. (Id.) Plaintiffs filed a Further Amended Complaint on October 3, 2014. (Docket # 29). On October 24, 2014, McCarthy and Verizon each filed a motion to dismiss the claims asserted against them in the Further Amended Complaint (Docket # 30, 34). McCarthy also moves for an award of fees and costs pursuant to 15 U.S.C. § 1692k(a)(3).
RULE 12(b)(6) STANDARD
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.'" Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 570 (2007)). "A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Id . Legal conclusions are not entitled to the presumption of truth, and a court assessing the sufficiency of a complaint disregards them. Id . Instead, the Court must examine only the wellpleaded factual allegations, if any, "and then determine whether they plausibly give rise to an entitlement to relief." Id. at 679. In assessing a complaint, courts draw all reasonable inferences in favor of the non-movant. See In re Elevator Antitrust Litig., 502 F.3d 47, 50 (2d Cir. 2007) (per curiam).
"[T]he complaint is deemed to include any written instrument attached to it as an exhibit or any statements or documents incorporated in it by reference." Int'l Audiotext Network, Inc. v. Am. Tel. & Tel. Co., 62 F.3d 69, 72 (2d Cir. 1995) (per curiam) (quoting Cortec Indus., Inc. v. Sum Holding L.P., 949 F.2d 42, 47 (2d Cir. 1991)). "[W]here a document is not incorporated by reference, the court may nevertheless consider it where the complaint relies heavily upon its terms and effect, which renders the document integral to the complaint." Mangiafico v. Blumenthal, 471 F.3d 391, 398 (2d Cir. 2006) (quoting Chambers v. Time Warner, Inc., 282 F.3d 147, 153) (2d Cir. 2002) (citations and internal quotation marks omitted)). "[A] plaintiff's reliance on the terms and effect of a document in drafting the complaint is a necessary prerequisite to the court's consideration of the document on a dismissal motion; mere notice or possession is not enough." Chambers, 282 F.3d at 153. "[E]ven if a document is integral to the complaint, it must ...