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Scalercio-Isenberg v. Citizens Financial Group, Inc.

United States District Court, S.D. New York

December 23, 2019

SHERRY SCALERCIO-ISENBERG, Plaintiff,
v.
CITIZENS FINANCIAL GROUP, INC., and BRUCE VAN SAUN, Defendants.

          MEMORANDUM OPINION AND ORDER

          John G. Koeltl United States District Judge

         The defendants, Citizens Financial Group, Inc. (“Citizens”) and Bruce Van Saun, have moved to dismiss the Second Amended Complaint (“SAC”) filed by the pro se plaintiff, Sherry Scalercio-Isenberg, for failure to state a claim pursuant to Federal Rule of Civil Procedure 12(b)(6). In a Memorandum Opinion and Order dated April 11, 2019 (Scalercio-Isenberg I), this Court dismissed the plaintiff's First Amended Complaint (“FAC”) against Citizens, but gave the plaintiff the opportunity to amend her complaint. See Scalercio-Isenberg v. Citizens Financial Group, Inc., No. 18-CV-9226 (JGK), 2019 WL 1585121 (S.D.N.Y. Apr. 11, 2019). For the reasons stated below, the defendants' motion to dismiss the SAC is granted in part and denied in part.

         I.

         In deciding a motion to dismiss pursuant to Rule 12(b)(6), the allegations in the complaint are accepted as true, and all reasonable inferences must be drawn in the plaintiff's favor. McCarthy v. Dun & Bradstreet Corp., 482 F.3d 184, 191 (2d Cir. 2007). The Court's function on a motion to dismiss is “not to weigh the evidence that might be presented at a trial but merely to determine whether the complaint itself is legally sufficient.” Goldman v. Belden, 754 F.2d 1059, 1067 (2d Cir. 1985). The Court should not dismiss the complaint if the plaintiff has stated “enough facts to state a claim to relief that is plausible on its face.” Bell Atl. 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.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). Moreover, pro se complaints are construed liberally. Dolan v. Connolly, 794 F.3d 290, 293 (2d Cir. 2015).

         While the Court should construe the factual allegations in the light most favorable to the plaintiff, “the tenet that a court must accept as true all of the allegations contained in the complaint is inapplicable to legal conclusions.” Id. When presented with a motion to dismiss pursuant to Rule 12(b)(6), the Court may consider documents that are referenced in the complaint, documents that the plaintiff relied on in bringing suit and that are either in the plaintiff's possession or that the plaintiff knew of when bringing suit, or matters of which judicial notice may be taken. See Chambers v. Time Warner, Inc., 282 F.3d 147, 153 (2d Cir. 2002).

         II.

         The Court accepts the following allegations solely for purposes of the pending motion. As stated in Scalercio-Isenberg I, the plaintiff alleges that she and her husband obtained a home equity line of credit (a “HELOC”) from the lender “Charter One, ” and Citizens later acquired the HELOC. See 2019 WL 1585121, at *1. The loan, executed in April, 2008, was in the amount of $ 49, 845.88 and was secured by a home in New Jersey. Bettino Decl. Ex. A at 1. Citizens is incorporated in Delaware and has its principal place of business in Rhode Island. See 2019 WL 1585121, at *2. The plaintiff has alleged that she primarily dealt with a branch of Citizens located in the Southern District of New York and that the summons and complaint in this case were served on that branch. Id. Three or four years ago, the HELOC had an outstanding balance of about $ 48, 000, which the plaintiff and her husband pay off in monthly payments. Id. at *1. The HELOC agreement included a section titled “Your Billing Rights, ” which notified the plaintiff of her “rights and responsibilities under the Fair Credit Billing Act.”[1] Bettino Cert. Ex. A. The section informed the plaintiff that she could write to “Charter One Servicing Department” at “P.O. Box 42002, Providence, RI, 02940-2002” in the event of errors or questions about her bill. Id. at 4. The notice also stated, “[a]fter we receive your letter, we cannot try to collect any amount you question, or report you as delinquent.” Id.

         The plaintiff alleges that the defendants made several errors on her account over several years, which include (1) failing to post payments to her loan account, (2) improperly reporting negative credit information, and (3) fraudulently opening a new account in her name.

         First, the plaintiff claims that she attempted to make several payments for her loan in 2016, but that Citizens failed to post those payments to her account. SAC at 2; SAC Ex. 7. For example, the plaintiff alleges that in February, 2016, she sent a check of $100.00 to Citizens for payment; however, Citizens returned the original check with a letter dated March 4, 2016, which stated that Citizens was “unable to identify an account to credit.” SAC Ex. 7.

         Attempting to correct the non-posting of payments, the plaintiff sent a letter to Bruce Van Saun on May 4, 2016. SAC at 2; SAC Ex. 7. Van Saun is the Chief Executive Officer of Citizens. SAC at 2. The letter stated the plaintiff's name and loan number, that she had attempted to submit monthly payments, but that the payments had not been posted by Citizens and explained that she thought this was an error because she had made all payments on time. SAC Ex. 7. The letter also mentioned that her check was returned in March. Id. The plaintiff does not indicate to which address she mailed the May 4, 2016 letter. Id. The plaintiff received no response to this letter. SAC at 2. On November 9, 2016, the plaintiff sent another letter to Van Saun, at One Citizens Plaza, Providence, RI 02903. SAC Ex. 6.

         Second, after sending the letters, the plaintiff alleges that instead of acknowledging the errors and taking corrective action, Citizens reported inaccurate, negative credit information to the credit reporting agencies. SAC at 2. The plaintiff states that she then took various steps to dispute the erroneous credit information reported by Citizens. Id. at 5. On April 23, 2018, she filed a dispute with an unidentified credit reporting agency (“CRA”).[2] Id. On August 20, 2018, she also filed a complaint with the Consumer Financial Protection Bureau (“CFPB”). SAC at 5; SAC Ex. 3 at 2.

         Third, in March 2018, the plaintiff received a letter from Citizens indicating she had opened a “new account” but that Citizens had not yet received her “first payment that was due on 02/23/2018.” SAC at 8; SAC Ex. 1 at 2. The plaintiff alleges that she did not open this account. SAC at 8.

         Due to these errors, the plaintiff alleges that she suffered negative credit reporting and has been denied loans due to reports of her “delinquent past or present credit obligations with others” and “current/previous slow payments, judgments, liens or BK.” SAC Ex. 1 at 1, 3. She states that she had to pursue “expensive financing, ” and has been denied access to over $300, 000 in savings invested in her home. SAC at 11.

         The plaintiff also alleges that the defendants sent her threatening and harassing extortionate letters by United States certified mail in an attempt unlawfully to extract money from her and her husband. Id. at 2. Further, in March and July 2018, the plaintiff received “automated, ” “[r]obo calls” from the defendant. Id. at 4-5. These calls were made by Citizens using “an automated, technical dialing device” and were made to the plaintiff's “cellular phone multiple times per day/per week.” Id. at 2. The plaintiff states that “no person was on the line when [she] answered” and that “when [she] called the number back, it was automatically answered stating, ‘you've reached Citizens Bank.'” Id. at 4.

         Additionally, the plaintiff alleges that Citizens used various entity names to “deceptively . . . set up their organizational structure” in a manner that obscures the fact that they are a debt collector for Charter One. Id. at 6-7. The plaintiff lists several names of Citizens' entities, including “Citizens Financial Group, ” “Citizens Bank N.A., ” “Citizens Home Loans, ” “Charter One A division of RBS Citizens N.A., ” and “Charter One N/A, ” and alleges that she received letters or statements from all of them. Id.

         The plaintiff previously brought a lawsuit against Citizens in 2016 and alleges that the defendants are now seeking revenge in retaliation because the previously filed lawsuit was settled. Id. at 9. She also alleges that the defendants and their lawyer have joined together to force the plaintiff's loan into default, to increase legal fees, and to eliminate the obligation of Citizens to service the loan in order to turn a profit. Id. at 8-11.

         In the SAC, the plaintiff adds Bruce Van Saun as an individual defendant and alleges 7 claims against the defendants. She first claims that the defendants breached a provision of the HELOC contract that incorporated rights under the Fair Credit Billing Act (“FCBA”). Second, she states that the defendants violated New York General Business Law (“NYGBL”) § 349. Third, the plaintiff brings a claim of fraudulent schemes and artifices pursuant to Section 13-2310 of Arizona's Criminal Code. Fourth, she claims that the defendants violated the Telephone Consumer Protection Act (“TCPA”) by making automated calls to her cell phone in March, 2018 and July, 2018. Fifth, the plaintiff reiterates her argument from the FAC that the defendants violated the Fair Credit Reporting Act (“FCRA”). Sixth, the plaintiff argues that the defendants are debt collectors who violated the Fair Debt Collection Practices Act (“FDCPA”). Finally, the plaintiff alleges that the defendants committed common law fraud.

         III.

         A.

         The defendants contend that the addition of Bruce Van Saun as a named defendant is improper because the plaintiff's allegations are too vague to hold Van Saun personally liable for the alleged acts of Citizens. Under New York law, [3] a corporation's officers and directors are not “generally liable for their corporation's debts or its breach of a contract.” Cohen v. Koenig, 25 F.3d 1168, 1173 (2d Cir. 1994); see also LeBoeuf, Lamb, Greene & MacRae, L.L.P. v. Worsham, 185 F.3d 61, 66 (2d Cir. 1999) (noting that the corporate form creates a legal shield that limits liability of officers and directors). Liability may attach, however, if the officers or directors know of or participate in the fraud alleged in the complaint. See Cohen, 25 F.3d at 1173.

         The plaintiff makes no colorable claim that Van Saun knew of or participated in a fraud. The plaintiff alleges that Van Saun received two letters about the billing dispute, one mailed in May 2016 and the other in November of the same year. SAC at 2-3. Van Saun did not respond to the first letter. Id. at 2. That Van Saun received a letter from the plaintiff notifying him of the billing dispute and then failed to respond is not enough to sustain an allegation that he intentionally participated in a fraud.

         Because the plaintiff has not alleged sufficient facts to plead any claim against Van Saun in an individual capacity, the defendants' motion to ...


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