DEANGELO v. LVNV FUNDING LLC

UNITED STATES DISTRICT COURT

DISTRICT OF NEW JERSEY

JOSEPH DEANGELO 1:18-cv-15689-NLH-KMW

Plaintiff, OPINION

v.

LVNV FUNDING LLC, RESURGENT

CAPITAL SERVICES L.P.,

SHERMAN FINANCIAL GROUP LLC,

SHERMAN CAPITAL MARKETS LLC,

SHERMAN ORIGINATOR III LLC,

SHERMAN ACQUIITION L.P.,

SHERMAN ACQUISITION OO LP,

SHERMAN ACQUISITION II

GENERAL PARTNERSHIP LLC,

SHERMAN CAPITAL, LLC, ALEGIS

GROUP LLC, BENJAMIN W.

NAVARRO, LESLIE G. GUTIERREZ,

SCOTT E. SILVER, KEVIN P.

BRANIGAN, ROBERT A. RODERICK

and KENNETT KENDALL

Defendants.

APPEARANCES:

LAURA ROSSI

MICAHEL O. KASSAK

WHITE AND WILLIAMS LLP

1650 MARKET STREET

SUITE 1800

PHILADELPHIA, PA

Attorneys for the Plaintiff.

THOMAS MICHAEL BRODOS

MICHAEL RAY DARBEE

STEPHEN M. ORLOFSKY

BLANK ROME LLP

300 CARNEGIE CENTER, SUITE 220

PRINCETON, NJ 08540

Attorneys for the Defendants.

HILLMAN, District Judge,

This matter comes before the Court by way of Defendants’

motion to dismiss. Plaintiff filed a class action complaint and

demand for a jury trial in New Jersey Superior Court, Law

Division in Gloucester County on September 28, 2018. On

November 5, 2018, Defendants removed this case to the District

of New Jersey. On September 23, 2019, Plaintiff filed an

Amended Complaint. Defendants moved to dismiss this Complaint

on November 8, 2019. For the reasons stated below, the Court

will deny in part and grant in part Defendants’ motion to

dismiss.

BACKGROUND

The Parties

Plaintiff Joseph DeAngelo is an individual residing in

Gloucester County, New Jersey. Defendant LVNV Funding, LLC

(“LVNV Funding”) is a Delaware limited liability company with

its principal place of business in Nevada. Defendant Resurgent

Capital Services L.P. (“Resurgent”) is a Delaware limited

partnership with its principal place of business in South

Carolina. Defendants LVNV Funding and Resurgent will be

collectively referred to as “LVNV.”

Plaintiff’s complaint includes a number of other entities

created under Delaware law, referred to as the “Sherman

Organization Defendants.”1 Plaintiff contends that these

entities are vicariously liable for the actions of LVNV.

Plaintiff has also included a number of individuals residing in

South Carolina, known as the “Sherman Executive Defendants,”2 and

alleges they are also vicariously liable for LVNV’s actions.

1 These Defendants are as follows:

•

Sherman Financial Group LLC (“SFG”), a Delaware LLC with

its principal place of business in Charleston, South

Carolina;

•

Sherman Capital Markets LLC (“SCM”), a Delaware LLC with

its principal place of business in Charleston, South

Carolina;

•

Sherman Originator III LLC (“SO”), a Delaware LLC with its

principal place of business in Charleston, South Carolina;

•

Sherman Acquisition L.P. (“SALP”), a Delaware limited

partnership with its principal place of business in

Houston, Texas;

•

Sherman Acquisition II L.P. (“SAIILP), a Delaware limited

partnership with its principal place of business in

Charleston, South Carolina;

•

Sherman Acquisition II General Partnership LLC

(“SAIIGLLC”), a Delaware limited liability company with its

principal place of business in Charleston, South Carolina;

•

Sherman Capital LLC (“SC”), a Delaware limited liability

company with its principal place of business in Charleston,

South Carolina; and

•

Alegis Group LLC (“Alegis”), a Delaware limited liability

company with its principal place of business in Greenville,

South Carolina.

Plaintiff contends that the Sherman Organization is “a complex

web of shell, holding and operating companies.” ECF No. 21, ¶

50.

2 These Defendants, all of which Plaintiff alleges reside in

South Carolina, are as follows:

•

Benjamin W. Navarro

•

Leslie G. Gutierrez

Plaintiff’s Debt and Default Judgment

In 1999, Plaintiff purchased a car for his nephew. To do

so, he incurred debt held by CitiFinancial, Inc. (“Citi”). In

2003, Plaintiff restructured this debt to lower his payments.

At some point, Plaintiff defaulted on this loan. Plaintiff

alleges that his last payment on this loan was in 2004, at the

latest. The car was repossessed in 2004.

In July 2009, Resurgent brought an action against Plaintiff

in LVNV Funding’s name in the Superior Court of Gloucester

County, Law Division. This action was brought long after the

four-year statute of limitations for contract actions had

expired. In that proceeding, Defendants alleged that Plaintiff

owed a debt of $28,382.10. Defendants further alleged that

Plaintiff had made two payments by money order in November 2008.

Defendants argued that these payments had the legal effect of

restoring a cause of action for breach of contract.

In this action, Plaintiff alleges these payments were never

made and, in essence, were a fabrication to create a false but

colorable claim that the expired debt had been revived by

voluntary payments by the Plaintiff after the expiration of the

•

Scott E. Silver

•

Kevin P. Branigan

•

Robert A. Roderick

•

Kennett Rusty Kendall

statute of limitations. A default judgment was entered in

Defendants’ favor in the underlying action on February 8, 2010.

According to Plaintiff, he did not become aware of the

state court action against him and the default judgment until

October 5, 2017 when he received a Notice of Wage Application.3

On October 25, 2017, LVNV filed a Writ of Execution against

Wages with the Superior Court of New Jersey. On February 5,

2018, Plaintiff filed a motion to vacate this judgment,

asserting that the debt was time-barred and that the suit was

brought in violation of the FDCPA. On May 10, 2018, LVNV sent

DeAngelo a Notice of Application for Wage Execution. Together

the 2017 Notice, the 2017 Writ, and this 2018 Notice are

referred to as “the Garnishment Pleadings.”

3 Defendants allege, not without foundation, that Plaintiff’s

hands in this matter are not completely clean. In the

proceedings before the Superior Court of New Jersey, that court

found that Plaintiff had been personally served with the

complaint on August 24, 2009 despite his denial of being unaware

of the action and judgment until much later. Defendants alleged

that Plaintiff did not answer this complaint because he felt he

was “bulletproof.” Defendants also served two Notices of

Application for Wage Execution on March 4, 2010, and September

13, 2012, respectively. Plaintiff would have been well advised

to have contested the underlying debt, if he had a complete

defense, years earlier than he did. The record also suggests

that Plaintiff may have also engaged in certain misleading

conduct designed to frustrate collection efforts. Defendants

were not without their own miscues. Defendants concede that the

2010 and 2012 wage executions “were addressed to an employer

associated with a different ‘Joseph DeAngelo,’ leading to the

wage executions being vacated.” ECF No. 34-1 at 5.

On August 23, 2019, the Superior Court of New Jersey issued

an opinion granting Plaintiff’s motion to vacate and sua sponte

granting summary judgment in favor of Plaintiff.4 ECF No. 35-1,

at 26. The state court found both that Plaintiff had not made

the alleged payments by money order in November 2008 and, even

if he had, Defendants lacked a good faith basis to conclude

their cause the action was still viable. Id. at 25.

The Current Matter

Plaintiff has since filed a class action complaint against

Defendants for their debt collection practices, which he refers

to as “zombie” debt collection. According to Plaintiff’s

Amended Complaint, Defendants are engaged in part of a

nationwide “epidemic haunting hundreds of thousands of

individuals consumers all across the country.” ECF No. 21, ¶ 2.

4 This opinion was attached to Plaintiff’s complaint as Exhibit A

and the Court takes notice of Judge Chell’s opinion. Generally,

when reviewing the legal sufficiency of a complaint, a court is

not permitted to consider material beyond the pleadings without

converting the motion to dismiss into a motion for summary

judgment. See In re Burlington Coat Factory Sec. Litig., 144

F.3d 1410, 1426 (3d Cir. 1997). However, the Third Circuit

permits certain exceptions to this general rule. A court may

consider a “document integral to or explicitly relied upon in

the complaint” without converting a motion to dismiss into one

for summary judgment. Id. at 1410 (quoting Shaw v. Digital

Equipment Corp., 82 F.3d 1194, 1220 (1st Cir. 1996)); see also

Oshiver v. Levin, Fishbein, Sedran & Berman, 38 F.3d 1380, 1384

n.2 (3d Cir. 1994) (taking into consideration “matters of public

record, orders, exhibits attached to the complaint and items

appearing in the record of the case”). Judge Chell’s Opinion is

such a document as it forms part of Plaintiff’s complaint and is

attached as an exhibit.

Plaintiff alleges that Defendants routinely “attempt to collect

on debts that have been settled, paid off, discharged in

bankruptcy, or rendered uncollectible due to the statute of

limitations.” ECF No. 21, ¶ 39.

He further alleges that Defendants “get consumers to reset

the statute of limitations by threatening them with legal action

and misleading them about the legal status of their debt so that

these consumers will make a small payment in order to cease the

harassing calls and threats [from debt collectors].” ECF No.

21, ¶ 40. In support of his claims, Plaintiff introduced news

articles and cases from other jurisdictions that describe zombie

debt, claiming that Defendants have a “long history of

flagrantly violating state and federal debt collection laws.”

ECF No. 21, ¶ 71.

Plaintiff has identified two classes of similarly situated

persons in this case: (1) the legal action class5 and (2) the

false representations class.6 Plaintiff’s complaint includes

three counts: the First Cause of Action alleges violations of

5 Plaintiff defines this class as “all persons against who

Resurgent or LVNV took any legal action to collect a time-barred

debt on or after September 28, 2017” ECF No. 21, ¶ 115(a).

6 Plaintiff defines this class as “all persons towards whom

Resurgent or LVNV falsely, deceptively, or misleading [sic]

misrepresented, either explicitly or impliedly, the legal status

of a time-barred debt, including by threatening to take legal

action, on or after September 28, 2017.” ECF No. 21, ¶ 115(b).

the Fair Debt Collection Practices Act (FDCPA), 15 U.S.C. §

1692f(1) (against Defendants Resurgent and LVNV Funding) on

behalf of the legal action class; the Second Cause of Action

alleges violations of the FDCPA, 15 U.S.C §§ 1692e(2)(A),

1692e(5), and 1692f(1) (against Defendants Resurgent and LVNV

Funding) on behalf of the false representations class; and the

Third Cause of Action, which does not allege a separate

statutory theory but rather alleges vicarious liability for the

first two counts against all Sherman Executive Defendants and

all Sherman Organization Defendants except Resurgent and LVNV

Funding on behalf of both classes.

Plaintiff seeks to permanently enjoin Defendants from

engaging in the zombie debt collection practices he describes,

restore monies owed to Plaintiff and the classes, including

monies spent in defense or settlement of time-barred claims,

compensatory, direct, consequential, and punitive damages, and

attorneys’ fees and costs.

Defendants Resurgent and LVNV Funding moved to dismiss this

complaint on November 8, 2019. Defendants allege, somewhat

ironically, that Plaintiff’s claims are time-barred and that he

has failed to state a claim under the FDCPA. This matter has

been fully briefed and is ripe for adjudication.

DISCUSSION

A. Subject Matter Jurisdiction

This Court has original federal question jurisdiction over

this case under 28 U.S.C. § 1331. Plaintiff has alleged

violations of the Fair Debt Collection Practices Act (FDCPA), 15

U.S.C. § 1692 et seq. The Court has supplemental jurisdiction

over any common law causes of action asserted by Plaintiff under

28 U.S.C. § 1367 because these claims are part of the same case

or controversy.

B. Standard for a Motion to Dismiss Pursuant to Fed. R. Civ.

P. 12(b)(6)

Federal Rule of Civil Procedure 12(b)(6) provides that a

court may dismiss a complaint for “failure to state a claim upon

which relief can be granted.” Fed. R. Civ. P. 12(b)(6). In

considering a motion under Federal Rule of Civil Procedure

12(b)(6), a court must accept all well-pleaded allegations in

the complaint as true and view them in the light most favorable

to the pleader. Evancho v. Fisher, 423 F.3d 347, 350 (3d Cir.

2005); see also Philips v. Cnty. Of Allegheny, 515 F.3d 224, 228

(3d Cir. 2008) (“[I]n deciding a motion under Fed. R. Civ. P.

12(b)(6), [a district court is] . . . required to accept as true

all factual allegations in the complaint and draw all inferences

from the facts alleged in the light most favorable to” the

plaintiff). A pleading is sufficient if it contains a “short

and plain statement of the claim showing that the pleader is

entitled to relief.” Fed. R. Civ. P. 8(a)(2).

When weighing a motion to dismiss, the Court does not ask

“whether a plaintiff will ultimately prevail, but whether the

claimant is entitled to offer evidence to support the

claims[.]’” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 562 n. 8

(2007) (quoting Scheuer v. Rhoades, 416 U.S. 232, 236 (1974));

see also Ashcroft v. Iqbal, 556 U.S. 662, 684 (2009) (“Our

decision in Twombly expounded the pleading standard for ‘all

civil actions.’”) (citations omitted).

In applying the Twombly/Iqbal standard, a district court

will first “accept all of the complaint’s well-pleaded facts as

true, but may disregard any legal conclusion.” Fowler v. UPMC

Shadyside, 578 F.3d 203, 210-11 (3d Cir. 2009) (citing Iqbal,

556 U.S. at 678). Next, the Court will “determine whether the

facts alleged in the complaint are sufficient to show that the

plaintiff has a ‘plausible claim for relief.’” Id. at 211

(citing Iqbal, 556 U.S. at 679).

To meet this standard, a “complaint must do more than

allege the plaintiff’s entitlement to relief.” Id.; see also

Philips, 515 F.3d at 234 (“The Supreme Court's Twombly

formulation of the pleading standard can be summed up thus:

‘stating . . . a claim requires a complaint with enough factual

matter (taken as true) to suggest’ the required element. This

‘does not impose a probability requirement at the pleading

stage,’ but instead ‘simply calls for enough facts to raise a

reasonable expectation that discovery will reveal evidence of’

the necessary element.”) (citing Twombly, 550 U.S at 556). The

party moving to dismiss under 12(b)(6) “bears the burden of

showing that no claim has been presented.” Hedges, v. United

States, 404 F.3d 744, 750 (3d Cir. 2005).

C. Analysis

1. Whether Plaintiff’s claims are time-barred

Defendants argue that all of Plaintiff’s claims are barred

by the one-year statute of limitations found in the FDCPA, 15

U.S.C. § 1692k(d). According to Defendants, the statute of

limitations begins to run either (1) when the complaint is filed

or (2) when the complaint is served on the debtor. See ECF No.

34-1, at 11 (citing Schaffhauser v. Citibank (S.D.) N.A., 340

Fed.App’x 128, 130 (3d Cir. 2009)).

Defendants argue that Plaintiff’s FDCPA claims were brought

over nine years after the original collection complaint was

filed. Defendants further assert that LVNV’s participation in

debt collection litigation in 2017 and 2018 does not constitute

an ongoing violation.

Plaintiff argues that his claims are not time-barred

because he filed them within one year of the Garnishment

Pleadings. According to Plaintiff, actions undertaken during

the course of litigation can constitute an independent violation

of the FDCPA in a case like the present one. Plaintiff asserts

that time-barred debt “is not cured by the fact that a debt

collector . . . obtained a default judgment on that debt.” ECF

No. 35, at 15. Plaintiff also asserts that he has adequately

pleaded independent violations of the FDCPA in relation to the

Garnishment Pleadings.

“An action under the FDCPA must be brought ‘within one year

from the date on which the violation occurs.’” Schaffhauser,

340 Fed.App’x at 130 (citing 15 U.S.C. § 1692k(d)). Several

courts have found that “[c]onduct which independently violates

the FDCPA, however, is actionable if it falls within the statute

of limitations within the limitations period, even if undertaken

in pursuit of litigation that was filed outside the limitations

period.” Brown v. Urden Law Officers PC, No. 11-cv-2697, 2011

WL 4011411, at *5-6 (E.D. Pa. Sept. 9, 2011) (citing Jones v.

Inv. Retrievers, LLC, No. 10-cv-1714, 2011 WL 1565851, at *3

(M.D. Pa. Apr. 25, 2011)); see Strader v. U.S. Bank Nat’l

Assoc., No. 17-cv-685, 2018 WL 741425, at *13 (W.D. Pa. Feb. 7,

2018). The court in Brown denied the defendants’ motion to

dismiss because the complaint “was filed within one year of the

most recent alleged FDCPA violation.” Brown, 2011 WL 4011411,

at *6.

In this case, Plaintiff has brought his case within one

year of the most recent alleged FDCPA violation. Plaintiff has

alleged that the Garnishment Pleadings were independent

violations of the FDCPA. Though Defendants highlight that these

actions and the default judgment appear on the same docket and

bear the same case number and caption, the Court agrees with

Plaintiff, given the allegations in the complaint as a whole,

that later efforts to collect debt that Defendants knew was

time-barred when the action resulting in a default judgment was

first brought is new conduct within the one-year statute of

limitations and the filing of this action is timely.

Schaffhauser v. Citibank (S.D.) N.A., 340 Fed.App’x 128 (3d

Cir. 2009), which rejected the “continuing violation” theory of

extending the statute of limitations, and upon which Defendants

rely, is not to the contrary. First, as a non-precedential

opinion it is merely persuasive and not binding authority on

this Court. It is also distinguishable in a material way.

Although the plaintiff in Schaffhauser also appears to have

alleged an attempt to collect “zombie” debt and other debt

collection misconduct, that claim was rejected by the state

court. See id., 340 Fed.App’x at 129-30 (noting Court of Common

Pleas entered judgment against debtors presumably rejecting

claims of deceptive and abusive debt collection efforts). Here,

the opposite occurred with Plaintiff prevailing in state court,

especially as it relates to alleged litigation misconduct by

Defendants in the original underlying proceeding. Even if

Schaffhauser were binding authority it would not directly bar

Plaintiff’s claims in this action.

2. Whether Plaintiff has failed to state a claim under the

FDCPA

The Third Circuit has held that “[t]he FDCPA is a remedial

statute and we construe its language broadly so as to effect its

purposes.” Allen ex rel. Martin v. LaSalle Bank, N.A., 629 F.3d

364, 367 (3d Cir. 2011) (citing Brown v. Card Serv. Ctr., 464

F.3d 450, 453 (3d Cir. 2006)). The Third Circuit has further

stated that “[t]he FDCPA is a strict liability statute to the

extent that imposes liability without proof of an intentional

violation.” Id. at 368 n. 7.

With this gloss over the statute in mind, the Court will

now turn to the requirements for stating a claim under the

FDCPA. To state a claim under the FDCPA, a plaintiff must

allege that “(1) [he or she] is a consumer, (2) the defendant is

a debt collector, (3) the defendant’s challenged practice

involves an attempt to collect a ‘debt’ as the Act defines it,

and (4) the defendant has violated a provision of the FDCPA in

attempting to collect the debt.” Douglass v. Convergent

Outsourcing, 765 F.3d 299, 303 (3d Cir. 2014); see also Thomas

v. John A. Youderian Jr., LLC, 232 F.Supp.3d 656, 671 (D.N.J.

2017).

Though not explicitly stated in the briefs, it appears that

only the fourth criterion is in dispute. At this stage, the

Court will accept all of Plaintiff’s well-pleaded facts and

allegations as true. See Evancho, 423 F.3d at 350; see also

Philips, 515 F.3d at 228. Defendants have the burden of

demonstrating that Plaintiff has failed to state a violation of

the FDCPA.

The First Cause of Action

Plaintiff’s first “Cause of Action” alleges that Defendants

tried to collect time-barred debt when it served the 2017 Writ

of Execution and 2018 Notice of Wage Execution. According to

Plaintiff, these attempts to collect upon time-barred debt

violated 15 U.S.C. § 1692f(1). Defendants respond that this

count should be dismissed because the Garnishment Pleadings were

permitted by law. Plaintiff contends that the Garnishment

Pleadings were illegal under federal law because the default

judgment in New Jersey state court violated federal law.

Section 1692f has been characterized as “a catchall

provision providing that a ‘debt collector may not use unfair or

unconscionable means to collect or attempt to collect any

debt.’” John A. Youderian Jr., LLC, 232 F.Supp.3d at 672

(quoting 15 U.S.C. § 1692f). Section 1692f(1) specifically

addresses “[t]he collection of any amount (including any

interest, fee, charge, or expense incidental to the principal

obligation) unless such amount is expressly authorized by the

agreement creating the debt or permitted by law.” 15 U.S.C. §

1692f(1).

In this case, construing the language of the FDCPA broadly

to effect its purposes, the Court finds that Plaintiff has

alleged facts in his complaint that are sufficient to show that

he has a plausible claim for relief under § 1692f(1). See Allen

ex rel. Martin, 629 F.3d at 367 (discussing the remedial

purposes of the FDCPA). The Court recognizes that at the time

Defendants filed the Garnishment Pleadings, they had a facially

valid state court judgment. And it follows, of course, that an

attempt to collect on a judgment through established and lawful

state court post-judgment procedures is ordinarily conduct

“permitted by law” within the meaning of the statute.

However, Defendants’ argument is only superficially

attractive as it ignores both the extraordinary nature of the

underlying state court opinion vacating the default judgment and

other core factual averments made by Plaintiff. Not only did

the state court determine that Defendants brought the default

judgment action on the original debt after the statute of

limitations had barred such an action, it also determined that

Defendants lacked a good faith basis in law and fact to assert

that alleged payments made after the expiration of the statute

of limitations renewed the claim. As the Third Circuit has

held, the FDCPA is a strict liability statute and Plaintiff is

not required to show that Defendants willfully violated the

FDCPA. But here, Plaintiff alleges such willfulness adding that

Defendants “knew or should have known that [their collection

efforts] were time-barred, but pursued collection of the debt

anyway ...” First Amended Class Action Complaint, ECF No. 21, ¶

130.

It remains to be seen if Plaintiff will ultimately support

his assertions, of course. But here, Plaintiff’s allegations go

beyond the strict liability requirements of the statute and

allege Defendants tried to collect a debt through legal action

they knew of should have known was time-barred. This is more

than sufficient to state a plausible claim that the Defendants

engaged in “unfair or unconscionable means” to collect a debt in

violation of 1692f(1) by filing the Garnishment Pleadings.

The Second Cause of Action

Plaintiff’s second cause of action focuses not on the

filing of the Garnishment Pleadings themselves but conduct

related to or associated with those filings. The Second Cause

of Action is also, unhelpfully, compound as it alleges

violations of at least two separate subsections of Section

1692e, specifically § 1692e(2)(A) and § 1692e(5) and a violation

of 1692f(1) separate from the First Cause of Action.7 The common

thread in the Second Cause of Action is that Defendants falsely

represented the legal status of his debt by impliedly

representing that the debt was not time-barred and that

Defendants’ communications with Plaintiff included threats

intending to induce Plaintiff to make payments on time-barred

debt.

Plaintiff argues that in serving the 2017 and 2018 Notices,

Defendants made implied threats to take legal action to collect

a time-barred debt. Plaintiff alleges that there were three

implied threats within the Notice of Application for Wage

Execution. First, Plaintiff alleges Defendants implied that it

would “in fact file the Notice with the court.” Second,

Plaintiff alleges the Notice implied that “should the judgment-

7 Similar to Plaintiff’s First Cause of Action, Plaintiff alleges

in the Second Cause of Action that Defendants made false

representations in conjunction with the Garnishment Pleadings

which violated Section 1692f(1) separate and independent from

the filings themselves. While the Court recognizes that each

separate act may constitute a separate violation of the FDCPA,

the conduct related to the Garnishment Pleading is so inherently

intertwined with the filings themselves as to render this

statutory theory for the Second Cause of Action duplicative of

the First Cause of Action at least as it relates to § 1692f(1).

Whether it is the Garnishment Pleadings themselves or statements

and actions associated with them, any of Defendants’ alleged

conduct in using “unfair or unconscionable means” to collect a

debt in violation of § 1692f(1) is fairly encompassed within the

First Cause of Action. To the extent the Second Cause of Action

asserts a claim under § 1692f(1) it will be dismissed as

duplicative.

debtor file an opposition to the notice that the debt collector

will cause a lawyer to appear at a hearing.” Finally, Plaintiff

alleges that the notice implied that “the applicant will, as

soon as legally allowed, file a Writ of Execution with the

court, actually effectuating the execution of wages.”

Defendants argue that this cause of action should be

dismissed because the identified statements were not false at

the time they were made. Furthermore, Defendants support their

motion to dismiss by arguing that the statements were not

directed to the Plaintiff, but rather his lawyer. Next

Defendants assert that because Plaintiff denied Defendants’

statements, he could not have been misled by Defendants’

statements. Finally, Defendants argue that this claim should be

dismissed because Defendant’s statements did not communicate

threats as defined under the FDCPA. According to Defendants,

the statements Plaintiff identifies as threats were merely

statements regarding legal actions Defendants had already taken.

Turning first to Plaintiff’s claim under Section 1692e,

that provision of the FDCPA prohibits “any false, deceptive, or

misleading representation or means in connection with the

collection of any debt” and provides a non-exhaustive list of

prohibited conduct. See 15 U.S.C. § 1692e. Section 1692e(2)(A)

prohibits debt collectors from making false representations of

“the character, amount or legal status of any debt.” 15 U.S.C.

§ 1692e(2)(A). The Court finds that Plaintiff has asserted a

plausible claim that Defendants made an implicit representation

that the underlying default judgment had been properly obtained

in New Jersey Superior Court in 2010 separate and independent of

the mere filing of the Garnishment Pleadings. Defendants’

related representations were false, Plaintiff alleges, as

Defendants knew or should have known that this debt was time-

barred, that alleged payments made in November 2008 were a

fabrication, and that the judgment was obtained in violation of

the FDCPA. The Court finds that Plaintiff has stated a separate

claim under 15 U.S.C § 1692e(2)(A) in the Second Cause of

Action.

To establish a claim under § 1692e(5), a plaintiff must

show that “the debt collector ‘threat[ened] to take any action

that cannot legally be taken or that [was] not intended to be

taken.’” See Devito v. Zucker, Goldberg & Ackerman, LLC, 908

F.Supp.2d 564, 570 (D.N.J. 2012) (citing Brown v. Card Serv.

Ctr., 464 F.3d at 455)(emphasis added). The statute is

therefore in the disjunctive and conduct within either prong

could constitute a violation.

This part of Plaintiff’s theory represents a closer call.

While an action to collect time-barred debt may be the use of

“unfair or unconscionable means” and associated false

representations of “the character, amount or legal status of any

debt” separately actionable under § 1692f(1) and § 1692e(2)(A)

respectively, the fact remains that Defendants held a valid

judgment at the time of the filing of the Garnishment Pleadings.

As for the first prong, the filings themselves and associated

statements could have been “legally” undertaken within the

meaning of § 1692e(5), at least until the judgment was vacated,

even if such conduct violated other provisions of the statute.

As for the second prong, Defendants actually undertook the

complained of action rendering them something different than

idle threats within the plain meaning of § 1692e(5).

Accordingly, the Court finds that Plaintiff has failed to state

a separate plausible claim under § 1692e(5) in the Second Cause

of Action.

In sum, the Court will partially deny and partially grant

the motion to dismiss as it relates to the Second Cause of

Action. Plaintiff’s claims under § 1692e(2)(A) will not be

dismissed. Plaintiff’s claims under § 1692e(5) and § 1692f(1)

will be dismissed.

3. Whether Plaintiff has failed to state a claim for vicarious

liability

Defendants argue that Plaintiff’s claims against the

Sherman Organization Defendants and the Sherman Executive

Defendants must be dismissed because the claims against LNVN, as

the alleged agent, are time-barred and fail to make a claim.

Both parties have stated that the fate of this claim rests

with the fate of the previous two. If Plaintiff has failed to

state a claim on either Causes of Action, it follows that no one

can be held vicariously liable for that claim. Having denied in

part Defendants’ motion to dismiss the First and Second Causes

of Action, the Court will allow Count III to proceed in an

manner consistent with this Opinion and accompanying Order.

CONCLUSION

For the reasons stated above, Defendants’ motion to dismiss

will be denied in part and granted in part. An appropriate

order will be entered.

Date: June 25, 2020____ __s/ Noel L. Hillman ____

At Camden, New Jersey NOEL L. HILLMAN, U.S.D.J.