Sorenson v. MBI, Inc.

          MEMORANDUM OF DECISION

          KARI A. DOOLEY, UNITED STATES DISTRICT JUDGE

         Plaintiff Eric Michael Sorenson (“Sorenson”) commenced this action on December 12, 2016 against two private entities and certain of their employees challenging their billing and debt collection practices. Some counts in the original complaint were dismissed pursuant to 28 U.S.C. § 1915(e)(2)(b). Defendants MBI, Inc., The Danbury Mint, and Jon P. Hobar (collectively, the “Defendants”) have moved to dismiss the remaining counts on a variety of bases or, in the alternative, seek summary judgment on the remaining counts. Sorenson in addition to filing an opposition to that motion has filed a “Motion to Strike Exhibits and Affidavit, to Amend Complaint, to Moot Motion to Dismiss and For Summary Judgment, for Transfer of Venue.” For ease of reference, the Court refers to this motion as the “Omnibus Motion.” How the Court addresses the Omnibus Motion necessarily derives from the Court's adjudication of the Motion to Dismiss. Therefore, all issues joined in these motions are addressed herein, albeit, not necessarily in the order raised and briefed.

         For the reasons set forth in this decision, the Defendant's Motion to Dismiss is GRANTED and Sorenson's Omnibus Motion is DENIED in part and found as MOOT in part.^[1]

         Factual Allegations and Procedural History

         The Danbury Mint (“Danbury Mint”) is a private merchant located in Norwalk, Connecticut. (See Compl. at ¶ 10.) Danbury Mint is an operating division of defendant MBI, Inc. (“MBI”). (See Id. at ¶¶ 30 n.1, 59 n.2; ECF No. 72 at 5.) Both businesses are located at the same address in Norwalk. (Compl. at ¶¶ 9-10.)

         In 2016, Sorenson purchased a ring from Danbury Mint, which he paid for in full prior to receipt of the ring. (Id. at ¶ 19.) Shortly after delivering the ring, Danbury Mint started sending Sorenson bills for what it believed to be the outstanding balance due for the ring. (Id. at ¶ 20.) Sorenson wrote to Danbury Mint to explain that he already paid for the ring in full, but he received no response. (Id. at ¶¶ 24-26.)

         On October 19, 2016, Sorenson was sent a “Final Notice” (the “final notice”). (ECF No. 72 at 5; see also Compl. at ¶ 30.) The final notice was on MBI letterhead and stated in relevant part:

This is our final notice regarding your delinquent Danbury Mint account. Your account has now been transferred from Customer Service to the Credit and Collections Department of MBI, Inc., of which the Danbury Mint is an operating division. Our records indicate that your account remains past due for the item(s) referenced on the enclosed statement. If you do not pay this past due balance within 30 days, we will have no choice but to turn your account over to an outside debt collection agency.

(ECF No. 72 at 5.)^[2] The final notice was signed by defendant Jon P. Hobar (“Hobar”), who was identified as a “Manager, Credit and Collections for The Danbury Mint.” (ECF No. 72 at 5; see also Compl. at ¶¶ 11, 31.) After receiving the final notice, Sorenson again wrote to Danbury Mint explaining that he had already paid in full for the ring, but he did not receive a response to that letter from Danbury Mint or MBI. (See Compl. at ¶¶ 27-28.)

         On December 12, 2016, Sorenson initiated this action by way of a fifteen-count complaint asserting claims under state and federal statutory law, state and federal constitutional law, and state common law. The Complaint includes several named and “John Doe” defendants.

         On June 2, 2017, Magistrate Judge William I. Garfinkle issued a Recommend Ruling, in which he recommended dismissal of all state and federal constitutional claims as well as “any claims” under the Fair Credit Billing Act, 15 U.S.C. § 1666, et seq. (“FCBA”) pursuant to 28 U.S.C. § 1915(e)(2)(B). On June 26, 2017, the Court (Underhill, C.J.)^[3] approved and adopted the Recommend Ruling in its entirety. That same day, the Court received Sorenson's objection to the Recommended Ruling. In response to the objection, ^[4] the Court issued a clarification order on July 13, 2017. The Court reiterated that it did not dismiss Sorenson's state law claims that were not premised on a constitutional violation. The Court further declined to reconsider its earlier “dismissal of Sorenson's claims brought under the Fair Credit Billing Act.” (ECF No. 10 at 2.) As a result of these orders, Counts One through Five, Nine, and Ten of the Complaint were dismissed.

         On February 28, 2018, the Defendants moved to dismiss the remaining counts - Counts Six through Eight and Eleven through Fifteen - or, alternatively, sought summary judgment on those counts. On October 15, 2018, Sorenson filed a memorandum in opposition to the Defendants' motion to dismiss. On October 31, 2018, Sorenson further filed the Omnibus Motion in which he sought to strike exhibits attached to the Defendants' motion for summary judgment, to amend his complaint (thereby ostensibly mooting the Defendants' motion to dismiss), and to transfer this matter to Minnesota state court.

         Sorenson's Motion to Transfer Venue (ECF No. 65)

         Sorenson asks this Court to transfer the venue of the action to the Minnesota state court pursuant to 28 U.S.C. § 1404. But Section 1404 does not authorize this Court to transfer a federal matter to a State of Minnesota court. 28 U.S.C. § 1404(a); see 17 Moore's Federal Practice §§ 111.01, 111.19[1] (Matthew Bender 3d ed.). Instead, it allows for transfer among federal district courts only. 28 U.S.C. § 1404(a). The Motion to Transfer is therefore DENIED.

         The Defendants' Motion to Dismiss (ECF No. 27)

         The Defendants have moved to dismiss the remaining counts in this action. As an initial matter, the parties do not agree which counts remain in this case. It is undisputed that Sorenson's constitutional claims - Counts One through Three, Nine, and Ten - have been dismissed. Citing to the Court's clarification order, Sorenson maintains that only these constitutional claims were dismissed and, therefore, all other counts remain. The Defendants in contrast maintain that Sorenson's claims brought under the FCBA have been dismissed as well.

         Sorenson's reading of the Court's clarification order is too narrow. Therein, the Court did state that “Sorenson's state law claims that are not premised on a violation of the federal or state constitution” remained in the case, but the Court also made clear that it would “not reconsider Judge Garfinkel's recommended dismissal of Sorenson's claims brought under the [FCBA].” (ECF 10 at 2.) Accordingly, “any claims” brought under the FCBA remained dismissed after the issuance of the Court's clarification order. (ECF No. 7 at 3.) Count Three plainly asserts a FCBA violation. In addition, Counts Four and Five are common law tort claims predicated on FCBA violation. As such, they are also subject to the Court's earlier dismissal order.^[5] Thus, Counts Six through Eight and Eleven through Fifteen are the only remaining counts in this action.

         The Defendants move to dismiss these remaining counts on several grounds. First, they argue that all claims against Danbury Mint should be dismissed because Danbury Mint lacks legal capacity to be sued, as it is an unincorporated division of MBI. Second, they argue that the Complaint should be dismissed pursuant to Rules 12(b)(4) and 12(b)(5) of the Federal Rules of Civil Procedure for insufficient process and service of process. Third, they argue that all of the remaining counts should be dismissed for failure to state a claim under Rule 12(b)(6) of the Federal Rules of Civil Procedure. Finally, the Defendants argue that if Sorenson's federal statutory claim, asserted in Count Eleven, fails, the Court should decline to exercise supplemental jurisdiction over Sorenson's state law claims and dismiss those counts pursuant to Rule 12(b)(1) of the Federal Rules of Civil Procedure.

         The Court does not address all of the Defendants' arguments because the question of whether Sorenson has stated a claim for which relief can be granted is dispositive. As set forth below, the Complaint is dismissed in its entirety pursuant to Rule 12(b)(6).

         Standard of Review

          To survive a motion to dismiss filed pursuant to Rule 12(b)(6), “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 Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)).^[6] “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.” Iqbal, 556 U.S. at 678. “The plausibility standard is not akin to a ‘probability requirement,' but it asks for more than a sheer possibility that a defendant has acted unlawfully.” Id. (quoting Twombly, 550 U.S. at 557). Legal conclusions and “[t]hreadbare recitals of the elements of a cause of action, supported by mere conclusory statements, ” are not entitled to a presumption of truth. Iqbal, 556 U.S. at 678. Nevertheless, when reviewing a motion to dismiss, the court must accept well-pleaded factual allegations as true and draw “all reasonable inferences in the nonmovant's favor.” Interworks Sys. Inc. v. Merch. Fin. Corp., 604 F.3d 692, 699 (2d Cir. 2010).

         Statutory Claims - Counts Eleven, Seven, and Fifteen

          In Count Eleven, Sorenson asserts a claim against MBI and Hobar for violation of the Fair Debt Collection Practices Act (the “FDCPA”), 15 U.S.C. § 1692, et seq. In Counts Seven and Fifteen, Sorenson asserts claims against the Defendants for violation of the Minnesota Collection Agencies Act (“MCAA”), Minn. Stat. § 332.31, et seq.^[7] The Court examines each claim in turn.

         FDCPA - Count Eleven

         Congress enacted the FDCPA in 1977 “to eliminate abusive debt collection practices by debt collectors, [and] to insure that those debt collectors who refrain from using abusive debt collection practices are not competitively disadvantaged. . . .” 15 U.S.C. § 1692(e). The FDCPA distinguishes between creditors and debt collectors. A “creditor” is “any person who offers or extends credit creating a debt or to whom a debt is owed.” 15 U.S.C. § 1692a(4). As a general rule, a creditor who is collecting or attempting to collect a debt owed or due to it is not a “debt collector.” 15 U.S.C. § 1692a(6)(F); Vincent v. The Money Store, 736 F.3d 88, 97 (2d Cir. 2013). “Similarly, a creditor's in-house collection division . . . is not considered a debt collector ‘so long as [it uses] the creditor's true business name when collecting.'” Maguire v. Citicorp Retail Servs., Inc., 147 F.3d 232, 235 (2d Cir. 1998) (quoting S. Rep. No. 95-382 ...