LVNV LLC v. Mose Jones (2011)

MEMORANDUM OF DECISION RE MOTION TO DISMISS (NO. 102)

Facts and Procedural History

On January 21, 2011, the plaintiff, LVNV Funding, LLC, initiated a debt collection action against the defendant, Mose Jones.   The pro se defendant filed his motion to dismiss and memorandum in support on March 29, 2011.   The plaintiff filed its objection and memorandum in opposition on April 14, 2011.

Discussion

“A motion to dismiss ․ properly attacks the jurisdiction of the court, essentially asserting that the plaintiff cannot as a matter of law and fact state a cause of action that should be heard by the court.”  (Internal quotation marks omitted.)  Bacon Construction Co. v. Dept. of Public Works, 294 Conn. 695, 706, 987 A.2d 348 (2010).  “In general, a motion to dismiss is the proper procedural vehicle to raise a claim that the court lacks subject matter jurisdiction over the action.”  Bellman v. West Hartford, 96 Conn.App. 387, 392, 900 A.2d 82 (2006).

The defendant appears to argue the court lacks subject matter jurisdiction over this action because the plaintiff is not a registered consumer collection agency in this state and as a result, cannot bring this debt collection action.   The plaintiff counters that as the holder of the note, it is entitled to bring suit against the defendant.

In its complaint, the plaintiff alleges the following.  “Plaintiff is a limited liability company ․ the defendant entered into a credit agreement with the original creditor, Credit One Bank, N.A. Plaintiff is owner and holder thereof ․ Pursuant to the credit agreement defendant is obligated for all charges made in connection with the credit extended under the agreement ․ Defendant failed to make payments as provided in said agreement, and all sums due under the agreement have been duly declared due and payable.   The total balance under said agreement is $1,357.49 as of 12/28/08 ․ That hereto, the original creditor rendered to defendant monthly, full and true accounts of the indebtedness owing by the defendant as a result of the above agreement ․ which account statements were delivered to and accepted without objection by the defendant resulting in an account stated for the amount set forth above.”

In Unifund CCR Partners v. Coyle, Superior Court, judicial district of New London, Docket No. CV 09 5010045 (June 5, 2009, Martin, J.) [47 Conn. L. Rptr. 649], the court addressed a similar argument to the one advanced by the defendant.   In that case, the plaintiff, Unifund CCR Partners, attempted to collect debt allegedly owed by the defendant, Carole A. Coyle.   The plaintiff filed a complaint alleging that the defendant made purchases using a credit card issued by Citibank South Dakota, N.A., which she agreed to pay back in accordance with the credit card agreement.

The defendant in Coyle, like the defendant in the present case, argued that General Statutes § 36a–805 prohibited the plaintiff from bringing the action.   Section § 36a–805(a)(3) states:  “No consumer collection agency shall ․ purchase or receive assignments of claims for the purpose of collection or institute suit thereon in any court.”   The plaintiff in Coyle conceded that it was a consumer collection agency,¹ but argued that as the owner of the debt it was entitled to bring this action pursuant to § 52–118, which states:  “The assignee and equitable and bona fide owner of any chose in action, not negotiable, may sue thereon in his own name.   Such a plaintiff shall allege in his complaint that he is the actual bona fide owner of the chose in action, and set forth when and how he acquired title.”

The Coyle court explained:  “Standing is established by showing that the party claiming it is authorized by statute to bring suit or is classically aggrieved.   The fundamental test for determining aggrievement encompasses a well-settled twofold determination:  first, the party claiming aggrievement must successfully demonstrate a specific, personal and legal interest in [the subject matter of the challenged action] ․ Second, the party claiming aggrievement must successfully establish that this specific personal and legal interest has been specially and injuriously affected by the [challenged action] ․ Aggrievement is established if there is a possibility, as distinguished from a certainty, that some legally protected interest ․ has been adversely affected ․” Furthermore, “[t]he assignee of a chose in action stands in the shoes of the assignor ․ A valid assignment transfers to the assignee exclusive ownership of all of the assignor's rights to the subject assigned and extinguishes all of those rights in the assignor.”  (Citations omitted;  internal quotation marks omitted.)  Id.

The court reasoned that the plaintiff's allegation that it was “the owner of the debt” was sufficient to withstand the defendant's motion to dismiss, even in the absence of an assignment agreement detailing the assignment of the defendant's debt from the original creditor to the plaintiff.   The court noted that creditors are not consumer collection agencies within the meaning of General Statutes § 36a–800 et seq., requiring licensure as a consumer collection agency.   See Household Finance Corp. III v. Leslie, Superior Court, judicial district of Tolland, Docket No. CV 05 4001821 (August 19, 2005, Scholl, J.) (denying defendant's motion to dismiss, rejecting argument that plaintiff was acting as a consumer collection agency in violation of General Statutes § 36a–801);  see also § 36a–645(2)(B) (“ ‘Creditor’ means ․ any person to whom such debt is assigned.  ‘Creditor’ shall not include a consumer collection agency, as defined in section 36a–800 ․”).  Therefore, the court concluded:  “Proof of the valid assignment of the defendant's debt from its original owner to the plaintiff will likely have to be produced in order for the plaintiff to successfully pursue this action ․ At this point, however, the court is bound by the complaint, which alleges that the plaintiff is the owner of the debt.   As an aggrieved party, the plaintiff has standing.”   As a result, the court denied the defendant's motion to dismiss the action.

In the present case, the plaintiff alleges that it “is owner and holder” of the credit agreement that the defendant entered into with the original creditor, Credit One Bank, N.A. The plaintiff does not concede that it is a consumer collection agency and rather, appears to bring this action in its capacity as the assignee of the defendant's debt.   Pursuant to the court's decision in Coyle, the allegation that the plaintiff is “is owner and holder” of the debt is sufficient to confer its standing and give the court subject matter jurisdiction over this action.   At this stage of the litigation, the plaintiff need not show proof of assignment.   The defendant may, however, engage in discovery for chain of title documents.

Conclusion

For all of the foregoing reasons, the defendant's motion to dismiss is hereby denied.

Cosgrove, J.

FOOTNOTES

FN1. General Statutes § 36a–800(1) states:  “ ‘Consumer collection agency’ means any person engaged in the business of collecting or receiving for payment for others of any account, bill or other indebtedness from a consumer debtor or engaged in the business of collecting or receiving for payment property tax from a property tax debtor on behalf of a municipality, including any person who, by any device, subterfuge or pretense, makes a pretended purchase or takes a pretended assignment of accounts from any other person or municipality of such indebtedness for the purpose of evading the provisions of sections 36a–800 to 36a–810, inclusive.   It includes persons who furnish collection systems carrying a name which simulates the name of a consumer collection agency and who supply forms or form letters to be used by the creditor, even though such forms direct the consumer debtor or property tax debtor to make payments directly to the creditor rather than to such fictitious agency.  ‘Consumer collection agency’ further includes any person who, in attempting to collect or in collecting such person's own accounts or claims from a consumer debtor, uses a fictitious name or any name other than such person's own name which would indicate to the consumer debtor that a third person is collecting or attempting to collect such account or claim.   ‘Consumer collection agency’ does not include (A) an individual employed on the staff of a licensed consumer collection agency, or by a creditor who is exempt from licensing, when attempting to collect on behalf of such consumer collection agency, (B) persons not primarily engaged in the collection of debts from consumer debtors who receive funds in escrow for subsequent distribution to others, including, but not limited to, real estate brokers and lenders holding funds of borrowers for payment of taxes or insurance, (C) any public officer or a person acting under the order of any court, (D) any member of the bar of this state, and (E) a person who services loans or accounts for the owners thereof when the arrangement includes, in addition to requesting payment from delinquent consumer debtors, the providing of other services such as receipt of payment, accounting, record-keeping, data processing services and remitting, for loans or accounts which are current as well as those which are delinquent.   Any person not included in the definition contained in this subdivision is, for purposes of sections 36a–645 to 36a–647, inclusive, a ‘creditor,’ as defined in section 36a–645.”.  FN1. General Statutes § 36a–800(1) states:  “ ‘Consumer collection agency’ means any person engaged in the business of collecting or receiving for payment for others of any account, bill or other indebtedness from a consumer debtor or engaged in the business of collecting or receiving for payment property tax from a property tax debtor on behalf of a municipality, including any person who, by any device, subterfuge or pretense, makes a pretended purchase or takes a pretended assignment of accounts from any other person or municipality of such indebtedness for the purpose of evading the provisions of sections 36a–800 to 36a–810, inclusive.   It includes persons who furnish collection systems carrying a name which simulates the name of a consumer collection agency and who supply forms or form letters to be used by the creditor, even though such forms direct the consumer debtor or property tax debtor to make payments directly to the creditor rather than to such fictitious agency.  ‘Consumer collection agency’ further includes any person who, in attempting to collect or in collecting such person's own accounts or claims from a consumer debtor, uses a fictitious name or any name other than such person's own name which would indicate to the consumer debtor that a third person is collecting or attempting to collect such account or claim.   ‘Consumer collection agency’ does not include (A) an individual employed on the staff of a licensed consumer collection agency, or by a creditor who is exempt from licensing, when attempting to collect on behalf of such consumer collection agency, (B) persons not primarily engaged in the collection of debts from consumer debtors who receive funds in escrow for subsequent distribution to others, including, but not limited to, real estate brokers and lenders holding funds of borrowers for payment of taxes or insurance, (C) any public officer or a person acting under the order of any court, (D) any member of the bar of this state, and (E) a person who services loans or accounts for the owners thereof when the arrangement includes, in addition to requesting payment from delinquent consumer debtors, the providing of other services such as receipt of payment, accounting, record-keeping, data processing services and remitting, for loans or accounts which are current as well as those which are delinquent.   Any person not included in the definition contained in this subdivision is, for purposes of sections 36a–645 to 36a–647, inclusive, a ‘creditor,’ as defined in section 36a–645.”

Cosgrove, Emmet L., J.