Opinion
CV156058388S
06-13-2016
National Collegiate Student Loan Trust 2005-3 v. Tcho Caulker
UNPUBLISHED OPINION
MEMORANDUM OF DECISION MOTION TO STRIKE (#102)
Robin L. Wilson, J.
FACTS
On November 13, 2015, the plaintiff, National Collegiate Student Loan Trust 2005-3, a business trust registered with the United States Securities Exchange Commission, filed a complaint against the defendant, Tcho Caulker. In its complaint, the plaintiff alleges the following facts. The defendant entered into a promissory note for a student loan with Charter One Bank, the original loan lender. Under the terms of the loan agreement, the defendant promised to pay all funds advanced on the defendant's behalf, including the loan origination fees, interest on the advanced funds, and attorneys fees. At the time of the loan origination, the loan was sold to the plaintiff for valuable consideration. As a result of such sale, the plaintiff is now the owner and holder thereof.
The plaintiff further alleges that the defendant failed to comply with the terms of the loan agreement, specifically regarding repayment. Pursuant to the terms of the agreement, and as a consequence of the default of the defendant, the plaintiff has elected to declare the entire balance of $49, 927.24 due, along with accrued interest of $11, 623.57, which accrued from December 1, 2010, through May 1, 2013, at the rate of 4.85%, for a total balance of $61, 550.81 due. Although the plaintiff has duly demanded these funds from the defendant, no amount of the $61, 550.81 has been paid. The plaintiff seeks repayment of these funds, attorneys fees at the rate of 15% as indicated in the loan agreement, and cost of collection.
On December 29, 2015, the defendant filed an answer to the plaintiff's complaint, as well as a three-count counterclaim, alleging a claim of negligent infliction of emotional distress and violations of the Connecticut Unfair Trade Practices Act (CUTPA), General Statutes § 42-110b et seq. In count one of the counterclaim, the defendant alleges that on April 8, 2013, the defendant sent a letter to the plaintiff's attorney, specifically requesting that the plaintiff validate and verify its identity, as well as the debts owed, because the defendant did not know whether the plaintiff's letter of debt and threat of lawsuit, dated March 2013, were fraudulent. Additionally, in the April 8, 2013 letter (letter), the defendant informed the plaintiff that he was currently unemployed, homeless, living on food stamps, suffering from distress and anxiety, and requested that the plaintiff grant him additional forbearance or leniency as a result of his dire circumstances. The defendant did not receive a response from the plaintiff until eight months later, on November 25, 2013, which did not address the defendant's questions or concerns, but rather was a generic form letter. The defendant further alleges that the plaintiff's failure to respond to the defendant's letter for eight months, and then responding with a generic form letter, constitutes negligent infliction of emotional distress, in that the plaintiff's actions irreparably harmed the defendant by: (1) leaving the defendant in a state of limbo plagued with distress and anxiety; (2) causing the defendant to lose out on a job opportunity; (3) depriving the defendant of substantial financial means to repay the loan; (4) forcing the defendant to remain homeless; and (5) causing the defendant further distress, pressure and destitution as a result of the filing of this present lawsuit.
In counts two and three of the defendant's counterclaim, the defendant alleges violations of CUTPA, but cites to General Statutes § § 5.2-7 and 5.2-5. Based on the language in counts two and three of the defendant's counterclaim, the court assumes that the defendant intended to cite to General Statutes § 42-110b et seq., the relevant CUTPA statutes, and accordingly, the court will construe counts two and three as such.
In counts two and three of the counterclaim, the defendant re-alleges many of the allegations in count one, and adds that the plaintiff's failure to formerly identify itself and validate the debt, as well as the plaintiff's failure to respond to the defendant's letter for eight months, constitutes a deceptive practice. The defendant also alleges that the plaintiff's failure to respond in a timely fashion caused the defendant to remain in a cycle of homelessness, employment, distress, and uncertainty, which constitutes an immoral, unethical, oppressive, and unscrupulous act. As a result, the defendant alleges that these practices and acts constitute a CUTPA violation.
The court notes that the defendant's counterclaim references Exhibits 1 through 10, however, the defendant did not request that these exhibits be incorporated into the counterclaim, nor are they attached to the counterclaim.
On January 13, 2016, the plaintiff filed the present motion to strike defendant's three-count counterclaim, along with a supporting memorandum of law, on the grounds that all three counts are legally insufficient because the defendant: (1) fails to plead facts that support a claim of negligent infliction of emotional distress; and (2) fails to plead a cognizable claim under the Connecticut Unfair Trade Practices Act (CUTPA), General Statutes § 42-110b et seq. The defendant filed an objection on January 20, 2016, along with a supporting memorandum of law, and attached Exhibits 1 through 10. The plaintiff filed a reply on March 3, 2016, and oral argument on the motion was heard at short calendar on March 14, 2016.
" It is well established that a motion to strike must be considered within the confines of the pleadings and not external documents . . . We are limited . . . to a consideration of the facts alleged in the complaint." (Internal quotation marks omitted.) Zirinsky v. Zirinsky, 87 Conn.App. 257, 268-69 n.9, 865 A.2d 488, cert. denied, 273 Conn. 916, 871 A.2d 372 (2005). Nonetheless, " [a]ny plaintiff . . . desiring to make a copy of any document a part of the complaint may, without reciting it or annexing it, refer to it as Exhibit A, B, C, etc., as fully as if it had been set out at length; but in such case the plaintiff shall serve a copy of such exhibit or exhibits on each other party to the action forthwith upon receipt of notice of the appearance of such party and file the original or copy of such exhibit or exhibits in court with proof of service on each appearing party . . . A complaint includes all exhibits attached thereto." (Citation omitted; internal quotation marks omitted.) Tracy v. New Milford Public Schools, 101 Conn.App. 560, 566, 922 A.2d 280, cert. denied, 284 Conn. 910, 931 A.2d 935 (2007).
On March 7, 2016, the defendant filed a brief in preparation for oral argument, and on March 14, 2016, the defendant filed a letter to the court, Wilson, J. The arguments in both the brief and the letter are either duplicative of the arguments in the defendant's January 20, 2016 objection to the plaintiff's motion to strike, or set forth allegations not included in the pleadings. As a result, neither document will be considered by the court.
DISCUSSION
" [A] party may challenge the legal sufficiency of an adverse party's claim by filing a motion to strike." Vertex, Inc. v. Waterbury, 278 Conn. 557, 564, 898 A.2d 178 (2006). " The purpose of a motion to strike is to contest . . . the legal sufficiency of the allegations of any complaint . . . to state a claim upon which relief can be granted." (Internal quotation marks omitted.) Fort Trumbull Conservancy, LLC v. Alves, 262 Conn. 480, 498, 815 A.2d 1188 (2003). " A motion to strike challenges the legal sufficiency of a pleading, and, consequently, requires no factual findings by the trial court." (Internal quotation marks omitted.) JP Morgan Chase Bank, N.A. v. Winthrop Properties, LLC, 312 Conn. 662, 670, 94 A.3d 622 (2014). " The role of the trial court in ruling on a motion to strike is to examine the [complaint], construed in favor of the [plaintiff], to determine whether [the pleading party has] stated a legally sufficient cause of action." (Internal quotation marks omitted.) Coe v. Board of Education, 301 Conn. 112, 117, 19 A.3d 640 (2011). " In ruling on a motion to strike, the court is limited to the facts alleged in the complaint." (Internal quotation marks omitted.) Faulkner v. United Technologies Corp., 240 Conn. 576, 580, 693 A.2d 293 (1997). " [P]leadings are to be construed broadly and realistically, rather than narrowly and technically . . ." (Internal quotation marks omitted.) Downs v. Trias, 306 Conn. 81, 92, 49 A.3d 180 (2012).
In the plaintiff's motion to strike the defendant's three-count counterclaim, it argues that count one must be stricken because the defendant fails to plead facts that support a claim of negligent infliction of emotional distress. Specifically, the plaintiff argues that the defendant fails to allege any facts to support the contention that the plaintiff was aware that by commencing this lawsuit against the defendant and not responding to the defendant's letter until November, it would cause the defendant illness or injury. The plaintiff also argues that counts two and three must be stricken because the defendant fails to plead a cognizable claim under CUTPA. The plaintiff contends that the Fair Debt Collection Practices Act (FDCPA), specifically 15 U.S.C. § 1692g, the relevant section that regulates validation of debt, does not prescribe a time limit within which to validate debts. The plaintiff argues that while 15 U.S.C. § 1692g provides that collection activity must be stayed after a validation request has been received by the plaintiff, the defendant has not alleged that any collection activity occurred between April 8, 2013, the date the defendant sent the validation request to the plaintiff, and November 2013, the date the defendant received a response from the plaintiff. The plaintiff argues that as a result, it has complied with the validation requirements set forth under 15 U.S.C. § 1692g, and therefore, the defendant's claim under CUTPA must be stricken.
15 U.S.C. § 1692g provides in relevant part:
In response, the defendant opposes the plaintiff's arguments, contending that his three-count counterclaim is legally sufficient. The defendant argues that count one does plead facts that support a claim of negligent infliction of emotional distress. Specifically, the defendant compares the actions of the defendant's other loan services provider, the United States Department of Education Direct Loan Program (Loan Program), to the actions of the plaintiff, arguing that Loan Program received the same letter from the defendant that the plaintiff had received, but that Loan Program responded to, and granted forbearance to, the defendant. The defendant argues that by taking Loan Program's response into account, such behavior by the plaintiff is egregious and outrageous. Additionally, the defendant argues that counts two and three plead a cognizable claim under CUTPA, because the fact that it took the plaintiff eight months to respond to the defendant's validation request constitutes unfair trade practices, and this failure to timely respond caused the defendant extreme emotional turmoil and distress.
I
NEGLIGENT INFLICTION OF EMOTIONAL DISTRESS
The plaintiff argues that the defendant fails to plead facts in count one that support a claim of negligent infliction of emotional distress. " To prevail on a claim of negligent infliction of emotional distress, the plaintiff must prove: (1) the defendant's conduct created an unreasonable risk of causing the plaintiff emotional distress; (2) the plaintiff's distress was foreseeable; (3) the emotional distress was severe enough that it might result in illness or bodily harm; and (4) the defendant's conduct was the cause of the plaintiff's distress." (Internal quotation marks omitted.) Grasso v. Connecticut Hospice, Inc., 138 Conn.App. 759, 771, 54 A.3d 221 (2012).
" The foreseeability requirement in a negligent infliction of emotional distress claim is more specific than the standard negligence requirement that an actor should have foreseen that his tortious conduct was likely to cause harm . . . In order to state a claim for negligent infliction of emotional distress, the plaintiff must plead that the actor should have foreseen that [its] behavior would likely cause harm of a specific nature, i.e., emotional distress likely to lead to illness or bodily harm." (Internal quotation marks omitted.) Stancuna v. Schaffer, 122 Conn.App. 484, 490, 998 A.2d 1221 (2010). Essentially, the foreseeability element " requires that the fear or distress experienced by the plaintiffs be reasonable in light of the conduct of the defendants. If such a fear were reasonable in light of the defendants' conduct, the defendants should have realized that their conduct created an unreasonable risk of causing distress, and they, therefore, properly would be held liable. Conversely, if the fear were unreasonable in light of the defendants' conduct, the defendants would not have recognized that their conduct would cause the distress and, therefore, they would not be liable." (Internal quotation marks omitted.) Carrol v. Allstate Ins. Co., 262 Conn. 433, 447, 815 A.2d 119 (2003).
The facts alleged by the defendant in his counterclaim, taken in light most favorable to him, allege that the plaintiff's failure to respond to the defendant's letter for eight months, and then responding with a generic form letter, constitutes a negligent infliction of emotional distress, in that the plaintiff's actions irreparably harmed the defendant by: (1) leaving the defendant in a state of limbo plagued with distress and anxiety; (2) causing the defendant to lose out on a job opportunity; (3) depriving the defendant of substantial financial means to repay the loan; (4) forcing the defendant to remain homeless; and (5) causing the defendant further distress, pressure and destitution as a result of the filing of this present lawsuit. The defendant, however, has not pleaded facts that support a conclusion that the plaintiff knew or should have known that its failure to respond to the defendant's letter in a timely fashion, and its filing the present lawsuit against the defendant, involved an unreasonable risk of causing him emotional distress; that such distress, anxiety, joblessness and homelessness were foreseeable; or that the emotional distress would be severe enough to lead to his illness or bodily harm.
Additionally, and most concerning to the court, the defendant has not pleaded any facts to support the conclusion that the plaintiff's conduct was the proximate cause of his emotional distress and misfortune. Specifically, the defendant acknowledges in his counterclaim that he had been experiencing distress, anxiety, unemployment, and homelessness as early as in 2010, three years prior to the plaintiff failing to respond to his letter in a timely fashion. While the defendant alleged that these conditions were exacerbated by the plaintiff's failure to respond in a timely manner, those allegations do not support the conclusion that the plaintiff's failure to respond for eight months was the proximate cause of the defendant's continued distress, anxiety, unemployment, and homelessness. Therefore, the defendant has not pleaded a legally sufficient claim for negligent infliction of emotional distress in count one of his counterclaim.
II
CUTPA
The plaintiff argues that the defendant fails to plead a cognizable claim in counts two and three under CUTPA, specifically because it contends that it has complied with the debt validation requirements pursuant to 15 U.S.C. § 1692g. " [General Statutes § ]42-110b(a) provides that [n]o person shall engage in unfair methods of competition and unfair or deceptive acts or practices in the conduct of any trade or commerce. It is well settled that in determining whether a practice violates CUTPA we have adopted the criteria set out in the cigarette rule by the federal trade commission for determining when a practice is unfair: (1) [W]hether the practice, without necessarily having been previously considered unlawful, offends public policy as it has been established by statutes, the common law, or otherwise--in other words, it is within at least the penumbra of some common law, statutory, or other established concept of unfairness; (2) whether it is immoral, unethical, oppressive, or unscrupulous; (3) whether it causes substantial injury to consumers, [competitors or other businesspersons] . . . All three criteria do not need to be satisfied to support a finding of unfairness." (Internal quotation marks omitted.) Harris v. Bradley Memorial Hospital & Health Center, Inc., 296 Conn. 315, 350, 994 A.2d 153 (2010). " A practice may be unfair because of the degree to which it meets one of the criteria or because to a lesser extent it meets all three." (Internal quotation marks omitted.) Votto v. American Car Rental, Inc., 273 Conn. 478, 484, 871 A.2d 981 (2005).
In regards to the ascertainable loss requirement, it is " a threshold barrier which limits the class of persons who may bring a CUTPA action seeking either actual damages or equitable relief. . . . Thus, to be entitled to any relief under CUTPA, a plaintiff must first prove that he has suffered an ascertainable loss due to a CUTPA violation." (Internal quotation marks omitted.) DiTeresi v. Stamford Health System, Inc., 149 Conn.App. 502, 508, 88 A.3d 1280 (2014). " Trial courts have uniformly dismissed or stricken CUTPA claims on the basis that emotional distress by itself is not an ascertainable loss sufficient to support a CUTPA claim." Pratt v. University Accounting Services, LLC, Superior Court, judicial district of Waterbury, Complex Litigation Docket, Docket No. X10-CV-10-116011594-S, (August 28, 2012, Dubay, J.) .
In addition, the purpose of the FDCPA, 15 U.S.C. § 1692 et seq., " is to provide civil . . . liability for those who engage in unscrupulous debt collection practices . . ." First Federal Bank v. Craco, Superior Court, judicial district of New Haven at Meriden, Docket No. CV-95-0249553-S (April 2, 1996, Silbert, J.) (16 Conn.L.Rptr. 377, ). " When considering allegations under [15 U.S.C. § ]1692g, the Second Circuit has emphasized that the FDCPA was intended to address the recurring problem of debt collectors dunning the wrong person or attempting to collect debt which the consumer has already paid." (Internal quotation marks omitted.) ValleCastro v. Tobin, United States District Court, Docket No. 3:13 CV 1441 (SRU), (D.Conn. October 27, 2015). 15 U.S.C. § 1692g provides in relevant part: " (b) If the consumer notifies the debt collector in writing within the thirty-day period . . . that the debt, or by portion thereof, is disputed, or that the consumer requests the name and address of the original creditor, the debt collector shall cease collection of the debt, or any disputed portion thereof, until the debt collector obtains verification of the debt or a copy of a judgment, or the name and address of the original creditor, and a copy of such verification or judgment, or name and address of the original creditor, is mailed to the consumer by the debt collector." (Emphasis added.) " District courts in the Second Circuit have repeatedly held that verification . . . does not require the debt collector to do anything more than confirm the amount of the debt and the identity of the creditor, and relay that information to the consumer." (Internal quotation marks omitted.) ValleCastro v. Tobin, supra, United States District Court, Docket No. 3:13CV1441 (SRU), .
In the present case, the defendant argues that the plaintiff's failure to respond to his letter in a timely manner constitutes a deceptive practice, and is therefore a violation of CUTPA. Given the plain language of 15 U.S.C. § 1692g, however, the plaintiff's only requirement was to cease collection of the defendant's debt until it responded to the defendant's request for verification. Based on the absence of specific statutory language or case law on the issue of whether a creditor is required to provide a response to a debtor's verification request within a specified time frame, the court concludes that pursuant to 15 U.S.C. § 1692g, the plaintiff did not have to respond to the defendant's verification request within a specified time frame. As a result, because the defendant did not allege that the plaintiff continued to attempt to collect the debt after the verification letter had been sent, the plaintiff complied with the verification requirements set forth under 15 U.S.C. § 1692g. Therefore, the defendant's allegations fail to support a claim under CUTPA because no unfair or deceptive practice has been identified as being violative of public policy established by statute or common law.
Additionally, the defendant's counterclaim further fails to support a claim under CUTPA because no ascertainable loss has been identified. As previously noted, the defendant concedes in his counterclaim that he had been experiencing unemployment and homelessness as early as in 2010, three years prior to him sending a validation request to the plaintiff. Therefore, the defendant's joblessness and homelessness, although certainly losses suffered by the defendant, were not losses suffered as a result of plaintiff's alleged failure to respond to his letter in a timely manner. While the defendant also argues that the plaintiff's alleged failure to respond to his letter in a timely manner caused him to experience extreme anxiety and exacerbated distress, trial courts have noted that emotional distress by itself is not an ascertainable loss sufficient to support a CUTPA claim. See Ross v. Company Store, Superior Court, judicial district of Stamford-Norwalk, Docket No. CV-91-0115710-S (October 1, 1991, Ryan, J.) (5 Conn.L.Rptr. 62, 63, ) (court held plaintiff, who alleged to have suffered anguish and emotional distress as a result of illegal search and detainment on defendant's premises, failed to present any facts to support ascertainable loss requirement of CUTPA); Burney v. Downer Funeral Home, Inc., Superior Court, judicial district of Stamford-Norwalk, Docket No. CV-99-0175648 (August 13, 2001, Lewis, J.T.R.) (" A survey of case law reveals that there are no appellate decisions as to whether emotional distress or injury constitutes an ascertainable loss under CUTPA."). Therefore, the defendant's extreme anxiety and distress are not ascertainable losses sufficient to support a violation of CUTPA. As a result, the defendant has not pleaded a legally sufficient claim for CUTPA in counts two and three of his counterclaim.
CONCLUSION
For the foregoing reasons, the plaintiff's motion to strike the defendant's three-count counterclaim is granted.
The defendant's counterclaim references Exhibits 1 through 10, however, the defendant did not attach a copy of the documents to the counterclaim, or serve copies on the plaintiff upon receipt of notice of the appearance of the plaintiff. Rather, the defendant attached Exhibits 1 through 10 to his opposition to the plaintiff's motion to strike. This action is procedurally deficient, and Exhibits 1 through 10 are not part of, or incorporated into, the counterclaim. Accordingly, they will not be considered by the court.
(a) Within five days after the initial communication with a consumer in connection with the collection of any debt, a debt collector shall, unless the following information is contained in the initial communication or the consumer has paid the debt, send the consumer a written notice containing (1) the amount of the debt; (2) the name of the creditor to whom the debt is owed; (3) a statement that unless the consumer, within thirty days after receipt of the notice, disputes the validity of the debt, or any portion thereof, the debt will be assumed to be valid by the debt collector; (4) a statement that if the consumer notifies the debt collector in writing within the thirty-day period that the debt, or any portion thereof, is disputed, the debt collector will obtain verification of the debt or a copy of a judgment against the consumer and a copy of such verification or judgment will be mailed to the consumer by the debt collector; and (5) a statement that, upon the consumer's written request within the thirty-day period, the debt collector will provide the consumer with the name and address of the original creditor, if different from the current creditor. (b) If the consumer notifies the debt collector in writing within the thirty-day period described in subsection (a) of this section that the debt, or any portion thereof, is disputed, or that the consumer requests the name and address of the original creditor, the debt collector shall cease collection of the debt, or any disputed portion thereof, until the debt collector obtains verification of the debt or a copy of a judgment, or the name and address of the original creditor, and a copy of such verification or judgment, or name and address of the original creditor, is mailed to the consumer by the debt collector. Collection activities and communications that do not otherwise violate this subchapter may continue during the 30-day period referred to in subsection (a) of this section unless the consumer has notified the debt collector in writing that the debt, or any portion of the debt, is disputed or that the consumer requests the name and address of the original creditor. Any collection activities and communication during the 30-day period may not overshadow or be inconsistent with the disclosure of the consumer's right to dispute the debt or request the name and address of the original creditor.