NOT FOR PUBLICATION WITHOUT THE

APPROVAL OF THE APPELLATE DIVISION

SUPERIOR COURT OF NEW JERSEY

APPELLATE DIVISION

DOCKET NO. A-5797-13T2

 A-0151-14T1

 A-0152-14T1

MIDLAND FUNDING LLC CURRENT 

ASSIGNEE, [CITIBANK USA, N.A., 

ORIGINAL CREDITOR],

Plaintiff-Appellant/

Cross-Respondent,

v.

BRUCE THIEL,

Defendant-Respondent/

Cross-Appellant.

________________________________

MIDLAND FUNDING LLC CURRENT 

ASSIGNEE, [CITIBANK CHILDREN'S 

PLACE, ORIGINAL CREDITOR],

Plaintiff-Appellant,

v.

LUISA ACEVEDO,

Defendant-Respondent.

_______________________________

MIDLAND FUNDING LLC CURRENT 

ASSIGNEE, [GE MONEY BANK, 

ORIGINAL CREDITOR],

Plaintiff-Appellant,

v.

APPROVED FOR PUBLICATION

August 29, 2016

APPELLATE DIVISION
2 A-5797-13T2

ALISA JOHNSON,

Defendant-Respondent.

________________________________

Argued March 15, 2016 – Decided

Before Judges Fisher, Rothstadt, and 

Currier.

On appeal from Superior Court of New Jersey, 

Law Division, Somerset County, Docket No. 

DC-87-14, and Passaic County, Docket Nos. 

DC-1886-14 and DC-1151-14.

Lawrence J. McDermott, Jr., argued the cause 

for appellant/cross-respondent in A-5797-13, 

and for appellants in A-0151-14 and A-0152-

14 (Pressler and Pressler, L.L.P., 

attorneys; Mr. McDermott, Steven A. Lang, 

and Michael J. Peters, on the briefs in A5797-13; Mr. McDermott and Mr. Lang, on the 

briefs in A-0151-14; Mr. McDermott, on the 

briefs in A-0152-14).

Richard A. Mastro argued the cause for 

respondent/cross-appellant in A-5797-13 

(Legal Services of Northwest Jersey, Inc., 

attorneys; Mr. Mastro, on the briefs).

Neil J. Fogarty argued the cause for 

respondents in A-0151-14 and A-0152-14 

(Northeast New Jersey Legal Services, 

attorneys; Mr. Fogarty, on the briefs).

Yongmoon Kim argued the cause for amici 

curiae Consumers League of New Jersey and 

National Association of Consumer Advocates 

in A-0151-14 and A-0152-14 (Kim Law Firm, 

LLC, attorneys; Mr. Kim, of counsel and on 

the briefs).

The opinion of the court was delivered by 

ROTHSTADT, J.A.D.

August 29, 2016
3 A-5797-13T2

In these three appeals, which we calendared back-to-back 

and consolidated for purposes of this opinion, we are asked to 

determine the statute of limitations applicable to an action 

filed to collect debts arising from a customer's use of a retail 

store's credit card which use is restricted to the specific 

store. Plaintiff Midland Funding LLC, an assignee of the 

financial institutions that issued credit cards to store 

customers on behalf of retailers, argues the six-year statute of 

limitations that governs most contractual claims, N.J.S.A.

2A:14-1, is applicable under the circumstances presented, while 

defendants in each action, as well as amici curiae Consumer 

League of New Jersey and National Association of Consumer 

Advocates, argue the four-year statute of limitations, which 

governs contracts relating to the sale of goods, N.J.S.A. 12A:2-

725, should control. In each of the cases, the trial court 

applied the four-year statute of limitations. Plaintiff 

challenges those decisions as well as the award to two 

defendants of statutory damages and fees under the Fair Debt 

Collection Practices Act (FDCPA), 15 U.S.C.A. §§ 1692 to 1692p.1 

 

1 The notices of appeal in A-0151-14 and A-0152-14 indicate 

plaintiff is also appealing from the court's denial of its 

motions for reconsideration in those actions. However, because 

plaintiff's briefs do not address those denials, we consider its 

appeal from those orders abandoned, as an issue that is not 

briefed on appeal is deemed waived. N.J. Dep't of Envtl. Prot. 

(continued)
4 A-5797-13T2

The third defendant cross-appeals from the denial of his motion 

for summary judgment seeking a similar award under the FDCPA.

Having considered the parties' arguments, we hold that 

claims arising from a retail customer's use of a store-issued 

credit card — or one issued by a financial institution on a 

store's behalf — when the use of which is restricted to making 

purchases from the issuing retailer are subject to the four-year 

statute of limitations set forth in N.J.S.A. 12A:2-725. We also 

hold that if an action is filed after the expiration of this 

four-year period, the FDCPA requires the award of statutory 

damages and costs, absent a showing that the action was filed 

due to a "bona fide error" under the act. Accordingly, we 

affirm the application of the four-year statute of limitations 

in each case and the award of statutory fees and costs in two of 

the cases, but we reverse and remand the denial of those fees 

and costs in the other.

The orders under appeal were entered in response to summary 

judgment motions filed by defendants. The material facts 

contained in each matter's motion record were undisputed and can 

be summarized as follows.

 

(continued)

v. Alloway Twp., 438 N.J. Super. 501, 505 n.2 (App. Div.), 

certif. denied, 222 N.J. 17 (2015).
5 A-5797-13T2

All three defendants obtained credit cards from specific 

stores, issued by unaffiliated financial institutions, that 

limited the cards' use to purchases from the specific store. 

Each of them defaulted in their payments. In each case, 

plaintiff acquired the debt by assignment and filed suit to 

recover the outstanding amount. Specifically, in June 2003, 

defendant Luisa Acevedo obtained a credit card from The 

Children's Place clothing store that was issued by Citibank and 

could only be used to purchase merchandise at that store. In 

1998, defendant Alisa Johnson obtained a JCPenny credit card, 

issued by GE Money Bank, for use only at JCPenny stores. 

Defendant Bruce Thiel obtained a Home Depot credit card, issued 

by Citibank, for use only at Home Depot stores.

Each defendant used their card at the designated stores and 

made payments before eventually defaulting. Acevedo made her 

last payment on March 5, 2009, and was in default as of May 

2009.2 Johnson defaulted by December 2008, having made her last 

payment the previous month. Thiel made his last minimum payment 

 

2 The credit card account became designated as "charged off" as 

of October 2009.
6 A-5797-13T2

on March 16, 2009, and was in default as of April 20, 2009, when 

he failed to make the next required minimum payment.

3

Plaintiff filed suit against each defendant more than four 

years after their respective defaults, but within six years. 

Specifically, on February 25, 2014, plaintiff filed a complaint 

against Acevedo seeking to recover the $824.90 balance on her 

account. Plaintiff filed a complaint against Johnson on 

February 4, 2014, seeking to collect her outstanding balance of 

$747.05. As to Thiel, plaintiff filed a complaint on July 18, 

2013, seeking to collect the $2340.77 outstanding balance. Each 

defendant filed a responsive pleading asserting that plaintiff's 

claims were barred by the four-year statute of limitations, 

N.J.S.A. 12A:2-725, and setting forth claims against plaintiff 

under the FDCPA. In May 2014, each defendant filed a motion for 

summary judgment seeking dismissal of plaintiff's complaint and 

an award of damages and fees under the FDCPA.

The Special Civil Part in Passaic County heard oral 

arguments on Acevedo's and Johnson's motions together. After 

considering counsels' arguments, the court granted both motions, 

dismissing the complaints and awarding each defendant one 

thousand dollars in statutory damages under the FDCPA. The 

 

3 Thiel made a few additional payments after this date, in the 

amount of forty dollars each, but none of these payments 

satisfied the minimum payment due.
7 A-5797-13T2

court entered judgments in favor of Acevedo and Johnson and 

directed them to file separate motions for counsel fees pursuant

to the FDCPA, 15 U.S.C.A. § 1692k(a)(3). 

In a written decision, the court explained its reasons for 

applying the four-year statute of limitations. The court 

adopted our reasoning in an unpublished opinion, New Century 

Fin. Servs., Inc. v. McNamara, A-2556-12 (App. Div. Mar. 20, 

2014) including our reliance upon the Supreme Court's opinions 

in Sliger v. R.H. Macy & Co., 59 N.J. 465 (1971), and Associates 

Discount Corp. v. Palmer, 47 N.J. 183 (1966), and our opinion in 

Ford Motor Credit Co. v. Arce, 348 N.J. Super. 198 (App. Div. 

2002).4

Acevedo and Johnson filed motions for statutory counsel 

fees, which the court granted, awarding Acevedo $4250 in 

attorney fees and Johnson $7632.50. Plaintiff filed motions for 

reconsideration, which the court denied, rejecting plaintiff's 

argument that the court failed to consider that the credit cards 

 

4 In relying upon our unpublished opinion in McNamara, the 

court recognized that Rule 1:36-3 limited its authority to cite 

or rely upon McNamara, but it felt it appropriate to mention it 

for the purpose of demonstrating that "the[se] very same 

attorneys who are now before this [c]ourt argued the very same 

issues before the Appellate Division in McNamara" and, for that 

reason, relied on McNamara to demonstrate that plaintiff 

consciously proceeded to commence these actions when its 

timeliness was contraindicated. We see no error in the judge's 

reliance on McNamara for that sole purpose.
8 A-5797-13T2

were issued to Acevedo and Johnson by unaffiliated financial 

institutions.

Thiel's motion for summary judgment was considered by the 

Special Civil Part in Somerset County. After the parties 

presented their arguments, that court also relied upon the 

holdings in Sliger, Palmer, and our decision in Docteroff v. 

Barra Corp. of America, 282 N.J. Super. 230 (App. Div. 1995), as 

well as the United States District Court's opinion in Tele-Radio 

Systems, Ltd. v. De Forest Electronics, Inc., 92 F.R.D. 371 

(D.N.J. 1981), and granted Thiel's motion as it pertained to 

plaintiff's claim against him, but denied it as to Thiel's 

counterclaim under the FDCPA. The court, relying upon Beattie 

v. D.M. Collections, Inc., 754 F. Supp. 383, 394 (D. Del. 1991) 

found that plaintiff did not violate the act.

Plaintiff filed a notice of appeal in all three cases, and 

Thiel filed a cross-appeal from the denial of his motion for 

statutory damages and counsel fees under the FDCPA.

In all three appeals, plaintiff challenges the courts' 

treatment of "an agreement between a buyer and a third-party 

financier who is neither the seller nor an assignee of the 

seller to provide credit for the purchase of goods [as 

equivalent to] a contract for the sale of goods [that is] 

subject to the four-year limitations period of the [UCC]." It 
9 A-5797-13T2

also argues that all three defendants were not entitled to 

summary judgment and, in the Acevedo and Johnson matters, that 

the court improperly relied upon our unpublished opinion. 

In the Thiel appeal, plaintiff, relying upon the parties' 

responses to requests for admissions and Thiel's statement of 

material facts, further contends summary judgment was 

inappropriate and challenges the court's determination regarding 

plaintiff's claim that discovery was necessary before the 

motions should have been decided. In his cross-appeal, Thiel 

contends the court erred when it failed to award him damages and 

fees under the FDCPA, arguing the statute imposes strict 

liability and "[d]ebt collection matters initiated past the 

applicable statute of limitations violate the Act[,] entitling 

defendant to statutory damages and mandatory attorney fees."

"We review an order granting summary judgment 'in 

accordance with the same standards as the motion judge.'" 

Johnson v. Roselle EZ Quick LLC, __ N.J. __, __ (2016) (slip op. 

at 18) (quoting Bhagat v. Bhagat, 217 N.J. 22, 38 (2014)). 

"Such a motion will be granted if the record demonstrates that 

there is no genuine issue of material fact and 'the moving party 

is entitled to a judgment or order as a matter of law.'" Ibid.

(quoting R. 4:46-2(c)).
10 A-5797-13T2

"We review questions of law de novo, and do not defer to 

the conclusions of the trial . . . courts." Ibid. Which 

statute of limitations applies to a claim, and whether the 

filing of a complaint after that period has passed constitutes a 

violation of the FDCPA, are "purely legal question[s] of 

statutory interpretation." Ibid.; see also Town of Kearny v. 

Brandt, 214 N.J. 76, 92-94 (2013); Zabilowicz v. Kelsey, 200 

N.J. 507, 512-13 (2009); J.P. v. Smith, 444 N.J. Super. 507, 520 

(App. Div.), certif. denied, __ N.J. __ (2016).

Applying this standard, we find plaintiff's arguments 

regarding the inapplicability of the four-year statute of 

limitations under N.J.S.A. 12A:2-7255 to be without merit, and we 

 

5 Plaintiff argues N.J.S.A. 2A:14-1 should apply. That statute 

provides:

Every action at law for . . . recovery upon 

a contractual claim or liability, express or 

implied, not under seal, or upon an account 

other than one which concerns the trade or 

merchandise between merchant and merchant, 

their factors, agents and servants, shall be 

commenced within 6 years next after the 

cause of any such action shall have accrued.

This section shall not apply to any action 

for breach of any contract for sale governed 

by [N.J.S.A. 12A:2-725].

[N.J.S.A. 2A:14-1 (Emphasis added).]

N.J.S.A. 12A:2-725, in turn, provides that "[a]n action for 

breach of any contract for sale must be commenced within four 

(continued)
11 A-5797-13T2

affirm substantially for the reasons expressed by the two motion 

judges. We add only the following brief comments.

"[I]n determining whether a contract is for 'sale of 

goods,' and thus covered by [N.J.S.A. 12A:2-725], a court must 

examine the whole transaction between the parties and look to 

the essence or main objective of the parties' agreement."

Docteroff, supra, 282 N.J. Super. at 240. The basis for the 

four-year statute's applicability to store-issued credit cards 

was provided by the Court in Sliger, which affirmed the nature 

of the subject transactions as a sale of goods. See Sliger, 

supra, 59 N.J. at 467. In Palmer and Arce, the Court and the 

Appellate Division determined that the fact that a third-party 

creditor provided the financing for a sale of goods did not 

change the nature of the transaction as a sale of goods. See

Palmer, supra, 47 N.J. at 187; Arce, supra, 348 N.J. Super. at

199-200. 

The Special Civil Part judges also correctly determined 

there was no basis to deny summary judgment as to this issue in 

any of the three cases. Plaintiff failed to create any genuine 

issues of material fact regarding the statute of limitations. 

Although plaintiff argues that it should have been entitled to 

 

(continued)

years after the cause of action has accrued." N.J.S.A. 12A:2-

725(1).
12 A-5797-13T2

further discovery, it failed to meet its burden as the party 

seeking additional discovery to demonstrate how additional 

discovery would change the outcome of the case. See Badiali v. 

N.J. Mfrs. Ins. Grp., 220 N.J. 544, 555 (2015).

We also find no merit in plaintiff's contention that 

Thiel's partial payments, which were all less than the minimum 

amount required by his credit card agreement, tolled the running 

of the statute of limitations.6 "A cause of action will accrue 

on the date that 'the right to institute and maintain a suit 

first arose,'" and "generally coincides with 'the date on which 

the statutory clock begins to run.'" Johnson, supra, __ N.J. at 

__ (slip op. at 30) (quoting White v. Mattera, 175 N.J. 158, 

164 (2003)). "In an action on a sales contract, '[a] cause of 

action accrues when the breach occurs.'" Deluxe Sales & Serv., 

Inc. v. Hyundai Eng'g & Constr. Co., 254 N.J. Super. 370, 375

(App. Div. 1992) (quoting N.J.S.A. 12A:2-725(2)). In collection 

actions, the right to institute and maintain a suit arises on

the date of default — the first date on which the debtor fails 

to make a minimum payment. See id. at 374-75. The fact that 

 

6 Plaintiff argues that Thiel's last payment was in February 

2010, at which time the statute began to run. We disagree with 

both contentions as, according to Thiel's account statements, 

the payment made on that date was reversed on the same day. The 

last partial payment appears to have been made in December 2009, 

but, as discussed above, the statute had already begun to run.
13 A-5797-13T2

Thiel made partial payments less than the minimum payment 

required after the date of default does not change the date of 

default, and thus does not change the date on which the cause of 

action accrued.

We turn to the trial courts' disparate treatment of 

defendants' FDCPA claims, and part company with the Somerset 

County Special Civil Part's determination that filing a timebarred action cannot be the basis for a claim under the act. We 

agree with the Passaic County Special Civil Part's decision that 

filing the action is automatically a violation, absent a showing 

that the complaint's filing was the result of a "bona fide 

error."

The purpose of the FDCPA is to protect consumers from 

"abusive debt collection practices by debt collectors . . . and 

to promote consistent State action to protect consumers against" 

such practices. 15 U.S.C.A. § 1692(e); see also Hodges v. Sasil 

Corp., 189 N.J. 210, 222 (2007). To prevail, a debtor must 

prove: "(1) she is a consumer, (2) the [party seeking payment] 

is a debt collector, (3) the . . . challenged practice involves 

an attempt to collect a 'debt' as the Act defines it, and (4) 

the [collector] has violated a provision of the FDCPA in 

attempting to collect the debt." See Douglass v. Convergent 

Outsourcing, 765 F.3d 299, 303 (3d Cir. 2014).
14 A-5797-13T2

Because the [FDCPA] imposes strict 

liability, a consumer need not show 

intentional conduct by the debt collector to 

be entitled to damages. However, a debt 

collector may escape liability if it can 

demonstrate by a preponderance of the 

evidence that its "violation [of the Act] 

was not intentional and resulted from a bona 

fide error notwithstanding the maintenance 

of procedures reasonably adapted to avoid 

any such error." [U.S.C.A.] § 1692k(c).

[Rutgers — The State Univ. v. Fogel, 403 

N.J. Super. 389, 392 n.2 (App. Div. 2008)

(second alteration in original) (quoting 

Russell v. Equifax A.R.S., 74 F.3d 30, 33-34 

(2d Cir. 1996)).]

See also Jerman v. Carlisle, McNellie, Rini, Kramer & Ulrich, 

L.P.A., 559 U.S. 573, 578, 130 S. Ct. 1605, 1609, 176 L. Ed. 2d 

519, 525 (2010). However, "ignorance of the law will not excuse 

any person" from liability under the FDCPA, "even if the actor 

lacked actual knowledge that [the] conduct violated the law." 

Id. at 581-83, 130 S. Ct. at 1611-12, 176 L. Ed. 2d at 527-28.

There is no prohibition against a creditor seeking the 

voluntary repayment of a debt. Under New Jersey law, after the 

statute of limitations has run, a debt is not extinguished but 

is unenforceable in a court of law. Huertas v. Galaxy Asset 

Mgmt., 641 F.3d 28, 32 (3d Cir. 2011) (citing R.A.C. v. P.J.S., 

Jr., 192 N.J. 81, 98 (2007)). The expiration of the statute of 

limitations does not absolve the debtor of the debt owed, but 

gives the debtor a complete defense to the creditor's attempt to 
15 A-5797-13T2

collect on the debt in a collection action. Ibid. Therefore, a 

debt collector does not violate the FDCPA by seeking voluntary 

payment of the debt, provided the collector "does not initiate 

or threaten legal action in connection with its debt collection 

efforts." Id. at 33.

A debt collector violates the FDCPA if "he [or she]

threaten[s or commences] a lawsuit on a debt which [he or she] 

'knows or should know is unavailable or unwinnable by reason of 

a legal bar such as the statute of limitations.'" Ibid.

(quoting Beattie, supra, 754 F. Supp. at 393). Thus, a debt 

collector violates the FDCPA by initiating "a lawsuit on a debt 

that appears to be time-barred, without . . . having first 

determined after a reasonable inquiry that [the] limitations 

period has been or should be tolled." Ibid. (quoting Kimber v. 

Fed. Fin. Corp., 668 F. Supp. 1480, 1487 (M.D. Ala. 1987)). 

Where there is no evidence raised establishing that the creditor 

made a "bona fide error notwithstanding the maintenance of 

procedures reasonably adapted to avoid any such error," the act 

is violated and sanctions may be imposed. See 15 U.S.C.A.

1692k(c); see also Fogel, supra, 403 N.J. Super. at 392 n.2; 

Kimber, supra, 668 F. Supp. at 1488-89; Jackson v. Midland 

Funding, LLC, 754 F. Supp. 2d 711, 714-16 (D.N.J. 2010), aff’d,

468 F. App'x 123 (3d Cir. 2012).
16 A-5797-13T2

Our review of the motion record in these matters leads us 

to conclude that plaintiff knew or at least should have known 

its claims were time-barred. In Acevedo's case, her statement 

of material facts stated that plaintiff admitted in its answer 

to her counterclaim that it knew she had defaulted in 2009, 

which plaintiff again admitted in its response, but it failed to 

file suit until 2014. In the Johnson action, plaintiff admitted 

in response to a request for admissions that Johnson had been in 

default since December 2008, and it did not file suit until 

2014. In Thiel's action, it was not disputed that Thiel 

defaulted by April 2009, and the complaint against him was not 

filed until July 2013, although plaintiff believed that a 

payment or two of less than the minimum amount owed tolled the 

running of the statute. Plaintiff's opposing submissions never 

raised any other issue as to why it failed to file within the 

appropriate limitations period, other than its contention that 

the six-year statute applied. It did not plead "bona fide 

error" as an affirmative defense, nor did it raise any issues as 

to what procedures it had in place to avoid its error or what 

reasonable inquiry it made into the applicable statute of 

limitations. Plaintiff simply operated under the wrong 

impression as to the applicable statute of limitation and became 

liable to defendants under the FDCPA, entitling them to damages, 
17 A-5797-13T2

counsel fees and costs. See Jackson, supra, 754 F. Supp. 2d at 

715 (holding creditor liable under the FDCPA for filing suit 

after expiration of applicable state's statute of limitations).

To the extent we have not expressly addressed any of 

plaintiff's remaining arguments, we find them to be without 

sufficient merit to warrant discussion in a written opinion. R.

2:11-3(e)(1)(E).

Accordingly, we affirm the dismissal of plaintiff's 

complaints in all three matters and the trial court's award of 

damages and counsel fees to Acevedo and Johnson under the FDCPA; 

but we reverse the dismissal of Thiel's claim for the same award 

and remand to the trial court for entry of an order awarding 

damages and counsel fees.

Affirmed in part; reversed and remanded in part. We do not 

retain jurisdiction.