NOT FOR PUBLICATION

UNITED STATES DISTRICT COURT

DISTRICT OF NEW JERSEY

TARA ELMS HENDERSON,

Plaintiff, 

v. 

WEINSTEIN & RILEY, P.S., PC., and

KENNETH STEVEN JANNETTE,

Defendants. 

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Hon. Dennis M. Cavanaugh

OPINION

Civil Action No. 11-cv-2607 (DMC)(MF)

DENNIS M. CAVANAUGH, U.S.D.J.:

This matter comes before the Court upon the Motion of Defendants Weinstein & Riley, P.S.,

P.C. (“W & R”) and Kenneth Steven Jannette (“Jannette”) (collectively, “Defendants”) to Dismiss

the Complaint, and upon Defendants’ Motion for Sanctions. ECF No.’s 6, 11. Pursuant to FED. R.

CIV. P. 78, no oral argument was heard. After carefully considering the submissions of the parties,

and based upon the following, it is the finding of this Court that Defendants’ motions are denied.

I. BACKGROUND1

This matter involves allegedly unlawful debt collection practices. Plaintiff is Tara Elms

Henderson (“Plaintiff”). W & R is a professional corporation organized and existing under the laws

of the State of New Jersey. Compl. ¶ 8, ECF No. 1. Jannettee is an attorney admitted to practice

 The following background is based on the Complaint, the factual allegations of which 1

this Court is required to accept as true.

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in the State of New Jersey, who was employed at all relevant times by W & R as a collection agent. 

Compl. ¶ 10. 

Plaintiff filed for bankruptcyprotection underChapter 7 of Title 11 of the United States Code 

on March 31, 2011. Compl. ¶ 26. Prior to Plaintiff’s filing for bankruptcy, on or about November

15, 2010, Plaintiff allegedly incurred a financial obligation to Discover Bank, Issuer of the Discover

Card (“Discover”). Compl. ¶ 23. At some point prior to April 26, 2011, Plaintiff’s financial

obligation was transferred by Discover to W & R for collection. Compl. ¶ 27. The Bankruptcy

Court issued an order discharging Plaintiff on July 8, 2011, and the bankruptcy proceedings closed

on August 2, 2011. Compl. ¶¶ 7, 26.

On April 26, 2011, during the bankruptcy proceedings and before discharge, Defendants sent

a collection letter to Plaintiff’s attorney, offering to settle the disputed financial obligation either by

installments or by a one time cash settlement at a reduced amount (the “Collection Letter”). Compl.

¶ 30; Ex. A to Compl., ECF No. 4. Along with the Collection Letter, Defendants sent a Notice of

Examination in Accordance with F.R.B.P. 2004 and Local Rule 2004-1 (“Notice of Rule 2004

Examination”) to Plaintiff’s attorney. Compl. ¶ 31; Ex. A to Compl. Plaintiff claims that the

Collection Letter and the Notice of Rule 2004 Examination violate “numerous and multiple”

provisions of the Fair Debt Collection Practices Act, 15 U.S.C. §§ 1692 et seq. (“FDCPA”). 

On May 6, 2011, Plaintiff filed her Complaint with this Court. On May 27, 2011, Defendants

filed the present Motion to Dismiss the Complaint, pursuant to FED.R.CIV.P. 12(b)(6). Defendants

filed a Motion for Sanctions, pursuant to FED. R. CIV. P . 11, on June 28, 2011. Plaintiff filed

Oppositions to Defendants’ Motion to Dismiss and Motion for Sanctions on June 6, 2011 and July

15, 2011, respectively. ECF Nos. 9, 12. The Motions are now before this Court.

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II. STANDARD OF REVIEW

A. Motion to Dismiss

In deciding a motion under FED. R. CIV. P 12(b)(6), the district court is “required to accept

as true all factual allegations in the complaint and draw all inferences in the facts alleged in the light

most favorable to the [plaintiff].” Phillips v. Countyof Allegheny, 515 F.3d 224, 228 (3d Cir. 2008). 

“[A] complaint attacked by a Rule 12(b)(6) motion to dismiss does not need detailed factual

allegations.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007). A plaintiff’s obligation to

provide the grounds of his entitlement to relief, however, “requires more than labels and conclusions,

and a formulaic recitation of the elements of a cause of action will not do.” Id. To survive a motion

to dismiss, the complaint must state a plausible claim. Ashcroft v. Iqbal, 129 S. Ct. 1937, 1950

(2009). Thus, assuming that the factual allegations in the complaint are true, those “[f]actual

allegations must be enough to raise a right to relief above a speculative level.” Twombly, 550 U.S.

at 555.

B. Motion for Sanctions

FED. R. CIV. P. 11 in pertinent part provides:

b) Representations to the Court. By presenting to the court a pleading, written

motion, or other paper–whether by signing, filing, submitting, or later advocating

it–an attorney or unrepresented party certifies that to the best of the person's

knowledge, information, and belief, formed after an inquiry reasonable under the

circumstances:

(1) it is not being presented for any improper purpose, such as to harass, cause

unnecessary delay, or needlessly increase the cost of litigation; [and]

(3) the factual contentions have evidentiary support or, if specifically so identified,

will likely have evidentiary support after a reasonable opportunity for further

investigation or discovery[.]

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FED.R.CIV.P. 11(b)(1) and (3). “Rule 11 is intended for only exceptional circumstances.” Gaiardo

v. Ethyl Corp., 835 F.2d 479, 483 (3d Cir. 1987). “The legal standard to be applied when evaluating

conduct allegedly violative of Rule 11 is reasonableness under the circumstances . . . with

reasonableness defined as an objective knowledge or belief at the time of the filing of a challenged

paper that the claim was well-grounded in law and fact.” Cottman v. Flower Manor Ltd. P’ship,

1992 U.S. Dist. LEXIS 19881 at *10-11 (E.D. Pa. Dec. 2, 1992) (internal citations and quotation

marks omitted). 

III. DISCUSSION

Defendants present two arguments in their Motion to Dismiss. First, Defendants argue that

the FDCPA claim pursued by Plaintiff is precluded by the Bankruptcy Code, 11 U.S.C. §§ 101 et

seq. Defs.’ Br. 4. Second, Defendants argue that even if the FDCPA claim is not precluded, the

correspondence at issue is not proscribed by the FDCPA. Defs.’ Br. 7. The Court will address each

of these arguments in turn.

Defendants draw the Court’s attention to a series of cases from this Circuit that have relied

on theNinth Circuit’s reasoning regarding the preclusion of FDCPA claims bythe BankruptcyCode.

Defs.’ Br. 4-7. In Walls v. Wells Fargo Bank, the Ninth Circuit found that no private cause of action

existed under Section 524(a)(2) of the Bankruptcy Code, and reasoned that “[t]o permit a

simultaneous claim under the FDCPA would allow through the back door what [plaintiff] cannot

accomplish through the front door–a private right of action.” 276 F.3d 502, 510 (9th Cir. 2002). 2

 Section 524(a) of the Bankruptcy Code provides that a discharge order releases a debtor 2

from personal liability with respect to any discharged debt by voiding any past or future

judgments on the debt and by operating as an injunction to prohibit creditors from attempting to

collect or to recover the debt. Tenn. Student Assistance Corp. v. Hood, 541 U.S. 440, 447

(2004). 

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In interpreting a different section of the Bankruptcy Code, Section 506(b), the Third Circuit cited

Walls approvingly, and found that no private cause of action existed under 506(b). Joubert v. ABN

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Mortg. Group, Inc., 411 F.3d 452, 455-56 (3d Cir. 2005). District Courts of this Circuit have applied

the reasoning of Walls and Joubert to their interpretation of Section 524(a)(2), and concluded that

no private cause of action exists pursuant to Section 524(a)(2). See, e.g., Townsend v. M & T

Mortgage Corp., No. 3:09-1866, 2010 U.S. Dist. LEXIS 62331 at *9 (M.D. Pa. June 22, 2010). The

Courts of this Circuit have further concluded, following the logic of Walls and Joubert, that FDCPA

claims are necessarily precluded by Section 524(a)(2). See id. at *13-14 (collecting cases). 

Defendants’ reliance on this line of cases is misplaced, however, as it requires an overly broad

interpretation of their holdings. 

Not all claims under the FDCPA are automatically precluded by the Bankruptcy Code. 

Dougherty v. Wells Fargo Home Loans, Inc. considered charges that a defendant improperly sought

to assess attorneys fees for debt collection on a mortgage during a pending bankruptcy. 425 F.Supp.

2d 599 (E.D. Pa. 2006). In that case, the court noted that the alleged violations complained of

occurred before discharge of the plaintiff’s bankruptcy, and therefore did not implicate Section 524

of the Bankruptcy Code. Id. at 604. The court thus found that it did not have to follow the logic of

Walls and Joubert. Id. Instead, the court cited to case law from the Seventh Circuit for the

proposition that FDCPA claims are not automaticallyprecluded bythe BankruptcyCode where those

claims can be determined without doing violence to the BankruptcyCode’s purpose of adjudicating

 Section 506(b) of the Bankruptcy Code provides holders of over-secured claims with an 3

unqualified right to post-petition interest, regardless of whether the agreement giving rise to the

claim provides for interest, until a plan’s confirmation date. Rake v. Wade, 508 U.S. 464, 468

(1993).

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all claims in a single proceeding. Id. at 605 (citing Randolph v. IMBS, Inc., 368 F.3d 726, 728 (7th

Cir. 2004); Wagner v. Ocwen Fed. Bank, No. 99-5404, 2000 U.S. Dist. LEXIS 12463 at *6 (N.D.

Ill. Aug. 28, 2000)). The court further noted that the purpose of the FDCPA is different from that

of the BankruptcyCode, as the FDCPA regulates how debt collectors interact with debtors, whereas

the Bankruptcy Code regulates what assets are made available to which creditors and how much is

left for debtors. Id. (citing Randolph, 368 F.3d at 731) (internal quotation marks omitted). For these

reasons, the Dougherty court found that the BankruptcyCode did not preclude FDCPA claims in the

circumstances considered.

Section 524 of the BankruptcyCode is not implicated in this case. The conduct complained

of, Defendants’ sending of the Collection Letter and the Notice of Rule 2004 Examination, occurred

prior to Plaintiff’s bankruptcy discharge. Thus, the reasoning of Walls and Joubert does not apply

to Defendants’ conduct. Further, Plaintiff’s claims require this Court to consider how debt collectors

interact with debtors, not whether an automatic stay violation, discharge violation, or any other

violation of the Bankruptcy Code occurred. Beyond their citation to the Walls line of cases,

Defendants have not pointed to any specific provisions of the BankruptcyCode that would otherwise

preclude Plaintiff’s FDCPA claim. Defendants’ argument of preclusion is therefore not persuasive.

Defendants’ second argument focuses on the merits of Plaintiff’s claims. In Count One of

the Complaint, Plaintiff alleges that Defendants’ debt collection attempt violated twelve specific

provisions of the FDCPA. Compl. ¶¶ 54-56. Plaintiff claims that these violations stem from both 4

the form and delivery of the Collection Letter and the Notice of Rule 2004 Examination, and makes

Specifically, Plaintiff has claimed that Defendants’ actions violated sections 1692d, 4

1692e, 1692e(2), 1692e(5), 1692e(9), 1692e(10), 1692e(11), 1692e(13), 1692f, 1692f(1),

1692f(6), and 1692g of the FDCPA. Compl. ¶ 55. 

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several factual assertions to that end. First, Plaintiff argues that the Notice of Rule 2004

Examination “provides false or misleading representations in its communications for failure to

complywith FED.R.CIV.P. 45(a)(1)(A)(iv) byfailing to provide the mandatoryconsumer protection

text of FED.R.CIV. P. 45(c) and (d).” Compl. ¶ 36. Second, Plaintiff argues that the Notice of Rule

2004 Examination “provides false or misleading representations in its communications for failure

to comply with FED. R. CIV. P. 45(a)(1)(B) by failing to state the method for recording the

testimony.” Compl. ¶ 37. Plaintiff also contends that the Notice of Rule 2004 Examination

“provides false or misleading representations in its communications for failure to comply with FED.

R. CIV. P. 45(a)(2)(B) by failing to be issued ‘from the court for the district where the deposition is

to be taken.’” Compl. ¶ 38. With respect to this contention, Plaintiff argues that the Notice of Rule

2004 Examination was issued from the United States Bankruptcy Court for the District of New

Jersey, but “compels” Plaintiff to appear for examination in the Southern District of New York. 

Compl. ¶ 38. Plaintiff also argues that Defendants’ communications violate the FDCPA because

they were not served on Plaintiff, but rather, on Plaintiff’s attorney. Compl. ¶ 39. Finally, Plaintiff

contends that Defendants have never “mailed anything to Plaintiff including the statutorynotification

requirement under 15 U.S.C. § 1692(g).” Compl. ¶ 40. 

Defendants do not directly address many of these arguments in their Motion to Dismiss. 

Rather, Defendants direct the Court’s attention to a number of cases filed by Plaintiff’s attorney in

which the same, or substantiallythe same, complaints concerningNotice of Rule 2004 Examinations

and other communications were examined. Defs.’ Br. 7-9. Defendants argue that the losses handed

to Plaintiff’s attorney in those cases should apply with equal force in this matter as well. Defs.’ Br.

7. In support, Defendants provide only unverified quotations to portions of various hearings

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transcripts from these cases. Defendants do not, however, suggest how the logic of those cases

should apply to the individual facts and circumstances of this case. Defendants also take issue with

Plaintiff’s attorney’s characterization of the record, arguing that Plaintiff “fragrantly [sic]

misrepresents the contents of the letters attached to her own complaint . . . .” Defs.’ Br. 10 n.3. In

so arguing, however, Defendants fail to address many of Plaintiff’s arguments, including, for

example, Plaintiff’s contention that the correspondences at issue violated FED.R.CIV.P. 45(a)(1)(A)

and FED. R. CIV. P. 45(a)(2)(B). The Court will not make those arguments for Defendants. 

Defendants’ Motion to Dismiss is therefore denied. Accordingly, Defendants’ Motion for Sanctions

is denied as well.

IV. CONCLUSION

For the foregoing reasons, Defendants’ Motion to Dismiss is denied. Defendants’ Motion

for Sanctions is denied. An appropriate Order accompanies this Opinion. 

 S Dennis M. Cavanaugh 

Dennis M. Cavanaugh, U.S.D.J.

Date: December 27 , 2011 

Orig.: Clerk 

cc: All Counsel of Record

Hon. Mark Falk, U.S.M.J.

File

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