Michael Ogbin v. Fein, Such, Kahn and Shepard ( 2011 )


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  •                                                               NOT PRECEDENTIAL
    
           UNITED STATES COURT OF APPEALS FOR THE THIRD CIRCUIT
    
    
    
                                         No. 09-2829
    
    
               MICHAEL OGBIN; LYNN OGBIN, individually and as a class
                   representative On behalf of others similarly situated,
                                                                      Appellant
                                            v.
    
                        FEIN, SUCH, KAHN AND SHEPARD, P.C.;
                      JOHN DOE 1-100; JOHN DOE SERVICES 1-100
    
    
                       On Appeal from the United States District Court
                                 for the District of New Jersey
                                   (D.C. No. 2-08-cv-04138)
                       District Judge: Honorable Dennis M. Cavanaugh
    
    
                                     Argued June 29, 2010
    
               Before: SLOVITER, BARRY and HARDIMAN, Circuit Judges
    
                                   (Filed: February 22, 2011)
    
    
    Lewis G. Adler (Argued)
    Woodbury, N.J. 08096
    
          Attorney for Appellant
    
    Gregory E. Peterson
    Andrew C. Sayles (Argued)
    Connell Foley
    Roseland, N.J. 07068
    
          Attorneys for Appellee
                                             ____
    
                                          OPINION
    
    
    SLOVITER, Circuit Judge.
    
          This case presents the same two questions of law that we recently decided
    
    in Allen v. LaSalle Bank, N.A., --- F.3d ----, No. 09-1466, 
    2011 WL 94420
     (3d Cir.
    
    Jan 12, 2011): (1) whether a communication from a debt collector to a
    
    consumer=s attorney is actionable under ' 1692f(1) of the Fair Debt Collection
    
    Practices Act (AFDCPA@); and (2) whether the New Jersey litigation privilege
    
    absolves a debt collector of liability under the FDCPA. The District Court here
    
    concluded that communications to attorneys are not actionable under the FDCPA
    
    and that the New Jersey litigation privilege creates an exemption to liability
    
    thereunder. In accordance with our decision in Allen, we will affirm in part,
    
    vacate in part, and remand for further proceedings.1
    
          Law firm Fein, Such, Khan and Shepard, P.C. (AFSKS@) filed a foreclosure
    
    action on behalf of loan servicer, West Coast Realty, LLC (AWCRSI@), against
    
    Michael and Lynn Ogbin after they defaulted on the second mortgage on their
    
    home. At the request of the Ogbins= attorney, FSKS sent two letters (the APayoff
    
    Letters@) to the attorney for the Ogbins during the pendency of the foreclosure
    
    proceedings. The first letter set forth the outstanding principal and interest owed
    
          1
              The District Court had jurisdiction under 28 U.S.C. ' 1331 and this court has
    jurisdiction under 28 U.S.C. ' 1291.
    
                                               2
    on the loans and FSKS=s attorney=s fees and costs. The second letter revised
    
    the first and itemized FSKS=s attorney=s fees and costs associated with the
    
    foreclosure action.
    
          The Ogbins and WCRSI subsequently settled the foreclosure action.
    
    Thereafter, the Ogbins filed a class action complaint against FSKS, alleging that
    
    FSKS violated the FDCPA and asserting common law claims. Specifically, the
    
    complaint alleged that the Payoff Letters violated ' 1692f(1) of the FDCPA
    
    because they contained charges for which FSKS could not legally collect under
    
    state law or the mortgage contract, and because they contained overcharges in
    
    violation of various state statutory caps and/or were in excess of what was
    
    actually owed. See 15 U.S.C. '' 1692f, 1692f(1) (AA debt collector may not use
    
    unfair or unconscionable means to collect or attempt to collect any debt@ including
    
    A[t]he collection of any amount . . . unless such amount is expressly authorized by
    
    the agreement creating the debt or permitted by law.@). The complaint also
    
    asserted claims of negligence and intentional misrepresentation based upon the
    
    alleged misstatements in the Payoff Letters.
    
          The District Court dismissed the complaint on FSKS=s motion to dismiss for
    
    failure to state a claim upon which relief could be granted pursuant to Rule
    
    12(b)(6) of the Federal Rules of Civil Procedure. Ogbin v. Fein, Such, Kahn &
    
    Shepard, PC, No.
    
    08-cv-4138, 
    2009 WL 1587896
     (D.N.J. June 1, 2009). In doing so, the Court
    
                                             3
    held that the Ogbins= common law claims of intentional misrepresentation and
    
    negligence were barred by the New Jersey litigation privilege and similarly failed
    
    because the complaint did not allege any cognizable damages stemming from the
    
    alleged overcharges. Id. at *3. The Court also concluded that the Ogbins=
    
    negligence claim was lacking on the basis that FSKS did not owe the Ogbins a
    
    duty of care because the Ogbins were represented by counsel in an action in
    
    which they were adverse to FSKS. Id. at *4. With respect to the Ogbins=
    
    FDCPA claims, the Court held that they were barred by the New Jersey litigation
    
    privilege, and alternatively that the Payoff Letters, which were sent to the Ogbins=
    
    attorney, were not actionable under the FDCPA. Id. at *2, *4. The Ogbins
    
    appeal.2
    
          There was no error in the District Court=s conclusion that the Ogbins failed
    
    to state common law claims of intentional misrepresentation and negligence.
    
    The Payoff Letters, which were sent by FSKS during the pendency of the
    
    foreclosure proceedings for the purpose of facilitating those proceedings, fall
    
    squarely within the scope of the New Jersey litigation privilege. See Hawkins v.
    
    Harris, 
    661 A.2d 284
    , 289 (N.J. 1995) (AThe absolute privilege applies to >any
    
    
          2
              We conduct a plenary review of the District Court=s order granting a motion to
    dismiss for failure to state a claim. Gelman v. State Farm Mut. Auto. Ins. Co., 
    583 F.3d 187
    , 190 (3d Cir. 2009). We accept all factual allegations in the complaint as true,
    construe it in the light most favorable to the Ogbins, and determine whether, under any
    reasonable reading of the complaint, the Ogbins may be entitled to relief. See id.
    
    
                                                4
    communication (1) made in judicial or quasi-judicial proceedings; (2) by litigants
    
    or other participants authorized by law; (3) to achieve the objects of the litigation;
    
    and (4) that have some connection or logical relation to the action.=@) (quoting
    
    Silberg v. Anderson, 
    786 P.2d 365
    , 369 (Cal. 1990)). Because the Ogbins=
    
    common law claims are precluded by the litigation privilege, they cannot be the
    
    subject of liability against FSKS. See Rickenbach v. Wells Fargo Bank, N.A.,
    
    
    635 F. Supp. 2d 389
    , 401 (D.N.J. 2009) (A[T]he litigation privilege protects attorneys
    
    not only from defamation actions, but also from a host of other tort-related
    
    claims.@) (quotation omitted). Accordingly, we will affirm that part of the District
    
    Court=s judgment dismissing the Ogbins= claims of intentional misrepresentation
    
    and negligence.
    
          On the other hand, this court=s decision in Allen requires remand of the
    
    Ogbins= FDCPA claims. In Allen, we concluded on substantially similar facts as
    
    alleged here, that letters to a debtor=s attorney are actionable under ' 1692f(1) of
    
    the FDCPA if those letters attempt to collect any amount not expressly authorized
    
    by the agreement creating the debt or permitted by law. --- F.3d at ----, 
    2011 WL 94420
    , at *4. We also concluded that the New Jersey litigation privilege does
    
    not absolve a debt collector from FDCPA liability. Id. In light of Allen, we will
    
    vacate and remand that part of the District Court=s judgment dismissing the
    
    Ogbins= FDCPA claims. We leave to the District Court to determine whether the
    amounts FSKS sought in the Payoff Letters are not permitted by the agreement
    
    authorizing the Ogbins= debt or by state law, such that the Ogbins have stated
    
    viable claims under ' 1692f(1) of the FDCPA.
    
         Accordingly, we will affirm in part, vacate in part, and remand for further
    proceedings.