FDCPA; JOINT ACCOUNTS — A creditor and its collection attorney may be liable for levying upon a joint bank account where not all parties are judgment debtors, but the Court suggests that there may be circumstances that would relieve a creditor and a creditor’s attorney from liability under the Fair Debt Collection Practices Act.
A married couple shared two joint bank accounts. Prior to their marriage, the woman incurred credit card debts for which collection was pursued after the marriage. As part of the collection efforts, the joint bank accounts were levied upon. In response, the couple claimed that the creditor and its collection attorney had violated the Fair Debt Collection Practices Act (FDCPA) “when they caused levies to be placed on the entirety of [their] joint bank accounts when only one of the account holders was a judgment debtor.” The essence of the complaint was that levies placed on the husband’s portion of the joint bank accounts had been placed on “the money of an innocent third party, amount[ing] to trespass to chattels or conversion ... .” The creditor and its attorneys moved to have the complaint dismissed on that basis that it failed to state a claim.
Under New Jersey law, “nless a contrary intent is manifested by the terms of the contract, or the deposit agreement, or there is other clear and convincing evidence of a different intent at the time the account is created: a. A joint account belongs, during the lifetime of all parties, to the parties in proportion by each to the sums on deposit. In the absence of proof of net contributions, the account belongs in equal shares to all parties having present right of withdrawal.” The presumption is rebuttable.
Based on New Jersey law, the couple argued that their accounts were entitled to the presumption of half ownership in each of the husband and wife. In response, the creditor and its collection attorneys asserted that “even if a creditor is only entitled to levy half of the amount in the joint account under New Jersey law, [they] were aware that [the couple’s] accounts were jointly held and therefore were not acting in an abusive or unconscionable way.”
Apparently, the bank never informed them that the accounts were jointly held. Further, they argued that the couple never disclosed this information in the wife’s response to an Information Subpoena and never raised the issue when the accounts were levied or during any subsequent communications. The Court absorbed this information, but refused to consider those statements because they were “extrinsic to the pleadings” and were not admissible when ruling on a motion to dismiss for failure to state a claim. It hinted that if the creditor and its attorneys had sought a summary judgment motion, the Court might have taken these statements into account. For those reasons, it would not dismiss the couple’s complaint on the motion to dismiss for failure to state a claim.
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