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Kieffer v. New Century Financial Services, Inc.

2011 WL 1899272 (U.S. Dist. Ct. D. N.J. 2011) (Unpublished)

FDCPA — Knowingly levying upon a joint account in New Jersey, where the debtor is only one of the account owners, is a violation of the Fair Debt Collection Practices Act because, in New Jersey, joint account holders are entitled to a presumption of half ownership.

A husband and wife shared two joint bank accounts at a bank. Prior to their marriage, the wife incurred credit card debts. The lender sold the debts to a financial services company, which retained a law firm to collect the debts. As part of its collection efforts, the law firm located and levied on bank accounts in the wife’s name at the bank, including both of the joint bank accounts. The couple claimed that the Fair Debt Collection Practices Act (FDCPA) was violated when the levies were placed on the entirety of the joint bank accounts when only one of the account holders was a judgment debtor. Furthermore, the couple asserted that the levies placed on the husband’s money, were liens on an innocent third party’s money, and amounted to trespass to chattels or conversion and caused either negligent or intentional emotional distress. The debt collecting parties filed a motion alleging that the couple had failed to state a claim in which relief could be granted.

The United States District Court reviewed New Jersey law and found that state law mandates that joint account holders be entitled to a presumption of half ownership. The debt collecting parties certified that they were unaware of the joint account status. It found that such an assertion was outside the scope of the complaint and thus extrinsic to the pleadings on which the motion could be decided. Because there had been no discovery, the Court refused to convert the current motion into one that essentially would mimic a summary judgment motion.

Although the Court rejected the collecting parties’ motion regarding the FDCPA claim, it dismissed the emotional distress claim. The Court found that the collecting parties’ conduct did not even remotely resemble the outrageous and atrocious conduct that New Jersey law requires for such a cause of action.

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