Franklin v. Cona Elder Law, PLLC

Background

The Wartburg Home of the Evangelical Lutheran Church engaged Cona Elder Law, PLLC, and attorney Ken Kern to pursue debt-collection lawsuits. Wartburg provided care to Alphonso Franklin’s mother during three periods in 2017 and 2018. Franklin alleged that he did not know she owed Wartburg $19,140 plus interest when she died.

On Wartburg’s behalf, Cona filed a New York state-court action against Franklin and his mother. The action included a fraudulent-conveyance claim against Franklin, alleging on information and belief that his mother had wrongfully transferred assets and income to him to prevent Wartburg from collecting money owed for her care. The state court later dismissed the amended complaint’s fraudulent-conveyance claim because it was overly broad, vague, insufficient, and did not disclose the source of the information pleaded on information and belief.

Franklin then filed this federal action. He asserted one federal claim under the Fair Debt Collection Practices Act, or FDCPA, against the Cona Defendants—Cona and Kern—and three state-law claims against the Cona Defendants and Wartburg. The defendants moved to dismiss under Federal Rule of Civil Procedure 12(b)(6), which allows dismissal when a complaint does not state a legally sufficient claim.

FDCPA claim

The FDCPA prohibits debt collectors from using false, deceptive, or misleading representations or means to collect a debt, and from using unfair or unconscionable means. The court applied the “least sophisticated consumer” standard, under which a communication is deceptive or misleading if it has more than one reasonable interpretation and at least one interpretation is inaccurate.

The court held that the complaint did not plausibly identify anything in the state-court pleadings that was a false, deceptive, or misleading representation or means of debt collection. The complaint did not dispute that Wartburg provided care to Franklin’s mother or that the state-court action sought to collect an amount allegedly owed for that care.

Franklin argued that the Cona Defendants had no factual basis for the fraudulent-conveyance allegation, that pleading on information and belief showed the absence of such a basis, and that there was no basis for seeking attorney’s fees because those fees could be recovered only from someone who engaged in a fraudulent conveyance with actual intent. The court rejected these arguments. It relied on the principle that an allegation, standing alone, that a defendant filed and pursued a lawsuit without sufficient evidence does not state that the lawsuit was a false, deceptive, or misleading means of collecting a debt.

The court also held that Franklin did not plausibly allege that the fraudulent-conveyance claim was an unconscionable means of obtaining payment. The court therefore dismissed the FDCPA claim.

State-law claims and disposition

After dismissing the only federal claim, the court considered whether to exercise supplemental jurisdiction—the authority to hear related state-law claims in the same federal case. The court declined to exercise that jurisdiction because the federal claim had been resolved, discovery had not begun, and judicial economy and respect for state courts favored dismissal of the remaining claims.

The court granted the July 14, 2021 motion of Cona Elder Law, PLLC and Ken Kern to dismiss. The FDCPA claim was dismissed with prejudice. The court declined to exercise supplemental jurisdiction over the state-law claims and dismissed them without prejudice to refiling in state court. The Clerk of Court was directed to close the case.