United States District Court, D. Massachusetts
MEMORANDUM & ORDER
TALWANI UNITED STATES DISTRICT JUDGE.
Amos Financial LLC ("Amos") filed this action in
Massachusetts state court for enforcement of a judgment
against Defendant Law Office of Charles P. Kazarian, P.C.
("Kazarian P.C.") for failing to make payment under
a promissory note and against Defendant Charles Kazarian,
Esq., d/b/a Kazarian Law ("Kazarian") via claims of
successor liability, de facto merger, and mere continuation.
Compl. [#1-1 Ex. A]. Defendant Kazarian filed a counterclaim,
alleging violations of the federal Fair Debt Collection
Practices Acts and its Massachusetts equivalent. Defs’
Answer Countercl. [#22 ¶¶ 25-32]. Currently pending
before the court is Plaintiff’s Motion to Dismiss
Counterclaim of Defendant, Charles Kazarian. [#23].
survive a motion to dismiss under Rule 12(b)(6), a complaint
must state a "claim upon which relief can be
granted." Fed.R.Civ.P. 12(b)(6). The complaint must
contain sufficient factual material "to ‘state a
claim to relief that is plausible on its face.’"
Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting
Bell Atl. Corp. v. Twombly, 550 U.S. 544, 559
alleges that he is a member of the Massachusetts Bar, and
that he practiced law in the form of a professional
corporation known as Charles P. Kazarian, P.C. until June
2010. Answer Countercl. [#22 ¶¶ 1-3]. Kazarian P.C.
had a $100, 000 revolving line of credit with Bank of New
England. Id. ¶ 5. The loan was memorialized in
a promissory note executed between Bank of New England and
Kazarian P.C. Id. The promissory note stated that
the loan was payable interest only, had a call provision, and
had a provision that the principle balance be paid to zero
once per year. Id. Despite the condition in the
promissory note, Bank of New England never enforced the zero
balance provision. Id at ¶ 6.
New England dissolved, and Shawmut Bank became its successor.
Id. When it became the successor, Shawmut Bank
requested that Kazarian supplement the promissory note with
his personal guarantee. After Kazarian declined to provide
the personal guarantee, Shawmut accepted the terms of the
promissory note anyway, and continued to accept Kazarian
P.C.’s monthly interest payments, and declined to
enforce the zero balance provision. Id. ¶ 7.
Bank also dissolved, and was taken over by Sovereign Bank.
Id. at ¶ 7. Sovereign Bank requested Kazarian
to personally guarantee the promissory note, but Kazarian
refused. Sovereign Bank thereafter accepted Kazarian
P.C.’s monthly interest payments, and also declined to
enforce the zero balance provision. Id. at ¶ 8.
Kazarian P.C. borrowed approximately $90, 000 against the
note, and while paying substantial interest payments, had not
paid back any of the principal. Id. at 8.
2009, Sovereign Bank was taken over by Santander. Santander
demanded a personal guarantee from Kazarian, and Kazarian
refused. Santander thereafter turned the matter over to their
in-house collection people. Id. at ¶ 10. After
discussions began between Kazarian P.C. and Santander,
Kazarian P.C. paid $1, 000 toward the principal along with
the interest payment that was currently due. Id. at
¶ 10. Kazarian P.C. and Santander continued to
negotiate, but failed to formalize a new agreement, and in
June of 2010, Santander swept all of the cash in Kazarian
P.C.’s operating account. Id. at ¶ 13.
Kazarian thereafter abandoned Kazarian P.C., and began
practicing law under the name Kazarian Law.
December of 2010, Plaintiff sent Kazarian a letter claiming
that Plaintiff owned the promissory note and that Kazarian
was personally responsible for the borrowing. Id. at
¶ 16. Plaintiff’s employees began dunning Kazarian
over the phone, calling him a deadbeat, and insisting that he
personally guaranteed the promissory note. Id. at
¶ 17. Plaintiff also began a civil action against
Kazarian P.C. in Suffolk Superior Civil Court. Id.
at ¶ 18. On October 11, 2011, that suit was dismissed
without prejudice. In April 2012, Plaintiff filed another
action against Kazarian P.C. in Suffolk Superior Court.
Plaintiff failed to obtain proper service on Kazarian P.C.,
and instead tried to serve Kazarian personally. Id.
at ¶ 23. Despite faulty service, in July 2013, Plaintiff
filed a default judgment against Kazarian P.C. Id.
at ¶ 24.
argues that Kazarian’s counterclaims should be
dismissed under Fed.R.Civ.P. 12(b)(6) because they fail to
state a claim for relief. Specifically Plaintiff argues that
Kazarian’s counterclaims, which are based on violations
of the federal Fair Debt Collection Practices Act 15 U.S.C.
§ 1692, and its Massachusetts equivalent, Mass. Gen.
Laws. ch. 93 § 49, do not apply to business loans. Per
Plaintiff, the underlying debt that Plaintiff seeks to
recover was a business loan, and as such the protections
under the consumer protection statutes do not apply. Kazarian
argues that while Plaintiff’s complaint alleged that
the original loan was a business loan, the complaint alleges
further that the loan was used for personal, family, or
household purposes. Kazarian’s Opp’n ...