A pro se plaintiff’s lawsuit brought pursuant to the Fair Debt Collection Practices Act was dismissed by the District of New Jersey for lack of standing in Kraft v. Phelan Hallinan Diamond & Jones, P.C., U.S. Dist. LEXIS 126323 (D. N.J. July 30, 2019). Plaintiff Warren R. Kraft inherited real estate from his deceased father who previously had taken out a mortgage on the property. The mortgage was in default, and when Phelan Hallinan pursued foreclosure, Kraft filed suit under the FDCPA alleging misrepresentations.

The Court granted dismissal of the lawsuit, ruling that Kraft lacked standing because he is not “personally obligated or allegedly obligated to pay any debt.” Here, it was clear that Kraft did not sign the promissory note which was instead signed by Kraft’s father and Kraft’s ex-wife. Therefore he was not personally obligated on the debt. Phelan Hallinan could enforce the lien on the property and foreclose, but it could not sue Kraft personally for a debt owed by his father.

Kraft argued that he was a consumer with standing because he is a “homeowner” and is “obligated or alleged to be obligated to pay the aforesaid principal debt … incidental to the mortgage because of a covenant that runs with the aforesaid residential property.” The Court rejected this argument as a “bald, conclusory statement which this Court may not consider in ruling on Defendants’ Motion to Dismiss.” Kraft failed to allege facts that supported that he owed a debt. The Court did not opine whether Kraft pled any facts that he “allegedly” owed a debt. However, it is clear that a complaint asserting violations of the FDCPA must allege more than the conclusory statement that the plaintiff is a consumer who owes or allegedly owes a debt.

This case bolsters the FDCPA’s limitation to “consumers” and that mere “homeowners” do not have standing to file suit. Troutman Sanders will continue to monitor the case for appeal.