ORDER GRANTING DEFENDANTS' MOTION FOR SUMMARY JUDGMENT AND DENYING PLAINTIFF'S MOTION FOR SUMMARY JUDGMENT AND DEFENDANTS' MOTION FOR SANCTIONS

JOSEPH IRENAS, District Judge

Presently before the Court are Defendants' Motion for Summary Judgment (Docket No. 22), Defendants' Motion for Sanctions (Docket No. 26), and Plaintiffs' Motion for Summary Judgment on Liability Only (Docket No. 30). The Court having considered the submissions of the parties, and for the reasons set forth in an opinion issued by this Court on even date herewith, and for good cause appearing;

IT IS on this 29th day of June, 2009,

ORDERED THAT: GRANTED. DENIED. DENIED.

OPINION

I.

This case arises out of events that transpired in a collection action brought in the Superior Court of New Jersey, Law Division, by Defendant New Century Financial Services Inc. ("NCFSI"), through its counsel, Defendant Pressler Pressler, LLP ("Pressler"), against Norman. The collection action was a result of a default on Norman's Citibank credit card, due to unpaid charges and fees totaling $1,845.60. (Sombers Aff. ¶ 4.) NCFSI purchased the defaulted Citibank account and referred it to Pressler for collection. (Id. at ¶ 5.)

On March 16, 2005, Pressler sent a notification to Norman pursuant to the Fair Debt Collection Practices Act, 15 U.S.C. § 1692g, encouraging him to contact Pressler to make arrangements to pay the debt. (Pressler Aff. Ex. 21.) On August 22, 2005, Pressler filed suit against Norman in the Superior Court of New Jersey, Law Division, Camden County, Special Civil Part under docket number DC-010592-05. (Pressler Aff. ¶ 2.) Service was effected on August 25, 2005, by the clerk mailing copies by certified and regular mail to Norman. (Hurdleston Br. Ex. I.)

On September 12, 2005, Norman's brother, Christopher Hurdleston ("Christopher"), filed a letter entitled "Answer to Complaint of Summons." (Pressler Aff. Ex. 1.) In the letter, Christopher stated, among other things, that on behalf of his brother he was filing a response of "Not Guilty" and that he wanted the court to hold a hearing, that Norman was "mentally handicapped and has been so for his 43 years of life," that Norman had minimal personal property and his sole source of income is Social Security Disability, for which Christopher was the representative payee, and therefore, Pressler's chances of recovering anything from Norman were "very poor, at best." (Id.) In response, James Padgett, a representative of Pressler, wrote a letter to Norman on September 16, 2005, requesting that he contact Pressler's office to discuss a possible resolution. (Id. at Ex. 2.)

On September 20, 2005, Pressler moved to strike Christopher's answer because Christopher was neither an attorney, a person qualified to appear in court, nor a real party in interest, and enter default in the case. (Id. at Ex. 3.) The motion to strike was unopposed and on October 11, 2005, the Hon. Lee B. Laskin, J.S.C., granted the motion, striking the answer and entering default. (Id. at Ex. 4.)

On December 8, 2005, Pressler filed a motion for the entry of default judgment. (Id. at Ex. 5.) The Certification of Proof that accompanied the motion states that "no defendant is an infant or mentally incapacitated person." (Id.) On December 27, 2005, Judge Laskin granted the motion and entered judgment in favor of NCFSI in the amount of $2801.60, plus costs. (Id. at Ex. 6.) After three failed attempts to deliver a certified copy of the judgment to Norman's address, on January 13, 18, and 28, 2006, it was returned by the Unites States Postal Service as "unclaimed" on February 2, 2006. (Id.)

On January 20, 2006, Pressler sent Norman, by regular and certified mail, an "Information Subpoena" and a questionnaire in order to ascertain what assets he might have to satisfy the default judgment. (Id. at Ex. 7.) The Information Subpoena informs the recipient that "If this judgment has resulted from a default, you may have the right to have this default judgment vacated by making an appropriate motion to the court." (Id.) Christopher telephoned Pressler in response to the information subpoena on January 27, 2006, but was informed that no one from Pressler could discuss the matter with him without Norman's written authorization. (Id. at Ex. 22.) On January 31, 2006, Christopher faxed Pressler a signed power of attorney for Norman. (Id. at Ex. 8.) Christopher confirmed that Pressler received the authorization on February 2, 2006, (Id. at Ex. 23), and later that day returned the questionnaire to Pressler. (Id. at Ex. 9.) On the questionnaire, Christopher indicated that Norman had a bank account with Wachovia, and personal property valued at less than $500. (Id.)

On February 6, 2006, Pressler sent Norman a letter indicating that a question on the form regarding exempt funds had not been answered. (Id. at Ex. 10.) Christopher answered the question, indicating that Norman received $986 per month in Social Security Benefits, and faxed the form back to Pressler on February 15, 2006. (Id. at Ex. 11.) However, Christopher failed to attach the required copies of the bank statements indicating that Norman's bank account indeed contained only the Social Security funds. (Id.)

On February 7, 2006, Pressler requested that the court execute a levy against Norman's bank account and personal property. (Pressler Aff. at ¶ 15.) On February 21, 2006, the Superior Court issued a writ of execution for a court officer to levy on Norman's Wachovia bank account and the possessions in his home. (Pressler Aff. Exs. 13, 14.) On March 6, 2006, Court Officer George Cook ("Cook") "visited Norman's apartment and viewed his belongings and determined they were not worth levying upon." (Id. at Ex. 16 at ¶ 4.) Cook returned the writ noting that there were insufficient funds in Norman's bank account and that the furniture in his apartment was not worth levying, and informed Pressler that he intended to return the writ as unsatisfied in 30 days. He also indicated that he left a "Goods Chattel notice." (Id. at Ex. 13.) The following day, Cook returned the writ marked as "Unsatisfied." (Id. at Ex. 14.) At no point was any property or money of Norman's actually taken.

On December 27, 2006, Christopher filed a motion seeking appointment as Norman's guardian ad litem and to vacate the state court judgment. The motion was granted on January 9, 2007. (Pressler Aff. ¶¶ 20-21.) After a period of discovery, the collection case ultimately went to trial on September 11, 2007. (Id. at ¶ 22.) At trial, both parties were represented by counsel. (Id.) Judge Laskin found that Norman did have the requisite mental capacity to enter into a credit card agreement with Citibank, and therefore entered judgment for $1,845.60 in favor of NCFSI. (Id. at ¶ 23; Pressler Aff. Ex. 19 at 170-172.)

Norman, through his guardian ad litem, Christopher, filed the Complaint in the instant case on July 17, 2007, after the original state court judgment was vacated, but before the trial on the merits was held. Count I of the Complaint alleges that Pressler and NCFSI violated of 42 U.S.C. § 1983 by failing to provide proper notice or process prior to seeking the default judgment against Norman in state court or "attempting" to seize his assets. Count II alleges that the same conduct deprived Norman of substantive rights in violation of the New Jersey Civil Rights Act ("NJCRA"), N.J. Stat. Ann. § 10:6-1, et seq. Counts III and IV allege common law fraud and negligent misrepresentation, respectively, because Pressler either knew, or should have known, that Norman was mentally incapacitated, and misrepresented the same in its Certification of Proof.

II.

"[S]ummary judgment is proper `if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law.'" Celotex Corp. v. Catrett, 477 U.S. 317, 322, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986) (quoting Fed.R.Civ.P. 56(c)). In deciding a motion for summary judgment, the Court must construe the facts and inferences in a light most favorable to the non-moving party. Pollock v. Am. Tel, Tel. Long Lines, 794 F.2d 860, 864 (3d Cir. 1986).

"`With respect to an issue on which the non-moving party bears the burden of proof, the burden on the moving party may be discharged by `showing'-that is, pointing out to the district court-that there is an absence of evidence to support the nonmoving party's case.'" Conoshenti v. Public Serv. Elec. Gas, 364 F.3d 135, 145-46 (3d Cir. 2004) (quoting Celotex). The role of the Court is not "to weigh the evidence and determine the truth of the matter, but to determine whether there is a genuine issue for trial." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 249, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986).

III.

Count I of the Complaint alleges that NCFSI and Pressler violated 42 U.S.C. § 1983 by failing to provide Plaintiff with the necessary process prior to entering the default judgment and attempting to execute the levy on his assets. "In order to prevail on a claim under section 1983, a plaintiff must establish (1) the violation of a federally protected constitutional or statutory right, (2) by state action or action under color of law." Jordan v. Fox, Rothschild, O'Brien Frank-el, 20 F.3d 1250, 1264 (3d Cir. 1994) (citing 42 U.S.C. § 1983, Flagg Bros., Inc. v. Brooks, 436 U.S. 149, 156, 98 S.Ct. 1729, 56 L.Ed.2d 185 (1978)). However, in order to determine that a private party is a state actor, such that it can be found liable under § 1983, a plaintiff must also satisfy a two-part inquiry:

First, the deprivation must be caused by the exercise of some right or privilege created by the State or by a rule of conduct imposed by the state or by a person for whom the State is responsible. . . . Second, the party charged with the deprivation must be a person who may fairly be said to be a state actor. This may be because he is a state official, because he has acted together with or has obtained significant aid from state officials, or because his conduct is otherwise chargeable to the State. Without a limit such as this, private parties could face constitutional litigation whenever they seek to rely on some state rule governing their interactions with the community surrounding them.

Plaintiff relies on Jordan as the basis of his claim both that Defendants were acting under color of law, and that the execution of a levy without process would violate the Fourteenth Amendment's requirement of procedural due process. In Jordan, the Third Circuit considered Pennsylvania's procedure for judgment by confession, and found that a landlord and its attorneys could have violated the due process rights of the tenant by executing on judgment by confession without pre-deprivation notice or hearing. There, the landlord's attorneys "took action that caused the Sheriff of Philadelphia to execute on the judgment by garnishing [the tenant]'s bank account" without prior notice. Jordan, 20 F.3d at 1255. The court concluded "that the entry of the judgment, when coupled with seizure of the [tenant]'s bank account, without prior notice or opportunity to be heard, does violate the Due Process Clause of the Fourteenth Amendment to the Constitution." Id.

As an initial matter, to the extent Plaintiffs claim is based on the entry of the judgment alone, it fails to meet the state action requirement. The "entry of the judgment is not a state action involving the force of law to an extent sufficient to hold that private persons become state actors and therefore can be liable under section 1983." Jordan, 20 F.3d at 1266.

Plaintiff also bases Count I on the theory that Defendants violated § 1983 by "attempting to seize his personal assets and bank account" when Pressler requested that the court officer execute a levy without "meaningful notice." (Compl. ¶ 41.) The Third Circuit has held:

[A] private individual who enlists the compulsive powers of the state to seize property by executing on a judgment without pre-deprivation notice or hearing acts under color of law and so may be held liable under section 1983 if his acts cause a state official to use the state's power of legal compulsion to deprive another of property.

While Plaintiff argues that a levy actually occurred on his personal property, despite seemingly contrary pleadings, the record is clear that no such levy actually took place. Plaintiff relies on the "Goods Chattels Levy" letter that was left at Norman's home by the court officer. However, it is clear that when the court officer actually returned the execution it was marked as "Unsatisfied." (Id. at Ex. 14.) Officer Cook's affidavit, as well as the hand written notations on the execution, indicate Cook's belief that Norman had no assets on which he could levy, and that "holding the writ open was worthless." (Pressler Aff. Ex. 14; Id. at Ex. 16 ¶ 6.) Furthermore, there is no evidence whatsoever that any property of Norman's was actually taken, or even in danger of being taken, by the court officer. As noted above, the Third Circuit distinguishes between even the entry of a lien against one's property, and an actual "seizure or deprivation of property under force of law." Id. at 1266 n. 17. While it may be true that Norman's mental deficiencies should have prevented the original entry of the default judgment, Plaintiff has failed to address the clear language in Jordan that there must actually be a deprivation of property. Jordan, 20 F.3d at 1266-67.

Accordingly, because there was no actual deprivation of property, no due process rights provided by the Fourteenth Amendment were violated. As such, Plaintiff has failed to establish "the violation of a federally protected constitutional or statutory right" necessary to succeed on a claim under § 1983, and Defendants's Motion will be granted, and Plaintiff's Cross-Motion will be denied with regard to Count I.

IV.

Count II of the Complaint alleges a violation of the NJCRA. N.J. Stat. Ann. § 10:6-1, et seq. Specifically, Plaintiff invokes section 10:6-2(c), which provides:

Any person who has been deprived of any substantive due process or equal protection rights, privileges or immunities secured by the Constitution or laws of the United States, or any substantive rights, privileges or immunities secured by the Constitution or laws of this State, or whose exercise or enjoyment of those substantive rights, privileges or immunities has been interfered with or attempted to be interfered with, by threats, intimidation or coercion by a person acting under color of law, may bring a civil action for damages and for injunctive or other appropriate relief. The penalty provided in subsection e. of this section shall be applicable to a violation of this subsection.

N.J. Stat. Ann. § 10:6-2(c). "[A] person may bring a civil action under the [NJCRA] in two circumstances: (1) when he's deprived of a right, or (2) when his rights are interfered with by threats, intimidation, coercion or force." Felicioni v. Admin. Office of Courts, 404 N.J.Super. 382, 400, 961 A.2d 1207 (App.Div. 2008).

As was discussed about in Part III, supra, Plaintiff did not suffer any deprivation of a substantive right because he was never actually deprived of his property. Similarly, no substantive right was "interfered with by threats, intimidation, coercion or force." Id. Plaintiff argues that the entering of default judgment and the attempt to levy, when it was known to Pressler that Norman had at least some mental deficiencies, violated his due process rights. However, if anything, Plaintiff was perhaps deprived of procedural due process, but the statute's clear language states that the NJCRA only protects against deprivation or interference with substantive due process rights. N.J. Stat. Ann. § 10:6-2(c). Accordingly, Defendants are entitled to summary judgment on Count II. And Plaintiff's Cross-Motion will be denied.

V.

Counts III and IV of the Complaint allege common law fraud and negligent misrepresentation, respectively. To support a claim of common law fraud, Plaintiff must prove: "(1) a material misrepresentation of a presently existing or past fact; (2) knowledge or belief by the defendant of its falsity; (3) an intention that the other person rely on it; (4) reasonable reliance thereon by the other person; and (5) resulting damages." Gennari v. Weichert Co. Realtors, 148 N.J. 582, 610, 691 A.2d 350 (1997) (citing Jewish Ctr. of Sussex County v. Whale, 86 N.J. 619, 624-25, 432 A.2d 521 (1981)). The elements of negligent misrepresentation are similar to those of common law fraud, except negligent misrepresentation does not require scienter. "Negligent misrepresentation is . . . [a]n incorrect statement, negligently made and justifiably relied on, [and] may be the basis for recovery of damages for economic loss . . . sustained as a consequence of that reliance." Kaufman v. i-Stat Corp., 165 N.J. 94, 109, 754 A.2d 1188 (2000) (quoting H. Rosenblum, Inc. v. Adler, 93 N.J. 324, 334, 461 A.2d 138 (1983) (internal quotations omitted), superseded by statute on other grounds).

Plaintiff bases Counts III and IV on the theory that Pressler either knowingly or negligently misrepresented Norman's "mental incapacity" to the state court through the Certification of Proof (Compl. ¶¶ 50, 58), and as a result of the court's reliance on that misrepresentation, Norman "suffered damages consisting of, but not limited to, the entry of default judgment against him and the invasion of his home pursuant to a levy." (Compl. ¶ 55, 63.) The parties spend a considerable portion of their briefs discussing the issue of whether a misrepresentation made to a third party, either knowingly or negligently, can give rise to a cause of action. However, it is not necessary for the Court to address that issue. What Defendants mention only briefly, and Plaintiff fails to address altogether, is the complete absence of proof that Plaintiff actually suffered any recoverable damages.

As has been discussed above, no levy actually occurred, the original default judgment was vacated, and a trial was ultimately held. At no point was Norman's access to his Social Security benefits or personal property interrupted. Nor is there any evidence that any of his personal property was damaged as a result of Officer Cook entering his home. Simply stated, Plaintiff has failed to produce evidence that even if the alleged misrepresentation was actionable, he suffered any recoverable injury. As such, Plaintiff is unable to prove an essential element of both fraud and negligent misrepresentation. Accordingly, Defendants' will also be granted summary judgment on Counts III and IV, and Plaintiff's Cross-Motion denied.

VI.

Defendants have also filed a Motion for Sanctions pursuant to Federal Rule of Civil Procedure 11. Rule 11 states:

(b) Representations to the Court. By presenting to the court a pleading, written motion, or other paper . . . an attorney or unrepresented party certifies that to the best of the person's knowledge, information, and belief, formed after an inquiry reasonable under the circumstances:

. . .

(2) the claims, defenses, and other legal contentions are warranted by existing law or by a nonfrivolous argument for extending, modifying, or reversing existing law or for establishing new law; [and]

(3) the factual contentions have evidentiary support or, if specifically so identified, will likely have evidentiary support after a reasonable opportunity for further investigation or discovery. . . .

Fed.R.Civ.P. 11(b). Subsection (c) permits the Court to impose sanctions upon an attorney who has violated the requirements of subsection (b). "It is well-settled that the test for determining whether Rule 11 sanctions should be imposed is one of reasonableness under the circumstances, the determination of which falls within the sound discretion of the District Court." Brubaker Kitchens Inc. v. Brown, 280 Fed.Appx. 174, 185 (3d Cir. 2008) (citing Gary v. Braddock Cemetery, 517 F.3d 195, 201 n. 6 (3d Cir. 2008)).

Defendants base their Motion on the theory that Plaintiff's counsel failed to perform competent legal research as required by Rule 11(b)(2) or a reasonable factual inquiry as required by Rule 11(b)(3). However, the Court's granting of summary judgment in favor of Defendants does not in an of itself necessitate the imposition of sanctions. See Gaiardo v. Ethyl Corp., 835 F.2d 479, 483-84 (3d Cir. 1987). This is not a case where Plaintiff's attorney did no research and simply copied a form complaint out of a practice manual. See Clement v. Public Service Elec. and Gas Co., 198 F.R.D. 634 (D.N.J. 2001). Rather, Plaintiff's attorney was presented with a situation where he reasonably believed an injustice had been perpetrated upon Norman, and the attorney did his best to fit the facts he was presented with into existing case-law. "The Rule seeks to strike a balance between the need to curtail abuse of the legal system and the need to encourage creativity and vitality in the law." Gaiardo, 835 F.2d at 483-84. Plaintiffs reliance on Jordan, and attempt to incorporate Covey, while ultimately unsuccessful, was not so far fetched as to be considered unreasonable. Likewise, there is at least some precedent in New Jersey law upon which Plaintiff could have argued for imposition of liability for misrepresentations made to, and relied upon by, a third party.

Similarly, the Court also notes that it was not until discovery was allowed to take place that it was clear that not only did Officer Cook not take any of Norman's property, but that he did not even intend to effectuate the levy by leaving the "Goods Chattel Levy" letter with Norman. Additionally, at the time the Complaint was filed, the state court case had not been completely resolved, and it was still contested whether Norman even owed the original credit card debt.

Overall, while there were many weaknesses in Plaintiff's case, none of his attorney's conduct rises to levels of unreasonableness to warrant sanctions pursuant to Rule 11. See Signorile v. City of Perth Amboy, 523 F.Supp.2d 428, 435 (D.N.J. 2007) (denying defendant's motion for Rule 11 sanctions despite granting summary judgment in defendant's favor). Accordingly, Defendants' Motion for Sanctions will be denied. The Court will similarly deny Plaintiffs request for legal fees or other expenses incurred in responding to this Motion, as they are also unwarranted.

VII.

For the reasons discussed above, Defendants' Motion for Summary Judgment will be granted. Plaintiff's Cross-Motion for Summary Judgment, and Defendant's Motion for Sanctions will be denied.