THE ESTATE OF LESTER COTTON v. SENIOR PLANNING SERVICES, LLC, 3:19-cv-08921

Background

Plaintiffs (estate representatives and powers of attorney) allege Senior Planning Services, LLC (SPS) and Price & Price, LLC (Price) assisted clients in obtaining Medicaid but misrepresented services and deprived clients of fees for lawful legal work.
Jennifer Cotton (POA for Lester Cotton) met with SPS in April 2018, signed a fee agreement (which disclaimed legal services), received a Spend-Down Report prepared by Price, and was later told she "did not have to hire an attorney."
Plaintiffs claim the Spend-Down Report shows little legal work and that SPS held itself out as able to perform legal tasks needed for Medicaid eligibility.
The court previously issued an Omnibus Opinion finding Plaintiffs’ NJCFA theory inadequately pleaded and permitting leave to amend to allege specific unlawful legal services or promises.
Plaintiffs filed a Third Amended Complaint (TAC) reasserting the NJCFA claim for Class A and adding other state-law claims; SPS moved to dismiss for failure to state a claim.
The district court held the TAC still failed to plead the required specificity that SPS performed or promised legal work under NJCFA; because the NJCFA claim was the only basis for CAFA jurisdiction, the court dismissed the TAC without prejudice, granted SPS’s motion, and denied Price’s motion as moot (30 days to cure; no leave to add new claims).

Issues

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether TAC pleads "unlawful conduct" under the NJCFA (i.e., SPS performed or promised legal services)	SPS told Cotton she didn’t need an attorney and thus held itself out as able to perform legal work; Spend-Down Report shows lack of proper legal involvement	Statement is vague/puffery; fee agreement disclaims legal services; allegations lack specifics tying SPS to drafting or performing legal work	TAC fails Rule 9(b) particularity; plaintiffs did not plead specific facts that SPS performed or promised legal work; NJCFA claim dismissed
Whether the court has subject-matter jurisdiction under CAFA	Class A’s NJCFA treble damages plus attorneys’ fees push amount in controversy over $5M based on alleged number of clients and average fees	Jurisdiction depends entirely on survival of NJCFA claim; if NJCFA fails, CAFA threshold is not met	Because NJCFA claim dismissed, CAFA jurisdiction collapses; court declines supplemental jurisdiction and dismisses entire TAC
Applicability of Rule 9(b) to Plaintiffs’ fraud-based NJCFA theory	Plaintiffs point to meeting date and the alleged oral representation as sufficient detail	Defendants contend pleading is conclusory, newly alleged, and lacks particularity about misrepresentations and who performed legal work	Rule 9(b) requires more: the court finds the allegations conclusory and insufficiently particular; dismissal warranted
Whether Plaintiffs may add new claims or class definitions beyond prior leave	Plaintiffs asserted additional state-law claims and a new class definition in the TAC	Price argues these additions exceed the scope of leave to amend	Court permits only a focused opportunity to cure NJCFA pleading defects (30 days); no leave to add further claims now; future dismissal may be with prejudice if repeated failures continue

Key Cases Cited

Block v. Seneca Mortg. Servicing, 221 F. Supp. 3d 559 (D.N.J. 2016) (elements required to state an NJCFA claim)
Dugan v. TGI Fridays, Inc., 171 A.3d 620 (N.J. 2017) (reaffirming NJCFA need for unlawful act, ascertainable loss, and causal link)
Fowler v. UPMC Shadyside, 578 F.3d 203 (3d Cir. 2009) (pleading standard and construing well-pleaded allegations in plaintiff’s favor)
Ashcroft v. Iqbal, 556 U.S. 662 (2009) (court may disregard legal conclusions; plausibility standard)
Cox v. Sears Roebuck & Co., 647 A.2d 454 (N.J. 1994) (categorization of "unlawful conduct" under NJCFA)
Fuqua v. Bristol-Myers Squibb Co., 926 F. Supp. 2d 538 (D.N.J. 2013) (Rule 9(b) particularity requirements for fraud allegations)