Elaine Aghaeepour, Ashley Glasgow, Julie Higgins, Shane Moore, Michele Norris, Jesus Rivera, Schilco, Inc. v. N. Leasing Sys., Inc.
| Decision Date | 01 December 2015 |
| Docket Number | 14 cv 5449 (NSR) |
| Parties | ELAINE AGHAEEPOUR, ASHLEY GLASGOW, JULIE HIGGINS, SHANE MOORE, MICHELE NORRIS, JESUS RIVERA, SCHILCO, INC. and RAY SHILBER, Plaintiffs, v. NORTHERN LEASING SYSTEMS, INC., MBF LEASING, LLC, LEASE FINANCE GROUP, LLC, LOUIS CUCINOTTA, JENNIFER CENTENO a/k/a JENNIFER NUGENT, JAY COHEN, SARA KRJEGER, JOSEPH I. SUSSMAN, and JOSEPH I. SUSSMAN, P.C., Defendants. |
| Court | U.S. District Court — Southern District of New York |
Elaine Aghaeepour ("Aghaeepour"); Ashley Glasgow ("Glasgow"); Julie Higgins ("Higgins"); Shane Moore ("Moore"); Michele Norris ("Norris"); Jesus Rivera ("Rivera"); Schilco, Inc. ("Schilco"); and Ray Schilber ("Schilber") (collectively, "Plaintiffs") filed the instant Complaint against Jay Cohen ("Cohen"); Sara Krieger ("Krieger"); Jennifer Centeno ("Centeno"); Louis Cucinotta ("Cucinotta") (collectively, "Individual Defendants"); Joseph I. Sussman ("Sussman"); Joseph I. Sussman, P.C. ("Sussman, P.C.") (collectively, "Sussman Defendants"); Lease Finance Group, LLC ("LFG"); MBF Leasing, LLC ("MBF"); and Northern Leasing Systems, Inc. ("NLS") (collectively, "Corporate Defendants") (with Individual Defendants and Sussman Defendants, collectively, "Defendants"), alleging claims under the federal Racketeer Influenced Corrupt Organizations Act ("RICO"), 18 U.S.C. §§ 1962, 1964; the federal Fair Credit Reporting Act ("FCRA"), 15 U.S.C. §§ 1681b(f), 1681s-2(b)(A); New York's Anti-Deceptive Trade Practices Act ("NYFCRA"), N.Y. Gen. Bus. Law §§ 349, 380; and common law fraud (See First Am. Compl. ("Compl."), ECF No. 6.) Before the Court is Defendants' Motion To Dismiss the Complaint pursuant to Federal Rules of Civil Procedure 8(a), 9(b), and 12(b)(6). (See Motion to Dismiss, ECF No. 13.) For the following reasons, Defendants' Motion is granted in part and denied in part.
The following facts are drawn from Plaintiffs' Complaint and are taken as true for the purposes of resolving the instant Motion. This action stems from Defendants' racketeering scheme to "intimidate out-of-state individuals into paying unwarranted sums of money by commencing (or threatening) fraudulent lawsuits in New York City Civil Court" based on forged documents. (Compl. ¶ 1.) In furtherance of this scheme, Defendants also made inaccurate entries on and improperly accessed Plaintiffs' credit reports. (Id. ¶ 2.)
Defendant NLS is in the business of financing equipment leases and manages and operates the other Corporate Defendants, LFG and MBF. (Id. ¶ 14.) LFG and MBF are subsidiaries of NLS. (Id. ¶¶ 15-16.) Individual Defendants are all principals and officers of the Corporate Defendants: Cohen is the President and Chief Executive Officer of Defendant NLS; Krieger is Vice President for Operations of NLS; Cucinotta is the Legal Collections Manager; and Centeno is the Legal Administrative Manager. (Id. ¶¶ 17-20.) Defendant Joseph Sussman is an attorney duly admitted to the Bar in New York. (Id. ¶ 21.) Sussman, through his law firm, Joseph I. Sussman, P.C., commenced and conducted litigation on behalf of the Corporate Defendants. (Id. ¶¶ 21-22.)
With regards to each Plaintiff, Defendants engaged in largely the same racketeering scheme, consisting of "systematic and repeated" intimidation in attempts to collect money from Plaintiffs to which Defendants were not entitled. (Id. ¶ 26.) More specifically, Defendants"bull[ied]" Plaintiffs with threats of litigation over documents that Defendants "knew were forged." (Id.) In each case, Defendants would create an allegedly fraudulent financing lease, with Plaintiffs as signed guarantors. (Id. ¶¶ 26, 68, 76, 91, 95, 108, 118.) Where Defendants had access to Plaintiffs' bank accounts, Defendants would wrongfully debit amounts under the forged leases. (Id. ¶¶ 35, 77-78, 92, 109, 119.) Where Defendants did not have such access or when a plaintiff closed the bank account, Defendants harassed Plaintiffs—through phone calls and mailings—over "amounts due" and threatened Plaintiffs with litigation to collect for the debt in default. (Id. ¶¶ 37, 122.) In most cases, Defendants commenced lawsuits in the New York City courts. (Id. ¶¶ 45, 65, 79, 98, 110.) Since Plaintiffs are all out-of-state individuals, the lawsuits were designed to "ensure that Plaintiffs had no real opportunity to raise defenses to the [racketeering enterprise's] bogus lawsuits, so that the entry of a default judgment was all but certain." (Id. ¶ 27.) When Defendants were granted default judgments, many Plaintiffs were forced to hire attorneys in New York to attempt to set the judgments aside. (Id. ¶¶ 51, 71, 85, 104, 115.)
In the course of this scheme, Defendants also wrongfully accessed Plaintiffs' credit reports (Id. ¶¶ 39, 60, 87, 93, 105-06, 116, 120) and, in some cases, made adverse entries in the credit reports. (Id. ¶¶ 40, 61, 88, 117, 121.) Plaintiffs allege that these actions had "significant impact on credit availability to Plaintiffs, including without limitation, denial of credit opportunities, increase in interest rates, and diverse other consequences." (Id. ¶ 30.)
As a result of the foregoing, Plaintiffs suffered significant economic and non-economic damages, including mental anguish, embarrassment, annoyance, and emotional distress. (Id. ¶¶ 58, 74, 90, 94, 107, 124.)
To survive a motion to dismiss pursuant to Federal Rule of Civil Procedure 12(b)(6) for failure to state a claim upon which relief can be granted, a complaint must include "sufficient factual matter, accepted as true, to 'state a claim to relief that is plausible on its face.'" Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atlantic Corp. v. Twombly, 550 U.S. 554, 570 (2007)). "A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Id. (citing Twombly, 550 U.S. at 556).
"When there are well-pleaded factual allegations [in the complaint], a court should assume their veracity and then determine whether they plausibly give rise to an entitlement to relief." Iqbal, 556 U.S. at 679. The court must "take all well-plead factual allegations as true, and all reasonable inferences are drawn and viewed in a light most favorable to the plaintiff[ ]." Leeds v. Meltz, 85 F.3d 51, 53 (2d Cir. 1996). However, the presumption of truth does not extend to "legal conclusions, and threadbare recitals of the elements of the cause of action." Harris v. Mills, 572 F.3d 66, 72 (2d Cir. 2009) (quoting Iqbal, 556 U.S. 662) (internal quotation marks omitted). A plaintiff must provide "more than labels and conclusions" to show he is entitled to relief. Twombly, 550 U.S. at 555.
As an initial matter, the Court notes that the Southern District of New York has heard at least three cases involving the same racketeering scheme alleged in the instant complaint against the same defendants. See Ritchie v. N. Leasing Sys., Inc., 14 F. Supp. 3d 229 (S.D.N.Y. 2014); Angermeir v. Cohen, 14 F. Supp. 3d 134 (S.D.N.Y. 2014); Serin v. N. Leasing Sys., Inc., No.7:06-CV-1625, 2009 WL 7823216 (S.D.N.Y. Dec. 18, 2009).1 In their motion to dismiss, Defendants make a number of arguments that have already been addressed by the federal court for the Southern District of New York. In light of the fact that these cases are solely persuasive authority, the Court will nonetheless undertake its own analysis of the law with regards to the repeated arguments.
Defendants first argue that the Complaint should be dismissed because it fails to adequately plead the actions of multiple defendants with particularity and therefore fails under Federal Rules of Civil Procedure 8(a) and 9(b). Though Defendants do not make the distinction in their motion, Rule 9(b) only applies to the claims of mail fraud and wire fraud as predicate acts for the RICO claims. See Angermeir, 14 F. Supp. 3d at 145 (citing First Capital Asset Mgmt., Inc. v. Satinwood, Inc., 385 F.3d 159, 178 (2d Cir. 2004); Spool v. World Child Int'l Adoption Agency, 520 F.3d 178, 185 (2d Cir. 2008)) ("In the context of a civil RICO claim, all allegations of fraudulent predicate acts[ ] are subject to the heightened pleading requirement of [Rule 9(b)].") (internal quotation marks omitted). See also McLaughlin v. Anderson, 962 F.2d 187, 194 (2d Cir. 1992) (); Hecht v. Commerce Clearing House, Inc., 897 F.2d 21, 26 n. 4 (2d Cir. 1990) ( ). Thus, only the allegations of mail and wire fraud are subject to the heightened pleading requirements of Rule 9(b), and the remaining claims must only meet the more liberal requirements of Rule 8(a).
Defendants contend that by "lumping defendants together," Plaintiffs fail to provide a factual basis to distinguish between the acts of each defendant. (Defendants' Memorandum of Law in Support of Motion to Dismiss the First Amended Complaint ("Def.'s Memo"), 7.) In support of this argument, Defendants cite a number of cases that were similarly cited in Angermeir: Marcilis v. Twp. of Redford, 693 F.3d 589 (6th Cir. 2012); Atuahene v. City of Hartford, 10 Fed.Appx. 33, 34 (2d Cir. 2001); Ochre LLC v. Rockwell Architecture Planning & Design, P.C., No. 12-CV-2837, 2012 WL 6082387 (S.D.N.Y. Dec. 3, 2012) aff'd, 530 F. App'x 19 (2d Cir. 2013); Elias v. City of New York, No. 10-CV-5495, 2010 WL 5475809 (E.D.N.Y. Dec. 30, 2010); Southerland v. N.Y.C. Housing Auth., No. 10-CV-5243, 2010 WL 4916935 (E.D.N.Y. Nov. 23, 2010). (See Def.'s Memo, 8.) The Angermeir court...
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