Lewis v. Legal Servicing, LLC
| Decision Date | 15 March 2022 |
| Docket Number | 19-CV-8085 (PAE) (OTW) |
| Parties | BERNARD LEWIS, Plaintiff, v. LEGAL SERVICING, LLC, et al., Defendants. |
| Court | U.S. District Court — Southern District of New York |
REPORT & RECOMMENDATION
I. Introduction
Pro se plaintiff Bernard Lewis (“Plaintiff”) brings this action against defendants Annemarie Steward Legal Servicing, LLC (“LS”), Robert T. Van De Mark, North American Process Serving, LLC (“NAPS”), Rodney A. Giove, Robert Crandall William Singler, Resolution Management, LLC (“RM”), Mark H. Stein, and Erin Capital Management, LLC (“ECM”) asserting a claim of negligence and violations of New York Judiciary Law § 487(1), the Fair Debt Collection Practice Act (“FDCPA”), and the Racketeer Influenced and Corrupt Organizations Act (“RICO”). Plaintiff's claims arise from two default judgments entered against Plaintiff in state court as a result of unpaid debt on a credit card issued to him by JP Morgan Chase Bank, N.A. (“Chase”), a former defendant in this case. Presently before the Court is a motion for judgment on the pleadings filed by defendants Steward, Giove, Van De Mark, and LS (“Moving Defendants”). For the reasons set forth below, the Court recommends that the Moving Defendants' motion be GRANTED and that the Court dismiss Plaintiff's claims against Moving Defendants with prejudice and without leave to amend.
II. Background
Before 2005, Plaintiff obtained a Chase credit card and thereafter incurred debt on it. Compl. ¶ 16. The Complaint does not specify when the debt was incurred or sold. After the debt was 90 days in default, Chase sold the debt to LS and ECM. Id. ¶¶ 16, 18, 37. Though Plaintiff alleges that Chase sold the debt associated with the same account to LS and ECM, exhibits to the Complaint suggest that the debt may have been associated with two separate accounts, with the debt for account ending in 0847 sold to ECM and the debt for account ending in 9503 sold to LS. Id. ¶ 37, Exs. E-F. In the Complaint, Plaintiff alleges that the debt was, at the time of the sales, “inaccurate, not owed, and or otherwise not collectable.” Id. ¶ 18.
Following the sales, LS and ECM attempted to collect on the debt. Id. ¶¶ 39-41, 43-46. In 2002, ECM obtained a default judgment against Plaintiff. Id. ¶ 38. Plaintiff allegedly did not learn about the ECM default judgment until 2019 when the judgment was assigned to another entity, Caddis Investments, LLC. Id. ¶ 38. In 2005, LS obtained a default judgment against Plaintiff for $15,844.06 (“2005 Action”). Id. ¶ 46, Ex. J. In the 2005 Action, affidavits of service affirm delivery and mailing of the summons and complaint to Plaintiff at 4058 Pratt Avenue, Bronx, NY 10466 in May 2005, as well as mailing of the summons and complaint to the same address in July 2005.[1] Id. ¶¶ 44, 45, Exs. H-J; ECF 89 at 13. The May affidavit of service was notarized by Singler, owner of process serving company, American Legal Process, Inc. (“ALP”). Id. ¶ 10, 45, Exs. I, L. The Complaint makes conclusory allegations that Giove and Steward, attorneys for LS, directed Singler “to engage in sewer service upon [P]laintiff.”[2] Id. ¶ 153.
Plaintiff's allegations largely arise out of the default judgment secured by LS in the 2005 Action, as well as criminal and civil actions related to Singler. Singler and ALP were criminally prosecuted in 2009 for engaging in “sewer service,” and Honorable Ann Pfau, the Chief Administrative Judge of the New York State United Court System, initiated a special proceeding to void thousands of default judgments in which Singler or his company allegedly served the complaint on the wrong address, misrepresented the method of service, or falsely notarized affidavits of service. See Id. ¶¶ 47-49, 53-61, 93-95, Exs. K, L, N. In the special proceeding, Judge Timothy Drury of the Erie County Supreme Court ordered respondents (law firms and lawyers, including Giove, who had used ALP to serve process and subsequently obtained default judgments) to show cause why the court should not, inter alia, (a) require respondents to identify actions for which ALP served process and a default judgment was taken and notify parties in those actions of their right to be heard and (b) vacate and set aside default judgments except upon a showing (without reference to an ALP affidavit of service) that service was proper (“Judge Drury's Order to Show Cause”). Id., Ex. M. Following Judge Drury's Order to Show Cause, Giove entered into a consent order, signed by Judge Drury on August 2, 2010, severing and dismissing the claims against Giove and more narrowly requiring him to identify and provide notice to individuals against whom default judgments were entered in actions filed on or after January 1, 2006 based on a complaint served by ALP. (ECF 25-2 ¶¶ 1, 3.c).[3]
Plaintiff alleges that, to avoid complying with Judge Drury's Order to Show Cause, Giove turned Plaintiff's file over to Steward, who then assigned (on behalf of LS) the 2005 default judgment to RM in June 2010. Compl. ¶¶ 62-63, 99-100, 111. Defendant Stein was allegedly the attorney who represented RM in its purchase of the default judgment from LS. Id. ¶¶ 12, 129. Plaintiff acknowledges that Steward has made statements affirming that RM assigned the default judgment back to LS in May 2012. Id. ¶¶ 83, 107. Plaintiff alleges, however, that on June 11, 2015, despite having assigned LS's default judgment to RM, Steward filed a summons and complaint for a “judgment lien renewal” in the New York Supreme Court in Bronx County (“2015 Action”). Id. ¶¶ 65-66, 69. In the 2015 Action, an affidavit of service affirms that defendant NAPS delivered and mailed the summons and complaint to Plaintiff at 4818 Wilder Avenue, Bronx, New York 10470 in June 2015. Id. ¶¶ 70, 101, Ex. S.[4] On February 25, 2016, the Supreme Court entered an order granting LS a renewal judgment in the amount of $31,007.85. Id. ¶ 71.
On November 16, 2017, LS, through Steward, filed a petition to auction Plaintiff's 4058 Pratt Avenue property to satisfy the judgment (“2017 Action”). Id. ¶ 72, Ex. U. The Complaint is not clear as to when Plaintiff discovered the renewed judgment and petition to auction his property. Id. ¶ 74. On October 1, 2018, Plaintiff filed a motion to “vacate the default judgment, judgment lien renewal, and dismissal for misrepresentation, fraud and lack of jurisdiction.” Id.
On June 6, 2019, the Bronx County Supreme Court denied Plaintiff's motion. Id. ¶ 87; see also ECF 24-1 at 3-7. In denying Plaintiff's motion, Justice Brigantti found that LS had obtained a valid lien and lien renewal on the property and was therefore entitled to an order authorizing the sale of the property. (ECF 24-1 at 4). While Plaintiff made standing arguments alleging that LS did not actually own the debt when it commenced the action resulting in the 2005 default judgment, Justice Brigantti found that those arguments had been waived by Plaintiff's failure to timely move to dismiss or answer, and that he had not provided any reasonable excuse for that default. Id. at 4, 6. Justice Brigantti also rejected as conclusory and unsupported Plaintiff's allegations that LS and Steward had a conflict of interest, had violated New York Gen. Business Law § 349(a) and the FDCPA, and had engaged in “sewer service.” Id. at 5.[5] On November 25, 2019, the Bronx County Supreme Court ordered the 2017 Action be stayed pending resolution of an adverse possession action involving the 4058 Pratt Avenue property. (ECF 24-1 at 23; ECF 76-6; see supra n.1). The 2017 Action remained stayed as of the date of Moving Defendants' motion. (ECF 76-7 at 4).
III. Relevant Procedural History
On August 29, 2019, Plaintiff filed his Complaint, bringing claims against 11 defendants. Compl. ¶¶ 4-14. On August 30, 2019, this case was referred to me for general pretrial supervision. (ECF 3). On December 13, 2019, the Moving Defendants filed an Answer. (ECF 16). On December 16, 2019, Plaintiff filed a motion seeking a preliminary injunction and temporary restraining order (“TRO”) to enjoin LS from auctioning Plaintiff's property at 4058 Pratt Avenue, and to compel Giove to comply with Judge Drury's Order to Show Cause. (ECF 17). On December 17, 2019, the Court referred that motion to me for a report and recommendation. (ECF 20). On the same date, Moving Defendants filed an opposition to Plaintiff's motion. (ECF 21).
On December 20, 2019, having determined that there was no emergency, I issued an order to show cause as to why I should not treat Plaintiff's request as a motion for a preliminary injunction. (ECF 22). On December 27, 2019, Plaintiff filed an opposition. (ECF 23). On December 30, 2019, Moving Defendants filed a letter supplementing the record by setting out the procedural history of the underlying state court actions. (ECF 24). On January 3, 2020, the Moving Defendants filed an opposition to Plaintiff's motion for a preliminary injunction. (ECF 25). On January 21, 2020, Plaintiff filed his reply. (ECF 28). On August 18, 2020, I issued a report and recommendation recommending that the Court deny Plaintiff's motion for a preliminary injunction, as well as grant a motion to dismiss filed by prior defendant Chase.[6] (ECF 68). Judge Engelmayer adopted the report and recommendation in full on November 19, 2020. (ECF 88).
On October 30, 2020, the Moving Defendants filed a motion for judgment on the pleadings pursuant to Fed.R.Civ.P. 12(c). (ECF 76). On November 2, 2020, the Court referred that motion to me for a report and recommendation. (ECF 78). On November 17, 2020, the Court stayed discovery pending the resolution of Moving Defendants' motion. (ECF 87). On December 14 2020, Plaintiff filed an...
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