Moukengeschaie v. Eltman, Eltman & Cooper, P.C.

• Decision Date: 31 March 2016
• Docket Number: 14-CV-7539 (MKB)
• Parties: JOVANA N. MOUKENGESCHAIE, on behalf of herself and all others similarly situated, Plaintiff, v. ELTMAN, ELTMAN & COOPER, P.C., LVNV FUNDING LLC and RESURGENT CAPITAL SERVICES, L.P., Defendants.
• Court: U.S. District Court — Eastern District of New York

JOVANA N. MOUKENGESCHAIE,on behalf of herself and all others similarly situated, Plaintiff, v. ELTMAN, ELTMAN & COOPER, P.C., LVNV FUNDING LLCand RESURGENT CAPITAL SERVICES, L.P., Defendants.

14-CV-7539 (MKB)

UNITED STATES DISTRICT COURT EASTERN DISTRICT OF NEW YORK

March 31, 2016

MEMORANDUM & ORDER

MARGO K. BRODIE, United States District Judge:

On May 8, 2015, Plaintiff Jovana Moukengeschaie filed an Amended Complaint in the above-captioned putative class action against Defendants Eltman, Eltman & Cooper, P.C. ("Eltman"), LVNV Funding LLC ("LVNV") and Resurgent Capital Services ("Resurgent"), alleging violations of the Fair Debt Collection Practices Act, 15 U.S.C. § 1692 et seq. ("FDCPA"), and seeking statutory damages.¹ Plaintiff alleges that Eltman sent a debt collection letter (the "Collection Letter") to her and hundreds of other consumers containing language that constitutes false, deceptive, misleading and unfair collection practices under the FDCPA. (Am. Compl. ¶¶ 1-4, Docket Entry No. 47) Defendants move to dismiss the Amended Complaint for failure to state a claim pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure.Defendants further move to strike allegations on behalf of a putative sub-class. (Defs. Mot. to Dismiss, Docket Entry No. 80.) For the reasons set forth below, the Court grants in part and denies in part Defendants' motion to dismiss. The Court also denies Defendants' motion to strike the sub-class allegations.

I. Background

The facts alleged in the Amended Complaint are assumed to be true for the purposes of this motion. Eltman mailed the Collection Letter to Plaintiff on December 31, 2013, notifying Plaintiff that a judgment against her had been referred to Eltman's asset investigation department for purposes of collection. (Am. Compl. ¶¶ 1-4; Collection Letter 1, annexed to Am. Compl. as Ex. A.) In the Collection Letter, Eltman states that it is acting on behalf of its client, LVNV, and that it "has been instructed to find any assets available to help us collect on the judgment."² (Am. Compl. ¶ 156; Collection Letter 1.) The Collection Letter also states that, "[i]n certain circumstances, the law allows creditors to seek seizure . . . of certain non-exempt assets owned by you to pay the judgment that you owe," and then lists various types of property that may be non-exempt assets. (Am. Compl. ¶ 157; Collection Letter 1.) Plaintiff asserts that Eltman had not in fact been given any instruction by LVNV to identify Plaintiff's assets and did not intend to seize Plaintiff's assets. (Am. Compl. ¶¶ 154, 156.)

The Collection Letter further states that the judgment arises from a debt originally owed to Capital One Bank (USA), N.A. ("Capital One") and that LVNV purchased the debt after theaccount entered default. (Id. ¶¶ 136-38; Collection Letter 1.) Plaintiff notes that the Collection Letter fails to explain that LVNV did not purchase the debt directly from Capital One, but rather from North Star Capital Acquisitions LLC ("North Star"), after the debt had been reduced to judgment. (Am. Compl. ¶ 139.) Plaintiff states that neither LVNV nor North Star "took the steps required" under state law to assign the debt. (Id. ¶ 141.) Plaintiff also states that she was not made aware of the 2009 proceeding in which North Star obtained a default judgment against her, "apparently because the process server hired by North Star's attorneys engaged in 'sewer service.'" (Id. ¶ 148.) She also "does not recall defaulting on a Capital One credit card." (Id.)

According to Plaintiff, Eltman mailed "letters identical" to the Collection Letter "to hundreds, if not thousands, of New York consumers who allegedly owed debts to LVNV" and, in "many" of those instances, Defendants were "seeking to collect [on] judgments that had not been properly assigned" under state law. (Id. ¶¶ 6-7; see also id. ¶ 161 (stating that the letters mailed to other consumers were "substantially similar" to the Collection Letter).)

II. Discussion

a. Standard of review

In reviewing a motion to dismiss under Rule 12(b)(6) of the Federal Rules of Civil Procedure, a court must "accept all factual allegations in the complaint as true and draw inferences from those allegations in the light most favorable to the plaintiff." Tsirelman v. Daines, 794 F.3d 310, 313 (2d Cir. 2015) (quoting Jaghory v. N.Y. State Dep't of Educ., 131 F.3d 326, 329 (2d Cir. 1997)); see also Matson v. Bd. of Educ., 631 F.3d 57, 63 (2d Cir. 2011) (quoting Connecticut v. Am. Elec. Power Co., 582 F.3d 309, 320 (2d Cir. 2009)). A complaint must plead "enough facts to state a claim to relief that is plausible on its face." Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007). A claim is plausible "when the plaintiff pleads factualcontent that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Matson, 631 F.3d at 63 (quoting Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009)); see also Pension Ben. Guar. Corp. ex rel. St. Vincent Catholic Med. Ctrs. Ret. Plan v. Morgan Stanley Inv. Mgmt. Inc., 712 F.3d 705, 717-18 (2d Cir. 2013). Although all allegations contained in the complaint are assumed true, this principle is "inapplicable to legal conclusions" or "[t]hreadbare recitals of the elements of a cause of action, supported by mere conclusory statements." Iqbal, 556 U.S. at 678.

When deciding a motion to dismiss, a court's review is limited to the four corners of the complaint but a court may also review (1) documents attached to the complaint, (2) any documents incorporated in the complaint by reference, (3) documents deemed integral to the complaint and (4) public records. See L-7 Designs, Inc. v. Old Navy, LLC, 647 F.3d 419, 422 (2d Cir. 2011) (documents attached to the complaint, those incorporated by reference, and those integral to the complaint); Glob. Network Commc'ns, Inc. v. City of New York, 458 F.3d 150, 156 (2d Cir. 2006) (documents integral to the complaint); Blue Tree Hotels Inv. (Canada), Ltd. v. Starwood Hotels & Resorts Worldwide, Inc., 369 F.3d 212, 217 (2d Cir. 2004) (public records).

b. Plaintiff's FDCPA claims

Plaintiff asserts that the Collection Letter is false, deceptive and unfair and violates the FDCPA for four main reasons. Plaintiff claims that the Collection Letter: (1) threatens to collect assets that Eltman had no intention of collecting; (2) threatens to enforce judgments despite Eltman's lack of standing to do so, due to a failure to file the assignment of judgment and provide notice to the consumer; (3) makes false and deceptive statements regarding asset investigation and non-exempt assets; and (4) misrepresents the involvement of attorneys, inviolation of various provisions of the FDCPA.³ (Am. Compl. ¶¶ 166-215.) For these reasons, Plaintiff asserts that the Collection Letter misleads the least sophisticated consumer and violates the FDCPA. Defendants argue that the Collection Letter was not deceptive or unfair within the meaning of the FDCPA because the Collection Letter: (1) merely informed consumers of the rights of the creditor and made no threats; (2) correctly stated that Defendants, who have no duty under state law to file assignments of judgment or to notify Plaintiff or other consumers of assignments of judgment, are entitled to collect on judgments assigned to them; (3) expressly disclaimed the involvement of any attorneys in drafting the letter or reviewing the consumers' accounts; and (4) did not include misrepresentations with respect to asset investigation or non-exempt assets. (Defs. Mem. of Law in Supp. of Defs. Mot. to Dismiss ("Defs. Mem.") 1-2, Docket Entry No. 80.)

The FDCPA was enacted to protect consumers from abusive debt collection practices by third-party debt collectors, to create parity in the debt collection industry and to standardize governmental intervention in the debt collection market. 15 U.S.C. § 1692(e); see also Benzemann v. Citibank, N.A., 806 F.3d 98, 100 (2d Cir. 2015) ("The purpose of the FDCPA is to 'eliminate abusive debt collection practices by debt collectors, to insure that those debt collectors who refrain from using abusive debt collection practices are not competitively disadvantaged, and to promote consistent State action to protect consumers against debt collection abuses.'" (quoting Kropelnicki v. Siegel, 290 F.3d 118, 127 (2d Cir. 2002))); Vincent v. The Money Store,736 F.3d 88, 96 (2d Cir. 2013) ("Congress enacted the FDCPA 'to eliminate abusive debt collection practices by debt collectors, to insure that those debt collectors who refrain from using abusive debt collection practices are not competitively disadvantaged, and to promote consistent State action to protect consumers against debt collection abuses.'" (quoting 15 U.S.C. § 1692(e))). "To accomplish these goals, the FDCPA creates a private right of action for debtors who have been harmed by abusive debt collection practices." Benzemann, 806 F.3d at 100 (citing 15 U.S.C. § 1692k).

The FDCPA prohibits debt collectors from, among other things, making false or misleading representations. 15 U.S.C. § 1692e. Section 1692e specifies certain categories of conduct that are prohibited, including making false representations about the amount or legal status of any debt, threatening to take any action that cannot legally be taken or that the debt collector does not intend to take, and using "any false representation or deceptive means to collect or attempt to collect any debt or to obtain information concerning a consumer." Id.; see Clomon v. Jackson, 988 F.2d 1314, 1319 (2d Cir. 1993) ("The sixteen subsections of § 1692e set forth a non-exhaustive list of practices that fall within [the ban on false, deceptive, or misleading representations or means in connection with the collection of any debt]."). The statute also prohibits "the use of any false, deceptive, or misleading representation in a collection letter . . . regardless of whether the representation in question violates a...