Okyere v. Palisades Collection, LLC

• Decision Date: 22 March 2013
• Docket Number: No. 12 Civ. 1453(GWG).,12 Civ. 1453(GWG).
• Parties: Johnson Poku OKYERE, Plaintiff, v. PALISADES COLLECTION, LLC et al., Defendants.
• Court: U.S. District Court — Southern District of New York

961 F.Supp.2d 508

Johnson Poku OKYERE, Plaintiff,

v.PALISADES COLLECTION, LLC et al., Defendants.

No. 12 Civ. 1453(GWG).

United States District Court, S.D. New York.

March 22, 2013.

Ahmad Keshavarz, Ahmad Keshavarz, Law Offices, Brooklyn, NY, Yisroel Schulman, Shanna Marie Tallarico, New York Legal Assistance Group, New York, NY, for Plaintiff.

Jonathan Justin Greystone, Spector Gadon & Rosen, P.C., Philadelphia, PA, Jay Shapiro, Katten Muchin Rosenman, LLP, New York, NY, for Defendants.

OPINION AND ORDER

GABRIEL W. GORENSTEIN, United States Magistrate Judge.

In this action, plaintiff Johnson Poku Okyere brings claims against defendants Todd Houslanger, Houslanger and Associates, PLLC (collectively, the “Houslanger Defendants”), and Palisades Collection, LLC (“Palisades”) for violations of the Fair Debt Collection Practices Act, 15 U.S.C. § 1692 et seq. (the “FDCPA”), and conversion. Okyere has also sued Ronald Moses, a New York City Marshal, for conversiononly. Moses and the Houslanger Defendants have moved to dismiss all claims against them under Fed.R.Civ.P. 12(b)(6) for failure to state a claim. Palisades has moved for judgment on the pleadings under Fed.R.Civ.P. 12(c). For the reasons stated below, these motions are granted, and the First Amended Complaint is dismissed with prejudice as to the federal claims and without prejudice as to the state claims.

I. BACKGROUND

We assume the allegations of the amended complaint to be true and summarize them only to the extent necessary to dispose of the defendants' motions.

A. Factual Background

In 2004, Palisades filed a lawsuit against Okyere in Bronx County Civil Court seeking a judgment on a debt owed to Discover Card, which had been assigned to Palisades. See Summons and Complaint, dated Jan. 12, 2004 (annexed as Ex. A to Plaintiff's First Amended Complaint and Jury Demand, filed June 7, 2012 (Docket # 24) (“Compl.” or “complaint”)). On May 17, 2004, a default judgment was entered against Okyere in the amount of $3954.03. See Judgment on Default, dated May 17, 2004 (annexed as Ex. A to Compl.). This judgment was procured based on a false affidavit of service. Compl. ¶ 12.

Nearly seven years later, on March 30, 2011, Moses restrained Okyere's bank account in order to execute the judgment. Id. ¶ 14; Computer Records of Marshal Moses related to Mr. Okyere, dated Nov. 17, 2011 (annexed as Ex. E to Compl.) (“Moses Records”), at 000062. Okyere believed the restraint related to a judgment with a different index number, which had been satisfied through a prior income execution. Compl. ¶ 16.

On April 25, 2011, Okyere, acting pro se, filed an order to show cause to vacate the default judgment and return the restrained funds. Id. ¶ 17; Order to Show Cause, dated Apr. 25, 2011 (annexed as Ex. C to Compl.). Okyere stated that he had never been served and requested a stay of further enforcement of the judgment pending resolution of the motion. Compl. ¶ 18. On April 25, 2011, the same day the motion was filed, Judge R. Franco signed the order to show cause and set a hearing date for May 5, 2011. Id. ¶ 19; Order to Show Cause. The order stated that all enforcement proceedings were “stayed” pending the hearing. Id. A copy of the order was mailed “on or before April 28, 2011” to both Moses and Mel S. Harris, the attorney who represented Palisades when the lawsuit was originally filed. Id. ¶¶ 11, 20. On April 29, 2011, Harris received the order to show cause, and on May 2, 2011, he contacted Palisades about representing it at the May 5 hearing. Id. ¶¶ 21–23. On May 3, 2011, Palisades informed Harris that it would arrange for a different attorney to represent it at the May 5 hearing. Id. ¶ 24.

“On or before May 2, 2011,” Moses received a copy of the order to show cause. Id. ¶ 26; Moses Records at 000062. On the same day, a “payout request/reminder” was sent from Moses's office to Okyere's bank. Compl. ¶ 27; Moses Records at 000062. On May 11, 2011, the bank issued a check in the amount of $2513.30 to Moses. Compl. ¶ 28. On May 16, 2011, Moses cashed the check and took out his own fee. Id. ¶ 29.

In the meantime, on May 4, 2011, the Houslanger Defendants filed an opposition to the order to show cause, at the direction of Palisades. Id. ¶ 32. At this point, the Houslanger Defendants had possession of the order staying execution of the judgment. Id. ¶ 33. Because no notice of substitutionof counsel was filed during this time period, Okyere did not know who actually represented Palisades. Id. ¶¶ 35, 38.

On May 5, 2011, the court adjourned the hearing on the order to show cause until May 12, 2011. Id. ¶ 39. On May 12, 2011, Judge Lizbeth Gonzalez issued an order vacating the judgment against Okyere. Id. ¶ 41; Decision/Order, dated May 12, 2011 (annexed as Ex. 1 to Plaintiff's Response in Opposition to Motion to Dismiss [DE 27–29] of Houslanger Defendants, filed July 13, 2012 (Docket # 39) (“Pl. Resp. to Houslanger Defs.' MTD”)).¹ The order stated, “all restraints, levies, liens and executions issued by the plaintiff against the defendant's bank accounts are lifted. All monies, including fees, in the possession of the plaintiff, City Marshall [sic] or other agent, shall be returned to the defendant forth[with].” Compl. ¶ 41; Decision/Order. At the May 12, 2012, hearing, Palisades was present “through the Houslanger Defendants,” Compl. ¶ 43, yet “[n]one of Defendants complied with the order to return the money ‘forth[with].’ ” Id.

On May 13, 2011, Palisades and the Houslanger Defendants, “through Marshal Moses,” took $2513.30 from Okyere's bank account, and Moses held $2371.78 in trust for Palisades and the Houslanger Defendants. Id. ¶ 45; Moses Records at 000066. On May 18, 2011, Palisades requested, through the Houslanger Defendants, that Moses continue to hold Okyere's money in trust for 60 additional days. Compl. ¶ 48; Moses Records at 000063. On June 14, 2011, Judge Barbato ordered Palisades to serve discovery on Okyere within 45 days, an order Palisades ignored. Compl. ¶ 49. Okyere then sent a letter to Palisades “via Houslanger Defendants,” which attached a copy of the May 12, 2011 Order and reminded both Palisades and the Houslanger Defendants to return the money. Id. ¶ 50.

On June 28, 2011, Moses asked the Houslanger Defendants about the status of Okyere's order to show cause. Id. ¶ 51; Moses Records at 000063. The Houslanger Defendants “declined to inform” Moses that the judgement against Okyere had been vacated “or affirmatively misrepresented to the Marshal the status of the court orders.” Compl. ¶ 51. On July 18, 2011, the Houslanger Defendants again asked Moses to continue holding Okyere's funds in trust for another 60 days. Id. ¶ 52; Moses Records at 000063. On August 23, 2011, the Houslanger Defendants reiterated this request. Compl. ¶ 53; Moses Records at 000063. On August 31, 2011, a notice of “Consent to Change Attorney” was filed, in which Palisades consented to the substitution of the Houslanger Defendants for Harris as Palisades' attorney. Compl. ¶ 54. Okyere did not receive a copy of this notice. Id. ¶ 55. On September 16, 2011, the Houslanger Defendants again instructed Moses to hold Okyere's money in trust for 60 additional days. Id. ¶ 58; Moses Records at 000063. The Houslanger Defendants made the same request on November 15, 2011. Compl. ¶ 59; Moses Records at 000063. On November 17, 2011, Moses returned $2513.30 to Okyere. Compl. ¶ 61; Moses Records at 000063–64.

B. Procedural History

After Okyere filed his original complaint on February 27, 2012, he eventually filed an amended complaint, see Compl., which now governs. On June 21, 2012, the Houslanger Defendants moved to dismiss the amended complaint. ² On July 9, 2012, Moses filed a motion to dismiss.³ Palisades filed an answer to the amended complaint and then moved for judgment on the pleadings.⁴ The defendants also filed a joint motion to stay discovery.⁵

II. GOVERNING LAWA. Motions to Dismiss and Motions for Judgment on the Pleadings

A party may move to dismiss pursuant to Fed.R.Civ.P. 12(b)(6) when the opposing party's complaint “fail[s] to state a claim upon which relief can be granted.” While a court must accept as true all of the allegations contained in a complaint, that principle does not apply to legal conclusions. See Ashcroft v. Iqbal, 556 U.S. 662, 677–80, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009); Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007) (“[A] plaintiff's obligation to provide the grounds of his entitlement to relief requires more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do.”) (citation, internal quotation marks, and brackets omitted). In other words, “[t]hreadbare recitals of the elements of a cause of action, supported by mere conclusory statements, do not suffice,” Iqbal, 556 U.S. at 678, 129 S.Ct. 1937, and thus a court's first task is to disregard any conclusory statements in a complaint, id. at 679, 129 S.Ct. 1937.

Next, a court must determine if the complaint contains “sufficient factual matter” which, if accepted as true, states a claim that is “plausible on its face.” Id. at 1949 (citation and internal quotation marks omitted); accord Port Dock & Stone Corp. v. Oldcastle Ne., Inc., 507 F.3d 117, 121 (2d Cir.2007) (“[A] complaint must allege facts that are not merely consistent with the conclusion that the defendant violated the law, but which actively and plausibly suggest that conclusion”). “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. The plausibility standard is not akin to a probability requirement, but it asks for more than a sheer possibility that a defendant has acted unlawfully.” Iqbal, 556 U.S. at 678, 129 S.Ct. 1937 (citations and internal quotation marks omitted). “[W]here the well-pleaded facts do not permit the...