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

277 F.Supp.3d 337

Jovana N. MOUKENGESCHAIE, Plaintiff,

v.ELTMAN, ELTMAN & COOPER, P.C., et al., Defendants.

14 CV 7539 (MKB) (CLP)

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

Signed September 29, 2017

Jonathan Robert Miller, Brian L. Bromberg, Bromberg Law Office, P.C., New York, NY, for Plaintiff.

Concepcion A. Montoya, Matthew B. Corwin, Matthew E. Lewitz, Hinshaw & Culbertson LLP, New York, NY, Jonathan M. Robbin, Blank Rome LLP, New York, NY, for Defendants.

MEMORANDUM AND ORDER

POLLAK, United States Magistrate Judge:

On December 29, 2014, plaintiff Jovana N. Moukengeschaie filed this putative class action on behalf of herself and all other similarly situated consumers against defendants Eltman, Eltman & Cooper, P.C., LVNV Funding LLC, and Resurgent Capital Services L.P., alleging violations of the Fair Debt Collection Practices Act ("FDCPA"), 15 U.S.C. § 1692 et seq. By Notice of Motion dated October 17, 2016, plaintiff moves to amend the Complaint to add a demand for actual damages on behalf of a Sub–Class defined in the proposed Second Amended Complaint, along with two paragraphs explaining why the alleged injuries suffered by the Sub–Class are concrete and particularized.

For the reasons set forth below, the Court grants plaintiff's motion to amend the Complaint.

FACTUAL BACKGROUND

Plaintiff alleges that she is a resident of Queens, N.Y. and a "consumer" as defined by Section 1692a(3) of the FDCPA. (Sec. Am. Compl.¹ ¶ 10). According to the plaintiff's proposed Second Amended Complaint ("Complaint"), defendant Eltman, Eltman & Cooper P.C. ("EEC") is a professional corporation, organized under the laws of the State of New York, and located at 140 Broadway, New York, N.Y. (Id. ¶ 11). Plaintiff alleges that EEC is a "debt collector" as defined by the FDCPA, in that it is regularly engaged in the business of collecting debts owed by consumers through telephone calls and correspondence. (Id. ) Plaintiff further alleges that defendant LVNV Funding LLC ("LVNV") is a limited liability company, organized under Delaware law, with a principal place of business located in Las Vegas, Nevada. (Id. ¶ 25). According to plaintiff, LVNV is a debt collector as defined by 15 U.S.C. §§ 1692a(4) and (6) because its business consists solely of purchasing, owning, and facilitating the collection of consumer debts. (Id. ¶¶ 26–29).

Plaintiff alleges that defendant Resurgent Capital Services L.P. ("Resurgent") is a limited partnership organized under the laws of Delaware, with its principal place of business in Greenville, S.C. (Id. ¶ 14). Plaintiff further alleges that Resurgent acts as the "master servicer" of all defaulted consumer debt owned by LVNV. (Id. ¶ 15). According to the Complaint, defendant Resurgent services, manages, and collects every charged-off consumer debt purchased by LVNV (id. ¶¶ 16–17), and Resurgent has been designated by LVNV as its "attorney-in-fact," retained by LVNV to service, liquidate, and manage accounts receivable on behalf of LVNV. (Id. ¶ 18).

The Complaint alleges that on December 31, 2013, EEC sent plaintiff a letter purporting to collect a debt owed to its client, LVNV (the "subject debt"). (Id. ¶ 135, Ex. A). The letter stated that the subject debt arose from a consumer credit card issued by Capital One Bank (USA), N.A. ("Capital One"). The Complaint alleges that EEC's collection letter failed to disclose that LVNV, which had purchased the debt after it went into default, had purchased the debt not from Capital One, but rather from North Star Capital Acquisitions LLC ("North Star"). (Id. ¶¶ 137–39). The collection letter also allegedly failed to disclose that LVNV had purchased the debt from North Star after the subject debt had been reduced to judgment by the Queens County Civil Court. See North Star Capital Acquisitions LLC v. Moukengeschaie, CV–16952–09/QU (N.Y. Civ. Ct.). (Sec. Am. Compl. ¶ 139). The letter states that EEC "ha[d] been instructed to find any assets available to help us collect on the judgment," including the seizure of "certain non-exempt assets owned by you to pay the judgment that you owe." (Sec. Am. Compl., Ex. A).

Plaintiff alleges that EEC was retained by Resurgent to represent LVNV to collect the debt, but that neither LVNV nor its predecessor, North Star, ever took the necessary steps required by New York Law to take assignment of the debt or enforce the judgment. (Id. ¶ 141). Plaintiff claims that she never received notice of the 2009 State court proceeding because the "process server hired by North Star's attorneys engaged in ‘sewer service.’ " (Id. ¶ 148). Plaintiff also claims that she has no recollection of ever defaulting on a Capital One credit card. (Id. )

In her first Amended Complaint, filed on May 8, 2015, plaintiff asserted claims on behalf of a class of New York consumers who allegedly owed debts to LVNV, alleging that in many instances, defendants were seeking to collect on judgments that had not been properly assigned under state law. In moving to amend her Complaint again, plaintiff seeks to add a demand for actual damages on behalf of a sub-class comprised of consumers who received letters that were "materially identical or substantially similar" to the collection letter sent to plaintiff and for whom the alleged debts were purchased by LVNV after the debts had already been reduced to judgment (the "Sub–Class"). (Id. ¶ 199). In relation to this demand for actual damages, plaintiff seeks to add allegations that she and all of the putative class members have suffered concrete and particularized injuries as a result of defendants' collection attempts, "which contained material misrepresentations that Defendants had the right to collect on the alleged debts and that Defendants intended to conduct extensive and invasive asset searches to collect on relatively small judgments." (Id. ¶ 161). Plaintiff asserts that, as a result, many class members "paid funds to Defendants as a result of being subject to threats and collection attempts from Defendants." (Id. ¶ 162). Finally, plaintiff seeks to add the allegation that "without proper notice of assignment of the debts allegedly owed by Plaintiff and the class members, Defendants did not have the right to collect" and therefore, any sums collected are actual damages, which must be returned to the class members. (Id. ¶ 218).

Following the filing of the Amended Complaint on May 8, 2015, the defendants moved to dismiss plaintiff's claims on June 15, 2015. The district court granted defendants' motion in part, but allowed plaintiff to pursue her claims that: 1) the EEC collection letter violated Sections 1692e(4), e(5), and f(6) of the FDCPA by threatening to investigate and seize assets with no intention of following through on the threats; 2) the collection letter violated Sections 1692e(4), e(5), and f(6) by threatening to execute on judgments defendants claimed to have purchased even though defendants lacked the legal authority to do so because the original creditors had failed to notify the consumers of the assignments of the judgments; 3) the collection letter violated Sections 1692e and e(2)(A) by falsely representing that defendants were legally entitled to collect on the judgments when they were not because the consumers had not been notified of the assignment; 4) the collection letter violated Sections 1692e and e(10) by falsely stating that EEC maintains an "asset investigation department" that identifies and seizes the types of assets listed in the collection letter, that plaintiff's debt had been referred to this department, and that LVNV had instructed EEC to find plaintiff's assets. (See Order² at 31).

In the Complaint and Amended Complaint, plaintiff sought only statutory damages under 15 U.S.C. § 1692k(a)(2)(B). In moving to amend her Complaint a second time, plaintiff seeks to add a claim for actual damages on behalf of the members of the Sub–Class. Plaintiff contends that class members who experienced collection efforts by defendant LVNV prior to the class members' receiving notice that their judgments had been assigned to LVNV are entitled to judgment on the sums collected as actual damages for LVNV's violation of the FDCPA. Defendants contend that the motion to amend should be denied because: 1) plaintiff lacks standing to bring such a claim; 2) amounts paid by Sub–Class members to reduce their state court judgments are not actual damages; and 3) the claim for damages is too individualized to survive class certification and the amendment would therefore be futile.

DISCUSSION

A. Motion to Amend—Standards

As a general matter, Rule 15(a) of the Federal Rules of Civil Procedure provides that an amendment as of right may be made at any time prior to the service of a responsive pleading. Otherwise, a party may amend a pleading "only with the opposing party's written consent or the court's leave." Fed. R. Civ. P. 15(a)(2). The Rule also states, however, that "the court shall freely give leave when justice so requires," id., and the Rule has been liberally construed. See Foman v. Davis, 371 U.S. 178, 182, 83 S.Ct. 227, 9 L.Ed.2d 222 (1962). As the court in Monahan v. New York City Dep't of Corrections noted: "The Rule reflects two of the most important principles behind the Federal Rules: pleadings are to serve the limited role of providing the opposing party with notice of the claim or defense to be litigated ... and ‘mere technicalities’ should not prevent cases from being decided on the merits." 214 F.3d 275, 283 (2d Cir. 2000) (internal citations omitted), cert. denied, 531 U.S. 1035, 121 S.Ct. 623, 148 L.Ed.2d 533 (2000) ; see also Kirkland v. City of New York, No. 06 CV 331, 2007 WL 1541367, at *2 (E.D.N.Y. May 25, 2007) (quoting Chapman v. YMCA of Greater Buffalo, 161 F.R.D. 21, 24 (W.D.N.Y. 1995) ) (noting that "[t]he stated purpose of Rule 15 is to allow a party to correct an error that might otherwise prevent the court from hearing the merits of the claim").

Although leave to amend "should [be]...