Kearney et al v. Cavalry Portfolio Services LLC et al

Filing 85

ORDER denying 78 Motion for Reconsideration -- For the reasons set forth in the ATTACHED WRITTEN MEMORANDUM AND ORDER, Plaintiffs' motion for reconsideration is denied in its entirety. This case was previously closed by court order. SO ORDERED by Judge Dora Lizette Irizarry on 3/30/2015. (Irizarry, Dora)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF NEW YORK
-------------------------------------------------------------------JANICE KEARNEY, SAMANTHA RODRIGUEZ,
GWENDOLYN BIRD, and LAURIE GOLDSTEIN on
behalf of themselves and all others similarly situated,

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:
:
:
: MEMORANDUM AND ORDER
Plaintiffs,
:
12-CV-00860 (DLI) (RML)
:
-against:
:
CAVALRY PORTFOLIO SERVICES, LLC,
:
CAVALRY SPV I LLC, CHOI LAW OFFICE PLLC, :
DANIELLE C. CHOI, SCHACHTER PORTNOY, LLC, :
CRAIG FAYE AND JOHN DOES # 1-10,
:
:
Defendants.
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DORA L. IRIZARRY, United States District Judge:
Plaintiffs Samantha Rodriguez, Janice Kearney, Gwendolyn Bird, and Laurie Goldstein
(“Plaintiffs”) seek reconsideration of this Court’s July 31, 2014 Memorandum and Order (“July
31 Order”) granting the motions to dismiss Plaintiffs’ amended complaint. Defendants Cavalry
Portfolio Services, LLC (“CPS”), Cavalry SPV I, LLC (“SPV I”), Choi Law Office PLLC,
Danielle C. Choi (together with Choi Law Office PLLC, “Choi Defendants”), Schachter Portnoy,
LLC, Craig Faye (together with Schachter Portnoy LLC, “Schachter Defendants”), oppose the
motion for reconsideration, contending that Plaintiffs’ challenge to the July 31 Order does not
put forward any new arguments, and, therefore, lacks merit. For the reasons set forth below,
Plaintiffs’ motion for reconsideration is denied.
BACKGROUND
The Court assumes familiarity with the underlying facts of this case, which are detailed in
the July 31 Order. The Court sets forth here only those facts most germane to this opinion.

Plaintiffs are individuals who were defendants in collection lawsuits initiated to recover
amounts due on debts that were not timely paid. (Plaintiffs’ First Amended Complaint and Jury
Demand (“Am. Compl.”), Docket Entry No. 45, ¶ 24.) SPV I purchased title to Plaintiffs’
outstanding debts from various creditors, and assigned servicer CPS “rights to seek to collect the
debt, but . . . not . . . title or ownership to the debt, which remains with SPV I.” (“Am. Compl. ¶
12.) Plaintiffs claim that Defendants violated the Fair Debt Collection Practices Act, 15 U.S.C. §
1692 et seq. (“FDCPA”), New York General Business Law § 349 (“NYGBL § 349”), and New
York Judiciary Law § 487 (“NYJL § 487”) by pursuing litigation in the name of CPS to collect
debts that actually belonged to SPV I.
The relationship between SPV I and CPS is central to the dispute. On or about June 13,
2003, SPV I and CPS entered into a Servicing and Management Agreement (“SMA”) wherein
CPS agreed to manage, collect and service the accounts that were owned by SPV I at that time
for the consideration set forth in the SMA. (See Exhibit Annexed to Am. Compl. at 161.)
Beginning in December 2007, SPV I transferred accounts, including the accounts of the four
named plaintiffs in this action, to CPS via assignment on a case-by-case basis. (See generally
Am. Compl.) CPS was tasked with pursuing collection or judicial enforcement of the debt
obligations under each of the assigned accounts. (See id. ¶ 46.) The assignments at issue are
substantially the same and vest with CPS all of SPV I’s rights to pursue collection or judicial
enforcement of obligations under SPV I’s accounts. (See Exhibit Annexed to Am. Compl. at 36,
87, and 157.) Subsequently, CPS, as assignee of SPV I, was the named plaintiff in separate
collection lawsuits against Plaintiffs in state court. (See Am. Compl. ¶¶ 10-13.)
In its July 31 Order, the Court granted various motions to dismiss Plaintiffs’ claims,
which were predicated on the notion that the underlying collection actions should not have been

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commenced on behalf of CPS, as CPS did not have standing and was not the real party in
interest. (See generally July 31 Order, Docket No. 73.) Plaintiffs supported this conclusion by
contending that the assignments only assigned to CPS the right to pursue collection of the debts,
which, they asserted, was an interest insufficient to confer standing. (See Am. Compl. ¶ 40.)
On August 27, 2014, Plaintiff filed the subject motion for reconsideration of the July 31
Order, pursuant to Local Rule 6.3.1 Plaintiffs argue that the Court improperly held that CPS had
standing to commence the underlying debt collection lawsuits based on the above-mentioned
assignments, because the Court did not consider that the assignments incorporated the SMA by
reference. (See Plaintiffs’ Memorandum of Law in Support of Motion for Reconsideration (“Pls.
Mem.”), Docket No. 79, at 1-3.) Additionally, Plaintiffs argue that the Court should reconsider
its dismissal of their NYJL § 487 claims, because they provided factual and legal support which
the Court did not discuss in its July 31 Order. (See id. at 12-13.) Defendants oppose the motion
on various grounds, arguing that Plaintiffs cannot satisfy the strict standard required for
reconsideration, because the Court did not overlook any facts or controlling principles of law and
Plaintiffs did not provide the Court with any newly discovered evidence. (See, e.g., Defendants

Schachter Portnoy, LLC and Craig Faye’s Memorandum of Law in Opposition (“Schachter
Mem.”), Docket No. 82, at 6.) The Court agrees.
DISCUSSION
I.

Standard for Reconsideration
“The standard for granting [a motion for reconsideration] is strict, and reconsideration

will generally be denied unless the moving party can point to controlling decisions or data that
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Under Local Civil Rule 6.3, an affidavit may not be filed in support of a motion for reconsideration absent court
authorization. Plaintiffs’ two submitted declarations are equivalent to an affidavit. See Polsby v. St. Martin’s Press,
Inc., 2000 WL 98057, at *1 (S.D.N.Y. Jan. 18, 2000) (“Because the rule permits such motions only to deal with
matters or decisions which it is claimed the court has ‘overlooked,’ affidavits are not permitted inasmuch as no new
facts may be adduced.”). As Plaintiffs did not request such leave here, the Court will not consider the submitted
declarations.

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the court overlooked—matters, in other words, that might reasonably be expected to alter the
conclusion reached by the court.” Shrader v. CSX Transport, Inc., 70 F.3d 255, 257 (2d Cir.
1995). “The major grounds justifying reconsideration are an intervening change in controlling
law, the availability of new evidence, or the need to correct a clear error or prevent manifest
injustice.” Hinds County, Miss. v. Wachovia Bank N.A., 708 F. Supp. 2d 348, 369 (S.D.N.Y.
2010) (citation and internal quotation marks omitted); see Kolel Beth Yechiel Mechil of Tartikov,
Inc. v. YLL Irrevocable Trust, 729 F.3d 99, 104 (2d Cir. 2013). Reconsideration is not a proper
tool to repackage and relitigate arguments and issues already considered by the court in deciding
the original motion. Hinds County, Miss., 708 F. Supp. 2d at 369; United States v. Gross, 2002
WL 32096592, at *4 (E.D.N.Y. Dec. 5, 2002). Nor is it proper to raise new arguments and
issues. Gross, 2002 WL 32096592 at *4.
I.

Plaintiffs May Not Relitigate the FDCPA Claims
Plaintiffs argue that reconsideration of the dismissal of the FDCPA claims is warranted,

because the Court erred in not considering the SMA in conjunction with the assignment
documents in the state court file. (See Pls. Mem. at 1.) Plaintiffs contend that the SMA utilizes
language reflecting that SPV I owned and controlled the accounts it assigned to CPS for
servicing, and that the later assignment’s referral to discrete paragraphs of the SMA require the
two contracts to be “read in harmony.” (Pls. Mem at 3.) Such a harmonious reading, Plaintiffs
argue, would lead the Court to find that the June 13, 2003 SMA was “incorporated by reference”
into the assignments, and, thus, SPV I retained control over the account portfolios transferred to
CPS in the assignments by virtue of language in the SMA. (Id. at 2-3.) According to Plaintiffs,
this compels the Court to conclude that CPS did not own the right to pursue collection of
accounts that the assignments conveyed, and, therefore, did not have standing to sue. (Id. at 5-9.)

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As an initial matter, this argument is inapplicable as to plaintiffs Kearney and Bird. With
regard to these Plaintiffs, the Court held that their FDCPA claims are time barred as against all
defendants, which warranted dismissal. (See July 31 Order at 8-10.) Plaintiffs Kearney and Bird
do not seek reconsideration as to this Court’s dismissal of their FDCPA claims on statute of
limitations grounds. (See generally Pls. Mem.) Thus, Plaintiffs’ motion for reconsideration as it
relates to the FDCPA claims bears upon only plaintiffs Rodriguez and Goldstein.
With regard to the remaining FDCPA claims, it is well settled that “[a] ‘motion to
reconsider should not give the moving party another bite at the apple by permitting argument on
issues that could have or should have been raised on the original motion.’” Bace v. Babitt, 2012
WL 2574750, at *4 (S.D.N.Y. July 3, 2012) (citing Key Mechanical Inc. v. BDC 56 LLC, 2002
WL 449856, at *2-3 (S.D.N.Y. Mar. 22, 2002), aff’d, 330 F.3d 111 (2d Cir. 2003)). Moreover,
the goal of Local Rule 6.3 is “to ensure the finality of decisions and to prevent the practice of a
losing party examining a decision and then plugging the gaps of a lost motion with additional
matters.”

Grand Crossing, L.P. v. U.S. Underwriters Ins. Co., 2008 WL 4525400, at *3

(S.D.N.Y. Oct. 6, 2008) (quotations omitted). Therefore, “[u]nder [L.C.R. 6.3], a party may not
‘advance new facts, issues or arguments not previously presented to the Court.’” E.E.O.C. v.
Fed. Express Corp., 268 F. Supp. 2d 192, 199 (E.D.N.Y. 2003) (quoting Morse/Diesel, Inc. v.
Fidelity & Deposit Co. of Md., 768 F. Supp. 115, 116 (S.D.N.Y. 1991)).
Plaintiffs previously did not raise their current argument regarding the impact of the
SMA on the assignments, and, because they could have made this argument previously, they are
precluded from raising it now. As Plaintiffs clearly state in their motion for reconsideration, the
SMA was attached to the First Amended Complaint, and therefore was before this Court when it
adjudicated Defendants’ motions to dismiss. (See Pls. Mem. at 2.) In their Amended Complaint

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and response to the motions to dismiss, Plaintiffs dealt directly with the impact of the SMA on
the 2007 assignments and never argued that the assignments at issue incorporated the entire 2003
SMA by reference or that the SMA’s language somehow supersedes the language of the
subsequent assignments, as they now argue. (See generally Am. Compl.; Plaintiffs’ Response in
Opposition to All Defendants’ Motions to Dismiss (“Pls. Opp. Mem.”), Docket No. 55.) Instead,

Plaintiffs argued that SPV I assigned CPS the right to seek to collect the debt, but not title to or
ownership of the debt. (See Am. Compl. ¶ 12.) Moreover, the detailed arguments put forward
by Plaintiffs in their Amended Complaint, and in their opposition papers to all of Defendants’
motions to dismiss, related almost solely to the significance of the assignments at issue. (See.
e.g., Am. Compl. ¶¶ 43-51, 107-110.) Plaintiffs previously failed to argue or even suggest that
the SMA decreased the rights obtained by CPS in the assignments. In fact, when acknowledging
the existence of the SMA, Plaintiffs simply argued that “[t]he SMA does nothing to increase the
assignment right of CPS.” (Am. Compl. ¶¶ 79, 110 (emphasis added).) Plaintiffs’ instant
argument could have been made in opposition to Defendants’ motions to dismiss, but they failed
to do so. Plaintiffs may not do so now through a motion for reconsideration.
In the instant motion, Plaintiffs also contend that, even if the Court does not consider the
SMA, the dismissal of their FDCPA claims was in error due to this Court’s incorrect
interpretation of Advanced Magnetics Inc. v. Bayfront Partners, Inc., 106 F .3d 11 (2d Cir.
1997).

(See Pls. Mot. at 9.)

This argument is similarly inappropriate for a motion for

reconsideration, because Plaintiffs have failed to “point to controlling decisions or data that the
court overlooked” and, instead are reiterating arguments the Court has rejected. See Shrader, 70
F.3d at 257. The Court examined Advanced Magnetics Inc. extensively in its July 31 Order, and
found Plaintiffs’ reliance on this case to be misplaced. (See July 31 Order at 11-13.) Moreover,

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Plaintiffs’ present argument does not reflect any intervening change of controlling law or the
availability of new evidence that would require reconsideration by the Court. Plaintiffs may not
use this motion for reconsideration “as a vehicle for relitigating issues already decided by the
Court.” Davidson v. Scully, 172 F. Supp. 2d 458, 461 (S.D.N.Y. 2001). Accordingly, Plaintiffs’
motion for reconsideration as to the dismissal of their FDCPA claims is denied.
II.

NYJL § 487
NYJL § 487 provides that an attorney who “[i]s guilty of any deceit or collusion, or

consents to any deceit or collusion, with intent to deceive the court or any party” is guilty of a
misdemeanor and is liable for treble damages recoverable in a civil action. In its July 31 Order,
the Court dismissed Plaintiffs’ allegations that CPS, SPV I, the Choi Defendants, and the
Schacter Defendants violated section 487 by bringing and participating in the underlying debt
collection law suits and “deceiv[ing] consumers into believing that they had no basis to challenge
the claim that CPS had a legal right to bring suit.” (Am. Compl. ¶ 149.) In dismissing this claim,
the Court stated that Plaintiffs’ section 487 claims “relies extensively on their claim that CPS did
not have standing to bring these suits, a claim this Court has rejected.” (July 31 Order at 17.)
The Court further noted that, even if CPS lacked standing in the underlying debt collection suits,
Plaintiffs failed to plead plausibly their section 487 claim, as: (1) a lack of standing is a curable
procedural defect; and (2) Plaintiffs cite no cases supporting the conclusion that a mere lack of
standing demonstrates the intent to deceive. (Id.) Plaintiffs now request reconsideration of the
Court’s dismissal of their section 487 claims against the Choi Defendants and the Schacter
Defendants. (See Pls. Mot. at 11-12.) The request is denied.
Plaintiffs have failed to raise any new evidence, controlling decisions, or arguments that
the Court overlooked with regard to their section 487 claims. As the Choi Defendants aptly note,

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“In support of their argument, plaintiffs reiterate the precise arguments that have already been
rejected. They compare an [allegedly] improper assertion of standing to the filing of collection
lawsuits without any meaningful attorney review, including the submission of false affidavits.”
(Defendants Choi Law Office PLLC and Danielle C. Choi’s Memorandum of Law in
Opposition, Docket No. 81, at 13.) Plaintiffs’ continued reliance on this argument is misplaced,
as “[a] motion for reconsideration is not ‘an occasion for repeating old arguments previously
rejected.’” Hicks v. T.L. Cannon Corp., 2014 U.S. Dist. LEXIS 144210 (W.D.N.Y. Oct. 8, 2014)
(citing Associated Press v. U.S. Dep‘t of Def., 395 F. Supp. 2d 17, 19 (S.D.N.Y. 2005)); see also
Dinsio v. F.B.I., 2007 WL 2581214, at *1 (W.D.N.Y. Sept. 5, 2007) (“Reconsideration is not an
appropriate forum for rehashing previously rejected arguments.”).
Moreover, courts repeatedly have dismissed section 487 claims where, as here, there is an
absence of evidence of the requisite intent to deceive. See O’Callaghan v. Sifre, 537 F. Supp. 2d
594, 596-597 (S.D.N.Y. 2008) (granting Defendants’ motion to dismiss section 487 claim as the
record lacked any evidence of intent to deceive); McNamara v. Estis, 226 A.D.2d 258 (1st Dep’t
1996)( granting summary judgment and dismissing section 487 claim as plaintiffs failed to show
an intent to deceive). In their instant motion, Plaintiffs still “cite no cases supporting the
conclusion that a mere lack of standing demonstrates the intent to deceive.” (July 31 Order at
18.) Plaintiffs have failed to articulate any reason for the Court to revisit its prior ruling, and,
therefore, Plaintiffs’ motion to reconsider the Court’s dismissal of their section 487 claims is
denied.
III.

NYGBL § 349
Plaintiffs’ motion for reconsideration does not address the Court’s dismissal of the

NYGBL § 349 claims. Accordingly, reconsideration is inappropriate.

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CONCLUSION
For the reasons set forth above, Plaintiffs’ Motion for Reconsideration is denied in its
entirety.
SO ORDERED.
Dated: Brooklyn, New York
March 30, 2015
/s/
DORA L. IRIZARRY
United States District Judge

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