Raviv v. NCB Management Services Incorporated

Filing 12

ORDER ADOPTING IN PART AND REJECTING IN PART REPORT AND RECOMMENDATIONS -- For the reasons set forth in the ATTACHED WRITTEN MEMORANDUM AND ORDER, the Court adopts that portion of the Report and Recommendation ("R & R") issued on July 1, 2 015 by the Hon. Robert M. Levy, U.S.M.J., that recommends granting Defendant's motion to enforce the Settlement Agreement, and rejects that portion recommending that Defendant be directed to send Plaintiff a copy of the tradeline deletion reques t. Accordingly, it is hereby ORDERED that: (1) Plaintiff send Defendant a copy of the executed Settlement Agreement and a W-9; and (2) upon receipt of the executed Settlement Agreement and W-9, (a) Defendant waive and/or discharge the balance of th e account made the subject of this action; (b) Defendant request that the reporting of its tradeline be deleted to the extent it has reported the debt at issue to any of the three credit bureaus; and (c) Defendant remit payment of $725.00 to Plaintiff. The Clerk of the Court is directed mail a copy of the Attached Written Memorandum and Order to close this case. SO ORDERED by Judge Dora Lizette Irizarry on 3/31/2016. (Irizarry, Dora)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF NEW YORK
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GIDEON RAVIV, pro se,
:
:
Plaintiff,
:
:
-against:
:
NCB MANAGEMENT SERVICES
:
INCORPORATED,
:
:
Defendants.
:
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DORA L. IRIZARRY, U.S. District Judge:

MEMORANDUM AND ORDER
ADOPTING IN PART AND REJECTING
IN PART REPORT AND
RECOMMENDATION
14-CV-2756 (DLI) (RML)

On April 17, 2014, pro se Plaintiff Gideon Raviv (“Plaintiff” or “Raviv”) brought this
action against Defendant NCB Management Services Incorporated (“Defendant” or “NCB”) in
New York State Supreme Court, Queens County alleging breach of contract, inter alia. On May
2, 2014, Defendant removed the matter to this Court pursuant to alleged violations of the Fair
Credit Reporting Act, 15 U.S.C. § 1681, et seq. contained in the complaint. On September 18,
2014, the parties reached a settlement on the record in open court to which both parties agreed to
be bound. (See generally Sept. 19 Conf. Tr., Dkt. Entry No. 8.)
Plaintiff submitted a letter to the Court on December 15, 2014 alleging that Defendant was
not in compliance with the terms of the settlement agreement because Defendant had failed to
inform the three credit reporting agencies that the debt at issue had been expunged. (Pl. Letter,
Dkt. Entry No. 7.) On February 9, 2015, Defendant filed a motion to compel compliance with the
aforementioned settlement agreement. (See generally Mot. to Compel, Dkt. Entry No. 9.) On
April 20, 2015, the Court referred the motion to compel to the assigned magistrate judge for a
report and recommendation.

On July 1, 2015, the Honorable Robert M. Levy, U.S.M.J., issued a Report and
Recommendation (“R & R”) 1 with respect to the parties’ Settlement Agreement and Release of
Liability (“Settlement Agreement”).

Pursuant to the terms of the Settlement Agreement,

Defendant agreed to: (1) pay Plaintiff $725.00; (2) waive and/or discharge the balance of the
account in the amount of $4,856.93; and (3) request that the reporting of its tradeline be deleted to
the extent Defendant had reported the debt to a credit bureau. The magistrate judge recommended
that NCB’s motion to enforce the Settlement Agreement be granted, and that Defendant be
“directed to send [Plaintiff] a copy of the tradeline deletion request that it sent to the credit
reporting agencies reflecting that it has discharged the Advanta debt.” 2 (R & R at 6, Dkt. Entry
No. 10.)
On July 2, 2015, Defendant objected to the recommendation that it send Plaintiff a copy of
the tradeline deletion request reflecting its discharge of the debt purchased from Advanta because
the terms of the Settlement Agreement already provided that Defendant will waive and/or
discharge the debt. (Def. Objection (“Objection”), Dkt. Entry No. 11 at 1.) Defendant further
contends that it never has reported any information regarding Plaintiff’s Advanta debt because the
original Advanta debt was sold to several third parties and then ultimately to Defendant. (Id.)
Defendant made these same representations during the settlement discussions on September 18,
2014. (Transcript of Sept. 18, 2014 Conference (“Tr.”) at 37-42, 68-71, Dkt. Entry No. 8.)
Moreover, Plaintiff acknowledged that he understood the terms of the agreement and assented to
them. (Id. at 39-70.) Plaintiff did not file an objection to the R & R.

1

Familiarity with the R & R, as well as the procedural history and relevant facts of this case, is assumed. (See
generally Docket Entry 10.)

2

2

Advanta Bank Corp. is the company that originally held the debt at issue in this matter. (R & R at 1.)

Upon due consideration and for the reasons set forth below, the Court adopts that portion
of the R & R that recommends granting Defendant’s motion to enforce the Settlement Agreement
and rejects that portion recommending that Defendant be directed to send Plaintiff a copy of the
tradeline deletion request.
STANDARDS OF REVIEW
Where a party objects to an R & R, a district judge must make a de novo determination
with respect to those portions of the R & R to which the party objects. See Fed. R. Civ. P. 72(b);
United States v. Male Juvenile, 121 F.3d 34, 38 (2d Cir. 1997). Portions of the R & R to which
the parties have not objected are reviewed for clear error. See Orellana v. World Courier, Inc.,
2010 WL 3861013, at *2 (E.D.N.Y. Sept. 28, 2010). The district court may then “accept, reject,
or modify the recommended disposition; receive further evidence; or return the matter to the
magistrate judge with instructions.” Fed. R. Civ. P. 72(b); see also 28 U.S.C. § 636(b)(1).
As a general matter, settlement agreements negotiated between litigants are fundamentally
indistinguishable from other contracts and, thus, must be construed in accordance with general
principles of contract law. Powell v. Omnicom, 497 F.3d 124, 128 (2d Cir. 2007); see also Red
Ball Interior Demolition Corp. v. Palmadessa, 173 F.3d 481, 484 (2d Cir. 1999). Furthermore, an
oral settlement agreement where all of the material terms are agreed to in open court constitutes a
binding contract. United States v. Sforza, 326 F.3d 107, 116 (2d Cir. 2013); see also Rispler v. Sol
Spitz Co., 418 F. Supp. 2d 82, 89 (E.D.N.Y. 2005). “When a party makes a deliberate, strategic
choice to settle, a court cannot relieve him of that a[sic] choice simply because his assessment of
the consequences was incorrect.” Powell, 497 F.3d at 129.
In assessing the enforceability of settlement agreements, the Court is mindful that, “the
Second Circuit, as a general matter, is solicitous of pro se litigants, enforcing standards of
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procedural leniency rather than holding them to the rigidities of federal practice.” Massie v.
Metropolitan Museum of Art, 651 F. Supp. 2d 88, 93 (S.D.N.Y. 2009). In the context of
settlements, “depending on the degree of the pro se litigant’s sophistication, his understanding of
the process and his appreciation of the significance of his agreeing to terms of settlement may be
less acute than that of a represented party.” Id.
It is well settled under New York law that parties are free to enter into a binding agreement
without reducing it to writing. Winston v. Mediafare Entm’t Corp., 777 F.2d 78, 80 (2d Cir. 1985);
see also Oparah v. The New York City Dept. of Educ., 2015 WL 4240733, *5 (S.D.N.Y. July 10,
2015). In Winston, the Second Circuit set forth four factors a court must consider to determine
whether an oral or unsigned agreement is enforceable: “(1) whether there has been an express
reservation of the right not to be bound in the absence of a writing; (2) whether there has been
partial performance of the contract; (3) whether all of the terms of the alleged contract have been
agreed upon; and (4) whether the agreement at issue is the type of contract that is usually
committed to writing.” Winston, 777 F.2d at 80. These factors may be supported by oral
testimony, correspondence or other preliminary or partially complete writings. Id. at 81. No single
factor is dispositive. Ciaramella v. Reader’s Digest Ass’n, Inc., 131 F.3d 320, 323 (2d Cir. 1997).
Where there is no written document upon which to rely, the evidence of the parties’ intent is the
determining factor. Powell, 497 F.3d at 129; see also Winston, 777 F.3d at 80; Oparah at *5. The
Court has the inherent power to summarily enforce a settlement agreement where the terms are
clear and unambiguous. Omega Engineering, Inc. v. Omega, S.A., 432 F.3d 437, 444 (2d Cir.
2005) (internal citations and quotation marks omitted). Furthermore, where the settlement is
negotiated before the Court on the record, as it is here, the Court’s inherent power is particularly
clear. Id.
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DISCUSSION
A tradeline is a credit industry term signifying an “entry by a credit grantor to a consumer’s
credit history maintained by a credit reporting agency.”

See Glossary of Credit Terms,

EXPERIAN, available at http://www.experian.com/credit-education/glossary.html#t.

“A

tradeline describes the consumer’s account status and activity.” Id. The information displayed on
a tradeline includes “names of companies where the applicant has accounts, dates accounts were
opened, credit limits, types of accounts, balances owed and payment histories.” Id.
Defendant is a debt buyer and third party collection agency.

(Motion to Compel

Compliance with Settlement Order (“Mot. to Compel”) at 1, Dkt. Entry No. 9.) In the instant
matter, the tradeline at issue reflects Plaintiff’s $4,856.93 Advanta debt that ultimately was
purchased by Defendant. (Id. at 1-2.) Specifically, Advanta Bank Corp. sold the debt to Vion
Holdings, LLC, who then sold it to Fortis Capital IV, LLC, who ultimately sold it to Defendant.
(Id.) The tradeline had been added to Plaintiff’s credit report pursuant to a notification from an
affiliate of Advanta Bank Corp. prior to its sale of the debt to various third parties. (Id. at 2.)
In applying the four Winston factors to the instant matter, there is no evidence in the record
that reveals an express or even an implied reservation of a right not to be bound by the terms of
the agreement in the absence of a writing. (See generally Tr.) Moreover, the settlement agreement
at issue ultimately was reduced to a writing in the form of the Settlement Agreement and Release
of Liability which had been forwarded to Plaintiff. (See Def.’s Letter Resp., Ex. A, Dkt. Entry No.
6.) Given this memorialization of settlement terms in a written document, the Court need not reach
the remaining three factors in the Winston analysis. However, in deference to Plaintiff’s pro se
status, the Court examines each of those factors in turn.

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The settlement agreement was partially performed insofar as Defendant mailed Plaintiff
the requisite settlement documents six days after the oral entry of the agreement before the
magistrate judge. (Id.) The submission of a written settlement draft between opposing parties is
sufficient to constitute partial performance of the agreement. Gildea v. Design Distrib., Inc., 378
F. Supp. 2d 158, 161 (E.D.N.Y. 2005). Thus, the second prong of the Winston analysis has been
satisfied.
The parties stated on the record that they understood the terms of the settlement agreement
and did not indicate that they had any material terms to add. (Tr. at 37:16-25; 38:1-25; 39:1-13.)
Indeed, Defendant provided an exhaustive explanation to Plaintiff why Defendant could agree to
request a tradeline deletion only for any NCB-reported debt on Plaintiff’s credit report. (Id. at
40:18-25; 41:18-25; 42:1-8.) Therefore, the third Winston factor has been satisfied because all of
the terms of the settlement agreement have been voluntarily assented to.
Such an agreement to discharge debt is typically memorialized in writing. See generally
Sodhi v. Mercedes Benz Financial Services, USA, LLC, 957 F. Supp. 2d 252 (E.D.N.Y. 2013).
Since the settlement agreement issue was reduced to writing, the fourth and final element in the
Winston analysis is moot.
Accordingly, the parties entered into an enforceable settlement agreement as reflected in
the September 18, 2014 settlement conference. (See generally Tr.) Plaintiff did not file an
objection to the R & R. Defendant, who brought the motion to compel compliance with the
settlement agreement in the first instance, does not dispute the enforceability of the agreement.
Instead, Defendant contends that it cannot comply with the additional requirement recommended
by the magistrate judge that it send Plaintiff a copy of the tradeline deletion request submitted to
the credit reporting agencies reciting its discharge of the $4,856.93 debt it purchased from Advanta
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Bank Corp. (R & R at 6.) As discussed further below, Defendant is unable to submit such a
tradeline deletion request because it did not report the Advanta debt to the credit bureaus in the
first instance. Defendant merely purchased the Advanta debt from another third party collection
agency. (Mot. to Compel at 1-2.)
During a detailed colloquy between the magistrate judge and Plaintiff, the magistrate judge
stated the clear terms of the agreement on the record and ensured that Plaintiff’s assent to those
terms was knowing and voluntary. (Tr. at 39:3-13.) Similarly, during the course of those on-therecord settlement discussions, Defendant explained that it was unable to order the removal of the
Advanta tradeline from Plaintiff’s credit report. (Id. at 38:8-12.) Specifically, Defendant informed
both the magistrate judge and Plaintiff that, notwithstanding its purchase of the debt at issue from
the original creditor, Advanta Bank Corp., Defendant did not have control over any tradeline on
Plaintiff’s credit report that had been reported by a different creditor irrespective of whether
Defendant had subsequently purchased that debt. (Id. at 37:22-25; 38:1-2.) The parties thereby
ultimately agreed that Defendant would issue a tradeline deletion request for any debt reported
specifically by Defendant, not any debt reported by prior creditors. (Id. at 38:13-28; 39:3-13.)
Because Defendant had not reported the aforementioned debt to the credit bureaus, it did not have
the requisite authority to request its removal. As such, Plaintiff’s demand for a deletion of the
Advanta tradeline from NCB is unreasonable and cannot be accommodated. Plaintiff obtained a
favorable result in this settlement because Defendant agreed to absolve Plaintiff of the Advanta
debt. Defendant is not seeking to rescind that debt waiver, but only asserts it cannot comply with
the recommendation of the magistrate judge. Defendant’s waiver of the Advanta debt represents
its full compliance with the provisions of the Settlement Agreement.

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CONCLUSION
Based upon the foregoing reasons, the Court adopts that portion of the R & R that
recommends granting Defendant’s motion to enforce the Settlement Agreement, and rejects that
portion recommending that Defendant be directed to send Plaintiff a copy of the tradeline deletion
request. Accordingly, it is hereby ORDERED that: (1) Plaintiff send Defendant a copy of the
executed Settlement Agreement and a W-9; and (2) upon receipt of the executed Settlement
Agreement and W-9, (a) Defendant waive and/or discharge the balance of the account made the
subject of this action; (b) Defendant request that the reporting of its tradeline be deleted to the
extent it has reported the debt at issue to any of the three credit bureaus; and (c) Defendant remit
payment of $725.00 to Plaintiff.

SO ORDERED.
Dated: Brooklyn, New York
March 31, 2016
/s/
DORA L. IRIZARRY
United States District Judge

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