Liew et al v. Cohen & Slamowitz, LLP et al

Filing 59

MEMORANDUM AND ORDER. For reasons stated in the attached Memorandum and Order defendants' motion to dismiss 52 is granted in part and denied in part as follows: (1) All class claims asserted by the three named plaintiffs are dismissed; (2) Th e individual claims by Ms. Atwood and Mr. Liew are dismissed; and (3) Mr. Kayani has stated plausible individual claims. Counsel for the remaining parties are directed to confer and submit a joint status report by April 14, 2017, advising the court how they wish to proceed with the litigation. Ordered by Judge Kiyo A. Matsumoto on 4/6/2017. (Fletcher, Camille)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF NEW YORK
-------------------------------------- X
WAI HOE LIEW a/k/a MICHAEL W. LIEW,
KHURRAM KAYANI, and
ELIZABETH K. ATWOOD a/k/a ELIZABETH
KING

Plaintiffs,
MEMORANDUM AND ORDER
-against14-CV-4868 (KAM)(MDG)
COHEN & SLAMOWITZ, LLP,
MITCHELL SELIP, MITCHELL G. SLAMOWITZ,
and DAVID A. COHEN
Defendants.
-------------------------------------X
MATSUMOTO, United States District Judge:
On August 15, 2014, Wai Hoe Liew a/k/a Michael W. Liew
(“Mr. Liew”), Khurram Kayani (“Mr. Kayani”) and Elizabeth Atwood
a/k/a Elizabeth King (“Ms. Atwood”) (collectively, “plaintiffs”)
commenced

this

class

action

against

Cohen

&

Slamowitz,

LLP

(“C&S”), and attorneys of that firm Mitchell Selip (“Mr. Selip”),
Mitchell G. Slamowitz (“Mr. Slamowitz”) and David A. Cohen (“Mr.
Cohen”) (collectively, “defendants”), alleging violations under
the Fair Debt Collection Practices Act (“FDCPA”) and New York
state law.

(Complaint (“Compl.”), ECF No. 1.)

Presently before

the court is defendants’ Motion to Dismiss pursuant to Rule
12(b)(6) of the Federal Rules of Civil Procedure. For the reasons

1

stated herein, defendants’ motion to dismiss is granted in part
and denied in part.
BACKGROUND
A. The Present Litigation
Plaintiffs bring a putative class action alleging that
defendants engaged in fraudulent practices in the collection and
attempted collection of debts allegedly incurred by plaintiffs
for personal, family and household purposes in violation of the
Fair Debt Collection Practices Act (FDCPA), 15 U.S.C. § 1692d,
15 U.S.C. § 1692e, 15 U.S.C. § 1692e(2)(A), 15 U.S.C. § 1692e(5),
15 U.S.C. 1692f, 15 U.S.C. 1692f(1), General Business Law (“GBL”)
349, and New York Judiciary Law § 487.

Each plaintiff was sued

in state court by different creditors that were represented by
C&S in efforts to collect the Debts.
Plaintiffs

allege

that

C&S

used

(See Compl., ECF No. 1.)
Midlantic

Process,

Inc.

(“Midlantic”) to serve process in the state court lawsuits,
obtained default judgments, and continued attempting to collect
the

debt

after

C&S

became

aware

of

Midlantic’s

false

and

fraudulent “sewer service” practices in October 2006.

(Id.)

C&S

was terminated by its creditor clients in each of the plaintiffs’
debt collection lawsuits, and representation was subsequently
transferred to other law firms that replaced C&S as counsel, and
the new law firms continued attempts to collect plaintiffs’
debts.

(Id. at ¶ 165.)

Plaintiffs allege that C&S failed to

2

notify the new law firms, their clients, the courts and the
consumer debtors that the judgments they were attempting to
enforce were potentially invalid due to Midlantic’s false and
fraudulent service practices.

(Id. at ¶¶ 113-18.)

B. The Coble Litigation
In February 2011, Elizabeth Coble and others filed a
class action complaint against C&S, Mr. Cohen, Mr. Slamowitz and
other employees of C&S in the United States District Court for
the

Southern

Slamowitz,

et

District
al.

of

No.

New

York.

11-cv-1037

(Compl., ECF No. 1 at ¶ 26.)

See
(“Coble

Coble

v.

Class

Cohen

&

Action”).

As in the instant action, Coble

plaintiffs alleged, inter alia, that C&S continued to enforce
state court judgments it had obtained against plaintiffs even
after C&S became aware as of 2006 that its process server,
Midlantic, was falsifying affidavits of service. 1

(Id. at ¶ 27.)

Midlantic engaged in so-called “sewer service” of the state court
complaints that included making no attempts at personal service
before serving process by the “nail & mail” method, making false

1

The allegations in the Coble action were in large part based on the affidavit
of Kenneth Vega (“Vega Affidavit”), a former process server at Midlantic,
produced in a suit styled Caprino et al. v. Cohen & Slamowitz, LLP et al.,
No. 05-Civ-04814 (“Caprino Suit”) in the Eastern District of New York. Mr.
Vega attested that Midlantic had falsified thousands of affidavits of service
between 1995 and 2006 as a result of a company-wide policy, which was applied
to all affidavits of service submitted on behalf of C&S. Midlantic’s practices
were implemented to maintain C&S’s business. (Compl., ECF No. 1 at ¶ 27.)

3

references to neighbors, and forgery and false notarization of
the process server’s signature.
The

Coble

court

(Id.)

denied

the

defendants’

motion

to

dismiss and ruled that the Coble plaintiffs sufficiently alleged
that the defendants were on notice as of 2006 that any default
judgments

based

on

Midlantic’s

potentially fraudulent.

affidavits

(Id. at ¶ 28.)

of

service

were

In denying the motion

to dismiss, the Coble court also ruled that the plaintiffs
plausibly
violated

alleged
the

that

FDCPA

the

by

Coble

failing

defendants,
to

including

investigate

C&S,

Midlantic’s

fraudulent practices and continuing collection efforts to enforce
the

judgments,

thereby

concealing

the

issues

relating

Midlantic’s false and fraudulent service practices.
October

9,

2014,

the

court

agreement in Coble action.

approved

the

final

(Id.)

to
On

settlement

(Id. at ¶ 31.)

The Coble “Settlement Class” was defined as:
“Settlement Class” means all persons who have
been sued in one or more consumer collection
actions commenced in New York State between
December 30, 2002 and the present in which
C&S represented the state court Plaintiff;
and the affidavit of service was signed
and/or notarized by Midlantic or any owner,
agent or employee of Midlantic. Defendants
represent that there are approximately
47,095 members of the Settlement Class.
(Coble

Class

Settlement

Agreement,

Exhibit

(“Ex.”)

D

to

Affirmation of Joseph Francoeur In Support Of Defendants’ Motion

4

to Dismiss (“Francoeur Aff.”), ECF No. 48-4, at ¶ 21.)

The Coble

settlement class also included a subclass of all class members
who made involuntary payments after October 30, 2006, following
a judgment entered, on any date before or after October 30, 2006,
in a consumer collection action commenced in New York State where
C&S represented the state court plaintiff, and the affidavit of
service was signed and/or notarized by Midlantic.

(Id. at ¶ 22.)

C. Plaintiff Wai Hoe Liew a/k/a Michael W. Liew
The

Complaint

in

the

instant

action

alleges

that

plaintiff Michael Liew’s debt arose out of a transaction used
primarily

for

personal,

family

or

household

purposes

(“Liew

Debt”), and is therefore a debt under 15 U.S.C. § 1692a of the
FDCPA.

(Compl., ECF No. 1 at ¶ 32.)

On or before July 25, 2000,

C&S, on behalf of North American Capital Corp. (“NAC”), brought
an action to collect the Liew Debt against Mr. Liew in the Civil
Court of the City of New York (“Liew State Action”), and hired
Midlantic to serve the lawsuit on Mr. Liew.

(Id. at ¶ 33-34.)

Midlantic’s affidavit of service for Mr. Liew lists an address
at which Mr. Liew alleges his parents lived, but he alleges that
his parents moved to that address after he ceased living with
them and that he was living in Brooklyn at the time of service.
(Id. at ¶ 35-36.)

On December 18, 2000, the Civil Court entered

a default judgment against Mr. Liew, based on an application by
C&S.

(Id. at ¶ 37.)

5

In October 2006, C&S learned of Midlantic’s false and
fraudulent service practices through an affidavit by a former
Midlantic process server Kenneth Vega in Caprino, et al v. Cohen
& Slamowitz, et al., No. 2:05-cv-4814 (E.D.N.Y.) action (“Vega
Affidavit”).

(Id. at ¶¶ 27, 39.).

After October 2006, when C&S

learned of issues with Midlantic’s false and fraudulent service
practices, C&S allegedly continued its efforts, on NAC’s behalf,
to collect on the debt for which judgment was entered in the Liew
State

Action

by,

inter

alia,

sending

out

yearly

letters

“informing Liew that there was a judgment against him” and
informing him of his right to claim exemptions of assets from
restraint, sending out bank restraints “on at least a yearly
basis,” engaging in searches regarding Mr. Liew’s employment and
most recent address, and attempting to reach him by phone using
automatic and manual dialing.
On

or

before

June

(Id. at ¶ 38.)
21,

2012,

NAC

terminated

C&S’s

representation in the Liew State Action and retained Eltman,
Eltman & Cooper (“EEC”) to collect Mr. Liew’s debt.
40.)

(Id. at ¶

On or about June 21, 2012, Mr. Cohen, on C&S’s behalf,

signed and sent a Consent to Change Attorney form to EEC, agreeing
that EEC shall take C&S’s place as NAC’s attorney in the Liew
State Action.

(Id. at ¶¶ 41-42.)

Plaintiffs allege that C&S

knew or should have known that EEC, on behalf of NAC, intended
to attempt to collect the Liew Debt.

6

(Id. at ¶ 43.)

Plaintiffs

allege that at no time after the Consent to Change Attorney form
was executed did C&S inform the state court, EEC, or NAC that
there may be an issue with the validity of the Liew Judgment and
the continued right of anyone to continue debt collection efforts
in regards to the Liew Debt.

(Id. at ¶ 47.)

On April 3, 2014, Mr. Liew learned that his bank
accounts at Citibank were restrained because of a restraining
notice issued by EEC on behalf of NAC, to collect the Liew Debt.
(Id. at ¶ 48.)

Mr. Liew alleges that he had not been served

with the Liew State Action and he had no prior knowledge of the
Liew

State

Action

and

judgment

accounts were restrained.

entered

therein,

until

his

On April 3, 2014, Mr. Liew filed an

Order to Show Cause in the Liew State Action seeking to vacate
the judgment and dismiss the case.

(Id.)

On May 8, 2014, EEC

signed a stipulation agreeing to vacate the state court judgment
and dismiss the action with prejudice.

(Id. at ¶ 49.)

Mr. Liew also alleges that the statute of limitations
to commence the instant action is equitably tolled, for the same
reasons found by the court in the Coble Class Action, as to any
acts or omissions by C&S which occurred prior to one year before
the filing of this action.

(Id. at ¶ 50.)

D. Plaintiff Khurram Kayani
Prior to February 24, 2003, plaintiff Khurram Kayani
allegedly incurred a debt (“Kayani Debt”), as defined under 15

7

U.S.C. § 1692a of the FDCPA.

(Compl., ECF No. 1 at ¶¶ 8, 78.)

On or before February 24, 2003, C&S, on behalf of Platinum
Financial Services (“PFS”), filed an action to collect a debt
against Mr. Kayani, in Civil Court of the City of New York
(“Kayani State Action”), and hired Midlantic to serve the lawsuit
on Mr. Kayani.

(Id. at ¶ 79.)

Midlantic’s February 10, 2003

affidavit of service for Mr. Kayani listed a service address
where he did not live at the time.

(Id. at ¶ 80-81.)

On July

9, 2003, the Civil Court entered a default judgment against Mr.
Kayani, based on an application by C&S.

(Id. at ¶ 82.)

In October 2006, C&S learned of Midlantic’s fraudulent
service practices through the Vega Affidavit in Caprino action.
(Id. at ¶¶ 27, 84.)

After October 2006, C&S continued its

efforts, on NAC’s behalf, to collect on the debt for which
judgment was entered in the Kayani State Action by, inter alia,
“sending out yearly letters informing [Mr.] Kayani that there was
a judgment against him,” “sending out bank restraints on at least
a

yearly

basis,”

and

the

other

collection

and

enforcement

activities and methods as described for plaintiff Liew.

(Id. at

¶ 83.)
On or before June 21, 2014, PFS terminated C&S’s legal
representation in the Kayani State Action and retained EEC to
collect the Kayani Debt.

(Id. at ¶ 85.)

On or about June 21,

2012, C&S signed and sent a Consent to Change Attorney form to

8

EEC, agreeing that EEC shall by substituted for C&S as PFS’s
attorney in the Kayani State Action. (Id. at ¶ 86.)

Mr. Kayani

alleges that C&S knew or should have known that EEC, on behalf
of PFS, intended to attempt to collect the Kayani Debt.
¶ 87.)

(Id. at

He further alleges that at no time after the Consent to

Change Attorney form was executed did C&S inform the state court,
EEC, or NAC that there may be an issue with the validity of the
Kayani Judgment and the continued right of anyone to continue
debt collection efforts in regards to the Kayani Debt.

(Id. at

¶ 91.)
On June 22, 2014, Mr. Kayani learned that his bank
account at JPMorgan Chase Bank (“Chase”) was restrained because
of a restraining notice issued on or before June 21, 2014, by EEC
on behalf of PFS, to collect the Kayani Debt.

Mr. Kayani alleges

that he had not been served with the Kayani State Action, and had
no prior knowledge of the Kayani State Action or the judgment
entered therein. (Id. at ¶¶ 92-93.)

On July 31, 2014, EEC signed

a stipulation agreeing to vacate the Kayani judgment and dismiss
the action with prejudice in exchange for a payment of $500.
(Id. at ¶ 94.)
Mr. Kayani also alleges that the statute of limitations
is equitably tolled for the same reasons found by the court in
the Coble class action, as to any actions or omissions which
occurred prior to one year before the filing of this action.

9

(Id. at ¶ 95.)

On or about July 21, 2014, Mr. Kayani received

notice of his right to participate in the Coble Class Action.
(Id. at ¶ 96.) Mr. Kayani alleged he was not going to participate
in the Coble Class Action. (Id.)
E. Plaintiff Elizabeth K. Atwood a/k/a Elizabeth King
Prior to February 27, 2005, plaintiff Elizabeth K.
Atwood allegedly incurred a debt (“Atwood Debt”), as defined
under 15 U.S.C. § 1692a of the FDCPA.
10, 51-52.)

(Compl., ECF No. 1 at ¶¶

On or before February 2, 2005, C&S, on behalf of

Portfolio Recovery Associates (“PRA”), brought an action against
Ms. Atwood in Civil Court of the City of New York (“Atwood State
Action”), and hired Midlantic to serve the lawsuit on Ms. Atwood.
(Id. at ¶ 52.)

On April 1, 2005, the Civil Court entered a

default judgment against Ms. Atwood, based on application by C&S.
(Id. at ¶ 53.)
In

October

2006,

C&S

lawsuits served by Midlantic.

became

aware

(Id. at ¶ 63.)

of

issues

with

On October 26,

2006, Ms. Atwood filed a motion to vacate the April 2005 default
judgment based, in part, on never having been served with the
lawsuit. (Id. at ¶ 54.) On November 8, 2006, C&S appeared in
court to oppose Ms. Atwood’s motion and, after an unsuccessful
attempt at settlement, C&S consented to the default judgment
being vacated, provided that Ms. Atwood file an Answer without
any jurisdictional defenses.

The April 1, 2005 judgment against

10

Ms. Atwood was vacated by the state court on November 8, 2006.
(Id.)
Between December 17, 2006 and February 27, 2008, after
C&S became aware, in October 2006, of the issues with lawsuits
served by Midlantic, C&S continued its efforts to collect on the
Atwood Debt while the Atwood State Action was pending by inter
alia, sending several letters to her, attempting to call her,
leaving several phone messages at her home, “sending out yearly
letters informing [Ms.] Atwood” that a judgment was entered
against her, “sending out bank restraints on at least a yearly
basis,” and other actions similar to actions taken to collect on
the debts of plaintiffs Liew and Kayani.

(Id. at ¶ 55.)

On

April 30, 2008, Ms. Atwood’s file at C&S became dormant, and was
reactivated on June 10, 2010, as a result of C&S conducting
periodic checks.

(Id. at ¶ 57.)

On April 22, 2013, C&S used an

automated dialer system to call a number believed by C&S to be
Ms. Atwood’s place of employment. (Id. at ¶ 56.)
On or about January 8, 2014, PRA terminated C&S’s
representation in the Atwood State Action and retained Forster &
Garbus (“F&G”) to collect the Atwood Debt; C&S closed its Atwood
file at PRA’s request on this day.

(Id. at ¶ 58.)

On or before

January 30, 2014, C&S signed and returned a Consent to Change
Attorney form to F&G, substituting F&G for C&S as PRA’s attorney
in the Atwood State Action.

(Compl., ECF No. 1 at ¶ 58.)

11

Ms.

Atwood alleges that C&S knew or should have known that F&G, on
behalf of PRA, intended to attempt to collect the Atwood Debt and
that delivery of the Consent to Change Attorney amounted to a
representation to F&G, PRA, and the Civil Court that there were
no issues or potential issues with what had occurred in the Atwood
State Action.

(Id. at ¶¶ 59-61.)

She further alleges that at

no time after C&S closed Atwood’s file did C&S inform the Civil
Court, F&G, or PRA that there may be an issue with the validity
of

the

judgment

and

the

right

of

anyone

to

continue

debt

collection efforts in regards to the Atwood Debt because of
Midlantic’s false and fraudulent service practices.

(Id. at ¶¶

61-64.)
On or about January 30, 2014, F&G served Bank of America
with

an

Information

Subpoena

and

Restraining

Notice

and

represented that the vacated April 1, 2005 state court judgment
was valid, which resulted in a restraint of $2,157.00 in two of
Ms. Atwood’s bank accounts and a $100 non-refundable fee.
at ¶¶ 65-66.)

(Id.

Upon learning that her Bank of America accounts

were restrained, Ms. Atwood opened bank accounts at JPMorgan
Chase and directed deposits of her salary to her Chase accounts.
(Id. at ¶ 67.)
accounts

were

On or about February 5, 2014, Ms. Atwood’s Chase
restrained

by

an

Information

Subpoena

and

Retraining Notice issued by F&G, and based on the April 1, 2005
judgment.

(Id. at ¶ 67-68.)

12

After

her

accounts

were

restrained,

Ms.

Atwood

contacted C&S on an unspecified date to inquire as to the cause
of the restraint.

C&S advised her that they did not have her

file and referred her to F&G. (Id. at ¶ 69.) Ms. Atwood contacted
F&G and they informed her that the restraint was based on a debt
she owed and offered to help her set up a repayment plan.

(Id.

at ¶ 70.)
Plaintiffs allege that prior to February 5, 2014, Ms.
Atwood filed an Order to Show Cause in state court.
71.)

(Id. at ¶

Upon receipt of the Order to Show Cause, on February 11,

2014, C&S asked PRA for permission to reopen Ms. Atwood’s file
to respond to the Order to Show Cause.

PRA granted permission

to C&S to represent PRA in contesting the Order to Show Cause in
the Atwood State Action.

(Id. at ¶ 72.)

On February 18, 2014,

Ms. Atwood, attorneys from C&S and F&G appeared at the Show Cause
Hearing. (Id. at ¶ 75.) C&S submitted a response to Ms. Atwood’s
Order to Show Cause in the state court, which was prepared based
on C&S’s Atwood file, asserting that C&S’s records did not show
that PRA had restrained Ms. Atwood’s accounts.

Allegedly, C&S

took no steps to ascertain if F&G had restrained Ms. Atwood’s
accounts on behalf of PRA.

(Id. at ¶¶ 73, 75.)

Ms. Atwood

explained her reason for the Order to Show Cause to the court.
Shortly thereafter, Ms. Atwood was called to another hearing room
by an F&G attorney.

(Id. at ¶ 75.)

13

She next was called before

the judge, who signed a decision and order dismissing the Atwood
State Action with prejudice.

(Id.)

Plaintiffs also allege that the statute of limitations
is equitably tolled for Ms. Atwood, for the same reasons found
by the court in the Coble Class Action, as to any actions or
omissions which occurred prior to one year before the filing of
this action.

(Id. at ¶ 76.)

On or about July 21, 2014, Ms.

Atwood received a notice of her rights to participate in the
Coble Class Action.

Ms. Atwood alleged she was not going to

participate in the Coble Class Action. (Id. at ¶ 77.)
On May 11, 2014, three months before she commenced the
instant action as a named plaintiff, Ms. Atwood filed a law suit
in the Eastern District of New York, No. 14-cv-02973 (JFB)(AYS),
against defendants 2 based on many of the same facts alleged in
the present action.
Bianco

dismissed

On March 26, 2015, the Honorable Joseph F.

Ms.

Atwood’s

first,

second,

fifth,

sixth,

seventh and eighth causes of action for failure to state a claim.
(See Atwood v. Cohen & Slamowitz, LLP et al., No. 14-cv-02973,
ECF No. 53-1 at 16.)

On February 8, 2017, Judge Bianco granted

defendants’ motion for summary judgment on plaintiffs third and

2 Defendants Selip & Stylianou LLP (“S&S”) named in Ms. Atwood’s action
under docket 14-cv-02973(JFB)(AYS), was known as Cohen and Slamowitz (C&S)
during the period relevant to that complaint. See Atwood v. Selip &
Stylianou, LLP, et al., 14-cv-02973, ECF No. 85 at 1, n.1.

14

fourth claims, thereby dismissing the action in its entirety.
(See id., ECF No. 85.)
Judge
undisputed

Bianco

factual

made

record

several

that

are

findings
of

based

on

the

significance

to

Ms.

Atwood’s overlapping claims in the instant action.

In both

actions, Ms. Atwood alleged that C&S failed to inform its client,
PRA, and successor counsel, F&G, that there were or “may be an
issue with the validity of the judgment and the continued right
of anyone to continue to attempt to collect the debt represented
by the judgment.”

(Compl., ECF No. 1 ¶¶ 61-63.)

summary

decision

judgment

acknowledged

that

Judge Bianco’s
Ms.

Atwood

had

alleged in her complaint that C&S failed to inform PRA and F&G
that the state default judgment had been vacated, but found that
this allegation and related allegations that form the factual
bases for Ms. Atwood’s FDCPA claims “have no factual support in
the record.”

(Atwood v. Cohen & Slamowitz, LLP et al., 14-cv-

02973, ECF No. 85 at 5.)

Judge Bianco determined, in relevant

part, as follows:
First, it is uncontroverted that [C&S] did
inform PRA that the default judgment had been
vacated.
In fact, [C&S] informed PRA that
the default judgment had been vacated on
multiple occasions. . . . Thus, the evidence
produced
through
discovery
completely
undermines plaintiff’s claim, and, absent
evidence supporting a different conclusion,
it fails as a matter of law.

15

This evidence also undermines plaintiff’s
claim that [C&S] “knew or should have known
that F&G, on behalf of Portfolio Recovery
Associates, intended to attempt to collect
the debt which is the subject of the State
Action” when [C&S’s] representation was
terminated.
.
.
.
Likewise,
the
uncontroverted
evidence
undermines
plaintiff’s assertion that omitting these
facts “amounted to a representation to F&G,
Portfolio Recovery Associates and the court
that there were no issues or potential issues
with what had occurred in the case. . . .”
Because [C&S] informed PRA repeatedly that
the judgment had been vacated, and there is
no evidence suggesting [C&S] knew or should
have known that PRA (or its agent, F&G) would
have attempted to collect the debt in spite
of knowing this information, these claims are
simply unsupported by the facts. Therefore,
they fail as a matter of law.
(Id.)

Judge

Bianco

granted

and

denied

plaintiff

judgment
judgment.

defendants’
Atwood’s

motion

for

summary

motion

for

summary

(Id. at 7.)

F. Procedural History
Plaintiffs filed this Class Action Complaint on August
15, 2014.

(Compl., ECF No. 1.)

On December 8, 2014, defendants

moved to disqualify the initial plaintiffs’ counsel, Mitchell L.
Pashkin (“Pashkin”), who also represented Ms. Atwood in her
action

filed

three

months

earlier

against

C&S

before

Judge

Bianco, based on Pashkin’s prior employment as an attorney with
C&S, during which he participated in the defense of the Coble
Action.

(ECF No. 19.)

On September 22, 2015, this court granted

the defendants’ motion to disqualify Pashkin.

16

(ECF No. 30.)

On

April 7, 2016, the parties filed the fully briefed motion to
dismiss.

(See ECF Nos. 47-53.)
DISCUSSION

A. Standard of Review
In deciding a motion to dismiss pursuant to Fed. R.
Civ. P. 12(b)(6), the court must “accept as true all factual
statements alleged in the complaint and draw all reasonable
inferences in favor of the non-moving party.”

McCarthy v. Dun &

Bradstreet Corp., 482 F.3d 184, 191 (2d Cir. 2007) (citations
omitted).

Although

detailed

factual

allegations

are

not

required, the pleading standard set forth in Rule 8 “demands more
than

an

unadorned,

accusation.”

the-defendant-unlawfully-harmed-me

Ashcroft v. Iqbal, 556 U.S. 662, 678, 129 S. Ct.

1937, 1949, 173 L. Ed. 2d 868 (2009) (quoting Bell Atlantic Corp.
v. Twombly, 550 U.S. 544, 555, 127 S. Ct. 1955, 167 L.Ed.2d 929
(2007)).

“A pleading that offers ‘labels and conclusions’ or ‘a

formulaic recitation of the elements of a cause of action will
not do.’ . . .
assertions’

Nor does a complaint suffice if it tenders ‘naked

devoid

of

‘further

factual

enhancement.’”

Id.

Moreover, “[t]o survive a motion to dismiss, a complaint must
contain sufficient factual matter, accepted as true, to ‘state a
claim to relief that is plausible on its face.’”

Id. at 678

(quoting Twombly, 550 U.S. at 570, 127 S. Ct. 1955 (2007)).
“Where a complaint pleads facts that are merely consistent with

17

a defendant’s liability, it stops short of the line between
possibility and plausibility of entitlement to relief.”

Id.

(internal quotations and citations omitted).
For the purposes of deciding a Rule 12(b)(6) motion,
“a district court may consider the facts alleged in the complaint,
documents attached to the complaint as exhibits, and documents
incorporated by reference in the complaint.”

DiFolco v. MSNBC

Cable L.L.C., 622 F.3d 104, 111 (2d Cir. 2010) (citation omitted).
A district court may also consider “matters of which judicial
notice

may

be

taken,

or

documents

either

in

plaintiffs’

possession or of which plaintiffs had knowledge and relied on in
bringing suit.”

Chambers v. Time Warner, Inc., 282 F.3d 147, 153

(2d Cir. 2002) (internal quotation marks and citation omitted).
That is, “a court may take judicial notice of prior pleadings,
orders, judgments, and other related documents that appear in the
court records of prior litigation and that relate to the case sub
judice.”

Jianjun Lou v. Trutex, Inc., 872 F. Supp. 2d 344, 350

n.6 (S.D.N.Y. 2012) (citation omitted); see also Rothman v.
Gregor, 220 F.3d 81, 92 (2d Cir. 2000) (taking judicial notice
of pleading in another lawsuit); Young v. Selsky, 41 F.3d 47, 5051

(2d

Cir.

1994)

(taking

judicial

testimony in a prior action).

notice

of

defendant’s

“In particular, [a court] can

affirm the dismissal of a complaint for failure to state a claim
based on the affirmative defense of res judicata if ‘all relevant

18

facts are shown by the court’s own records,’ of which [the court]
can take judicial notice.”

AmBase Corp. v. City Investing Co.

Liquidating Trust, 326 F.3d 63, 72 (2d Cir. 2003) (citing Day v.
Moscow, 955 F.2d 807, 811 (2d Cir. 1992)).
I.

Analysis
Defendants

contend

that

the

Complaint

should

be

dismissed because plaintiffs Atwood and Kayani, by opting out of
the Coble Class Action, waived their right to proceed as a class
and are barred from bringing another class action based upon the
identical

factual

predicate

as

the

Coble

Class

Action.

Defendants also argue that Mr. Liew’s claim, and the class claims
of those similarly situated, are untimely. For the reasons stated
herein, the class claims, and the individual claims alleged by
Ms. Atwood and Mr. Liew are dismissed for failure to state a
claim.

The court also finds that Mr. Kayani states plausible

individual claims.
A. The Class Claims That Include Individuals Sued in State
Court Actions Between December 30 2002 and October 9,
2014, Are Barred by the Coble Class Action Settlement.
Defendants

assert

that

the

Complaint

should

be

dismissed because it is based on the same factual predicate as
the claims that were settled and released in the Coble Class
Action. (Memorandum of Law in Support Defendants’ Motion to
Dismiss (“Def. Br.”), ECF No. 49 at 8-12.)

19

Although the court recognizes that Mr. Kayani and Ms.
Atwood allegedly opted out of the Coble Class Action, the court
finds

instructive

cases

regarding

class

action

settlements,

releases, and opt outs, and their effect on subsequent class
claims arising from identical core facts.

A suit commenced

subsequent to a class action settlement may be barred in a
situation “analogous to the barring of claims that could have
been asserted in the class action,” specifically “where there is
a realistic identity of issues between the settled class action
and the subsequent suit, and where the relationship between the
suits is at the time of the class action foreseeably obvious to
notified class members.”

TBK Partners, Inc. v. Western Union

Corp., 675 F.2d 456, 461 (2d Cir. 1982).

A settled class action

may release claims “not presented directly in [the class action]
complaint” if the subsequent claims are “based on the identical
factual predicate as that underlying the claims in the settled
class action.”

In re Literary Works in Elec. Databases Copyright

Litig., 654 F.3d 242, 248 (2d Cir. 2011) (citing Wal–Mart Stores,
Inc. v. Visa U.S.A., Inc., 396 F.3d 96, 107 (2d Cir. 2005), cert.
denied, 544 U.S. 1044 (2005));

In re WorldCom, Inc. Sec. Litig.,

No. 02-Civ.-3288(DLC), 2005 WL 2495554, at *3 (S.D.N.Y. Oct.11,
2005) (“[A] class action settlement may ‘prevent class members
from subsequently asserting claims relying on a legal theory
different from that relied on in the class action complaint, but

20

depending upon the very same set of facts.’”) (quoting Nat’l
Super Spuds, Inc. v. N.Y. Merc. Exch., 660 F.2d 9, 18 n.7 (2d
Cir. 1981)).

“This rule of law serves the important policy

interest of judicial economy by permitting parties to enter into
comprehensive settlements that prevent relitigation of settled
questions at the core of a class action.”

In re Currency

Conversion Fee Antitrust Litig., 264 F.R.D. 100, 119 (S.D.N.Y.
2010) (internal quotation marks omitted); TBK Partners, 675 F.2d
at 460 (“[I]n order to achieve a comprehensive settlement that
would prevent relitigation of settled questions at the core of a
class action, a court may permit the release of a claim based on
the identical factual predicate as that underlying the claims in
the settled class action even though the claim was not presented
and might not have been presentable in the class action.”).
Whether

a

class

claim

pleaded

in

a

subsequent

lawsuit

“is

predicated on sufficiently similar facts as the class action
claim to be barred by a class action settlement release is
inherently an individualized, fact-specific [inquiry].”

In re

Credit Default Swaps Antitrust Litig., No. 13-MD-2476 (DLC), 2016
WL 2731524, at *15 (S.D.N.Y. Apr. 26, 2016) (citation omitted).
Here, plaintiffs’ four class claims are based on the
same factual predicate as the Coble Class Action.

The Coble

Class Settlement Agreement identifies the core factual predicate
that describes the Settlement Class in relevant part as:

21

[A]ll persons who have been sued in . . .
consumer collection actions . . . in New York
State . . . in which C&S represented the
state court Plaintiff; and the affidavit of
service was signed and/or notarized by
Midlantic or any owner, agent or employee of
Midlantic.
(Coble Class Settlement Agreement, Ex. D to Francoeur Aff., ECF
No. 48-4, at ¶ 21).

The instant Complaint copies the identical

language from the Coble Class Settlement Agreement to describe
the

identical

factual

predicate

common

to

the

four

classes:
The classes alleged in the instant action
consist of:
I. (a) all natural persons (b) who have been
sued in one or more consumer collection
actions commenced in New York State between
July 25, 2000 and December 29, 2002 in which
C&S represented the state court Plaintiff;
and the affidavit of service was signed
and/or notarized by Midlantic or any owner,
agent or employee of Midlantic;
II. (a) all natural persons (b) who have been
sued in one or more consumer collection
actions commenced in New York State between
July 25, 2000 and the present in which C&S
represented the state court Plaintiff and the
affidavit of service was signed and/or
notarized by Midlantic or any owner, agent
or employee of Midlantic (c) where Defendants
were terminated as the plaintiff’s or
plaintiff’s assignee’s attorney and the
plaintiff or plaintiff’s assignee or a person
or entity on behalf of the plaintiff or
plaintiff’s assignee attempted to collect
the debt which was the subject of the action
or took any action in connection with the
collection of the debt which was the subject
of the action;

22

alleged

III. (a) all natural persons (b) who have
been sued in one or more consumer collection
actions commenced in New York State between
July 25, 2000 and the present in which C&S
represented the state court Plaintiff and the
affidavit of service was signed and/or
notarized by Midlantic or any owner, agent
or employee of Midlantic (c) where Defendants
signed and delivered a Consent To Change
Attorney; and
IV. (a) all natural persons (b) who have been
sued in one or more consumer collection
actions commenced in New York State between
July [sic] December 30, 2002 and the present
and not included in the Prior Class Action
as a result of a failure to be sent or receive
a class notice or choosing to opt-out of the
class in which C&S represented the state
court Plaintiff; and the affidavit of service
was signed and/or notarized by Midlantic or
any owner, agent or employee of Midlantic.
(Compl., ECF No. 1 at ¶ 165) (emphasis added).

The crux of the

Coble Class Action was that in the consumer collection actions,
C&S

caused

to

be

filed

“affidavits

of

service

provided

by

Midlantic;” and that C&S learned in October or November 2006 that
Midlantic’s
fraudulent,”

service
and

for

C&S

Midlantic’s

was

“grossly

affidavits

of

deficient
service

and
“were

substantively false.” (Coble Am. Compl., Ex. C to Francoeur Aff.,
ECF No. 48-3 at ¶¶ 1-3.)

The Coble amended complaint further

alleged that C&S failed to inform the state courts and the
consumers it sued in state court about issues with Midlantic’s
affidavits of service, and “concealed information in order to

23

facilitate collections against consumers” in violation of the
FDCPA.

(Id. at ¶¶ 1-3.)
A commonsense reading of the Coble amended complaint

and the instant Complaint clearly reveals that the class claims
here arise from the identical factual predicate as those alleged
in the Coble Class Action.

Plaintiffs in Coble and the instant

action both allege that C&S continued to enforce state court
judgments it had obtained against consumer debtors even after C&S
became aware in 2006 that its process server, Midlantic, had
falsified affidavits of service in the underlying state court
actions.
The only difference with the Coble amended complaint
and the instant class action Complaint is that the instant
Complaint specifically alleges collection and enforcement actions
by C&S and the successor law firms against the named plaintiffs,
and also seeks to broaden the temporal scope of the class.
(Compl., ECF No. 1 at ¶¶ 40-49, 58-75, 85-94, 164-65.)

The

Complaint otherwise makes identical allegations about Midlantic’s
false and fraudulent service practices and C&S’s collection and
enforcement activities after C&S learned of Midlantic’s false and
fraudulent service practices in October 2006.

All alleged class

members in the instant action, whose state court collection
actions were commenced between December 30, 2002 and October 9,
2014 (the date the Coble Class Settlement Agreement was approved

24

by the court), were also class members whose claims were settled
and released in the Coble Class Action, unless, like Mr. Kayani
and Ms. Atwood, they opted out.

(Id. at ¶ 165.)

The court

addresses, infra, those purported class members, like Mr. Liew,
who allege that state court collection actions by C&S were
commenced between July 25, 2000 and December 30, 2002, and finds
that those claims are time barred.
In opposition to the defendants’ motion to dismiss the
Complaint,

plaintiffs

contend

that

some

of

the

allegedly

violative conduct underpinning their claims here occurred after
the

offending

conduct

alleged

in

the

Coble

Class

Action,

including C&S’s continued debt collection efforts after learning
of

Midlantic’s

sewer

service

practice

in

October

2006.

(Plaintiff’s Opposition to the Motion to Dismiss (“Pl. Opp.”),
ECF No. 52 at 16-17; see Coble Am. Compl., Ex. C to Francoeur
Aff., ECF No. 48-3 at ¶¶ 2-3, 38-44.)

Plaintiffs specifically

allege continued efforts to collect the Kayani and Atwood Debts
which occurred in 2013 or later.
17.)

(Pl. Opp., ECF No. 52 at 16-

Plaintiffs’ argument fails because the continued debt

collection efforts by C&S alleged in this action are based on the
identical and foreseeable factual predicate as in the Coble Class
Action.

That the factual predicate in the Coble Class Action and

the instant action are identical is beyond doubt because they
both arise from and allege the “same core facts:” Midlantic’s

25

false and fraudulent service and affidavits, the state court
actions resulting in judgments based, in part, on Midlantic’s
false affidavits of service, and C&S’s debt collection efforts
even after learning of Midlantic’s false and fraudulent service
practices in October 2006.

See In re Adelphia Commc’ns Corp.

Sec. & Deriv. Litig., 272 Fed. Appx. 9, 13 (2d Cir. 2008) (various
fraud

claims

based

on

false

statements

made

in

different

documents were based on the “same core of facts” and therefore
arose out of the identical factual predicate).
Further, the post 2013 debt collection conduct, which
plaintiffs

allege

in

their

class

claims,

was

specifically

contemplated by the Coble Class Settlement Agreement.

The Coble

Class Settlement Agreement, “entered into as of” May 27, 2014 and
approved by the court on October 9, 2014, contains the following
key definitions:
11. “Involuntary Payment” means any payment
made by means of any device set forth in
Article 52 of New York’s Civil Practice Law
and Rules (“Money Judgments – Enforcement”)
including,
without
limitation,
wage
garnishment,
levy,
execution,
bank
restraint, or other process covered by the
statute. . . .
21. “Settlement Class” means all persons who
have been sued in one or more consumer
collection actions commenced in New York
State between December 30, 2002 and the
present in which C & S represented the state
court Plaintiff; and the affidavit of service
was signed and/or notarized by Midlantic or
any owner, agent or employee of Midlantic.

26

Defendants
represent
approximately
47,095
Settlement Class.

that
there
members
of

are
the

22.
“Settlement
Subclass”
means
all
Settlement Class members who made one or more
Involuntary Payments after October 30, 2006
following a judgment taken (on any date
before or after October 30, 2006) in a
consumer collection action commenced in New
York State in which C & S represented the
state court Plaintiff; and the affidavit of
service was signed and/or notarized by
Midlantic or any owner, agent or employee of
Midlantic. Defendants represent that there
are approximately 7,216 members of the
Settlement
Subclass.
The
term
“Class
members”
where
used
herein
without
qualification means all Settlement Class
members, inclusive of Settlement Subclass
members.
(Coble Settlement Agreement, Ex. D to Francoeur Aff., ECF No. 484 at ¶¶ 11, 21, 22 (emphasis added).)

Further, “Released Claims”

are defined, in relevant part, in the Coble Settlement Agreement
as “[c]laims for statutory damages under the FDCPA, as well as
release of all claims that were raised or could have been raised
in the instant action based on a common nucleus of operative
facts.”

(Id. at ¶ 18.)
In

the

instant

Complaint,

plaintiffs

allege

class

claims comprised primarily of persons whose claims were settled
and released by the Coble Class Action Settlement Agreement.

For

example, all of the plaintiffs’ alleged classes include persons
who have been sued in consumer collection actions in New York

27

state court in which C&S represented the creditor-plaintiffs and
the affidavits of service were signed by Midlantic.
Specifically, Class II and Class III, which includes
persons sued in consumer collection actions in New York state
court “between July 25, 2000 and the present,” (Compl., ECF No.
1 at ¶ 165), are largely the same persons included in the Coble
Settlement

Class.

The

Coble

Class

Action

Settlement

Class

encompassed all persons who have been sued in consumer collection
actions in New York State court “between December 30, 2002 and
the present,” in which C&S represented the creditor-plaintiffs
and the affidavits of service were signed by Midlantic.

(Coble

Class Action Settlement Agreement, Ex. D to Francoeur Aff., ECF
48-4 at ¶ 21.)

Thus, the claims for persons sued in consumer

collection actions in New York State court “between December 30,
2002 and the present,” were already resolved in the Coble Class
Action and the Coble Settlement Agreement released “all claims
that were raised or could have been raised.” 3

(Coble Settlement

Agreement, Ex. D to Francoeur Aff., ECF No. 48-4 at ¶¶ 18, 21,
54.)

Accordingly, Class II and Class III claims are dismissed

3

The Coble Class Settlement Agreement’s Release provision made clear that
class members “will each forever release, discharge, waive, and covenant not
to sue the Released Parties regarding any of the Released Claims. This release
includes all such claims that the [class members] do not know of or suspect
to exist in their favor at the time of this release and that if known by them
might have affected their settlement and release of the Released Parties, or
might have affected their decision to object to this agreement.”
(Coble
Settlement Agreement, Ex. D to Francoeur Aff., ECF No. 48-4 at ¶ 54.)

28

because they attempt to assert class claims on behalf of persons
who

were

sued

“in

one

or

more

consumer

collection

actions

commenced in New York State between [December 30, 2002] and the
present in which C&S represented the state court Plaintiff and
the affidavit of service was signed and/or notarized by Midlantic
or any owner, agent or employee of Midlantic.”

(Compl., ECF No.

1 at ¶ 165.)
The Class IV claim which includes, in relevant part,
persons “not included in the [Coble] Class Action as a result of
. . . choosing to opt-out of the class,” are also dismissed
because a person who opts out of a class action can pursue his
or her individual claims, but not class claims arising from the
same core facts.

(Id.)

Class members who opt out of a class

action are free to file separate individual claims, but they may
not frustrate the efficiency and benefits afforded by the class
action procedure by opting out of the class action and then
resurrecting class claims in the same or a separate action.

If

opt out plaintiffs wish to pursue their individual claims, they
must do so individually, and not as a resurrected class asserting
claims

arising

from

factual

predicates

identical

to

those

asserted in the prior class action from which they opted out.
See Morris v. Affinity Health Plan, Inc., 928 F. Supp. 2d 805,
811–12 (S.D.N.Y. 2013), aff’d, 558 F. App’x 51 (2d Cir. 2014)
(citing Martens v. Smith Barney, Inc., 190F.R.D. 134, 139–40

29

(S.D.N.Y. 1999)); see also Eisen v. Carlisle, 417 U.S. 156, 176,
94 S. Ct. 2140, 2152 (1974) (“[Under Rule 23], each class member
who can be identified through reasonable effort must be notified
that he may request exclusion from the action and thereby preserve
his opportunity to press his claim separately or that he may
remain in the class and perhaps participate in the management of
the [class] action.”) (emphasis added).

If a plaintiff exercises

the right to be excluded from the class action by opting out, the
plaintiff thereby relinquishes his right to bring class claims
and may proceed only on an individual basis.

See Johnson v.

Nextel Commc’ns, Inc., 293 F.R.D. 660, 666-67 (S.D.N.Y. 2013),
vacated on other grounds, 780 F.3d 128, 136 n.10 (2d Cir. 2015). 4
Thus, the class claims of persons who opted out of the Coble
Class Action, as described in Class IV in the instant action are
barred.
Moreover,

plaintiffs

Atwood

and

Kayani

had

ample

opportunity to object to the terms of the Coble Settlement
Agreement, including the notice and scope of the released claims.
Accepting plaintiff’s allegations as true, C&S and the successor
law firms allegedly injured Ms. Atwood, at the latest, by February

4 When vacating the district court’s ruling, the Second Circuit noted that the
district court’s holding that parties who opted out of the class settlement,
“had preserved their right to proceed only on an individual basis,” was not
raised on appeal. Johnson v. Nextel Commc’ns Inc., 780 F.3d 128, 136 n. 10
(2d Cir. 2015). Therefore, the Second Circuit did not address this holding
when vacating the district court’s decision.

30

5, 2014, when her Chase account was restrained, and Mr. Kayani,
at the latest, by June 22, 2014, when his Chase account was
restrained.

(Compl., ECF No. 1 at ¶¶ 67, 93.)

Ms. Atwood and

Mr. Kayani also allege other conduct by C&S after October 2006
that allegedly violated the FDCPA.
The

Coble

Class

Action

Settlement

Agreement

was

executed by the parties on May 27, 2014, and approved by the
court on October 9, 2014.

(Coble et al v. Cohen & Slamowitz, LLP

et al, No. 11-cv-01037 (ER), Final Approval Order and Judgment,
ECF No. 90.)

The instant action was commenced on August 15,

2014, prior to the filing of Motions for Approval of the Coble
Class Action Settlement Agreement (filed on September 24, 2014),
prior to the Fairness Hearing on the Coble Class Action Settlement
Agreement (held on October 2, 2014), and prior to the final
approval

of

the

October 9, 2014.
ECF Nos. 83-90).

Coble

Class

Action

Settlement

Agreement

on

(See Coble Class Action, No. 11-cv-01037 (ER),
Ms. Atwood and Mr. Kayani allege that they

received a class notice in the Coble Class Action on July 21,
2014, but they do not explicitly allege that they had opted out
of the Coble Class Action Settlement.

Instead, both Ms. Atwood

and Mr. Kayani allege that “[s/h]e is not going to participate”
in the Coble Class Action Settlement. (Compl., ECF No. 1 at ¶¶
77, 96.)

31

Thus,

plaintiffs

Atwood

and

Kayani

had

a

full

opportunity to litigate the same class issues in the Coble Class
Action that they assert here.

They instead commenced this class

action against C&S alleging their intention to opt-out of the
Coble Class Action and alleging the same factual predicate as in
Coble.

This plaintiffs cannot do.

As discussed above “the opt-

out right merely ensures that each putative class member retains
the ability to act independently of the class action if she so
elects. . . .

The opt-out right does not confer extra benefits

to a plaintiff’s independent action.”

In re Lehman Bros. Sec. &

Erisa Litig., 655 F. App’x 13, 16 (2d Cir. 2016) (emphasis added),
cert. granted in part sub nom. California Pub. Employees’ Ret.
Sys. v. ANZ Sec., Inc., 137 S. Ct. 811 (2017).

Plaintiffs may

not bring another class action based on the identical factual
predicate as the class action from which the plaintiffs opted
out.

To allow the plaintiffs here to proceed with their class

claims, which alleged the identical factual predicate as the
Coble Class Action from which they allegedly opted out, would
betray the efficiencies of class actions and class settlements.
See Morris, 928 F. Supp. 2d at 811, aff’d, 558 F. App’x 51 (“‘The
efficiency afforded by the class action procedure would be poorly
served if numerous class members were permitted to opt out of the
class

and

then

remain

in

the

32

litigation

with

supposedly

resurrected individual claims.’”) (quoting Martens, 190 F.R.D.
at 139).
The

court

also

dismisses

the

Class

IV

claims

of

persons, not included as Coble class members “as a result of a
failure to be sent or receive a class notice,” because counsel
for the parties in Coble negotiated and agreed, with court review
and approval, the Notice and the method for providing Notice to
all putative class members.

(Compl., ECF No. 1 at ¶ 165.)

Indeed, the parties to the Coble Settlement agreed that the Final
Approval Order and Judgment by the court shall: “find that the
form and manner of disseminating class Notice as set forth in
this Settlement Agreement . . . was accomplished as directed,
constituted the best practicable notice under the circumstances,
met or exceeded the requirements of due process, and constituted
due and sufficient notice to all members of the Settlement Class
and Settlement Subclass.”

(Coble Class Settlement Agreement, Ex.

D to Francoeur Aff., ECF No. 48-4 at ¶ 37(g).)

Thus, the Class

IV claims, for persons who purportedly did not receive the Coble
Notice, are dismissed.

See Hecht v. United Collection Bureau,

Inc., 691 F.3d 218, 224 (2d Cir. 2012) (If a class notice comports
with due process, a class action settlement may bind absent class
members

even

constructive

if

the

notice.);

absent
In

re

class

member

Prudential

received

Sec.

Inc.

only
Ltd.

Partnerships Litig., 947 F. Supp. 750, 755–56 (S.D.N.Y. 1996)

33

(concluding that because the court approved Notice program met
Rule 23’s requirement and comported with due process, a class
member who alleged that he did not personally receive notice of
the class settlement was still bound by the settlements terms).
Even if plaintiffs may not have alleged exactly the
same violations of the FDCPA and state law, 5 and may have asserted
claims that were not assertable in the Coble Class Action, they
may not reassert class claims arising from the same factual
predicate here.
others

that

“The law is well established in this Circuit and

class

action

releases

may

include

claims

not

presented and even those which could not have been presented as
long as the released conduct arises out of the ‘identical factual
predicate’ as the settled conduct.” Wal–Mart Stores, 396 F.3d at
107; see also In re Literary Works in Elec. Databases Copyright
Litig., 654 F.3d at 248 (A settled class action may release claims
“not presented directly in [the class action] complaint” if the
subsequent claims are “based on the identical factual predicate
as that underlying the claims in the settled class action.”)
(internal quotation marks and citation omitted); TBK Partners,

5

The Coble plaintiffs alleged FDCPA violations of 15 U.S.C. § 1692d, 15 U.S.C.
§ 1692e, 15 U.S.C. § 1692e(2)(A), 15 U.S.C. § 1692e(10), and 15 U.S.C. §
1692f. (See Coble Am. Compl., Ex. C to Francoeur Aff., ECF No. 48-3 at ¶ 101.)
Here, plaintiffs allege the same FDCPA violations—except the instant
plaintiff’s do not allege violations 15 U.S.C. § 1692e(10)—but they also
allege (1) other additional FDCPA violations including 15 U.S.C. § 1692e(5)
and 15 U.S.C. § 1692f(1) and state law violations under N.Y. GBL § 349, and
N.Y. Jud. Law § 487. (See Compl., ECF No. 1 at ¶¶ 97-163.)

34

675 F.2d at 461 (“[W]here there is a realistic identity of issues
between the settled class action and the subsequent suit, and
where the relationship between the suits is at the time of the
class action foreseeably obvious to notified class members, the
situation is analogous to the barring of claims that could have
been asserted in the class action.”);

In re WorldCom, 2005 WL

2495554, at *3 (“[A] class action settlement may ‘prevent class
members from subsequently asserting claims relying on a legal
theory

different

from

that

relied

on

in

the

class

action

complaint, but depending on the very same set of facts.’”)
(quoting Nat’l Super Spuds, 660 F.2d at 18 n.7).

Thus, the class

claims predicated on C&S’s continued efforts to collect on state
court judgments after learning, in October 2006, of Midlantic’s
false and fraudulent service practices,’ even if the claims were
not alleged in the Coble Class Action, are dismissed because they
are based on the identical factual predicate as in the Coble
Class Action.
Plaintiffs also argue that the Coble Class Action class
representatives did not adequately represent their claims, (Pl.
Opp., ECF No. 52 at 17-21), but this argument must be rejected.
As

discussed

above,

plaintiffs

Atwood

and

Kayani

had

the

opportunity to object to the Coble Class Settlement, including
challenging

the

adequacy

of

the

allegedly opted out of the class.

35

representation,

but

instead

Therefore, they have waived

their right to challenge the adequacy of the class representation
in the Coble Class Action.

See e.g. Joel A. v. Giuliani, 218

F.3d 132, 143 (2d Cir. 2000) (holding that parties had waived
their rights to challenge the adequacy of the subclasses where
objections were not raised before the district court).

Further,

even though Ms. Atwood and Mr. Kayani allege that they opted out
of the Coble Class action, the court finds that plaintiffs’
interests were adequately aligned with the interests of the Coble
class members because their claims arose out of an identical
factual predicate.
representation

of

See Wal-Mart, 396 F.3d at 113 (“[A]dequate
a

particular

claim

is

alignment of interests of class members.”).

determined

by

the

Thus, plaintiffs’

arguments as to the adequacy of the representation in the Coble
Class Action are without merit because they opted out, thereby
removing themselves from the class action entirely.

See Morris,

928 F. Supp. 2d at 811, aff’d, 558 F. App’x 51 (parties “who opt
out of a class action are removed from the case entirely”) (citing
Phillips Petro. Co. v. Shutts, 472 U.S. 797, 810-11, 105 S. Ct.
2965, 86 L.Ed.2d 628 (1985)).
Consequently, this court dismisses all of the class
claims of persons described in Classes II, III, and IV, 6 who were

6 The court notes that the Coble Amended Complaint defined the Settlement
Class broadly and without temporal limits as:
All persons who have been sued in a consumer
collection action commenced in New York State in which
C&S represented the Plaintiff; and the affidavit of

36

sued “in one or more consumer collection actions commenced in New
York State between December 30, 2002 and the present in which C&S
represented

the

state

court

Plaintiff

and

the

affidavit

of

service was signed and/or notarized by Midlantic or any owner,
agent or employee of Midlantic,” as their claims were already
settled and released as of October 9, 2014, when the Coble court
granted final approval to the Coble Class Action Settlement
Agreement.

(Compl., ECF No. 1 at ¶ 165; Coble, No. 11-CV-01037

(S.D.N.Y.), Final Approval Order and Judgment, ECF No. 90.)
B. Ms. Atwood’s
Judicata

Individual

Claims

Are

Barred

by

Res

Even if the class claims were not barred by the Coble
Settlement Agreement, Ms. Atwood would not be a proper class
representative because her individual and class claims are barred
by res judicata or claim preclusion.

Res judicata “bars later

litigations if [an] earlier decision was (1) a final judgment on
the merits, (2) by a court of competent jurisdiction, (3) in a
case

involving

the

same

parties

or

involving the same cause of action.”

their

privies,

and

(4)

EDP Med. Computer Sys.,

service was signed and/or notarized by Midlantic or
any owner agent or employee of Midlantic.
(See Coble Am. Compl., Ex. C to Francoeur Aff., ECF No. 48-3 ¶ 85.) Under
this temporally unlimited class definition, the claims of persons described
in the instant action, who were sued in a consumer collection action between
July 25, 2000 and December 29, 2002, including Mr. Liew, would be included in
the Coble class. However, the Coble Settlement Agreement prescribed a temporal
limit “between December 30, 2002 and the present,” in defining the Settlement
Class, and “after 2006” in defining the Settlement Subclass. (Coble Class
Action Settlement Agreement and Release Ex. D to Francoeur Aff., ECF No. 484 at ¶¶ 21-22.)

37

Inc. v. United States, 480 F.3d 621, 624 (2d Cir. 2007) (citation
and internal quotation marks omitted).

Thus, “later claims

arising out of the same factual grouping as an earlier litigated
claim are barred, even if the later claims are based on different
legal theories or seek dissimilar or additional relief.”

Garcha

v. City of Beacon, 232 Fed. Appx. 74, 75 (2d Cir. 2007).
By opting out of the Coble Class Action, Ms. Atwood
secured the right to proceed on an individual basis and nothing
more.

Ms. Atwood availed herself of that right and commenced an

individual action against the same defendants in the Eastern
District

of

New

York

on

May

11,

2014,

three

months

before

commencing the instant action, against the same defendants, based
on the same core facts and FDCPA claims alleged here. (See Atwood
v. Cohen & Slamowitz, LLP, et al., No. 14-cv-02973, Complaint,
ECF No. 1.) 7

Ms. Atwood’s individual claims were adjudicated,

found to be without merit, and dismissed by Judge Joseph F.
Bianco.

First, by order dated March 26, 2015, Judge Bianco

granted defendants’ motion to dismiss Ms. Atwood’s first, second,
fifth, sixth, seventh, and eighth causes of action for failure
to

state

a

claim

upon

which

relief

may

be

granted.

(See

Transcript of Judge Bianco’s ruling on defendants’ motion to

7 The action by Ms. Atwood, in case No. 14-cv-02973, and the instant class
action were commenced by Mitchell Pashkin, Esq., who had previously worked
on the Coble litigation defending C&S, before his employment as an attorney
with C&S was terminated. As noted above, this court disqualified Mr.
Pashkin from representing the plaintiffs in this action. (ECF No. 30.)

38

dismiss in Atwood v. Cohen & Slamowitz, LLP, et al., No. 14-cv02973 dated March 26, 2015, attached to Plaintiff’s Opposition
to the Motion to Dismiss, ECF No. 52-1).

In a Memorandum and

Order dated February 8, 2017, Judge Bianco granted defendants’
motion for summary judgment on plaintiff’s remaining third and
fourth causes of action.

As described, supra, Judge Bianco found

on the undisputed facts that C&S had notified its client, PRA,
numerous times that Ms. Atwood’s judgment had been vacated, and
thus her claims pursuant to the FDCPA failed as a matter of law.
(Atwood v. Cohen & Slamowitz, LLP, et al., No. 14-CV-02973,
Memorandum and Order, ECF No. 85 at 5.)

Judge Bianco also found

that Ms. Atwood’s claim that C&S “knew or should have known” that
the successor law firm F&G would continue collection efforts on
behalf of PRA was without factual basis.

(Id.)

Similarly, Judge

Bianco noted that the uncontroverted evidence undermined Ms.
Atwood’s assertion that C&S’s omission of facts regarding the
vacatur of Ms. Atwood’s state court judgment, “amounted to a
representation to F&G, [PRA] and the [state] court that there
were no issues or potential issues with what had occurred in the
case.”

(Id.)

Given that C&S repeatedly informed its client,

PRA, that Ms. Atwood’s judgment had been vacated, there was no
evidence that C&S knew or should have known that PRA or its agent,
F&G would attempt to collect Ms. Atwood’s debt.

(Id.)

Judge

Bianco held, based on uncontroverted facts, that plaintiff’s two

39

remaining claims failed as a matter of law, and granted summary
judgment to defendants and dismissed Ms. Atwood’s action in its
entirety.

(Id. at 7.)
Ms.

Atwood

makes

many

of

the

same

individual

allegations and asserts claims in the instant action arising from
the same core facts as the claims dismissed by Judge Bianco.
Accordingly, the court finds that Ms. Atwood’s individual claims
are barred by res judicata, and they are dismissed.

See Garcha,

232 Fed. App’x. at 74.
C. Mr. Kayani States a Plausible Individual Claim
Mr. Kayani, has stated a plausible individual claim.
Mr. Kayani, like Ms. Atwood, was invited to join the Coble Class
Action on July 21, 2014, but alleges that he was “not going to
participate.”
merely

ensures

(Compl., ECF No. 1 at ¶ 96.)
that

each

putative

class

“[T]he opt-out right
member

retains

the

ability to act independently of the class action if she so
elects.”
at 16.

In re Lehman Bros. Sec. & Erisa Litig., 655 F. App’x
Mr. Kayani filed this action independently of the Coble

Class Action—albeit while it was still pending and, possibly,
before he opted out—to vindicate his rights arising from C&S’s
debt collections efforts after C&S learned of Midlantic’s false
and fraudulent service practices in October 2006.

As discussed

herein, Mr. Kayani’s claims are based on the identical factual
predicate as the Coble Class Action, but he is not a member of

40

the Coble Class or Subclass.

This court agrees with the Coble

court’s denial of a motion to dismiss the Coble Class Action, and
finds

that

Mr.

Kayani’s

individual

allegations,

like

the

allegations in the Coble Class Action, state a plausible claim.
Coble, 824 F. Supp. 2d at 571.

Accordingly, defendants’ motion

to dismiss as to Mr. Kayani’s individual claims is denied.
D. Mr. Liew Claims are Time Barred
The claims of Mr. Liew and those similarly situated to
him, that is individuals “who have been sued in one or more
consumer collection actions commenced in New York State between
July 25, 2000 and December 29, 2002 in which C&S represented the
state court plaintiff, and the affidavit of service was signed
and/or notarized by Midlantic or any owner, agent or employee of
Midlantic,” are time barred.

(Compl., ECF No. 1 at ¶ 165.)

Mr.

Liew and those alleged to be similarly situated were not members
of the Coble Settlement Class which was defined as:
[A]ll persons who have been sued in one or
more consumer collection actions commenced
in New York State between December 30, 2002
and the present in which C&S represented the
state court Plaintiff; and the affidavit of
service was signed and/or notarized by
Midlantic or any owner, agent or employee of
Midlantic. Defendants represent that there
are approximately 47,095 members of the
Settlement Class.
(Coble Class Settlement Agreement, Ex. D to Francoeur Aff, ECF
No. 48-4, at ¶ 21) (emphasis added).

41

The Liew State Action was commenced by C&S, on behalf
of NAC, on July 25, 2000.

(Compl., ECF No. 1 at ¶ 34.)

The

default judgment in the Liew State Court action was entered on
December 18, 2000.

(Id. at ¶ 37.)

Plaintiff Liew alleges that

C&S, in the normal course of its business continued to attempt
to collect the judgment, inter alia, “by sending out yearly
letters informing Liew that there was a judgment against him . .
., by sending out bank restraints on at least a yearly basis,”
and attempting to search for his recent address and place of
employment, and to reach him by telephone, via auto-dialer and
manually.

(Id. at ¶ 38.)

On June 21, 2012, NAC terminated C&S’s

representation of it in the Liew State Action, and C&S executed
a Consent to Change Attorney form and sent it to successor
counsel, EEC.

(Id. at ¶¶ 41-42.)

Plaintiffs allege that C&S

knew or should have known that EEC would file the substitution
of counsel in state court, and that C&S did not notify its client,
NAC, successor counsel, or the state court that Midlantic service
on Mr. Liew was subject to challenge.

(Id. at ¶¶ 44-47.)

Actions brought under the FDCPA must be brought “within
one year from the date on which the violation occurs.”

15 U.S.C.

§ 1692k(d); see also Wright v. Zabarkes, 347 F. App’x 670, 671–
72 (2d Cir. 2009).

“While a question may exist as to whether the

cause of action accrues on the date upon which the allegedly
unlawful communication is sent or received, there is no question

42

that the latest date upon which the one year period begins to run
is the date when a plaintiff receives an allegedly unlawful
communication.”

See Nichols v. Niagara Credit Recovery, Inc.,

No. 5:12-CV-1068 (MAD) (TWD), 2013 WL 1899947, at *5 (N.D.N.Y.
May 7, 2013) (citing Bates v. C & S Adjusters, Inc., 980 F.2d
865, 868 n. 2 (2d Cir. 1992)).
Mr.

Liew

argues

that

his

claims

accrued

when

his

Citibank bank account was restrained, not by C&S, but by successor
counsel, EEC, on April 3, 2014, (see Compl., ECF No. 1 at ¶ 48;
Pl. Opp., ECF No. 52 at 13-15.)

Plaintiffs cite Benzemann v.

Citibank N.A., 806 F.3d 98, 101 (2d Cir. 2015), cert. denied, 137
S. Ct. 618 (2017) in support of the position that Mr. Liew’s
claims are timely.

In Benzemann, the court reversed the district

court’s determination that the statute of limitations began to
run on the date the debt collector allegedly violated the FDCPA
by issuing a restraining notice to the plaintiff’s bank, rather
than the date the bank actually restrained the account.

The

district court dismissed the action as untimely because it was
filed

more

than

one

year

after

the

defendant

issued

the

restraining notices to the plaintiff’s bank, and exactly one year
after the account was restrained.

(Id. at 101.)

The Second

Circuit noted that even if the sending of the restraining notice
allegedly violated the FDCPA because the notice constituted a
“false,

deceptive,

or

misleading

43

representation,”

Benzemann

suffered no actionable injury and had no cause of action before
his bank account was restrained.
that

the

FDCPA

restrained

violation

Benzemann’s

(Id.)

occurred

account

The Benzemann court held
when

pursuant

the
to

bank

the

actually

defendant’s

restraining notice, rather than the date that the defendant sent
the allegedly unlawful restraining notice. (Id. at 103).
Unlike the plaintiff in Benzemann, Mr. Liew has alleged
a multitude of actionable injuries prior to learning on April 3,
2014 that his Citibank accounts had been restrained.

Mr. Liew

has alleged injuries beginning in October 2006, when C&S learned
of the defects with Midlantic’s affidavits of service, but failed
to review its files, and instead continued its debt collection
efforts against Mr. Liew, including attempting to enforce the
judgment

entered

against

violation of the FDCPA.

Mr.

Liew

on

December

18,

2000

in

As set forth above, plaintiff alleges,

inter alia, that C&S sent him yearly notices and “bank restraints
on at least a yearly basis,” and took other collection actions.
(Compl., ECF No. 1 at ¶ 38.)

Mr. Liew also alleges that when C&S

was terminated and substituted as counsel for NAC on June 21,
2012, the failure of C&S to inform its client, NAC, successor
counsel, EEC, Mr. Liew and the state court that the validity of
the judgment against Mr. Liew was in question, also violated the
FDCPA because C&S knew or should have known that EEC would

44

continue to attempt to collect on the Liew Debt.

(Id. at ¶¶ 40-

47.)
Plaintiff Liew alleges “complete and present cause[s]
of action,” for over 7 ½ years prior to April 3, 2014, when his
accounts
judgment.

were

restrained

and

he

allegedly

Benzemann, 806 F.3d 98 at 101.

learned

of

the

Accepting plaintiffs’

allegations as true, this court agrees with the decision in Coble
v. Cohen & Slamowitz, LLP, 824 F. Supp. 2d 568, 572 (S.D.N.Y.
2011), that the alleged facts state plausible claims to the extent
they are not time barred, or are equitably tolled.

The court

must accept as true plaintiff’s allegations that after October
2006, when C&S learned of the Midlantic’s false and fraudulent
service practices, C&S continued to send “out yearly letters
informing Liew that there was a judgment against him,” as well
as “bank restraints on at least a yearly basis.”
No. 1 at ¶ 38.)

(Compl., ECF

After the end of C&S’s representation in the

Liew State Action on June 21, 2012, there are no allegations that
C&S continued debt collection efforts against Mr. Liew.
Based on his allegations, Mr. Liew had “complete and
present cause[s] of action” against C&S when the defendants’
representation was terminated in June 2012, nearly two years
before his account was restrained, by successor counsel, EEC, on
April 3, 2014.

Benzemann, 806 F.3d 98 at 101.

Mr. Liew’s claims

are untimely because he alleges that C&S sent him annual letters

45

informing him of the judgment entered against him, and that C&S
sent out bank restraints on at least a yearly basis.
ECF No. 1 at 38.)

(Compl.,

Accepting his allegations as true Mr. Liew had

notice of the alleged violations by C&S years before his bank
account was restrained by successor counsel, EEC.

Mr. Liew is

unlike the plaintiff in Benzemann whose sole actionable injury
occurred when his accounts were restrained exactly one year
before he filed his lawsuit.

Nowhere does Benzemann hold that

time-barred FDCPA claims can be rehabilitated more than a year
after the violation, if further debt collection efforts, such as
the restraint of a bank account, are continued thereafter by
another debt collector.

See Benzemann, 806 F.3d 98 at 101-03.

Even assuming the truth of Mr. Liew’s allegations that
he did not know until April 2014 of the state court judgment and
that his bank accounts were restrained in violation of the FDCPA,
he alleges that successor or counsel, EEC, and not defendants,
issued the restraining notice.

Mr. Liew alleges that C&S’s

involvement in any debt collection activities on Mr. Liew’s
judgment ended on June 21, 2012, when C&S was (1) terminated as
counsel for NAC in the Liew State Action and (2) when C&S executed
and sent a Consent to Change Attorney form to EEC.
No. 1 at ¶¶ 40-42.)

(Compl., ECF

Plaintiffs allege that C&S knew or should

have known that its delivery of the Consent to Change Attorney
form amounted to a representation to EEC, NAC and the state court

46

that there were no issues with the judgment in the Liew State
Action.

(Id. at ¶ 45.)

Thus, any claim against C&S accrued on

or about June 21, 2012, well before this action was filed on
August 15, 2014.

See Shieh v. Flushing Branch, Chase Bank USA,

N.A., No. 11-CV-5505 (CBA) (SMG), 2012 WL 2678932, at *6 (E.D.N.Y.
July 6, 2012) (holding that FDCPA claim was time-barred where the
default judgment and the assignment of the judgment occurred more
than five years prior to the filing of the action and where the
original debt collector had no further involvement in the matter
after the assignment); see Coble, 824 F. Supp. 2d at 571 (finding
that,

absent

equitable

tolling,

two

of

the

three

named

plaintiffs’ claims were barred by the statute of limitations
because

the

complaint

did

not

specifically

allege

that

the

defendants violated the FDCPA within a year of the complaint
being commenced).
Further,

the

court

finds

that

plaintiffs

have

not

stated a plausible claim against C&S, based upon any conduct by
EEC and NAC’s that occurred after C&S’s legal representation of
NAC ended on June 21, 2012.

In order to state a plausible claim

that C&S violated the FDCPA after it ceased representing NAC,
plaintiffs must plead sufficient facts supporting a finding that
C&S was an agent of EEC & NAC after June 21, 2012.

In order to

hold a debt collector vicariously liable for the acts of the
agent, the plaintiff must allege plausible facts that (1) the

47

agent and principal are both debt collectors [under the FDCPA];
and (2) the principal has exercised control over the agent’s
conduct or activities.

See Nichols, 2013 WL 1899947, at *5

(citing Suquilanda v. Cohen & Slamowitz, LLP, No. 10 Civ. 5868
(PKC), 2011 WL 4344044, *4 (S.D.N.Y. Sept. 8, 2011)).
Mr. Liew’s allegation that C&S, NAC, and EEC are debt
collectors under the FDCPA satisfies the first factor.

Mr. Liew,

however, failed to plead any facts that plausibly support a claim
that defendant C&S exercised control over EEC’s or NAC’s debt
collection activities after C&S was terminated as NAC’s counsel
in June 21, 2012.

See Bodur v. Palisades Collection, LLC, 829

F. Supp. 2d 246, 259 (E.D.N.Y. 2011); Herzlinger v. Nichter, 09
Civ. 00192, 2011 WL 1434609 at *9 (S.D.N.Y. Feb. 9, 2011).
Instead, Mr. Liew has alleged that C&S’s engagement on the Liew
State Action was terminated by NAC on June 21, 2012, that EEC was
substituted as counsel, that C&S failed to advise NAC or EEC
about the questionable validity of the Liew judgment due to
Midlantic’s fraudulent service of process on Mr. Liew in the
state court action, and that EEC, on behalf of NAC, caused Mr.
Liew’s bank accounts to be restrained.
48.)

(Compl., ECF No. ¶¶ 40-

Absent any allegations that C&S exercised control over

EEC’s or NAC’s actions, C&S cannot be held liable for EEC’s or
NAC’s conduct. In the absence of a sufficiently pleaded agency
relationship between C&S, and NAC and EEC, plaintiffs have not

48

stated timely claims against C&S within the applicable one-year
statute of limitations.

Consequently, Mr. Liew’s claims are

barred by the statute of limitations, unless equitable tolling
applies.

See Nichols, 2013 WL 1899947, at *5 (finding FDCPA

claim was untimely against debt collectors where the complaint
made no allegations of injuring conduct by these parties within
a year of the filing of the complaint, and where the debt
collectors were agents of the previous debt holders, and not the
debt collectors who engaged in the alleged violating conduct).
Mr. Liew argues and alleges in the Complaint that the
statute of limitations should be tolled for the same reasons
stated in Coble, 824 F. Supp. 2d at 572.

“[E]quitable tolling

is only appropriate in rare and exceptional circumstance[s] . .
. , in which a party is prevented in some extraordinary way from
exercising

his

rights.”

Zerilli–Edelglass

v.

N.Y.C.

Transit

Auth., 333 F.3d 74, 80 (2d Cir. 2003) (internal quotation marks,
citations, and alterations omitted).

Plaintiffs must show that:

(1) the defendant concealed the existence of plaintiffs’ cause
of action; (2) plaintiffs remained in ignorance of that cause of
action until some length of time within the statutory period
before

commencement

of

their

action;

and

(3)

plaintiffs’

continuing ignorance was not attributable to lack of diligence
on their part.

Sykes v. Mel Harris and Assocs., 757 F. Supp. 2d

49

413, 422 (S.D.N.Y. 2010) (citing State of N.Y. v. Hendrickson
Bros., Inc., 840 F.2d 1065, 1083 (2d Cir. 1988).
In considering defendants’ motion to dismiss based on
untimeliness, the Coble court found that the claims of two of the
three

named

complaint

plaintiffs’

did

not

claims

specifically

were

untimely

allege

that

because

the

the

defendants’

violated the FDCPA within a year of the action being commenced,
unless equitable tolling applied.

Coble, 824 F. Supp. 2d at 571.

The court determined that Ms. Coble’s action was not time-barred
because she alleged that within a year of the commencement of the
action, C&S had continued affirmatively to misrepresent that
Midlantic’s affidavits were true and proper.
The
requirements

Coble
for

court

the

then

considered

application

of

(Id. at 570-71).
whether

equitable

the

three

tolling

in

extraordinary circumstances were met: (1) defendant concealed the
existence of the plaintiff’s cause of action; (2) plaintiffs
remained ignorant of that cause of action until some point within
the limitations period; and (3) plaintiffs’ continued ignorance
was not due to a lack of diligence.
omitted).

First,

the

court

found

(Id. at 571) (citations
that

the

concealment

requirement for equitable tolling was met because C&S falsely and
affirmatively reasserted the validity of the faulty affidavits
of

service,

and

continued

to

collect

on

debts

involving

Midlantic’s false and fraudulent service practices after becoming

50

aware of the problem in October 2006.

(Id.)

Second, the Coble

court found that plaintiffs were ignorant of the problem with the
Midlantic affidavits of service until they discovered the Vega
affidavit in 2010. 8

The court further noted that the Vega

affidavit was not publicly available on PACER until the Coble
lawsuit was filed on February 15, 2011.

Thus, the Coble court

found the second factor of equitable tolling was satisfied.
at 570, 572).

(Id.

Lastly, with regard to the third factor examining

the plaintiff’s diligence or lack thereof, the court found that
the plaintiffs did not sit on their rights, as they only became
aware of the Vega affidavit in 2010, and that the Vega Affidavit
was not publicly available on PACER until the Coble Class Action
was filed in February 2011.

(Id. at 572.)

Consequently, the

court tolled plaintiffs’ claims until February 15, 2011, when the
Coble Class Action was filed and the Vega Affidavit became
available on PACER.

(Id.)

Applying the equitable tolling factors to Mr. Liew’s
claim, the court first finds that plaintiffs allege in conclusory
fashion that defendants concealed the existence of Mr. Liew’s
cause of action by sending annual letters informing Mr. Liew of
the

judgment

and

annual

restraints

of

his

bank

accounts,

8 The Vega Affidavit was submitted in the Caprino lawsuit by a former Midlantic
employee, who disclosed that Midlantic had falsified thousands of affidavits
of service between 1995 and 2006, in order to maintain its business
relationship with C&S. Coble, 824 F. Supp. 2d at 569-70.

51

presumably after C&S learned in October 2006 of the problems with
Midlantic’s affidavits of service.

Mr. Liew alleges with regard

to the second factor that he remained ignorant of the cause of
action until April 2014, when his account was restrained.
Defendants argue that even if equitable tolling were
to apply to plaintiffs, the statute of limitations expired on
February 15, 2012, one year after the Coble class action was
filed and when the Vega Affidavit became publicly available.
(Def. Br., ECF No. 49 at 8.)

The court agrees with defendants

and the Coble court that, prior to the Vega Affidavit becoming
publicly available on PACER upon the filing of the Coble Class
Action on February 15, 2011, plaintiffs like Mr. Liew “could not
have

engaged

in

due

diligence”

in

vindicating

their

rights

arising from C&S’s continued debt collection efforts after C&S
of the issues with Midlantic’s sewer service.

Coble, 824 F.

Supp. 2d at 572.
The court finds, however, that Mr. Liew has not alleged
sufficient facts establishing that his ignorance was not due to
a lack of diligence, and that extraordinary circumstance justify
equitable

tolling

after

February

15,

2011,

when

the

Vega

Affidavit became public and when the Coble Class Action was filed.
Equitable tolling is warranted in “a situation where a plaintiff
could show that it would have been impossible for a reasonably
prudent person to learn about his or her cause of action.”

52

Pearl

v. City of Long Beach, 296 F.3d 76, 85 (2d Cir. 2002) (internal
quotation marks and citations omitted).

It clearly was not

impossible for a reasonably prudent person who allegedly was
being

sent

“yearly

letters,”

annual

restraints

against

bank

accounts, and regular phone calls from C&S, to learn about his
or her cause of action under the FDCPA, after the Coble Class
Action was filed and the Vega Affidavit became public.
February

15,

Midlantic’s

2011,
false

when
and

the

Vega

fraudulent

affidavit,
service

which

practices

By

exposed
became

available on the public Coble docket, Mr. Liew, with reasonable
diligence should have discovered defendants’ FDCPA violations,
specifically, that C&S was violating the FDCPA by continuing to
attempt to enforce the judgment and collect on the Liew Debt, in
spite of C&S’s knowledge that the validity of the judgment was
questionable.

See Vincent v. Money Store, 304 F.R.D. 446, 458

(S.D.N.Y. 2015) (denying request for equitable tolling because
“plaintiffs have not alleged facts showing due diligence to
discover such a cause of action”) (citing Conklin v. Jeffrey A.
Maidenbaum, Esq., No. 12-CV-3606 ER, 2013 WL 4083279, at *5
(S.D.N.Y. Aug. 13, 2013) (same).
Further, plaintiffs have alleged that C&S was engaged
in the Liew State Action only until June 21, 2012; therefore,
plaintiffs have not plausibly alleged that after June 21, 2012,
C&S acted to conceal from plaintiffs the questionable validity

53

of the Liew judgment or the existence of a cause of action for
the violations regarding the collection and enforcement of the
Liew judgment. Thus, even if the court were to find that Mr.
Liew, and those similarly situated, were entitled to equitable
tolling after the Coble Class Action was filed and the Vega
Affidavit became publicly available on February 15, 2011, the
court would only toll the statute of limitations to June 21,
2012, the date on which C&S ceased to conceal or attempt to
collect

the

Liew

judgment.

Consequently,

the

statute

of

limitations for FDCPA claims against C&S would have expired on
June 21, 2013, more than a year before this action was filed.
Accordingly, the court finds that Mr. Liew’s claims, and the
claims of others similarly situated, are time barred and must be
dismissed.

54

CONCLUSION
For

the

foregoing

reasons,

defendants’

motion

to

dismiss is granted in part and denied in part as follows: (1) All
class

claims

asserted

by

the

three

named

plaintiffs

are

dismissed; (2) The individual claims by Ms. Atwood and Mr. Liew
are dismissed; and (3) Mr. Kayani has stated plausible individual
claims.

Counsel for the remaining parties are directed to confer

and submit a joint status report by April 14, 2017, advising the
court how they wish to proceed with the litigation.

SO ORDERED.
Dated:

April 6, 2017
Brooklyn, New York
__________/s/________________
Kiyo A. Matsumoto
United States District Judge

55