Musah v. Houslanger & Associates, PLLC
Filing
16
OPINION: For foregoing reasons, defendant Houslanger's motion to dismiss the complaint is granted with leave to amend within 20 days. (Signed by Judge Robert W. Sweet on 11/16/2012) (js)
UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK
1\ ELECTRONICALLY FILED:
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ZAKARI MUSAH,
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Plaintiff,
12 Civ.
3207
againstOPINION
HOUSLANGER & ASSOCIATES, PLLC,
Defendant.
-x
A P PEA RAN C E S:
Att
Plaintiff
SCHLANGER & SCHLANGER, LLP
343 Manville Road
Pleasantville, NY 10570
By:
Elizabeth Ann Shollenberger
At
for Defendant
KAUFMAN, BORGEEST & RYAN, LLP
120 Broadway, 14th Floor
New York, NY 11530
By: Jonathan B. Bruno
l
,
Sweet, D.J.
Defendant Houslanger & Associates, PLLC ("Houselanger"
or "Defendant"), has moved, pursuant to Fed. R. Civ. P. 12(b) (6)
("12 (b) (6)"), to dismiss the complaint of plaintiff Zakari Musah
("Musah" or "PIa
iff") for failure to state a claim.
Based
upon the conclusions set forth below, the Defendant's motion is
granted and the compl
is dismissed with leave to amend
within twenty days.
Prior Proceedings
On April 24, 2012, Musah filed a complaint against
Houslanger ("Complaint"), alleging that Musah received an
subpoena and restraining notice ("Information
informat
Subpoena") in May 2011 stating that a restraint had been placed
upon his bank account in an attempt to collect on a 1997
judgment ("Judgment") entered in Bronx County Civil Court
aga
Musah and in favor of a party called FCC National Bank
("FCC").
Compl.
~
11.
The Information Subpoena, which was
signed by Houslanger, stated on its face that "the current
judgment creditor/assignee is Palisades Collections, LLC."
at
~
11 12.
1
rd.
Musah alleges that in sending the Information Subpoena
and restraining the Plaintiff's bank account, Houslanger
violated (1) the Fair Debt Collection Practices Act, 15 U.S.C.
1692 et seq.
("FDCPA") i and (2) N.Y. Judiciary Law
§
§
487
("Section 487").
According to Musah, Houslanger's attempt to collect
the Judgment on behalf of a party-Palisades Collections LLC
("Palisades")-that did not possess a right to that judgment
constituted numerous violations of the FDCPA, in that
Houslanger:
(i) falsely represented that it had the right to
restrain Musah's account on behalf of Palisade, in violation of
15 U.S.C.
1692ei
§
(ii)
falsely represented that the debt had
been assigned to Palisades, in violation of 15 U.S.C.
1692e(2) (A)
i
§
(iii) sent out a debt collection communication
without conducting a meaningful review of the court file,
violation of 15 U.S.C.
§
1692e(3)l i
(iv)
in
took action that cannot
Contrary to Plaintiff's suggestion, 15 U.S.C. § 1692e(3) does
not mandate a "meaningful review of the court file," see Compl.
~ 35, but rather simply prohibits "[t]he false representation or
implication that any individual is an attorney or that any
communication is from an attorney."
15 U.S.C. § 1692e(3).
Musah acknowledges in his Complaint that Houslanger is, in fact,
a law office, see Compl. ~ 8, and moreover makes no allegations
that Houslanger's attorneys are not properly licensed to
practice.
§ 1692e(3) is therefore inapplicable, so this element
1
2
I
ly be taken by restraining Musah's account to col
on
behalf of an entity that did not have the rights to the debt, in
violation of 15 U. S. C. § 1692e (5)
i
(v) used a false
representation to obtain information by serving Musah's bank
with the Information Subpoena to gather information about Musah,
in violation of 15 U.S.C.
§
1692e(10);
(vi) engaged
unfair
and unconscionable practice by taking steps to rest
bank account without
that Palisades had a
funds in question,
attempted to col
violation of 15 U.S.C.
1692fi
§
olation of 15 U.S.C.
§
present right to
dispossessed property by causi
~~
and
i
absent a
Musah's
restrained, in violation of 15 U.S.C.
See Compl.
Hous
(vii)
1692f(l)
(viii) took nonjudicial action to effect dispos
1692f (6).
to the
t an unauthorized debt (since the assignment
was not effective), in
bank account to
Musah's
§
31-39.
filed the instant motion to dismiss on
August 20, 2012, and the motion was marked fully submitted on
October 3, 2012.
of Musah's FDCPA claim fails as a matter of law on this basis,
as well as for the reasons set forth below.
3
The Applicable Standard
On a motion to dismiss pursuant to Rule 12(b) (6), all
factual allegations
the complaint are accepted as true, and
all inferences are drawn in favor of the pleader. Mills v. Polar
Molecular
., 12 F.3d 1170, 1174 (2d Cir. 1993).
----~~----~~
The issue
"is not whether a plaintiff will ultimately prevail but whether
the claimant is entitled to of
Pond
claims." ViII
(2d
1995)
r evidence to support the
Inc. v. Town of Darien, 56 F.3d 375, 378
(quoting Scheuer v. Rhodes, 416 U.S. 232,235-36,
94 S.Ct. 1683, 40 L.Ed.2d 90 (1974)).
To survive a motion to dismiss pursuant to Rule
12 (b) (6),
"a complaint must contain sufficient factual matter,
accepted as true, to 'state a claim to relief that is plausible
on its face.'" Ashcro
1, 556 U.S. 662, 129 S.Ct. 1937,
~~--------~~-1949, 173 L.Ed.2d 868 (2009)
(quoting
_B~e_l_l__ _t_l__~~____~~__- L
A
550 U.S. 544, 570, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007)).
Plaintiffs must allege sufficient facts to "nudge [ ] their
claims across the line from conceivable to plausible." Twombly,
550 U.S. at 570.
Though the court must accept the factual
legations of a complaint as true, it is
4
~not
bound to accept
as true a legal conclusion couched as a factual allegation. H
_I~__ ,
556 U.S. at 678
(quoting Twombly, 550 U.S. at 555).
Plaintiff Fails to State a Claim for Violation of the FDCPA
All of the FDCPA violations alleged by Musah are
grounded on
premise that FCC's assignment
the Judgment to
Palisades was not legally effective, and therefore that
Houslanger had no right to collect the Judgment on behalf of
Palisades.
C.P.L.R.
§
Musah bases this contention on his reading of N.Y.
5019(c) ("5019(c)H), which states:
Change in judgment creditor. A person other than the
party recovering a judgment who becomes entitled to
enforce it, shall file in the office of the c
of
the court in which the judgment was entered or, in the
case of a judgment of a court other than the supreme,
county or a family court which has been docketed by
the clerk of the county in which it was entered, in
the
fice of such county clerk, a copy
the
instrument on which his authority is based,
acknowledged in the form required to entitle a deed to
recorded, or, if his authority is based on a court
order, a certified copy of the order. Upon such filing
the clerk shall make an appropriate entry on his
docket of the judgment.
Musah has contended that the statute not only requires
that any assignment of judgment be filed with the relevant
court, but also mandates that, absent such filing,
assignment does not take effect.
the
See Memorandum of Law in
5
opposition to Defendant's Motion to Dismiss Pursuant to Fed. R.
Civ. P. 12(b) (6)
("Mem. Opp.") at 4-5.
Since Palisades failed
to file FCC's assignment of the Judgment, Musah has contended
that the assignment to Palisades was inef
5019(c), and that as a result
ctive pursuant to
isades never had a right to the
Judgment and, by extension, Houslanger did not have the right to
act on behalf of
isades to collect the Judgment.
Id. at 2 3.
However, 5019(c) is "not meant to benefit the debtor,
should
assignment not be recorded," Eckhaus v. Blauner, No.
94 Civ. 5635(CSH), 1997 WL 362166, at *4
(S.D.N.Y. June 26,
1997), but rather "is clearly intended for the benefit of the
assignee, being designed to protect him against payment of the
judgment to the wrong party." Law Research Serv., Inc. v. Martin
Lutz Appellate Printers, Inc., 498 F.2d 836, 840 (2d Cir. 1974).
As such, "section 5019(c) does not require assignments to be
recorded" in order for those assignments to be deemed valid,
Schubert v. Ostano, No. 91 Civ. 7423 (RLC), 1992 WL 112351, at *5
(S.D.N.Y. May 13, 1992), and the assignee of a judgment may
attempt to enforce that judgment and collect from the debtor
even if the filing requirement of 5019(c) has not been
satisfied.
See Law Research, 498 F.2d at 839 (holding that an
assignment of judgment was "valid when executed" despite not
6
being filed at that time, and further stating that "[w]e hold
that filing [pursuant to 5019(c)] was not in any event necessary
to perfect the assignment of the judgment")
.2
Musah has cited --------~------~~--~~--~~~~~~~~
Tri Ci
Roofers Inc. v
Indus. Park, 61 N.Y.2d 779 (N.Y. 1984), which involves a
judgment debtor who repaid the wrong party, having not received
Musah has cited footnote twelve
the Law Research opinion,
see Mem. Opp. at 7 8, which states that:
2
Filing under § 5019(c)
so serves to assist the
assignee in directly enforcing the judgment against
judgment against
judgment debtor. With his
right to the judgment a matter of court record, the
assignee himself can invoke the court's process
against the judgment debtor.
, N.Y.C.P.L.R.
§ 5225 (a) .
Law Research, 498 F.2d at 840 n.12. However, contrary to
Musah's contention, footnote twelve does not dilute the strength
the Court's express holding that "filing [pursuant to
5019(c)] was not in any event necessary to perfect the
assignment of judgment," id. at 839, nor does it imply, as Musah
would suggest, that a 5019(c) filing must occur in order for an
assignee to gain
right to attempt collecting on
assigned
judgment. Footnote twe
is
cta
provides helpful advice
to a judgment assignee by noting that filing an assignment of
judgment pursuant to 5019(c) could be advantageous for the
assignee, as it would permit the assignee to invoke the court's
process to assist in collecting on the judgment.
It does not
suggest that an assignee is not free to attempt to collect on
the judgment by means other than obtaining a court order.
For
example, the assignee could, as Houslanger did here, serve an
information subpoena and restraining order.
See N.Y.C.P.L.R. §
5222.
7
notice that the right to the judgment had been assigned from the
initi
creditor to a third party.
The Court of Appeals held
that even though the assignment was filed with the court
pursuant to 5019(c), the debtor could not be held responsible
for the erroneous payment, since not
not been given. See id. at 780-82.
of the assignment had
This holding has no bearing
on the salient question here-whether or not an assignment of
judgment is effective absent a 5019{c) filing-except, perhaps,
to the extent that it tends to impliedly support the holding in
Law Research that 5019(c) 's filing requirement is intended to
protect the assignee.
With respect to the other two cases cited by Musah
Kohl v. Fusco, 624 N.Y.S.2d 509 (N.Y. Civ. Ct. 1994), and Chase
Bank USA, N.A. v. Cardello, 896 N.Y.S.2d 856
2010)
(N.Y. Civ. Ct.
question of whether or not they support Musah's
reading of 5019{c) need not be reached, since absent a contrary
holding by the New York Court of Appeals, the Second Circuit's
holding in Law Research-which unequivocally states that an
assignment of judgment is effective even without a 5019(c)
filing, see
s binding authority on the issue for federal
district courts within the Circuit.
See
& Co. v.
Tecnoconsult Holdings Ltd., No. 96 Civ. 3748, 1996 WL 391884, *4
8
(S.D.N.Y. July II, 1996)
("Although this Court may look to lower
court decisions for guidance on questions of state law, this
Court is bound only by decisions by the New York Court of
Appeals and the Court of Appeals for the Second Circuit.") .
Since 5019(c) does not require that an assignment be
filed with the court in order for the assignee to be entitled to
enforce the judgment, and since Musah does not allege any other
de
s with the assignment from FCC to Palisade or reasons that
Houslanger did not have a right to collect on the Judgment 3 ,
Musah's FDCPA allegations are without basis, and he fails to
state a claim against Houslanger for violation of the FDCPA.
In his opposition brief, Musah argues for the first time the
argument that Houslanger was not authorized to collect on the
judgment because Musah had not been notified of the assignment
of the judgment from FCC to Palisade.
See Mem. Opp. at 10 12.
However, "[i]n considering a motion to dismiss for failure to
state a claim under Rule 12(b) (6), a district court must limit
itself to facts stated in the complaint or in documents attached
to the complaint as exhibits or incorporated in the complaint by
reference. [.
.] Accordingly, memoranda and supporting
fidavits
opposition to a motion to dismiss cannot be used
to cure a defective complaint." Goodman v. Port Authority of
New York and New Jers
, 850 F. Supp. 2d 363, 380 (S.D.N.Y.
2012) (internal citations and quotation marks omitted).
Since
Complaint does not contain allegations relating to the lack
of notice to Musah, the "additional factual assertions, provided
in his opposition papers.
., are inadmissible." rd. at 381.
Accordingly, Musah's notice argument has not been considered in
ruling on the instant motion.
3
9
Plaintiff Fails to State a Claim for Violation of N.Y. Judiciary
Law § 487
Section 487 of the Judiciary Law prohibits an attorney
or counselor from (1) engaging in any deceit or collusion
consenting to
deceit or collusion
or
l
with intent to deceive
l
court or any partYi or (2) willfully delaying a client/s
suit with a view to his own gain
or willfully receiving any
l
money or allowance for or on account of any money which he has
not laid outl or becomes answerable for.
N.Y. Jud. Law
§
487.
Musah/s contention that Houslanger is guilty of
violating Section 487 is premised upon his allegation that
Houslanger engaged in dece
I
in violation of
"knowingly and falsely represent [ing] that
§
487(1)
I
by
[it] had authority to
collect a judgment obtained by FCC National Bank when [it] knew
or should have known that its client Palisades Collections LLC
had never
the steps necessary to obtain authority to
collect on that judgment."
Compl.
~
45.
As set forth above
FCC/s
assignment of the Judgment to Palisades was indeed
e
ive.
I
See supra
§
III (A) .
Since Musah does not allege any
alternative basis to support his claim
l
he fails to state a
claim against Houslanger for violation of Section 487.
10
IV. Conclusion
For foregoing reasons, defendant Houslanger's motion
to dismiss the complaint is grant
with leave to amend within
20 days.
It is so ordered.
New York, NY
November
I {,
2012
U.S.D.J.
11
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