Musah v. Houslanger & Associates, PLLC

Filing 32

OPINION re: 20 MOTION to Dismiss Amended Complaint, filed by Houslanger & Associates, PLLC. For the foregoing reasons, defendant Houslanger's motion to dismiss the amended complaint is granted with prejudice with respect to the claim under Sec. 487, and denied with respect to the remaining claims. It is so ordered. (Signed by Judge Robert W. Sweet on 8/17/2013) (ja)

UNI D
SOUTHERN

S

STRICT COURT
CT OF NEW YORK

------------ -------------x
ZAKARI MUSAH,
intiff,
12 Civ. 3207
-aga

st
OPINION

HOUSLANGER & ASSOCIATES, PLLC,

De

----------------------------------------x
A P PEA RAN C E S:

Attorne

r Plaintiff

SCHLANGER & SCHLANGER, LLP

343 Manville

Pleasantville, NY 10570

By:
Elizabeth Ann
11

Atto
KAUFMAN, BORGEEST & RYAN, LLP
120 Broadway, 14th
New York, NY 11530
By:
Jonathan B. Bruno

Sweet, D.J.

Defendant Housl

r & Assoc

es, PLLC ("Houslanger"

or "Defendant"), has moved, pursuant to Fed. R. Civ. P. 12 (b) (6)
("12(b) (6)"), to

smiss the amended complaint

intiff Za
state a

aim.

Musah ("Musah" or "

("AC") of

intiff")

r failure to

Based upon the conclusions set forth below, the

Defendant's motion is grant

part and denied in

rt.

Prior Proceedings

On April 24, 2012, Musah
Housl

r assert

led a complaint against

causes of action under (1) the Fair Debt

Collection Practices Act, 15 U.S.C. § 1692 et se .
and (2) N.Y. Judiciary Law § 487

("FDCPA");

("Section 487").

The complaint alleged that Musah rece

notice ("Information

information subpoena and rest
Subpoena")

an

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 C
against Musah and in favor of a party call
(" FCC").

Compl.

<J[

11.

1 Court

FCC Nat

al Bank

The Information Subpoena, which was
1

on its face that "the current

signed by

langer, sta

judgment c

tor/assignee is Palisades Collections, LLC."

at

err

Id.

11-12.

complaint asserted

t Houslanger's attempt to

collect the Judgment on behalf of its client, Palis

s

Collections LLC ("Palisades"), constituted numerous
of the FDCPA

cause Palisades had not in fact been assigned the

rights to the Judgment.
Houslanger:

lations

(i)

Specifically, Musah alleged

t

Isely represented that it had the right to

restrain Musah's account on behalf of Palisade, in violation of
15 U.S.C.

1692e;

§

(ii)

falsely

been assigned to Pali
1692e (2) (A)
w

i

sent

s, in violat

(iii) sent out a debt col

that the debt
of 15 U.S.C.

§

ction cOffii11Unication

hout conducting a meaningful review of the court file,
olation of 15 U.S.C. § 1692e(3);

in

took action that cannot

legally be taken by restraining Musah's account to collect on
If of an ent

did not have

y

olation of 15 U.S.C.

§

1692e(5)

i

rights to the debt, in

(v) used a false

resentation to obtain information by se

Musah's bank

th the Information Subpoena to gather information about Musah,
in violation of 15 U.S.C.

§

l692e (10);

(vi) e

in unfair

unconscionable practice by taking steps to restrain Musah's
2

Palisades had a right to

bank account without assuring t
funds in
attempt

stion, in violation of 15 U.S.C. § 1692f;
to col

(vii)

ct an unauthorized debt (since the assignment

was not effective), in

olation of 15 U.S.C. § 16

f(l); and

ii) took nonjudicial action to effect dispossession absent a
present right to the dispossessed property by causing Musah's
bank account to be restrained, in violation of 15 U.S.C. §
1692f(6).

See Compl.

~~

31 39.

In addition, Musah alleged that Houslanger's attempt
the Judgment constituted a violation of N.Y.

to col

Judiciary Law § 487
counselor from .

"prohib

("§487"), whi

. engaging in any dece

s an attorney or
or collusion, or

consenting to any deceit or collusion, with intent to

ive

Musah I, 2012 WL 583

93, at

"

the court or any party .

*4.

ss the complaint, and in an

Houslanger moved to di

opinion filed on November 16, 2012, the Court granted
Houslanger's motion to
C . 3207

~M~u~s~~v~.__~o~u~s~l~-L~'
H

No. 12

(RWS) , 2012 WL 5835293 (S.D.N.Y. Nov. 16, 2012)

("Musah I").
alia,

ss.

In

smissing

that Musah's cIa

complaint, the Court held, inter

failed because they rested on the
3

erroneous premise that N.Y. C.P.L.R. § 5019(c)
required that an assignment of a judgment
court

fore

("§5019{c)")

filed with the

can be enforced by the assignee; In

§5019(c) "does not require that an assignment be filed with the
court

order

t

assignee to

entitled to enforce [a]

judgment" issued against a judgment debtor.

Musah I, 2012 WL

5835293, at *2-3.

Musah s

equently filed the AC, wh

claims under the FDCPA and §487.

aga

ass

The AC alleged t

Houslanger's attempts to collect the judgment from Mus
violated these statutes because:

(1) t

been filed with the court, and there
by the assi

assignment had never
could not be enforced

pursuant to §5019(c); and (2) Musah had never

received notice of the assignment, which is a
assignee's abil

y to enforce a judgment.

AC

erequisite to an
~~

44 50,

60-67.

The AC also alleged that Houslanger violated the FDCPA's
"meaningful review" requirement, 15 U.S.C. § 1692e(3)
("§1692e(3)"), by sending out the Information Subpoena without
conducting the requisite review of the case file.

Houslanger moved to dismiss the AC.
argued and marked fully submitt

Id. at 50 57.

motion was

on March 21, 2013.
4

The Applicable Standard

On a motion to
factual allegat

ss pursuant to Rule 12 (b) (6), all

in

compla

all inferences are drawn in

are accepted as true, and

r of the pleader. Mills v. Polar

Molecular Corp., 12 F.3d 1170, 1174
"is not whether a plaintiff

(2d Cir. 1993).

11 ultimately prevail but whether
dence to support the

the claimant is entitled to of
claims." Vill
( 2 d Ci r. 1995 )

Pond

The issue

Inc. v. Town of Darien

(qu 0 tin g S c h e u e r v.

56 F.3d 375, 378

416 U. S. 232 , 235 - 36,

94 S.Ct. 1683, 40 L.Ed.2d 90 (1974)).

To survive a motion to

ss pursuant to Rule

12 (b) (6), "a complaint must contain sufficient
accepted as true, to 'state a claim to rel

ctual matter,

f that is plausible

on its face.'" Ashcroft v. Iqbal, 556 U.S. 662, 129 S.Ct. 1937,
1949, 173 L.Ed.2d 868

(2009)

(quoting Bell Atl. Co

. v.

Twombl , 550 U.S. 544, 570, 127 S.Ct. 1955, 167 L.
(2007)).
their c
---"-

Plaintiffs must allege suf

, 550 U.S. at 570.

e to plausible."

Though the court must ac

I allegations of a complaint as true,

a

cts to "nudge [

cient

ims across the line from concei

.2d 929

it is "not bound to

as true a legal conclusion couched as a
5

the

tual

allegation." Iqbal, 556 U.S. at 678

(quoting Twombly, 550 U.S.

at 555).

Plaintiff Has Stated a Claim for Violations of the FDCPA

Plaintiff's FDCPA claims are

(with the exception of

the claim under §1692e(3), which is addressed below) premised
upon the contention that Houslanger's client, Palisades, did not
have the right to collect the Judgment from Plaintiff because
(1) the assignment was not filed with the court pursuant to
§5019(c), and (2)

Plaintiff was not notified of the assignment.

This Court has already rejected the former, holding
that §5019(c) "does not require that an assignment be filed with
the court in order for the assignee to be entitled to enforce
raj

judgment" issued against a judgment debtor.

WL 5835293, at *2-3.

Musah I, 2012

The latter, however, provides a suitable

basis for Plaintiff's FDCPA claims.
Appeals has held that "raj debtor,

The New York Court of
in order to be charged with a

duty to pay a debt to an assignee, must first have actual notice
of the assignment."
Industrial Park,

Tri City Roofers,

61 N.Y.2d 779,780

Inc. v. Northeastern

(1984).

Plaintiff has

alleged that "[pJrior to Houslanger's initiation of collection
6

action against

[Plaintiff] on behalf of Palisades,

s," AC ,

collection ef
st

17, and therefore at the time of Housl
s, "Houslanger was not legally entitl

olation of the FDCPA.

Housla
il

r's
to ta

to

the

Id.

48.

<J[

r has contended that Plaintiff's FDCPA claims

cause Housla

assi

r did in fact give notice of the

aintiff prior to Houslanger's attempt to enforce
See Memorandum of Law in Support of Defendant's

Motion to
12 (b) (6)

at 6.

to

to enforce the judgment," thereby rendering such

s

at

iff]

notice that the judgment had been ass

d not rece
lis

[Pla

smiss t
of the

Amended Complaint Pursuant to Rule
ral Ru

s of Civil Procedure

("Def. Mem.")

In support of this contention, Houslanger has submitted

an affidavit from Todd E. Houslanger, Esq.,
Houslanger law firm,

atta

purports to be a letter

a member of the

to which is an exhibit that
May I,

2009

(the "May 2009

Letter") mailed to Plaintiff that "stated that the original
creditor on the matter was

National Bank and the current
is owed is Palisades."

creditor to whom plaintiff's
Affidavit of Todd E. Housl

r,

("Houslanger Aff.")

Ex. A.

7

<J[

4 &

However, Houslanger has provided no proof that the May
2009 Letter was received by Plaintiff other than asserting that
the letter was in fact mailed.
noted above,

See Houslanger Aff.

~

3.

As

the AC has specifically alleged that Plaintiff did

not receive any notice from Houslanger regarding the assignment
of the judgment to Palisades prior to receiving the Information
See AC

Subpoena.

~~

17, 35, 38,

49.

Accordingly, a factual

dispute exists between the parties as to whether or not
Plaintiff received notice of the assignment.

Such a factual

dispute is "inappropriate for resolution on a motion to dismiss,
where allegations are taken as true and read in a light most
favorable to plaintiffs."
Trust Co.,

Burns v.

805 F. Supp. 2d 12,23-24

Delaware Charter Guarantee &
(S.D.N.Y. 2011).1

Houslanger has contended that the requirement that a
judgment debtor be given notice of the assignment of the
judgment is satisfied merely by the act of sending notice of the
assignment,

regardless of whether the judgment debtor actually

receives such notice.

See Def. Mem. at 6.

However, the

1 Since the AC has stated valid claims under the FDCPA, there is
no need to engage in an analysis of Houslanger's request for an
award of attorney's fees pursuant to 15 U.S.C. § 1692k(a) (3),
which grants a court discretion to dispense such an award in the
event that "an action under th[e FDCPA] was brought in bad faith
and for the purpose of harassment
"
Id.

8

j

relevant precedent indicates that t
rece
to be s

notice of the assignment in 0
isfied.

See Tri Cit

debtor must
r

rs,

--------~---------

r this requirement

61 N.Y.2d at 780

(holding that the judgment debtor was not obligated to pay the
assignee because he had "re
(emphasis added); _ _ _ _ _ _
TPZ Co

~L-

App. Div. 2006)

ved no notice of the assignment")

_ _ _ _ _ _ _ __ _

(holding that a

, 25 A.D.3d 787, 790
r

(N.Y.

comes obligated to an

assignee only when "the .

or receives notification that

the amount due or to become

s

added); Chase Bank USA, N.A. v. Ca

ct.

(N.Y. Civ.

2010)

("

judgment debtor to re

n assigned")

(emphasis

110, 27 Misc. 3d 791, 793

es of this court .

. require the

ve notice of the assignment.

fI)

(emphasis

added) .

Moreover,
the proposition
inapposite.

cases

ted by Houslanger in support of

t merely sending the notice is sufficient are

~B~u~r~r~v~._E~v~e~~~~I~n~s~.~C~o~.,

tail an office practice or
ar course of business to ef

followed in
a document,2 a

(N.Y.

where there has been testimony

App. Div. 1998), he
setting forth

253 A.D.2d 650

t

presumption of rece

that is
ct

mailing

is created.

In Burr, the following testimony was deemed sufficiently
detailed to
rise to a rebuttable pres
ion of receipt:
2

9

See

rd. at 651.

sen ted any such evidence, as

Houslanger has not

the affidavit submitted along

th the May 2009 Letter merely

asserts that "[the Houslanger] firm mailed a letter to
plaintiff," Houslanger Aff.

~

3,

to the particular practices

thout providing any detail as

employees of the firm in
and mailing a letter.
F.3d 1197

res that were followed by

p

course of drafting, printing

Likewise,

v. Credit Bureau

1 to Houslanger because it

(9th Cir. 1999), is unhe

sses a section of the FDCPA

171

§

1692g(a)

that requires a

collector make certain written communications to a debtor
days of the in

ial communication, see id. at 1201,

s nothing to do with the salient issue in the instant case

[The] office handles numerous personal
injury cases, and the normal rout
is that
a er the claim data is gathe
and ente
in the computer, several documents are
ted .
. The attorney then reviews
correspondence, signs it,
it into
an envel
,and places it in an out-bas
ck-up at the end of the day by a c rk
lies postage and mails it.
If the
who
letter never goes out, the original will
in the file with the office copy,
still
if
letter is returned undelivered,
11 be returned to the file.
it, too,

253 A.D.2d at 651.
10

name

,the requirement to g

notice that the debt

a

has been assigned.

Plaintiff Has Stated a Claim For Lack of Meaningful Review
Pursuant to 15 U.S.C. § 1692e(3)

Plaintiff has cont
§1692e(3) by sending

In

attorney in [the] of

ion Subpoena "without any

ce

ewing the underlying file

account, and on informat
documents themse

t Houslanger violated

s."

§1692e(3) merely proh

and
AC

~

52.

lief, without reviewing t
Although the statutory text of

its "[t]he false representat

or

implication that any individual is an attorney or that
communication is from an attorney," id., the Second

rcuit has

held that "some

ir

ree of attorney involvement is

before a letter will

considered 'from an attorney' within the

mea n i n g

:..:.M~ic-=l,-=-=-=---,--=---=---=--=-",--=--=fc-=f_&,-=-_A_b-=r_a-=m-=s,-=-o___
n...!.--=Lc-='. -=L-=.-=P~. ,
___

0

f the FDC PA . "

("Miller

I "\
I

321 F.3d 292, 301 (2d

r. 2003)

Miller I Court

to set forth a bright-l

Ii

determine

suf

occurred in a g

case, see id. at 304,

the

•

test to
has

ciently meaningful attorney
Court not

that

the analysis would turn on, among other things, whether the
attorney's e

ion of the case file was

11

to permit

determination of "whether [the debtor]
to pay the debt .

In

II

against PIa

the Plaintiff "was or was not

that there

iff, the question of whether

,

igated to pay t

If

•

d

~,

that Houslanger sought to collect it on behalf of

Palisades turns on not only
also

existence of the Judgment, but

r Plaintiff received adequate notice of

assignment of the Judgment.
780.

igated

Id. at 305 (emphasis added).

instant case, while it is undisput

existed a j

at the t

was or was not

Acco

See Tri Cit

Roofers

61 N.Y.2d at

,s

ngly, although ordinarily an att

determination that there exists a valid judgment may obviate the
need for fu
the

r review of a case file,
case, where

judgment was ass

party, §1692e(3) requires
that judgment engage in a
dete

in situations such as
to a third

an attorney see

to collect

ew the case fi

suf

cient to

that the judgment debtor received notice of the

ass

Since Plaintiff's meaningful
di

issue of

as to whether or not

ew c

im turns on

aintiff received

notice of the assignment, it is not appropriate for dismiss
pleading stage.

Burns, 805 F. Supp. 2d at 23-24.
12

at

Plaintiff Has Failed To state a Claim for Violation of
N.Y. Judiciary Law § 487

Section 487 of

ciary Law ("§487") proh

ts an

attorney or counselor from (1) engaging in any deceit or
collusion, or consenting to any deceit or collusion, with intent
to deceive the court or
client's suit with a v

rty; or (2) willfully dela

a

to his own gain, or willfully

receiving any money or allowance for or on account of
which he has not la

out, or becomes answerable

money
N.Y. Jud.

Law § 487.

" [T]

deceit forming the basis for .

al

cause of action

r §487], if it is not directed at a court,
course of a pending j

must occur duri

cia 1 proceeding."

Nicholson v. Forster & Garbus LLP, No. 11 C

0524

2012 WL 273150, at *2 (E.D.N.Y. Jan. 30, 2012)
v. Amalfitano, 305 A.D.2d 202, 204

Here,

. a

(N.Y.

Plaintiff has alleged

Information Subpoena to Plaintiff's

(SJF) (WOW),
Costalas
2003)).

t Houslanger sent the
k without conducting a

sufficient

ew of the file, and t

engaged in deceitful

conduct in t

course of "invok[ing]

authority of the state

court stern," Compl.

<]I

63, and"
13

1

ng the power of the

State Courts," Compl.

~

64.

Crucially, "the allegedly

lse

statements were not directed to a court, nor did they occur
cia I proceedi

'during the course of a pending ]
Nicholson, 2012 WL 273150, at *2
at 204).

Rather, Plaintiff has only all

statements made in "post
~

57

(quoting Costalas

305 A.D.2d

deceit

1

udgment collection documents,"

); by definition, such statements

(emphasis a

"occur during the course

a pending j

Nicholson, 2012 WL 273150, at *2.
all

,"

d not

cial proceeding."

Accordingly, Plaintiff's

tions cannot support a cause of action under §487.

Plaintiff's reliance on S kes v. Mel Harris & Assocs.
757 F. Supp. 2d 413
Recove

(S.D.N.Y. 2010) and

az v. Port

Assocs., No. 10 Civ. 3920 (ERK), 2012 WL 1882976

(E.D.N.Y. May 24, 2012), is mi
involved all

aced, as both Sykes and
defendant made deceit

ions that

with the court during

course of judicial

757 F. Supp. 2d at 417

(plaintiff al

serve a summons and complaint and t

1 filings
ngs.

d that

conducted a scheme to obtain default judgments by"

affi

lio

See

fendants
iling to

filing a fraudulent

t attesting to service"); Diaz, 2012 WL 1882976, at *2

aintiff alleged that defendants

14

tentionally filed

complaints asse

ing time-barred claims "knowing that the vast

majority of the claims will result in

*

*

fault judgments").

*

When a motion to dismiss is granted, "[iJt is the
usual practice

. . to allow leave to replead."

French, 232

Appx. 17, 19 (2d Cir. 2007)

1991)).

(quoting Cortec

949 F.2d 42, 48

I

Schindler v.

(2d

However, "it is proper to deny leave to repl

. . amendment would be futile."

where

Hunt v. Alliance N. Am. Gov't

Income Trust, Inc., 159 F.3d 723, 728 (2d Cir. 1998).
amendment of

r.

Here,

aintiff's §487 claim would be futile because, as

set forth above, the allegedly deceit

1 statements were not

made to the court or during the course of a pending judicial
proceedi
§487 c

See
im is di

cholson, 2012 WL 273150, at *2.
ss

with prejudice.

15

As such, the

Conclusion

For foregoing reasons, defendant Houslanger's motion
to dismiss the amended complaint is granted with prejudice with
respect to the claim under §487, and deni

with re

remaining claims.

It is so ordered.

New York, NY
August t
2013

7

U.S.D.J.

16

ct to the