Hallmark v. Cohen & Slamowitz, LLP

Filing 177

DECISION AND ORDER DENYING Cohen and Slamowitz's 132 Motion for Reconsideration; DENYING Midland's 127 Motion for Reconsideration; DEFERRING decision on Hallmark's 124 Motion for Approval of Class Notice. Signed by William M. Skretny, Chief Judge on 1/5/2014. (MEAL)

UNITED STATES DISTRICT COURT
WESTERN DISTRICT OF NEW YORK
MICHAEL HALLMARK,
Plaintiff,
v.

DECISION AND ORDER
11-CV-842S

COHEN & SLAMOWITZ LLP, and MIDLAND
FUNDING, LLC d/b/a MIDLAND FUNDING OF
DELAWARE, LLC,
Defendants.

1.

On September 16, 2013, this Court issued a Decision and Order that, among

other things, denied Defendants Cohen & Slamowitz’s and Midland Funding’s motions to
dismiss. It also granted Plaintiff Michael Hallmark’s motion for class certification. Familiarity
with that ruling and the facts of this case are presumed. Both Defendants now move for
reconsideration of that Decision.
Also currently pending before this Court is Plaintiff’s motion for approval of class
notice.
2.

The standard for a motion for reconsideration is well settled, and need not

be repeated here. It is sufficient to note that Defendants base their motion on the ground
that this Court “overlooked controlling decisions or data.” See Shrader v. CSX Transp.,
Inc., 70 F.3d 255, 257 (2d Cir. 1995).
3.

Initially, Defendants argue that this court erred when it denied their motions

to dismiss. Defendants argue that, contrary to this Court’s finding, they did in fact raise the
argument, in their original memorandum, that they were authorized by an underlying
agreement to charge Hallmark court costs associated with the collection of his debt.

This assertion borders on the frivolous. Defendants point to a single point heading
that reads, “C&S is authorized by statute and agreement to charge additional collection
costs to Plaintiff.” (See Docket No. 42-4, at 21) (emphasis added). But the discussion that
follows, far beyond a simple failure to attach the purported agreement, completely fails to
suggest that any agreement even exists, much less what the agreement provides, or how
it affects this case, or why the agreement authorizes them to charge collection costs. This
is plainly insufficient.
Even more bewildering, Defendants focus exclusively on this element of the
Decision, and ignore that this Court offered three independent reasons for rejecting their
argument that the purported underlying agreement controlled this case.
The motion for reconsideration of the motion to dismiss is therefore denied.
4.

Defendants also move for reconsideration of that part of the Decision that

granted Hallmark’s motion for class certification. In their initial opposition, Defendants relied
on the same argument they asserted in support of their motion to dismiss: they were
authorized to collect the court costs because an underlying agreement between Hallmark
and his creditor authorized this practice. For this reason, Defendants initially argued,
Hallmark failed each factor of the Rule 23 analysis. The “commonality” factor, for example,
was not met because “C&S was authorized to include in the total amount owed any
incurred collection costs pursuant to the credit card agreement and state law. Plaintiff is
alleging that all plaintiffs have a similar cause of action that carries no right to relief.
Therefore, the commonality requirement cannot be fulfilled and the class certification must
be denied.” (Docket No. 43-3, at 9–11.)
Now, contrary to the limited confines of a motion for reconsideration, see Koehler
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v. Bank of Berm., Ltd., No. M18-302 (CSH), 2005 WL 1119371, at *1 (S.D.N.Y. May 10,
2005) (reconsideration motion “cannot assert new arguments or claims which were not
before the court on the original motion”), Defendants take a different tack, arguing that:
to determine commonality, typicality and predominance
amongst all members of Plaintiff’s proposed class and their
claims, the Court would have to conduct individualized factintensive investigations as to (1) the nature/origin of all class
members’ subject debt; (2) any underlying contracts or
agreements regarding their debt; and (3) the dates of filing,
judicial judgment, as well as the date the collection cost was
incurred by C&S.

Relying on Myers v. Hertz Corporation, Defendants argue that these inquires will
predominate over issues common to the class and that, therefore, class certification should
be revoked. 624 F.3d 537, 549 (2d Cir. 2010).
5.

Putting aside the belated nature of this argument, “[a]s long as a sufficient

constellation of common issues binds class members together, variations in the sources
and application of a defense will not automatically foreclose class certification under Rule
23(b)(3).” In re Visa Check/MasterMoney Antitrust Litig., 280 F.3d 124, 138 (2d Cir. 2001).
This Court reaffirms its finding that Hallmark has sufficiently demonstrated that the
attempted collection of court costs remains a more substantial issue than the possibility of
individual defenses. Discovery, about which there are ongoing disputes, may reveal that
underlying agreements, if they exist, are likely to bar claims against some class members.
Or, if the agreements are produced, it may become clear that individual differences among
them will predominate. If that is the case, “then a court has available adequate procedural
mechanisms. For example, it can place class members with potentially barred claims in a
separate subclass, [] exclude them from the class altogether,” or it can decertify the class.
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See Dupler v. Costco Wholesale Corp., 249 F.R.D. 29, 45 (E.D.N.Y. 2008). Although the
class certification inquiry may “entail some overlap with the merits of the plaintiff's
underlying claim,” Wal–Mart Stores, Inc. v. Dukes, 564 U.S. ----, ----, 131 S.Ct. 2541, 2551,
180 L.Ed.2d 374 (2011), there is no competent evidence before the court at this time to
suggest that individual defenses will predominate. Indeed, these agreements, which
purportedly authorize the collection of court costs, are presumably in Defendants’
possession. Yet none has been adequately identified, filed with the Court, or (to this
Court’s knowledge) turned over to Plaintiff.
Defendants motions for reconsideration on this ground are, accordingly, denied.
Further, this Court has considered each of the other arguments raised in the motions for
reconsideration and finds them to be without merit.
6.

As a separate matter, Plaintiff moves for approval of class notice. Defendants

oppose the motion on several grounds, including the fact that Cohen and Slamowitz filed
a motion for leave to appeal this Court’s certification decision with the Second Circuit Court
of Appeals. This Court finds it prudent to defer ruling on this motion until the outstanding
discovery disputes are resolved. That discovery process shall continue despite the
application for leave to appeal.

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IT HEREBY IS ORDERED, that Cohen and Slamowitz’s motion for reconsideration
(Docket No. 132) is DENIED.
FURTHER, that Midland’s motion for reconsideration (Docket No. 127) is DENIED.
FURTHER, that Hallmark’s motion for approval of class notice (Docket No. 124) is
DEFERRED.
SO ORDERED.

Dated: January 5, 2014
Buffalo, New York
/s/William M. Skretny
WILLIAM M. SKRETNY
Chief Judge
United States District Court

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