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lJNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK
ELIZABETH COBLE, MILAGROS HARPER,
and DEN~IS HARPER, on behalf of themselves
and others similarly situated,
COHEN & SLAMOWITZ, LLP, DAVID
COHEN, ESQ., MITCHELL SLAMOWITZ,
ESQ., LEANDRE JOlIN, ESQ., and
CRYSTAL S.A. SCOTT, ESQ.,
11 CV 1037 (VB)
Plaintiffs Elizabeth Coble, Milagros Harper, and Dennis Harper bring this action pursuant
to the Fair Debt Collection Practices Act, 15 U.S.C. §§ 1692 et seq. ("FDCPA"). Now pending
is defendants' motion to dismiss the complaint (Doc. #9), which, for the following reasons, is
The Court has subject matter jurisdiction over this action pursuant to 28 U .S.c. § 1331.
For purposes of ruling on a motion to dismiss, the Court accepts all factual allegations of
the complaint as true.
Defendant Cohen & Slamowitz, LLP ("C&S") is a large consumer collection law firm.
C&S collects defaulted credit card debts in New York State courts using affidavits of serviee
provided by Midlantic Service, Inc. ("Midlantic") in support of applications for default
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Plaintiffs sue on behalf of themselves and all others similarly situated. Plaintiffs were
sued by defendants in state debt collection actions commenced between 2002 and 2005.
Defendants filed Midlantic affidavits of service in each action and obtained default judgments
against each of the plaintiffs.
Plaintiff Elizabeth Coble had a default judgment entered against her in 2005. Ms. Coble
learned about this default judgment for the first time in mid-2009. Plaintiff Milagros Harper also
had a default judgment entered against her in 2005. Plaintiff Dennis Harper had a default
judgment entered against him in 2002. The complaint does not state when the Harpers learned of
the default judgments against them.
On October 15, 2005, C&S was sued in the Eastern District of New York for violating
the FDCPA. See Caprino et al v. Cohen & Slamowitz, LLP et al., No. 05 Civ. 04814
(E.D.N.Y.). During the course of that lawsuit in October, 2006, C&S became aware of a sworn
affidavit of a former Midlantic process server, Kenneth Vega, stating that Midlantic had falsified
thousands of affidavits of service between 1995 and 2006 ("Vega Affidavit"). Vega explained
that Midlantic followed an illegal but streamlined practice aimed at producing as many affidavits
as possible in order to maintain its business relationship with C&S. This practice included no
attempts at service before making effective service by the "nail & mail" method; making false
references to neighbors; and forgery and false notarization of the process server's signature.
The Vega Affidavit states that the practice of fraudulent service was a company-wide
policy implemented with regard to all affidavits submitted on behalf of C&S.
Although C&S has had knowledge of the fraudulently prepared affidavits of service since
2006, it continues to enforce the collection actions relating to those judgments. C&S has not
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reviewed the judgments it obtained based on Midlantic's service and has not informed the courts
or consumers that it did not have good faith bases to assert the veracity of the Midlantic
atlidavits on file.
Nonetheless, defendants have continued to atlirmatively assert the veracity of the
Midlantic atlidavits in the course of enforcing the default judgments. When consumers have
raised lack of service as a defense to collection, C&S has filed sworn affIrmations by its
attorneys citing the Midlantic affidavits as proof of service. Plaintiff Coble filed an order to
show cause on September 7,2010, alleging she had never been served, and C&S responded with
such an affirmation. I
Plaintiffs first became aware of the Vega Affidavit in the middle of 20 10. They filed this
action on February 15,2011.
The function of a motion to dismiss is "merely to assess the legal feasibility of the
complaint, not to assay the weight of the evidence which might be offered in support thereof."
Ryder Energy Distrib. v. Merrill Lvnch Commodities, Inc., 748 F.2d 774, 779 (2d Cir. 1984).
When deciding a motion to dismiss, the court must accept all well-pleaded allegations as true and
draw all reasonable inferences in favor of the pleader. Hishon v. King, 467 U.S. 69, 73 (1984).
The complaint must contain the grounds upon which the claim rests through factual allegations
sufficient "to raise a right to relief above the speculative level." Bell Atl. Corp. v. Twombly, 550
U.S. 544,555 (2007). A plaintiff is obliged to amplify a claim with some factual allegations to
1 Plaintiffs Milagros and Dennis Harper do not allege that C&S affirmatively cited Midlantic
affidavits in relation to their collections actions.
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allow the court to draw the reasonable inference that the defendant is liable for the alleged
conduct. Ashcroft v. Iqbal, 129 S. Ct. 1937 (2009).
The FDCPA prohibits debt collectors from engaging in unfair collection practices,
including making a "false, deceptive, or misleading representation," 15 U.S.C. § 1692e, and
using "unfair or unconscionable means" to attempt to collect a debt, 15 U.S.c. § 1692f.
Statute of Limitations
A claim for violations of the FDCPA may be brought "within one year from the date on
which the violation occurs." 15 U.S.C. § 1692k(d).
Defendants argue that plaintiffs' allegations fall outside of this time period because the
default judgments in the underlying state court cases were entered between 2002 and 2005.
Plaintiffs plausibly allege defendants violated the FDCP A when they applied for default
judgments against plaintiffs. See,~, Gargiulo v. Forster & Garbus Esqs., 651 F. Supp. 2d 188,
191-92 (S.D.N. Y. 2009) (FDCPA applies to statements in affidavits submitted by law firm in
default judgment application); Hasbrouck v. Arrow Fin. Servs. LLC, 2010 WL 1257885, at *1
(N.D.N.Y. Mar. 26, 2010) (FDCPA applies to statements in affidavits submitted by debt
collector in default judgment application). If defendants' last violations of the FDCPA occurred
when they obtained default judgments against plaintiffs - in 2005 at the latest - they are time
barred absent equitable tolling.
However, plaintiffs argue that their cause of action includes the continuing acts and
omissions of C&S in connection with the invalid Midlantic affidavits. Plaintiffs claim
defendants violated the FDCP A within the last year by affirmatively misrepresenting the
Midlantic affidavits as true and proper, concealing their knowledge of the falseness of the
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atTidavits, and continuing to collect on the underlying judgments. Although plaintiffs claim in
their opposition papers that these violations occurred within the one-year statute of limitations
with respect to each plaintiff, the complaint alleges a specific action on the part of C&S within
the one-year statute oflimitations only with respect to Ms. Coble. Therefore, Ms. Coble's action
is not time-barred.
However, because the complaint does not specifically allege defendants violated the
FDCPA with respect to Milagros and Dennis Harper within a year of the commencement of this
action, their claims will be barred by the statute of limitations unless equitable tolling applies.
Equitable tolling applies in extraordinary circumstances where plaintiffs show: (1)
defendant concealed the existence ofplaintifTs' cause of action; (2) plaintiffs remained ignorant
of that cause of action until some point within the limitations period; and (3) plaintiffs'
continuing ignorance was not due to lack of diligence. Sykes v. Mel Harris and Assoc" LLC,
757 F. Supp. 2d 413,422 (S.D.N.Y. 2010) (citing New York v. Hendrickson Bros, Inc., 840
F.2d 1065, 1083 (2d Cir. 1988)). Equitable tolling applies to FDCPA claims in appropriate
circumstances. Somin v. Total Cmty. Mgmt. Corp., 494 F. Supp. 2d 153, 158 (E.D.N.Y. 2007).
The concealment element is met when plaintiffs show either that the affirmative acts of
defendant prevented discovery of plaintiffs' claim or that the wrong itself was self-concealing.
New York v. Hendrickson Bros, Inc., 840 F.2d at 1083.
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Plaintiffs first argue defendants actively and knowingly concealed the fact that the
Midlantic affidavits and attorney affirmations referencing them were false and improper? In
those instances where a consumer raised lack of service as a defense, defendants affirmatively
re-asserted the validity of the Midlantic affidavits they knew to be false.
Moreover, defendants are still attempting to collect on the default judgments. Continued
collection potentially legitimizes those judgments and conceals the fact that C&S can no longer
maintain a good faith belief in their validity. Because plaintiffs had no reason to doubt the
authenticity of the Midlantic affidavits until they discovered the Vega Affidavit, defendants'
conduct prevented plaintiffs from discovering their claims under the FDCP A in a timely manner.
Defendants dispute plaintiffs' allegations of fraudulent concealment in two ways.
Defendants first argue that they were not on notice that the Midlantic affidavits were falsified
with respect to the named plaintiffs because the Vega Affidavit does not specifically reference
those plaintiffs. They characterize the affidavit as a fabrication by a lone process server seeking
to avoid personal liability in an unrelated case. This argument is irrelevant at this stage, where
the Court accepts plaintiffs' allegations as true. The Vega Affidavit clearly states that
Midlantic's illegal practices were pervasive, and defendants were on notice of these practices as
Defendants next argue they have not engaged in fraudulent concealment because they
have done nothing to conceal the Vega Affidavit and the prior litigation against them is public
2 Claims of fraudulent concealment are subject to the requirements of Rule 9(b), which provides
that plaintiffs claiming fraud must allege the fraud or mistake with particularity. Fed. R. Civ. P.
9(b). Plaintiffs' complaint contains detailed allegations of defendants' fraud sufficient to satisfy
the pleading standards of that rule.
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knowledge. 3 However, plaintiffs claim the Vega Affidavit was not available on PACER until
this lawsuit was filed, nor is there any reference on the Caprino v. Cohen & Slamowitz docket
that would provide a consumer with knowledge of the Vega Affidavit's contents. Plaintiffs
argue they had no reason to suspect that the Midlantic affidavits were fraudulent and could not
have discovered such information until they became aware of the Vega Affidavit in 2010. Thus,
they could not have discovered, even upon reasonable exercise of diligence, that the affidavits
were false and improper. By continuing to enforce the collections actions based on those
affidavits, defendants intentionally kept plaintiffs ignorant of information essential to the pursuit
of their claims.
Plaintiffs have sufficiently alleged that defendants were on notice that any default
judgments based on the Midlantic affidavits were potentially fraudulent as of2006. They have
also plausibly alleged that by failing to investigate the fraudulent practices of its process service
company and continuing to enforce those judgments, defendants violated the FDCPA and
concealed that violation in the process.
In addition to showing that defendants concealed plaintiffs' cause of action, plaintiffs
must also show that their continuing ignorance was not due to a lack of diligence. Plaintiffs
argue that because they had no way of knowing that the Midlantic affidavits were falsified, they
could not have engaged in due diligence until they became aware of the Vega Affidavit after
meeting with counsel in 2010.
3 Defendants do not argue that plaintiffs' claims are identical to those asserted by the plaintiffs in
Caprino v. Cohen & Slamowitz. Thus, they do not argue that plaintiffs were on inquiry notice as
of the filing of that suit and the Court will not address that argument See Weiss v. La Suisse,
Societe D'Assurances Sur La Vie, 381 F. Supp. 2d 334,337-39 (S.D.N.Y. 2005).
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Defendants argue that plaintiffs could have learned of their injury if they had inquired
into whether any default judgments had been entered against them prior to 2010. This argument
does not reflect the practices of a reasonably diligent consumer. See,~, Thompson v. Metro.
Life Ins. Co., 149 F. Supp. 2d 38,52 (S.D.N,y' 2001) (media coverage and prior lawsuits are not
sufficient to establish that plaintiffs should have known of their injuries).
Plaintiffs allege that neither the Vega Affidavit nor any other public disclosure of
Midlantic's fraudulent practices were available on the court's electronic databases until the
commencement of this action. Thus, no amount of diligence, even with knowledge of the default
judgments and supporting affidavits of service, would reveal the FDCPA violations alleged in
Because the purpose of a motion to dismiss is merely to assess the legal sufficiency of the
complaint, the Court will not weigh the factual evidence at this time, The complaint contains
specific allegations that defendants were on notice of the falsity of the Midlantic affidavits and
continued to enforce those collections actions despite this knowledge, Plaintiffs have thus
plausibly alleged a violation of the FDCP A. Because plaintiffs have also alleged that
defendants' conduct concealed plaintiffs' cause of action, equitable tolling applies and dismissal
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For the foregoing reasons, the Court DENIES defendants' motion to dismiss the
complaint (Doc. #9).
The Clerk is instructed to terminate this motion.
Dated: October 3 \ ,2011
White Plains, NY
Vincent L. Briccetti
United States District Judge