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Melody Simon v. Worldwide Filing Services

February 18, 2013


The opinion of the court was delivered by: William M. Skretny Chief Judge United States District Judge



On December 19, 2011, Plaintiff filed a complaint alleging various violations of the Fair Debt Collection Practices Act ("FDCPA"), 15 U.S.C. §§ 1692, et seq. Defendants failed to appear and defend this action, which resulted in the Clerk of the Court entering default on July 16, 2012. Presently before this Court is Plaintiff's Motion for a Default Judgment against only Defendants Jason R. Begley and Wayne W. Lunsford pursuant to Rule 55(b)(2) of the Federal Rules of Civil Procedure. (Docket No. 22.) For the following reasons, Plaintiff's motion is granted.


As alleged in the Amended Complaint, Plaintiff received a phone call from Defendant Worldwide Filing Services, Inc., on August 12, 2011 at her place of employment. During that call, "Worldwide, itself and on behalf of [Defendant] Portfolio [Investment Financial Inc.], Begley, and Lunsford, threatened to serve Plaintiff with court papers in two hours at work unless she agreed to a settlement that day." (Am. Compl. ¶¶ 22-23, Docket No. 5.) There was no indication that the call was from a debt collector, the true corporate or business name of the caller's firm, or that Plaintiff in fact had certain rights with respect to the asserted debt. Out of fear of a lawsuit, Plaintiff agreed that day to a payment plan that required repayment of the debt plus additional costs and fees. Three days later, Defendant sent Plaintiff a written settlement agreement.

On September 13, 2011, after making two payments, Plaintiff revoked Worldwide's permission to withdraw funds pursuant to the settlement agreement. Portfolio, "itself and on behalf of Begley and Lunsford," then contacted Plaintiff by email. (Am. Compl. ¶ 37.) As with the initial phone call, Portfolio failed to properly identify itself as a debt collector, or provide any of the disclosures required by the FDCPA.


A. Default Judgment Standard

Before obtaining default judgment, a party must first secure a Clerk's Entry of Default by demonstrating, by affidavit or otherwise, that the opposing party is in default. See Fed. R. Civ. P. 55(a). Once default has been entered, the allegations of the complaint that establish the defendant's liability are accepted as true, except for those relating to the amount of damages.Greyhound Exhibitgroup, Inc. v. E.L.U.L. Realty Corp., 973 F.2d 155, 158 (2d Cir. 1992), cert denied, 506 U.S. 1080 (1993).

In considering whether to enter default judgment, the court must determine whether the facts alleged in the complaint are sufficient to state a claim for relief as to each cause of action for which the plaintiff seeks default judgment. Further, where the damages sought are not for a sum certain, the court must determine the propriety and amount of the default judgment. See Fed. R. Civ. P. 55(b)(2). Damages must be established by proof, unless the damages are liquidated or "susceptible of mathematical computation." Flaks v. Koegel, 504 F.2d 702, 707 (2d Cir. 1974). All reasonable inferences from the evidence presented are drawn in the moving party's favor. See Au Bon Pain Corp. v. Artect, Inc., 653 F.2d 61, 65 (2d Cir. 1981).

B. Liability under FDCPA

Considering the allegations in a light most favorable to Plaintiff, as this Court must, the Amended Complaint is sufficient to state claims for relief on the five FDCPA causes of action asserted. Defendants' placement of a call to Plaintiff without meaningful disclosure of their identity as a debt collector attempting to collect a debt violated sections 1692d(6) and 1692e(11). (Am. Compl. ¶¶ 22-29.) Defendants' threat of legal action absent Plaintiff's immediate participation in a settlement could be perceived by the least sophisticated consumer as indicating that: (1) the caller was a lawyer for the entity to which Plaintiff owed a debt; and (2) Plaintiff had no right to challenge the validity of that debt. Pipiles v. Credit Bureau of Lockport, Inc., 886 F.2d 22, 25-26 (2d Cir. 1989)(violation of § 1692e(10) found where import of language used was that legal action was about to be initiated and could only be averted by payment); see Ellis v. Solomon & Solomon, P.C., 591 F.3d 130, 135 (2d Cir. 2010)(considering whether a FDCPA violation exists from the perspective of the least sophisticated consumer), cert denied, 130 S. Ct. 3333 (2010). This conduct also violates the requirements of section 1692g that a consumer be notified following the initial communication from a debt collector that, among other things, he or she has 30 days from that communication to dispute the validity of the debt. Russell v. Equifax A.R.S., 74 F.3d 30, 34-35 (2d Cir. 1996) (concluding that debt collector's statement that debtor must make payment within 10 days or "we will . . . post this collection to your file" violated 1692g as a matter of law); see15 U.S.C. § 1692g(b) (collection activity must cease until debt collector obtains and mails verification of the debt to consumer).

Finally, Plaintiff alleged that Defendants Begley and Lunsford materially participated in Worldwide and Portfolio's debt collection activities, particularly with respect to Plaintiff's debt. (Am. Compl. ΒΆΒΆ 16-17.) See Pollice v. Nat'l Tax Funding, L.P., 225 F.3d 379, 405 (3d Cir. 2000)(general partner exercising control over affairs of partnership may be held liable under FDCPA); Piper v. Portnoff Law Assocs., 274 F. Supp. 2d 681, 689-90 (E.D. Pa. 2003), aff'd, 396 F.3d 227 (2005) (individuals exercising control over the affairs of a business may be held liable under the FDCPA for the business' actions); see also Teng v. Metro. Retail Recovery Inc., 851 F. Supp. 61, 67 (E.D.N.Y. 1994) (each employee is himself a debt ...

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