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Fernandez v. Peter J. Craig & Assocs., P.C.

United States District Court, E.D. New York

December 4, 2013


Decided December 2, 2013

Page 364

For Monserate Fernandez, Plaintiff: Hashim Rahman, LEAD ATTORNEY, Brooklyn, NY.

For Peter J. Craig & Associates, P.C., Defendant: Peter J. Craig, LEAD ATTORNEY, PRO HAC VICE, Peter J. Craig & Associates, P.C., Pittsford, NY.


Nina Gershon, United States District Judge.

Page 365


Defendant Peter J. Craig & Associates, P.C. brings this motion pursuant to Rule 12(b)(1) of the Federal Rules of Civil Procedure, seeking to dismiss the complaint of plaintiff Monserate Fernandez for lack of subject matter jurisdiction. Plaintiff opposes the motion and requests a pre-motion conference to discuss his intended motion to amend the complaint.

I. Background and Procedural History

A. Factual Allegations

Plaintiff Monserate Fernandez, an adult individual residing in Queens, New York, brings this action on behalf of himself and others similarly situated against defendant Peter J. Craig & Associates, P.C. (the " Firm" or " defendant" ), and against John Does # 1-5, certain employees of the Firm. Plaintiff alleges that defendants have violated the Fair Debt Collection Practices Act, 15 U.S.C. § § 1692 et seq (the " FDCPA" ), as well as Section 601 of the New York State General Business Law.

The allegations arise out of plaintiff's receipt of a letter from the Firm, dated August 22, 2012, enclosing a document referred to as the " Statement of Account," which indicated that plaintiff owed $11,354,63 in connection with a Perkins Loan he obtained from the Rochester Institute of Technology (" RIT" ). ( See Compl.[1] ¶ ¶ 19-20, 26; see also Craig Decl.[2] Ex. A.) The August 22 letter is signed by " Megan Keymel, Collections Paralegal," on behalf of Peter J. Craig & Associates, P.C., and contains the statement, " This is an attempt to collect a debt, and any information obtained will be used for that purpose." (Craig Decl. Ex. A, at 1.) Plaintiff alleges that the Firm was either employed by RIT for the purpose of collecting the debt, or that the debt was assigned or transferred by RIT to the Firm, but that Peter J. Craig & Associates, P.C, is not authorized to do business in New York, nor does it hold a valid debt collector license. (Compl. ¶ ¶, 24-25.)

Moreover, plaintiff alleges that several of the entries contained on the Statement of Account, which purport to relate to certain legal proceedings initiated against plaintiff, are false or inaccurate, ( See id . ¶ ¶ 28-41.) Plaintiff further alleges that the entries relating to interest charges are improper because the promissory note giving rise to the debt does not provide for such interest. ( See id . ¶ ¶ 43-46.)

Plaintiff alleges that the Firm has violated the FDCPA by employing false and deceptive means to collect a debt, using a false entity name, threatening to take an action it was not entitled to take, and attempting to collect amounts not authorized by the underlying agreement. ( See id . ¶ ¶ 55, 57, 59.) Plaintiff also alleges that the Statement of Account contains

Page 366

false, inaccurate and invalid entries and misrepresents the amount of the debt and the services rendered in connection with the debt. ( See id . ¶ ¶ 56, 58, 60.) Plaintiff further alleges that the Finn violated § 601 of New York's General Business Law by attempting to collect fees and costs that are not due or chargeable against the plaintiff. ( Id. ¶ 65.)

In the Complaint, plaintiff seeks statutory damages under the FDCPA, as well as actual damages stemming from the " humiliation, anger, anxiety, emotional distress, fear, frustration and embarrassment" that he suffered as a direct consequence of defendant's conduct. ( Id. ¶ 51.) Plaintiff also seeks a declaratory judgment and money damages in connection with his claim under § 601.

Since plaintiff alleges that the Firm sent similar account statements and communications to other consumers around New York State, he alleges that class litigation is appropriate. To that end, he proposes two class definitions: One class would be comprised of consumers who received from defendant an account statement containing false or impermissible charges; the other proposed class would be comprised of consumers who received correspondence from an entity doing business under the name " Peter J. Craig & Associates, P.C.," which name plaintiff alleges is false. ( See Compl. ¶ ¶ 16-17,)

B. Procedural History

Plaintiff commenced this action in October 2012, and the Firm filed its Answer on December 17, 2012, An initial conference was held January 29, 2013, before Magistrate Judge Marilyn D. Go. The parties engaged in settlement discussions between themselves and subsequently participated in several rounds of settlement conferences with Judge Go.

On May 8, 2013, counsel appeared for the first time before me, in connection with a premotion conference to discuss, inter alia, plaintiff's intended motion to disqualify counsel to defendant.[3] The parties also discussed their previous efforts at settling this matter, as well as the potential effect of a Rule 68 offer of judgment for statutory damages with the issue of attorneys' fees to be resolved by the court:

Mr. Craig:[4] I would point out that we have made a settlement offer to the plaintiff for that full thousand dollars. That was rejected.
Mr. Rahman:[5] He has made a settlement offer for a thousand dollars about a week ago. We have invited the settlement offer and ...

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