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Smith v. New Falls Corporation

United States District Court, N.D. New York

September 10, 2014

MICHAEL R. SMITH, Plaintiff,
NEW FALLS CORPORATION, et al., Defendants.


LAWRENCE E. KAHN, District Judge.


Pro se Plaintiff Michael R. Smith ("Plaintiff") alleges violations of the Fair Debt Collection Practices Act ("FDCPA"), 15 U.S.C. §§ 1692 et seq., by Defendants New Falls Corporation ("New Falls"); Vlock and Associates P.C. ("Vlock and Associates"); and Stephen Vlock ("Vlock") (collectively, "Defendants"). Dkt. No. 1 ("Complaint"). Defendants filed a Motion to dismiss under Federal Rule of Procedure 12(b)(6), asserting, inter alia, that Plaintiff's claims are timebarred under the applicable statute of limitations. Dkt. No. 7 ("Motion to dismiss"). Plaintiff filed a Response, which also included a Cross-Motion to disqualify Defendants' counsel. Dkt. No. 8 ("Response").[1] For the following reasons, Defendants' Motion to dismiss is granted, and Plaintiff's Cross-Motion to disqualify counsel is denied.


Plaintiff is a resident of Franklin County, New York. Compl. ¶ 2. New Falls is an Ohio corporation that functions as a debt collection agency. Id . ¶ 6. New Falls hired Vlock and Associates, a New York city law firm, to collect a debt allegedly owed to New Falls by Plaintiff. Id . ¶ 7.

In April 2008, Plaintiff had $53, 000 withdrawn from three of his mutual fund accounts. Id . ¶ 20. Plaintiff discovered that the funds were taken in connection with a default judgment obtained in state court by Defendants in 2007. Id . ¶¶ 17, 19. Plaintiff was not aware that he had been sued, and asserts that he was a victim of identity theft. Id . ¶¶ 16, 18.

"On October 16, 2012... upon viewing the [state] court record for the first time since his funds were taken in 2008, ... Plaintiff discovered false and misleading documents used by [D]efendants to obtain the state court judgment." Id . ¶¶ 22-23. On December 31, 2012, Plaintiff filed a motion to vacate the state court judgment. Id . ¶ 31. Plaintiff did not seek recourse earlier because "Plaintiff wasn't aware previous to [his] state court action of his right to dispute the alleged debt...." Id . ¶ 32. Defendants filed a response to Plaintiff's motion in March 2013. Id . ¶ 37. Defendants have not reimbursed Plaintiff for the funds withdrawn from his mutual fund accounts, nor have they ceased efforts to collect the remaining balance of the debt. Id . ¶¶ 41-42.

Plaintiff filed his Complaint on September 9, 2013, alleging numerous violations of the FDCPA. See id. ¶¶ 48-71. For a complete statement of Plaintiff's claims, reference is made to the Complaint.


To survive a motion to dismiss pursuant to Federal Rule of Civil Procedure 12(b)(6), a "complaint must contain sufficient factual matter, accepted as true, to state a claim to relief that is plausible on its face.'" Ashcroft v. Iqbal , 556 U.S. 662, 663 (2009) (quoting Bell Atl. Corp. v. Twombly , 550 U.S. 544, 570 (2007)); see also FED. R. CIV. P. 12(b)(6). A court must accept as true the factual allegations contained in a complaint and draw all inferences in favor of a plaintiff. See Allaire Corp. v. Okumus , 433 F.3d 248, 249-50 (2d Cir. 2006). A complaint may be dismissed pursuant to Rule 12(b)(6) only where it appears that there are not "enough facts to state a claim to relief that is plausible on its face." Twombly , 550 U.S. at 570. Plausibility requires "enough fact[s] to raise a reasonable expectation that discovery will reveal evidence of [the alleged misconduct]." Id. at 556. The plausibility standard "asks for more than a sheer possibility that a defendant has acted unlawfully." Iqbal , 556 U.S. at 678 (citing Twombly , 550 U.S. at 556). "[T]he pleading standard Rule 8 announces does not require detailed factual allegations, ' but it demands more than an unadorned, the-defendant-unlawfully-harmed-me accusation." Id . (citing Twombly , 550 U.S. at 555). Where a court is unable to infer more than the mere possibility of the alleged misconduct based on the pleaded facts, the pleader has not demonstrated that she is entitled to relief and the action is subject to dismissal. See id. at 678-79.


The FDCPA provides, inter alia, that a "debt collector may not use any false, deceptive, or misleading representation or means in connection with the collection of any debt." 15 U.S.C. § 1692e. Claims for liability under the FDCPA must be brought "within one year from the date on which the violation occurs." Id . § 1692k. In determining the date on which the "violation" occurs, "there is no question that the latest date upon which the one year period begins to run is the date when a plaintiff receives an allegedly unlawful communication." Somin v. Total Cmty. Mgmt. Corp. , 494 F.Supp.2d 153, 158 (E.D.N.Y. 2007) (citing Bates v. C & S Adjusters, Inc. , 980 F.2d 865, 868 n.2 (2d Cir. 1992)). An "unlawful communication" includes either (1) a debt collection letter/notice, or (2) service of a summons and complaint by a debt collector. See, e.g., Ellis v. Gen. Revenue Corp., 274 F.R.D. 53, 57 (D. Conn. 2011) (listing cases); see also Kropelnicki v. Siegel , 290 F.3d 118, 126 (2d Cir. 2002) (noting that the statute of limitations for FDCPA violations begins to run either upon serving a summons and complaint or the mailing of a debt collection notice).

Defendants argue that Plaintiff's claims are time-barred under the FDCPA's one-year statute of limitations. Dkt. No. 7-9 ("Defendant's Memorandum") at 3-6. First, Plaintiff received a summons and complaint from Defendants in August 2007, and, thus, Plaintiff was required to file his claim by August 2008; however, Plaintiff did not commence this action until September 2013. Def.'s Mem. at 5 (citing Calka v. Krucker, Kraus & Bruh, LLP, No. 98 Civ. 0990 , 1998 WL 437151, at *3 (S.D.N.Y. Aug. 3, 1998) (holding statute of limitations for FDCPA claim began to run from filing of state complaint)). Alternatively, although Plaintiff disputes that he received the summons and complaint in August 2007, Plaintiff does not contest that he received a debt collection letter from New Falls in May 2007. Def.'s Mem. at 4-5; Resp. at 13; see also Dkt. No. 11 ("Reply") ¶ 17. Under that scenario, even if Plaintiff did not receive the summons and complaint, Plaintiff was nonetheless required to file his claim by May 2008. Reply ¶ 17. Finally, Plaintiff admits that he became aware of the debt collection when his funds were executed upon in April 2008. See id. ¶ 19. Therefore, at the very latest, Plaintiff's claims were barred after April 2009. See id. Thus, because Plaintiff did not commence this action until September 2013, his claims are barred by the one-year statute of limitations.

Plaintiff responds that the statute of limitations did not begin to run until March 2013, when Defendants failed to validate the alleged debt and cease debt collection activities. Resp. 13. In support, Plaintiff cites two out-of-circuit cases for the proposition that the statute of limitations does not begin to run until the debt collector fails to validate a debt because that is the "debt collector's last ...

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