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Plummer v. Atlantic Credit & Finance, Inc.

United States District Court, S.D. New York

December 8, 2014

PATRICK PLUMMER, on behalf of himself individually and all others similarly situated, Plaintiff,
v.
ATLANTIC CREDIT & FINANCE, INC., CAPITAL MANAGEMENT SERVICES, LP, and VELOCITY INVESTMENTS, LLC, Defendants

Page 485

For Patrick Plummer, On behalf of himself individually and all others similarly situated, Plaintiff: Novlette Rosemarie Kidd, Fagenson & Puglisi, New York, NY.

For Atlantic Credit & Finance, Inc., Defendant: Arthur Jay Sanders, LEAD ATTORNEY, Law Offices of Arthur Sanders, New City, NY.

For Capital Management Services, LP, Defendant: Aaron R. Easley, LEAD ATTORNEY, Sessions, Fishman, & Nathan & Israel LLC, Flemington, NJ.

For Velocity Investments, LLC, Defendant: Concepcion A. Montoya, Elizabeth Kathryn Devine, Matthew E. Lewitz, Hinshaw & Culbertson LLP New York, NY.

OPINION

Page 486

ANALISA TORRES, United States District Judge.

In this proposed class action, Plaintiff, Patrick Plummer, alleges that Defendants, Atlantic Credit & Finance, Inc. (" Atlantic Credit" ), Capital Management Services, LP (" Capital Management" ), and Velocity Investments, LLC (" Velocity" ) violated provisions of the Fair Debt Collection Practices Act (" FDCPA" ), 15 U.S.C. § § 1692 et seq. Velocity moves to dismiss the complaint pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure on the ground that it is not a " debt collector" under the FDCPA. For the reasons stated below, the motion is DENIED.

BACKGROUND

The following facts are taken from the amended class action complaint (the " complaint" ) and are accepted as true for the purposes of this motion. See ATSI Commc'ns, Inc. v. Shaar Fund, Ltd., 493 F.3d 87, 98 (2d Cir. 2007).

Plaintiff incurred credit card debt to Union Plus Credit Card/HSBC. Am. Compl. ¶ ¶ 5, 35. Plaintiff made his last payment on the account no later than September 2006, after which HSBC alleged that Plaintiff's debt fell into default. Id. ¶ ¶ 36-37. Atlantic Credit subsequently purchased Plaintiff's credit card debt from HSBC. Id. ¶ 38. Atlantic Credit placed the debt with various debt collectors for the purpose of collecting from Plaintiff. Id. ¶ 39. Beginning no later than 2007, several debt collectors, on behalf of Atlantic Credit, sent collection letters to Plaintiff. Id. ¶ ¶ 40-42. Plaintiff's attorney responded to each debt collector, informing them that Plaintiff was disputing the debt and that Plaintiff was represented by counsel and should not be contacted directly. Id. ¶ ¶ 43-46.

By letter dated February 7, 2011, Plaintiff's attorney sent a dispute and representation letter to Atlantic Credit. Id. ¶ ¶ 58-59. Atlantic Credit responded to counsel on February 15, 2011, acknowledging receipt of Plaintiff's attorney's letter and providing " purported verification" of the debt. Id. ¶ ¶ 60-61. Atlantic Credit's letter indicated that Plaintiff's last payment to HSBC was on September 21, 2006. Id. ¶ 61.

Atlantic Credit subsequently sold the debt to Velocity, id. ¶ ¶ 66-67, a New Jersey limited liability company, with a principal business described as " the purchase of defaulted consumer debts originally owed or due or alleged to be originally owed or due to others." Id. ¶ ¶ 23, 28. Velocity " regularly collects or attempts to collect such debts either through itself or through

Page 487

others." Id. ¶ 26. Velocity placed Plaintiff's debt with Capital Management for the purpose of collection. Id. ¶ 65. Atlantic Credit had informed Velocity that Plaintiff disputed his debt and was represented by counsel. Id. ¶ 121. Plaintiff alleges that, upon placing the debt with Capital Management for collection, Velocity failed to provide this information to Capital Management. Id. ¶ ¶ 106, 122-25. Plaintiff alleges, in the alternative, that Velocity did inform Capital Management that Plaintiff disputed his debt and was represented by counsel. Id. ¶ 107.

On October 24, 2012, Capital Management sent a collection letter to Plaintiff, stating that Capital Management was collecting on behalf of Velocity. Id. ¶ ¶ 62-64. The letter demanded $744.82 as settlement for a debt balance of $3,724.12. Id. ¶ ¶ 68-69. The letter was sent more than six years after the date of Plaintiff's last payment on the account, id. ¶ ¶ 61, 70, and failed to inform Plaintiff that the applicable six-year statute of limitations had expired and that any payment by Plaintiff would revive the statute of limitations, id. ¶ ¶ 71-74.

Plaintiff alleges that Capital Management, in sending letters to collect on his debt, was acting as an agent of Velocity and that Velocity " exercised control or had the right to exercise control over the collection activities of Capital Management." Id. ¶ ¶ 30-31. Plaintiff claims that Velocity used Capital Management in order to shield itself from liability under the FDCPA. Id. ΒΆ 32. Plaintiff alleges that Atlantic Credit, Capital Management, and Velocity ...


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