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Coburn v. P.N. Financial

United States District Court, E.D. New York

January 15, 2015

P.N. FINANCIAL, Defendant

For Donna Coburn (Powell), Plaintiff: Mark H. Rephen, LEAD ATTORNEY, M. Harvey Rephen & Associate, New York, NY; Alan J Sasson, Law Office of Alan J. Sasson, P.C., Brooklyn, NY; Yitzchak Zelman, Law Office of Alan J. Sasson, Brooklyn, NY.


STEVEN I. LOCKE, United States Magistrate Judge.

Presently before the Court in this Fair Debt Collections Practices Act action, 15 U.S.C. § 1692, et seq . (" FDCPA" or the " Act"), on referral from the Hon. Arthur D. Spatt, is Plaintiff's Donna Coburn (Powell) (" Plaintiff" or " Coburn") motion for a default judgment. Specifically, Judge Spatt has ordered that a recommendation be issued as to " whether the motion for a default judgment should be granted, and if so, to determine what relief [is] appropriate, including reasonable attorney's fees and costs." DE [13].


The Complaint in this action DE [1], filed on February 26, 2013, contains a single count bare-bones recitation of factual allegations. According to the Complaint, Plaintiff, Donna Coburn (Powell), who is a " consumer" for FDCPA purposes, is a resident of Hicksville, New York. Defendant PN Financial, which is a " debt collector" under the FDCPA, is an Illinois limited liability company with its " main" office address in Skokie, Illinois.

On or about June 12, 2012, Defendant sent Plaintiff a " Collection Letter, " (the " Letter"), which is not attached to the Complaint or the motion papers. This Letter allegedly states that " Because you have refused to address this debt despite being given every opportunity to do so, be advised that as of June 27th 2012, if you have not accepted our terms and conditions, we will have exhausted all methods of resolution." The Letter continues, " [y]ou have been repeatedly advised of your long overdue balance . . . . However, there is still time to avoid any interest and/or penalties if you resolve this matter June 27, 2012 [ sic ]. This will be your final opportunity to resolve this matter without additional expense of penalties [ sic ] or interest."

On or about September 28, 2012, Plaintiff's representative, Alberto Reyes, Jr., from an entity identified only as " Asset Management" contacted Defendant to discuss the alleged debt. During this conversation Mr. Reyes was advised by an unidentified representative of Defendant that " [t]hey will put the account back on the credit report if she does not pay."

According to the Complaint, the Letter was false, deceptive and misleading because: (1) Plaintiff never refused to address the debt; (2) it fails to identify what " opportunities" Plaintiff had been given to resolve the debt; (3) it states that Defendant will attempt to force Plaintiff to resolve the debt by adding penalties and/or interest, without explaining what penalties and interest are to be added; and (4) it claims that Defendant will put the " account back on [Coburn's] credit report if she does not pay, " despite that the " statute of limitations is from July 2002 and has long since passed."

The body of the Complaint also makes Fed.R.Civ.P. 23 class allegations, but no motion for class certification was ever filed and no class was ever certified.

Based on these allegations, Plaintiff claims that Defendant has violated the FDCPA by: making a threat to take action that cannot be legally taken, 15 U.S.C. § 1692e(5); using false, deceptive and misleading representations in connection with the collection of a debt, 15 U.S.C. § 1692e(10); and making an unlawful claim for interest for the purpose of obtaining payment on an expedited basis, 15 U.S.C. § 1692f(1). The Clerk entered a certificate of default on August 22, 2013 DE [7], and on May 1, 2014, after receiving a notice of impending dismissal, DE [8], Plaintiff filed her motion for entry of a default judgment in her favor. It is this motion that is presently pending before the Court.


A. Default judgment standard

Motions for default judgments are governed by Fed.R.Civ.P. 55, which establishes a two-step process for obtaining a default judgment against a defaulting party. See Gonzalez v. Healthcare Recovery Mgt. Inc., 13-CV-1002, 2013 WL 4851709 *1 (E.D.N.Y. Sept. 10, 2013) (applying Rule 55 in the FDCPA context) (citing Priestley v. Headminder, Inc., 647 F.3d 497, 504 (2d Cir. 2011)); Mira v. Maximum Recovery Solutions, Inc., CV 11-1009, 2012 WL 4511623 *2 (E.D.N.Y. Aug. 31, 2012) (same). Initially, the Clerk of the Court enters a default against the party that has failed to plead or otherwise defend the action. See Fed.R.Civ.P. 55(a); Gonzalez, 2013 WL 4851709 at *1; DE [7]. Once the default is entered, and where the amount sought is not for a sum certain, a default judgment may be obtained by motion. See Fed.R.Civ.P. 55(b)(2); Gonzalez, 2013 WL 4851709 at *1.

Once the default is entered by the Clerk of the Court, and the appropriate motion is filed, the Court accepts the factual allegations set forth in the Complaint as true, and all inferences are drawn in favor of the moving party. See id.; Ehrlich v. Royal Oak Fin. Servs., Inc., CV-12-3551, 2012 WL 5438942 at *1 (E.D.N.Y. Nov, 7, 2012) (" A default constitutes an admission of all well-pleaded factual allegations in the complaint pertaining to liability") (citing Greyhound Exhibitgroup, Inc. v. E.L.U.L. Realty Corp., 973 F.2d 155, 158 (2d Cir. 1992)) (applying standard in FDCPA context); see also Au Bon Pain Corp. v. Artect, Inc., 653 F.2d 61, 65 (2d Cir. 1981) (" at the inquest, the court should have accepted as true all of the factual allegations of the complaint, except those relating to damages"). Nevertheless, the Court must engage in an independent analysis as to whether liability has been established. See Chudomel v. Dynamic Recovery Servs., Inc., 12-CV-5365, 2013 WL 5970613 *6 (E.D.N.Y. Nov. 8, 2013) (" courts are required to determine whether the [plaintiff's] allegations establish the [defendant's] liability as a matter of law") (internal quotations omitted). Further, the default does not constitute an admission as to damages. See Id. ...

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