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Vincent v. Money Store

United States District Court, S.D. New York

February 2, 2015

LORI JO VINCENT, ET AL., Plaintiffs,
THE MONEY STORE, ET AL., Defendants.


JOHN G. KOELTL, District Judge.

The plaintiffs Linda and John Garrido bring this purported class action on behalf of themselves and all others similarly situated against the defendants, The Money Store, TMS Mortgage, Inc., HomEq Servicing Corp. (collectively, the "Money Store defendants"), and Moss, Codilis, Stawiarski, Morris, Schneider & Prior, LLP ("Moss Codilis"). The plaintiffs allege a common law fraud claim against the Money Store defendants in connection with the Money Store defendants' allegedly improper debt collection practices, and a claim against Moss Codilis under Col. L. § 12-5-115, a Colorado state statute prohibiting the unauthorized practice of law. The plaintiffs move for certification of a class based on each claim pursuant to Rule 23 of the Federal Rules of Civil Procedure.


The factual background of this case has been set forth in the Court's previous decision on summary judgment, Vincent v. Money Store ("Vincent II"), 915 F.Supp.2d 553, 557-59 (S.D.N.Y. 2013), and is substantially similar to the facts set out in the Opinion and Order resolving the class certification motion in Vincent I, which this Court is issuing on the same day as this Opinion and Order. Familiarity with those decisions is assumed. The following factual and procedural background relevant to the present motion is undisputed, unless otherwise noted.


The named plaintiffs in this action, Linda and John Garrido, [1] took out home mortgage loans on which they later defaulted. The Money Store defendants serviced the loans. In the event of default, the loan documents that the plaintiffs signed provided that the lender had a right to be paid back for costs and expenses, including attorneys' fees, provided they were reasonable and not prohibited by applicable law. See Grobman Decl. Ex. A. Throughout their loan-servicing practice, the Money Store defendants worked with several outside vendors and law firms to assist them with debt collection, foreclosures, and bankruptcies. The defendants used multiple electronic databases to record and review the payment of bills from law firms. See Dunnery Decl. ¶ 3. During discovery in Vincent I, the Money Store defendants produced invoices from a database, the New Invoice System, showing records of fees charged to the plaintiffs. Each invoice contains information about a particular borrower, including the attorneys' fees the borrower was charged, the event for which the services were required (such as a foreclosure or bankruptcy), and various other fields relating to the billing of those fees. See Grobman Decl. Ex. J (Garrido invoices). The invoices include fields that track various milestones for processing the attorneys' fees, including "Submitted, " "Reviewed, " "Accepted, " "Approved, " "Check Requested, " and "Check Confirmed." See id. Relying on deposition testimony from the defendants' 30(b)(6) witness, John Dunnery, the plaintiffs allege that the absence of a date under "Check Confirmed" means that the defendants never paid the fees to the attorneys. See Dunnery Dep. 516-17. The defendants, through a Declaration by Dunnery, deny that a blank space under "Check Confirmed" proves a failure to pay fees. See Dunnery Decl. ¶ 3.

The Money Store defendants also hired the law firm Moss Codilis to prepare and send default notices, or breach letters, to borrowers that were in default.[2] The plaintiffs allege that this "Breach Letter Program" was overseen by Moss Codilis attorney Christina Nash, who was not licensed to practice law in Colorado, where Moss Codilis was located. See Am. Compl. ¶ 27; Nash Dep. 19-20. The plaintiffs and Moss Codilis dispute the type of work that Ms. Nash performed while supervising the Breach Letter Program. The plaintiffs argue that Nash had to make many legal determinations, such as whether a debt was owed and whether a letter could be sent. See Nash Dep. 208-09. Moss Codilis emphasizes the many non-legal tasks that Nash performed, such as pulling out loans with incomplete addresses, assessing whether the amount in default met a threshold number for attempting recovery, and ensuring the boilerplate language of the letters was correct. See Nash Dep. 39-41, 208-09.


The plaintiffs filed this action on October 28, 2011, as the third action in a series of related actions against the Money Store defendants, dating back to Mazzei v. Money Store, filed in June 2001. The second action, Vincent v. Money Store ("Vincent I"), was filed in April 2003 against the Money Store defendants. In Vincent I, the plaintiffs brought claims under the Fair Debt Collection Practices Act ("FDCPA"), the Truth in Lending Act ("TILA"), and various state law claims. See Vincent I Am. Compl, No. 03cv2873, ECF No. 126. On September 29, 2011, this Court granted summary judgment dismissing the plaintiffs' TILA claim, denied a motion to reconsider the prior dismissal of the FDCPA claim, and declined to exercise supplemental jurisdiction over the remaining state law claims. See Vincent v. Money Store, No. 03cv2876, 2011 WL 4501325, at *9 (S.D.N.Y. Sept. 29, 2011).[3] Shortly thereafter, the plaintiffs initiated this action, bringing the state law claims that had been dismissed in Vincent I and alleging diversity jurisdiction under the Class Action Fairness Act. See Am. Compl. ¶ 1.

The plaintiffs' claims relevant to this motion include a fraud claim against the Money Store defendants for allegedly charging borrowers for attorneys' fees that were never paid to attorneys, and a claim against Moss Codilis under Col. L. § 12-5-115, a Colorado state statute forbidding the unauthorized practice of law based on Ms. Nash's supervision of the Breach Letter Program.[4] On January 4, 2013, this Court granted partial summary judgment for the defendants dismissing the claims of two of the named plaintiffs as time-barred. See Vincent II, 915 F.Supp.2d at 574. The Court held that claims of the Garridos, who are New York residents, were tolled pursuant to the New York saving statute, N.Y. C.P.L.R. § 205(a). Id. at 567. However, for the non-resident plaintiffs, Ms. Gutierrez and Ms. Vincent, New York's borrowing statute, N.Y. C.P.L.R. § 202, required looking to the tolling laws of their home states, California and Texas, respectively. Id. This Court held that under both California and Texas law, the plaintiffs' claims were time-barred. Id. 569-72. Consequently, the Gutierrez and Vincent claims were dismissed.[5]

The remaining plaintiffs, the Garridos, now move to certify a class based on the fraud claim against the Money Store defendants and a class based on the Colorado state law claim against Moss Codilis. The plaintiffs filed their present motion for certification on June 6, 2014.


Before certifying a class, the Court must determine that the party seeking certification has satisfied the four prerequisites of Rule 23(a): (1) numerosity, (2) commonality, (3) typicality, and (4) adequacy of representation. See Fed.R.Civ.P. 23(a); Teamsters Local 445 Freight Div. Pension Fund v. Bombardier, Inc., 546 F.3d 196, 202-03 (2d Cir. 2008); In re Initial Pub. Offerings Sec. Litig. ("In re IPO"), 471 F.3d 24, 32 (2d Cir. 2006). The Court must also find that the party seeking certification has satisfied the requirements of one of the subdivisions of Rule 23(b).

The plaintiffs here seek certification under Rule 23(b)(3). A class action may be maintained under Rule 23(b)(3) where "the questions of law or fact common to the class members predominate over any questions affecting only individual members, and... a class action is superior to other available methods for fairly and efficiently adjudicating the controversy." The Court has set out the requirements for Rule ...

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