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Wolin v. Midland Credit Management, Inc.

United States District Court, E.D. New York

August 24, 2017

TARA WOLIN and ROBERT GREENWALD, individually and on behalf of all others similarly situated, Plaintiffs,
v.
MIDLAND CREDIT MANAGEMENT, INC., and MIDLAND FUNDING, LLC, Defendants.

          THE MUHLSTOCK LAW FIRM, PC BY: Todd D. Muhlstock, Esq. Attorney for Plaintiffs.

          MARSHALL DENNEHEY WARNER COLEMAN & GOGGIN, P.C.. BY: Joseph A. Hess, Esq. Attorney for Defendants.

          MEMORANDUM & ORDER

          WEXLER, DISTRICT JUDGE.

         Plaintiffs Tara Wolin ("Wolin") and Robert Greenwald ("Greenwald") (collectively "plaintiffs") commenced this action against defendants Midland Credit Management, Inc. ("MCM") and Midland Funding LLC ("Midland Funding") (collectively, "defendants") alleging violations of the Fair Debt Collection Practices Act ("FDCPA"), 15 U.S.C. § 1692 et seq. Presently before the Court is defendants' motion to compel arbitration pursuant to the Federal Arbitration Act ("FAA"), 9 U.S.C. § 1 et seq., and agreements between the parties. See Motion, Docket Entry ("DE") [20]. Plaintiffs have opposed the motion. For the reasons set forth herein, the motion to compel arbitration is granted in part and denied in part.

         I. BACKGROUND

         Tolin and Greenwald are apparently unrelated individuals who each allegedly incurred a separate debt. Wolin's account was with Synchrony Bank/PC Richard and Greenwald's debt originated with Synchrony Bank/JCPenney. Both accounts were sold to defendant Midland Funding and the collection letters were sent by defendant MCM, a debt collection company purportedly collecting on and servicing the accounts on behalf of Midland Funding. The particulars of the accounts prior to their purchase by defendants are germane to the current motion and are provided in affidavits and supporting documents from (1) Jodi Anderson, a Lead Litigation Analyst with non-party Synchrony Bank ("Synchrony"), formerly known as GE Capital Retail Bank, regarding the origination of the accounts, and (2) Michael Burger, Director of Legal Collections Operations at defendant MCM regarding the acquisition of the accounts by defendants.

         A. Wolin Account

         On or about February 28, 2003, a PC Richard account was applied for in the name of Tara Wolin and was approved that same day by Synchrony Bank ("Synchrony"). Affidavit of Jodi Anderson re: Wolin account ("Anderson Aff: Wolin"), ¶5, DE [25]. The application has not been provided. Anderson avers that a PC Richard credit card was mailed to Wolin on or about February 28, 2003.

         According to Synchrony's records, Wolin made her last payment on the account on November 20, 2014. The account was charged off by Synchrony on June 28, 2015, and subsequently sold to Midland Funding in July 2015.

         Synchrony has provided a copy of the Credit Card Account Agreement that was purportedly in effect at the time of the charge off in June 2015. Anderson Aff.: Wolin, Ex. A. That agreement includes an arbitration provision that will apply if the recipient "does not reject it." The arbitration provision also contains language whereby the debtor agrees to not participate in a class action or bring suit on behalf of other account holders. The agreement does not show any indication on its face that it was sent to Wolin, and Anderson does not expressly claim that the agreement was sent to her. Although Synchrony claims that a "change of terms" was sent to Wolin in February 2015, the supporting document attached only contains a reference to a change in the late fee, does not contain an arbitration provision, and does not indicate that a complete agreement was provided to Wolin. Synchrony states that there is no record of Wolin rejecting the arbitration provision.

         The Wolin account was assigned to defendant Midland Funding when it purchased her charged-off debt as part of a portfolio of such debts from Synchrony in July 2015. See Affidavit of Michael Burger re: Wolin account ("Burger Aff: Wolin"), ¶¶ 3, 6, DE [22]. Defendants provide documents evidencing the purchase. Id.

         B. Greenwald Account

         Synchrony acquired Greenwald's JC Penney credit card account as part of a portfolio in December 1999. That same month, Synchrony sent a notice to Greenwald enclosing the credit card agreement effective at that time. Affidavit of Jodi Anderson re: Greenwald account ("Anderson Aff: Greenwald"), ¶6, DE [24]. Change in term notices were sent to Greenwald in April 2008, July 2009, and June 2012. The agreement sent in December 1999 and the subsequent notices sent in 2008 and 2012 each contained arbitration provisions. The most recent agreement sent to Greenwald in June 2012 contains an arbitration provision stating that absent rejection, certain claims are subject to arbitration and the debtor agrees not to participate in class actions or bring claims on behalf of others." Anderson Aff: Greenwald, Ex. B. Synchrony states that there is no record of Greenwald rejecting the arbitration provision.

         Greenwald made his last payment on July 29, 2014. The account was charged off by Synchrony on March 11, 2015, and subsequently sold to Midland Funding LLC that same month. The Greenwald account, which had an outstanding balance of $7, 081.73 at charge-off, was part of a portfolio of charge-off debts purchased from Synchrony by defendant Midland Funding. See Affidavit of Michael ...


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