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Clark v. Cavalry Portfolio Services, LLC

United States District Court, S.D. New York

December 28, 2017

LUKE CLARK, on behalf of himself and all others similarly situated, Plaintiff,
v.
CAVALRY PORTFOLIO SERVICES, LLC, CAVALRY SPV I, LLC, and SCHACHTER PORTNOY, LLC, Defendants.

          OPINION AND ORDER

          Vincent L. Briccetti United States District Judge

         Plaintiff Luke Clark brings this putative class action against defendants Cavalry Portfolio Services, LLC (“CPS”), Cavalry SPV I, LLC (“CSI”), and Schachter Portnoy, LLC (“SP”), alleging violations of the Fair Debt Collection Practices Act (“FDCPA”), 15 U.S.C. § 1692 et seq., and New York General Business Law § 349 (“GBL § 349”).

         On June 28, 2017, plaintiff voluntarily dismissed his claims against SP pursuant to Rule 41(a)(1)(A)(ii). (Doc. #34).

         Before the Court is CPS and CSI's motion to dismiss pursuant to Rule 12(b)(6). (Docs. ##20, 35).

         For the reasons set forth below, defendants' motion is GRANTED IN PART and DENIED IN PART.

         The Court has subject matter jurisdiction under 28 U.S.C. §§ 1331 and 1367.

         BACKGROUND

         For purposes of ruling on a motion to dismiss, the Court accepts all factual allegations in the amended complaint as true and draws all reasonable inferences in plaintiff's favor. Although the amended complaint is not a model of clarity, the pertinent facts seem to be as follows.

         Plaintiff had a credit card issued by HSBC Bank Nevada, N.A. (“HSBC”). Plaintiff recalls using his HSBC credit card to purchase personal items, but does not aver whether he eventually failed to pay the balance. In any event, in 2009, HSBC “charged-off” $3, 188.22 of plaintiff's debt (the “underlying debt”). (Am. Compl. ¶ 59).

         In 2010, CSI acquired plaintiff's debt. According to the amended complaint, CSI is a wholly-owned subsidiary of CPS, and both entities are debt collectors. Plaintiff was not notified by HSBC, CSI, or CPS about the assignment of his debt.

         On March 12, 2012, either CSI or CPS engaged SP, a law firm, to pursue a collection action against plaintiff.

         On August 15, 2012, SP filed a complaint on CSI's behalf in Supreme Court, Sullivan County, to collect on plaintiff's debt (the “state court action”).[1] According to plaintiff, the summons and complaint in the state court action were served at his parents' address in Barryville, New York. At the time, plaintiff was estranged from his parents and living in California. Thus, plaintiff never received the service documents, nor was he made aware of the action against him. As such, plaintiff never appeared in the state court action.

         On January 14, 2013, CSI obtained a default judgment against plaintiff in the amount of $4, 294.80, which accounted for the underlying debt, plus interest, costs, and disbursements.

         On August 25, 2015, plaintiff received a copy of his credit report and discovered CSI's judgment against him.

         On August 24, 2016, plaintiff timely commenced this action in Supreme Court, Westchester County. On January 5, 2017, ...


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