Stinson v. Houslanger & Associates PLLC

Background

Barbara Stinson sued Houslanger & Associates, PLLC; Todd Houslanger; Matthew Blake; Harry Torres; Bryan Bryks; and DEMI, LLC. She asserted claims under the Fair Debt Collection Practices Act (FDCPA), New York General Business Law § 349, New York Judiciary Law § 487, and New York law concerning conversion, which generally means exercising unauthorized control over another person’s property.

In 2005, DEMI, through the PLLC, sued Stinson in New York court to collect an $8,745.12 judgment. Torres later stated that he had served Stinson at a New York City address by delivering the papers to “Robert Stinson.” The opinion states that no Robert Stinson lived there and that Stinson did not live there at the time. Stinson therefore did not appear, and a default judgment was entered against her in 2006. After Stinson learned of an income execution in 2018, she sought to vacate the judgment. The New York court vacated it, finding that she had not been properly served.

The parties filed cross-motions for summary judgment. Summary judgment is granted when the evidence shows no genuine dispute over an important fact and the moving party is entitled to judgment under the law. The court also held that equitable tolling—extending a filing deadline in appropriate circumstances—applied because Stinson did not learn of the lawsuit until 2018, acted promptly after learning of it, and filed this action less than seven months later.

FDCPA claims

The court held that the underlying collection lawsuit was time-barred because New York’s borrowing rule required use of both New York’s limitations period and Delaware’s three-year limitations period, and the original creditor was a Delaware resident. The court concluded that filing the time-barred lawsuit violated the FDCPA.

The court granted Stinson’s motion for summary judgment on liability for that violation as to the PLLC, DEMI, Houslanger, and Blake. It rejected the PLLC’s and DEMI’s defense that the violation resulted from a good-faith legal error, explaining that the defense does not cover mistakes about the law. The court also concluded that Houslanger and Blake could be held personally liable because they participated in filing the time-barred lawsuit.

The court rejected Stinson’s other FDCPA theories. It held that Defendants’ opposition to Stinson’s order seeking to vacate the default judgment was not a deceptive FDCPA communication. It also held that Defendants’ refusal to immediately vacate the judgment and their request for an adjournment did not violate the FDCPA, and that Stinson had not produced sufficient evidence that Defendants knowingly approved Torres’s false affidavit of service. The court had previously dismissed claims based on the letter and stipulation; in this opinion, it also concluded that the stipulation did not plausibly state an unfair or unconscionable-practices claim under FDCPA § 1692f.

Accordingly, Stinson’s FDCPA motion was granted in part for the filing of the time-barred lawsuit and otherwise denied. Defendants’ FDCPA motion was denied as to the filing of the time-barred lawsuit and otherwise granted.

New York General Business Law § 349

The court granted Defendants summary judgment on Stinson’s § 349 claims based on opposing the order to show cause, prolonging the default-judgment litigation, and allegedly ratifying Torres’s conduct. The court held that no reasonable consumer would find those actions materially misleading.

The court denied Defendants summary judgment on the § 349 claim based on filing time-barred lawsuits. Evidence that the PLLC had filed more than 11,000 actions in 2005 and that its practice was to use the debt owner’s residence, rather than the original creditor’s residence, created a factual dispute about whether the conduct affected consumers broadly. The court concluded that Stinson had established the other required elements of the claim as a matter of law. Stinson’s motion for summary judgment on the § 349 claim was nevertheless denied.

The court also rejected Stinson’s request for punitive damages under § 349, finding that she had not shown conduct sufficiently close to criminality to justify them.

Judiciary Law § 487

The court dismissed the Judiciary Law § 487 claims based on Defendants’ opposition to the order to show cause, prolonging the vacatur litigation, and allegedly ratifying the false service affidavit. It also held that Stinson had not raised a triable factual issue on the claim based on filing time-barred lawsuits. The court reasoned that the evidence showed legal error, not the intentional deceit required by § 487.

Stinson’s motion for summary judgment on the Judiciary Law § 487 claim was denied, and Defendants’ motion was granted.

Conversion claim

The court granted summary judgment to DEMI and Houslanger on Stinson’s conversion claim. The evidence showed that Defendants stayed the income execution after receiving Stinson’s request to vacate the judgment, and Stinson offered no evidence that Defendants received garnished funds, lifted the stay, or took ownership of her money.

Disposition

The court ordered that:

- Stinson’s motion for summary judgment on the FDCPA claim was granted in part for Defendants’ filing of the time-barred lawsuit and otherwise denied. Defendants’ FDCPA motion was denied as to that conduct and otherwise granted. - Stinson’s motion for summary judgment on the § 349 claim was denied. Defendants’ motion was denied as to filing the time-barred lawsuit and otherwise granted. - Stinson’s motion for summary judgment on the Judiciary Law § 487 claim was denied, and Defendants’ motion was granted. - Defendants’ motion for summary judgment on the conversion claim was granted.

Judge J. Paul Oetken directed the Clerk of Court to close the two summary-judgment motions.