Wimberly v. Stern

Background

Jason Wimberly, proceeding without a lawyer, alleged that Spring Bank agreed in 2020 to remove a past-due loan from his reports with Equifax, TransUnion, and Experian. The bank removed the loan from the TransUnion and Equifax reports but did not remove it from the Experian report. Wimberly communicated with Melanie Stern, identified in the opinion as a Community Reinvestment Act Officer for Spring Bank, and alleged that she denied the bank had agreed to remove the loan.

Wimberly had already filed a related breach-of-contract action against Spring Bank in New York State Supreme Court. Spring Bank filed an answer, defenses, and counterclaims in that action and was represented there by Gallet, Dreyer & Berkey, LLP and Kaufman Dolowich & Voluck, LLP. In the federal case, Wimberly asserted claims under the Fair Debt Collection Practices Act, 42 U.S.C. § 1985(3), and other laws. The pending motions were brought by the defendants to dismiss, by Wimberly to amend his complaint, by Wimberly to stay the state case, and by Wimberly for a temporary restraining order.

Motions to Dismiss

The court applied the rule requiring a complaint to allege enough facts to make a claim legally plausible. It also read Wimberly’s filings liberally because he was representing himself, but explained that this did not permit the court to rewrite claims supported only by conclusions.

Fair Debt Collection Practices Act claims against the bank defendants. The court granted Melanie Stern and Spring Bank’s motion to dismiss all of the Fair Debt Collection Practices Act claims. The court explained that the statute generally applies to “debt collectors,” not creditors collecting debts owed to themselves. Wimberly did not allege that Stern or Spring Bank were collecting a debt for another party, and the opinion treated them as creditors of the loan. The court therefore dismissed the second and third causes of action against the bank defendants.

Fair Debt Collection Practices Act claims against the GDB defendants. The court granted in part and denied in part the motion by Jay Lawrence Hack and Gallet, Dreyer & Berkey, LLP:

- The court granted the motion as to the first claim because Hack’s email, as described in the complaint, concerned the state lawsuit and could not reasonably be understood as a communication sent in connection with collecting a debt. - The court granted the motion as to the second claim because Wimberly did not identify an earlier qualifying communication that would have triggered the requirement to send a debt notice within five days. - The court granted the motion as to the third and fourth claims. The email and an offer of a confession of judgment were not the type of abusive, extrajudicial debt-collection conduct covered by the statute, and filing a lawsuit or counterclaim to collect a debt was not itself a violation. - The court granted the motion as to Count 5A because Hack’s description of his professional credentials was accurate and Wimberly did not plausibly allege that it would mislead the least sophisticated consumer. - The court granted the motion as to Counts 6A and 6B because the complaint did not identify a qualifying initial communication that triggered the notice requirement, and the statements that the notice was not legally required and that a counterclaim would be filed were not misleading on the allegations presented. - The court denied the motion as to Count 5B. Wimberly alleged that the law-firm defendants regularly engaged in debt-collection activity. Accepting that allegation as true at the dismissal stage, the court found it possible that they were debt collectors, making their alleged statement that they were not debt collectors potentially false or misleading under the statute.

The court also dismissed Wimberly’s declaratory-judgment claim in its entirety, concluding that private litigants cannot obtain declaratory or equitable relief under the Fair Debt Collection Practices Act.

Conspiracy claims. The court granted both dismissal motions as to all six conspiracy counts in Wimberly’s first cause of action and dismissed that cause of action. A claim under 42 U.S.C. § 1985(3) requires, among other things, a conspiracy motivated by racial or other class-based discriminatory intent. The court found no allegation of discriminatory animus. It also gave additional reasons why the individual counts failed: the alleged stale-debt theory was legally incorrect based on the timing of the statute, the Fair Debt Collection Practices Act conspiracy theories lacked a viable underlying violation, and the due-process theory could not support a conspiracy claim against private entities.

Motion to Amend

The court denied Wimberly’s motion to amend his complaint. He sought to add Kaufman Dolowich & Voluck, LLP and Adam Marshall as defendants and to add claims under the Fair Debt Collection Practices Act, Section 1985, Title VI of the Civil Rights Act of 1964, and New York General Business Law §§ 601 and 349.

The court concluded that the proposed claims could not survive a motion to dismiss. Filing or pursuing a debt-collection lawsuit and seeking attorneys’ fees authorized by a contract did not state a Fair Debt Collection Practices Act claim. The proposed Section 1985 claims again lacked allegations of discriminatory animus. Title VI claims could not be brought against the individual defendants, and Wimberly did not allege that the law firms received federal funding or that he engaged in protected activity that caused retaliation. New York General Business Law § 601 did not provide a private cause of action. The proposed claim under Section 349 against Spring Bank also failed because the contractual provision allowing collection expenses and attorneys’ fees was not misleading, and Wimberly did not plead an injury caused by that provision.

Motion to Stay and Temporary Restraining Order

The court denied both Wimberly’s motion to stay the state-court action and his motion for a temporary restraining order seeking to prevent the defendants from pursuing their counterclaims there. The court held that the Anti-Injunction Act barred the requested relief. None of the statute’s exceptions applied: the Fair Debt Collection Practices Act and Section 1985 did not require a stay to achieve their purposes, and the possibility that state-court factual findings might affect the federal case was not enough to justify stopping the state proceeding.

Disposition

The court’s final dispositions were as follows:

- The Gallet, Dreyer & Berkey, LLP and Jay Lawrence Hack motion to dismiss was granted in part and denied in part. - The Melanie Stern and Spring Bank motion to dismiss was granted. - Wimberly’s motion to amend was denied. - Wimberly’s motion to stay the state-court action and motion for a temporary restraining order were denied.

The opinion therefore left the Fair Debt Collection Practices Act claim concerning the alleged statement that Hack and Gallet, Dreyer & Berkey, LLP were not debt collectors as the identified claim that survived dismissal against those defendants.