Polanco v. NCO Portfolio Management, Inc.
2013 U.S. Dist. LEXIS 40001
S.D.N.Y.2013Background
- FDCPA suit against NCO Portfolio Management for allegedly abusive debt collection practices.
- NCO filed a state court collection suit against Polanco; a default judgment was entered due to alleged improper service and a falsified affidavit.
- A New York City marshal collected the judgment funds; Polanco’s funds were sent to NCO via Harris.
- Polanco obtained an order to vacate the default judgment and to return funds; initial order granted but funds not promptly returned.
- A second court order on March 17, 2011 required immediate return of funds; NCO again failed to comply.
- Polanco sued under FDCPA sections 1692d, 1692e, and 1692f for fraudulent judgment scheme and prolonged noncompliance with court orders.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether FDCPA applies to sewer service and fraudulent default judgment. | Polanco argues FDCPA covers abuse in obtaining and enforcing a judgment. | NCO argues Court Order-based noncompliance is not debt collection under FDCPA. | FDCPA applies; conduct plausibly falls within the Act's scope. |
| Whether noncompliance with court orders to return funds falls within FDCPA. | Noncompliance with court orders relating to consumer debt is within FDCPA’s ambit. | FDCPA does not regulate court-order compliance independent of debt collection. | Noncompliance with court orders can be FDCPA actionable when tied to consumer debt. |
| What standard governs a Rule 12(c) motion here. | Claims should survive if facially plausible under Iqbal/Twombly. | Rule 12(c) uses the 12(b)(6) plausibility standard. | Standard is the Rule 12(b)(6) plausibility framework. |
Key Cases Cited
- Ashcroft v. Iqbal, 556 U.S. 662 (U.S. 2009) (plausibility standard; facial factual allegations required)
- Bell Atl. Corp. v. Twombly, 550 U.S. 544 (U.S. 2007) (facial plausibility required; conclusions not enough)
- Sykes v. Mel Harris & Assocs., LLC, 757 F.Supp.2d 413 (S.D.N.Y. 2010) (sewer service and FDCPA liability context)
- Beal v. Himmel & Bernstein, LLP, 615 F.Supp.2d 214 (S.D.N.Y. 2009) (consumer debt focus; nonconsumer debts not FDCPA)
- Pipiles v. Credit Bureau of Lockport, Inc., 886 F.2d 22 (2d Cir. 1989) (FDCPA breadth to protect consumers from abusive collection practices)
- Mabe v. G.C. Servs. Ltd. P'ship, 32 F.3d 86 (4th Cir. 1994) (debt arising from consumer transaction; FDCPA applicability)