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Doyle v. Frontline Asset Strategies, LLC

United States District Court, D. Maryland

June 15, 2017

JEFFREY DOYLE, et al, Plaintiffs
v.
FRONTLINE ASSET STRATEGIES, LLC, et al, Defendants.

          MEMORANDUM OPINION

          Richard D. Bennett United States District Judge.

         Lead Plaintiff Jeffrey Doyle ("Doyle") and co-Plaintiffs Mario Dazza ("Dazza") and Roberto Aracena ("Aracena") (collectively "Plaintiffs") have brought this putative class action against Frontline Asset Strategies, LLC ("Frontline"); Resurgent Capital Services L.P. ("Resurgent"); Kirschenbaum, Phillips & Levy, P.C. ("Kirschenbaum"); Eltman Law, P.C. d/b/a Eltman, Eltman & Cooper, P.C. ("Eltman"); and Levy & Associates, LLC ("Levy") (collectively "Defendants"), alleging violations of the Fair Debt Collection Practices Act ("FDCPA"), 15 U.S.C. § 1692, et seq., and the Maryland Consumer Debt Collection Act ("MCDCA"), Md. Code Ann., Com. Law § 14-201, et seq., in connection with Defendants' efforts to collect on void judgments obtained against Plaintiffs and members of the putative class by LVNV Funding, LLC ("LVNV"), an unlicensed collection agency. See e.g., Aracena Compl., ¶¶ 55-67, ECF No. I.[1] This action initially proceeded in three separate cases Doyle v. Frontline Asset Strategies, et al. LLC, No. RDB-16-3501, Dazga v. Kirschenbaum, Phillips & Levy, P.C, et al, No. RDB-16-3954, and Aracena v. Eltman Law, P.C, No. RDB-16-3851, but has recently been consolidated with Doyle as the lead Plaintiff, via this Court's Order of May 11, 2017 (ECF No. 24). Currently pending before this Court is Defendant Eltman's Motion to Dismiss the Aracena Complaint, or alternatively, Motion for Stay of Proceedings (ECF No. 6)[2], pursuant to the "Colorado River" abstention doctrine articulated by the United States Supreme Court in Colorado River Water Conservation Dist. v. United States, 424 U.S. 800 (1976). Prior to consolidation, this Court denied two similar Motions to Dismiss, or alternatively, Stay Proceedings filed by Defendants Frontline, Resurgent, Kirschenbaum, and Levy in the now consolidated Doyle and Dasga cases. See Doyle v. Frontline Asset Strategies, LLC, No. RDB-16-3501, 2017 WL 1230819, at *6 (D. Md. Apr. 4, 2017); Dazza v. Kirschenbaum, Phillips &Levy, P.C, et al, No. RDB-16-3954, 2017 WL 1315510, at *7 (D. Md. Apr. 10, 2017). The parties' submissions have been reviewed, and no hearing is necessary. See Local Rule 105.6 (D. Md. 2016). As with the prior motions, Defendant Eltman fails to satisfy the criteria for abstention set forth in Colorado River, and recently confirmed by the United States Court of Appeals for the Fourth Circuit in vonRosenberg v. Lawrence, 849 F.3d 163, 168 (4th Cir. 2017). Accordingly, for the reasons herein, Defendant Eltman's Motion to Dismiss the Aracena Complaint, or alternatively, Motion for Stay of Proceedings (ECF No. 6) is DENIED.

         BACKGROUND

         I. LVNV Funding, LLC's Maryland State Court Judgment Against Roberto Aracena

         Plaintiff Roberto Aracena ("Plaintiff or "Aracena") is a resident of Wicomico County, Maryland. Aracena Compl, ¶ 5, ECF No. 1. On March 4, 2008, LVNV Funding, LLC ("LVNV"), a collection agency, sued Aracena in the District Court of Maryland for Wicomico County, Case No. 020300014322008, "based upon a consumer claim that it acquired in default from another for pennies on the dollar." Id., ¶ 19. LVNV subsequently "obtained an affidavit judgment of $782.67 plus costs against [Aracena] on June 26, 2008 ([the] "Aracena Judgment")." Id.

         II. Finch v. LVNV Funding LLC Class Action Filed in the Circuit Court for Baltimore City, Maryland

         On November 11, 2009, Larry Finch ("Finch") and Kurt A. Dorsey ("Dorsey"), two debtors against whom LVNV had also obtained judgments, filed a putative class action against LVNV in the Circuit Court for Baltimore City, Maryland (the "Finch Action") on behalf of the class of "persons sued by LVNV in Maryland state courts from October 30, 2007 through February 17, 2010 against whom LVNV obtained a judgment for an alleged debt, interest or costs, including attorneys['] fees in its favor in an attempt to collect a consumer debt" (the "Finch Class"). See Finch v. LVNV Funding LLC, 71 A.3d 193, 195 (Md. Ct. Spec. App. 2013). The facts of that action, and its current procedural posture, have been thoroughly summarized by this Court in its prior opinion of April 4, 2012 (ECF No. 19), denying the Motion to Dismiss or, alternatively, Stay Proceedings of Defendants Frontline and Resurgent, See Doyle v. Frontline Asset Strategies, LLC, No. RDB-16-3501, 2017 WL 1230819, at *2 (D. Md. Apr. 4, 2017).

         In summary, Finch and Dorsey (collectively the "Finch Plaintiffs") alleged "that LVNV engaged in illegal collection of debts because LVNV was not licensed as a collection agency in Maryland, as required by the Maryland Collection Agency Licensing Act ("MCALA"), Md. Code Ann., Bus. Reg. § 7-301." Finch, 71 A.3d at 195. Upon motion of LVNV, the Circuit Court dismissed the Finch Action, reasoning that all "claims [we]re barred as an impermissible attempt to mount a collateral attack on the judgments entered by the District Court of Maryland." Id. at 195-96. However, on appeal, the Court of Special Appeals of Maryland reversed the Circuit Court Judgment and remanded the Finch Action for further proceedings in an opinion dated June 28, 2013, holding that "LVNV was not licensed when it obtained judgments against [the Finch Plaintiffs] in the [D]istrict [C]ourt, " that "the underlying [D]istrict [C]ourt judgments [we]re void, " and that the "parties may collaterally attack a void judgment in another court." Id. at 196, 205. LVNV subsequently appealed the Judgment of the Court of Special Appeals of Maryland to the Court of Appeals of Maryland, but the Court of Appeals denied certiorari on October 8, 2013. See LVNV Funding v. Finch & Dorsey, 77 A.3d 1084 (Md. 2013).

         On remand, the Circuit Court for Baltimore City, Maryland certified the Finch Class and declared the judgments entered against the Finch Class members in the District Court of Maryland void and unenforceable. Aracena Compl, ¶ 7, ECF No. 1; see Finch Action Docket, p. 21. The Circuit Court entered a final judgment against LVNV. Id., ¶ 7. LVNV has now filed a second appeal in the Finch Action, which is currently pending before the Court of Special Appeals of Maryland. On appeal, LVNV challenges, inter alia, the Circuit Court's declaring the judgments obtained by LVNV to be void. Finch Action Not. of Appeal. As a member of the putative Finch Class, Aracena was sent notice of the pendency of the Finch Action and was given an opportunity to opt-out of the Finch Class. See Admin. Order & Notice. The Circuit Court docket confirms that Aracena did not opt-out of the Class Action. See Finch Action Docket.

         III. Defendant Eltman Law, P.C. d/b/a Eltman, Eltman & Cooper. P.C. Collect on LVNV's 2008 Judgment Against Plaintiff Aracena

         On July 17, 2008, LVNV filed a lien against Aracena in the Circuit Court for Wicomico County to attempt to collect the Aracena Judgment. Aracena Compl. ¶ 20, ECF No. 1. Aracena "paid LVNV a lump sum payment of $1, 046.00 on January 28, 2015 in order to remove the lien by sending the payment to LVNV's collectors, (Eltman]." Id. Eltman "filed a 'Satisfaction of Judgment' on behalf of LVNV on April 2, 2015 based on the void judgment, " but did not "tell him that the Aracena Judgment was void as a matter of law, was unenforceable, and that he owed no sum of money based upon the judgment" Id., ¶ 24, 21. Consequently, Aracena was unaware that the judgment against him "was void and [Eltman's] collection of his assets was not proper and legal." Id., ¶ 25.

         IV. The Instant Putative Class Action Against Eltman

         On November 30, 2016, Aracena brought the instant putative class action against Eltman, alleging "predatory and deceptive debt collection practices" on behalf of "[t]hose persons in the State of Maryland from whom Eltman has communicated with directly or indirectly for the purpose of collecting a judgment entered in favor of an unlicensed collection agency that filed suit when it was unlicensed." Id., ¶¶ 1, 36. Specifically, Aracena alleges that Elman has violated the Fair Debt Collection Practices Act ("FDCPA"), 15 U.S.C. § 1692, et seq. (Count II), and the Maryland Consumer Debt Collection Act ("MCDCA"), Md. Code Ann., Com. Law § 14-201, et seq. (Count III). Id., ¶¶ 55-67. Aracena requests a Declaration of this Court that "Eltman is not entitled, directly or indirectly, as a matter of law to collect against any member of the Class based upon a void judgment" and that "Eltman may not, directiy or indirectly threaten or actually utilize the assistance of any Maryland court to collect or attempt to collect upon any void judgment acquired by an unlicensed collection agency upon a consumer claim" (Count I). Id., ¶ 53. Aracena further requests that Eltman "be enjoined from attempting to collect any sums from [Aracena] and Class members, directly or indirectly, based upon a void judgment" (also Count I). Id., ¶ 54. As discussed supra, this case has now been consolidated with the member cases of Doyle and Dazza, with Doyle as the lead case. Now pending before this Court is Eltman's Motion to Dismiss the Aracena Complaint, or alternatively, Motion for Stay of Proceedings (ECF No. 6) in light of LVNV's pending appeal in the separate Finch Action, pursuant to the "Colorado River" abstention doctrine articulated by the Supreme Court in Colorado River Water Conservation Dist. v. United States, 424 U.S. 800 (1976).

         STANDARD ...


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