SHAW et al v. HAYT, HAYT & LANDAU, LLC, No. 3:2015cv08852 - Document 60 (D.N.J. 2018)
Court Description: OPINION filed. Signed by Judge Anne E. Thompson on 4/4/2018. (km)
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SHAW et al v. HAYT, HAYT & LANDAU, LLC Doc. 60 RECEIVED NOT FOR PUBLICATION APR 05 2018 UNITED STATES DISTRICT COU T DISTRICT OF NEW JERSEY AT 8:30 WILLIAM T. WALSH CLERK M GRIFFITH SHAW, JR. and CAROLYN M. SHAW, Civ. No. 15-8852 Plaintiffs, v. OPINIO LAW OFFICES OF HA YT, HAYT & LANDAU, LLC and FIRST AMERICAN ACCEPTANCE CO., LLC, Defendants. THOMPSON. U.S.D.J. INTRODUCTION This matter comes before the Court on a motion for partial summary judgment brought by Defendants Law Offices of Hayt, Hayt & Landau, LLC ("HHL ') and First American Acceptance Co., LLC ("First American") (collectively, "Defendan s"). (ECF Nos. 51, 52.) Plaintiffs Griffith Shaw, Jr. and Carolyn M. Shaw ("Plaintiffs") o ose. (ECF Nos. 55, 56.) The Court has decided the Motion after considering the written submis ions without oral argument pursuant to Local Civil Rule 78.l(b). For the following reasons, D fondants' Motion is denied. BACKGROUND Plaintiffs bring this action for misuse of process, abuse of rocess, and violation of the Fair Debt Collection Practices Act ("FDCPA") against Defendant , a law firm and debt collection agency seeking to enforce a civil judgment. Plaintiffs G "ffith Shaw, Jr. and Carolyn Shaw are a married couple who live in Barnegat, NJ, with two inf t sons. (Pis.' Suppl. 1 Dockets.Justia.com Statement of Disputed Material Facts ("SMF') <J[ 1, ECF No. 56.) . Shaw has an adult son from a previous marriage, Griffith Shaw ill. (Am. Compl. <][ 12.) fondant First American, which has no employees, is a purchaser of delinquent debts belong ng primarily to consumers. (Pls.' Suppl. SMF <Jr)[ 59-60.) Defendant HHL is a debt collection aw firm representing commercial interests and financial institutions. (Id. <Jr)[ 61, 64.) ndants First American and HHL are both owned and managed by Martin Rubin. (Id. <][ 57.) In February 2011, First American bought a portfolio of de that had already been sold four times, which included an account belonging to "Griffith Sha assigned Christopher Fox, an attorney with HHL, the task of colle ting on this portfolio. (Id. <Jr)[ 5, 79.) On April 25, 2011, HHL commenced litigation against" riffith Shaw" in the Superior Court of New Jersey, Law Division, Ocean County, Special Civil Undisputed Material Facts ("SMF') <][ 1, ECF No. 52; Pls.' Suppl. underlying bank statements listed the debtor as "Griffith Shaw ill, the complaint named defendant "Griffith Shaw," without a suffix. (Pls.' Suppl. SMF <J[ 81.) That court entered judgment against "Griffith Shaw" on June 28, 2011. (Defs.' SMF 2.) On or about July 17, 2014, the court issued a writ of execution against judgment debtor "Griffith Shaw." (Id. <J[ 3.) By letter, HHL requested that Court Officer Jason Rienzo ("Rienzo") erve the writ upon Bank of America, PNC Bank, TD Bank, and Wells Fargo. (Id. <J[ 4.) The let er listed the names and local addresses of the banks, but did not identify any specific account n mbers, the judgment-debtor's social security number, or the judgment-debtor's date of birth. (Pl.' Suppl. SMF<J( 84.) On December 29, 2014, TD Bank identified funds subject o the writ and faxed Rienzo a letter informing him that $3,154.07 had been levied. (Id. <J[ 6.) The e funds were levied from two accounts-one in the name of "Griffith Shaw" and a joint account in the name of "Griffith Shaw 2 and Carolyn Shaw." (Pis.' Resp. to Defs.' SMF <J[ 7, ECF No. 56.) hat night, while attempting to make a purchase at W algreens, Plaintiff Carolyn Shaw's debit car was turned down for insufficient funds. (Defs.' SMF <J[ 8; Pis.' Suppl. SMF 'fJ[ 2-3.) Ms. Shaw checked her TD Bank account balance and realized that a levy had been placed on her ac ount. (Defs.' SMF <J[ 9.) The next day, Ms. Shaw contacted TD Bank's levy department and wa told that HHL caused the levy. (Id. <J[ 10.) Ms. Shaw realized the levy was improperly placed against Plaintiffs' accounts instead of those belonging to Griffith Shaw ill. (Id. <J[ 11; Pis.' Res . to Defs.' SMF <J[ 11.) Ms. Shaw called HHL and spoke with Mr. Fox, telling him that HHL had levied the wrong account. (Pis.' Suppl. SMF <J[ 5.) HHL informed Ms. Shaw ow to have the levy released. (Defs.' SMF <J[ 12.) On December 30, 2014, Ms. Shaw sent HHL a letter containing the requested proof, including a copy of her husband's social security card, two opies of bank statements, and direct deposit forms. (Pis.' Suppl. SMF <J[ 7.) After receiving the d cumentation, on January 2, 2015, Mr. Fox sent a letter to Rienzo stating, in pertinent part, "we will not be proceeding with a turnover [motion]. Accordingly, please release the levy and notify he bank to return the funds to their customer." (Defs.' SMF<J[ 13.) Both Griffith Shaw and TD B were copied on the letter. (Id. <J[ 14.) Fox's letter also stated that "[t]he case has not been sett d and payments after the levy have not been received." (Pis.' Suppl. SMF 'J[ 11.) TD Bank confi ed that the levied funds were released that same day, January 2, 2015. (Defs.' SMF ')[ 15.) On January 6, 2015, HHL filed a new motion in state court to tum over the alreadyreleased funds. (Id. <J[ 16.) Plaintiffs contacted Rienzo and told him the January 13, 2015 hearing on that motion was unnecessary since the funds had already been leased back to them. (Id. <J[ 19.) However, the court subsequently granted the motion to tum o er funds as unopposed on January 26, 2015. (Id. <J[ 16.) Rienzo accordingly re-served the wri on TD Bank on February 12, 3 2015. (Id. <J[ 20; Pis.' Suppl. SMF<J[ 29.) On February 17, 2015, TD Bank again identified funds in response to the writ and informed Rienzo that $86.80 had been I vied. (Defs.' SMF <J[ 21.) TD Bank had once again identified funds belonging to Plaintiffs, not t e judgment debtor Griffith Shaw ill. (Id. <J[ 22.) Plaintiffs again contacted HHL and sent docu entation evidencing that the account belonged to Plaintiffs. (Id. <J[ 23; Pis.' Suppl. SMF TI 30-31.) 1 On March 21, 2015, Plaintiffs mailed HHL another letter r questing return of their funds, as they had not yet been returned. (Pis.' Suppl. SMFTJ[ 30-31; Pis' Ex. L, ECF No. 55-12.) On March 23, 2015, Defendants mailed Plaintiffs in New Jersey and riffith Shaw ill in Florida a copy of a Notice of Motion to Tum Over Monies from the Febru 2015 TD Bank levy. (Pis.' Suppl. SMF<J[ 32; Defs.' Resp. to Pis.' Suppl. SMF<J[ 32; Pis.' Ex. , ECF No. 55-13.) That Motion was never filed in court. (Defs.' Resp. to Pis.' Suppl. S On May 7, 2015, pursuant to the July 2014 Writ and at the ·nstruction of HHL, Rienzo levied $886.24 on a Capital One account belonging to "Griffith S aw." (Defs.' SMF<J[ 25; see also Pis.' Suppl. SMF<J[ 37.) Capital One was not one of the banks specifically requested to be levied by HHL. (Defs.' SMF <J[ 26.) Approximately one week later HHL filed a notice of motion to tum over funds from the Capital One account. (Id. <J[ 27.) The st te court granted that motion as unopposed on June 8, 2015. (Id.) At no time did Defendants m e any attempt to alter the caption of the case to reflect the true judgment debtor, Griffith Sh will. (Pis.' Suppl. SMF <J[ 43.) Plaintiffs did not request return of these funds at the time. Plaintiffs filed their federal Complaint on December 23, 2 15, alleging: (I) violation of the FDCPA (Compl. TI 33-34, ECF No. 1) and (Il) malicious abu e of process and/or malicious 1 It is unclear whether this TD Bank account was identical to the e lier-levied account, or if it was a second account owned by one or both of the Plaintiffs. (See Defs.' Resp. to Pis.' Suppl. SMF <J[ 30; compare Defs.' Ex. 5, ECF No. 51-2, with Defs.' Ex. 11 (noting different bank reference numbers for each account).) 4 use of process (id. <J(<J( 35-40), seeking compensatory and punitive January 11, 2016, Rienzo levied additional funds from Plaintiffs' D Bank accounts. (Pis.' Suppl. SMF <J( 46; see also Am. Compl. <J( 2, ECF No. 24.) Upon le ing of the levy, on January 22, 2016, HHL instructed Rienzo to release the levy and to notify t e bank to return the funds to Plaintiffs. (Pis.' Suppl. SMF<J( 47.) On February 25, 2016, HHL se t Rienzo another letter instructing him to notify TD Bank to release the levies and return y funds to Plaintiffs. (Defs.' SMF<J( 31; see also Pis.' SMF<J[ 52; Defs.' Ex. 14.) In that letter, explained, "[w]hile the case has not been settled, we are voluntarily suspending all collect on efforts on this account. Please cease collection activity immediately. Kindly release ALL utstanding bank levies at TD Bank in this matter and return the writ of execution to the Court as unsatisfied." (Defs.' Ex. 14.) On April 4, 2016, HHL attempted to return the funds to Plaintiffs, hrough their counsel, with stated conditions, but Plaintiffs sent the checks back to HHL. (Def . ' SMF <J( 24; Pis.' Resp. to Defs.' SMF <J( 24; Defs.' Ex. 16; Pis.' Ex. BB, ECF No. 55-28.) Pl "ntiffs filed their Amended Complaint on August 5, 2016, including new factual allegations re arding the Capital One levy. Defendants filed a Motion for Partial Summary Judgment n January 12, 2018, on the state common law claims only. (ECF Nos. 51, 52.) After a single cle adjournment, Plaintiffs filed opposition on February 20, 2018. (ECF Nos. 55, 56.) After a second adjournment, Defendants replied on March 5, 2018. (ECF No. 59.) The Court n w considers the Motion. LEGAL STANDARD Summary judgment shall be granted if "the movant shows hat there is no genuine dispute as to any material fact and the movant is entitled to judgment as a atter of law." Fed. R. Civ. P. 56(a); Celotex Cotp. v. Catrett, 477 U.S. 317, 322 (1986). A disp e is "genuine" if it could lead a "reasonable jury [to] return a verdict for the nonmoving party." nderson v. Liberty Lobby, 5 Inc., 477 U.S. 242, 248 (1986). A fact is "material" if it will "affec the outcome of the suit under the governing law." Id. When deciding the existence of a genuine "spute of material fact, a court's role is not to weigh the evidence; all reasonable "inference , doubts, and issues of credibility should be resolved against the moving party." Meyer v. iegel Prods. Corp., 720 F.2d 303, 307 n.2 (3d Cir. 1983); Curley v. Klem, 298 F.3d 271, 276-7 (3d Cir. 2002). Summary judgment is inappropriate when a party's knowl dge or other mental state is at issue, "because evaluating state of mind often requires the drawin of inferences from the conduct of parties about which reasonable persons might differ." stofin v. Metro. Life Ins. Co., 372 F.3d 517, 524 (3d Cir. 2004), as amended (Aug. 12, 2004). In resolving a motion for summary judgment, a district court considers the facts drawn fro "materials in the record," including depositions, documents, affidavits, and declarations. Fe . R. Civ. P. 56(c)(l)(A). The court must determine "whether the evidence presents a sufficient isagreement to require submission to a jury or whether it is so one-sided that one party m st prevail as a matter of law." Anderson, 477 U.S. at 251-52. ANALYSIS I. Malicious Use of Process To establish a claim for malicious use of process, Plaintiff must prove that: (1) Defendants instituted a civil action against them, (2) the action was motivated by malice, (3) there was an absence of probable cause to prosecute, (4) the actio was terminated in Plaintiffs' favor, and (5) Plaintiffs suffered a special grievance-an interfere ce with their liberty or property. LoBiondo v. Schwartz, 970 A.2d 1007, 1022 (N.J. 2009) Klesh v. Coddington, 684 A.2d 530, 533 (N.J. Super. Ct. 1996), aff'd and remanded, 684 A. d 504 (N.J. App. Div. 1996). 6 Defendants primarily challenge elements two through four: actual malice, absence of probable cause, and that the action was terminated in Plaintiffs' fa or. In challenging elements three and four, Defendants raise an implicit attack on element one well; by arguing that Plaintiffs were swept up in a levy stemming from a writ of executi n related to a lawful proceeding against someone else, Defendants essentially disclaim ver instituting a civil action against Plaintiffs. (See, e.g., Defs.' Br. at 11, 14; see also Defs.' R ply at 5-6.) As a threshold inquiry, the Court must resolve whether De ndants instituted a "civil action" within the meaning of the tort of malicious use of process. oth parties agree on a general skeleton of the facts here: Defendants meant to collect on debt owed by Griffith Shaw ill; they filed a civil action and obtained a judgment against "Grif th Shaw;" they sought a writ of execution, including authorization to levy accounts at four bank ; and Plaintiffs' funds were erroneously and/or improperly levied pursuant to that writ. (See, e. . , Pls.' Br. at 5; Defs.' Br. at 11-12.) Plaintiffs argue that Defendants commenced garnishment roceedings against Plaintiffs through an enforcement action, which ended in their favor once th writ was withdrawn by HHL; Defendants argue that Plaintiffs were simply swept up as Defend ts sought a remedy in a civil action against someone else. (See Defs.' Br. at 11; see also Pls.' B . at 7-8.) Citing out-of-jurisdiction cases, Plaintiffs argue that "[e]xe ution proceedings against a third party can give rise to a malicious use of process claim regard ess of the validity of the underlying judgment." (Pls.' Br. at 8 (citing Keys v. Chrysler Cre it Corp., 494 A.2d 200, 205 (Md. 1985) (initiation of an attachment); Todd v. Weitman, Weinb rg & Reis Co., L.P.A., 434 F.3d 432, 445-46 (6th Cir. 2006) (initiation of a garnishment proc eding)).) However, these cases do not concern execution proceedings against a third party 7 rather, they concern execution proceedings against the person named in the underlying civil jud ent, where the execution proceeding was invalid but the judgment itself was validly obtaine .2 Nevertheless, the fact that the writ of execution and levy w re brought against a third party should not be dispositive for whether they may be considere a civil action within the meaning of the tort. Comment f to § 674 of the Restatement (Seco d) of Torts notes that: A particular civil proceeding may be ancillary to ot er proceedings .... Even though the principal proceed ngs are properly brought, the ancillary proceeding may be rongfully initiated. In this case the wrongful procurement an execution of the ancillary process subjects the person procuring t to liability .... If the ancillary proceedings are ex p e, the person against whom they are brought need not prove a te ·nation of proceedings favorable to him. Restatement (Second) of Torts§ 674 cmt. f (Am. Law. Inst. 1977) see also id.§ 674(b). A proceeding is considered ex parte when "relief is granted without opportunity for the person against whom the relief is sought to be heard." Id. § 674 cmt. k; (s e also Pis.' Br. at 8 n.2). Plaintiffs essentially argue that the writ of execution and the atten ant levies here constituted an ex parte ancillary proceeding, initiated by Defendants against Plai tiffs. This element is sufficiently supported in the law to withstand summary judgment. Turning next to whether the prior proceeding was terminat din Plaintiffs' favor, Defendants argue that Plaintiffs have not contested any process in he underlying civil case and it could not terminate in their favor because the case was never brou ht against them. (Defs.' Br. at 10; Defs.' Reply at 11-13.) Plaintiffs respond with arguments int e alternative that (1) HHL's voluntary withdrawal of the writ constitutes favorable termination (Pis.' Br. at 8-9 (citing case 2 At least one court in this Circuit has determined that a levy and amishment of a bank account made by way of mistaken identity violates the account holder's du process rights, Nat'l Stabilization Agreement of Sheet Metal Indus. Tr. Fund v. Evans, 1 F. Supp. 2d 427, 431 (M.D. Pa. 1999) (garnishment against nephew of uncle judgment debtor ith similar name), but that supported dissolving the writ of execution, not a subsequent actio for malicious use of process. 8 law finding favorable termination when criminal charges withdra n)) or (2) they need not prove favorable termination since this was an ex parte proceeding (Pls.' t. at 8 n.2). It is not clear that New Jersey has adopted the Restatement rule that individuals nee not prove favorable termination when the proceedings are ex parte, but the Court need ot reach this question on the facts presented. HHL's recall of the writ of execution, which was pplied against Plaintiffs' accounts, constitutes favorable termination to surmount summary j dgment. See, e.g., Zebrowski v. Wells Fargo Bank, N.A., 657 F. Supp. 2d 511, 524 (D.N.J. 2009 ("[A] malicious use of process claim ... survive[d] summary judgment when ... the fore losure action was withdrawn as to the particular plaintiff before payment was made to the defen ants."). Though the recall was not requested until after Plaintiffs filed litigation, and therefor might be seen as an offer to compromise and insufficient termination, 3 it was requested unilate ally and voluntarily by HHL (see Defs.' 14), was not made in connection with a settlement ttempt by and happened before Plaintiffs filed their Amended Complaint, which resently governs this action. The fourth element is sufficiently supported to withstand summ Defendants most fervently contest the malice and probable cause elements, arguing that their case was lawfully filed but resulted in a series of unfortunate ·stakes and isolated events. (See, e.g., Defs.' Br. at 12 n.5, 13-14.) The parties genuinely disp te whether Defendants had a responsibilityto correct the missing suffix in the name of the jud ent-debtor, either before · filing the writ of execution or once the erroneous TD account levy was brought to their attention. (Compare Pls.' Suppl. SMF <Jr][ 13-21, 27-28, with Defs.' Resp. to Pls.' Suppl. SMF <Jr][ 13-21, 3 "Whether a withdrawal or an abandonment constitutes a final te ·nation of the case in favor of the person against whom the proceedings are brought ... depends pon the circumstances under which the proceedings are withdrawn. In determining the effect of withdrawal the same considerations are decisive as when criminal charges are withdra n[.]" Restatement (Second) of Torts§ 674. 9 27-28, ECF No. 59-1.) This knowing failure to correct is the basis or Plaintiffs' claims of malice and lack of probable cause for the writ of execution and co tinuing levies; in response, Defendants assert that all errors stemmed from inadvertence, not alice, and that they were acting with probable cause against judgment-debtor "Griffith Sha ."The questions of malice and lack of probable cause are somewhat collapsed by the facts in ·s case, and rely on the resolution of disputed material facts. Moreover, a finding of malic is a mental state issue which requires the drawing of inferences upon which reasonable people uld differ, and is therefore better left to a jury. See Wishkin v. Potter, 416 F.3d 180, 184 (3d ir. 2007) ("Issues such as intent and credibility are rarely suitable for summary judgment."). esolving all doubts in favor of the nonmoving party, Defendants' Motion for Partial Summary udgment on Plaintiffs' malicious use of process claim is denied. II. Abuse of Process The two essential elements of an abuse of process claim ar "an ulterior motive and some further act after the issuance of process representing the perversio of the legitimate use of the process." Simone v. Golden Nugget Hotel & Casino, 844 F.2d 103 , (3d Cir. 1988) (quoting Fielder Agency v. Eldan Constr. Corp., 377 A.2d 1220, 1 22 (N.J. Super. Ct. 1977)). For the first element, malicious intent alone is insufficient-plaint' ffs must show "some coercive or illegitimate use of the judicial process ... ."Id. at 1037 (quotin Fielder Agency, 377 A.2d at 1222). The touchstone of the second element is that the defendant ook some secondary act, such as "attachment, execution, garnishment, sequestration proceedings arrest, [or] criminal prosecution." D & D Assocs., Inc. v. Bd. of Educ. of N. Plainfield, 001 WL 4554208, at *31 (D.N.J. Dec. 21, 2007) (citing Baglini v. Lauletta, 768 A.2d 825, 832 (N.J. App. Div. 2001)), 10 aff'd, 552 F. App'x 110 (3d Cir. 2014). "[T]he ulterior motive can e inferred from the 'improper act,"' but if the act is proper, any motive is immaterial. Zebrowski, 651 F. Supp. 2d at 517. Plaintiffs purport to describe six illegitimate acts that Defe dants committed against them. (Pis.' Br. at 10-11 (listing the initial filing of the writ in the allowing the writ to remain on the docket for the second and third D Bank levies, filing the January 2015 Notice of Motion to Turn Over Funds, co.,.opting Pl ntiffs to get Griffith Shaw ill to begin paying off his debt, and allowing a levy to be placed on t e Capital One account).) Because the process against Plaintiffs began with the issuance oft e writ and the first levy, they cannot constitute further acts. Without parsing the other acts Plain iffs identify, the Court finds that the parties genuinely dispute whether Officer Rienzo was ope ating at Defendants' instructions and whether Defendants had an obligation to amend t e writ to include a suffix once the first erroneous levy was brought to their attention. Plaintiffs ca t the failure to correct the record as repeated acts evidencing impropriety and ulterior motive constituting abuse of process (Pis.' Br. at 1O); they argue that Defendants were willfully blind t the continuing wrongful levies based on the outstanding writ, in an effort to get paid at any cost. The material facts here are sufficiently disputed to overcome summary judgment on Plain iffs' abuse of process claim. CONCLUSION For the reasons stated herein, Defendants' Motion for Parti denied. An appropriate order will follow. 11 Summary Judgment is
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