New York City Debt Collection Defense Attorney

Judge Straniere derails Midland Funding's collection lawsuit for improperly using Midland Funding of Delaware, LLC as a "D/B/A"

In a September 2011 case from Richmond County, Judge Philip S. Straniere took issue with plaintiff Midland Funding, LLC over its use in New York of the assumed name "Midland Funding of Delaware, LLC" in a matter captioned Midland Funding LLC d/b/a in New York as Midland Funding of Delaware v. Tagliaferro[1]. As noted by the court, the acronym "DBA" is generally thought to be an abbreviation for "doing business as," and the New York statute that governs the use of DBAs or assumed names is General Business Law § 130. That statute requires a limited liability company to file with the secretary of state a certificate setting forth both the name under which business is to be carried on, as well as its legal, or "real name." "Real name" is defined in the statute, GBL § 130(1-a)(b), to mean the corporate name as set forth in the company's certificate of incorporation.

The court researched the database of the New York Department of State, Division of Corporations and found that both names, Midland Funding LLC and Midland Funding of Delaware, LLC, were listed on January 22, 2008 as active foreign limited liability companies, having "real names." Since under the statutory definition, both companies have "real names" as set forth on their own certificates of incorporation, one cannot be a DBA for the other. Or, as stated more succinctly by the court, Midland's "current attempt to have one registered LLC be designated as another LLC is not permitted. Each entity named in the caption is capable of doing business as or under an assumed name, but cannot do business under each other's name."

The court went on to note that this practice may be a deceptive act or practice under New York General Business Law § 349 (which protects consumers from deceptive acts and practices), because it is impossible for the defendant to know which entity is the actual plaintiff. It is also impossible to know which entity actually purchased the plaintiff's alleged debt or is trying to collect it. The court also noted that only Midland Funding of Delaware, LLC is licensed with the Department of Consumer Affairs (DCA) to collect debts in the City of New York, under license number 1312658. (However, a recent check of the DCA database indicates that the license number has now been transferred to Midland Funding LLC).

In Tagliaferro, the court directed that the case be stayed until the plaintiff corrects its "doing business as" status. But what does this case mean for preexisting Midland Funding litigation involving the same improper "DBA"? Midland's newer cases are now being filed under the name Midland Funding, LLC.

In this case, Judge Straniere also observed that Midland Funding's attorney did not sign the summons and complaint as required under 22 NYCRR § 130–1.1–1, a rule that requires attorneys' signatures to legal papers thereby certifying their accuracy.

[1] 935 NYS2d 249, 33 Misc3d 937 [2011]