My firm shuts down the most unlawful businesses, including landlords and debt collectors, as shown below. Here, I argued in the Court of Appeals with the resulting Rule 1:28 opinion affirming the housing court judge’s Order and finally shutting down the plaintiff in this case – the same plaintiff as in LAS Collections v. Pagan, 447 Mass. 847 (2006), who was affirmed to be practicing law without a license and collecting debt without a license to circumvent the SJC ruling against her in that 2006 case.
LORIE SPAULDING v. BRANDY LAJOIE, 85 Mass. App. Ct. 1120 (2014). Appeals Court of Massachusetts. May 19, 2014.
Decision Pursuant to Rule 1:28.
“Lorie Spaulding appeals from a Housing Court order and judgment that together dismissed her attempt to collect a judgment debt she had acquired as an assignee, ordered her to pay attorney’s fees pursuant to G. L. c. 93A, and instructed the Clerk’s office to cease accepting or processing requests for ” any payment hearings, contempt hearings, supplementary process, or any other attempt to collect a debt,” both existing or future, filed by Spaulding or her business entities.
It was undisputed that in 2006 Nasir Khan obtained a judgment against Brandy Lajoie, his former tenant, and that in 2010, Khan sent a notice to Lajoie that he had assigned the debt and the judgment to Spaulding. Khan moved for a payment hearing, and shortly thereafter moved to substitute Spaulding as party plaintiff. Spaulding’s debt collection efforts were the subject of the hearing before the judge. On the evidence before her, including Spaulding’s testimony, the judge was fully warranted in concluding that despite previous admonitions, Spaulding continued to operate as an unlicensed debt collector and to engage in the unauthorized practice of law by her corresponding attempt to utilize court processes to compel payments from Lajoie. See LAS Collection Mgmt. v. Pagan, 447 Mass. 847, 850-851, 858 N.E.2d 273 (2006) (concluding that Spaulding and LAS engaged in unauthorized practice of law in collecting debts on behalf of landlords). As the judge explicitly found, despite ” not hav[ing] a license to conduct business as a Debt Collector,” Spaulding ” routinely purchases debts from landlords and then proceeds to attempt to collect these debts,” in violation of the debt collection laws. See G. L. c. 93, § 24A(a), inserted by St. 2003, c. 130 (requiring licensure to engage in debt collection); G. L. c. 93, § 24 (” debt collector” includes ” any person . . . who regularly collects . . ., directly or indirectly, a debt owed or due . . . another,” but not persons who collect debts purchased from others if debt was not in default at the time of purchase). See also 209 Code Mass. Regs. § 18.02 (2013) (clarifying that ” debt collector” includes ” any person who buys or acquires debt that is in default at the time of purchase or acquisition and who seeks to collect such debt directly” ). The judge found that Spaulding’s attempts to enforce payment of the judgment must be dismissed because, without being licensed, Spaulding continued to engage in the debt collection business, employed a ” doing business as” and held herself out as being in the debt collection business, and had the same business address as her debt collection business. The judge did not err in concluding that Spaulding’s attempts to enforce payment of the judgment must be dismissed. Nor did the judge err in implicitly rejecting as unlawful and unenforceable a payment agreement between Spaulding and Lajoie that arose in the context of Spaulding’s unlicensed debt collection.
Although the record is not entirely clear, to the extent the judge purported to vacate the underlying judgment obtained by Khan and assigned to Spaulding, we discern no basis for doing so. Nothing in Mass.R.Civ.P. 60(b), 365 Mass. 828 (1974), or any other provision of law, provides a basis to vacate that judgment. Indeed, not only is the judgment valid, but Spaulding was lawfully entitled to purchase it. What is prohibited is Spaulding’s unlawful attempts at collection. See 209 Code Mass. Regs. § 18.02 (2013).
In light of the judge’s finding that ” Ms. Spaulding has continued to attempt to collect debts through [the Housing Court],” in derogation of both the 2007 injunction and the debt collection laws, the judge was justifiably concerned about Spaulding’s use of the court to facilitate her unlicensed debt collection activities. Under the circumstances, prophylactic measures to guard against such improper use of the court were warranted. See Sahli v. Bull HN Information Sys., Inc., 437 Mass. 696, 702, 774 N.E.2d 1085 (2002) (right to petition not absolute and baseless or sham litigation not protected). Nevertheless, we believe the judge’s order went too far. Unless modified to require prior judicial approval, such an absolute prohibition on accepting or processing filings would very likely infringe on Spaulding’s due process right of access to the courts. See art. 11 of the Massachusetts Declaration of Rights. Accordingly, the order is modified to prohibit accepting or processing such filings ” without prior judicial approval.”
We affirm so much of the order, dated March 1, 2013, as concludes that Spaulding and her business entities are prohibited from engaging in the business of debt collection, including collection and judicial enforcement of judgment debt, unless licensed as a debt collector, or undertaken through a duly licensed attorney. We reverse so much of the order as requires Spaulding to pay attorney’s fees, and we modify so much of the order as directs the Clerk’s office to cease accepting or processing debt collection cases filed by Spaulding or her business entities by inserting the words ” without prior judicial approval.”  The dismissal of the underlying judgment is vacated, and that judgment, which was entered on September 20, 2006, is reinstated. Lajoie’s request for appellate attorney’s fee is denied.”