Lamm v. FMS, Inc.

587 F.Supp.3d 49

Abraham LAMM, individually and on behalf of all others similarly situated, Plaintiff,

v.FMS, INC., and John Does 1-25, Defendants.

No. 21 Civ. 2478 (NSR)

United States District Court, S.D. New York.

Signed February 28, 2022

Raphael Deutsch, Stein Saks PLLC, Hackensack, NJ, for Plaintiff.

Aaron R. Easley, Sessions, Israel & Shartle, LLC, Flemington, NJ, for Defendant FMS, Inc.

OPINION & ORDER

NELSON S. ROMÁN, United States District Judge:

Section 1692e of the Fair Debt Collection Practices Act ("FDCPA") makes it unlawful for a debt collector to "use any false, deceptive, or misleading representation or means in connection with the collection of any debt." 15 U.S.C. § 1692e. Similarly, section 1692g requires a debt collector's initial communication with the debtor to adequately state "the amount of the debt." See Carlin v. Davidson Fink LLP , 852 F.3d 207, 215 (2d Cir. 2017). Plaintiff Abraham Lamm brings this peculiar case against Defendants FMS, Inc. and John Does 1-25, alleging they violated the FDCPA by "deceptively list[ing,]" on a debt collection letter, a payment of one cent he never made and which he claims makes it "impossible for [him] to know how much is owed." (Compl. ¶ 35, ECF No. 1.) Presently pending before the Court is Defendants’ motion to dismiss Plaintiff's Complaint under Federal Rule of Civil Procedure 12(b)(6). (ECF No. 9.) For the following reasons, the Court GRANTS Defendants’ motion to dismiss.

BACKGROUND

The following facts are derived from the Complaint and are taken as true and constructed in the light most favorable to pro se Plaintiff for the purposes of this motion.

"Some time prior to April 2, 2020, an obligation was incurred to Synchrony Bank" that arouse out of transactions in which the funds obtained from the creditor were used primarily for personal, family or household purposes. (Compl. ¶¶ 21–22.) On April 2, 2020, Defendant FMS sent Plaintiff an initial contact notice letter regarding the debt originally owed to Synchrony Bank. (Id. ¶ 27; id. , Ex. A (Initial Contact Notice Letter), ECF No. 1-1.) The right side of the letter states the following account summary:

Account Summary

Creditor

SYNCHRONY BANK

Customer No

xxxxxxxxxxx[REDACTED]

Account of

ABRAHAM LAMM

Account No

[REDACTED]

Balance Due

$3,434.05

Charge-Off Balance

$3,434.06

Total Interest Accrued Since Charge-Off

$0.00

Charges or Fees Accrued Since Charge-Off

$0.00

Total Payments Made Since Charge-Off

$0.01

(Id. , Ex. A.)

Plaintiff did not make a $0.01 payment since the charge-off. (Id. ¶ 33.) Plaintiff claims he suffered damages as a result of Defendants’ "deceptive, misleading[,] and unfair debt collection practices." (Id. ¶ 39.) Plaintiff seeks statutory and actual damages, costs, and attorney's fees as relief. (Compl. at 11.)

On March 22, 2021, Plaintiff filed his Complaint. (Compl. at 1.) On May 24, 2021, Defendants sought leave to file their motion to dismiss, which the Court subsequently granted and issued a briefing schedule. (ECF Nos. 6 & 8.) On August 6, 2021, the parties filed their respective briefing: Defendants their notice of motion (ECF No. 9), memorandum in support ("Motion," ECF No. 10), reply ("Reply," ECF No. 11); and Plaintiff his response in opposition ("Response in Opposition," ECF No. 12).

LEGAL STANDARD

In deciding a motion to dismiss under Rule 12(b)(6), the Court must accept all factual allegations in the complaint as true and draw all reasonable inferences in the plaintiff's favor. Freidus v. Barclays Bank PLC , 734 F.3d 132, 137 (2d Cir. 2013). To survive a motion to dismiss, a complaint must contain "sufficient factual matter, accepted as true, to state a claim to relief that is plausible on its face." Ashcroft v. Iqbal, 556 U.S. 662, 678, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009) (quoting Bell Atl. Corp. v. Twombly , 550 U.S. 544, 570, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007) ). Mere "labels and conclusions" or "formulaic recitation[s] of the elements of a cause of action will not do"; rather, the complaint's "[f]actual allegations must be enough to raise a right to relief above the speculative level." Twombly , 550 U.S. at 555, 127 S.Ct. 1955. In applying these principles, the Court may consider facts alleged in the complaint and documents attached to it or incorporated by reference. Chambers v. Time Warner, Inc. , 282 F.3d 147, 152–53 (2d Cir. 2002) (internal quotation marks and citation omitted).

DISCUSSION

By his Complaint, Plaintiff claims that Defendants violated the FDCPA in two ways. First, he claims Defendants violated § 1692e by deceptively listing a $0.01 payment he never made, which is materially misleading because it makes it impossible for him to know how much is owed. (Compl. ¶¶ 32–36.) And second, he claims Defendants violated § 1692g "by confusingly stating that a payment was made when it was not," which "fail[s] to provide the consumer with the correct and clear balance owed." (Id. ¶¶ 38, 48.)

By their motion, Defendants move to dismiss the Complaint with prejudice on the ground that Plaintiff has failed to allege that he suffered any material harm. (Mot. at 5–10.) They contend that Plaintiff's quibbling about a one-cent difference in the amount owed—which is actually debited to his advantage—highlights the fact that he suffered no harm. (Id. at 7.) Instead, they aver that this lawsuit is founded upon what the Honorable Shira A. Scheindlin described as "an idiosyncratic interpretation of a collection letter ‘much more likely arrived at by an enterprising plaintiff's lawyer than by a least sophisticated consumer.’ " (Id. (citing Ghulyani v. Stephens & Michaels Assocs. , 2015 WL 6503849, at *3 (S.D.N.Y. Oct. 26, 2015) ) ("[T]he FDCPA does not aid plaintiffs whose claims are based on ‘bizarre or idiosyncratic interpretations of collection notice ....’ ").) After due consideration, the Court agrees with Defendants.

The purpose of the FDCPA is to "eliminate abusive debt collection practices by debt collectors, to insure that those debt collectors who refrain from using abusive debt collection practices are not competitively disadvantaged, and to promote consistent State action to protect consumers against debt collection abuses." 15 U.S.C. § 1692(e). To achieve this, the FDCPA imposes, "among other things, certain notice and timing requirements on efforts by ‘debt collectors’ to recover outstanding obligations." Goldstein v. Hutton, Ingram, Yuzek, Gainen, Carroll & Bertolotti , 374 F.3d 56, 58 (2d Cir. 2004). Section 1692k of the FDCPA provides that "any debt collector who fails to comply with any provision of [the FDCPA] with respect to any person is liable to such person ...." 15 U.S.C. § 1692k.

To state a claim under the FDCPA, a plaintiff must demonstrate that: (1) the plaintiff is a person who was the object of efforts to collect a consumer debt; (2) the defendant is a debt collector as defined in the statute; and (3) the defendant has engaged in an act or omission in violation of the FDCPA. See Cohen v. Ditech Fin. LLC , 15-CV-6828, 2017 WL 1134723, at *3 (E.D.N.Y. Mar. 24, 2017). Here, the parties only dispute whether Plaintiff sufficiently alleges the third factor: whether Defendants have engaged in an act or omission that violates the FDCPA. Plaintiff claims Defendants violated §§ 1692e and g.

Section 1692e of the FDCPA prohibits a debt collector from making a "false, deceptive, or misleading representation." 15 U.S.C. § 1692e. In the Second Circuit, two principles of statutory construction guide courts’ assessments of alleged violations of § 1692e : (1) the FDCPA is liberally construed to effectuate its purpose of consumer protection, and (2) collection notices are analyzed from the perspective of the "least sophisticated consumer." Taylor v. Fin. Recovery Servs. , 886 F.3d 212, 214 (2d Cir. 2018) (internal citation omitted).

The least sophisticated consumer test is an objective one that "pays no attention to the circumstances of the particular debtor in question." Easterling v. Collecto, Inc. , 692 F.3d 229, 234 (2d Cir. 2012). And, despite the name, the least sophisticated consumer is not wholly unsophisticated; they are "presumed to possess a rudimentary amount of information about the world and a willingness to read a collection notice with some care." Kolbasyuk v. Capital Mgmt. Servs. LP , 918 F.3d 236, 239 (2d Cir. 2019) (internal quotations and citation omitted). Applying the standard of the least sophisticated consumer, a debt collector's representation is misleading or deceptive "if it is ‘open to more than one reasonable interpretation, at least one of which is inaccurate.’ " Avila v. Riexinger & Assocs., LLC , 817 F.3d 72, 75 (2d Cir. 2016) (quoting Clomon v. Jackson , 988 F.2d 1314, 1319 (2d Cir. 1993) ).

The Second Circuit also reads a materiality requirement into the FDCPA's prohibition of false, deceptive, or misleading practices in the collection of a debt. See Cohen v. Rosicki, Rosicki & Assocs., P.C. , 897 F.3d 75, 85 (2d Cir. 2018) ("Several of our sister circuits have held that the least sophisticated consumer standard encompasses a materiality requirement; that is, statements must be materially false or misleading to be actionable under the FDCPA .... We reach that conclusion here, adopting the persuasive reasoning of these courts of appeals."). The materiality requirement functions as "a corollary to the well-established proposition that [i]f a statement would not mislead the unsophisticated consumer, it does not violate the [FDCPA]—even if it is false in some technical sense." Id. at 85 (brackets in original) (internal quotation and citation omitted). Simply put, a debt collector's statement is material if it is capable of influencing the decisions of the least sophisticated consumer. See id. at 86 (finding that statements identifying entity as a creditor were immaterial where they did not misrepresent "nature or legal status of the debt or undermine a [consumer's] ability to respond to the debt collection").

Relatedly, section 1692g requires that a debt...