ELIZABETH A. WOLFORD, United States District Judge.
Plaintiff William B. Kelsey ("Plaintiff") commenced this action on February 1, 2018, alleging that defendant law firm Forster & Garbus, LLP ("Defendant") sought to collect a debt from Plaintiff in violation of the Fair Debt Collection Practices Act, 15 U.S.C. § 1692 et seq. ("FDCPA"). (Dkt. 1). Plaintiff claims that Defendant filed an attorney affirmation in an underlying state court action commenced against him that falsely asserted that he had failed to answer the summons and complaint or otherwise appear in that action. (Id. at 3-4).
Presently before the Court is Defendant's motion for judgment on the pleadings. (Dkt. 6). For the following reasons, Defendant's motion is granted, and Plaintiff's Complaint is dismissed.
The following facts are drawn from Plaintiff's Complaint unless otherwise indicated and are assumed true for purposes of this motion. (Dkt. 1). Plaintiff alleges that on March 24, 2017, Defendant filed a lawsuit on behalf of Navient Credit Finance Corporation ("Navient") against Plaintiff in New York State Supreme Court, County of Orleans. (Id. at ¶ 10). Defendant served Plaintiff with a summons and complaint on May 22, 2017, and Plaintiff filed his answer "with the court and mailed the same to [Navient]." (Id. at ¶¶ 11-12). However, on August 15, 2017, Defendant filed an attorney affirmation with the state court, affirming that the time for Plaintiff "to appear or answer has expired" and that Plaintiff has "not appeared or answered." (Id. at ¶ 13; see id. at ¶ 14). As a result, Defendant "obtained a default judgment against Plaintiff." (Id. at ¶ 14).
On or about November 2, 2017, Plaintiff filed an order to show cause with the state court to vacate the default judgment rendered against him. (See Dkt. 6-4 at 14-17 (state court filings)). On or about November 17, 2017, a state court judge set a return date on the motion for December 15, 2017. (Id. at 16). By attorney affirmation, dated December 11, 2017, Defendant consented to the vacatur of the default judgment and agreed to accept the answer filed with the state court. (Id. at 18-19). The default judgment has since been vacated. (Dkt. 8 at 3 (Plaintiff's response papers)).
On February 1, 2018, Plaintiff commenced this action against Defendant alleging that the attorney affirmation filed in state court falsely represented that Plaintiff failed to answer the summons and complaint
On March 15, 2018, Defendant filed a motion for judgment on the pleadings, seeking dismissal of this action. (Dkt. 6). Defendant argues that Plaintiff did not comply with state court procedures in answering the summons and complaint, and thus, Plaintiff failed to properly appear in the state action. (Dkt. 6-1 at 3-4). Defendant also contends that Plaintiff's attempts to serve his answer did not constitute an "informal appearance" in that action, and even if they did, Defendant's affirmation was "technically accurate" because Plaintiff "did not appear in the [state court] action as contemplated under CPLR 320(a)." (Id. at 5-6). Plaintiff opposes Defendant's motion. (Dkt. 8).
"Judgment on the pleadings may be granted under Rule 12(c) where the material facts are undisputed and where judgment on the merits is possible merely by considering the contents of the pleadings." McAuliffe v. Barnhart, 571 F.Supp.2d 400, 402 (W.D.N.Y. 2008). "In deciding a Rule 12(c) motion for judgment on the pleadings, the court should `apply the same standard as that applicable to a motion under Rule 12(b)(6), accepting the allegations contained in the complaint as true and drawing all reasonable inferences in favor of the nonmoving party.'" Aboushama v. EMF Corp., 214 F.Supp.3d 202, 205 (W.D.N.Y. 2016) (quoting Mantena v. Johnson, 809 F.3d 721, 727-28 (2d Cir. 2015)).
"In considering a motion to dismiss for failure to state a claim pursuant to Rule 12(b)(6), a district court may consider the facts alleged in the complaint, documents attached to the complaint as exhibits, and documents incorporated by reference in the complaint." DiFolco v. MSNBC Cable L.L.C., 622 F.3d 104, 111 (2d Cir. 2010). To withstand dismissal, a complaint must set forth "enough facts to state a claim to relief that is plausible on its face." Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007). "A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Turkmen v. Ashcroft, 589 F.3d 542, 546 (2d Cir. 2009) (quoting Ashcroft v. Iqbal, 556 U.S. 662, 678, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009)).
"While a complaint attacked by a Rule 12(b)(6) motion to dismiss does not need detailed factual allegations, a plaintiff's obligation to provide the grounds of his entitle[ment] to relief requires more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do." Twombly, 550 U.S. at 555, 127 S.Ct. 1955 (internal quotations and citations omitted). "To state a plausible claim, the complaint's `[f]actual allegations must be enough to raise a right to relief above the speculative level.'" Nielsen v. AECOM Tech. Corp., 762 F.3d 214, 218 (2d Cir. 2014) (quoting Twombly, 550 U.S. at 555, 127 S.Ct. 1955).
"The Second Circuit has established two principles to assist courts in applying the [FDCPA]. First, `because the
"This hypothetical consumer is a `naive' and `credulous' person," Ceban v. Capital Mgmt. Servs., L.P., No. 17-CV-4554 (ARR) (CLP), 2018 WL 451637, at *2 (E.D.N.Y. Jan. 17, 2018) (quoting Altman v. J.C. Christensen & Assocs., Inc., 786 F.3d 191, 193 (2d Cir. 2015)), who is absent "the astuteness of a `Philadelphia lawyer' or even the sophistication of the average, everyday, common consumer," Avila, 817 F.3d at 75 (quoting Russell v. Equifax A.R.S., 74 F.3d 30, 34 (2d Cir. 1996)). "However, she is `neither irrational nor a dolt.'" Ceban, 2018 WL 451637, at *2 (quoting Ellis v. Solomon & Solomon, P.C., 591 F.3d 130, 135 (2d Cir. 2010)). As the Seventh Circuit has aptly explained, "[t]he `unsophisticated consumer' isn't a dimwit. She may be uninformed, naive, [and] trusting, but she has rudimentary knowledge about the financial world and is capable of making basic logical deductions and inferences." Wahl v. Midland Credit Mgmt., Inc., 556 F.3d 643, 645 (7th Cir. 2009) (quotations and citations omitted); accord Greco v. Trauner, Cohen & Thomas, L.L.P., 412 F.3d 360, 363 (2d Cir. 2005) ("We have observed ... that in crafting a norm that protects the naive and the credulous the courts have carefully preserved the concept of reasonableness, and that some courts have held that even the least sophisticated consumer can be presumed to possess a rudimentary amount of information about the world and a willingness to read a collection notice with some care." (quotations and citations omitted)).
The FDCPA provides that "[a] debt collector may not use any false, deceptive, or misleading representation or means in connection with the collection of any debt." 15 U.S.C. § 1692e. This provision applies to "communications and practices that could mislead a putative-debtor as to the nature and legal status of the underlying debt, or that could impede a consumer's ability to respond to or dispute collection." Gabriele v. Am. Home Mortg. Servicing, Inc., 503 F. App'x 89, 94 (2d Cir. 2012).
While it is apparent that Plaintiff failed to satisfy the requirements of CPLR 2103(b), such noncompliance does not necessarily mean that Plaintiff's attempt to answer was a nullity. New York courts have frequently found that a party's failure to comply with CPLR 2103 creates a mere "irregularity" in service, which may be readily disregarded in the absence of any prejudice to the opposing party. See, e.g., Neroni v. Follender, 137 A.D.3d 1336, 1337, 26 N.Y.S.3d 621 (3d Dep't 2016) ("Although CPLR 2103(a) requires service to be made by a person who is not a party to the action, a violation of this provision `is a mere irregularity which does not vitiate service' where, as here, no resulting prejudice is shown."); Jade Mfrs. Outlet, Inc. v. Transamerica Ins. Co., 237 A.D.2d 104, 104, 655 N.Y.S.2d 342 (4th Dep't 1997) ("The motion court properly deemed defendant's failure to comply with the mailing requirements of CPLR 2103(b)(2) as an irregularity to be disregarded under CPLR 2001."); Schodack Concerned Citizens v. Town Bd. of Town of Schodack, 148 A.D.2d 130, 133, 544 N.Y.S.2d 49 (3d Dep't 1989) ("[W]e reject the argument that the proceeding should have been dismissed because a party served the petition in violation of CPLR 2103(a). In our view, this violation is a mere irregularity which does not vitiate service."); Rohany v. State, 144 Misc.2d 940, 953, 545 N.Y.S.2d 513 (N.Y. Ct. Cl. 1989) ("[D]efects in service under CPLR 2103 are mere irregularities which may be disregarded in the absence of prejudice. Where, as here, interlocutory papers
In fact, Defendant has offered no reason for this Court to infer that it was prejudiced as a result of Plaintiff's defective service. Accordingly, because Plaintiff's noncompliance with CPLR 2103(b) does not vitiate service without some additional showing of prejudice, Defendant's blanket assertion that Plaintiff failed to answer or otherwise appear in the state court action did not account for the nuances found in New York State's service rules and represented an incomplete depiction of Plaintiff's participation in the lawsuit up to that point in time.
The parties expend a significant portion of their arguments discussing whether Plaintiff "informally appeared" in the state court action. (Dkt. 6-1 at 5-6; Dkt. 8 at 7-10; Dkt. 11 at 4-6). New York courts have "recognized that a `person who participates in the merits of an action appears informally and confers jurisdiction on the court.'" USF & G v. Maggiore, 299 A.D.2d 341, 342-43, 749 N.Y.S.2d 555 (2d Dep't 2002) (quoting Matter of Roslyn B. v. Alfred G., 222 A.D.2d 581, 582, 635 N.Y.S.2d 283 (2d Dep't 1995)); Sheinkman v. Khalif, 5 Misc.3d 1012(A), 2004 WL 2535207, at *3 (N.Y. Civ. Ct., Kings Cty. 2004) ("Courts will most often find [a] defendant has made an `informal appearance['] resulting in a waiver of jurisdiction when the defendant has taken steps indicative to a defense of the action on the merits."); see also Taylor v. Taylor, 64 A.D.2d 592, 592, 407 N.Y.S.2d 172 (1st Dep't 1978) ("While it is true that the formal notice of appearance was not timely served, nonetheless it is equally true that, by actively litigating the issue of alimony and child support and submitting fully to the jurisdiction of the court, Raymond had made an informal appearance in the action and was therefore technically not in default." (citations omitted)). While there is a colorable argument to be made that Plaintiff "informally appeared" in the state court action by filing his answer with the state court and mailing it to Navient directly, see Meyer v. A & B Am., Ltd., 160 A.D.2d 688, 689, 553 N.Y.S.2d 462 (2d Dep't 1990) (finding that while the defendants' "letter" to the plaintiff's attorney "did not constitute an answer, it was, nevertheless, an appearance and the defendant Kief's pro se attempt to participate in the action"); Gen. Elec. Credit Corp. v. Zemrus, 115 A.D.2d 953, 953, 497 N.Y.S.2d 530 (4th Dep't 1985) ("Although defendant's letter may not be construed to be an answer to the complaint, it was, nonetheless, a pro se attempt to participate in the action and demonstrated a justifiable excuse for his default."), the Court need not determine whether Plaintiff informally appeared in order to resolve the pending motion.
Taking Plaintiff's allegations as true, Navient and the state court were in receipt of Plaintiff's pro se answer at the
The Second Circuit has recently joined several other circuits in holding 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." Cohen v. Rosicki, Rosicki & Assocs., P.C., 897 F.3d 75, 85 (2d Cir. 2018) ("We cited this line of cases with approval in a summary order without explicitly deciding that § 1692e incorporates a materiality requirement. We reach that conclusion here, adopting the persuasive reasoning of these courts of appeals." (citation omitted)). While Defendant's attorney affirmation might not have been completely correct, Plaintiff has failed to plausibly allege that the imprecise language employed by Defendant constituted a material misrepresentation.
"The materiality inquiry focuses on whether the false statement would `frustrate a consumer's ability to intelligently choose his or her response.'" Cohen, 897 F.3d at 86 (quoting Donohue v. Quick Collect, Inc., 592 F.3d 1027, 1034 (9th Cir. 2010)). "Although [i]t is clear that Congress painted with a broad brush in the FDCPA[,]' not every technically false representation by a debt collector amounts to a violation of the FDCPA." Gabriele, 503 F. App'x at 94 (quoting Pipiles v. Credit Bureau of Lockport, Inc., 886 F.2d 22, 27 (2d Cir. 1989)); accord Wahl, 556 F.3d at 645-46 ("If a statement would not mislead the unsophisticated consumer, it does not violate the FDCPA— even if it is false in some technical sense. For purposes of § 1692e, then, a statement isn't `false' unless it would confuse the unsophisticated consumer."). Accordingly, "a false statement is only actionable under the FDCPA if it has the potential to affect the decision-making process of the least sophisticated [consumer]." Jensen v. Pressler & Pressler, 791 F.3d 413, 421 (3d Cir. 2015).
Allegations of false or misleading submissions filed in support of a default judgment motion may plausibly state a claim for relief under the FDCPA. See, e.g., Coble v. Cohen & Slamowitz, LLP, 824 F.Supp.2d 568, 570 (S.D.N.Y. 2011); Hasbrouck v. Arrow Fin. Servs. LLC, No.
To be sure, the Supreme Court has held that the FDCPA "applies to attorneys who `regularly' engage in consumer-debt-collection activity, even when that activity consists of litigation." Heintz v. Jenkins, 514 U.S. 291, 299, 115 S.Ct. 1489, 131 L.Ed.2d 395 (1995). "But the circuit courts have struggled to define the extent to which a
The Second Circuit recently addressed a § 1692e claim based upon the assertion of allegedly false statements made in an attorney affirmation. See Arias, 875 F.3d at 137. The state court proceedings underlying the Arias decision involved the plaintiff's challenge to the defendant's attempt to garnish funds from his bank account that he contended were exempt from forcible collection. Id. at 133. The defendant objected to the plaintiff's claim of exemption, and filed a motion supported by an attorney affirmation "representing that `[t]he commingling of personal funds with exempt funds transforms the opening balance into personal and non-exempt monies,' and that [the plaintiff] had `not provide[d] the proper documentation in support of his Exemption Claim Form'...." Id. The plaintiff claimed that "these representations were false and misleading and that [the defendant] had no good faith basis to object to his exemption claim because it knew, based on the bank statements he provided, that all of the funds in his account were exempt from garnishment." Id.
The Second Circuit rejected the defendant's position that FDCPA liability was inappropriate because the "affirmation [w]as `legal advocacy made by counsel,'" and determined that the plaintiff had stated a claim under § 1692e. See id. at 136-37. The affirmation in Arias "concerned the applicable burden of proof and the substantive law regarding commingling of funds under" a New York statute intended to protect debtors from the garnishment of certain exempt funds; "issues that can reasonably be expected to affect how or even whether a consumer responds to a debt collector's objection to a claim that the restrained funds are exempt from garnishment." Id. at 137-38. Unlike the purported misrepresentation at issue here, the Arias defendant touched upon the merits of the state court proceedings, directly challenging the substance of the pro se consumer's opposition to the attempt at garnishing his bank account. Under those circumstances, the Second Circuit concluded that the procedures afforded by the state court were alone insufficient to protect the consumer from the complexities of "the law governing garnishment of bank accounts." Id. at 137.
Representations like those asserted in the Arias context are much more likely to "take advantage of a debtor's naivete or lack of legal acumen" than assertions pertaining to run-of-the-mill state court procedures used to effectuate service upon a party represented by counsel.
Plaintiff contends that the "least sophisticated consumer," in mounting a defense against a collection lawsuit, "would believe that he was responding to the lawsuit by filing his answer with the court and mailing a copy of the answer to the defendant," and "would further believe it to be false and misleading for Defendant to state that he had not responded to the lawsuit." (Dkt. 8 at 6-7). The Court is reluctant to presume that the "least sophisticated consumer" is ignorant of state court service procedures where every pro se litigant appearing before this Court is required to "become familiar with, follow, and comply with the Federal Rules of Civil Procedure and the Local Rules of Civil Procedure." L.R. Civ. P. 5.2(i). Nonetheless, assuming this hypothetical consumer would find Defendant's representation that no answer had been filed to be false or misleading, Plaintiff has failed to allege or otherwise contend that any such falsity could mislead the least sophisticated consumer "as to the nature and legal status of the underlying debt" or "could impede [the] consumer's ability to respond to or dispute collection." Gabriele, 503 F. App'x at 94.
Defendant may have filed its motion for default judgment upon the mistaken belief that Plaintiff failed to sufficiently effectuate service process, but this in no way prevented Plaintiff from defending against this assumption. Since the "least sophisticated consumer" is "neither irrational nor a dolt," Ellis, 591 F.3d at 135, the Court rejects the notion that this hypothetical consumer, naive as he or she may be, would somehow be misled into believing that he or she did not respond to the summons and complaint after having just filed and mailed an answer weeks earlier, see Gabriele, 503 F. App'x at 95 (noting that the least sophisticated consumer would not be misled into "believing ... that he had not filed counterclaims that he had filed three months before" by an affidavit "incorrectly representing that there were no ... counterclaims"); Walsh, 2012 WL 4372251, at *4-5 (assuming that the defendant's motion to strike "falsely claimed that defendants never received requests for admissions and that notice of service was improperly filed[,] ... nowhere does [the plaintiff] assert that these statements caused her any confusion about the validity or amount of the debt or otherwise impeded her ability to pay or challenge it"). In fact, Plaintiff did challenge
At base level, Plaintiff's claim for FDCPA relief is premised upon the notion that Defendant's improper advocacy persuaded the state court that he had failed to appear or answer in that action and resulted in a default judgment being rendered against him. Although FDCPA defendants may not avoid liability by couching false or misleading statements made in furtherance of a legal action as mere legal advocacy, see Arias, 875 F.3d at 137, where a plaintiff "could have, and did, seek redress through the [state] court system," the exigency to effectuate the FDCPA's purpose of protecting unsophisticated consumers is not nearly so substantial, Lautman, 2014 WL 4843947, at *12; see Walsh, 2012 WL 4372251, at *5 ("Because litigants in state court already enjoy myriad procedural and substantive protections from fraudulent and deceptive practices, resort to the FDCPA is unnecessary."). Under the circumstances presented, Plaintiff's successful vacatur of the default judgment demonstrates that resort to the state court to redress any confusion with or misinterpretation of state court service procedures was imminently more appropriate than the relief he now seeks under a federal consumer protection statute. See generally Hemmingsen, 674 F.3d at 818 ("The rule [the plaintiff] urges—that a debt collector's fact allegations are false and misleading for purposes of § 1692e when rejected as not adequately supported in the collection suit—would be contrary to the FDCPA's `apparent objective of preserving creditors' judicial remedies.'" (quoting Heintz, 514 U.S. at 296, 115 S.Ct. 1489)). In this case, Plaintiff was "protected by the court system and its officers." Simmons, 622 F.3d at 96; see Derisme v. Hunt Leibert Jacobson P.C., 880 F.Supp.2d 311, 328 (D. Conn. 2012) (questioning whether compliance "with the rules of practice and procedure in Superior Court could form the basis of a violation of the FDCPA" and noting that an attorney who "abuses the judicial process or otherwise fails to fulfill her or his professional responsibility" is subject to disciplinary proceedings).
Therefore, since "[t]he misrepresentations at issue concerned assertions made during pretrial proceedings in an adversarial system," Walsh, 2012 WL 4372251, at *6, and because Defendant's attorney affirmation was not materially "misleading or deceptive as to the nature or legal status" of Plaintiff's debt, nor would it "have prevented the least sophisticated consumer from responding to or disputing the action," Gabriele, 503 F. App'x at 95, Plaintiff's § 1692e claim is dismissed.
For the foregoing reasons, Defendant's motion for judgment on the pleadings (Dkt. 6) is granted. The Clerk of Court is directed to close this case.
SO ORDERED.
