Summary
denying a motion to dismiss because the plaintiff plausibly alleged that the collector had no intention of commencing threatened litigation
Summary of this case from Moukengeschaie v. Eltman, Eltman & Cooper, P.C.Opinion
03 CV 1262 (CBA).
March 10, 2005
NOT FOR PUBLICATION ORDER
Plaintiff Joyce Failla ("Plaintiff") brings this action against defendants Steven Cohen and Mark Krassner ("Defendants") pursuant to the Fair Debt Collections Practices Act ("FDCPA"), alleging that a letter written to plaintiff by defendants' law firm, Cohen Krassner, threatened litigation when none was intended and was designed to mislead the plaintiff, in violation of 15 U.S.C. 1692e (5) and (10). Defendants have moved to dismiss this action pursuant to Fed.R.Civ.P. 12(b)(6) for failure to state a cause of action. For the reasons stated herein, defendants' motion to dismiss is denied.
BACKGROUND
According to the Amended Complaint in this action, plaintiff incurred a personal debt to the Home Shopping Network in the amount of $64.50. This debt was referred to the defendant for collection, whereupon the defendant sent plaintiff an initial letter dated December 17, 2002 ("the letter"). In this letter, defendants informed plaintiff that they had been retained with respect to the outstanding debt and stated, in relevant part that, "[w]e may proceed with suit against you without waiting 30 days if so requested by our client." Plaintiff alleges that this statement constitutes a threat against the plaintiff in violation of 15 U.S.C. § 1692e(5) and that it amounts to a deceptive act and misrepresentation against the plaintiff in violation of 15 U.S.C. § 1692e(10).
DISCUSSION
I. Motion to Dismiss Standard
In deciding a Rule 12(b)(6) motion, the Court's function is to determine whether the complaint is legally sufficient. See Festa v. Local 3 Int'l Bhd. of Elec. Workers, 905 F.2d 35, 37 (2d Cir. 1990). A motion to dismiss must be denied "unless it appears beyond a reasonable doubt that the plaintiff can prove no set of facts in support of his claim which would entitle him to relief." Conley v. Gibson, 355 U.S. 41, 45-46; accord Tarshis v. Riese Org., 211 F.3d 30, 35 (2d Cir. 2000). In reviewing plaintiff's complaint, the Court must accept as true the plaintiff's factual allegations, drawing all reasonable inferences in her favor. See Bolt Elec., Inc. v. City of New York, 53 F.3d 465, 469 (2d Cir. 1995). In ruling on a motion to dismiss, "the complaint is deemed to include any written instrument attached to it as an exhibit or any statements or documents incorporated in it by reference." Cortec Indus., Inc. v. Sum Holding L.P., 949 F.2d 42, 47 (2d Cir. 1991).
II. Violation of § 1692e(5) and (10)
Section 1692e of the FDCPA establishes a general prohibition against the use of "false, deceptive, or misleading representation or means in connection with the collection of any debt." 15 U.S.C. § 1692e. In determining whether a collection letter, such as defendants' Dec. 17, 2002 letter, violates § 1692e, courts in this circuit apply the "least sophisticated consumer" test. Clomon v. Jackson, 988 F.2d 1314, 1318-19 (2d Cir. 1993); Tsenes v. Trans-Cont'l Credit and Collection Corp., 892 F. Supp. 461, 465 (E.D.N.Y. 1995); Unger v. Nat'l Revenue Group, Ltd., d/b/a Nat'l Revenue Recovery Group, 2000 U.S. Dist. LEXIS 18708 at *10 (E.D.N.Y. Dec. 8, 2000). The purpose of this standard is to protect all consumers, including the naive and trusting, against deceptive debt collection practices on the one hand, and to protect debt collectors against liability for bizarre or idiosyncratic interpretations of collection notices on the other. Clomon, 988 F.2d at 1320.
Sections 1692e(5) and (10) prohibit a debt collector from making a "threat to take any action that cannot legally be taken or that is not intended to be taken," and from making "any false representation or deceptive means to collect or attempt to collect any debt or to obtain information concerning a consumer," respectively. Plaintiff alleges that defendants' letter, which stated that "we may proceed with suit against you without waiting thirty days if so requested by our client," constituted a threat in violation of these provisions because the defendants "have no intention of ever filing as the sum of the debt is nominal and the law firm of Cohen Krassner has never and probably will never commence a lawsuit for less than sixty five dollars." (Plaintiff's Response at 2-3.)
The Court finds that a statement to the effect that a lawsuit might be filed, although not an explicit threat, could be understood by the "least sophisticated consumer" to mean that legal action was "authorized, likely and imminent." Bentley v. Great Lakes Collection Bureau, 6 F.3d 60, 62 (2d Cir. 1993). Because the language could have been understood as an implicit threat to commence legal action and because the complaint alleges that defendants had no intention of bringing such action, the complaint states sufficient claims under § 1692e(5) and (10) to survive a motion to dismiss. Tsenes, 892 F. Supp. at 465 (E.D.N.Y. 1995). The plaintiff will now have an opportunity to show that the defendant did not intend to bring any legal action. In order to prevail, plaintiff will have to demonstrate that the possibility of a lawsuit could be "ruled out." Sluys v. Hand, 831 F. Supp. 321, 327 (S.D.N.Y. 1993). "This may be established, for example, where `a creditor had a fixed practice of not bringing suits against customers in order to promote good will, or had advertised an unlimited satisfaction guarantee inconsistent with such lawsuits.'" Unger, 2000 U.S. Dist. LEXIS 18708 at *10 (citing Wiener v. Bloomfield, 901 F. Supp. 771, 777 (S.D.N.Y. 1995)); Tsenes, 892 F. Supp. at 465 (E.D.N.Y. 1995); Sluys, 831 F. Supp. at 326-27.
CONCLUSION
For the reasons set forth herein, defendants' motion for summary judgment is denied.
SO ORDERED
ORDER
In light of United States District Judge Carol B. Amon's decision denying defendant's motion to dismiss this action, the initial conference previously scheduled for July 7, 2003 will now take place 12:00 p.m. on March 31, 2005 before the undersigned.Counsel are to refer to the original scheduling order, which appears as docket entry no. 3 on the docket sheet, and be prepared to set a discovery schedule at the initial conference.
Requests for adjournments must be made electronically only, with consent of all parties, no later than 48 hours prior to the conference.
SO ORDERED.