Opinion
Index No. 531117/22
08-22-2023
Family Guardian Services, Inc., as Guardian of P.R., an Incapacitated Person, Plaintiff, v. Abrams Fensterman, LLP, Defendant.
Counsel for plaintiff: Robert Yusko, Stein Saks, PLLC Counsel for defendants: Melanie I. Wiener, Abrams Fensterman, LLP
Unpublished Opinion
Counsel for plaintiff: Robert Yusko, Stein Saks, PLLC
Counsel for defendants: Melanie I. Wiener, Abrams Fensterman, LLP
KAREN B. ROTHENBERG, J.
The following e-filed papers read herein:
NYSCEF Doc No.:
Notice of Motion, Affirmation, Memorandum of Law, and Exhibits Annexed
5-10, 1-2
Opposing Affirmation, Memorandum of Law, and Exhibits Annexed
12-14
Reply Memorandum of Law
16
Post-Argument Letter Submission with Exhibit Annexed
17
In this action to recover damages for alleged violations of the Fair Debt Collection Practices Act ("FDCPA"), defendant Abrams Fensterman LLP moves, pre-answer, for an order dismissing the complaint pursuant to CPLR 3211 (a) (1) and (7), as well as for the imposition of sanctions pursuant to 22 NYCRR § 130-1.1 (a). Plaintiff opposes the motion. On June 1, 2023, the Court heard argument and reserved decision on the motion. Defendant, in a post-argument submission dated July 31, 2023, advised the Court of a recent decision issued by a sister court in Suffolk County in a similar case involving the same parties (see Family Guardian Servs., Inc. v Abrams Fensterman, LLP, Index No. 614749/22, Decision/Order, dated July 27, 2023 [Sup Ct, Nassau County, Fischer, A.J.S.C.] [NYSCEF Doc. No. 18]). Further, the Court has taken judicial notice of the record in the guardianship proceeding titled Matter of P.R., an Incapacitated Person, Index No. 100266/17 (Sup Ct, Kings County) (the "guardianship proceeding").
See Matter of Allen v Strough, 301 A.D.2d 11, 18 (2d Dept 2002) ("In New York, courts may take judicial notice of a record in the same court of either the pending matter or of some other action.") (internal quotation marks omitted).
Background
P.R., an incapacitated person (the "IP"), has been a resident of nonparty Cobble Hill Health Center, Inc. (the "Nursing Home") since December 2015. Approximately two years later in August 2017, defendant acting on behalf of the Nursing Home commenced the guardianship proceeding. By order, dated January 25, 2018 (as subsequently modified by orders, dated February 23, 2018 and January 11, 2019) (collectively, the "guardianship order"), Justice Leon Ruchelsman appointed plaintiff as the guardian for the IP and directed that plaintiff, as guardian, pay defendant the sum of approximately $8,000 representing the latter's fees and expenses incurred in the commencement and prosecution of the guardianship proceeding. Thereafter, plaintiff paid defendant $2,000 of the $8,000 owed, leaving a balance of $6,000. Sometime later plaintiff paid defendant the balance of $6,000, thus fully satisfying its obligation to defendant. Nonetheless, defendant subsequently mailed to plaintiff - in error - an invoice for $6,000 in allegedly owed fees and disbursements (collectively, the "invoiced fees"). Thereafter, plaintiff commenced the instant action alleging that defendant, by mailing the erroneous invoice to plaintiff, violated various provisions of the FDCPA. In lieu of an answer, defendant served the instant motion to dismiss under CPLR 3211 (a) (1) and (7), as well as for ancillary relief.
"A motion to dismiss a complaint pursuant to CPLR 3211 (a) (1) may be granted only if the documentary evidence submitted utterly refutes the factual allegations of the complaint and conclusively establishes a defense to the claims as a matter of law" (Integrated Constr. Servs., Inc. v Scottsdale Ins. Co., 82 A.D.3d 1160, 1162-1163 [2d Dept 2011]). "To constitute documentary evidence, the evidence must be unambiguous, authentic, and undeniable, such as judicial records and documents reflecting out-of-court transactions such as mortgages, deeds, contracts, and any other papers, the contents of which are essentially undeniable" (Yan Ping Xu v Van Zwienen, 212 A.D.3d 872, 874 [2d Dept 2023] [internal quotation marks and citations omitted]).
When a party moves to dismiss a claim or cross claim pursuant to CPLR 3211 (a) (7), the standard is whether the allegations underlying the claim or cross claim state a cause of action, and, in considering such a motion, "the court must accept the facts as alleged in the complaint as true, accord plaintif[f] the benefit of every possible favorable inference, and determine only whether the facts as alleged fit within any cognizable legal theory" (Sokol v Leader, 74 A.D.3d 1180, 1180-1181 [2d Dept 2010] [internal quotation marks omitted]). "However, allegations consisting of bare legal conclusions as well as factual claims flatly contradicted by documentary evidence are not entitled to any such consideration" (Maas v Cornell Univ., 94 N.Y.2d 87, 91 [1999] [internal quotation marks omitted]).
Congress enacted the FDCPA after finding "abundant evidence of the use of abusive, deceptive, and unfair debt collection practices by many debt collectors" (15 USC § 1692 [a]). The intent of the FDCPA is "to protect consumers from deceptive or harassing actions taken by debt collectors[,] with the purpose of limiting the suffering and anguish often inflicted by independent debt collectors" (Gabriele v American Home Mtge. Serv., Inc., 503 Fed.Appx. 89, 93 [2d Cir 2012] [internal quotation marks and citations omitted]).
"The first question in any claim brought under the FDCPA is whether the allegedly violative conduct was used in an attempt to collect a 'debt' within the meaning of the FDCPA" (Beal v Himmel & Bernstein, LLP, 615 F.Supp.2d 214, 216 [SD NY 2009]). The term "debt" is defined under the FDCPA as "any obligation or alleged obligation of a consumer to pay money arising out of a transaction in which the money, property, insurance, or services which are the subject of the transaction are primarily for personal, family, or household purposes, whether or not such obligation has been reduced to judgment" (15 USC § 1692a [5] [emphasis added]). The term "consumer" is defined under the FDCPA as "any natural person obligated... to pay any debt" (15 USC § 1692a [3]). Although the term "transaction" is not defined in the FDCPA, the applicable case law holds that "at a minimum, the statute contemplates that the debt has arisen as a result of the rendition of a service or purchase of property or other item of value" (Beggs v Rossi, 145 F.3d 511, 512 [2d Cir 1998] [internal quotation marks omitted]; see also Turner v Cook, 362 F.3d 1219, 1227 [9th Cir 2004] ["the statute is limited in its reach to those obligations to pay arising from consensual transactions, where parties negotiate or contract for consumer-related goods or services"] [internal citations omitted], cert denied 543 U.S. 987 [2004]). To summarize, the protections of the FDCPA are "triggered when the obligation is a debt arising out of a consumer transaction," irrespective of whether such obligation has (or has not) been reduced to a court order or judgment (see Polanco v NCO Portfolio Mgt., Inc., 930 F.Supp.2d 547, 551 [SD NY 2013]; see also Kitchings v Shelton, 2018 WL 398285, *4 [D Md 2018]; Beal, 615 F.Supp.2d at 217).
Here, the "unambiguous, authentic, and undeniable" documentary evidence establishes that the invoiced fees did not - contrary to the allegation in ¶ 19 of the unverified complaint - represent the "Nursing Home debt" owed by a consumer. Rather, the invoiced fees represented the amounts allegedly owed for a commercial (rather than a consumer) transaction (i.e., the guardianship proceeding) (see Green v Carlson, 2019 WL 5400509 at *4 [D Minn 2019]).
In opposition, plaintiff posits that the invoiced fees were a consumer debt under the FDCPA because they were incurred by (or on behalf of) the IP (i.e., a consumer and a natural person) to obtain legal services from defendant. Proceeding from that premise, plaintiff maintains that its own obligation as the IP's guardian for the invoiced fees was akin to an obligation to pay a consumer debt. Plaintiff's argument, however, is unavailing. The character of the underlying obligation of the IP to defendant is irrelevant. Rather, the only question of relevance is the character of the obligation owed by plaintiff to defendant. Plaintiff's obligation to defendant could not have been a consumer debt within the meaning of the FDCPA because it did not arise out of any consumer transaction in which plaintiff (rather than the IP) was engaged (see Beal, 615 F.Supp.2d at 217; see also Zamanzada v Clayton, 2013 WL 5566133, *2 [D Utah 2013]; Family Guardian Servs., Inc. v Abrams Fensterman, LLP, Index No. 614749/22, Decision/Order, dated July 27, 2023 [Sup Ct, Nassau County 2023] [NYSCEF Doc. No. 18]; accord Balsewich v Backer Law Firm, P.A., 2015 WL 12699878, *2 [SD Fla 2015]; Delbello, Donnellan, Weingarten, Wise & Wiederkehr, LLP v Lopez, 34 Misc.3d 1213 [A], 2012 NY Slip Op 50065[U] [Sup Ct, Nassau County 2012], judgment entered 2012 WL 12092063 [Sup Ct, Nassau County 2012]).
Contrary to plaintiff's further contention, a foreclosure action has little (if anything) in common with a guardianship proceeding. Whereas a foreclosure (when completed) deprives the real property owner of its equity of redemption, a guardianship proceeding benefits the incapacitated person by having a court-appointed fiduciary manage his/her affairs. Further, the collection of debt secured by real property is the essence of a foreclosure action, whereas the guardian's payment of the incapacitated person's nursing-home and other obligations is one of many elements of a guardianship proceeding.
The remaining branch of defendant's motion which is for the imposition of sanctions is denied. This action does not rise to the level of frivolous conduct necessary for the imposition of sanctions (see Matter of Christopher, 280 A.D.2d 546 [2d Dept 2001]).
The Court has considered the parties' remaining contentions and found them unavailing.
Conclusion
Accordingly, it is
ORDERED AND ADJUDGED that defendant's pre-answer motion is granted to the extent that the complaint is dismissed in its entirety without costs and disbursements, pursuant to CPLR 3211 (a) (1) and (7), and the remainder of its motion for sanctions is denied; and it is further
ORDERED that neither plaintiff nor defendant may be reimbursed from the incapacitated person's estate in the guardianship proceeding for their respective attorneys' fees and expenses incurred in the prosecution and defense of this action; and it is further
ORDERED that defendant shall: (1) electronically serve a copy of this decision, order, and judgment with notice of entry on plaintiff's counsel; (2) electronically serve an affidavit of service thereof with the Kings County Clerk; and (3) file a copy of this decision, order, and judgment in the guardianship proceeding.
This constitutes the decision, order, and judgment of the Court.