Kolbasyuk v. Capital Management Services, LP
ORDER granting 10 Motion to Dismiss for Failure to State a Claim. The Clerk of Court is directed to enter judgment dismissing the case. Ordered by Judge Brian M. Cogan on 4/14/2018. (Cogan, Brian)
UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF NEW YORK
- against :
CAPITAL MANAGEMENT SERVICES, LP,
DECISION & ORDER
COGAN, District Judge.
Plaintiff brings this putative class action under the Fair Debt Collection Practices Act
(“FDCPA”), 15 U.S.C. § 1692, et seq., alleging that defendant sent a debt collection letter, which
was its initial communication, that failed to provide a true and accurate statement of the amount
he owed, as required by 15 U.S.C. § 1692g. In relevant part, the letter adopted the “safe harbor”
language endorsed by the Second Circuit in Avila v. Riexinger & Assocs., LLC, 817 F.3d 72 (2d
Cir. 2016), stating:
As of the date of this letter, you owe $5918.69. Because of interest, late charges,
and other charges that may vary from day to day, the amount due on the day you
pay may be greater. Hence, if you pay the amount shown above, an adjustment
may be necessary after we receive your check, in which event we will inform you
before depositing the check for collection.
In opposing defendant’s instant motion to dismiss, plaintiff relies on a more recent
Second Circuit decision, Carlin v. Davidson Fink LLP, 852 F.3d 207 (2d Cir. 2017), that he
claims outlined specific items that debt collection letters must contain to pass muster under the
FDCPA. Plaintiff contends that Carlin clarifies and expands upon the requirements the Second
Circuit announced in Avila.
“The FDCPA was passed to protect consumers from deceptive or harassing actions taken
by debt collectors.” Kropelnicki v. Siegel, 290 F.3d 118, 127 (2d Cir. 2002). It is construed
liberally to achieve its legislative purpose. See Vincent v. The Money Store, 736 F.3d 88, 98 (2d
Cir. 2013). In considering alleged violations of the FDCPA, courts ask how a “least
sophisticated consumer” would interpret a disputed notice. Carlin, 852 F.3d at 216. The
standard “protects the naïve and the credulous,” while “preserv[ing] the concept of
reasonableness.” Clomon v. Jackson, 988 F.2d 1314, 1319 (2d Cir. 1993). But the least
sophisticated consumer is not cognitively impaired. “[E]ven 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.” Greco v. Trauner, Cohen & Thomas,
L.L.P., 412 F.3d 360, 363 (2d Cir. 2005) (internal quotations omitted).
The instant case attracts two statutory provisions. First, pursuant to § 1692g(1) of the
Within five days after the initial communication with a consumer in connection
with the collection of any debt, a debt collector shall, unless the following
information is contained in the initial communication or the consumer has paid
the debt, send the consumer a written notice containing –
the amount of the debt . . .
15 U.S.C. § 1692g(1). “Section 1692g concerns only the disclosures related to a consumer’s
need to verify a debt . . . .” Avila, 817 F.3d at 76.
Second, § 1692e operates as a “backstop,” providing that “[a] debt collector may not use
any false, deceptive, or misleading representation or means in connection with the collection of
any debt.” In the context of communications, § 1692e ensures that a collection notice is not
misleading. See Avila, 817 F.3d at 76.
Section 1692g lists the minimum disclosures required in an initial communication. Those
disclosures must also comply with § 1692e. In other words, although § 1692g obligates a debt
collector to disclose the amount of debt owed, the debt collector’s recital of that amount must
also satisfy § 1692e’s requirement to not be misleading by, for instance, omitting accruing fees
and interest. “The two sections have different aims, and compliance with Section 1692g does
not guarantee compliance with Section 1692e, which always applies in connection with the
collection of any debt by a debt collector.” Id.
In Avila, the Second Circuit was confronted with two letters which stated the debtors’
current balances, but “did not disclose that [the] balance was continuing to accrue interest or that,
if plaintiffs failed to pay the debt within a certain amount of time, they would be charged a late
fee.” 817 F.3d at 74. The Court held that the letters were misleading because the debtors could
believe that paying the listed balance would satisfy the debts, when in fact interest was accruing
and therefore the total amounts due were increasing. Avila held that “the FDCPA requires debt
collectors, when they notify consumers of their account balance, to disclose that the balance may
increase due to interest and fees.” Id. at 76.
The Avila Court adopted as “safe-harbor” language text from Miller v. McCalla, Raymer,
Padrick, Cobb, Nichols, & Clark, L.L.C., 214 F.3d 872 (7th Cir. 2000), holding that a debt
collector who used that language when seeking to recover debts where the amount varies from
day to day, would “not be subject to liability under Section 1692e for failing to disclose that the
consumer’s balance may increase due to interest and fees.” Avila, 817 F.3d at 77. The safeharbor language reads:
As of the date of this letter, you owe $____ [the exact amount due]. Because of
interest, late charges, and other charges that may vary from day to day, the
amount due on the day you pay may be greater. Hence, if you pay the amount
shown above, an adjustment may be necessary after we receive your check, in
which event we will inform you before depositing the check for collection. For
further information, write the undersigned or call 1–800–[phone number].
Carlin dealt with a different problem than Avila: in Carlin, 852 F.3d at 211, the disputed
letter listed an estimated amount due. The Carlin letter stated that the total amount due “included
unspecified fees, costs, additional payments, and/or escrow disbursements that were not yet due
at the time the statement was issued.” Id. at 215. It therefore “omit[ted] information allowing
the least sophisticated consumer to determine the minimum amount she owes at the time of the
notice, what she will need to pay to resolve the debt at any given moment in the future, and an
explanation of any fees and interest that will cause the balance to increase.” Id. at 216.
As required by § 1692g, defendant’s letter stated the amount plaintiff owed as of its date.
In addition, using the Avila safe-harbor language, it stated that the amount owed may increase
due to interest and fees.
Plaintiff argues that under Carlin, the letter here violates § 1692g because it fails to list
how interest and other charges are added to plaintiff’s account, in what amounts, at what
percentage rate, and how often such additional costs are assessed. There is, however, a key
distinction between the letter in Carlin and the letter at issue here. Carlin addresses what a letter
needs to do when it does not state the minimum amount owed. Carlin does not add on additional
requirements if the letter already states the minimum amount due, rather than an estimate. That
is precisely what defendant’s letter did.
Plaintiff alternatively argues that Carlin and Avila “cover different stages in the
collection process.” He suggests that “[a]t the commencement of collections, consumers must be
truthfully informed of the amount of the debt,” with the detail required by Carlin, and that “[i]n
subsequent communications, the more general safe harbor language from Avila [offers]
sufficient protect[ion].” But this is not so. The two decisions address different shortcomings in
different letters, and do not prescribe parallel requirements for discrete stages of the debt
Defendant’s motion to dismiss  is granted. The Clerk of Court is directed to enter
judgment dismissing the case.
Digitally signed by Brian M.
Dated: Brooklyn, New York
April 14, 2018
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