Carlin v. Davidson Fink LLP

Filing 44

MEMORANDUM & ORDER granting 25 Motion for Reconsideration; For the foregoing reasons, Davidson Fink's motion for reconsideration (Docket Entry 25) is GRANTED. The Clerk of the Court is directed to VACATE that portion of the Court's Memo randum and Order dated September 23, 2014 (Docket Entry 23) that denied Davidson Fink's motion to dismiss (Docket Entry 15). Davidson Fink's motion to dismiss is GRANTED and the Complaint is DISMISSED WITH PREJUDICE. The Clerk of the Court is further directed to enter judgment accordingly and mark this case CLOSED. So Ordered by Judge Joanna Seybert on 9/30/2015. C/ECF (Valle, Christine)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF NEW YORK
--------------------------------------X
ANDREW CARLIN, individually and on
behalf of a class,
Plaintiff,
MEMORANDUM & ORDER
13-CV-6062(JS)(GRB)

-againstDAVIDSON FINK LLP,
Defendant.
--------------------------------------X
APPEARANCES
For Plaintiff:
Abraham Kleinman, Esq.
Kleinman, LLC
626 RXR Plaza
Uniondale, NY 11556-0626

Tiffany N. Hardy, Esq.
Cathleen M. Combs, Esq.
Edelman, Combs, Latturner
& Goodwin, LLC
120 S. Lasalle Street, 18th Floor
Chicago, IL 60603
For Defendant:

Matthew J. Bizzaro, Esq.
L'Abbate, Balkan, Colavita
& Contini, LLP
1001 Franklin Avenue, 3rd Floor
Garden City, NY 11530
Andrew M. Burns, Esq.
Davidson Fink LLP
28 East Main Street, Suite 1700
Rochester, NY 14614

SEYBERT, District Judge:
Plaintiff Andrew Carlin (“Plaintiff”) commenced this
putative class action against defendant law firm Davidson Fink LLP
(“Davidson Fink”), alleging that Davidson Fink violated the Fair
Debt Collection Practices Act (“FDCPA”), 15 U.S.C. § 1692, et seq.,

in connection with a residential foreclosure proceeding filed in
New York State Supreme Court, Nassau County.

Currently pending

before the Court is Davidson Fink’s motion for reconsideration of
the

Court’s

Davidson

September

Fink’s

23,

motion

2014

to

Memorandum

dismiss

the

and

Order

Complaint

or,

denying
in

the

alternative, for certification pursuant to 28 U.S.C. § 1292(b).
(Docket Entry 25.)

For the following reasons, the Court GRANTS

reconsideration, VACATES the prior order denying dismissal (Docket
Entry 25), and GRANTS Davidson Fink’s motion to dismiss the
Complaint (Docket Entry 15).
BACKGROUND
The

Court

presumes

familiarity

with

the

factual

background of this case, which is set forth in detail in the
Court’s order denying Davidson Fink’s motion to dismiss (the “Order
Denying Dismissal”).

See Carlin v. Davidson Fink LLP, No. 13-CV-

6062, 2014 WL 4826248, at *1-3 (E.D.N.Y. Sept. 23, 2014).
On June 24, 2013, non-party Deutsche Bank National Trust
Company, through Davidson Fink, filed a summons and complaint
against Plaintiff in New York State Supreme Court, Nassau County,
seeking to foreclose on Plaintiff’s real property located in Sea
Cliff, New York (the “Foreclosure Complaint”).
A.)

(Compl. ¶ 13, App.

Plaintiff commenced the present action on October 31, 2013,

alleging that Davidson Fink violated Section 1692g(a) of the FDCPA,
which requires a debt collector to send a consumer a written notice
2

containing, inter alia, the amount of the alleged debt within five
days

after

connection

an
with

§ 1692g(a).

“initial
the

communication

collection

of

with

[the]

[the]

consumer

debt.”

15

in

U.S.C.

Plaintiff alleged that Davidson Fink was a “debt

collector” and that it “attempted to provide the notice required
by [§ 1692g(a) of the FDCPA]” by attaching a debt collection notice
(the “Debt Collection Notice”) to the Foreclosure Complaint and by
sending

Plaintiff

a

“Payoff

Statement”

after

he

requested

validation of the amount of the debt in accordance with the FDCPA.
(Compl.

¶¶

14,

21-22.)

Plaintiff

contended

that

the

Debt

Collection Notice and the Payoff Statement both failed to comply
with Section 1692g(a) because they did not accurately state the
amount of the alleged debt.

(Compl. ¶¶ 19, 23-26.)

On December 20, 2013, Davidson Fink filed a motion to
dismiss the Complaint for failure to state a claim pursuant to
Federal Rule of Civil Procedure 12(b)(6).

(Docket Entry 15.)

On

September 23, 2014, the Court issued its Order Denying Dismissal.
(Docket Entry 23.)

On October 7, 2014, Davidson Fink filed its

motion for reconsideration of the Order Denying Dismissal or, in
the alternative, for certification pursuant to 28 U.S.C. § 1292(b).
(Docket Entry 25.)

This motion is fully briefed and currently

pending before the Court.
DISCUSSION
I.

Legal Standard
3

The standard for granting a motion for reconsideration
pursuant to Federal Rule of Civil Procedure 59(e) is “strict, and
reconsideration will generally be denied.”

Herschaft v. N.Y. City

Campaign Fin. Bd., 139 F. Supp. 2d 282, 283 (E.D.N.Y. 2001)
(internal quotation marks and citation omitted).

Thus, a motion

for reconsideration is appropriate when the moving party believes
the Court overlooked important “matters or controlling decisions”
that

would

have

influenced

the

prior

decision.

Shamis

v.

Ambassador Factors Corp., 187 F.R.D. 148, 151 (S.D.N.Y. 1999).
II.

Analysis
“The FDCPA imposes liability on ‘debt collectors’ for

certain prohibited debt collection practices.”

Abrahmov v. Fid.

Info. Corp., No. 12-CV-3453, 2013 WL 5352473, at *2 (E.D.N.Y.
Sept. 23, 2013) (internal quotation marks and citation omitted).
Congress enacted the FDCPA “with the aim of eliminating abusive
practices in the debt collection industry, and also sought to
ensure that ‘those debt collectors who refrain from using abusive
debt collection practices are not competitively disadvantaged.’”
Jacobson v. Healthcare Fin. Servs., Inc., 516 F.3d 85, 89 (2d Cir.
2008) (quoting 15 U.S.C. § 1692e).
FDCPA,

a

plaintiff

must

To establish a claim under the

satisfy

the

following

threshold

requirements: “(1) [t]he plaintiff must be a ‘consumer;’ (2) the
defendant must be a ‘debt collector;’ and (3) the defendant must
have committed some act or omission in violation of the FDCPA.”
4

Abrahmov,

2013

WL

5352473,

at

*2

(citation

omitted);

accord

Suquilanda v. Cohen & Slamowitz, LLP, No. 10-CV-5868, 2011 WL
4344044, at *6 (S.D.N.Y. Sept. 8, 2011).
Here, the sole count of the Complaint alleged that
Davidson Fink violated Section 1692g(a) of the FDCPA.

Under

Section 1692g(a), a “debt collector,” when attempting to collect
a debt from a “consumer,” must provide the consumer with a detailed
debt

validation

notice

within

five

communication” with the consumer.

days

after

an

“initial

15 U.S.C. § 1692g(a).

The

validation notice must provide the amount of the debt, the name of
the current creditor, and a statement of the procedure by which
the consumer can dispute the debt and obtain verification of the
amount of the debt and the name and address of the original
creditor, if different from the current creditor.

15 U.S.C.

§ 1692g(a).
Plaintiff contended that Davidson Fink failed to comply
with Section 1692g(a) because both the Debt Collection Notice,
which was attached as an exhibit to the Foreclosure Complaint, and
the Payoff Statement, which was later sent to Plaintiff, did not
provide the amount of the alleged debt.

Davidson Fink moved to

dismiss this claim on three grounds: (1) Davidson Fink was not
acting as a debt collector under the FDPCA because the FDCPA does
not apply to foreclosure actions; (2) an “initial communication”
under

the

FDCPA

never

took

place
5

between

Davidson

Fink

and

Plaintiff, and thus, the notice requirements of Section 1692g(a)
were never triggered; and (3) even if an initial communication had
taken place, Davidson Fink did not violate Section 1692g(a) because
the Payoff Statement properly stated the amount of the balance
remaining on Plaintiff’s mortgage.
In the Order Denying Dismissal, the Court disagreed with
Davidson Fink on all three grounds and denied its motion to
dismiss.

Davidson Fink now moves for reconsideration, arguing

that the Court overlooked precedent from prior cases in the Eastern
District of New York in reaching its conclusion that Plaintiff
plausibly alleged that Davidson Fink was acting as a debt collector
and that an initial communication had taken place.
Br., Docket Entry 25-1, at 2-9.)

(See Def.’s

After carefully reviewing

Davidson Fink’s motion for reconsideration, the Court agrees that
it erred in holding that Davidson Fink was acting as a debt
collector.
In its motion to dismiss, Davidson Fink argued that it
was

not

engaged

in

debt

collection

because

the

Foreclosure

Complaint sought only to foreclose on Plaintiff’s property and did
not seek a monetary judgment against Plaintiff.

(Def.’s Dismissal

Br., Docket Entry 17, at 8.) In support of this argument, Davidson
Fink relied primarily on two district court decisions from this
Circuit holding that “the enforcement of a security interest
through

foreclosure

proceedings
6

that

do

not

seek

monetary

judgments against debtors is not debt collection for purposes of
the FDCPA.”

Boyd v. J.E. Robert Co., No. 05-CV-2455, 2013 WL

5436969, at *9 (E.D.N.Y. Sept. 27, 2013); see also Derisme v. Hunt
Leibert Jacobsen P.C., 880 F. Supp. 2d 311, 325 (D. Conn. 2012)
(“[F]oreclosing on a mortgage does not qualify as debt collection
activity for purposes of the FDCPA.”).
In assessing this argument, the Court acknowledged that
a majority of courts has found that the FDCPA does not apply to
foreclosure-related activities.
(collecting cases).

Carlin, 2014 WL 4826248, at *9

However, the Court went on to state that it

believed that neither party squarely addressed the dispositive
issue, which the Court phrased as: “whether Davidson [Fink] can
pursue a foreclosure action and also engage in debt collection
under the FDCPA.”

Carlin, 2014 WL 4826248, at *9.

The Court held that Davidson Fink could engage in both
activities.

In support, the Court relied on the decision in Reese

v. Ellis, Painter, Ratterree & Adams, LLP, 678 F.3d 1211 (11th
Cir. 2012), where the Eleventh Circuit held that “[a] communication
related to debt collection does not become unrelated to debt
collection simply because it also relates to the enforcement of a
security

interest.”

678

F.3d

at

1218.

However,

the

Court

overlooked an important factual distinction in that case.

In

Reese, the defendant law firm sent a debt collection notice before
any foreclosure action was commenced and argued that it was not an
7

attempt to collect a debt under the FDCPA because “the purpose was
simply to inform the [plaintiffs] that [the mortgagee] intended to
enforce its security deed through the process of non-judicial
foreclosure.”
argument,

678 F.3d at 1217.

explaining

that

it

The Reese court rejected this
“wrongly

assume[d]

that

a

communication cannot have dual purposes” and that the practical
effect of the proposed rule would be that a debt collector could
simply avoid the requirements of the FDPCA by sending a debt
collection notice that also included notice of foreclosure on the
secured interest.

678 F.3d at 1217-18.

The Reese case is factually distinguishable from this
case because Davidson Fink commenced a foreclosure action and
included
Complaint.

the

Debt

Collection

Notice

with

the

Foreclosure

By overlooking this distinction and applying it to the

present case, the Court deviated from the majority rule that “the
enforcement of a security interest through foreclosure proceedings
that do not seek monetary judgments against debtors is not debt
collection for purposes of the FDCPA.”
*9.

Boyd, 2013 WL 5436969, at

This is because under New York law, “[t]he holder of a note

and mortgage may proceed at law to recover on the note or proceed
in equity to foreclose on the mortgage, but must only elect one of
these alternate remedies.”

Gizzi v. Hall, 309 A.D.2d 1140, 1141,

767 N.Y.S.2d 469, 471 (3rd Dep’t 2003).

Because it sought to

foreclose on the property, Davidson Fink was not engaging in the
8

collection of a debt as a matter of law.

The Complaint therefore

should have been dismissed with prejudice.

CONCLUSION
For the foregoing reasons, Davidson Fink’s motion for
reconsideration (Docket Entry 25) is GRANTED.

The Clerk of the

Court is directed to VACATE that portion of the Court’s Memorandum
and Order dated September 23, 2014 (Docket Entry 23) that denied
Davidson Fink’s motion to dismiss (Docket Entry 15).

Davidson

Fink’s motion to dismiss is GRANTED and the Complaint is DISMISSED
WITH PREJUDICE.

The Clerk of the Court is further directed to

enter judgment accordingly and mark this case CLOSED.

SO ORDERED.
/s/ JOANNA SEYBERT______
Joanna Seybert, U.S.D.J.
Dated:

September
30 , 2015
Central Islip, New York

9