Dimatteo v. Sweeney, Gallo, Reich & Bolz, L.L.P. et al
MEMORANDUM & ORDER re: 9 MOTION to Dismiss. CONCLUSION: For the foregoing reasons, Defendant's motion to dismiss the Complaint is GRANTED. Plaintiff's FDCPA claim is dismissed under Federal Rule of Civil Procedure 12(b)(6), and the Court declines to exercise supplemental jurisdiction over the New York Judiciary Law claim. The Clerk of Court is directed to terminate the pending motion and to close this case. SO ORDERED. (Signed by Judge Paul A. Crotty on 09/09/2014) (mov)
UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK
DOC #: _________________
DATE FILED: September 9, 2014
No. 13 Civ. 8451 (PAC)
-againstSWEENEY, GALLO, REICH & BOLZ, LLP
and DAVID A. GALLO, ESQ.,
MEMORANDUM & ORDER
HONORABLE PAUL A. CROTTY, United States District Judge:
Plaintiff Eugene DiMatteo is a statutory tenant in a rent-controlled apartment in New
York City. His landlord refused to cash a year's worth ofrent checks tendered, not by DiMatteo,
but rather by a person who lives with DiMatteo, because doing so might establish a right to
succeed to DiMatteo's rent-controlled tenancy. The landlord, represented by Defendants,
commenced a summary eviction proceeding in New York City Housing Court for nonpayment of
rent. That action promptly settled. Apparently, the settlement was only partially satisfactory to
DiMatteo, and within a short time, he instituted this action, asserting that Defendants violated the
Fair Debt Collection Practices Act ("FDCPA"), 15 U.S.C. § 1692 et seq., and New York
Judiciary Law§ 487. Defendants move to dismiss the Complaint. The motion is granted.
In September 2012, the landlord, nonparty Tom Sullivan LLC, "refused to accept
payments" unless they were made by DiMatteo, the statutory tenant. (See Compl.
On September 6, 2013, Defendant Sweeney, Gallo, Reich & Bolz, LLP ("SGRB"), sent
DiMatteo a letter, demanding that he make back rent payments for September, 2012 to
September, 2013. (Id.
iii! 25-27 &
Ex. C ("Demand Letter").) The Demand Letter began as
Despite this demand for payment, if any portion of this claim is disputed, you are
to notify us within thirty (30) days after receipt of this notice, indicating the nature
of the dispute, as to the amount due or any part thereof. If we do not hear from you
within said thirty (30) days, we will assume the debt to be valid as stated in the
(Id. Ex. C.) It continued that SGRB "may be considered to be acting as a 'debt collector'" under
the FDCPA and that "[t]his notice shall not prevent your landlord from proceeding with such
other remedies as may be available to it, as a summary proceeding." (Id.) The next page warned
that unless full payment was made by September 19, 2013, "the Landlord will commence
summary proceedings under the Statute to recover the possession" of the apartment. (Id.)
On October 18, 2013, SGRB commenced a summary proceeding in New York City
Housing Court on behalf of the landlord, seeking ( 1) the eviction of DiMatteo and the
nonstatutory tenant, (2) payment of the rent in arrears, and (3) "legal fees" of $750. (Id. Ex. D).
On November 1, 2013, DiMatteo's counsel wrote to Defendants that no debt was owed because
the landlord "has simply failed to cash his rent checks" and that "there is no lease provision
authorizing the collection of attorneys' fees." (Gallo Deel. Ex. 4.) 1 The letter also asserted that
SGRB's Demand Letter violated the FDCPA but suggested that "[t]his dispute can be resolved
without Federal court litigation." (Id.)
Four days later, on November 5, the landlord-tenant dispute was settled by stipulation in
the Housing Court. (Compl.
if 35 & Ex. E (the "Settlement").) The Settlement provides that the
The Court considers this letter upon this motion because the letter is relied upon in Paragraph 34 of the Complaint.
See Chambers v. Time Warner, Inc., 282 F.3d 147, 153 (2d Cir. 2002).
landlord "had refused to cash the checks, because the checks were signed by" the nonstatutory
tenant living with DiMatteo. (Settlement~ 2.) It also states that the landlord "is now in
possession of a check for $6180. 93, drawn on a joint account in the name of [Di Matteo and the
nonstatutory tenant], signed by [the nonstatutory tenant]." (Id.) The amount tendered
"represents all rent due." (Id. ~ 3.) The Settlement further provides that the parties reserved their
rights with respect to any future dispute regarding the nonstatutory tenant's right to succeed
DiMatteo as a rent-controlled tenant in the apartment. (Id. ~~ 4- 6.)2
Three weeks after the Settlement, on November 26, DiMatteo commenced this action
against SGRB and one of its attorneys, David A. Gallo, alleging FDCP A violations and a
pendent state-law claim.
I. Legal Standards
A. Motion to Dismiss
"To survive a motion to dismiss, a complaint must contain sufficient factual matter,
accepted as true, to ' state a claim to relief that is plausible on its face."' Ashcroft v. Iqbal, 556
U.S. 662, 678 (2009) (quoting Bell At!. Corp. v. Twombly, 550 U.S. 544, 570 (2007)). That is, a
complaint must "nudge [the plaintiffs] claims across the line from conceivable to plausible."
Twombly, 550 U.S . at 570. "Threadbare recitals of the elements of a cause of action, supported
by mere conclusory statements, do not suffice." Iqbal, 556 U.S. at 678. Nevertheless, the Court
must accept well-pleaded factual allegations as true, "drawing all reasonable inferences in the
More specifically, the Stipulation provides that: (I) the landlord 's acceptance of checks signed by the nonstatutory
tenant " is without prejudice to [the landlord]'s rights to contest the occupancy/tenancy of [the nonstatutory tenant]" ;
(2) the landlord '" recognizes ' only DiMatteo as the rent-controlled tenant of the subject apartment"; and (3) " [the
nonstatutory tenant] reserves his right to seek succession rights to the subject apartment."
plaintiff's favor." Standard Inv. Chartered, Inc. v. Nat'! Ass'n of Sec. Dealers, Inc., 637 F.3d
112, 115 (2d Cir. 2011 ). Upon a motion to dismiss, "[ c]ourts may also properly consider
'matters of which judicial notice may be taken, or documents either in plaintiffs' possession or of
which plaintiffs had knowledge and relied on in bringing suit."' Halebian v. Berv, 644 F.3d 122,
131 n. 7 (2d Cir. 2011) (quoting Chambers, 282 F.3d at 153).
B. The Fair Debt Collection Practices Act
"The FDCP A 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 prohibits debt
collectors from using "any false, deceptive, or misleading representation or means in connection
with the collection of any debt." 15 U.S.C. § 1692e. For example, a debt collector may not
make a "false representation of ... the character, amount, or legal status of any debt" or
"threat[en] to take any action that cannot legally be taken." Id. § 1692e(2), (5). "To effectuate
[the statute's] purpose, [courts] review claims ofFDCPA violations under the so-called leastsophisticated-consumer standard .... " Kropelnicki, 290 F.3d at 127.
Nonetheless, "the FDCP A does not aid plaintiffs whose claims are based on 'bizarre or
idiosyncratic interpretations of collection notices."' Ellis v. Solomon & Solomon, P. C., 591 F.3d
130, 135 (2d Cir. 2010). Therefore, "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."' Ellis, 591 F.3d at 135. In addition,
"[t]o satisfy the FDCPA, the alleged act must at a minimum involve a misrepresentation that is
'material.' That is, the statement must 'influence a consumer's decision or ability to pay or
challenge a debt."' Okyere v. Palisades Collection, LLC, 961 F. Supp. 2d 508, 518 (S.D.N.Y.
2013) (citations omitted).
Furthermore, since "[t]he Act focuses on regulating interactions between 'debt collectors'
and 'consumers,"' Ellis, 591 F.3d at 134, "[w]here an attorney is interposed as an intermediary
between a debt collector and a consumer, [courts may] assume the attorney, rather than the
FDCP A, will protect the consumer from a debt collector's fraudulent or harassing behavior."
Kropelnicki, 290 F.3d at 128 (dicta); see also Gabriele v. Am. Home Mortg. Servicing, Inc., 503
F. App'x 89, 96 (2d Cir. 2012) (summary order) ("[T]he protective purposes of the FDCPA
typically are not implicated 'when a debtor is instead protected by the court system and its
The allegations in the Complaint and the language of the Settlement demonstrate that
even the least sophisticated consumer would not have been confused about the nature of the
landlord ' s claims for back rent. DiMatteo was well aware that the landlord refused to accept rent
checks not signed by him, and that that was the reason why SGRB ' s Demand Letter asserted that
his rent payments were in arrears. DiMatteo himself had signed a letter urging the landlord to
accept a check for the full amount of back rent because the landlord had "not cashed any of the
previous rent checks."
26 & Ex. B.) Indeed, the Settlement conceded that the
amounts set forth in the Demand Letter represented "rent due." (Id. Ex . E.
Furthermore, the Demand Letter began with the " validation notice" prescribed by the
FDCPA, "setting forth, among other things, the consumer's right to dispute the debt" within 30
days. Ellis, 591 F.3d at 131 - 32 (citing 15 U.S .C. § 1692g(a)). Absent a dispute notice from
DiMatteo, SGRB was within its rights to "continue collection activities, including commencing
litigation," even during that 30-day period, provided that such activities did not "overshadow or
contradict the validation notice"-i. e., by "mak[ing] the least sophisticated consumer uncertain
as to her rights." Id. at 135-37. Here, SGRB filed the lawsuit in Housing Court after the
expiration of the 30-day validation period. And while the Demand Letter demanded payment by
September 19, 2013, it also clarified that "[t]his notice shall not prevent your landlord from
proceeding with such other remedies as may be available to it, as a summary proceeding."
(Comp!. Ex. C.) Therefore, DiMatteo's own pleadings render implausible any allegation that the
Demand Letter was deceptive or misleading.
The allegation that the Housing Court lawsuit itself represents an independent FDCP A
violation is not well taken. DiMatteo, of course, was represented by counsel in that proceeding.
Indeed, his counsel negotiated a settlement of the summary eviction proceeding, during which
negotiations his counsel alleged the same FDCP A violations that DiMatteo asserts here. While
the Settlement itself does not mention the FDCP A, it is clear that both parties understood that the
landlord had been refusing to accept checks from the nonstatutory tenant out of concern that the
nonstatutory tenant might be able to succeed DiMatteo as the rent-controlled tenant. The
landlord's position was understandable and appropriate. See, e.g., Park Holding Co. v. Power,
554 N.Y.S.2d 861 , 863 (App. Div. 1st Dep't 1990) ("[A]n issue of fact is presented as to whether
the landlord's acceptance of rent from [the tenant ofrecord's lifetime partner] over a four-year
period, without any effort to terminate the tenancy, constituted a waiver of the landlord ' s right to
object to [the parnter]'s continued occupancy of the apartment."); 80 Delancey, LLC v. Gee
Hong Lee, 25 Misc. 3d 13l(A) (N.Y. App. Term 2009) (same).
The Court need not resolve any questions of local landlord-tenant law. It suffices to say
that DiMatteo was well aware of the reason for the landlord's refusal of the checks and the basis
for the summary proceeding. Cf Gabrielle v. Law Office of Martha Croog, No. 1O-CV-1798,
2012 WL 460264, at *3 (D. Conn. Feb. 9, 2012) ("Even if a statement is false in some technical
sense, it does not violate the statute unless it would mislead the unsophisticated consumer."),
ajf'd sub nom. Gabriele, 503 F. App'x 89, 94 ("[N]ot every technically false representation by a
debt collector amounts to a violation of the FDCPA."). Aside from DiMatteo's own knowledge
of what was going on from September 2012 to September 2013, he was represented by counsel
during the Housing Court proceeding. In these circumstances, it is surely not plausible that there
was any consumer deception under the FDCPA. See Kropelnicki, 290 F.3d at 128; Gabriele, 503
F. App'x at 96. 3 Therefore, the FDCPA claim is dismissed.
III. Pendent Claim Under New York Judiciary Law
DiMatteo's remaining claim under New York Judiciary Law§ 487 4 is brought on the
basis of supplemental jurisdiction. The Court, however, "decline[ s] to exercise supplemental
jurisdiction" over this state-law claim because it "has dismissed all claims over which it has
original jurisdiction." 28 U.S .C. § 1367(c); see Oneida Indian Nation of N. Y v. Madison Cnty.,
665 F .3d 408, 43 7 (2d Cir. 2011) ("[l]f a plaintiffs federal claims are dismissed before trial, 'the
state law claims should be dismissed as well.'").
For the same reasons, there is no plausible FDCPA claim on the grounds that Defendants misrepresented that there
was a written lease and that " legal fees" were due. Whether the lease was written is immaterial, see Okyere, 961 F.
Supp. 2d at 518, and the claim for legal fees was not made in the Demand Letter, but rather in the subsequent
Housing Court proceeding where DiMatteo was represented by counsel.
This statute provides, in pertinent part: " An attorney or counselor who .. . deceive[s] the court or any party . . .
forfeits to the party injured treble damages, to be recovered in a civil action."
For the foregoing reasons, Defendant's motion to dismiss the Complaint is GRANTED.
Plaintiff's FDCPA claim is dismissed under Federal Rule of Civil Procedure 12(b)(6), and the
Court declines to exercise supplemental jurisdiction over the New York Judiciary Law claim.
The Clerk of Court is directed to terminate the pending motion and to close this case.
Dated: New York, New York
September .i_, 2014
PAUL A. CROTTY
United States District Judge
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