Samms v. Abrams, Fensterman, Fensterman, Eisman, Formato, Ferrara & Wolf, LLP

Filing 69

OPINION AND ORDER: re: 56 MOTION for Partial Summary Judgment filed by Abrams, Fensterman, Fensterman, Eisman, Formato, Ferrara & Wolf, LLP, 46 MOTION for Summary Judgment As To Liability filed by Larry Samms. For the foregoing reasons, the Court hereby grants Samms's motion for summary judgment for liability on his FDCPA claims, denies Abrams's motion for partial summary judgment on Samms's distant venue claim, and denies both parties' motions on Samms's § 349 claim. The parties are instructed to jointly call chambers by March 4, 2016, to set a date for trial on damages for Samm's FDCPA claims and on liability and damages for his § 349 claim. The Clerk of Court is directed to close documents numbered 46 and 56 on the docket of this case. SO ORDERED. (Signed by Judge Jed S. Rakoff on 2/27/2016) (ama)

f I

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK
- -

-- - -- --- --- --- -- - -- - -- - -- --- --- ---

... .'.

-'-~.::::::.:::;~:;::~:::.:::.:::..::~~-"

..

LARR y SAMMS I
Plaintiff,
15-cv-2741 (JSR)

-v-

OPINION AND ORDER

ABRAMS, FENSTERMAN, FENSTERMAN,
EISMAN, FORMATO, FERRARA & WOLF, LLP,
Defendant.

------------------------------------- x
JED S. RAKOFF, U.S.D.J.
Plaintiff Larry Sarruns brought this action against the law firm of
Abrams, Fensterman, Fensterman, Eisman,

Formato,

Ferrara & Wolf, LLP

("Abrams"), alleging two violations of the Fair Debt Collection
Practices Act

("FDCPA") and one violation of N.Y. Gen. Bus. Law

§

349.

The Court now has cross-motions for surrunary judgment before it: Sarruns
moves for surrunary judgment on liability on all of his claims; Abrams
moves for partial surrunary judgment on the first FDCPA claim and on the
§

349 claim. The Court grants Sarruns's motions with respect to the

FDCPA violations and denies his motion with respect to the state law
claim. The Court denies Abrams's motions.
The facts of this case are set out in greater detail in the
Court's opinion denying in part and granting in part defendant's
motion for judgment on the pleadings. Memorandum Order dated July 7,
2015, at 1-3, ECF No. 21. By way of background, Abrams filed an action
in New York State Supreme Court in Westchester County on behalf of its
client the Bishop Charles W. Maclean Episcopal Nursing Home

(the

"Nursing Home"). The state court complaint alleged that Sarruns owed the
Nursing Home a debt of $21,000 for services rendered. Sarruns brought

the present action alleging that the state court proceeding against
him violated the FDCPA and GBL § 349. Samms'

first FDCPA claim is a

"distant venue" claim under 15 U.S.C. § 1692i(a) (2): Abrams filed the
lawsuit against Samms in Westchester County, but Samms resides in
Bronx County. Samms's second FDCPA claim is based on the request in
the debt collection lawsuit for attorneys'

fees,

was without legal basis in violation of 15 U.S.C.

which Samms alleges
§§

1692e, 1692f (l).

Samms also claims that the baseless request for attorneys'

fees was a

deceptive business practice under GBL § 349.
A court grants a party's motion for summary judgment when "there
is no genuine dispute as to any material fact and the movant is
entitled to judgment as a matter of law." Fed. R. Civ.

Pro.

56(a).

With respect to Samms's first claim, there are no material facts in
dispute. 15 U.S.C. § 1692i states in relevant part that "[a]ny debt
collector who brings any legal action on a debt against any consumer
. bring such action only in the judicial district

shall

. in

which such consumer resides at the commencement of the action."
However,

15 U.S.C. § 1692k(c)

sets out a "bona fide error" defense to

FDCPA violations: "[a] debt collector may not be held liable in any
[FDCPA]

action .

if the debt collector shows by a preponderance of

evidence that the violation was not intentional and resulted from a
bona fide error notwithstanding the maintenance of procedures
reasonably adapted to avoid any such error."
Abrams concedes that it filed its debt collection lawsuit against
Samms in Westchester County on April 9,
2

2014.

See Abrams,

Fensterman,

Fensterman, Eisman,

Formato,

Ferrara, & Wolf, LLP Statement of

Material Facts in Support of Motion for Summary Judgment

~

23, ECF No.

58. Invoking § 1692k(c), Abrams argues that it filed the suit with a
good faith belief that Samms resided in Westchester County and
pursuant to internal procedures designed to prevent FDCPA violations.
The facts marshalled by Abrams demonstrating its good faith belief and
internal procedures are not material because Abrams also concedes that
it served Samms through "nail-and-mail" service at his residence in
Bronx County on June 26,

2014. Id.

~

38; Declaration of Anthony

Genovesi, Esq. in Opposition to Plaintiff's Motion for Summary
Judgment Ex. O, ECF No.

60. "Nail-and-mail" service requires a summons

to be affixed to an individual's residence or place of business, and
Abrams does not claim that it had confused Samms's home with a
business. N.Y. C.P.L.R. § 308(4); Declaration of Anthony Genovesi,
Esq. in Opposition to Plaintiff's Motion for Summary Judgment Ex. O,
ECF No. 60
Samms's

(identifying the site of service in the Bronx as "Larry
residence"). Therefore, by June 26, 2014, Abrams must

have believed that Samms resided in Bronx County.
In light of these undisputed facts,

the dispositive question is

one of law: when and where did Abrams "bring" its action against Samms
for purposes of 15 U.S.C. § 1692i by filing the lawsuit in Westchester
County in April but serving Samms in Bronx County in June? The Second
Circuit has spoken approvingly of, although not outright adopted, the
Fifth Circuit's rule that a lawsuit is "brought" for purposes of§
1692i when a debtor receives notice of the suit. See Benzemann v.
3

Citibank N.A., 806 F.3d 98, 102-03 (2d Cir. 2015); Serna v. Law Office
of Joseph Onwuteka, P.C., 732 F.3d 440, 445-46 (5th Cir. 2013); see
also Johnson v. Riddle, 305 F.3d 1107, 1113 (10th Cir. 2003) (holding
that FDCPA violation occurs when a plaintiff has been served for
purposes of statute of limitations provision) . 1 The Serna court
explained that "'tying a violation to the mere filing of a complaint
does not serve the statute's remedial purpose,' because 'no harm
immediately occurs' upon the filing of the complaint." Benzemann, 806
F.3d at 102 (quoting Serna, 732 F.3d at 445). Serna's reasoning
applies here. The harms the FDCPA was designed to prevent do not occur
until a debtor receives notice of a collection lawsuit. Accordingly,
the lawsuit against Samms was not "brought" within the meaning of

§

1692i until he was served on June 26, 2014.
The question of when a lawsuit is brought is only half the
puzzle: the question of where a lawsuit is brought within the meaning
of

§

1692i must also be considered. Notice cannot serve the same

purpose in determining the location of a lawsuit as opposed to its
timing. Were the Serna notice rule to be applied to the location of a
lawsuit, the FDCPA would require that debt collection actions be
served within a debtor's district of residence. This would invalidate
many acceptable methods and locations of service, such as,

in New

York, personal service on a debtor outside of the debtor's county of

1

The Second Circuit's specific holding in Benzemann was "that where a
debt collector sends an allegedly unlawful restraining notice to a
bank, the FDCPA violation does not 'occur' for purposes of Section
1692k(d) until the bank freezes the debtor's account." Benzemann v.
Citibank N.A., 806 F.3d 98, 103 (2d Cir. 2015). Thus, Benzemann does
4

residence. See N.Y. C.P.L.R. § 308(1). The purpose of the FDCPA is not
to obstruct valid debt collection lawsuits but to prevent abusive debt
C01-lecL1-Uil

lJLdCL.ice~.

oee

9

1'.'.i U.:'.J.C.

1C0~.

The

u.Luo~vc

debt

collection practices addressed by§ 1692i's venue requirements are the
costs and inconveniences imposed on debtors by responding to lawsuits
in faraway places. Thus, again guided by Serna's focus on the
"remedial purpose" of the FDCPA, where a lawsuit is "brought" for the
purposes of § 1692i should be determined by where a debtor must
respond to it. Barring exceptional cases, this will be where the
lawsuit was filed.
Synthesizing these location and timing requirements yields the
rule that, under §§ 1692i and 1692k(c), a debt collector must have a
good faith belief that the district in which it files a debt
collection lawsuit is that of the debtor's residence and this good
faith belief must continue at least until the debtor receives notice
of the lawsuit. Put another way, a collector must believe that it has
filed its lawsuit in the proper venue at least until a debtor is
served. In the present case, Abrams violated the FDCPA by serving
Samms with a debt collection lawsuit when it knew that the lawsuit had
been filed and was pending in a district in which Samms did not
reside. Because these facts are undisputed, the Court grants Samms's
motion for summary judgment as to liability on his distant venue claim
and denies Abrams's motion.

not control this case outright.
5

There are also no disputed facts material to Samms's second FDCPA
claim. 15 U.S.C. § 1692e bars use of "any false,

deceptive, or

misleading representatlon or mectr1:s in currnection with the collection
of any debt," including "[t]he false representation of

(A)

character, amount, or legal status of any debt; or

any services

(B)

the

rendered or compensation which may be lawfully received by any debt
collector for the collection of a debt." 15 U.S.C.
"[t]he collection of any amount

1692f(l)

§

(including any interest,

forbids

fee,

charge,

or expense incidental to the principal obligation) unless such amount
is expressly authorized by the agreement creating the debt or
permitted by law." It is undisputed that the state court complaint
filed by Abrams against Samms states the following:

"[w] here fore,

[the

Nursing Home] demands judgment against the DEFENDANT as follows:
(c)

. attorneys'

[t] he

fees of this action." Declaration of Ahmad

Keshavarz in Support of Motion for Summary Judgment as to Liability,
Ex. A, ECF No.

47.

It is also undisputed that the attorneys'

fees

requested in Abrams's lawsuit against Samms were not allowed by
contract or law. Abrams,
Ferrara,

Fensterman,

Fensterman, Eisman,

Formato,

& Wolf, LLP Counter Statement of Material Facts in Opposition

to Plaintiff's Motion for Summary

Judgment~~

38,

42,

43, ECF No.

62.

Abrams raises two legal arguments against Samms's summary
judgment motion.

First, contradicting its own concession that fees

were not allowed by contract or law, Abrams argues that its request
for fees was permitted by law because the New York Supreme Court has
the power to award attorneys'

fees for frivolous conduct. See N.Y. Ct.
6

Rules§ 130-1.1. However, these sanctions can only be imposed for
frivolous litigation conduct. There can be no legal basis to request
sucl1

sanc~1ons

lr1

ct

complaint

becau~e

Lhe complcinl begin3 lhc

litigation: a defendant has not had the opportunity to engage in
frivolous litigation conduct. See Memorandum Order dated July 7, 2015,
at 7, ECF No. 21

(addressing this argument on defendant's motion for

judgment on the pleadings). Abrams's first argument fails.
Second, Abrams argues that a jury must consider whether any
specific practice is "unfair or unconscionable" under § 1692f. The
authorities Abrams cites for this claimed exception from Fed. R. Civ.
P. 56 are not on-point, not controlling, or both. See,
v. Unifund CCR Partners,

~'

LeBlanc

601 F.3d 1185, 1195-96 (11th Cir. 2010)

(holding that question of whether a dunning letter was a threat under
15 U.S.C. § 1692(e) (5) was for jury). The Second Circuit has affirmed
summary judgment on § 1692e claims. See,

~'

Clomon v. Jackson,

988

F.2d 1314, 1320-21 (2d Cir. 1993). Moreover, Samms has not raised a
general claim of "unfair or unconscionable" conduct under § 1692f, but
has instead shown Abrams undertook conduct specifically prohibited by
§ 1692(1), namely, the attempted collection of attorneys'

fees without

any legal basis. Thus, Abrams's second argument fails. Accordingly,
because there are no disputed facts material to Samms's second FDCPA
claim, the Court grants his motion for summary judgment on liability
with respect to this claim.2

2 Abrams has not moved for summary judgment on this claim.
7

There are, however, disputed facts material to Sarnrns's third
claim,
Law~

for deceptive business practices in violation of N.Y. Gen. Bus.
349.

secllon 349 bars "[d]ecepllve

act~

uL

prdcllce~

in lhe

conduct of any business, trade or commerce or in the furnishing of any
service." "To make out a prima facie case under Section 349, a
plaintiff must demonstrate that

(1)

were directed at consumers,

the acts are misleading in a material

way, and (3)
Goldsmith,

(2)

the defendant's deceptive acts

the plaintiff has been injured as a result." Maurizio v.

230 F.3d 518,

521

(2d Cir. 2000). While the facts

establishing the first two of these elements are undisputed, there are
factual disputes material to the third element.
To be consumer-oriented under

§

349, "acts or practices [must]

have a broader impact on consumers at large." Oswego Laborers' Local
214 Pension Fund v. Marine Midland Bank, N.A.,

647 N.E.2d 741, 745

(N.Y. 1995). In granting Samms's earlier motion to amend his
complaint, this Court ruled that routinely asking for attorneys'
without a legal basis constitutes consumer-oriented behavior,

fees

joining

other courts that have held similar practices are consumer-oriented.
See Memorandum Order dated Oct. 21, 2015, at 5-6, ECF No.
~,

43; see,

Campbell v. Associates, No. 12-CV-989, 2015 WL 1543215 at *18

(E.D.N.Y. March 31, 2015); Fritz v. Resurgent Capital Services, LP,
955 F Supp. 2d 163, 173-74

(E.D.N.Y. 2013); Diaz v.

Portfolio Recovery

Associates, No. 10-CV-3920, 2012 WL 1882976 (E.D.N.Y. 2012); Sykes v.
Mel Harris and Associates, LLC, 757 F. Supp. 2d 413,

428

(S.D.N.Y.

2010). Abrams does not dispute that "[d]uring the period between April
8

8, 2012 to present, Abrams filed approximately 147 collection lawsuits
against consumers, including Mr. Samms, demanding judgment or
attorney's

fee~

ln Lhe "wherefore" clau:se of the complaint, when none

were allowed by contract or law." Abrams,

Fensterman,

Fensterman,

Eisman, Formato, Ferrara, & Wolf, LLP Counter Statement of Material
Facts in Opposition to Plaintiff's Motion for Summary
ECF No.

Judgment~

43,

62. Accordingly, there is no dispute of material fact that

Abrams's practices had a "broader impact on consumers at large."
Oswego Laborers' Local 214 Pension Fund v. Marine Midland Bank, N.A.,
647 N.E.2d 741, 745

(N.Y. 1995).

With respect to the second element of Samms's

§

389 claim,

"' [d]eceptive acts' are defined objectively [] as acts likely to
mislead a reasonable consumer acting reasonably under the
circumstances." Spagnola v. Chubb Corp., 574 F.3d 64, 74
2009)

(2d Cir.

(alteration in original). On defendant's motion for judgment on

the pleadings, this Court held that requesting attorneys'

fees in debt

collection actions without any basis in law is deceptive under the
FDCPA. See Memorandum Order dated at July 7, 2015, at 5-7, ECF No. 21;
see also Mccollough v. Johnson, Rodenburg & Lauinger, LLC,
939,

949

(9th Cir. 2011); Moxley v.

637 F.3d

Pfundstein, No. 1:10-CV-2912, 2012

WL 4848973, at *5 (N.D. Ohio Oct. 11, 2012); Foster v. D.B.S.
Collection Agency,

463 F. Supp. 2d 783, 802

(S.D. Ohio 2006); Strange

v. Wexler, 796 F. Supp. 1117, 1119 (N.D. Ill. 1992); cf. Lox v. CDA,
Ltd.,

689 F.3d 818,

826 (7th Cir. 2012)

(reversing grant of summary

judgment in favor of debt collector who falsely stated in collection
9

. attorney fees");

letter that a court "could allow·.
Weinstein & Riley,
Tex. Aug. 14,

P.S., No.

L:'. 013) .

F. Supp. 2d 55,

t3U~

61-62

Fosen v.

4:12CV662, 2013 WL 4417526, at *5

see Argentler l

v.

F Ls her

La.ndoca.pe::>,

(E.D.
Inc. ,

lS

(D. Mass. 1998). Although the standard for

deceptive conduct under the FDCPA is determined from the perspective
of the "least sophisticated consumer" instead of the "reasonable
consumer" standard of §349, see Clemon v. Jackson,

988 F.2d 1314,

1318-19 (2d Cir. 1993), the grounds for the Court's earlier decision
call for the same outcome here. A reasonable consumer reading Abrams's
request for attorneys'

fees would likely be misled into believing that

there was some basis for the request. This belief could coerce a
reasonable consumer into paying the debt out of fear of incurring even
greater liability. 3 Accordingly, there is no material factual dispute
that Abrams's acts were materially misleading.
To satisfy the third element of a § 389 claim, a "plaintiff must
show that the defendant's material deceptive act caused [plaintiff's]
injury." Gale v. Int'l Bus. Machs. Corp., 781 N.Y.S.2d 45,

47

(N.Y.

App. Div. 2004). At Samms's deposition, he testified that, as a result
of the collection lawsuit, he has been having trouble thinking,
eating, and sleeping and has had to pay filing fees.

Declaration of

Ahmad Keshavarz in Support of Motion for Summary Judgment as to

3

In response, Abrams again argues that its request for fees was
justified by N.Y. Ct. Rules§ 130-1.1. As discussed supra and in this
Court's decision on Abrams's motion for judgment on the pleadings, §
130-1.1 allows sanctions directed at frivolous litigation conduct.
Sanctions related to litigation conduct cannot be the basis for an
attorneys' fees request in a complaint.
10

Liability, Ex. Bat 63:09-64:23; 65:11-65:25, ECF No.

47. However,

Samms seemed unable to recall the specific request for attorneys'
upon

wrLi.cl1

lLL:::>

§

'.)():;

Gla.lm l;c:, Luo1._;J.

IJ.

u.L -10,lC

~J\.

fees

Ile cc.id 1:ho.t ho

did not "remember everything that was on those papers [referring to
the lawsuit]," but that he "just kn[e]w it was annoying." Id. at 50:810. He only specifically mentioned the attorneys'

fees request in an

errata sheet filed after his deposition, wherein he stated that
"[t]hey said I owed them attorney's fees." Declaration of Ahmad
Keshavarz in Support of Motion for Summary Judgment as to Liability,
Ex. Z, ECF No.

47.

Abrams argues that the errata to Samms's deposition cannot be
considered because it was not timely filed.

Fed. R. Civ. P. 30(e)

directs that a "deponent must be allowed 30 days after being notified
by the officer that the [deposition] transcript .

is available in

which" to review and make changes to the transcript. Samms received
notification that the transcript was available on September 15, 2015.
See Declaration of Ahmad Keshavarz in Support of Plaintiff's Reply in
Further Support of his Motion for Summary Judgment as to Liability,
Regarding the Timeliness of his October 15, 2015 Errata Sheet Ex. A,
ECF No.

67. Samms submitted his errata on October 16, 2015.

Declaration of Ahmad Keshavarz in Support of Motion for Summary
Judgment as to Liability, Ex. Z, ECF No. 47. As plaintiff himself
concedes, "[t]here are 31 days between September 15, 2015[,] and
October 16, 2015." Plaintiff's Reply in Further Support of his Motion
for Summary Judgment as to Liability, Regarding the Timeliness of his
11

October 15, 2015 Errata Sheet at 1, ECF No.
errata sheet was untimely,
nis depuslLlon

LLdIJ~cLl~L.

67.

4

Accordingly,

Samms's

and he therefore waived his right to alter
MuLeuveL,

even

if

~hie

were

not the coco,

the vagueness of his testimony means that genuine issues of material
fact would remain as to whether and to what extent the request for
attorneys'

fees caused the harms allegedly suffered by Samms.

Accordingly,

the Court denies Samms's summary judgment motion with

respect to § 389 claim.
Abrams also moves for summary judgment on Samms's § 349 claim.
Abrams argues that, because the conduct underlying plaintiff's§ 349
claim would also support a claim under N.Y. Gen. Bus. Law§ 601,
Samms's § 349 claim must be dismissed. Section 601 states that "[n]o
principal creditor .
collect,

or his agent shall:

attempt to collect,

attorney's fee,

[k]nowingly

or assert a right to any collection fee,

court cost or expense unless such cha[r]ges are justly

due and legally chargeable against the debtor." "The New York Court of
Appeals has stated unequivocally that Section 601 does not supply a
private cause of action," and the Second Circuit has held that
"plaintiffs cannot thwart legislative intent

[and bring a private

action to enforce § 601] by couching a Section 601 claim as a Section
349 claim." Conboy v. AT & T Corp.,

4

241 F.3d 242,

258

(2d Cir. 2001).

Samms argues that he was electronically served with the deposition
transcript within the meaning of Fed. R. Civ. P. 5 and therefore three
days must be added to his 30-day allowance under Fed. R. Civ. P. 6(d).
Rule 6(d) applies "[w]hen a party may or must act within a specified
time after service," whereas Rule 30(e) contemplates the notification
of party by an officer that a transcript is available - not service.
Samms had 30 days, not 33 days, to submit his errata sheet.
12

In Conboy, plaintiffs alleged that a debt collector called them in a
harassing way, a violation of
do

required

'uy

§

349.

Id.

§

601, although not materially deceptive

A.ccuLJl_Ilgly,

Conboy

;s~mply

cd:o.ndc for the

proposition that a § 601 claim is not necessarily a § 349 violation:
it did not address conduct that supports claims under both

§

601 and §

349. In particular, it does not disallow a § 349 claim because the
underlying conduct also constitutes a violation of § 601. There is no
basis for Abrams's argument that§ 601 bars overlapping§ 349 claims.
Despite the failure of its § 601 argument, Abrams would
nonetheless prevail on its motion if there were no factual disputes
material to Samms's § 349 claim. However, as discussed above, Samms
introduced testimony from his deposition that raises triable issues of
fact regarding whether Abrams's request for attorneys'

fees injured

Samms. For instance, Samms testified that the collection lawsuit and
its claims that Samms owed money "caused [Samms] a lot of problems, a
lot of anguish." Declaration of Ahmad Keshavarz in Support of Motion
for Summary Judgment as to Liability, Ex. B 74:11-21. On the record
before it, the Court cannot conclude that none of these problems was
due to Abrams's request for fees. Because Samms has established the
other two elements of his § 349 claim, the factual disputes over the
third element mean the Court must deny Abrams's motion for summary
judgment.
For the foregoing reasons, the Court hereby grants Samms's motion
for summary judgment for liability on his FDCPA claims, denies
Abrams's motion for partial summary judgment on Samms's distant venue
13

claim, and denies both parties' motions on Samms's § 349 claim. The
parties are instructed to jointly call chambers by March 4, 2016, to
set a date ror

~rial

on damages for Sanun::;'::; FDCP.A. claim:s and on

liability and damages for his § 349 claim.
The Clerk of Court is directed to close documents numbered 46 and
56 on the docket of this case.

SO ORDERED.
Dated:

~~R~.S.D.J.

New York, NY
February ~' 2016

14