United States District Court, Southern District of New York
March 18, 1999
SARAH GOLDSTEIN, PLAINTIFF,
HUTTON, INGRAM, YUZEK, GAINEN CARROLL & BERTOLOTTI, DEFENDANT.
The opinion of the court was delivered by: Cedarbaum, District Judge.
Plaintiff Sarah Goldstein commenced this putative class action suit
against defendant Hutton, Ingram, Yuzek, Gainen, Carroll & Bertolotti
("Hutton"), a New York City law firm, for alleged violations of the Fair
Debt Collection Practices Act, 15 U.S.C. § 1692-1692o ("FDCPA").
Hutton moves to dismiss the complaint pursuant to Fed.R.Civ.P. 12(b)(6)
for failure to state a claim upon which relief may be granted. For the
reasons that follow, Hutton's motion is denied.
According to the complaint, plaintiff incurred a personal debt to Stahl
York Avenue Co. ("Stahl") by failing to make certain rent payments on her
apartment. She received a notice, dated January 7, 1998, demanding payment
of $2,583.02 for past due rent (the "Notice"). The Notice, which is
attached to the complaint and incorporated by reference thereto, has the
heading "THREE DAY NOTICE," and it states:
PLEASE TAKE NOTICE that you are hereby required to pay
to Stahl York Avenue Co landlord of the above
described premises, the sum of $2,583.02 for rent of
the premises [from August
1997 through January 1998 at the rate of $430.27 per
You arc required to pay within three days from the day
of service of this notice, or to give up possession of
the premises to the landlord. If you fail to pay or to
give up the premises, the landlord will commence
summary proceedings against you to recover possession
of the premises.
(Compl.Ex. 2). The Notice is signed by a vice president of Charles H.
Greenthal Management Corp. as agent for Stahl*fn1
. Even though the
Notice is signed by an agent of Stahl, it appears that Hutton is involved
in the collection of the rent arrears because the top of the Notice reads
Hutton, Ingram, Yuzek, Gainen, Carrol & Bertolotti
Attorneys For Landlord 250 Park Avenue 6th Fl. New
York, New York 10177
In addition, Hutton's name and return address appear on both the envelope
in which the Notice was mailed and the certified mail receipt for the
Notice. (Compl.Ex. 2).
According to the complaint, Hutton is a "(lebt collector" as defined by
the FDCPA, 15 U.S.C. § 1692a(6), "in that it regularly attempts to
directly or indirectly collect debts owed to [Stahl] and other landlords"
(Compl.¶ 4), and the Notice, allegedly the initial communication from
Hutton to plaintiff, (1) violates 15 U.S.C. § 1692g because it lacks
a thirty day validation notice (Compl.¶ 14) and is inconsistent with
the requirement that the plaintiff be advised of and be given a thirty
day period in which to dispute the bill (Compl.¶ 15); (2) fails to
disclose clearly that Hutton was attempting to collect a debt and that
any information obtained would be used for that purpose, as required by
15 U.S.C. § 1692e(11) (Compl.¶ 19); and (3) contains threats to
take actions that could not legally be taken, or that were not intended
to be taken, in violation of 15 U.S.C. § 1692e(5). (Compl.¶ 20).
Hutton moves to dismiss the complaint on the grounds that (1) Hutton is
not a "debt collector" under the FDCPA; (2) the service of the Notice is
legal process and therefore Hutton is excluded from the definition of a
debt collector under the legal process exemption in
15 U.S.C. § 1692a(6)(D); (3) rent arrears are not a "debt" within the
meaning of the FDCPA; (4) the Notice is not a "communication" within the
meaning of the FDCPA; (5) the FDCPA should be narrowly construed to avoid
preempting New York's landlord-tenant procedures; (6) the rent arrears
arose out of an illegal sublet, and are therefore excluded from the
FDCPA's definition of debt (15 U.S.C. § 1692a(5)); and (7) the FDCPA
represents an unconstitutional taking. In its reply memorandum, Hutton
also argues that the Notice is not the initial communication to
On a motion to dismiss pursuant to Fed. R.Civ.P. 12(b)(6), the court
must take the allegations of the complaint as true and draw all
reasonable inferences in plaintiff's favor. The motion may then be
granted only if it appears beyond a doubt that plaintiff does not have a
claim entitling her to relief. Sheppard v. Beerman, 18 F.3d 147, 150 (2d
Cir.), cert. denied, 513 U.S. 816, 115 S.Ct. 73, 130 L.Ed.2d 28 (1994).
In Romea v. Heiberger & Assocs., 163 F.3d 111 (2d Cir. 1998), the
Second Circuit sustained a similar complaint against a lawyer who sent a
three-day notice. Many
of Hutton's principal arguments were rejected in Romea. Since the
complaint in this case parrots the complaint in Romea, to succeed on this
motion to dismiss, Hutton must distinguish this case from Romea.
Accordingly, plaintiff contends that in Romea, the lawyer signed the
notice, whereas in this case, the managing agent signed the Notice on
behalf of the landlord. But there is no focus in Romea on the signatory
of the notice. In discussing whether a three-day notice is a
"communication" regarding a debt, the Second Circuit speaks only of the
"sending" of the letter notice by the defendant lawyer. Romea, 163 F.3d
at 116. Hutton does not, and cannot, argue that it did not send the
Notice. Indeed, the letterhead of the Notice bears Hutton's name and
address, and the same name and address appear on the mailing envelope and
the certified mail receipt.
Hutton advances two other arguments that were not explicitly addressed
in Romea. Hutton's first such argument is that rent from an illegal
sublet does not constitute a debt within the meaning of the FDCPA. This
issue cannot be resolved on the face of the complaint. A "debt" under the
FDCPA is an obligation or alleged obligation of a consumer arising out of
a transaction that is primarily for a "personal, family, or household
purpose". 15 U.S.C. § 1692a(5). Hutton argues that since plaintiff
was subletting her apartment for profit, her rent arrears arose out of a
commercial or business transaction rather than one with a personal,
family or household purpose. These questions of fact cannot be resolved
on a motion to dismiss the complaint. Two such factual issues include
whether an illegal sublet existed, and what the purpose of the sublet
Hutton also contends that reading the FDCPA to apply to three-day
notices "abrogates the contract of lease and is [thus] a `taking' of
landlords' rights prohibited by law. U.S. Const. Amend. 5; N Y Const.
Art. I, Sec. 6." (Def. Mem. 16; Repl. Mem at 12 a. 4). Takings Clause
jurisprudence is complex, and aside from the bare statement quoted
above, Hutton provides no explanation of how it supports the position
that the FDCPA as applied constitutes an impermissible taking. In any
event, courts do not reach constitutional issues unless and until they
are necessarily presented. Three Affiliated Tribes of Fort Berthold
Reservation v. Wold Engineering, P.C., 467 U.S. 138, 157, 104 S.Ct.
2267, 81 L.Ed.2d 113 (1984); Ashwander v. Tennessee Valley Authority,
297 U.S. 288, 347, 56 S.Ct. 466, 80 L.Ed. 688 (1936) (Brandeis, J.,
concurring). Therefore, the complaint will not be dismissed on the
Finally, in its reply memorandum, Hutton contends that the Notice
cannot be the initial communication because plaintiff had been previously
served with a holdover petition. Hutton requests that I take judicial
notice of the holdover petition. This argument was raised in the reply
memorandum and thus plaintiff has not had an opportunity to respond to
it. It appears that the holdover petition was signed by Stahl, the
creditor, and makes no reference to Hutton. There is no indication that
Hutton sent the petition to plaintiff. Thus, it is unclear whether the
holdover petition constituted the initial communication from Hutton in
its alleged capacity as debt collector. Since the facts must be construed
most favorably to plaintiff, this ambiguity precludes dismissal on the
face of the complaint.
All the factual issues, including the conclusory allegation that Hutton
is a debt collector, are subject to reexamination after the completion of
discovery on a motion for summary judgment.
For the foregoing reasons, Hutton's motion to dismiss is denied.