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Schwartz v. I.C. System, Inc.

United States District Court, E.D. New York

March 30, 2018

BENJAMIN SCHWARTZ, Plaintiff,
v.
I.C. SYSTEM, INC., Defendant.

          MEMORANDUM & ORDER

          DORA L. IRIZARRY, Chief United States District Judge.

         On August 12, 2016, Plaintiff Benjamin Schwartz (“Plaintiff”) filed the instant action in the Civil Court of the City of New York, County of Kings, against I.C. System, Inc. (“Defendant”), alleging violations of the Fair Debt Collection Practices Act (“FDCPA”), 15 U.S.C. § 1692, et seq. On September 16, 2016, Defendant removed the action to this Court. (See Notice of Removal, Dkt. Entry No. 1.) Plaintiff alleges that Defendant, a debt collector, impermissibly collected from Plaintiff a 5.5% collection fee. (See Complaint (“Compl.”), Dkt. Entry 1, Ex. A.)

         Defendant moves for summary judgment, pursuant to Rule 56 of the Federal Rules of Civil Procedure, for dismissal of the Complaint on the grounds that there is no genuine dispute as to any material fact that would entitle Plaintiff to the relief requested in the Complaint. (See Motion for Summary Judgment (“Mot.”), Dkt. Entry No. 16.) Plaintiff opposed the motion, (See Memorandum in Opposition (“Opp.”), Dkt. Entry No. 18.), and Defendant replied. (See Reply in Support (“Reply”), Dkt. Entry No. 17.) For the reasons set forth below, Defendant's motion for summary judgment is denied.

         BACKGROUND

         Plaintiff, a New York resident, incurred a debt of $3, 264.25 with Con Edison. (See generally, Compl.) On November 20, 2015, Con Edison placed Plaintiff's account with Defendant to collect the debt. (See Declaraction of Michael Selbitschka in Support of Motion for Summary Judgment (“Decl.”) ¶ 3-4, Dkt. Entry No. 16, Ex. 1.) On November 26, 2015, Defendant sent Plaintiff a collection letter (“Letter”). (Compl. ¶ 10.) The Letter included a textbox with the heading “Payment Options, ” which listed three methods of payments. The first payment option featured a QR code icon and directed Plaintiff to “[m]ake online payment at: www.yourpayment.com.” The second payment option featured an envelope icon and directed Plaintiff to “[m]ail check or money order payable to I.C. System, Inc.” The third payment option featured a phone icon and directed Plaintiff to “[c]all us.” The Letter made no reference to fees associated with making an online payment. (See Statement of Undisputed Material Facts (“Rule 56.1 Statement”) ¶ 7, Dkt. Entry No. 16, Ex. 4; Plaintiff's Counter Statement of Material Facts (“Rule 56.1 Counter Statement”), ¶ 7, Dkt. Entry No. 18, Ex. 3.)

         Plaintiff chose the first payment option, the online payment method. When Plaintiff entered “www.yourpayment.com” into his browser, he was redirected automatically to pay.icsystem.com, a website featuring Defendant's information and logo. (Opp. at 10-11.) When Plaintiff made his payment on this website, he was charged a 5.5% debit processing fee. (Compl. ¶ 12.) Plaintiff alleges that he did not agree to such a collection charge. (Id.)

         LEGAL STANDARD

         Summary judgment is appropriate where “the movant shows that 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.P. 56(a). The court must view all facts in the light most favorable to the nonmoving party, but “only if there is a ‘genuine' dispute as to those facts.” Scott v. Harris, 550 U.S. 372, 380 (2007). “When opposing parties tell two different stories, one of which is blatantly contradicted by the record, so that no reasonable jury could believe it, a court should not adopt that version of the facts for purposes of ruling on a motion for summary judgment.” Id. A genuine issue of material fact exists if “the evidence is such that a reasonable jury could return a verdict for the nonmoving party.” Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). The nonmoving party, however, may not rely on “[c]onclusory allegations, conjecture, and speculation.” Kerzer v. Kingly Mfg., 156 F.3d 396, 400 (2d Cir. 1998). “When no rational jury could find in favor of the nonmoving party because the evidence to support its case is so slight, there is no genuine issue of material fact and a grant of summary judgment is proper.” Gallo v. Prudential Residential Servs., Ltd. P'ship, 22 F.3d 1219, 1224 (2d Cir. 1994) (citing Dister v. Cont'l Grp., Inc., 859 F.2d 1108, 1114 (2d Cir. 1988)).

         DISCUSSION

         I. FDCPA

         The FDCPA was enacted to “protect consumers from a host of unfair, harassing, and deceptive debt collection practices without imposing unnecessary restrictions on ethical debt collectors.” S. Rep. No. 95-382, at 1696 (1977). “[B]ecause the FDCPA is primarily a consumer protection statute, we must construe its terms in liberal fashion to achieve the underlying Congressional purpose.” Avila v. Riexinger & Associates, LLC, 817 F.3d 72, 75 (2d Cir. 2016) (internal citations and quotations omitted). To determine whether a given communication runs afoul of the FDCPA, courts apply an objective standard measured by how the “least sophisticated consumer” would interpret the communication. See Clomon v. Jackson, 988 F.2d 1314, 1318-20 (2d Cir. 1993).

         Section 1692e of the FDCPA prohibits a “debt collector” from using any “false, deceptive, or misleading representation or means in connection with the collection of any debt.” The sixteen subsections of § 1962e set forth a non-exhaustive list of practices that fall within this ban. Avila, 817 F.3d at 75.

         Section 1629f of the FDCPA states, “[a] debt collector may not use unfair or unconscionable means to collect or attempt to collect any debt.” 15 U.S.C. § 1629f. Section 1629f(1) prohibits “[t]he collection of any amount (including any interest, fee, charge or expense incidential to the principal obligation) unless such amount is expressly authorized by the agreement creating the debt or permitted by law.” A debt collection agency “may impose a service charge if (i) the customer expressly agrees to the charge in the contract creating the debt or (ii) the charge is permitted by law.” Tuttle v. Equifax Check, 190 F.3d 9 (2d Cir. 1999).

         This District has permitted § 1692f claims when a debt collector collects or attempts to collect processing or transaction fees. See Campbell v. MBI Associates, Inc.,98 F.Supp.3d 568 (E.D.N.Y. 2015) (granting plaintiff's summary judgment motion on a § 1692f claim where the collection letter stated, “[t]here will be a $5.00 processing fee for all credit cards.”); Quinteros v. MBI Associates, Inc.,999 F.Supp.2d 434 (E.D.N.Y. 2014) (finding that plaintiff stated a § 1692f(1) claim where the collection letter stated, “[t]here will be a $5.00 processing fee for all credit cards or checks over the phone.”); Shami v. Nat'l Enter. Sys., 2010 WL 3824151 (E.D.N.Y. Sept. 23, 2010) (denying motion to ...


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