14-3746 DiMatteo v. Sweeney, Gallo, Reich & Bolz, L.L.P.


## UNITED STATES COURT OF APPEALS FOR THE SECOND CIRCUIT 

# SUMMARY ORDER

RULINGS BY SUMMARY ORDER DO NOT HAVE PRECEDENTIAL EFFECT. CITATION TO A SUMMARY ORDER FILED ON OR AFTER JANUARY 1, 2007, IS PERMITTED AND IS GOVERNED BY FEDERAL RULE OF APPELLATE PROCEDURE 32.1 AND THIS COURT’S LOCAL RULE 32.1.1. WHEN CITING A SUMMARY ORDER IN A DOCUMENT FILED WITH THIS COURT, A PARTY MUST CITE EITHER THE FEDERAL APPENDIX OR AN ELECTRONIC DATABASE (WITH THE NOTATION “SUMMARY ORDER”). A PARTY CITING TO A SUMMARY ORDER MUST SERVE A COPY OF IT ON ANY PARTY NOT REPRESENTED BY COUNSEL. At a stated term of the United States Court of Appeals for the Second Circuit, held at the 1 Thurgood Marshall United States Courthouse, 40 Foley Square, in the City of New York, on the 2 16 thday of July, two thousand fifteen. 3 4 PRESENT: 5 PIERRE N. LEVAL, 6 GERARD E. LYNCH, 7 RAYMOND J. LOHIER, JR., 8 Circuit Judges. 9

_____________________________________ 10 11 EUGENE DIMATTEO, 12 13 Plaintiff-Appellant, 14 15 v. No. 14-3746 16 17 SWEENEY, GALLO, REICH & BOLZ, L.L.P., 18 DAVID A. GALLO. 19 20 Defendants-Appellee s. 21

_____________________________________ 22 23 24 

### FOR APPELLANT: DANIEL A. SCHLANGER (Elizabeth 25 

### Shollenberger, on the brief ) Schlanger & 26 

### Schlanger, LLP, Pleasantville, NY. 27 28 

### FOR APPELLEES: RASHEL M. MEHLMAN, Sweeney, Gallo, 29 

### Reich & Bolz, LLP, Rego Park, NY. 30

### Appeal from a judgment of the United States District Court for the Southern 1 

### District of New York (Paul A. Crotty, J. ). 2 

### UPON DUE CONSIDERATION, IT IS HEREBY ORDERED, ADJUDGED, 3 

### AND DECREEDthat the judgment is VACATED and the case is REMANDEDto the 4 

### district court for further proceedings consistent with this Order. 5 

### Plaintiff-appellant Eugene DiMatteo appeals from an order of the district court 6 

### dismissing his claims against defendants-appellees Sweeney, Gallo, Reich & Bolz, LLP 7 

### and David A. Gallo under the Fair Debt Collection Practices Act (“FDCPA”), 15 U.S.C. 8 

### § 1692 et seq ., and New York Judiciary Law § 487. We review the district court’s 9 

### decision de novo, accepting all factual allegations in the complaint as true and 10 

### drawing all reasonable inferences in plaintiff’s favor. Standard Inv. Chartered, Inc. v. 11 

### Nat’l Ass’n of Sec. Dealers, Inc. , 637 F.3d 112, 115 (2d Cir. 2011). We assume the 12 

### parties’ familiarity with the facts and procedural history. 13 

### 1. Collection Letter and Housing Court Action 14 

### Appellees, on behalf of DiMatteo’s landlord, sent DiMatteo a collection letter and 15 

### commenced a New York City Housing Court action against him, alleging fourteen 16 

### months of unpaid rent. The alleged debt arose because the landlord refused to accept 17 

### payment tendered by Martin Hirko, who resides with DiMatteo in the rent-controlled 18 

### apartment. DiMatteo claims that the collection letter and the Housing Court complaint 19 

### violated the FDCPA by falsely asserting that he owed rent, when in fact no rent was 20



### 2

### owing because it had been tendered by Hirko. 1 

### See15 U.S.C. § 1692e (prohibiting debt 1 

### collectors from “us[ing] any false . . . representation . . . in connection with the collection 2 

### of any debt”). Under the circumstances, appellees’ assertion that rent was unpaid was not 3 

### false, as the governing law was unclear whether the landlord could lawfully refuse to 4 

### accept Hirko’s tender of the rent. SeePark Holding Co. v. Power , 554 N.Y.S.2d 861, 863 5 

### (1st Dep’t 1990). 6 

### The FDCPA prohibits debt collectors from using not only false representations, but 7 

### also “deceptive . . . or misleading” ones. 15 U.S.C. § 1692e. Whether a communication 8 

### is deceptive or misleading is determined under “an objective standard based on the ‘least 9 

### sophisticated consumer,’” in order “to ensure that the FDCPA protects all consumers, the 10 

### gullible as well as the shrewd.” Clomon v. Jackson , 988 F.2d 1314, 1318 (2d Cir. 1993). 11 

### Under this standard, “collection [communications] can be deceptive if they are open to 12 

### more than one reasonable interpretation, at least one of which is inaccurate.” Id . at 1319. 13 

### “[I]n applying this standard, we bear in mind the Act’s ‘dual purpose’: in addition to 14 

### protecting consumers against deceptive debt collection practices, the objective test . . . 15 

### protects debt collectors from unreasonable constructions of their communications.” 16 

### Jacobson v. Healthcare Fin. Svcs., Inc. , 516 F.3d 85, 90 (2d Cir. 2008). 17
18

1 

### Pursuant to a Stipulation of Settlement and Discontinuance in the Housing Court action, DiMatteo and Hirko paid the back rent, and DiMatteo’s landlord agreed to accept payment from Hirko “without prejudice to [the landlord’s] rights to contest the occupancy/tenancy of Hirko at the subject apartment at a future date.” Joint App’x at 36. 3

### DiMatteo argues that the collection letter and the Housing Court complaint were 1 

### deceptive and misleading because they “mis-portray[ed] the dispute . . . as one involving 2 

### garden variety non-payment.” Appellant’s Br at 17. The district court rejected this 3 

### argument on the ground that “even the least sophisticated consumer would not have been 4 

### confused about the nature of the landlord’s claims for back rent,” since DiMatteo was 5 

### “well aware that the landlord refused to accept rent checks not signed by him, and that 6 

### that was the reason why [appellees] asserted that his rent payments were in arrears.” Joint 7 

### App’x at 98. DiMatteo contends that this was error because interpreting the 8 

### communications in light of the facts known to him converts the least sophisticated 9 

### consumer standard into a “subjective, reliance-based standard.” Appellant’s Br. at 15. 10 

### DiMatteo argues that because we have said that “the least sophisticated consumer 11 

### test pays no attention to the circumstances of the particular debtor in question,” 12 

### Easterling v. Collectco, Inc. 692 F.3d 229, 234 (2d Cir. 2012), we should disregard any 13 

### background facts known to him. Unlike the “circumstances” at issue in Easterling , 14 

### however, the facts at issue here do not pertain to the debtor’s background, financial 15 

### circumstances, or sophistication, but merely to what even the “least sophisticated 16 

### consumer” would know about the context of the ongoing dispute leading to the assertion 17 

### of the debt. We are not certain that the language in Easterlingreaches so far. 18 

### We need not decide here, however, what facts regarding the debt should be 19 

### imputed to the least sophisticated consumer, because DiMatteo’s argument fails even on 20 

### its own terms. Appellees’ communications did not characterize DiMatteo’s debt as one of 21


### 4

### “garden variety nonpayment”; they simply asserted that the debt was owing. In these 1 

### circumstances, such a statement could be misleading only if appellees were obligated in 2 

### the communications to recount the history of DiMatteo’s rent dispute or to raise defenses 3 

### that DiMatteo might present. DiMatteo cites no authority under the FDCPA or Housing 4 

### Court procedure that imposes such a requirement. Cf. 15 U.S.C. § 1692g(a) (listing 5 

### requirements for written notice of debt). Instead, the FDCPA prescribes that debt 6 

### collectors provide a “validation notice” setting forth the consumer’s right to dispute the 7 

### debt within 30 days. If the consumer disputes the debt within that period “the debt 8 

### collector shall cease collection of the debt, or any disputed portion thereof, until the debt 9 

### collector obtains verification of the debt.” Id . § 1692g(a), (b). Appellees’ collection 10 

### letter complied with this requirement, affording DiMatteo an opportunity, which he does 11 

### not allege he took, to halt collection efforts if he disputed the debt. Absent an obligation 12 

### to elaborate on the reasons the alleged debt arose, appellees’ assertion that a debt was 13 

### owing cannot be considered misleading, even without imputing DiMatteo’s knowledge to 14 

### the least sophisticated consumer. 15 

### We also reject DiMatteo’s contention that filing the Housing Court action 16 

### constituted the use of an “unfair or unconscionable means” to collect a debt in violation 17 

### of the FDCPA. 15 U.S.C. § 1692f. As explained, DiMatteo was aware that his rent had 18 

### not been accepted for fourteen months, and appellees provided DiMatteo with thirty days 19 

### to dispute the debt before bringing suit. On these facts, we cannot conclude that 20 

### commencing a summary proceeding was in and of itself unfair or unconscionable. 21


### 5

### 2. Attorneys’ Fees 1 

### DiMatteo also claims that appellees violated two provisions of the FDCPA by 2 

### seeking $750 in attorneys’ fees in the Housing Court action: § 1692e(2), which prohibits 3 

### the “false representation of . . . any . . . compensation which may be lawfully received by 4 

### any debt collector for the collection of a debt,” and § 1692f(1), which prohibits “[t]he 5 

### collection of any amount (including any interest, fee, charge, or expense incidental to the 6 

### principal obligation) unless such amount is expressly authorized by the agreement 7 

### creating the debt or permitted by law.” 8 

### We agree that DiMatteo has stated a plausible claim that appellees’ demand for 9 

### attorneys’ fees violated the FDCPA. At oral argument, appellees conceded that they did 10 

### not know of any written agreement between the landlord and DiMatteo, let alone one 11 

### authorizing the award of attorneys’ fees. They also conceded that, absent such an 12 

### agreement, they could point to no authority under New York law for the award of 13 

### attorneys’ fees to a landlord in a summary eviction proceeding based on unpaid rent. 14 

### Indeed, appellees acknowledged that their attempt to recover attorneys’ fees from 15 

### DiMatteo was a “mistake.” Without a basis under New York law or an agreement 16 

### between the parties, appellees’ demand for attorneys’ fees constitutes an attempt to 17 

### collect a “fee, charge, or expense incidental to the principle obligation” that is not 18 

### “expressly authorized by the agreement creating the debt or permitted by law.” 15 U.S.C. 19



### 6

### § 1692f(1). 2

### Because the demand for attorneys’ fees violates § 1692f(1), we need not 1 

### address DiMatteo’s argument that the demand also violates § 1692e(2). SeeMcCollough 2 

### v. Johnson, Rodenburg & Lauinger, LLC , 637 F.3d 939, 949-50 (9th Cir. 2011) 3 

### (affirming ruling that demand for attorneys’ fees in state court collection complaint 4 

### without a basis in the parties’ agreement violated both §1692f(1) and § 1692e(2) of the 5 

### FDCPA); cf. Miller v. Wolpoff & Abramson, L.L.P. , 321 F.3d 292, 307-08 (2d Cir. 2003) 6 

### (holding that demand for attorneys’ fees in collection action did not violate the FDCPA 7 

### where credit card agreement provided for such fees). 3 8
9
10
11
12

2 

### The fact that appellees sought attorneys’ fees only in the Housing Court complaint and not in the collection letter does not defeat DiMatteo’s claim, because actions taken in furtherance of a lawsuit are not exempt from liability under the FDCPA. Goldman v. Cohen , 445 F.3d 152, 157 (2d Cir. 2006).

3 

### We need not consider whether the least sophisticated consumer would read the complaint to assert that attorneys’ fees were owed pursuant to a written agreement, because demanding attorneys’ fees without basis violates the FDCPA in any event. To the extent DiMatteo argues that the asserted existence of a written agreement violates the FDCPA even apart from the issue of attorneys’ fees, he has failed to allege a plausible claim. DiMatteo presents no reason to believe that whether the rent was payable pursuant to a written agreement or by statute affects the amount, character, or enforceability of the debt, or the debtor’s ability or willingness to contest it. Thus, in this case, the assertion in a Housing Court complaint that rent was owing pursuant to a written agreement amounts to a “mere technical falsehood[] that misle[d] no one.” Donohue v. Quick Collect, Inc. , 592 F.3d 1027, 1034 (9th Cir. 2010). 7

### We have considered DiMatteo’s remaining arguments and find them without merit. 1 

### Accordingly, the judgment of the district court is VACATEDwith respect to the claim 2 

### that appellees’ demand for attorneys’ fees violated the FDCPA, and the case is 3 

### REMANDEDto the district court for further proceedings consistent with this Order. 4


### FOR THE COURT: 5 

### Catherine O’Hagan Wolfe, Clerk 6 7 8



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