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Cicalo v. Pierce

United States District Court, D. Connecticut

August 10, 2017



          Stefan R. Underhill United States District Judge

         Samuel Cicalo filed this action on March 1, 2016, against the law firm Hunt Leibert Jacobson, P.C. (“Hunt”)[1], and one of its attorneys, Christopher J. Picard, alleging multiple violations of the Fair Debt Collection Practices Act, 15 U.S.C. § 1692 et seq. (“FDCPA”). On April 26, 2016, defendants moved to dismiss all claims for failure to state a claim. Thereafter, on September 6, 2016, Cicalo filed a motion to amend his complaint in which he sought to add factual allegations in an attempt to cure perceived defects in the complaint. On January 10, 2017, in a single ruling, I granted Cicalo's motion to amend his complaint and, construing the defendants' earlier motion to dismiss as applied to the Amended Complaint, I dismissed the claims brought under sections 1692f and section 1692g. Following that ruling, the only claims remaining in this case pertain to alleged violations of 15 U.S.C. § 1692e. On March 30, 2017, Cicalo filed a motion for summary judgment on the remaining claims. On May 22, 2017, the defendants filed an opposition to Cicalo's motion, which included a cross-motion for summary judgment. Because both parties have moved for summary judgment, I now consider whether it would be appropriate in favor of either party, or whether the matter will proceed to trial.

         I. Standard of Review

         Summary judgment is appropriate when the record demonstrates 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); see also Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 256 (1986) (plaintiff must present affirmative evidence in order to defeat a properly supported motion for summary judgment).

         When ruling on a summary judgment motion, the court must construe the facts of record in the light most favorable to the nonmoving party and must resolve all ambiguities and draw all reasonable inferences against the moving party. Anderson, 477 U.S. at 255; Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587 (1986); Adickes v. S.H. Kress & Co., 398 U.S. 144, 158-59 (1970); see also Aldrich v. Randolph Cent. Sch. Dist., 963 F.2d. 520, 523 (2d Cir. 1992) (court is required to “resolve all ambiguities and draw all inferences in favor of the nonmoving party”). When a motion for summary judgment is properly supported by documentary and testimonial evidence, however, the nonmoving party may not rest upon the mere allegations or denials of the pleadings, but must present sufficient probative evidence to establish a genuine issue of material fact. Celotex Corp. v. Catrett, 477 U.S. 317, 327 (1986); Colon v. Coughlin, 58 F.3d 865, 872 (2d Cir. 1995).

         “Only when reasonable minds could not differ as to the import of the evidence is summary judgment proper.” Bryant v. Maffucci, 923 F.2d 979, 982 (2d Cir. 1991); see also Suburban Propane v. Proctor Gas, Inc., 953 F.2d 780, 788 (2d Cir. 1992). If the nonmoving party submits evidence that is “merely colorable, ” or is not “significantly probative, ” summary judgment may be granted. Anderson, 477 U.S. at 249-50.

The mere existence of some alleged factual dispute between the parties will not defeat an otherwise properly supported motion for summary judgment; the requirement is that there be no genuine issue of material fact. As to materiality, the substantive law will identify which facts are material. Only disputes over facts that might affect the outcome of the suit under the governing law will properly preclude the entry of summary judgment. Factual disputes that are irrelevant or unnecessary will not be counted.

Id. at 247-48. To present a “genuine” issue of material fact, there must be contradictory evidence “such that a reasonable jury could return a verdict for the non-moving party.” Id. at 248.

         If the nonmoving party has failed to make a sufficient showing on an essential element of his case with respect to which he has the burden of proof at trial, then summary judgment is appropriate. Celotex, 477 U.S. at 322. In such a situation, “there can be ‘no genuine issue as to any material fact, ' since a complete failure of proof concerning an essential element of the nonmoving party's case necessarily renders all other facts immaterial.” Id. at 322-23; accord Goenaga v. March of Dimes Birth Defects Found., 51 F.3d 14, 18 (2d Cir. 1995) (movant's burden satisfied if he can point to an absence of evidence to support an essential element of nonmoving party's claim). In short, if there is no genuine issue of material fact, summary judgment may enter. Celotex, 477 U.S. at 323.

         II. Background

         I assume the parties' familiarity with the facts and provide only a brief overview of the undisputed facts. The instant dispute arises out of a mortgage loan transaction between Cicalo and First Niagara Bank, N.A. (“First Niagara”), which closed in 2004. On September 3, 2015, Hunt sent a letter (the “September 3 Letter”) on behalf of First Niagara, which stated that Cicalo owed First Niagara $115, 058.54. On September 10, 2015, Cicalo responded in writing, disputing the amount owed and demanding an itemization of the debt. On November 19, 2015, Picard sent Cicalo a letter in which he stated that he had contacted First Niagara and confirmed that the amount set forth in the initial letter was accurate. Included in Picard's letter were (1) a copy of a prior letter from Hunt to Picard, dated November 19, 2015 (the “November 19 Letter”), which disclosed a balance of $124, 062.90, as of that date; (2) documents disclosing a balance of $96, 354.27 as of August 15, 2015; and (3) documents showing the assignment of the note and mortgage by the predecessor of First Niagara to NewAlliance Servicing Company, now known as First Niagara Servicing Company.

         On November 24, 2015, Cicalo responded in writing, once again disputing the balance and requesting an itemization of seven of the purportedly new charges set forth in the November 19 Letter. The defendants did not respond to Cicalo's November 24, 2015 letter and thereafter instituted a foreclosure action on behalf of First Niagara against Cicalo in December 2015. The documents served on Cicalo in the foreclosure action included an additional document, which referenced Cicalo's right to dispute the debt or any portion thereof. On December 30, 2015, Cicalo once again disputed the balance listed in the foreclosure action and requested an itemization of the debt. The defendants never responded to that request.

         III. Discussion

         “Congress enacted the FDCPA ‘to eliminate abusive debt collection practices by debt collectors, to [en]sure that those debt collectors who refrain from using abusive debt collection practices are not competitively disadvantaged, and to promote consistent State action to protect consumers against debt collection abuses.'” Hess v. Cohen & Slamowitz LLP, 637 F.3d 117, 120 (2d Cir. 2011) (quoting 15 U.S.C. § 1692(e)). Section 1692e of the FDCPA provides that “[a] debt collector may not use any false, deceptive, or misleading representations or means in connection with the collection of any debt.” 15 U.S.C. § 1692e.

         “[T]he question of whether a communication complies with the FDCPA is determined from the perspective of the ‘least sophisticated consumer.'” Jacobson v. Healthcare Fin. Servs., Inc., 516 F.3d 85, 90 (2d Cir. 2008) (citing Clomon v. Jackson, 988 F.2d 1314, 1318 (2d Cir. 2003)). “This objective standard is designed to protect all consumers, the gullible as well as the shrewd, while at the same time protecting debt collectors from liability for bizarre or idiosyncratic interpretations of collection notices.” Maguire v. Citicorp Retail Servs., Inc., 147 F.3d 232, 236 (2d Cir. 1998) (internal quotations omitted). The test aims at balancing the need to protect consumers against the need to ensure that debt collectors are not held liable “for unreasonable misinterpretations of collection notices.” Clomon, 988 F.2d at 1319. This objective standard presumes the consumer possesses at least a “rudimentary amount of information about the world.” Id.

         Before addressing whether or not the defendants' actions could be considered violations of the FDCPA, I must first consider whether there are sufficient facts in the record for a jury to conclude that the defendants are in fact debt collectors under the FDCPA. Goldstein v. Hutton, Ingram, Yuzek, Gainen, Carroll & Bertolotti, 374 F.3d 56, 60-61 (2d Cir. 2004). Next, because the remaining allegations involve violations of section 1692e, I must also determine whether the alleged communications were “in connection with” the collection of a debt. Hart v. FCI Lender Servs., Inc., 797 F.3d 219, 225 (2d Cir. 2015).

         1. Whether defendants are debt collectors

         To bring a defendant within the ambit of the FDCPA, it is the plaintiff's burden to prove “the defendant's debt collector status.” Goldstein, 374 F.3d at 60. In other words, to survive summary judgment, Cicalo must “make a showing sufficient to support a determination that [the defendants were] debt collector[s] at the time [they] issued the challenged communication.” Id. at 60-61. A plaintiff may establish a defendant's debt collector status by showing: (1) that debt collection is the “principal purpose” of the defendant's business; or (2) that the defendant “regularly” engages in debt collection activity. Id. at 61 (quoting 15 U.S.C. § 1692a(6)). Because there is no contention-or at least no evidence-that debt collection was a principal purpose of the defendants' business, the issue is whether the defendants “regularly engaged in such activity.” Id. at 61.

         a. Debt Collection Activity

         Before addressing whether the defendants engaged in debt collection with sufficient regularity, I must first determine whether the complained-of conduct constitutes “debt collection activity.” Id. at 61. Defendants argue that their communications to Cicalo cannot constitute debt collection activity because the communications were made for the sole purpose of enforcing a security interest.

         Defendants are correct that many courts have concluded that communications sent for the sole purpose of enforcing a security interest do no constitute debt collection activities. See Derisme v. Hunt Leibert Jacobson P.C., 880 F.Supp.2d 339, 361-62 (D. Conn. 2012) (collecting cases). Those cases rely on a construction of section 1692a(6) that implicitly exempts enforcers of security interests from the requirements of the FDCPA. Id. at 361. Relying on the interpretive cannon of “expression unius est exclusion alterius, ” courts point to the fact that section 1692a(6) only expressly identifies enforcers of security interests as debt collectors in reference to Section 1692f(6), which prohibits “[t]aking or threatening to take any nonjudicial action to effect dispossession or disablement of property [under false pretenses].” See Derisme, 880 F.Supp.2d at 361. The fact that “the statute specifically says that a person in the business of enforcing security interests is a ‘debt collector' for the purposes of § 1692f(6) . . . reasonably suggests that such a person is not a debt collector for purposes of the other sections of the Act.” Warren v. Countrywide Home Loans, Inc., 342 F. App'x 458, 460 (11th Cir. 2009).

         I do not find those cases persuasive because their effect is to imply an identity-based exclusion where Congress did not expressly provide it. See Kaymark v. Bank of Am., N.A., 783 F.3d 168, 179 (3d Cir. 2015), cert. denied sub nom. Udren Law Offices, P.C. v. Kaymark, 136 S.Ct. 794 (2016) (holding enforcers of security interests not exempted from FDCPA). Section 1692a(6) broadly defines “debt collector” as, inter alia, “any person . . . who regularly collects or attempts to collect, directly or indirectly, debts owed or due or asserted to be owed or due another.” 15 U.S.C. § 1692a(6). It specifically exempts from liability certain classes of individuals notwithstanding the fact that they make take actions to collect or attempt to collect on a debt. Id. at § 1692a(6)(A)-(F). Notably absent from those exclusions are individuals engaged in the enforcement of security interests. See Wilson v. Draper & Goldberg, P.L.L.C., 443 F.3d 373, 378 (4th Cir. 2006). The natural implication of that absence is that individuals engaged in the enforcement of security interests may be considered debt collectors so long as they engage in activities to collect or attempt to collect a debt. See Kaymark, 783 F.3d at 179. Section 1692a(6)'s reference to enforcers of security interests operates only to “include as debt collectors, for the purposes of § 1692f(6), those who only enforce security interests” and who would not otherwise qualify as debt collectors under section 1692a(6)'s general definition. Wilson, 443 F.3d at 378 (emphasis in original). As the courts in Kaymark and Wilson have noted, any conclusion to the contrary would “create an enormous loophole in the FDCPA by immunizing any debt from coverage if that debt happened to be secured by a real property interest and foreclosure proceedings were used to collect the debt.” Kaymark, 783 F.3d at 179 (quoting Wilson, 443 F.3d at 376) (internal alterations omitted).

         My interpretation of section 1692a(6) comports with the Second Circuit's view of that section and the FDCPA in general. See Goldstein, 374 F.3d at 60 (citing Heintz v. Jenkins, 514 U.S. 291, 299 (1995)) (“The Supreme Court has made it clear that the FDCPA applies to attorneys ‘regularly' engaging in debt collection activity, including such activity in the nature of litigation.”). In Goldstein, the Court held that state-law required notices issued by a law firm in connection with eviction proceedings constituted a “debt collection activity, within the scope of the FDCPA.” Id. The Court was not concerned that the purposes of such notices were to commence summary proceedings to recover possession of property rather than collect on a debt. Id. at 59 n.1. Similarly, in Hart v. FCI Lender Serv., Inc., the Court did not spend any time considering the status of the purported debt collector or the purposes for which it was sending the alleged communication. 797 F.3d 219, 226 (2d Cir. 2015). Rather, in determining whether a letter was an attempt to collect a debt, the Court looked to whether a reasonable consumer would interpret it as an attempt to collect such debt. Id. The Court explicitly held that neither defendant's purported intention in sending the letter-to comply with the Real Estate Settlement Procedure Act (“RESPA”)-nor “the absence of an explicit payment demand” operated to “take the communication outside the FDCPA.” Id. at 226-27. In other words, to determine whether a given communication constituted a debt collection activity, the Second Circuit looks to the communication itself and not the identity or intent of the sender. Id. Moreover, the Court was unconcerned with the fact that a defendant may incur FDCPA liability by simply complying with another federally or state-law mandated requirement. Id.; see also Romea v. Heiberger & Assocs., 163 F.3d 111, 118 (2d Cir. 1998) (compliance with state law requirement insufficient to absolve defendant of liability under FDCPA).

         Because I conclude that enforcers of security interests are not per se excluded from the definition of debt collector under the FDCPA, I must next consider whether the defendants' alleged conduct constitutes a “debt collection activity” under section 1692a(6). Whether a communication constitutes a “debt collection activity” under section 1692a(6) and whether that same communication constitutes a communication sent “in connection with the collection of any debt” under section 1692e appear to be analogous inquiries. If anything, latter inquiry is a narrower one, such that any letter deemed to be sent “in connection with the collection of any debt” will also be deemed to constitute a “debt collection activity.” See Kaymark, 783 F.3d at 179 (noting “broad definition” of “debt collection” under the FDCPA); Kaltenbach v. Richards, 464 F.3d 524, 529 (5th Cir. 2006) (“party who satisfies § 1692a(6)'s general definition of a ‘debt collector' is a debt collector for the purposes of the entire ...

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