197 A.D.3d 1102
N.Y. App. Div.2021Background
- HSBC commenced a mortgage foreclosure against Lien Thi Ngo in February 2015.
- Ngo answered and asserted multiple counterclaims (FDCPA, TILA, RESPA, GBL § 349, and request for RPL § 282 fees among others).
- Ngo moved for leave to amend her answer and counterclaims; HSBC cross-moved under CPLR 3211 to dismiss those counterclaims.
- Supreme Court (Kings County) denied Ngo’s motion to amend and granted HSBC’s CPLR 3211 cross motion to dismiss most counterclaims; Ngo appealed.
- The Appellate Division reviewed dismissal of FDCPA, TILA, RESPA, and GBL § 349 claims and the denial of leave to amend.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| FDCPA (15 U.S.C. § 1692) | HSBC is not a "debt collector" under the statute. | HSBC’s communications violated the FDCPA. | Dismissed: HSBC not a debt collector. |
| TILA (15 U.S.C. § 1601) | TILA damages claim is time-barred. | Claim timely / substantive violations alleged. | Dismissed as time-barred. |
| RESPA (12 U.S.C. § 2605) | Alleged QWR did not state a valid RESPA claim; loan-term challenges not proper QWRs. | Plaintiff failed to respond to a qualified written request. | Dismissed: loan-term dispute not a proper QWR. |
| GBL § 349 (consumer deceptive practices) | Allegations insufficient to show consumer-oriented, materially misleading conduct causing injury. | HSBC miscommunicated temporary forbearance terms and failed to disclose that partial payments would cause default, causing financial injury. | Not dismissed: § 349 claim adequately pleaded; damages alleged. |
| RPL § 282 fees (derivative of § 349) | Fees improper if underlying statutory claim fails. | Fees recoverable if § 349 claim stands. | Dismissal of § 282 claim reversed (tied to viable § 349 claim). |
| Leave to amend — RESPA & negligent misrepresentation | Amendment would be futile or prejudicial; proposed claims lack merit. | Seeks to add RESPA and negligent misrepresentation theories. | Denied: proposed RESPA and negligent misrep amendments were palpably insufficient. |
| Leave to amend — GBL § 349 | Amendment would cause prejudice/futile. | Sought to amend § 349 counterclaim with more detail on deceptive forbearance communications. | Granted: proposed § 349 amendment sufficiently pleaded and would not prejudice HSBC. |
Key Cases Cited
- Koch v. Acker, Merrall & Condit Co., 18 N.Y.3d 940 (definition and elements of a GBL § 349 claim)
- City of New York v. Smokes-Spirits.Com, Inc., 12 N.Y.3d 616 (consumer-oriented conduct requirement under GBL § 349)
- Oswego Laborers' Local 214 Pension Fund v. Marine Midland Bank, 85 N.Y.2d 20 (requirements for GBL § 349 injury/damage pleading)
- Leon v. Martinez, 84 N.Y.2d 83 (liberal construction of pleadings and leave to amend)
- Kimmell v. Schaefer, 89 N.Y.2d 257 (scope of negligent misrepresentation and duty requirement)
- Greenberg, Trager & Herbst, LLP v. HSBC Bank USA, 17 N.Y.3d 565 (arm’s-length lender-borrower relationship bars negligent misrepresentation claim)
- Pirrelli v. Ocwen Loan Servicing, LLC, 129 A.D.3d 689 (FDCPA: servicer not a debt collector)
- DKR Mtge. Asset Trust 1 v. Rivera, 130 A.D.3d 774 (RPL § 282 fees tied to underlying statutory claims)