Kapsis v. American Home Mortgage Servicing Inc.
923 F. Supp. 2d 430
E.D.N.Y2013Background
- Plaintiff James L. Kapsis sues AHMSI and Argent, alleging FDCPA, RESPA, and NY GBL § 349 claims, plus contract, implied covenant, promissory estoppel, and unjust enrichment theories.
- Argent’s claims were dismissed earlier; the court now resolves AHMSI’s Rule 12(b)(6) dismissal motion regarding the amended complaint.
- Plaintiff alleges AHMSI became loan servicer in 2009 and proceeded with disputed escrow increases, misapplied payments, and failure to respond with documentation.
- Plaintiff asserts AHMSI’s communications labeled him as a debt collector, and asserts improper payoff statements, harassment, and misappropriation of insurance funds.
- Plaintiff seeks damages under FDCPA and RESPA, damages and injunctive relief under NY law, and a breach of contract theory tied to AHMSI’s servicing role.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Is AHMSI a debt collector under the FDCPA and are the claims timely? | AHMSI obtained the loan in default, making it a debt collector; alleged violations within one year are timely. | AHMSI is not a debt collector and the FDCPA claim is untimely; the default timing is disputed. | Yes, AHMSI is plausibly a debt collector and the FDCPA claim is timely. |
| RESPSA Section 2605 claim viability for QWRs and damages | Plaintiff sent multiple QWRs; AHMSI failed to respond and/or correct; damages alleged for actual and statutory relief. | Plaintiff failed to plead proper QWRs and damages causal link; statute limitations and pattern arguments apply. | RESPSA claim survives; plaintiff pled QWRs and plausible damages, including pattern-based statutory damages. |
| New York General Business Law § 349 viability | AHMSI’s conduct as loan servicer constitutes consumer-oriented deceptive practices affecting the public. | Plaintiff failed to allege a public-deception pattern directed at consumers. | § 349 claim survives; plaintiff adequately pleads consumer-oriented deceptive practices. |
| Breach of contract viability given privity | AHMSI, as loan servicer, interacts within privity via agency, enabling breach claim. | AHMSI is not a party to the contract; no privity to support breach. | Dismissed for lack of privity, but leave to amend to plead an agency-based privity theory. |
| Promissory estoppel and unjust enrichment claims | Clear promises and reliance; unjust enrichment due to misappropriated funds. | Promissory estoppel requires clear promise; unjust enrichment is precluded if a contract exists. | Promissory estoppel and unjust enrichment claims survive as pled; promissory estoppel viable and unjust enrichment plausible absent contract finding. |
Key Cases Cited
- Alibrandi v. Financial Outsourcing Services, Inc., 333 F.3d 82 (2d Cir. 2003) (contractual default timing aids FDCPA applicability)
- Oswego Laborers' Local 211 Pension Fund v. Marine Midland Bank, N.A., 85 N.Y.2d 20 (N.Y. 1995) (consumer-oriented conduct and public impact for §349)
- Securitron Magnalock Corp. v. Schnabolk, 65 F.3d 256 (2d Cir. 1995) (broad standards for consumer-directed misrepresentation and claims)
- Rock City Sound, Inc. v. Bashian & Farber, LLP, 74 A.D.3d 1168 (2d Dep’t 2010) (pleading damages in contract/quasi-contract actions)