Kolbasyuk ex rel. Situated v. Capital Mgmt. Servs., LP
918 F.3d 236
2d Cir.2019Background
- Plaintiff Yuri Kolbasyuk owed a debt to Barclays; Barclays retained Capital Management Services, LP (CMS) to collect it. CMS sent a July 21, 2017 collection letter stating the balance as $5,918.69, identifying the creditor(s), and providing contact/payment info.
- The letter included the statement: the amount shown is as of the date of the letter and "because of interest, late charges, and other charges that may vary from day to day, the amount due on the day you pay may be greater," and said CMS would notify the consumer before depositing any check.
- Kolbasyuk filed a putative class action alleging violations of the Fair Debt Collection Practices Act (FDCPA), asserting the letter failed to disclose the breakdown of the debt (principal, interest, other charges), interest rate, timing of interest, and that the listed amount might not satisfy the debt if paid later.
- The district court dismissed the complaint under Rule 12(b)(6). Kolbasyuk appealed to the Second Circuit.
- The Second Circuit reviewed under the "least sophisticated consumer" standard and accepted Kolbasyuk’s complaint allegations as true for the motion-to-dismiss posture.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether CMS satisfied 15 U.S.C. § 1692g(a)(1) by stating the "amount of the debt" | Kolbasyuk: the letter was deficient because it did not itemize principal, interest, or other charges or state rates/timing, so it did not give the required "amount of the debt." | CMS: the letter plainly stated the total, present amount owed as of the letter date; §1692g requires the present total, not an itemized breakdown. | Court: Affirmed — the letter satisfied §1692g by stating the total, present amount owed. |
| Whether a payoff-type ambiguity (as in Carlin) makes the notice noncompliant with §1692g | Kolbasyuk: cites Carlin to argue notices must allow determination of minimum owed now and explanation of future increases. | CMS: Carlin dealt with an estimated future "Total Amount Due" (a payoff statement), not a present-balance statement; Carlin is distinguishable. | Court: Carlin inapplicable — Carlin governs estimated/future payoff statements, not clear present-balance notices. |
| Whether CMS violated 15 U.S.C. § 1692e by misleading consumers into thinking listed amount would satisfy the debt if paid later | Kolbasyuk: the letter could be read to imply the listed amount would satisfy the debt at any time after receipt. | CMS: the letter explicitly warned the amount may increase due to interest/fees; it used safe-harbor language that disclaims future increases. | Court: Affirmed — no §1692e violation; the explicit safe-harbor language prevents the misleading inference. |
| Whether CMS had to provide a detailed itemization or specific interest rates/terms under §1692e or §1692g | Kolbasyuk: seeks detailed breakdown and specific rate/timing disclosures. | CMS: FDCPA does not require itemization or forward-looking rate disclosures when total present amount and a warning are provided. | Court: Held not required — failure to provide detailed breakdown or precise future rates does not make the notice false or misleading. |
Key Cases Cited
- Carlin v. Davidson Fink LLP, 852 F.3d 207 (2d Cir. 2017) (distinguishes payoff/estimated future-amount statements from present-balance notices)
- Avila v. Riexinger & Assocs., LLC, 817 F.3d 72 (2d Cir. 2016) (failure to disclose that balance may increase can mislead; adopted Miller safe-harbor language)
- Miller v. McCalla, Raymer, Padrick, Cobb, Nichols & Clark, L.L.C., 214 F.3d 872 (7th Cir. 2000) (safe-harbor disclosure language stating balance may increase due to interest/fees)
- Clomon v. Jackson, 988 F.2d 1314 (2d Cir. 1993) (least sophisticated consumer standard described)
- Jacobson v. Healthcare Fin. Servs., Inc., 516 F.3d 85 (2d Cir. 2008) (FDCPA communications judged by the least sophisticated consumer standard)