Lane v. Fein, Such and Crane, LLP
767 F. Supp. 2d 382
E.D.N.Y2011Background
- Lane plaintiffs own Bay Street Property in Lindenhurst, NY, encumbered by a mortgage (Bay Street Mortgage) likely held by Bridgefield Mortgage Corporation (BMC) and foreclosed by Fein LLP in NY Supreme Court, Suffolk County.
- Fein LLP filed a state foreclosure complaint on April 21, 2010 against Martin and Maureen Lane; service later targeted Maureen Lane (April 28) and Martin Lane (May 6).
- The Lanes sent letters disputing the debt’s validity and requesting validation on April 28, 2010, before service on Martin Lane; Fein LLP nonetheless proceeded with the foreclosure action.
- The Lanes filed this FDCPA/GBL §349/negligence action in August 2010, alleging (i) misrepresentation of BMC’s status, (ii) improper collection timing after dispute, and (iii) baseless service against Maureen Lane.
- Fein LLP moved to dismiss under Fed. R. Civ. P. 12(b)(6); the court granted the motion in its entirety.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| FDCPA §1692g – initial communication and moratorium | Lane challenged debt before initial communication; moratorium should apply once initial communication occurs. | No initial communication occurred; moratorium not triggered. | No initial communication; §1692g not violated. |
| FDCPA §1692e – false/misleading statements | Fein’s statement that BMC is a US banking corporation is materially false/misleading. | Statement not misleading; does not imply government partnership; not material to debt. | Not materially false or misleading; §1692e claim dismissed. |
| FDCPA §1692d – harassing conduct | Service of foreclosure complaint and alleged misstatements harassed debtors. | Filing a lawsuit is not per se harassing under FDCPA; no listed harassing conduct. | Not harassing conduct; §1692d claim dismissed. |
| N.Y. Gen. Bus. Law § 349 | Conduct was deceptive; service on Maureen/lack of basis for foreclosure violated §349. | Not consumer-oriented; statements not materially misleading; damages not shown. | No material deception; §349 claim dismissed. |
| Negligence and gross negligence | Attorney conduct breached a duty of reasonable care in debt collection. | No privity breach; attorneys not liable to nonclients absent fraud or malice. | No valid negligence/gross negligence claim; dismissed. |
Key Cases Cited
- Greco v. Trauner & Cohen & Thomas, L.L.P., 412 F.3d 360 (2d Cir. 2005) (materiality standard for §1692e; protects naïve consumers)
- Hahn v. Triumph Partnerships LLC, 557 F.3d 755 (7th Cir. 2009) (materiality required for §1692e claims)
- Miller v. Javitch, Block & Rathbone, 561 F.3d 588 (6th Cir. 2009) (applies materiality to §1692e claims based on misstatements)
- Doo v. Berger, 227 A.D.2d 435 (2d Dep’t 1996) (no attorney liability to nonclients for simple negligence)
- Michalic v. Nakovics v. Klat, 128 A.D.2d 505 (2d Dep’t 1987) (limits on attorney liability to third parties absent fraud/malicious acts)
- Calamari v. Grace, 98 A.D.2d 74 (2d Dep’t 1983) (no liability for simple negligence in attorney malpractice context)
- Oswego Laborers' Local 214 Pension Fund v. Marine Midland Bank, N.A., 85 N.Y.2d 20 (1995) (consumer-oriented requirement under NY §349)
- Hyatt v. Metro-North Commuter R.R., 16 A.D.3d 218 (1st Dep’t 2005) (duty of standard in negligence analysis)
- Doo v. Berger, 227 A.D.2d 435 (2d Dep’t 1996) (professional duty considerations)