Fedotov v. Peter T. Roach and Associates, P.C.

• Decision Date: 03 February 2005
• Docket Number: No. 03 Civ. 8823(CSH).,03 Civ. 8823(CSH).
• Citation: 354 F.Supp.2d 471
• Parties: Evgueniy FEDOTOV, on behalf of himself and all others similarly situated, Plaintiff, v. PETER T. ROACH AND ASSOCIATES, P.C., Defendant.
• Court: U.S. District Court — Southern District of New York

354 F.Supp.2d 471

Evgueniy FEDOTOV, on behalf of himself and all others similarly situated, Plaintiff, v. PETER T. ROACH AND ASSOCIATES, P.C., Defendant.

No. 03 Civ. 8823(CSH).

United States District Court, S.D. New York.

February 3, 2005.

Abraham Kleinman, Katz & Kleinman PLLC, Uniondale, NY, for plaintiff.

MEMORANDUM OPINION AND ORDER

HAIGHT, Senior District Judge.

Plaintiff Evgueniy Fedotov brings this purported class action against defendant Peter T. Roach and Associates ("Roach"), a law firm, for alleged violations of the Fair Debt Collection Practices Act ("FDCPA" or "Act"), 15 U.S.C. §§ 1692 et seq., Pursuant to Rule 56 of the Federal Rules of Civil Procedure, defendant moves for summary judgment, claiming that plaintiff does not have standing to pursue this lawsuit, and, pursuant to Rule 23(a)(4), for an order denying class certification on the ground that plaintiff is not a proper class representative. For the reasons discussed below, defendant's motion for summary judgment is denied. I do not reach the question of class certification, but rather direct the plaintiff to submit papers in opposition to defendant's motion for denial of class certification.

I. Background

On October 28, 2003, defendant law firm sent a collection letter to plaintiff Fedotov demanding payment of $2,506.98, allegedly on behalf of Citibank (South Dakota) N.A. ("Citibank").¹ It is the contents of that letter, discussed in detail below, which form the basis of this lawsuit.

On November 7, 2003, Fedotov filed a voluntary petition for relief under Chapter 7 of the Bankruptcy Code in the United States Bankruptcy Court for the Southern District of New York. Schedule B of that petition is entitled "Personal Property" and enumerates "Potential Claim under Fair Debt Collection Practices Act, Maximum Statutory Damages of $1,000" as one of Fedotov's assets. The petition also lists Roach — acting as a putative collection agent for Citibank — as a "Creditor Holding Unsecured Nonpriority Claims." Thereafter, in a notice dated November 11, 2003 from the Bankruptcy Court, Roach was informed of Fedotov's Chapter 7 petition and of the creditor's meeting scheduled for December 15, 2003. Roach avers, and Fedotov does not dispute, that after receiving this notice, Roach took no further action with regard to the collection of this debt. On February 20, 2004, the Bankruptcy Court issued an Order of Discharge and Order of Final Decree, which fully administered the estate and released Fedotov from all dischargeable debts. The bankruptcy case was closed on February 23, 2004.

On November 7, 2003 — the same day he filed his bankruptcy petition — plaintiff filed this purported class action, alleging that two statements in Roach's October 28, 2003 collection letter violate provisions of the FDCPA, including 15 U.S.C. §§ 1692e, 1692e(10), and 1692g(a)(3). First, the collection letter states "[p]lease be advised that this office has been retained by the above referenced client in their claim against you." Plaintiff claims that this statement is untrue and thus violates 15 U.S.C. §§ 1692e and 1692(e)(10) which prohibit "false, deceptive, or misleading representation[s] [used] to collect or attempt to collect any debt or to obtain information concerning a consumer." Second, the letter states, "[u]nless you, the recipient of this notice, within thirty (30) days after receipt dispute the validity of this debt or any portion thereof, the debt will be assumed to be valid." Plaintiff claims that this statement violates 15 U.S.C. § 1692g(a)(3) which requires that the debtor be notified that only the debt collector may presume the validity of the debt. Plaintiff requests class certification, injunctive relief, statutory damages, costs, and attorneys' fees. The purported "nationwide" class consists of "all consumers who have received debt collection notices and/or letters from the defendant which contain one or more of the violations of the FDCPA specified in this complaint, from the period beginning one year prior to the filing of plaintiff's complaint and thereafter." Compl. ¶ 5.

Defendant filed an Answer on January 6, 2004 in which he denied that the statements contained in the October 28, 2003 collection letter violate the FDCPA. In addition, the Answer sets forth four affirmative defenses: (i) the complaint fails to state a claim upon which relief can be granted; (ii) any alleged violation resulted from a bona fide error notwithstanding the maintenance of procedures reasonably adapted to avoid any such error;² (iii) this Court lacks personal jurisdiction over the defendant; and (iv) insufficiency of process. On April 23, 2004, defendant filed a motion in this Court seeking summary judgment and an order denying plaintiff class certification.

II. Discussion

The motion for summary judgment is premised on defendant's assertion that, as a consequence of plaintiff's Chapter 7 Bankruptcy petition, he no longer has standing to bring this action. According to defendant, the implications of plaintiff's bankruptcy petition are twofold. First, through plaintiff's Chapter 7 filing, the asset of this cause of action passed to the Bankruptcy Trustee, leaving plaintiff without standing to pursue his claim. And second, because plaintiff's debts were fully discharged in bankruptcy, he no longer has any collectible debt, without which he also has no standing to pursue his claim under the FDCPA. Finally, defendant moves this Court, presumably in the alternative,³ to deny plaintiff class certification based on his alleged lack of standing.

A. Standard of Review on Motion for Summary Judgment Pursuant to Rule 56

Rule 56 of the Federal Rules of Civil Procedure directs that a court shall grant a motion for summary judgment "if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue of material fact and that the moving party is entitled to a judgment as a matter of law." Fed.R.Civ.P. 56(c); see also Celotex Corp. v. Catrett, 477 U.S. 317, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986). "The party seeking summary judgment bears the burden of establishing that no genuine issue of material fact exists and that the undisputed facts establish her right to judgment as a matter of law." Rodriguez v. City of New York, 72 F.3d 1051, 1060-61 (2d Cir.1995). In determining whether a genuine issue of material fact exists, a court must resolve all ambiguities and draw all reasonable inferences against the moving party. Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986). If there is "any evidence in the record from any source from which a reasonable inference could be drawn in favor of the non-moving party," then summary judgment should be denied. Chambers v. TRM Copy Centers Corp., 43 F.3d 29, 37 (2d. Cir.1994).

B. Abandonment of this Cause of Action by the Bankruptcy Trustee

Upon commencement of a bankruptcy action, the Bankruptcy Code requires that "[t]he debtor shall — (1) file ... a schedule of assets and liabilities ... and a statement of the debtor's financial affairs." 11 U.S.C. § 521(1). The assets scheduled under § 521(1) comprise a bankruptcy estate, and all of the debtor's nonexempt assets become assets of that estate. 11 U.S.C. § 541(a). The bankruptcy estate encompasses "all legal or equitable interests of the debtor in property as of the commencement of the case," id. at § 541(a)(1); Seward v. Devine, 888 F.2d 957, 963 (2d Cir.1989), including all pre-petition causes of action belonging to the debtor. Kunica v. St. Jean Financial, Inc., 233 B.R. 46, 52 (S.D.N.Y.1999); see also Seward, 888 F.2d at 963 ("The bankruptcy estate ... includ[es] any causes of action possessed by the debtor."); Rosenshein v. Kleban, 918 F.Supp. 98 (S.D.N.Y.1996). Hence, by operation of § 541 of the Bankruptcy Code, any causes of action belonging to Fedotov, including this one, became the property of the bankruptcy estate when he sought protection under the bankruptcy laws.

However, a long-standing principle of bankruptcy law allows a Trustee to abandon property, including causes of action, if such property is burdensome or of inconsequential value to the bankruptcy estate. See, e.g., Brown v. O'Keefe, 300 U.S. 598, 57 S.Ct. 543, 81 L.Ed. 827 (1937); Meyer v. Fleming, 327 U.S. 161, 66 S.Ct. 382, 90 L.Ed. 595 (1946); Vreugdenhill v. Navistar Intern. Transp. Corp., 950 F.2d 524 (8th Cir.1991). This principle was articulated in the Bankruptcy Code in § 554(c), which provides that "any property scheduled under section 521(1) of this title not otherwise administered at the time of the closing of a case is abandoned to the debtor." 11 U.S.C. § 554(c); see also Ball v. Nationscredit Financial Services Corp., 207 B.R. 869, 872 (N.D.Ill.1997) ("If a cause of action that preexisted the filing of the bankruptcy petition is ... abandoned by the trustee, then it is property of the debtor and the debtor will have standing to pursue the cause of action in his or her own name.") (citing In re Bronner, 135 B.R. 645, 647 (9th Cir.BAP1992)). Therefore, by operation of law, property, including a cause of action, properly scheduled pursuant to § 521(1) and not administered by the Trustee, reverts to the debtor's possession once the bankruptcy estate is fully administered and the bankruptcy case is closed.

The parties agree that plaintiff scheduled this cause of action in his Chapter 7 bankruptcy petition. Schedule B of plaintiff's petition is entitled "Personal Property" and includes descriptions of multiple types of property. Item 20 of Schedule B instructs the debtor to list "[o]ther contingent and unliquidated claims of every nature, including tax refunds, counterclaims of the debtor, and rights of setoff claims." Under that item, plaintiff lists "Potential Claim under Debt Collection Practices Act, Maximum Statutory Damages of $1,000." The form is marked as signed...