[BROKERDIRT] DD 10/17/06 Residential eviction procedures nailed again by new Federal Fair Debt case.

Daily Development for October 17, 2006
by: Patrick A. Randolph, Jr.
Elmer F. Pierson Professor of Law
UMKC School of Law
Of Counsel: Blackwell Sanders Peper Martin
Kansas City, Missouri
dirt@umkc.edu

LANDLORD/TENANT; RESIDENTIAL; EVICTION; FAIR DEBT COLLECTION ACT:  A summary dispossess action is an attempt to collect a debt and if an attorney is regularly in the business of filing summary possession actions, it must abide by the provisions of the Fair Debt Collection Practices Act, even it that means inserting the required notices in the eviction complaint.  Hodges v. Feinstein, Raiss, Kelin & Booker, LLC, 383 N.J. Super. 596, 893 A.2d 21 (App. Div. 2006), Also discussed under the heading: “Landlord/Tenant; Residential; Evictions; Due Process.”

A law firm brought eviction actions against tenants in federally subsidized housing for

The tenants filed this action alleging the law firm violated, inter alia, the Fair Debt Collection Practices Act (FDCPA.)  The law firm moved to dismiss the complaint.  The lower court ruled that the FDCPA's definition of "debt collector" applies to law firms who regularly engage in consumer debt collection activity.  Finding that this firm was not "regularly" engaged in the collection of debts, the lower court granted the law firm's motion to dismiss.  Further, the lower court found that the landlord was seeking possession of the premises, not collection on a debt.  In issuing its decision, the lower court did not conclude that an action for non-payment of rent was equivalent to an a action to collect on a debt.  Even assuming that an action for possession would be considered an action to recover a debt, the lower court drew a distinction between a landlord, through its attorneys, asserting its own rights, and the purpose of the FDCPA which, according to the lower court, is to pr

event contracted third parties from harassing debtors to enforce the rights of creditors.  The tenants appealed.

The Appellate Division reasoned that summary dispossess actions, while being actions pertaining to property and not directed against specific persons, have the same effect as enforcing a lien for outstanding rent.  The summary dispossess action forecloses the right of the tenant to possession of the leased premises.  Holding there was no difference between actions affecting property and actions directed against people, the Appellate Division held that summary dispossess actions are actions to collect a debt within the FDCPA.  The FDCPA applies to attorneys who regularly engage in the practice of filing summary dispossess actions.  Therefore, it reversed and remanded the matter to the lower court for a factual finding as to whether this particular law firm "regularly" engaged in the filing of summary dispossess actions, and thus qualified as a "debt collector" under the FDCPA.

The court listed what it viewed to be the consequences of imposition of FDCPA standards to eviction actions in New Jersey:

Landlord’s attorney [assuming the attorney is a “debt collector” under the Act} must include FDCPA required information (including the disclosure of the right to contest the debt) in the non-payment Complaint or in a separate notice to be served upon the tenant after the complaint.  Trial dates could not be scheduled until the thirty period for notice to contest the debt has passed. 

Comment 1:  The court, for some reason, failed to cite a parallel decision based upon New York law in 1999, romea v. Heiberger & Assocs., 163 F. 2d 111 (2d Cir. 1999).  This case was applied by the New York courts at least in Giaio v. Greco,  QDS:46701058, May 5, 1999, New York Civ. Ct. https://e2k.exchange.umkc.edu/exchweb/bin/redir.asp?URL=http://www.nylj.com/decisions/99/05/050599b2.htm. (The DIRT DD for 5/7/99)  As Romeo was decided seven years ago, undoubtedly there is other authority around the country that the court also didn’t bother to pick up. 

Comment 2:   If you wonder whether you might be a “debt collector” under the Act, you probably are.  The standards as to what constitutes “regularly” collecting consumer debts aren’t that hard to satisfy. 

But as both the trial court (which gave summary judgment to the lawyers) and the appellate court failed to pick up Romeo, the editor felt it might be useful to review this law.  Perhaps lawyers in other states who do eviction work might want to review their own state’s procedures in light of these rulings.

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