Gabriele v. American Home Mortgage Servicing Inc.
Communications that mislead a consumer about the nature and status of debt, or that obstruct the consumer's ability to respond to a debt collection action, can violate the federal Fair Debt Collection Practices Act. A bank filed a complaint to foreclose on property that Michael Gabriele owned. Michael Gabriele requested sanctions and argued that the bank filed motions for default, although Gabriele was not in default, that the bank filed a judgment for strict foreclosure prematurely and that the bank did not provide an exhibit. The Superior Court denied the consumer's motion for sanctions and granted the bank's motion for judgment of strict foreclosure. Gabriele sued the bank's law firm in District Court, alleging that the law firm violated the federal Fair Debt Collection Practices Act and CUTPA, the Connecticut Unfair Trade Practices Act. The District Court dismissed Gabriele's claims, and Gabriele appealed. The 2nd Circuit found that Gabriele failed to state a cause of action against the law firm under the federal Fair Debt Collection Practices Act, because the law firm's affidavits and motions were not misleading or deceptive with respect to the type or status of Gabriele's debt. A so-called "least sophisticated consumer" would not have been prevented from mounting a defense. "[T]he false statements of which Gabriele complains," wrote the 2nd Circuit, "do not amount to the kind of misleading and deceptive practices that fall within the ambit of the FDCPA." A debt collector who files an untimely motion does not interfere with a consumer defendant's ability to defend, and the act does not guaranty an efficient resolution of a creditor's complaints about debt. Gabriele's CUTPA count against the law firm did not adequately allege entrepreneurial conduct, which was a required element. The alleged misconduct did not take place as a result of entrepreneurial work in the form of advertisements or bill collection, and the 2nd Circuit found that the law firm was "immune from liability" under CUTPA. The 2nd Circuit affirmed the judgment of the District Court.