New Ruling On Eviction Procedures
New York Times, January 25, 1998

Jennifer Lynn Romea recalls spending the 1996 New Year's Eve alone in her Manhattan apartment, out of work, four months behind in her rent and wondering how things could possibly get any worse. Then a process server slipped a notice under her door saying she must pay the rent in three days or vacate the premises.

"Needless to say," said the 28-year-old Ms. Romea, "I was pretty ticked off."

So irritated, in fact, that she is now a plaintiff in a federal lawsuit inspired by that notice. In her suit Ms. Romea, a former debt collector, charges that her landlord's lawyer, who signed the notice on behalf of the landlord, violated the federal Fair Debt Collection Practices Act. Among other things, the act requires debt collectors to inform debtors that they have 30 days to contest a debt -- something a three-day notice clearly fails to do.

Last month, rejecting a motion to dismiss the case, a U.S. District Court judge in Manhattan ruled that a rent demand made by a lawyer on behalf of a client makes the lawyer a debt collector subject to the federal law.

"It is not without some discomfort that the court reaches this conclusion," wrote Judge Lewis Kaplan in his Dec. 22, 1997, opinion. Nevertheless, he said, the "unambiguous" language of the federal statute compelled him to apply the law as he did. And that, Kaplan observed, "will have a significant effect on New York's statutory scheme for the fair and efficient resolution of landlord-tenant rent disputes."

Lawyers in the case say that the decision, which is being appealed, may create some problems for landlords in Housing Court if lawyers representing tenants in similar situations use it to seek to have those cases dismissed. While it is unclear whether such motions will be successful, the lawyers say, it is likely that the issue will ultimately have to be resolved by the appellate courts, a process that could take years.

Moreover, they say, the decision opens the door for tenants who have been served with three-day notices signed by individuals other than the landlord to sue the signers for damages for up to one year after the notice was received.

"There are a lot of vulnerable lawyers out there," said Colleen McGuire, a Manhattan lawyer who represents Ms. Romea. "And we're putting together a case now against a management company that signed three-day notices."

Ms. McGuire, who specializes in representing tenants, explained that the Fair Debt Collection Practices Act was a "strict liability" statute, meaning it does not matter whether someone who violates the law intended to do so or was acting in good faith. Violation of the law, she said, can result in a damage award to the plaintiff of up to $1,000, plus payment of the plaintiff's reasonable legal fees.

And while $1,000 may not seem like a lot of money in an individual case, Ms. McGuire pointed out, some lawyers and managing agents issue thousands of three-day notices each year, making them prime targets for class-action lawsuits.

Ms. McGuire said that under state law, before an action for nonpayment of rent can be filed, a tenant must be served with a notice giving the tenant no fewer than three days to pay all rent due. If payment is not made, the landlord

In contested cases, the matter is set for trial. If the tenant loses, he or she has five days to pay the judgment in full, after which time a warrant can be issued to a city marshal who then gives the tenant 72 hours to vacate the premises.

Ms. McGuire said that if all communications are between the landlord and the tenant the federal law does not apply. But, she said, if someone other than the landlord attempts to collect the unpaid rent, that individual is considered a debt collector and must give the tenant 30 days to dispute the debt.

Lawyers who represent landlords disagree. "The statute is designed to deter and punish abusive debt collection practices," said Janice DiGennaro, a Uniondale, L.I., lawyer who represented the defendant in Ms. Romea's case. "It was never intended to impair a creditor's remedies."

In a motion to dismiss the case against her client, Heiberger & Associates, Ms. DiGennaro argued that unpaid rent is not a "debt" covered by the federal statute because it does not involve the extension of credit. Moreover, she said, the three-day notice is not a "communication to collect a debt" -- but a legal document required by state law.

Judge Kaplan, apparently with reluctance, rejected both arguments, pointing out that even though it appeared that Congress did not anticipate that the law would be applied to such cases, the clear language of the law, he said, "affords no basis to carve out an exception to the statute's applicability."

Paul Klein, a retired Housing Court judge, said that Kaplan's legal reasoning would be difficult to attack on appeal. "Even if this is not a result Congress anticipated, it's the result you get," said Klein. "When the language of a law is ambiguous, you can interpret legislative intent. But when the language is clear, there's nothing to interpret."

Klein said the easiest way for lawyers and managing agents to avoid problems was to make sure that the landlord (or, in buildings owned by corporations, a corporate officer) issues the necessary notices.

But even that may not be as simple as it sounds. "Some owners live out of state, some go on vacation, some go out of town," said Alan Kucker, a Manhattan lawyer who often represents landlords. "That's why they hire lawyers and managing agents."