22-2064-cv Faith Labadie v. NU Era Towing and Service, Inc.

UNITED STATES COURT OF APPEALS FOR THE SECOND CIRCUIT

SUMMARY ORDER RULINGS BY SUMMARY ORDER DO NOT HAVE PRECEDENTIAL EFFECT. CITATION TO A SUMMARY ORDER FILED ON OR AFTER JANUARY 1, 2007 IS PERMITTED AND IS GOVERNED BY FEDERAL RULE OF APPELLATE PROCEDURE 32.1 AND THIS COURT’S LOCAL RULE 32.1.1. WHEN CITING A SUMMARY ORDER IN A DOCUMENT FILED WITH THIS COURT, A PARTY MUST CITE EITHER THE FEDERAL APPENDIX OR AN ELECTRONIC DATABASE (WITH THE NOTATION “SUMMARY ORDER”). A PARTY CITING TO A SUMMARY ORDER MUST SERVE A COPY OF IT ON ANY PARTY NOT REPRESENTED BY COUNSEL.

At a stated term of the United States Court of Appeals for the Second Circuit, held at the Thurgood Marshall United States Courthouse, 40 Foley Square, in the City of New York, on the 18th day of December, two thousand twenty-three.

PRESENT: RICHARD C. WESLEY, DENNY CHIN, JOSEPH F. BIANCO, Circuit Judges. _____________________________________

Faith Labadie,

Plaintiff-Appellant,

v. 22-2064-cv

NU Era Towing and Service, Inc.,

Defendant-Appellee. _____________________________________

FOR PLAINTIFF-APPELLANT: BRIAN L. BROMBERG, Bromberg Law Office, P.C., Brooklyn, NY (Seth J. Andrews, Law Offices of Kenneth Hiller, PLLC, Amherst, NY, on the brief).

FOR DEFENDANT-APPELLEE: MATTHEW S. LERNER (Daniel Gerber, on the brief), Gerber Ciano Kelly Brady LLP, Buffalo, NY. Appeal from a judgment of the United States District Court for the Western District of New

York (Vilardo, J.).

UPON DUE CONSIDERATION, IT IS HEREBY ORDERED, ADJUDGED, AND

DECREED that the judgment of the district court is AFFIRMED.

Plaintiff-Appellant Faith Labadie appeals from the district court’s judgment, entered on

August 24, 2022, dismissing her complaint with prejudice for failure to state a claim under Federal

Rule of Civil Procedure 12(b)(6). Labadie asserted in her complaint that Defendant-Appellee NU

Era Towing and Service, Inc. (“NU Era”) breached the peace in violation of the Fair Debt

Collection Practices Act,

et seq. (“FDCPA”), when its agent repossessed her

vehicle. We assume the parties’ familiarity with the underlying facts, procedural history, and

issues on appeal, to which we refer only as necessary to explain our decision to affirm.

According to the complaint, Chrysler Capital hired NU Era to collect a debt that Labadie

owed for a vehicle or to repossess it. On November 1, 2019, as Labadie walked out of a mall with

her minor son, her vehicle was blocked by NU Era’s vehicle, which prevented her from leaving

the parking lot. The driver of NU Era’s vehicle (the “agent”) told her that her vehicle was being

repossessed. Although Labadie objected to the repossession, the agent called for a tow truck,

which arrived approximately twenty minutes later. Labadie then objected again and advised the

agent that she needed to take her son to Ronald McDonald House, where he resided, for medical

treatment. The agent told her that she could drive her vehicle back to Ronald McDonald House so

that she could get her son to the treatment facility and then her vehicle would be repossessed at

that location. The agent allegedly also stated that, if she did not agree or tried to drive anywhere

else on the way to the treatment facility, he would call the police. Labadie drove her vehicle to

2 Ronald McDonald House, with the agent and tow truck driver following her, and she objected to

the repossession again upon arriving there. The agent allegedly told her that, if she did not provide

her keys to the vehicle, she would be charged $400 for the replacement set. Labadie then provided

her vehicle’s keys to the tow truck driver.

The complaint asserted one cause of action for repossessing a vehicle in a manner that

violated Section 1692f(6) of the FDCPA. In a decision and order, dated August 23, 2022, the

district court adopted the report and recommendation of the magistrate judge to whom the matter

had been referred and granted NU Era’s motion to dismiss the complaint for failure to state a claim

under Section 1692f(6). See Labadie v. NU Era Towing and Serv., Inc., 20-CV-722-LJV-LGF,

(W.D.N.Y. Aug. 23, 2022). Labadie appealed.

We review a district court’s grant of a motion to dismiss de novo, assuming the truth of all

factual allegations contained in the complaint and drawing all reasonable inferences in the

plaintiff’s favor. Melendez v. Sirius XM Radio, Inc.,

(2d Cir. 2022). “To survive

a motion to dismiss, a complaint must contain sufficient factual matter, accepted as true, to ‘state

a claim to relief that is plausible on its face.’” Ashcroft v. Iqbal,

(2009) (quoting

Bell Atl. Corp. v. Twombly,

(2007)).

The FDCPA prohibits debt collectors from using “unfair or unconscionable means to collect

or attempt to collect any debt,” including: “[t]aking or threatening to take any nonjudicial action

to effect dispossession or disablement of property if . . . there is no present right to possession of

the property claimed as collateral through an enforceable security interest.” 15 U.S.C. § 1692f.

Here, the sole issue on appeal is whether Labadie sufficiently pled that NU Era had no “present

right to possession” of her vehicle at the time of its repossession. We assume without deciding

3 that the parties are correct in agreeing that NU Era’s “present right to possess[]” Labadie’s vehicle

is determined under state law—here, the New York Uniform Commercial Code (“U.C.C.”). The

New York U.C.C. allows a secured party to “take possession of the collateral . . . without judicial

process, if it proceeds without breach of the peace.”

(McKinney 2023)

(emphasis added). The New York U.C.C. “does not define or explain the conduct that will

constitute a breach of the peace, leaving that matter for continuing development by the courts.”

cmt. 3.

Labadie argues that the district court erred in concluding that she failed to plausibly allege

that NU Era’s agent repossessed her vehicle on November 1, 2019 in a manner that breached the

peace in violation of the FDCPA. In particular, the district court concluded that Labadie’s three

verbal objections to the repossession did “not suggest anything remotely approaching facts

sufficient to create a breach of the peace” and that her other factual allegations were likewise

inadequate to assert a claim for relief under Section 1692. Labadie,

at *1–2.

As set forth below, we conclude that the district court properly dismissed the claim under Rule

12(b)(6).

The New York Court of Appeals has defined a breach of the peace as “a disturbance of

public order by an act of violence, or by any act likely to produce violence, or which, by causing

consternation and alarm, disturbs the peace and quiet of the community.” People v. Most,

(1902) (defining the common law criminal offense). In other words, a breach of

the peace “is an offense which tends to disturb public quiet and peace and interfere with the

tranquil[]ity which the citizens of a community have a right to enjoy,” People v. Halliday,

(3d Dep’t 1932) (applying the criminal definition in the repossession context);

4 accord Hilliman v. Cobado,

(Sup. Ct., Cattaraugus County 1986); Cherno

v. Bank of Babylon,

, 281–82 (Sup. Ct., Nassau County 1967), aff’d,

(2d Dep’t 1968).

We agree with the district court that Labadie’s allegations are insufficient to state a plausible

claim for breach of the peace, as defined under New York law. As a threshold matter, Labadie’s

suggestion that her verbal objections were sufficient to constitute a breach of peace under New

York law is inconsistent with the legal standard articulated by New York’s highest court in Most,

which we are bound to follow for purposes of interpreting New York law as a requisite part of our

analysis of her federal claim under the FDCPA. See Wainwright v. Goode,

(1983)

(per curiam) (“[T]he views of the state’s highest court with respect to state law are binding on the

federal courts.”); see also Portalatin v. Graham,

(2d Cir. 2010) (“Of course, we

do not defer to [the New York Court of Appeals’] interpretation of federal law, but we are bound

by its construction of New York law in conducting our analysis.”). Moreover, New York courts

have held, applying the definition established in Most, that a lack of consent by the debtor to

repossession does not constitute a breach of peace. See, e.g., Cherno, 54 Misc. 2d at 281–82 (use

of unauthorized key to enter debtor’s premises not breach of the peace); Glob. Casting Indus., Inc.

v. Daley-Hodkin Corp.,

, 520–21 (Sup. Ct., Nassau County 1980) (same). Indeed,

no New York state court has found that a debtor’s verbal objections, standing alone, give rise to a

claim for breach of the peace; rather, New York courts have found a breach of peace where the

debtor’s verbal objections were followed by actions taken by the repossessor that resulted in

violence or were likely to lead to violence. See, e.g., Hilliman,

.

5 To the extent Labadie alternatively suggests that her additional allegations together with the

verbal objections constitute a plausible claim for breach of the peace under New York law, we

disagree. Even when her verbal objections are considered in combination with her other

allegations, including the agent’s act of blocking her car in the mall parking lot, the complaint did

not plausibly allege an “act likely to produce violence” or one that “disturbs the peace and quiet

of the community.” Most,

. Labadie relies heavily on the alleged fact that, when

the agent allowed her to drive the vehicle to Ronald McDonald House before the repossession, she

was told that the police would be called if she tried to go somewhere else. To be sure, we recognize

that the active use of police assistance to effectuate a repossession is not permitted under Section

9-609. See

cmt. 3 (“This section does not authorize a secured party

who repossesses without judicial process to utilize the assistance of a law-enforcement officer. A

number of cases have held that a repossessing secured party’s use of a law-enforcement officer

without benefit of judicial process constituted a failure to comply with former Section 9-503.”).

Notwithstanding the agent’s alleged reference to possibly calling the police, the complaint does

not allege that NU Era ever contacted the police or that the police were used at all in the

repossession of Labadie’s vehicle.

In short, the complaint fails to plausibly allege that NU Era’s statements or actions created

a likelihood of violence or disturbance to the community such that a breach of the peace occurred,

as defined by New York law. Therefore, the district court properly dismissed the complaint’s sole

claim under the FDCPA.

6 * * *

We have considered Labadie’s remaining arguments and find them to be without merit.

Accordingly, we AFFIRM the judgment of the district court.

FOR THE COURT: Catherine O’Hagan Wolfe, Clerk of Court

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