Full Opinion

NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION This opinion shall not "constitute precedent or be binding upon any court." Although it is posted on the internet, this opinion is binding only on the parties in the case and its use in other cases is limited. R. 1:36-3. SUPERIOR COURT OF NEW JERSEY APPELLATE DIVISION DOCKET NO. A-2665-24 JHON CASTILLO, SHEYLA MANRIQUE, a/k/a SHEYLA KATHERINE VARA, and JHON CASTILLO, on behalf of his minor child JHON EVANS CASTILLO VARA, and JHON CASTILLO, on behalf of his minor child JEREMY CASTILLO VARA, Plaintiffs-Appellants, v. SAMMARRO & ZALARICK, P.A. and GARY J. ZALARICK, Defendants-Respondents. __________________________________ TOMAS ROJAS, GUADALUPE BARRANCO, TOMAS ROJAS, on behalf of his minor child BRIAN GALICIA DAVID ROJAS, and TOMAS ROJAS, on behalf of his minor child MELANIE LUNA, Plaintiffs-Appellants, v. SAMMARRO & ZALARICK, P.A. and GARY J. ZALARICK, Defendants-Respondents. __________________________________ EVELIA SOSA, GUMARO PEREZ, GUMARO PEREZ, on behalf of his child RICARDO PEREZ, GUMARO PEREZ on behalf of his child CESAR PEREZ and GUMARO PEREZ, on behalf of his child NANCY PEREZ, Plaintiffs-Appellants, v. SAMMARRO & ZALARICK, P.A. and GARY J. ZALARICK, Defendants-Respondents. __________________________________ BENITA GUERRA, GERARDO DEJESUS, BENITA GUERRA, on behalf of her minor child CARLA GUERRA, and BENITA GUERRA, on behalf of her minor child ERICA GUERRA, Plaintiffs-Appellants, v. SAMMARRO & ZALARICK, P.A. and GARY J. ZALARICK, A-2665-24 2 Defendants-Respondents. __________________________________ Argued October 7, 2026 – Decided November 10, 2026 Before Judges Smith, Vinci, and Zazzali-Hogan. On appeal from the Superior Court of New Jersey, Law Division, Bergen County, Docket Nos. L-6024-24, L- 6026-24, L-6028-24, and L-6029-24. David C. Ricci (David C. Ricci, LLC) argued the cause for appellants. Gary J. Zalarick argued the cause for respondents (Sammarro & Zalarick, PA, attorneys; Gary J. Zalarick, on the brief). PER CURIAM Nearly twenty years ago, our Supreme Court held "a law firm or attorney that regularly files summary dispossess actions for nonpayment of rent is a debt collector under the" Fair Debt Collection Practices Act (FDCPA), 15 U.S.C. §§ 1692 to 1692o, and may be subject to liability under the FDCPA. Hodges v. Sasil Corp., 189 N.J. 210, 215, 234 (2007). In these cases, which were consolidated in the trial court, plaintiffs allege defendants Sammaro & Zalarick, P.A. and Gary J. Zalarick violated the FDCPA when they filed landlord-tenant summary dispossess actions against them. Plaintiffs argue that in each action defendants improperly attempted to collect attorneys' fees and filings fees as A-2665-24 3 rent and falsely represented, among other things, that such amounts were "permitted to be charged as rent by . . . law . . . and by the[ir] lease[s]." On March 24, 2025, the court entered orders dismissing plaintiffs' complaints for failure to state a claim upon which relief can be granted pursuant to Rule 4:6-2(e). Plaintiffs appeal from those orders. For the reasons that follow, we reverse. I. The Castillo Lawsuit On January 19, 2024, defendants filed a verified landlord-tenant complaint in the Special Civil Part, Passaic County, against plaintiff Jhon Castillo and any other occupants (the Castillos) seeking possession of residential rental premises located in Passaic. The complaint was based on non-payment of rent allegedly due under a written lease agreement. The complaint stated there was "due . . . and owing . . . rent" including attorneys' fees in the amount of $750.00 and a filing fee in the amount of $57.00. It also stated, "[t]he . . . attorney fees and other charges are permitted to be charged as rent for purposes of this action by federal, state[,] and local law . . . and by the lease." On April 18, 2024, the landlord-tenant court entered a judgment for possession by default and the Castillos moved out. A-2665-24 4 On October 18, 2024, the Castillos filed an action in the Law Division against defendants alleging violations of the FDCPA (Castillo Lawsuit). In the Castillo Lawsuit, plaintiffs allege defendants improperly sought to collect attorneys' fees in the landlord-tenant action in the amount of $750.00 and a filing fee in the amount of $57.00 even though their written lease "fail[ed] to contain the provision" under the New Jersey Tenant Protection Act of 1992 (TPA), N.J.S.A. 2A:18-61.67, requiring leases to disclose that when the lease allows a landlord to collect attorneys' fees or expenses, the tenant has the same reciprocal right. They also allege their lease includes a provision limiting "filing fees and any additional legal fees" to $100.00. The Castillo Lawsuit alleges defendants violated 15 U.S.C. § 1692e which provides "[a] debt collector may not use any false, deceptive, or misleading representation or means in connection with the collection of any debt." Specifically, defendants falsely represented "the character, amount, or legal status of a[] debt" in violation of 15 U.S.C. § 1692e(2)(A) and used "false representation or deceptive means to collect or attempt to collect any debt" in violation of 15 U.S.C. § 1692e(10). The Castillo Lawsuit also alleges defendants used "unfair or unconscionable means to collect or attempt to collect a[] debt" in violation of 15 U.S.C. § 1692f. They specifically contend A-2665-24 5 defendants violated 15 U.S.C. § 1692f(1) by attempting to collect any amount, including fees or expenses, "unless such amount is expressly authorized by the agreement creating the debt or permitted by law." The Rojas Lawsuit On October 20, 2023, defendants filed a verified landlord-tenant complaint in the Special Civil Part, Passaic County, against Tomas Rojas and any other occupants (the Rojases) seeking possession of residential rental premises located in Passaic. The complaint was based on non-payment of rent. The complaint failed to state whether the tenants had a written or oral lease.1 In a separate registration statement, the landlord certified the lease was "not the subject of a written agreement." The complaint alleged there was "due . . . and owing . . . rent" including attorneys' fees in the amount of $750.00 and a filing fee in the amount of $57.00. The complaint stated, "[t]he . . . attorney fees and other charges are permitted to be charged as rent for purposes of this action by federal, state[,] and local law . . . and by the lease." On December 11, 2023, the Rojases appeared for trial and, with the 1 Paragraph five of the complaint included check boxes to indicate whether the tenants were in possession of the premises under a written or oral lease. Defendants left that section blank. A-2665-24 6 assistance of counsel, entered into a settlement agreement that allowed them to remain in the apartment. The settlement agreement provided "late fees and attorneys['] fees [were] eliminated." On October 18, 2024, the Rojases filed an action in the Law Division against defendants alleging violations of the FDCPA (Rojas Lawsuit). The Rojas Lawsuit alleges defendants improperly sought to collect attorneys' fees in the amount of $750.00 and a filing fee in the amount of $57.00 in the landlord- tenant action because they did not have a written lease agreement. They contend without a written lease agreement, the landlord was precluded from seeking attorneys' fees or the filing fee as additional rent and defendants "falsely represented the amount allegedly owed . . . at the time the [e]viction [l]awsuit was filed," falsely represented the "character, amount, or legal status of the alleged debt," and "used unfair or unconscionable means to collect the alleged debt" in violation of 15 U.S.C. §§ 1692e, e(2)(A), e(10), f, and f(1). The Sosa Lawsuit On October 20, 2023, defendants filed a landlord tenant complaint in the Special Civil Part, Passaic County, against Evelia Sosa and any other occupants (the Sosas) seeking possession of residential rental premises located in Passaic based on nonpayment of rent. The complaint was substantially the same as the A-2665-24 7 complaint filed against the Rojases. Again, the check boxes in paragraph five were left blank. In a separate registration statement, the landlord certified the lease was "not the subject of a written agreement." The complaint nevertheless sought $750.00 in attorneys' fees and a filing fee of $57.00 as rent. On December 11, 2023, the Sosas appeared for trial and, with the assistance of counsel, entered into a settlement agreement that allowed them to remain in the apartment. The settlement agreement provided "[t]he landlord will eliminate attorneys['] fees [and] late fees." On October 18, 2024, the Sosas filed an action in the Law Division against defendants alleging violations of the FDCPA (Sosa Lawsuit). The Sosa Lawsuit is nearly identical to the Rojas Lawsuit. The Guerra Lawsuit On October 20, 2023, defendants filed a landlord tenant complaint in the Special Civil Part, Passaic County, against Benita Guerra and any other occupants (the Guerras) seeking possession of residential rental premises located in Passaic based on nonpayment of rent. The complaint was substantially the same as the complaint filed in the Rojas and the Sosa Lawsuits. Again, the check boxes in paragraph five were left blank. In a separate registration statement, the landlord certified the lease was "not the subject of a A-2665-24 8 written agreement." The complaint nevertheless sought $750.00 in attorneys' fees and a filing fee of $57.00 as rent. On December 11, 2023, the Guerras appeared for trial and, with the assistance of counsel, entered into a settlement agreement that allowed them to remain in the apartment. The settlement agreement provided the "landlord will eliminate late fees [and] attorneys['] fees." On October 18, 2024, the Guerras filed an action in the Law Division against defendants alleging violations of the FDCPA (Guerra Lawsuit). The Guerra Lawsuit is nearly identical to the Rojas and Sosa Lawsuits. II. On December 19, 2024, defendants filed answers to the Castillo, Rojas, Sosa, and Guerra Lawsuits (collectively the FDCPA lawsuits), and third-party complaints alleging plaintiffs and their attorneys defamed them. On January 27, 2025, plaintiffs filed motions to dismiss the third-party complaints. On March 4, 2025, defendants filed cross-motions to dismiss the FDCPA lawsuits. That same day, the court consolidated the FDCPA lawsuits. On March 21, 2025, after hearing oral argument, the court granted A-2665-24 9 defendants' cross-motions to dismiss the FDCPA lawsuits in an oral decision. 2 It found there is "absolutely no basis whatsoever, no requirement for landlord's attorney to do anything other than to plead the facts as accurately at the time they signed the pleading as they know them." The court reasoned "[d]efense counsel should . . . make any arguments or defenses" that "the legal fees and costs . . . were not appropriate . . . in the landlord[-]tenant action" and that "was handled" there. The court also concluded "if you plead unpaid rent and someone paid additional rent during the . . . pendency of the action, that does[ not] necessarily make the representations fraudulent or . . . violative of the [FDCPA]" and "[t]hat would lend itself to legal chaos." It determined "[t]his is not a FDCPA" case and it was "not required that in the pleadings that there[ is] . . . anything that require[d] [defendants] to have indicated that." The court found "that there was no [FDCPA] violation [here]." Conforming orders were entered on March 24, 2025. This appeal followed. On appeal, plaintiffs argue the court failed to state clearly its factual 2 The court also entered orders dismissing defendants' third-party complaints alleging defamation against plaintiffs and their attorneys. Defendants did not cross-appeal from those orders and any such appeals are therefore waived. Green Knight Cap., LLC v. Calderon, 469 N.J. Super. 390, 396 (App. Div. 2021). A-2665-24 10 findings and conclusions of law as required by Rule 1:7-4(a). They also contend the court improperly determined they failed to allege facts sufficient to state viable causes of action under the FDCPA and dismissed their complaints with prejudice. In response, defendants do not dispute plaintiffs' allegations that they regularly file summary dispossess actions for nonpayment of rent. Rather, they contend: (1) a formal pleading in a civil action shall not be treated as an "initial communication" under the FDCPA; (2) the New Jersey litigation privilege protects statements made in the course of judicial proceedings from civil liability; and (3) plaintiffs' claims are precluded by the Entire Controversy Doctrine (ECD), Rule 4:30A, because they should have been joined in the underlying eviction actions. III. We review de novo a trial court's order dismissing a complaint for failure to state a claim upon which relief can be granted pursuant to Rule 4:6-2(e). Pace v. Hamilton Cove, 258 N.J. 82, 95-96 (2024). We "search[] the complaint in depth and with liberality to ascertain whether the fundament of a cause of action may be gleaned even from an obscure statement of claim, opportunity being given to amend if necessary." AC Ocean Walk, LLC v. Am. Guar. & Liab. Ins. A-2665-24 11 Co., 256 N.J. 294, 311 (2024) (alteration in original) (quoting Printing Mart-Morristown v. Sharp Elecs. Corp., 116 N.J. 739, 746 (1989)). "When deciding a motion to dismiss under Rule 4:6-2(e), the test to determine 'the adequacy of a pleading' is 'whether a cause of action is "suggested" by the facts.'" Doe v. Est. of C.V.O., 477 N.J. Super. 42, 54 (App. Div. 2023) (quoting MasTec Renewables Constr. Co. v. SunLight Gen. Mercer Solar, LLC, 462 N.J. Super. 297, 309 (App. Div. 2020)). The court's task is not to determine whether the plaintiff will ultimately prove the allegations, but only whether the pleadings state a legally cognizable claim. Printing Mart, 116 N.J. at 746. "[W]e assume that the allegations in the pleadings are true and afford the [pleading party] all reasonable inferences." Johnson v. City of Hoboken, 476 N.J. Super. 361, 371 (App. Div. 2023) (quoting Sparroween, LLC v. Twp. of W. Caldwell, 452 N.J. Super. 329, 339 (App. Div. 2017)). "Nonetheless, 'the essential facts supporting plaintiff's cause of action must be presented in order for the claim to survive; conclusory allegations are insufficient in that regard.'" AC Ocean Walk, LLC, 256 N.J. at 311 (quoting Scheidt v. DRS Techs., Inc., 424 N.J. Super. 188, 193 (App. Div. 2012)). "A trial court's interpretation of the law and the legal consequences that flow from established facts are not entitled to any special deference." Strickland v. Foulke Mgmt. Corp., 475 N.J. A-2665-24 12 Super. 27, 38 (App. Div. 2023) (quoting Manalapan Realty, L.P. v. Twp. Comm. of Manalapan, 140 N.J. 366, 378 (1995)). Based on our de novo review, we conclude plaintiffs' complaints set forth legally cognizable claims based on alleged violations of the FDCPA and the court improperly granted defendants' motions to dismiss. We are unpersuaded by any of defendants' arguments. The FDCPA was enacted "to eliminate abusive debt collection practices by debt collectors, to insure that those debt collectors who refrain from using abusive debt collection practices are not competitively disadvantaged, and to promote consistent State action to protect consumers against debt collection abuses." Hodges, 189 N.J. at 222 (quoting 15 U.S.C. § 1692(e)). To prevail on a FDCPA claim, a debtor must establish: "'(1) [they are] a consumer, (2) the . . . [defendant] is a debt collector, (3) the . . . challenged practice involves an attempt to collect a "debt" as the [FDCPA] defines it, and (4) the [collector] has violated a provision of the FDCPA in attempting to collect the debt.'" Midland Funding LLC v. Thiel, 446 N.J. Super. 537, 549 (App. Div. 2016) (last alteration in original) (quoting Douglass v. Convergent Outsourcing, 765 F.3d 299, 303 (3d Cir. 2014)). In Hodges, our Supreme Court held "a landlord may not evict a tenant for A-2665-24 13 failure to pay tangential fees such as late charges, attorneys' fees, or costs unless the lease provides that such fees are collect[i]ble as rent." Hodges, 189 N.J. at 221 (citing Cmty. Realty Mgmt., Inc. v. Harris, 155 N.J. 212, 242 (1998)). There, the plaintiffs alleged their landlord's attorney violated the FDCPA by, among other things, "labeling late charges and legal fees as 'rent.'" Id. at 219.3 The Court held summary dispossess actions are subject to the FDCPA because "summary dispossess litigation is an effective – and at times coercive – mechanism for collecting rent and other fees." Id. at 226. The Court noted "[t]he tenant and [the] landlord understand the summons and complaint to be a demand for payment of rental arrears, a demand that prompts defaulting tenants to pay owed rent and frequently . . . coerces those tenants to pay additional fees unnecessary to prevent eviction." Id. at 227-28. In this case, plaintiffs sufficiently allege all the elements necessary to sustain their FDCPA claims. They allege they are consumers and defendants are debt collectors, which defendants do not dispute. They also allege, in accordance with Hodges, that defendants' filing of the summary dispossess 3 Hodges also involved restrictions applicable to federally subsidized housing, "commonly referred to as Section [eight] rental assistance." Id. at 215. Those restrictions are not applicable here. The Court expressly noted, however, "[f]or non-subsidized housing tenants . . . the rent required to avoid eviction shall be defined by their lease agreements." Id. at 232. A-2665-24 14 actions involved attempts to collect debts. Plaintiffs sufficiently allege defendants violated the FDCPA in attempting to collect a debt. As the Court stated in Hodges, "a landlord may not evict a tenant for failure to pay . . . attorneys' fees[] or costs unless the lease provides that such fees are collect[i]ble as rent." Hodges, 189 N.J. at 221. That restriction is now expressly included in Rule 6:3-4, which provides "[t]he amount of rent owed for purposes of [a summary] dispossess action can include only the amount that the tenant is required to pay by federal, state[,] or local law and the lease executed by the parties." The Rojas, Sosa, and Guerra Lawsuits allege defendants improperly included attorneys' fees and the filing fee as rent despite knowing there was no written lease supporting those claims. As in Hodges, by doing so, plaintiffs were "induce[d] . . . to believe they would be evicted unless they paid all [the] enumerated charges" including amounts that exceeded their rental obligations. Hodges, 189 N.J. at 218-19. Indeed, in each of the settlement agreements, the landlords agreed to "eliminate" those claims as a term of the settlements. We are convinced plaintiffs' allegations in the Rojas, Sosa, and Guerra Lawsuits are sufficient to state cognizable claims under the FDCPA. Likewise, in the Castillo Lawsuit, plaintiffs allege defendants included A-2665-24 15 claims that exceeded the amount permitted under their lease and violated the TPA. In that case, the landlord obtained a judgment of possession by default based on "rent due and owing in the amount of $8,207.00," which appears to include the disputed attorneys' fees and filing fee. Again, we conclude the allegations set forth in the Castillo Lawsuit are sufficient to state cognizable claims under the FDCPA. Defendants' argument that the pleadings they filed in the summary dispossess action were not "initial communications" as defined by the FDCPA is both correct and irrelevant. In Hodges, the court determined "Congress precluded 'formal pleading[s] in a civil action' from being treated as an 'initial communication' for purposes of the [FDCPA]'s procedural safeguards, known as the validation notice requirements." Hodges, 189 N.J. at 225 (citing 15 U.S.C. § 1692g(d)) (alteration in original). 4 The Court found "[b]y expressly excluding legal pleadings from one portion of the FDCPA, Congress tacitly reaffirmed the applicability of the remainder of the [FDCPA]'s substantive 4 The validation notice requirements are set forth in 15 U.S.C. § 1692g(a) which provides, a debt collector must send the consumer a written notice "[w]ithin five days" of the first "communication . . . in connection with the collection of any debt, . . . unless" the first communication included the required information. The notice must state, among other things: (1) the amount owed; (2) the name of the creditor; and (3) that the consumer has thirty days to dispute the debt. A-2665-24 16 provisions to law firms engaged in debt collection." Id. at 225-26 (citing Heintz v. Jenkins, 514 U.S. 291, 292 (1995)). In this case, plaintiffs do not contend defendants violated the "validation notice requirements" set forth in 15 U.S.C. § 1692g(a). Rather, as discussed, they contend defendants violated other substantive provisions of the FDCPA that are applicable to pleadings filed in a civil action. Defendants' argument that the litigation privilege shields them from liability is not persuasive. To accept this argument would effectively negate our Supreme Court's holding in Hodges that lawyers who regularly file summary dispossess actions are debt collectors potentially subject to liability under the FDCPA. By definition, such lawyers are engaged in litigation that would be immunized by the litigation privilege. We must presume the Court did not intend such an anomalous result. Moreover, defendants' argument and variations of it have been expressly rejected by other courts, including the United States Supreme Court. See Heintz, 514 U.S. at 299 (holding the FDCPA "applies to attorneys who 'regularly' engage in consumer-debt-collection activity, even when that activity consists of litigation"); Allen v. LaSalle Bank, N.A., 629 F.3d 364, 369 (3d Cir. 2011) ("The application of the New Jersey litigation privilege does not absolve a debt A-2665-24 17 collector from liability under the FDCPA."); Sayyed v. Wolpoff & Abramson, 485 F.3d 226, 231 (4th Cir. 2007) ("[C]ommon law immunities cannot trump the [FDCPA]'s clear application to the litigating activities of attorneys."); Hartman v. Great Seneca Fin. Corp., 569 F.3d 606, 616 (6th Cir. 2009) ("[T]he FDCPA does apply to litigation-related activity, . . . [and] does not shield lawyers engaged in litigation from FDCPA liability."). Defendants' contention that plaintiffs' claims are barred by the entire controversy doctrine (ECD) because they were not asserted in the underlying landlord-tenant actions lacks merit. The ECD provides "[n]on-joinder of claims required to be joined by the [ECD] shall result in the preclusion of the omitted claims." R. 4:30A. Pursuant to Rule 6:3-4(a), "[s]ummary actions between landlord and tenant for the recovery of premises shall not be joined with any other cause of action, nor shall a defendant in such proceedings file a counterclaim or third-party complaint." Because plaintiffs' claims could not have been asserted in the landlord-tenant actions, they are not barred by the ECD. Reversed and remanded. We do not retain jurisdiction. A-2665-24 18