Bentley v. Great Lakes Collection Bureau

• Decision Date: 15 September 1993
• Docket Number: No. 1670,D,1670
• Citation: 6 F.3d 60
• Parties: Diane W. BENTLEY, Plaintiff-Appellant, v. GREAT LAKES COLLECTION BUREAU, Defendant-Appellee. ocket 93-7153.
• Court: U.S. Court of Appeals — Second Circuit

Page 60

6 F.3d 60

Diane W. BENTLEY, Plaintiff-Appellant, v. GREAT LAKES COLLECTION BUREAU, Defendant-Appellee.

No. 1670, Docket 93-7153.

United States Court of Appeals Second Circuit.

Argued June 14, 1993.

Decided Sept. 15, 1993.

Joanne S. Faulkner, New Haven, CT, for plaintiff-appellant.

Robert W. Allen, New Haven, CT (Tyler Cooper & Alcorn, of counsel), for defendant-appellee.

Before: KEARSE, PRATT and MINER, Circuit Judges.

MINER, Circuit Judge:

Plaintiff-appellant Diane Bentley appeals from a summary judgment entered in the United States District Court for the District of Connecticut (Covello, J.) dismissing her complaint in an action brought against defendant-appellee Great Lakes Collection Bureau, Inc. ("Great Lakes"). In the complaint, Bentley alleged that two collection letters sent to her by Great Lakes violated the Fair Debt Collection Practices Act, 15 U.S.C. Secs. 1692-1692o (1988 & Supp.1993) (the "FDCPA"). The district court found that Great Lakes did not violate the FDCPA even though some of the statements contained in the letters were not entirely accurate. For the reasons that follow, we reverse.

BACKGROUND

Great Lakes is a debt collection agency that was retained by Citicorp Retail Services, Inc. ("CRSI") to provide debt collection services. The contract entered into by CRSI and Great Lakes provided that Great Lakes "must have CRSI's prior written authorization to bring legal action to affect [sic] collection of any Referred Account." The service contract further provided that Great Lakes "shall at no time state or imply in any communication to a Referred Account that CRSI will sue the debtor without [prior] written authorization" from CRSI. This action arises out of two attempts by Great Lakes to collect an outstanding debt of $483.43 owed to CRSI by Bentley.

Great Lakes sent Bentley two computer-generated collection letters ("dunning letters") dated November 30, 1990 and December 18, 1990. The November 30 dunning letter included the following language:

YOUR CREDITOR IS NOW TAKING THE NECESSARY STEPS TO RECOVER THE OUTSTANDING AMOUNT OF $483.43. THEY HAVE INSTRUCTED US TO PROCEED WITH WHATEVER LEGAL MEANS IS NECESSARY TO ENFORCE COLLECTION.

ENCLOSE YOUR PAYMENT IN THE ENVELOPE PROVIDED AND MAKE YOUR CHECK OR MONEY ORDER PAYABLE TO GREAT LAKES BUREAU, INC.

THIS IS AN ATTEMPT TO COLLECT A DEBT AND ANY INFORMATION OBTAINED WILL BE USED FOR THAT PURPOSE.

Great Lakes' computer is programmed to generate this form of letter whenever the agency receives a new account.

The December 18 letter, a follow-up form letter, stated in relevant part:

THIS OFFICE HAS BEEN UNABLE TO CONTACT YOU BY TELEPHONE, THEREFORE YOUR DELINQUENT ACCOUNT HAS BEEN REFERRED TO MY DESK WHERE A DECISION MUST BE MADE AS TO WHAT DIRECTION MUST BE TAKEN TO ENFORCE COLLECTION.

WERE OUR CLIENT TO RETAIN LEGAL COUNSEL IN YOUR AREA, AND IT WAS DETERMINED THAT SUIT

SHOULD BE FILED AGAINST YOU, IT COULD RESULT IN A JUDGMENT. SUCH JUDGMENT MIGHT, DEPENDING UPON THE LAW IN YOUR STATE, INCLUDE NOT ONLY THE AMOUNT OF YOUR INDEBTEDNESS, BUT THE AMOUNT OF ANY STATUTORY COSTS, LEGAL INTEREST, AND WHERE APPLICABLE, REASONABLE ATTORNEY'S FEES.

AGAIN, DEPENDING UPON THE LAW IN YOUR STATE, IF SUCH JUDGMENT WERE NOT THEREUPON SATISFIED, IT MIGHT BE COLLECTED BY ATTACHMENT OF AN EXECUTION UPON YOUR REAL AND PERSONAL PROPERTY. GARNISHMENT MAY ALSO BE AN AVAILABLE REMEDY TO SATISFY AN UNSATISFIED JUDGMENT, IF APPLICABLE IN THE STATE IN WHICH YOU RESIDE.

WE THEREFORE SUGGEST YOU CALL OUR OFFICE IMMEDIATELY TOLL FREE AT 1-800-874-7080 TO DISCUSS PAYMENT ARRANGEMENTS OR MAIL PAYMENT IN FULL IN THE ENCLOSED ENVELOPE.

NO LEGAL ACTION HAS BEEN OR IS NOW BEING TAKEN AGAINST YOU.

In fact, CRSI had not authorized Great Lakes "to proceed with whatever legal means is necessary to enforce collection" as represented in the first letter; and Great Lakes had made no effort to telephone Bentley prior to December 18, had not referred her account to anyone's desk and was not about to make any decisions regarding her account as represented in the second letter. According to information disclosed during discovery, Great Lakes: does not make the decision whether to initiate legal proceedings in matters involving CRSI; never recommends legal proceedings unless its advice is solicited from its clients; does not employ attorneys admitted to practice in the state of Connecticut; has no procedure by which to refer accounts to attorneys in Connecticut or in other states to commence litigation; and is not informed when any of its clients ultimately sues a debtor. Moreover, even in cases where its advice is solicited, Great Lakes recommends legal proceedings to its clients only for approximately one percent of the collection accounts referred to it.

DISCUSSION

The FDCPA prohibits the use of "any false, deceptive, or misleading representation or means in connection with the collection of any debt." 15 U.S.C. Sec. 1692e (1988). We apply an objective test based on the understanding of the "least sophisticated consumer" in determining whether a collection letter violates section 1692e. Clomon v. Jackson, 988 F.2d 1314, 1318 (2d Cir.1993). The sixteen subsections of section 1692e provide a nonexhaustive list of practices that fall within the statute's ban. These practices include "[t]he threat to take any action that cannot legally be taken or that is not intended to be taken." 15 U.S.C. Sec. 1692e(5) (...