Foti v. Nco Financial Systems, Inc.

Citation424 F.Supp.2d 643
Decision Date25 March 2006
Docket NumberNo. 04-CV-707 (KMK).,04-CV-707 (KMK).
PartiesPaul S. FOTI; Zovinar Ashjian, on behalf of himself and all others similarly situated; Chris Zebro, on behalf of himself and all others similarly situated, Plaintiffs, v. NCO FINANCIAL SYSTEMS, INC., Defendant.
CourtUnited States District Courts. 2nd Circuit. United States District Courts. 2nd Circuit. Southern District of New York

Michael M. Cohen, Law Offices of Michael M. Cohen, New York City, Yitzchak E. Cohen, Law Offices of Yitzchak E. Cohen, Riverdale, NY, for. Plaintiffs.

David Israel, Sessions, Fishman & Nathan, L.L.P., New Orleans, LA, Kevin Barry McHugh, Fiedelman Garfinkel & Lesman, New York City, for Defendant.


KARAS, District Judge.

Plaintiffs Paul S. Foti, Chris Zebro, and Zovinar Ashjian (collectively Plaintiffs) bring this action, on behalf of themselves and all other persons similarly situated, alleging that Defendant NCO Financial Systems, Inc. (Defendant or "NCO"), a debt collector, violated the Fair Debt Collection Practices Act ("FDCPA" or "Act"), 15 U.S.C. § 1692 et seq. Specifically, Plaintiffs allege violations of the FDCPA based on two communications: (1) a January 18, 2004 pre-recorded message; and (2) a January 26, 2004 telephone conversation. NCO moves to dismiss Counts One and Two of the First Amended Class Action Complaint ("Amended Complaint") pursuant to Fed.R.Civ.P. 12(b)(6).1 For the reasons stated below, the Motion is GRANTED in part and DENIED in part.2

I. Background

For the purpose of this Motion, the Court will take as true the facts alleged in the Amended Complaint, which are as follows. On January 1, 2004, Foti received a collection letter ("January 1 Letter") from NCO seeking to collect a debt of $78.75 on behalf of Columbia House Company. (Am. Compl. ¶ 21, Ex. A) The January 1 Letter provides, in pertinent part:

The named creditor3 has placed this account with our office for collection. It is important that you forward payment in full.

If you choose not to respond to this notification, we will assign your account to a collector with instructions to collect the balance.

. . . . .

Unless you notify this office within 30 days after receiving this notice that you dispute the validity of the debt or any portion thereof, this office will assume this debt is valid. If you notify this office in writing within 30 days from receiving this notice, this office will obtain verification of the debt or obtain a copy of a judgment and mail you a copy of such judgment or verification. If you request this office [sic] in writing within 30 days after receiving this notice, this office will provide you with the name and address of the original creditor, if different from the current creditor.

. . . . .

This is an attempt to collect [illegible] debt. Any information obtained will be used for that purpose. This is a communication from a debt collector.

(Am.Compl.Ex. A) Plaintiffs do not contest that this letter complied with the FDCPA requirements (Am.Compl.¶ 22), and, in particular, the requirement that a debt collector's initial communication provide the debtor with notice of a thirty-day validation period. (Am.Compl.¶ 23)

Plaintiffs' allegations stem from two subsequent communications. First, Plaintiffs contend that on or about January 18, 2004, NCO called Foti's residence and left the following uniform, pre-recorded, and standardized message ("January 18 Pre-Recorded Message"):4

Good day, we are calling from NCO Financial Systems regarding a personal business matter that requires your immediate attention. Please call back 1-866-701-1275 once again please call back, toll-free, 1-866-701-1275, this is not a solicitation.

(Am.Compl.¶ 27, Ex. B) (emphasis by Plaintiffs omitted) Plaintiffs allege that this message was "communicated to millions of other debtors, including members of the Class." (Am.Compl.¶ 26)

Second, Plaintiffs contend that on January 26, 2004, Foti called the toll-free number (referenced in the message outlined above), and had the following conversation with an NCO agent ("January 26 Conversation"):

NCO Agent: Good afternoon, NCO, can I help you?

Paul Foti: Yes, hi, I am responding to a message that I got on my machine

NCO Agent: OK, and what's your telephone number that we dialed?

Paul Foti: Uh, 845-223-3954

NCO Agent: OK, just bear with me here for one moment . . . OK, we are looking for a Paul Foti

Paul Foti: Yes

NCO Agent: Is this him? OK sir what we are calling in regards to is

Paul Foti: What, what5 I was away, when did you call me?

NCO Agent: I have no idea

Paul Foti: What do you mean you have no idea?

NCO Agent: I have no idea sir, I personally did not phone you

Paul Foti: OK can you transfer me to the person that called me, let me see if I need to speak to a certain person

NCO Agent: It doesn't matter who called you sir, [chuckle] it doesn't matter, a whole bunch of agents get assigned to call millions of people a day it doesn't matter who called you

Paul Foti: OK, OK

NCO Agent: OK, you're Paul Foti? Paul Foti: Yes

NCO Agent: OK, sir, what we are calling in regard to is two outstanding Columbia House accounts, one's for thirty eight dollars and thirteen cents and the other is for seventy eight dollars and seventy five cents. They've both been sent here into collections by Columbia House.

Paul Foti: OK, it said, the message was that it required my immediate attention, what does that mean?

NCO Agent: And it does. Because you have accounts sitting here in collections and it's not a solicitation and the problem is, sir, that if you don't take care of this, we call up to four times a day.

Paul Foti: You could you would call me you could call me up to four times a day? NCO Agent: Yeah, we could call you very often.

Paul Foti: If I don't take care of it. NCO Agent: Yes.

Paul Foti: So, so what do you need me to do today?

NCO Agent: Pay the account

Paul Foti: Excuse me?

NCO Agent: Pay the account

Paul Foti: Pay the account

NCO Agent: Pay the account

Paul Foti: OK, uh what what if I don't want you to call my house anymore?

NCO Agent: eh you've got to pay the account

Paul Foti: and what if I don't want to pay the account

NCO Agent: you've gotta pay the account in order to stop that sir, the legislation governs us to call for the purpose of collecting this debt until it's paid in full

Paul Foti: and what if, and what if I tell you to stop calling me?

NCO Agent: that means nothing to us

Paul Foti: that means

NCO Agent: by law, it means nothing to us

Paul Foti: OK. Alright, why don't you give me the, the uh information where I need to send the money

NCO Agent: OK, you got a pen handy? [beep—incoming call]

NCO Agent: You got a beep?

NCO Agent: Are you there sir? . . . really.

(Am.Compl.¶ 31, Ex. C) (emphasis by Plaintiffs omitted)

The Amended Complaint also alleges that "Plaintiffs Zebro and Ashjian had substantially similar experiences as did Foti and were subjected to additional deceptive and harassing collection practices." (Am. Compl. ¶ 33) For purposes of this Motion, however, the Court examines only the question of whether the allegations as they relate to the January 18 Pre-Recorded Message and the January 26 Conversation survive the Motion to Dismiss. The question of whether the "substantially similar experiences" of Zebro and Ashjian are such that they fall within the same class of plaintiffs as Foti need not be resolved at this time.

Moreover, the Amended Complaint indicates that "Ashjian (i) challenged—in writing—the alleged debt NCO was retained to collect, and (ii) made repeated written requests to NCO that they cease any and all collection communications" (Am. Compl.¶ 36); and that "NCO . . . did not heed Ashjian's written requests to cease communications" (Am.Compl.¶ 37), or "acknowledge Ashjian's written challenges of the debts NCO was attempting to collect and, in fact, continues to attempt to collect." (Am.Compl.¶ 38) These allegations relate to Count Three, discussed below, which is not the subject of the present dispute. Rather, this Motion focuses on the two specific communications outlined above—(i) the January 18 Pre-Recorded Message and (ii) the January 26 Conversation.

Based on the above correspondence, Plaintiffs allege several violations of the FDCPA.6 First, Count One claims (on behalf of the entire class) NCO violated 15 U.S.C. § 1692g, requiring, inter alia, the debt collector to inform the consumer/debtor that s/he is entitled to a thirty-day validation period in which s/he can indicate that any portion of the debt is disputed,7 and § 1692e(10), prohibiting false and deceptive practices.8 Specifically, Plaintiffs contend that "NCO contacted Plaintiffs, and members of the Class, within the thirty-day validation period and confused and/or overshadowed Plaintiffs', and members of the Class's, thirty-day validation rights by, inter alia, demanding immediate payment." (Am.Compl.¶ 70)

Count Two9 alleges violations of FDCPA § 1692e(11), which requires a debt collector to disclose that a communication is from a debt collector, often referred to as the Mini-Miranda.10 Plaintiffs maintain that "NCO in subsequent communications with Plaintiffs, and members of the Class, did not identify itself as a `debt collector,' or otherwise communicate the Mini-Miranda." (Am.Compl.¶ 80)

Count Three11 alleges violations of FDCPA § 1692c(c), which pertains to the circumstances under which a debt collector must cease communication with the consumer,12 and § 1692d, which prohibits a debt collector from engaging "in any conduct the natural consequence of which is to harass, oppress, or abuse any person in connection with the collection of a debt."13 Count Three is not at issue in the present Motion to Dismiss, and, accordingly, is not discussed herein.

Plaintiffs append to both Counts One and Two general claims that NCO used "unfair or unconscionable means to collect or attempt to collect any debt" in violation of 15 U.S.C. § 1692f.14 (Am.Comp.¶¶ 72, 82) The...

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