Gervais v. Riddle & Associates, P.C.

• Decision Date: 19 March 2007
• Docket Number: No. 3:03CV2102 (PCD).,3:03CV2102 (PCD).
• Court: U.S. District Court — District of Connecticut
• Parties: Gilbert J. GERVAIS, Plaintiff, v. RIDDLE & ASSOCIATES, P.C., Defendant.

479 F.Supp.2d 270

Gilbert J. GERVAIS, Plaintiff, v. RIDDLE & ASSOCIATES, P.C., Defendant.

No. 3:03CV2102 (PCD).

United States District Court, D. Connecticut.

March 19, 2007.

Zenas Zelotes, New London, CT, for Plaintiff.

Jason Marc Kuselias, Robinson & Cole LLP, Hartford, CT, for Defendant.

RULING ON MOTION FOR RECONSIDERATION

DORSEY, Senior District Judge.

Defendant moves for reconsideration of this Court's Ruling on Cross — Motions for Summary Judgment [Doc. No. 32] filed March 31, 2005. For the reasons stated herein, Defendant's Motion for Reconsideration [Doc. No. 33] is granted, and the prior Ruling is vacated in part and affirmed in part.

I. STANDARD OF REVIEW

The standard for granting a motion for reconsideration is strict. Reconsideration "will generally be denied unless the moving party can point to controlling decisions or data that the court overlooked — matters, in other words, that might reasonably be expected to alter the conclusion reached by the court." Shrader v. CSX Transp., 70 F.3d 255, 257 (2d Cir. 1995); see also United States v. Sanchez, 35 F.3d 673, 677 (2d Cir.1994) (granting reconsideration when a "need is shown to correct a clear error of law or to prevent manifest injustice"). A "motion to reconsider should not be granted where the moving party seeks solely to relitigate an issue already decided." Shrader, 70 F.3d at 257.

II. BACKGROUND¹

Defendant Riddle & Associates, P.C. ("Riddle"), a professional corporation organized under the laws of Utah, operates as a law firm specializing in consumer debt collection. In November 2003, Defendant was retained to recover on Plaintiff Gilbert J. Gervais's past due account. The most recent activity on Plaintiffs account had occurred in 1993, and by 2003 any litigation to recover the debt was barred by the statute of limitations. On November 7, 2003, Defendant sent Plaintiff a collection letter seeking payment on the debt and offering a discount for prompt payment. From mid-November until the end of November, Defendant also attempted unsuccessfully to contact Plaintiff by telephone eleven times and left several messages. On December 8, 2003, Plaintiff filed the present action alleging violations of the Fair Debt Collection Practices Act ("FDCPA"), 15 U.S.C. § 1692, et seq., and the Connecticut Unfair Trade Practices Act ("CUTPA"), CONN. GEN.STAT., 44-110a, et seq. Defendant filed a counter claim requesting a declaratory judgment that its collection efforts violated neither the FDCPA nor CUTPA. Defendant and Plaintiff filed a Motion and Cross-Motion for Summary Judgment [Docs. Nos. 17, 20], respectively, and in its Motion Defendant also asserted an affirmative bona-fide error defense under 15 U.S.C. § 1692k. On March 31, 2005, this Court granted Plaintiffs Cross-Motion for Summary Judgment for both the FDCPA and CUPA claims, rejected Defendant's bona-fide error defense, and denied Defendant's Motion for Summary Judgment. Defendant now seeks reconsideration of that Ruling.

III. DISCUSSION

The FDCPA prohibits "false, deceptive, or misleading representation or means in connection with the collection of any debt." 15 U.S.C. § 1692e. This prohibition includes "[t]he threat to take any action that cannot legally be taken" as well as "[t]he false representation of ... the character, amount, or legal status of any debt." Id. §§ 1692e(5), (2)(A). More generally, the FDCPA also prohibits "[t]he use of any fals6 representation or deceptive means to collect or attempt to collect any debt." Id. § 1692e(10).

A. The False Threat of Litigation Claim Under § 1692e(5)

Previously, in granting Plaintiffs Cross-Motion for Summary Judgment, this Court concluded that no genuine issue of material fact existed as to whether Defendant made a false threat of litigation under § 1692e(5). This Court based its conclusion on the content of a letter and several telephone messages that were left with Plaintiff by Defendant. The letter contained a letterhead identifying Defendant as "Attorneys & Counselors at Law," and the following statements: (1) "[o]ur law firm has been retained to collect from you," (2) "[o]ur client has agreed to," and (3) "[i]f you want to resolve this matter, you must either pay the Total Amount Due ... or call our law firm ... and work out arrangements for payment." (Rul. Mot. Summ. J. 6-7; Riddle & Assocs. Collection Letter 1, Ex. A. to Pl.'s Cross — Mot. Summ. J.) The telephone messages stated: "This is the law firm of Riddle & Associates calling you about an important legal matter." (Rul.Mot.Summ. J. 7.) Upon reconsideration, this Court affirms its prior Ruling.

To evaluate claims under the FDCPA, a court views the facts using the "least-sophisticated-consumer standard." Clomon v. Jackson, 988 F.2d 1314, 1318 (2d Cir.1993); accord Bentley v. Great Lakes Collection Bureau, 6 F.3d 60, 62 (2d Cir.1993). This standard recognizes that "consumers of below-average sophistication or intelligence are especially vulnerable to fraudulent schemes," while at the same time "carefully preserve[s] the concept of reasonableness." Clomon, 988 F.2d at 1318. Hence, the least-sophisticated-consumer standard serves a dual purpose: It "(1) ensures the protection of all consumers, even the naive and the trusting, against deceptive debt collection practices, and (2) protects debt collectors against liability for bizarre or idiosyncratic interpretations of collection notices." Id. at 1320.

As a threshold matter, a court evaluating a claim under § 1693e(5) must determine whether litigation to secure the collection of a debt "[could] not legally be taken or ... is not intended to be taken." 15 U.S.C. § 1692e(5). To make this determination in the instant case, the Court must evaluate the nature of Plaintiffs debt. Since the last activity on Plaintiffs account occurred in 1993, legal action by Plaintiffs creditor was barred by the six-year statute of limitations by the time Defendant sent Plaintiff a collection letter in 2003. See CONN. GEN STAT. § 42a-3-118. Nonetheless, Connecticut courts have long held that "[t]he Statute of Limitations creates a defense to an action. It does not erase the debt. ... [T]he defense can be lost by an unequivocal acknowledgment of the debt, such as ... an unqualified recognition of the debt, or a payment on account." Wells v. Carson 140 Conn. 474, 476, 101 A.2d 297 (1953) (citing Potter v. Prudential Ins. Co., 108 Conn. 271, 280, 142 A. 891 (1928); Sears v. Howe, 80 Conn. 414, 417, 68 A. 983 (1908)). Since the running of the statute of limitations does not extinguish a debt, courts have permitted debt collectors to send collection letters for time-barred debt where the letters do not threaten collection action. See Wallace v. Capital One Bank, No. CIV. JFM-00-2290, 2001 WL 357301, at *2 (D.Md. April 6, 2001). Courts have also found that absent a threat of litigation or other remedy that the debt collector could not legally pursue, there is no FDCPA violation in attempting to collect on a time-barred debt. See Freyermuth v. Credit Bureau Sens., Inc., 248 F.3d 767 (8th Cir.2001); Johnson v. Capital One Bank, No. Civ.A. SA00CA315EP, 2000 WL 1279661, at *2 (VV.D.Tex.. May 19, 2000). However, where a debt collector threatens to sue on a debt it knew was time-barred by the statute of limitations, a violation of the FDCPA will lie. See Stepney v. Outsourcing Solutions, Inc., No. 97 C 5288, 1997 WL 722972, at * 5 (N.D.Ill. Nov. 13, 1997); Kimber v. Federal Fin. Corp., 668 F.Supp. 1480, 1488-90 (M.D.Ala.1987). Therefore, because Plaintiffs debt was time-barred, the next step under § 1692e(5) is to determine whether Defendant's communications constituted a threat of litigation.

In making this determination, courts have been careful to observe that there must be "more than the fact that a collection letter is from an attorney to find a section 1692e(5) violation." Kapeluschnik v. LeSchack & Grodensky, P.C., No. 96cv2399 (ERK)(CLP), 1999 U.S. Dist. LEXIS 22883, at *19 (E.D.N.Y. Aug. 25, 1999); see Veillard v. Mednick, 24 F.Supp.2d 863, 867 (N.D.Ill.1998) ("[T]he mere inference that legal action could be taken because the letter is on law firm letterhead is not enough for § 1692e(5)."). The claim that "every collection letter from an attorney carries an implied threat of legal action" has been described by courts as "overbroad," Kapeluschnik, 1999 U.S. Dist. LEXIS 22883, at *18, and "frivolous," Sturdevant v. Thomas E. Jolas, P.C., 942 F.Supp. 426, 430 (W.D.Wis.199.6). At the same time, courts have noted that "in cases where the likelihood of legal action is not clear from the language, the letter's source can be determinative, especially if it purports to be from an attorney." Jenkins v. Union Corp., 999 F.Supp. 1120 (N.D.Ill.1998). "Because to most consumers, the relevant distinction between a collection agency and an attorney is the ability to sue," a letter signed by an attorney signals to the unsophistcated consumer that legal action is at hand. United States v. Nat'l Fin. Servs., 98 F.3d 131, 136-37 (4th Cir.1996); see Russey v. Rankin, 911 F.Supp. 1449, 1454 (D.N.M. 1995) (holding that a letter "clearly threaten[ed] litigation" when it purported to be from an attorney and declared that "we have the legal right to file a lawsuit").

In addition to the source of the communication, courts look to the content of the communication in order to determine whether "[t]he clear import of the language, taken as a whole, is that some type of legal action has already been or is about to be initiated and can be averted from running its course only by payment." Pipiles v. Credit Bureau of Lockport, Inc., 886 F.2d 22, 25 (2d Cir.1989); see Bentley, 6 F.3d at 62 (finding a false threat of litigation where the "`least sophisticated consumer' would interpret ... language to mean that legal action was authorized, likely and imminent"). Consistent with this focus on "imminence," some courts have held that even where communications specifically refer to...