Lezark v. I.C. Sys.

• Decision Date: 29 March 2022
• Docket Number: 2:20-CV-00403-CCW
• Parties: JEFFREY LEZARK, Plaintiff, v. I.C. SYSTEM, INC., Defendant.
• Court: U.S. District Court — Western District of Pennsylvania

JEFFREY LEZARK, Plaintiff,
v.
I.C. SYSTEM, INC., Defendant.

No. 2:20-CV-00403-CCW

United States District Court, W.D. Pennsylvania

March 29, 2022

MEMORANDUM OPINION

CHRISTY CRISWELL WIEGAND, United States District Judge.

Before the Court is (1) Plaintiff Jeffrey Lezark's (“Mr. Lezark”) Motion for Partial Summary Judgment, see ECF No. 42, and (2) Defendant I.C. System, Inc.'s (“ICS”) Motion for Judgment on the Pleadings. See ECF No. 46. Because the Court concludes that the communication at issue here is not “false, deceptive, or misleading” under the Fair Debt Collection Practices Act, 15 U.S.C. § 1692, et seq. (“FDCPA”), ICS's Motion will be GRANTED. As such, Mr. Lezark's Motion will be DENIED as MOOT.

I. Background

A. Procedural History

In his operative, Amended Complaint, Mr. Lezark alleges, on behalf of himself and others similarly situated, that ICS violated the FDCPA by sending communications to debtors that are “false, deceptive or misleading representations or means in connection with the collection of a debt, in violation of 15 U.S.C. § 1692e; and/or unfair or unconscionable means to collect or attempt to collect any debt, in violation of 15 U.S.C. § 1692f.” ECF No. 36 ¶¶ 67, 69. Following the close of discovery, Mr. Lezark filed a Motion for Partial Summary Judgment and ICS filed a

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Motion for Judgment on the Pleadings. See ECF Nos. 42 & 46. Both Motions are fully briefed and ripe for disposition.

B. Relevant Factual Allegations

Because the Court concludes that the Amended Complaint does not state a claim on which relief can be granted, and so will grant ICS's Motion -specifically because the allegedly unlawful communications at issue here do not run afoul of the FDCPA-the Court only considers the facts as alleged in the Amended Complaint.

Mr. Lezark alleges that he incurred a personal medical debt to non-party Tri-State Ortho and Sports Medicine Inc. (“Tri-State”). See ECF No. 36 ¶¶ 35-36. At some point, Tri-State contracted with ICS to collect the debt. See Id. ¶ 38. On April 1, 2019, ICS sent Mr. Lezark a so-called “540 Letter.” See Id. ¶ 40. The 540 Letter is the second form collection letter that ICS sends to debtors. See Id. ¶¶ 13, 16. The first, the “510 Letter, ” informs the debtor that ICS has been retained to pursue debt collection efforts, among other things. See ECF No. 36 ¶¶ 13-14. The 540 Letter, as relevant here, read as follows:

We have contacted you several times regarding the balance stated in the account summary, which remains unpaid

The account information is scheduled to be reported to credit reporting agencies. You have the right to inspect those credit files in accordance with federal law

If you fail to contact us to discuss payment of this account, our client has authorized us to pursue additional remedies to recover the balance due, including referring the account to an attorney.

Please pay this account or contact us to make payment arrangements

If you will be receiving a tax refund and would like to use it to pay your account, please call us to make payment arrangements.

We are a debt collector attempting to collect a debt and any information obtained will be used for that purpose.

This does not contain a complete list of the rights consumers have under Federal, State, or Local laws.

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ECF NO. 46-1 (emphasis added); see also ECF No. 36 ¶ 42 (quoting 540 Letter).^[1]

According to the Amended Complaint, if, after receiving a 540 Letter, a debtor failed to pay, ICS's collection agreement with Tri-State authorized ICS to refer accounts to a so-called “non-litigation attorney referral” (“NLAR”) vendor. See Id. ¶¶ 18-19, 39. The NLAR vendor is authorized to send letters and make phone calls, but is not authorized to take legal action. See id. ¶¶ 21-22. If the debtor does not pay during the time the account is with the NLAR vendor, the account is then returned to ICS. See Id. ¶ 25. ICS then undertakes its own analysis to determine whether the account can be referred for litigation. See Id. ¶¶ 27-28. If ICS determines an account can be referred for litigation, ICS must then seek authorization from Tri-State to refer the account to an attorney for litigation. See Id. ¶¶ 26, 28.

If Tri-State authorizes litigation, and remits payment for court costs, ICS then refers the account to an attorney for litigation. See Id. ¶ 29. The litigation attorney undertakes his or her own independent assessment as to whether to file suit. See Id. ¶ 32. If the attorney decides to sue, he or she would first send a demand letter to the debtor. See Id. ¶ 33. If the debtor fails to pay in response to the demand letter, only then would the attorney file a lawsuit. See Id. ¶ 34. Mr. Lezark alleges in the Amended Complaint that ICS “rarely (if ever)” receives authorization from Tri-State to refer accounts for litigation, and notes that “Tri-State, over the past decade, has not filed a lawsuit in any Allegheny County court on a patient-related medical debt.” See Id. ¶¶ 49-50.

Mr. Lezark alleges in the Amended Complaint that the above-bolded portion of the 540 Letter is “false, deceptive, or misleading, ” in violation of 15 U.S.C. § 1692e, because the 540 Letter “implies that legal action is possible when legal action is not possible and/or intended.”

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Id. ¶¶ 44, 69. Alternatively, Mr. Lezark claims that the 540 Letter, in violation of 15 U.S.C. § 1692f, constitutes an “unfair or unconscionable means to collect or attempt to collect any debt.” Id. ¶ 69.

II. Standard of Review - Motion for Judgment on the Pleadings

“After the pleadings are closed-but early enough not to delay trial-a party may move for judgment on the pleadings.” Fed.R.Civ.P. 12(c). “[J]udgment on the pleadings is only appropriate in favor of the moving party when that party ‘clearly establishes that no material issue of fact remains to be resolved' such that the party is ‘entitled to judgment as a matter of law.'” Consumer Fin. Prot. Bureau v. Navient Corp., 523 F.Supp.3d 681, 686 (M.D. Pa. 2021) (quoting Rosenau v. Unifund Corp., 539 F.3d 218, 221 (3d Cir. 2008)). Where, as here, the movant contends that the operative complaint fails to state a claim on which relief can be granted, the standard applied to a Rule 12(c) motion is functionally the same as that applied to a motion under Rule 12(b)(6). See Christy v. We the People Forms & Serv. Ctrs., United States, Inc., 213 F.R.D. 235, 238 (D.N.J. 2003) (noting that the difference in the standard applied to Rule 12(c) and Rule 12(b)(6) motions is “merely semantic”); see also Spruill v. Gillis, 372 F.3d 218, 223 n.2 (3d Cir. 2004) (“There is no material difference in the applicable legal standards” between Rule 12(b)(6) and Rule 12(c)).

As such, the Court must view the facts alleged in the complaint and “the inferences to be drawn therefrom in the light most favorable to the nonmoving party.” Hoover v. Monarch Recovery Mgmt., 888 F.Supp.2d 589, 593 (E.D. Pa. 2012) (quoting Sikirica v. Nationwide Ins. Co., 416 F.3d 214, 220 (3d Cir. 2005)). In resolving a Rule 12(c) motion, the Court “may not ‘consider matters extraneous to the pleadings.'” Dovale v. Marketsource, Inc., Civil Action No. 05-2872 (FLW), 2006 U.S. Dist. LEXIS 57679, at *12 (D.N.J. Aug. 17, 2006) (quoting In re Burlington Coat Factory Sec. Litig., 114 F.3d 1410, 1426 (3d Cir.1997). That said, courts may consider “(1) exhibits attached to the complaint, (2) matters of public record, and (3) all documents

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that are integral to or explicitly relied upon in the complaint.” Id. at *12-13 (citing Angstadt v. Midd-West Sch. Dist., 377 F.3d 338, 342 (3d Cir. 2004)).

III. Discussion

A. The FDCPA and the “Least Sophisticated Debtor” Standard

To succeed on his FDCPA claim, Mr. Lezark must establish that “‘(1) [he] is a consumer, (2) the defendant is a debt collector, (3) the defendant's challenged practice involves an attempt to collect a ‘debt' as the [FDCPA] defines it, and (4) the defendant has violated a provision of the FDCPA in attempting to collect the debt.'” Daniels v. Solomon & Solomon P.C., 751 Fed.Appx. 254, 256 (3d Cir. 2018) (quoting Douglass v. Convergent Outsourcing, 765 F.3d 299, 303 (3d Cir. 2014)). Only the fourth prong, for purposes of ICS's Motion, is disputed. See, generally, ECF No. 47 (challenging only whether the 540 Letter was false, deceptive, or misleading).

Mr. Lezark's claims that the 540 Letter violates the FDCPA rest primarily on § 1692e, “which prohibits the use of ‘false, deceptive, or misleading representation or means in the connection with the collection of any debt.'” Lesher v. Law Offices of Mitchell N. Kay, PC, 650 F.3d 993, 997 (3d Cir. 2011) (quoting 15 U.S.C. § 1692e). Section 1692e “set[s] forth a non-exhaustive list of practices that fall within its ban, ” id., including, as relevant here, subsection 1692e(5) (which prohibits “[t]he threat to take any action that cannot be legally taken or that is not intended to be taken”) and/or subsection 1692e(10) (which prohibits “[t]he use of any false representation or deceptive means to collect or attempt to collect any debt or to obtain information concerning a consumer”). That said, “[b]ecause the list of the sixteen subsections is non-exhaustive, a debt collection practice can be a ‘false, deceptive, or misleading' practice in violation of section 1692e even if it does not fall within any of the subsections.” Lesher, 650 F.3d at 997 (quoting Clomon v. Jackson, 988 F.2d 1314, 1318 (2d Cir. 1993)).

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“Because the FDCPA is a remedial statute…we construe its language broadly, so as to effect its purpose.” Brown v. Card Serv. Ctr., 464 F.3d 450, 453 (3d Cir. 2006) (citations omitted). Accordingly, “lender-debtor communications potentially giving rise to claims under the FDCPA…[are] analyzed from the perspective of the least sophisticated debtor.” Id. at 454. “This standard aims to ‘protect[] the gullible as well as the...