Lindbergh v. Transworld Systems, Inc.

• Decision Date: 09 February 1994
• Docket Number: Civ. No. 3:93-1843 (JAC).
• Parties: Douglas Kowal LINDBERGH v. TRANSWORLD SYSTEMS, INC.
• Court: U.S. District Court — District of Connecticut

846 F. Supp. 175

Douglas Kowal LINDBERGH v. TRANSWORLD SYSTEMS, INC.

Civ. No. 3:93-1843 (JAC).

United States District Court, D. Connecticut.

February 9, 1994.

Marc M. Schindelman, Hartford, CT, for plaintiff.

Robert W. Allen, Tyler Cooper & Alcorn, New Haven, CT, for defendant.

RULING ON CROSS-MOTIONS FOR SUMMARY JUDGMENT

JOSÉ A. CABRANES, Chief Judge:

This action is brought pursuant to the Fair Debt Collection Practices Act, 15 U.S.C. §§ 1692 et seq. ("FDCPA"), and parallel provisions of Connecticut state law. Pending before the court are the plaintiffs Motion for Summary Judgment as to the Issue of Liability Alone (filed Dec. 16, 1993) ("Plaintiffs Motion"), and the defendant's Cross Motion for Summary Judgment (filed Jan. 6, 1994).

BACKGROUND

A review of the record reveals the following facts. The plaintiff, Douglas Kowal Lindbergh, allegedly incurred a debt in the approximate amount of $1,559.00 to Dr. Walter J. Leckowicz for services rendered in December 1982.¹ As recently as March 30 or March 31, 1993, however, the plaintiff, pursuant to an appointment he himself made, visited the office of Dr. Leckowicz for a consultation.²

Dr. Leckowicz had an agreement with the defendant Transworld Systems, Inc., a debt collector under the FDCPA, whereby — upon receipt of a transmittal form — the defendant would commence collection efforts regarding any debts assertedly owed to Dr. Leckowicz by any of his patients.³ That agreement instructed Dr. Leckowicz that no transmittals should be forwarded to the defendant which "involved bankrupt accounts or accounts which are beyond twelve (12) months from date of last payment or charge."⁴ The agreement further instructed Dr. Leckowicz to provide on the transmittal form the date of the patient's last payment or charge.⁵

In May 1993, the defendant received from Dr. Leckowicz a transmittal form regarding the plaintiffs alleged debt which indicated that March 31, 1993 was the date of the plaintiffs last payment or charge.⁶ Shortly thereafter, also in May 1993, the defendant commenced efforts to collect the plaintiffs debt. Its first communication with the plaintiff contained the notice required by 15 U.S.C. § 1692g.⁷ The plaintiff did not respond to this letter, and in May and June 1993, the defendant followed up on its collection efforts with four more letters to the plaintiff.⁸

At least one of the letters sent to the plaintiff by the defendant had a bold blue stripe across the front of the envelope, upon which was printed in white letters the word "TRANSMITTAL."⁹ This envelope also bore a return address of Santa Rosa, California.¹⁰

The defendant maintains regional offices in Rocky Hill, Connecticut and Woburn, Massachusetts, both of which are licensed as consumer collection agencies in the state of Connecticut.¹¹ The defendant's principal place of business is in Rohnert Park, California. Apparently, however, the California office is not licensed by Connecticut's Banking Commissioner.¹²

The plaintiff believes that all of the correspondence sent to him by the defendant originated from its California office.¹³ In any event, all but one of the letters sent to the plaintiff by the defendant set forth the address of the defendant's office in Rocky Hill, Connecticut.¹⁴

On or about July 17, 1993, the plaintiff sent a letter to the defendant, asserting that the collection of the alleged debt — which dated from 1982 — was barred by the Connecticut statute of limitations, Conn.Gen.Stat. § 52-576.¹⁵ In this letter, the plaintiff further asserted that the defendant was in violation of the FDCPA and demanded $1,500 to avoid a lawsuit. Upon receipt of this letter, the defendant, in accordance with its normal practice when it learns that a debt is disputed, ceased its collection activities, which have not been resumed to date.¹⁶

On September 13, 1993, the plaintiff commenced this action, alleging violations of 15 U.S.C. §§ 1692c,¹⁷ 1692e,¹⁸ and 1692f,¹⁹ and parallel provisions of state law. Both parties have moved for summary judgment.

DISCUSSION

I.

Summary judgment shall be granted "if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits ... show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." Fed.R.Civ.P. 56(c). "The mere existence of some alleged factual dispute between the parties will not defeat an otherwise properly supported motion for summary judgment; the requirement is that there be no genuine issue of material fact." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247-48, 106 S.Ct. 2505, 2509-10, 91 L.Ed.2d 202 (1986) (emphasis in original). While the court must view the inferences to be drawn from the facts in the light most favorable to the party opposing the motion, Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587, 106 S.Ct. 1348, 1356, 89 L.Ed.2d 538 (1986), a party may not "rely on mere speculation or conjecture as to the true nature of the facts to overcome a motion for summary judgment." Knight v. U.S. Fire Ins. Co., 804 F.2d 9,12 (2d Cir.1986) (Feinberg, C.J.), cert. denied, 480 U.S. 932, 107 S.Ct. 1570, 94 L.Ed.2d 762 (1987). The non-moving party may defeat the summary judgment motion by producing sufficient specific facts to establish that there is a genuine issue of material fact for trial. Celotex Corp. v. Catrett, 477 U.S. 317, 322, 106 S.Ct. 2548, 2552, 91 L.Ed.2d 265 (1986). Finally, "`mere conclusory allegations or denials'" in legal memoranda or oral argument are not evidence and cannot by themselves create a genuine issue of material fact where none would otherwise exist. Quinn v. Syracuse Model Neighborhood Corp., 613 F.2d 438, 445 (2d Cir.1980) (quoting SEC v. Research Automation Corp., 585 F.2d 31, 33 (2d Cir.1978)).

II.

A.

In support of his motion for summary judgment, the plaintiff first claims that the defendant has violated 15 U.S.C. §§ 1692e(2)(A) and 1692f²⁰ by attempting to collect a debt barred by the state statute of limitations, Conn.Gen.Stat. § 52-576.²¹ The plaintiffs argument, however, is devoid of merit.

In Hubbard v. National Bond & Collection Associates, 126 B.R. 422 (D.Del.), aff'd without opinion, 947 F.2d 935 (3d Cir.1991), the bankruptcy court held that the plain language of Section 1692e "was intended to prohibit only knowing or intentional misrepresentations by debt collectors," and that this interpretation was "consistent with the FDCPA's purpose and structure." Id. at 427; see also Smith v. Transworld Systems, Inc., 953 F.2d 1025, 1032 (6th Cir.1992) (holding that an unintentional, bona fide error did not give rise to a violation of the FDCPA); 15 U.S.C. § 1692k(c) (providing that "a debt collector may not be held liable ... if it shows by a preponderance of the evidence that the violation was not intentional and resulted from a bona fide error notwithstanding the maintenance of procedures reasonably adapted to avoid such error").

In Hubbard, the court also rejected the proposition that a debt collector must investigate the background of the debt prior to communicating with the debtor as "contrary to the intent of Congress and the purpose behind § 1692g of the FDCPA." Id. at 427-28.²² The court emphasized the process of communication and verification prescribed by Section 1692g, through which

the debt collector learns whether the debt is contested and the reasons, if any, for the debtor's refusal to pay. The statutory scheme of the FDCPA thus allows debt collectors to avoid the costs of investigating a debtor's background and ensures a cost effective means by which a debtor and debt collector can exchange information.

Id. at 428. The court highlighted two important functions of the exchange of information provided for by Section 1692g. First, it ensures that "debt collectors receive relevant factual information concerning debtors so that unnecessary contacts between debt collectors and debtors can be minimized." Id. Second, it

provides debt collectors with "actual knowledge" of the facts relevant to their collection efforts. This is significant because only a knowing violation of § 1692e is actionable.... Therefore, under § 1692g, the debtor bears the responsibility to notify the debt collector of facts which the debt collector would not otherwise be aware.

Id.

Under the circumstances presented here, the court finds that there is simply no genuine issue of material fact that remains for trial. The plaintiff has nowhere alleged that the defendant failed to comply with the requirements of Section 1692g. Indeed, the record demonstrates the contrary. In addition, the plaintiff has produced no specific evidence even remotely suggesting that the defendant actually knew or should have known that the collection of the plaintiffs debt was time-barred. Furthermore, the plaintiff has not offered any explanation as to why he did not dispute his debt and demand verification in the manner envisaged by Section 1692g or why the defendant should not have assumed that the debt was valid by dint of the plaintiffs failure to respond in a timely fashion to its first communication. Moreover, the plaintiff nowhere contests the defendant's assertion that — as soon as it received actual notice of the nature and circumstances of the plaintiffs debt — it ceased its collection activities.

On this record, the court can only wonder why the plaintiff has chosen to impose the significant burden of litigation on both the defendant and this court, instead of simply following the cost-effective procedures provided by the FDCPA specifically designed to facilitate the exchange of information between debt collectors and debtors. Put simply, the plaintiff's position ignores the importance of Section 1692g — which serves to obviate the need for litigation except where a debt collector has behaved knowingly, or at least recklessly, in violation of the statute.

In sum, under the circumstances...