Pipiles v. Credit Bureau of Lockport, Inc.

• Decision Date: 18 September 1989
• Docket Number: No. 644,D,644
• Parties: Vadonna M. PIPILES, Plaintiff-Appellant, v. CREDIT BUREAU OF LOCKPORT, INC., Defendant-Appellee. ocket 88-7802.
• Court: U.S. Court of Appeals — Second Circuit

Page 22

886 F.2d 22

58 USLW 2257

Vadonna M. PIPILES, Plaintiff-Appellant, v. CREDIT BUREAU OF LOCKPORT, INC., Defendant-Appellee.

No. 644, Docket 88-7802.

United States Court of Appeals, Second Circuit.

Argued Jan. 23, 1989.

Decided Sept. 18, 1989.

O. Randolph Bragg, UAW-GM Legal Services Plan, Newark, Del. (Joseph Rotella and Robert Scheffer, Lockport, N.Y., of counsel), for plaintiff-appellant.

Willard H. Harris, Jr., Lockport, N.Y., for defendant-appellee.

Before NEWMAN, PIERCE and MAHONEY, Circuit Judges.

MAHONEY, Circuit Judge:

Plaintiff-Appellant Vadonna Pipiles ("Pipiles") appeals from a judgment entered, after a bench trial, in the United States District Court for the Western District of New York, John T. Curtin, Judge, dismissing her complaint alleging various violations of the Fair Debt Collection Practices Act, 15 U.S.C. Secs. 1692-1692o (1982 & Supp. V 1987) (the "FDCPA"), by defendant-appellee the Credit Bureau of Lockport, Inc. (the "Bureau"). The complaint alleges six violations of the FDCPA and two violations of the New York General Business Law. On appeal, Pipiles addresses three of the six violations of the FDCPA and a fourth violation thereof not stated in her complaint. We consider the issues presented on appeal.

This case is based primarily upon a document entitled "48 HOUR NOTICE" mailed by the Bureau to Pipiles on April 9, 1987 (the "Notice"). Pipiles charges that the Notice (1) misrepresented the character and amount of a debt in violation of 15 U.S.C. Sec. 1692e(2)(A) (1982); (2) threatened action that was not intended to be taken in violation of 15 U.S.C. Sec. 1692e(5) (1982); (3) used a false representation or deceptive means to collect or attempt to collect a debt in violation of 15 U.S.C. Sec. 1692e(10) (1982); and (4) failed to disclose clearly that the Bureau was attempting to collect a debt and that any information obtained would be used for that purpose, in contravention of 15 U.S.C. Sec. 1692e(11) (1982).

In an oral opinion at the conclusion of trial, the district court dismissed the complaint and directed entry of judgment for the Bureau. For the reasons that follow, we find violations of the FDCPA, and reverse and remand for an award of costs and an attorney's fee to Pipiles.

Background

An indebtedness of $35.00 owed by John T. Julius ("Julius"), ex-husband of Pipiles, for services rendered to Julius' subsequent spouse, Patricia, by Cardiology Associates was referred to the Bureau for collection on April 17, 1986. On March 3, 1987, a further indebtedness of $100.00 purportedly owed by Julius for dental work performed on Tina Julius, the daughter of Julius and Pipiles, by Drs. Sippel, Doyle and Murray was referred to the Bureau for collection. The Bureau thereupon sent a written communication to Julius, who came to the Bureau on March 6, 1987 with a copy of the decree divorcing him from Pipiles, which provided inter alia that "[Julius] shall maintain health and hospitalization for the minor issue of the marriage with any medical, dental, visual or similar bills to be split equally between the parties hereto." The decree does not identify these minor issue by name, but it is clear from the support provisions of the decree that there are two such issue.

Robert B. Emerick ("Emerick"), president of the Bureau, testified that he thereupon sent an initial form letter to Pipiles on March 7, 1987 concerning the $135.00 indebtedness which included the statement: "This is an attempt to collect a debt. Any information obtained will be used for that purpose." Pipiles denied receipt of the letter, but the district court accepted Emerick's testimony that it was sent. A further notice, in the same format as the Notice which is the subject of this litigation, was sent to Julius on April 1, 1987, resulting in his payment of $85.00 to the Bureau on April 13, 1987 (i.e., the full amount of the $35.00 indebtedness to Cardiology Associates and half of the $100.00 dental bill). Meanwhile, however, the Bureau mailed the Notice to Pipiles on April 9, 1987.

The Notice demanded payment of one-half of an outstanding amount of $135.00. Across the top of the Notice was printed in large type "48 HOUR NOTICE." The Notice also stated in capital letters that: "Notice is Hereby Given That This Item Has Already Been Referred For Collection Action," "We Will At Any Time After 48 Hours Take Action As Necessary And Appropriate To Secure Payment In Full," and "Pay This Amount Now If Action Is To Be Stopped." As for the source of the debt, a handwritten notation under the legend "On The Account Of" read "Drs Sippel, Doyle & Murray & Cardiology Associates 135.00". The Notice also contained the handwritten notations "for Patricia & Tina" and "Your ex-husband John Julius states that you are responsible for 1/2 the stated amount. Please remit to this office by 4-15-87," as well as the name and address of Pipiles (as addressee), and the name, address and telephone number of the Bureau.

Pipiles called the Bureau the next day and told a secretary that she was not responsible for any bill relating to Patricia Julius, the wife of her ex-husband. In a telephone conversation that he initiated with Pipiles the next day, Emerick conceded this. Pipiles testified that she was never told by the Bureau what the breakdown was between the two bills which totalled $135.00, and has never paid the $50.00 that she concededly owes on the dental bill.

Emerick testified that he had no prior knowledge, when the Notice was sent to Pipiles, that Patricia was not a daughter of Pipiles and Julius, and that the $35.00 indebtedness to Cardiology Associates was included in the Notice for that reason. He further testified that in dealing with a $50.00 account (the amount of Pipiles' indebtedness), he would "try to contact by phone," but would not institute legal action for an account less than $150.00.

At the conclusion of the bench trial, the district court rendered an oral decision dismissing the complaint. The court made no specific determination with respect to Pipiles' claim that section 1692e(2)(A) was violated by a false representation as to the character and amount of a debt; this claim was not stated in Pipiles' complaint and is apparently raised for the first time on appeal. The district court rejected the overlapping claims of violations of section 1692e(5) ("threat to take any action that ... is not intended to be taken") and section 1692e(10) ("use of any false representation or deceptive means to collect or attempt to collect any debt"), concluding that "[t]here is nothing said here that he is going to refer this further to an attorney," and "there is no violation of either the letter or the spirit of the law." As to section 1692e(11), which, with an exception not here pertinent, requires the disclosure in "all communications made to collect a debt" that "the debt collector is attempting to collect a debt and that any information obtained will be used for that purpose," the district court concluded that the failure of the Notice to include this information "may be excused under the circumstances" because the Bureau had no intent to deceive.

Judgment was thereupon entered for the defendant dismissing the complaint. This appeal followed.

Discussion

A. Violations of the FDCPA.

On appeal, Pipiles argues that four subsections of 15 U.S.C. Sec. 1692e were violated by the Notice. Section 1692e is violated when a debt collector uses "any false, deceptive, or misleading representation or means in connection with the collection of any debt." The sixteen subsections of section 1692e detail nonexclusive specifications of this general prohibition.

15 U.S.C. Sec. 1692k(c) provides a general defense to any violation of Sec. 1692e, however, stating:

A debt collector may not be held liable in any action brought under this subchapter if the debt collector shows by a preponderance of evidence that the violation was not intentional and resulted from a bona fide error notwithstanding the maintenance of procedures reasonably adapted to avoid any such error.

Further, section 1692k(b)(1) provides that in determining the amount of liability in any individual action for violation of the FDCPA, "the court shall consider, among other relevant factors ..., the frequency and persistence of noncompliance by the debt collector, the nature of such noncompliance, and the extent to which such noncompliance was intentional...."

Against this background, we turn to consideration of the specific statutory violations asserted by Pipiles.

1. Section 1692e(2)(A).

No violation of this subsection was pleaded, and no application to amend the pleadings to conform to the proof, see Fed.R.Civ.P. 15(b), was made here or below. Under these circumstances, we ordinarily refuse to consider a claim for the first time on appeal. Hormel v. Helvering, 312 U.S. 552, 556, 61 S.Ct. 719, 721, 85 L.Ed. 1037 (1941); Davis v. Musler, 713 F.2d 907, 917 (2d Cir.1983) (Van Graafeiland, J., concurring); Adato v. Kagan, 599 F.2d 1111, 1116 (2d Cir.1979); Terkildsen v. Waters, 481 F.2d 201, 204-05 (2d Cir.1973).

This is an appropriate case to invoke this rule. Because this issue was not brought into focus below, the state of the record is quite murky concerning the Bureau's responsibility for the erroneous information transmitted in the Notice concerning the $35.00 indebtedness to Cardiology Associates for treatment of Patricia Julius. Furthermore, we determine hereinafter that (1) the Notice violated three other subdivisions of section 1692e, (2) no damages should be awarded to Pipiles, but (3) she is entitled to costs and a reasonable attorney's fee unless the Bureau is allowed to tender, and establishes, a section 1692k(c) defense on remand. None of these rulings would be changed in any respect by any determination we might make on Pipiles' section 1692e(2)(A) claim. In view of all the foregoing, we decline to consider it.

2. Sections 1692e(5) and (10).

Section 1692e(5)...