Salinas v. R.A. Rogers, Inc.

• Decision Date: 12 March 2020
• Docket Number: No. 19-50618,19-50618
• Citation: 952 F.3d 680
• Parties: Marco SALINAS, Plaintiff - Appellant v. R.A. ROGERS, INCORPORATED, Defendant - Appellee
• Court: U.S. Court of Appeals — Fifth Circuit

952 F.3d 680

Marco SALINAS, Plaintiff - Appellant

v.R.A. ROGERS, INCORPORATED, Defendant - Appellee

No. 19-50618

United States Court of Appeals, Fifth Circuit.

FILED March 12, 2020

Daniel Zemel, Zemel Law, L.L.C., Clifton, NJ, for Plaintiff-Appellant.

Kevin Thomas Crocker, Barron & Newburger, P.C., Austin, TX, for Defendant-Appellee.

Before BARKSDALE, HIGGINSON, and DUNCAN, Circuit Judges.

STUART KYLE DUNCAN, Circuit Judge:

R.A. Rogers, Inc., a debt collection agency, mailed a collections letter to Appellant Marco Salinas listing the total amount due on his account ($4629.96) and the interest and fees due (both $0.00). The letter also included this statement: "In the event there is interest or other charges accruing on your account, the amount due may be greater than the amount shown above after the date of this notice." In response, Salinas sued R.A. Rogers, alleging the letter was false, deceptive, and misleading in violation of the Fair Debt Collection Practices Act ("FDCPA"), 15 U.S.C. §§ 1692 et seq ., because no interest or other charges could actually accrue on his account. The district court granted summary judgment for R.A. Rogers, holding that the letter accurately conveyed what was possible under Texas law—that interest could accrue—and was therefore not false, deceptive, or misleading. We affirm the summary judgment, but based on a more fundamental proposition. The challenged statement in the letter is not false, deceptive or misleading because it merely expresses a common-sense truism about borrowing—if interest is accruing on a debt, then the amount due may go up. That simple statement would have been clear even to an unsophisticated borrower thousands of years ago, just as it would be today. We therefore conclude that putting the statement in a dunning letter does not violate the FDCPA.

I.

At some unknown point in the past, Marco Salinas obtained a loan for personal, family, or household use from Security Service Federal Credit Union ("SSFCU"). Apparently, the loan agreement between Salinas and SSFCU was silent as to whether interest or other charges could accrue in the event of default. Salinas eventually did default on the loan, which led to R.A. Rogers sending Salinas an initial dunning letter on September 5, 2017. The letter lists the "Principal Balance" and "Total Amount Due" as $4629.96, and states that the "Interest" and "Fee[s]" are each $0.00. A sentence near the bottom of the letter reads: "In the event there is interest or other charges accruing on your account, the amount due may be greater than the amount shown above after the date of this notice."

On July 16, 2018, Salinas filed suit against R.A. Rogers in federal district court, alleging that the language quoted above is false, deceptive, and misleading in violation of the FDCPA, 15 U.S.C. § 1692e, because (1) R.A. Rogers does not collect interest or other charges on debts related to SSFCU and (2) the agreement between Salinas and SSFCU "does not allow" for interest to accrue or other charges to be added. Salinas characterized the language as an attempt to "induce payment ... by scaring him." Contending that R.A. Rogers sent "hundreds if not thousands" of similar letters, Salinas sought certification of a class of "[a]ll consumers within the State of Texas that have received collection letters from Defendant concerning debts from Security Service FCU within one year prior to filing of this complaint which falsely represent to the consumer that interest or other charges may accrue." Salinas requested $1000.00 in statutory damages for himself and each class member, plus attorneys' fees and costs.

The parties stipulated that "R.A. Rogers does not collect interest or other charges on debts referred to it for collection by the creditor, Security Service FCU" and also that "[t]he agreement between Security Service FCU and Salinas is silent as to whether interest or other charges can accrue in the event of default." R.A. Rogers moved for summary judgment, arguing that even on the stipulated facts the letter complies with the FDCPA because it "clearly and unambiguously states the amount of the debt." According to R.A. Rogers, the "plain statement" that the total amount due is $4629.96 and interest and fees are $0.00 "is not undercut by the contingent (but obviously inapplicable rather than ‘applicable’) language of the [challenged] sentence." R.A. Rogers added that "common sense also dictates that Salinas' claims lack merit."

In granting summary judgment, the district court sua sponte detoured to the Texas Finance Code, reasoning that the letter was not false, misleading, or deceptive because "Texas law stipulates that a six percent interest rate may be applied to the principal balance of the loan starting thirty days after payment is due when the obligor has not agreed on an interest rate." Salinas v. R.A. Rogers, Inc. , No. SA-18-CV-733-XR, 2019 WL 2465325, at *5 (W.D. Tex. June 13, 2019) (citing TEX. FIN. CODE ANN . § 302.002 ). The court faulted Salinas for "fail[ing] to produce the loan agreement or any statute or regulation that would absolutely prohibit interest or other charges to accrue on the account following default." Id. Given the possibility that SSFCU could, under Texas law, elect to charge interest on the defaulted loan, the district court also held that the letter was "not confusing or unclear on its face" and faulted Salinas further for failing to produce any objective or subjective evidence of confusion. Id. Ultimately, the court concluded "[t]here is insufficient evidence in the record to create a triable issue of fact as to whether Defendant's debt collection letter is false, deceptive, or misleading." Id. Salinas timely appealed.

II.

We review a summary judgment de novo . Mahmoud v. De Moss Owners Ass'n, Inc. , 865 F.3d 322, 328 (5th Cir. 2017). "Summary judgment is required ‘if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.’ " Id. (quoting FED. R. CIV. P. 56(a) ). A genuine dispute of material fact exists "if the evidence is such that a reasonable jury could return a verdict for the nonmoving party." Anderson v. Liberty Lobby, Inc. , 477 U.S. 242, 248, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). "This court may affirm the district court's grant of summary judgment on any ground supported by the record and presented to the district court." Mahmoud , 865 F.3d at 328 (citation omitted).

III.

On appeal, Salinas argues that the district court erred in granting summary judgment because, given the stipulated facts, the conditional language in R.A. Rogers' letter is misleading, deceptive, and "utterly false," and therefore violates the FDCPA. He also contends that the district court misapplied the summary judgment standard by drawing one or more inferences in R.A. Rogers' favor. We consider each argument in turn.

A.

The FDCPA provides: "A debt collector may not use any false, deceptive, or misleading representation or means in connection with the collection of any debt." 15 U.S.C. § 1692e.¹ Among its nonexclusive list of proscribed practices, the FDCPA prohibits "[t]he false representation of (A) the character, amount, or legal status of any debt; or (B) any services rendered or compensation which may be lawfully received by any debt collector for the collection of a debt." Id. § 1692e(2). It is also a violation of the FDCPA to use "any false representation or deceptive means to collect or attempt to collect any debt or to obtain information concerning a consumer." Id. § 1692(e)(10). Because Congress "intended the FDCPA to have a broad remedial scope," the FDCPA should "be construed broadly and in favor of the consumer." Daugherty v. Convergent Outsourcing, Inc. , 836 F.3d 507, 511 (5th Cir. 2016) (internal quotation marks and citations omitted). We evaluate whether a collection letter violates § 1692e by "view[ing] the letter from the perspective of an ‘unsophisticated or least sophisticated consumer.’ " Id. (quoting McMurray v. ProCollect, Inc. , 687 F.3d 665, 669 (5th Cir. 2012) ). "At the same time we do not consider the debtor as tied to the very last rung on the intelligence or sophistication ladder." Goswami v. Am. Collections Enter., Inc. , 377 F.3d 488, 495 (5th Cir. 2004) (cleaned up).²

Salinas argues that the conditional language in the letter—"In the event there is interest or other charges accruing on your account, the amount due may be greater than the amount shown above after the date of this notice"—is false, deceptive, and misleading because under no set of circumstances would Salinas' debt have increased due to interest or other charges while being collected upon by R.A. Rogers. According to Salinas, the letter clearly implied the false proposition that in the absence of prompt payment, interest or other charges could accrue on his account.

To the extent Salinas contends the language in the dunning letter is false, his claim is "downright frivolous." See Taylor v. Cavalry Inv., L.L.C. , 365 F.3d 572, 575 (7th Cir. 2004). The language merely expresses a truism: "In the event there is interest or other charges accruing on your account, the amount due may be greater than the amount shown above after the date of this notice" (emphasis added). In American legal usage, "in the event" is the equivalent of "if." See BRYAN A. GARNER, A DICTIONARY OF MODERN LEGAL USAGE 465 (2d ed. 1995) (observing that "in the event of" and "in the event that" are "unnecessarily prolix" equivalents of "if"). Thus, the letter's statement is no more false than the statement: "If it is raining outside, the ground may be wet"—a proposition as true in Death Valley as in New Orleans. It matters not whether Salinas' agreement with SSFCU prohibited SSFCU from applying interest or other charges to the debt, because the language at issue does not state that R.A. Rogers or SSFCU would—or even could—collect interest.

A perhaps closer question is whether the language is "de...