Shapiro v. Dun & Bradstreet Receivable Management

• Decision Date: 15 July 2002
• Docket Number: No. 02 CIV. 1231(JES).,02 CIV. 1231(JES).
• Parties: Jacob SHAPIRO, on behalf of himself and all others similarly situated, Plaintiff(s), v. DUN & BRADSTREET RECEIVABLE MANAGEMENT SERVICES, INC., Defendant(s).
• Court: U.S. District Court — Southern District of New York

209 F.Supp.2d 330

Jacob SHAPIRO, on behalf of himself and all others similarly situated, Plaintiff(s), v. DUN & BRADSTREET RECEIVABLE MANAGEMENT SERVICES, INC., Defendant(s).

No. 02 CIV. 1231(JES).

United States District Court, S.D. New York.

July 15, 2002.

Katz & Kleinman, Uniondale, NY (Lawrence Katz, Of Counsel), for Plaintiff.

Pitney Hardin Kipp & Szuch LLP, New York City (Lisa Martinez Wolmart, Of Counsel), for Defendant.

MEMORANDUM OPINION AND ORDER

SPRIZZO, District Judge.

Plaintiff Jacob Shapiro brings the above-captioned action on behalf of himself and others similarly situated, alleging a violation of the Fair Debt Collections Practices Act ("FDCPA"). Plaintiff claims that a debt collection letter sent by defendant Dun & Bradstreet Receivable Management Services, Inc. ("RMS") violated the FDCPA because it was so confusing as to "overshadow or contradict" RMS's statutorily-mandated debt validation notice advising plaintiff of his legal rights. Defendant moves to dismiss plaintiff's claim pursuant to Fed.R.Civ.P. 12(b)(6) and plaintiff cross-moves for partial summary judgment pursuant to Fed.R.Civ.P. 56(a). For the reasons set forth below, the Court grants defendant's motion and denies plaintiff's cross motion.

BACKGROUND

The following facts are uncontested. On or about February 8, 2002, RMS sent a notice to plaintiff in connection with a debt owed to ECONnergy Energy Company, Inc. ("the creditor"). See Plaintiff's Memorandum of Law in Support of Cross Motion on Pleadings dated May 6, 2002, Exhibit A, Debt Collection Letter to Plaintiff dated February 2, 2002 ("the Letter"). The front side of the Letter advised plaintiff that the debt was past due, and further advised plaintiff:

At this time[the creditor] ha[s] have requested assistance from [RMS] in collecting this debt. We ask that you send your check directly to [the creditor] for the amount owed. If you have already remitted payment, thank you, and you can disregard this letter.

* * * * * *

If there are any questions regarding this account, or if you wish to make payment arrangements, please contact [the creditor] directly at [telephone #]. Should you wish to dispute this account, please refer to the notice on the reverse side of this letter.

Letter at ¶¶ 2,4.

At the bottom of the page and in large bold letters, RMS advised plaintiff: "NOTICE: SEE REVERSE SIDE FOR IMPORTANT INFORMATION." On the reverse side, and in similar oversized lettering, appeared the following language: "IMPORTANT NOTICE OF YOUR RIGHTS UNDER FEDERAL LAW." The notice stated:

Unless you notify this office within 30 days after receiving this notice that you dispute the validity of this debt or any portion thereof, this office will assume that this debt is valid. If you notify this office in writing within 30 days from receiving this notice that you dispute the validity of this debt or any portion thereof, this office will obtain verification of the debt or obtain a copy of a judgment, if any, and mail you a copy of such judgment or verification. If you request this office in writing within 30 days after receiving this notice this office will provide you with the name and address of the original creditor, if different from the current creditor.

Letter at side 2.

Plaintiff contends that the above-quoted language on the front side of the Letter misled him regarding how to preserve his rights under the FDCPA. Defendant denies this contention and argues that the language in the Letter does not violate the FDCPA as a matter of law.

DISCUSSION

In deciding a Rule 12(b)(6) motion to dismiss, a court must construe in plaintiff's favor any well-pleaded factual allegations of the complaint. See Finnegan v. Campeau Corp., 915 F.2d 824, 826 (2d Cir. 1990). A court may dismiss the complaint only where it appears beyond doubt that plaintiff can prove no set of facts in support of his claim which would entitle him to relief. See Allen v. WestPoint-Pepperell, Inc. 945 F.2d 40, 44 (2nd Cir.1991) (citing Conley v. Gibson, 355 U.S. 41, 45-46, 78 S.Ct. 99, 2 L.Ed.2d 80 (1957)).

Congress enacted the FDCPA in 1977 to "eliminate abusive debt collection practices by debt collectors [and] to insure that those debt collectors who refrain from using abusive debt collection practices are not competitively disadvantaged." 15 U.S.C. § 1692. In the instant case, plaintiff seeks damages and declaratory and injunctive relief arising out of defendant's alleged violation of 15 U.S.C. §§ 1692g, 1692e.

Section 1692g requires that a debt collection letter contain a "validation notice" which must inform the consumer how to obtain verification of the debt within thirty (30) days from receiving the letter. 15 U.S.C. §§ 1692g(a)(3), (a)(4). Section 1692e of the FDCPA 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." 15 U.S.C. § 1692e(10).

In determining whether the FDCPA has been violated, the United States Court of Appeals for the Second Circuit ("the Second Circuit") uses an objective standard based on how the "least sophisticated consumer" would interpret the debt collection letter. Russell v. Equifax, A.R.S., 74 F.3d 30, 34 (2d Cir.1996); Clomon v. Jackson, 988 F.2d 1314, 1318 (2d Cir.1993). Under this standard, the mere inclusion of the required statutory debt validation language does not ensure compliance with the FDCPA. Russell, 74 F.3d at 35. This is especially so where the letter includes "language that overshadows or contradicts other language informing the consumer of her rights." Id. at 34 (internal quotations omitted). Thus, to determine whether a defendant violated the FDCPA, the Court must establish whether the challenged language fails to convey the required information "clearly and effectively and thereby makes the least sophisticated consumer uncertain" as to its meaning. Savino v. Computer Credit Inc., 164 F.3d 81, 85 (2d Cir.1998).

Plaintiff alleges violations of the FDCPA arising out of two (2) sentences in RMS's debt-collection letter. According to plaintiff, the language in these sentences "overshadows and contradicts" the validation notice on the reverse side of the Letter, thereby confusing the "least sophisticated consumer" into waiving his statutory rights under the FDCPA. Both of these assertions must be rejected as a matter of law.

Plaintiff first contends that RMS's instruction to contact the creditor directly with "any questions regarding this account, or ... to make payment arrangements" suggests that the consumer can preserve his protections under the FDCPA simply by contacting the creditor. See Plaintiff's Complaint dated February 12, 2002 at ¶ 19. Plaintiff thus contends that RMS's debt collection letter "overshadows and contradicts" the validation notice which makes clear that plaintiff can only preserve these rights by contacting RMS. However, unlike debt collection letters that "can be reasonably read to have two (2) or more different meanings," or that leave consumers uncertain as to their rights, see Russell, 74 F.3d at 35; Savino, 164 F.3d at 86, RMS's instruction to contact the creditor with questions regarding the account does not leave the consumer uncertain. In Russell, the letter stated that "[i]f you do not dispute this claim (see reverse side) and wish to pay it within the next 10 days we will not post this collection to your file," while at the same time stressing that "it is our practice to post unpaid collections in the amount of $25 or more to individual credit records." Russell, 74 F.3d at 32. There was thus a veiled implication that plaintiff's credit record might be adversely affected should he not pay the debt.

Moreover, unlike the letter in Savino, the notice at issue here never demands payment within a certain time. In Savino, the Second Circuit held that any demand for payment, "without also explaining that its demand did not override the consumer's rights under Section 1962g," Savino, 164 F.3d at 86, effectively contradicts the validation notice and therefore violates the FDCPA. In the instant case, RMS simply advises plaintiff that he can either contact the creditor for payment arrangements or refer to the validation notice should he wish to dispute the debt. Thus there is no suggestion as to which course the plaintiff should follow nor even a demand for immediate payment.

For the same reason, Spira v. Consiglio, Parisi and Allen, Inc, 99 Civ. 870 (E.D.N.Y. Jan. 3, 2001) (ARR), a case plaintiff relies on heavily in support of his motion, is factually inapposite. In that case, plaintiff received a letter informing him that "[y]ou may telephone us to discuss this, however we suggest you contact Brooklyn Union directly." Spira, 99...