Tolentino v. Friedman

• Decision Date: 21 September 1993
• Docket Number: No. 93 C 878,93 C 971.,93 C 878
• Parties: Arsenia TOLENTINO, Plaintiff, v. Lawrence FRIEDMAN, Defendant. Nelwin BREWER and Johnnie Mae Johnson, individually and on behalf of all others similarly situated, Plaintiffs, v. Lawrence FRIEDMAN, d/b/a Law Offices, Lawrence Friedman, Defendant.
• Court: U.S. District Court — Northern District of Illinois

833 F. Supp. 697

Arsenia TOLENTINO, Plaintiff, v. Lawrence FRIEDMAN, Defendant.

Nelwin BREWER and Johnnie Mae Johnson, individually and on behalf of all others similarly situated, Plaintiffs, v. Lawrence FRIEDMAN, d/b/a Law Offices, Lawrence Friedman, Defendant.

Nos. 93 C 878, 93 C 971.

United States District Court, N.D. Illinois, E.D.

September 21, 1993.

Daniel A. Edelman, Cathleen M. Combs, Tara Goodwin Redmond, James Eric Vander Arend, Edelman & Combs, Chicago, IL, for Tolentino.

Richard J. Sorman, Marcia Clare Bellows, Rieck & Crotty, P.C., Chicago, IL, for defendant.

Alan A. Alop, Benjamin C. Weinberg, Legal Assistance Foundation of Chicago, Chicago, IL, for Brewer.

OPINION AND ORDER

NORGLE, District Judge:

Before the court are cross-motions for partial summary judgment. For the following reasons, the court grants the plaintiffs' motions and denies defendant's motion.

FACTS

The defendant in these two consolidated cases, Lawrence Friedman ("Friedman"), is a practicing attorney maintaining a sole proprietorship in Chicago, Illinois. At least a part of Friedman's practice includes the representation of creditors in their efforts to recover debts allegedly owed. These two cases arose from the debt collection practices of Friedman; one case was filed as a class action¹ and the other individually.

Sometime in 1992, Citicorp National Services Inc. ("Citicorp") hired Friedman to recover an alleged deficiency on an automobile lease that Citicorp claimed plaintiff Arsenia Tolentino ("Tolentino") owed. Also in 1992, F.C.C. National Bank ("F.C.C.") hired the services of Friedman in order to recover monies allegedly owed by Nelwin Brewer ("Brewer"), and Discover Card Services, Inc. ("Discover Card") hired Friedman to recover monies from Johnnie Mae Johnson ("Johnson"). Friedman sent collection letters to these individuals which read:

Please be advised that I have been retained by the above named, to represent them in their claim against you.

Be further advised that I have been instructed to initiate all necessary action in the enforcement of this claim, but before doing so, I am giving you this opportunity to pay this indebtedness without the necessity of filing suit.²

If, however, I do not hear from you I may have no alternative but to commence legal action against you, which will greatly increase the amount due hereunder, by the addition of court costs and attorney fees, where applicable.

Unless you, the recipient of this notice, within thirty days after receipt dispute the validity of this debt or any portion thereof, the debt will be assumed to be valid.

If you notify the office of the undersigned, in writing within the thirty-day period that the debt, or any portion there is disputed, this office will obtain verification of the debt or a copy of a judgment against you and a copy of such verification of judgment³ will be mailed to you by the undersigned.

Upon your written request within the thirty day period, this office will provide you with the name and address of the original creditor if different from the current creditor.

This letter is an attempt to collect a debt and any information obtained may be used for that purpose.

Tolentino refused to pay the purported debt, claiming it was illegal and unenforceable, and also filed suit against Citicorp alleging violations of various consumer protection laws. Brewer and Johnson also refused to pay their alleged debts.

On September 4, 1992, Friedman filed a complaint against Tolentino on behalf of Citicorp and on September 10, 1992, filed suit against Brewer on behalf of F.C.C. Johnson was sued on September 24, 1992. All of these cases were filed in Cook County Circuit Court. Friedman contacted the Cook County Sheriff for service of the summonses and complaints upon Tolentino, Brewer, and Johnson. After Friedman delivered the summonses and complaints to the Sheriff for service, Friedman mailed copies of them to these individuals in envelopes bearing the return address of Friedman's law firm. Also included in the envelopes, however, was a separately folded copy of a notice labelled "IMPORTANT NOTICE" (the "Notice"). This Notice read as follows:

In the next few days it is likely that you will receive mail from lawyers recommending that the only way you can clean up your financial affairs is to file BANKRUPTCY, and that you employ that lawyer to represent you.

As you know CREDIT is extremely important in this day and age. Filing bankruptcy is not necessarily the end to your financial problems. It might cause more problems than it solves. Bankruptcy may also involve COSTS to you such as filing, trustee and attorney fees.

Your failure to pay your indebtedness to this creditor has prompted the filing of this legal proceeding against you. Though this action is unfortunate, it does not hinder your ability to discuss the payment of this debt on terms that everyone can live with. Please contact this office to discuss a repayment arrangement in line with your financial situation. Please note that this office only represents the creditor and we cannot represent your interests in this matter.

Law Offices LAWRENCE FRIEDMAN — 03532 19 S. LaSalle Street 10th Floor Chicago, IL 60603 (312) 977-8000

On February 10, 1993, and February 16, 1993, respectively, Tolentino and Brewer filed the present lawsuits alleging that the Notice Friedman included with the copies of the summonses and complaints violated the Fair Debt Collection Practices Act ("FDCPA"), 15 U.S.C. § 1692e(2), (9), (10), (11), and (13). Johnson was added as a named plaintiff in May 1993. The class action suit is premised on the theory that there exist many other previous debtors who received Friedman's Notice as part of his efforts to collect debts for various clients. The parties filed cross-motions for summary judgment on the issue of whether the Notice violates the FDCPA.

DISCUSSION

Section 1692e of the FDCPA prohibits false and misleading representations or procedures in connection with debt collection. 15 U.S.C. § 1692e. The FDCPA lists conduct that is in violation of § 1692e, without limiting its general application. See 15 U.S.C. § 1692e(1)-(16). The prohibitions listed include the false representation of the character, amount or legal status of any debt, 15 U.S.C. § 1692e(2)(A), the use of false representations or deceptive means to collect or attempt to collect a debt, 15 U.S.C. § 1692e(10), and "the failure to disclose clearly 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," 15 U.S.C. § 1692e(11). The FDCPA also prohibits debt collectors from using documents or other communications which appear to be "authorized, issued, or approved by any court, official, or agency ... or which create a false impression as to its source, authorization, or approval," 15 U.S.C. § 1692e(9), and prohibits debt collectors from falsely representing or implying that documents are legal process, 15 U.S.C. § 1692e(13).

The issue in this case is whether Friedman's mailing of the Notice constitutes a debt collection activity which violates the FDCPA. For purposes of these motions, the parties have stipulated that Friedman is a debt collector covered by the FDCPA. See 15 U.S.C. § 1692a(6). The court holds that the Notice is a deceptive means to collect or attempt to collect a debt in violation of § 1692e(10) of the FDCPA, and fails to clearly disclose that Friedman is attempting to collect a debt and that any information obtained therefrom will be used for that purpose in violation of § 1692e(10). Furthermore, the Notice appears to be authorized, issued, or approved by a court and therefore creates a false impression as to its source, authorization, or approval in violation of 15 U.S.C. § 1692e(9), and falsely implies that it is part of the legal process in violation of 15 U.S.C. § 1692e(13).

Because the FDCPA's directives only apply to communications made to collect a debt, the principal question in this case is whether the Notice constitutes a communication intended for debt collection. The key to the answer to this question converges on whether the action taken by Friedman constitutes a debt collection practice instead of a litigation practice.⁴ Not all communications made to a debtor in regard to a debt are made for collection purposes. For instance, an attorney whose collection efforts render him a debt collector for purposes of the FDCPA is not collecting a debt at all times and not all activities undertaken on behalf of the creditor are to collect the debt. As defendant points out, Congress removed the attorney exemption in 1986 in order to "close a loophole which allowed attorneys engaging in unsavory debt collection activities to avoid liability ... simply because they had obtained a law degree." Green v. Hocking, 792 F.Supp. 1064, 1065 (E.D.Mich.1992).

But the Notice in this case is clearly an attempt to communicate to the debtors regarding the collection of the debts allegedly owed. The Notice is not a traditional legal activity. Even a non-attorney debt collector could send a copy of a summons, complaint, and Notice to a debtor. Non-attorney debt collectors cannot, on the other hand, represent the creditor and file court documents on his or her behalf. Also, a summons and a complaint, as well as other legal documents filed in court, constitute traditional legal activities that may not be covered by the FDCPA because they are intended for use in litigation. But Friedman's use of the Notice is distanced from the traditional role of attorney as litigator and has the effect of advancing the financial interests of the creditors through possibly oppressive means. This distinguishes the debt collection activity to which the FDCPA applies from the traditional litigation activities of an attorney to which Friedman argues the FDCPA does not apply. Compare Graziano v. Harrison, 950 F.2d...