Wilson v. Quadramed Corp.

• Citation: 225 F.3d 350
• Decision Date: 07 September 2000
• Docket Number: No. 99-5758,99-5758
• Parties: (3rd Cir. 2000) GEORGE WILSON, on behalf of himself and all others similarly situated v. QUADRAMED CORPORATION, George Wilson, Appellant
• Court: United States Courts of Appeals. United States Court of Appeals (3rd Circuit)

Page 350

225 F.3d 350 (3rd Cir. 2000)

GEORGE WILSON, on behalf of himself and all others similarly situated v. QUADRAMED CORPORATION, George Wilson, Appellant

No. 99-5758

UNITED STATES COURT OF APPEALS FOR THE THIRD CIRCUIT

Argued July 17, 2000

Filed August 28, 2000

As Amended Sept. 7, 2000

Appeal from the United States District Court for the District of New Jersey, D.C. Civ. No. 99-cv-00095, District Judge: Honorable William H. Walls COUNSEL FOR APPELLANT: Bruce D. Greenberg, Esquire (ARGUED) Joseph J. DePalma, Esquire Allyn Z. Lite, Esquire Mary Jean Pizza, Esquire Lite, DePalma, Greenberg & Rivas Two Gateway Center, 12th Floor Newark, New Jersey 07102, Andrew R. Wolf, Esquire 1254 Highway 27 North Brunswick, New Jersey 08902

COUNSEL FOR APPELLEE: John K. Crossman, Esquire (ARGUED) Zevnik, Horton, Guibord, McGovern, Palmer & Fognani, L.L.P. 1330 Avenue of the Americas, 11th Floor New York, New York 10019, Lisa M. Campisi, Esquire Zevnik, Horton, Guibord, McGovern, Palmer & Fognani 50 Tice Boulevard Woodcliff Lake, New Jersey 07675, John M. Agnello, Esquire Carella, Byrne, Bain, Gilfillan, Cecchi, & Stewart 6 Becker Farm Road Roseland, New Jersey 07068

Before: MANSMANN, RENDELL and STAPLETON, Circuit Judges.

OPINION FOR THE COURT

MANSMANN, Circuit Judge.

The question before us is whether the District Court erred as a matter of law in holding that language contained in a debt collection letter, which notified the debtor that his account has been placed with the debt collector for "immediate collection," and that it "shall afford [the debtor] the opportunity to pay this bill immediately and avoid further action against you," did not overshadow or contradict the required validation notice under 15 U.S.C. S 1692g(a) and, therefore, did not confuse or mislead the "least sophisticated debtor" as to his statutory rights under the Fair Debt Collection Practices Act to validate and dispute the debt. The debtor has also asked this court to certify a class under Fed. R. Civ. P. 23(a) and (b)(3) which would allegedly consist of similarly situated debtors, i.e., debtors who received the same debt collection letter from the debt collector.

Because we do not find any violation of section 1692g here, we will affirm the judgment of the District Court. Accordingly, we need not reach the debtor's request for class certification.

I.

On or about September 1, 1998, defendant Quadramed Corporation ("Quadramed" or the "debt collector"), on behalf of Robert Wood Johnson Memorial Hospital (the "creditor"), sent to the plaintiff, George Wilson ("Wilson" or the "debtor"), a one-page letter notifying him that it was attempting to collect a debt he allegedly owed to the hospital for almost two years. The body of the letter contains three paragraphs which read as follows:

Our client has placed your account with us for immediate collection. We shall afford you the opportunity to pay this bill immediately and avoid further action against you.

To insure immediate credit to your account, make your check or money order payable to ERI. Be sure to include the top portion of this statement and place your account number on your remittance.

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 this debt is valid. If you notify this office in writing within 30 days from receiving this notice, this office will obtain verification of the debt or obtain a copy of a judgement and mail you a copy of such judgement 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.

All three paragraphs are printed in the same font, size and color type-face. Approximately two inches above the body of the letter with a flush right margin appears, "THIS IS AN ATTEMPT TO COLLECT A DEBT. ANY INFORMATION OBTAINED WILL BE USED FOR THAT PURPOSE." In addition, the letter provides the debt collector's name and address, the creditor's name, the date of service, balance due and client account number. The letter closes with the name of the Accounts Representative and her telephone number. All of this information, other than the body of the letter, is typed in all capital letters.

Wilson filed a purported class action suit, alleging that the debt collection letter violates section 1692g of the Fair Debt Collection Practices Act ("the Act"), 15 U.S.C. S 1692g. Quadramed filed a motion to dismiss Wilson's complaint under Fed. R. Civ. P. 12(b)(6). Wilson filed a cross motion for partial summary judgment on liability and for class certification.

The District Court, in a letter opinion dated August 25, 1999, granted Quadramed's motion to dismiss and denied Wilson's motion for partial summary judgment and for class certification. The District Court held that the "format of the letter does not obscure the plaintiff's rights under the statute." Wilson v. Quadramed Corporation, No. 99-CV- 95, Letter Order at 7 (D. N.J. Aug. 25, 1999) ("Letter Order"). In this regard, the District Court found that the "validation notice appears on the front of the letter along with the allegedly offending language and is written in the same size font." Id. As to the substance of Quadramed's letter, the court noted that the "letter does not make an explicit demand for payment, but states that the defendant `shall offer the plaintiff an opportunity' to make payment." Id. Moreover, the court specifically found that the letter does not request payment within a time period shorter than the statutory thirty-day period. Thus, the court concluded that the first two paragraphs of the letter did not contradict the third, and that "even the least sophisticated debtor would understand that he is being given a choice, that he has options. . . . Such a debtor would not be mislead or confused into foregoing his statutory rights." Id. at 8.

Thereafter, Wilson filed a timely notice of appeal.¹ The District Court's dismissal of this suit pursuant to Fed.R.Civ.P. 12(b)(6) is subject to de novo review.² Klein v. General Nutrition Companies, Inc., 186 F.3d 338, 342 (3d Cir. 1999); Weiner v. Quaker Oats Co., 129 F.3d 310, 315 (3d Cir. 1997). Accordingly, we must accept plaintiff 's factual allegations as true and may affirm the District Court only if it appears that the plaintiff cannot prove any set of facts entitling him to relief. Klein, 186 F.3d at 342; see also In re Westinghouse Securities Litigation , 90 F.3d 696, 706 (3d Cir. 1996) (citation omitted). Moreover, in granting Quadramed's motion to dismiss, the District Court also denied Wilson's cross-motion for partial summary judgment as to liability and for class certification. Our review of District Court's denial of the partial summary judgment motion is de novo.³ We turn now to the merits of this appeal.

II.

Although the debt collection letter here presents a close question, we are not convinced that the language in the first two paragraphs overshadows or contradicts the validation notice such that the "least sophisticated debtor" would be confused or mislead as to his rights to dispute or seek validation of the debt.

A.

Under the Fair Debt Collection Practices Act, a debt collector is required to include the following information in a debt collection letter to a consumer:

(1) the amount of the debt;

(2) the name of the creditor to whom the debt is owed;

(3) a statement that unless the consumer, within thirty days after receipt of the notice, disputes the validity of the debt, or any portion thereof, the debt will be assumed to be valid by the debt collector;

(4) a statement that if the consumer notifies the debt collector in writing within the thirty-day period that the debt, or any portion thereof, is disputed, the debt collector will obtain verification of the debt or a copy of a judgment against the consumer and a copy of such verification or judgment will be mailed to the consumer by the debt collector; and

(5) a statement that, upon the consumer's written request within the thirty-day period, the debt collector will provide the consumer with the name and address of the original creditor, if different from the current creditor.

15 U.S.C. S 1692g(a). Paragraphs 3 through 5 of section 1692g(a) contain the validation notice--the statements that inform the consumer how to obtain verification of the debt and that he has thirty days in which to do so. The Act further mandates the debt collector to cease all collection efforts if the consumer provides written notice that he or she disputes the debt or requests the name of the original creditor until the debt collector mails either the debt verification or creditor's name to the consumer. 15 U.S.C. S 1692g(b).

Congress enacted the Act " `to eliminate abusive debt collection practices' which `contribute to the number of personal bankruptcies, to marital instability, to the loss of jobs, and to invasions of individual privacy.' " Miller v. Payco-General American Credits, Inc., 943 F.2d 482, 483-84 (4th Cir. 1991) (quoting 15 U.S.C. SS 1692a and 1692e). Moreover, the debt validation provisions of section 1692g were included by Congress to guarantee that consumers would receive adequate notice of their rights under the law. Id. at 484 (citing S. Rep. No. 382, 95th Cong., 1st Sess. 4, 8, reprinted in 1977 U.S. Code Cong. & Admin. News 1695, 1699, 1702).

Thus, in order to comply with the requirements of section 1692g, more is required than the mere inclusion of the statutory debt validation notice in the debt collection letter --the required notice must also be conveyed effectively to the debtor. Id. (citing Swanson v. Southern Oregon Credit Serv., Inc., 869 F.2d 1222, 1224 (9th Cir. 1988)); see also Graziano v. Harrison, 950 F.2d 107, 111 (3d Cir. 1991). Moreover, the validation notice required by the FDCPA "is to be...