Martin v. Butler & Hosch, P.A.
Filing
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ORDER granting in part and denying in part 12 motion to dismiss. Signed by Judge Susan C Bucklew on 7/18/2014. (JD)
UNITED STATES DISTRICT COURT
MIDDLE DISTRICT OF FLORIDA
TAMPA DIVISION
ERICA MARTIN, on behalf
of herself and others similarly situated,
Plaintiff,
v.
Case No. 8:14-cv-640-T-24 TBM
BUTLER & HOSCH, P.A.,
Defendant.
_________________________________/
ORDER
This cause comes before the Court on Defendant’s Motion to Dismiss. (Doc. No. 12).
Plaintiff opposes the motion. (Doc. No. 16). As explained below, the motion is granted in part
and denied in part.
I. Standard of Review
In deciding a motion to dismiss, the district court is required to view the complaint in the
light most favorable to the plaintiff. See Murphy v. Federal Deposit Ins. Corp., 208 F.3d 959,
962 (11th Cir. 2000)(citing Kirby v. Siegelman, 195 F.3d 1285, 1289 (11th Cir. 1999)). The
Federal Rules of Civil Procedure do not require a claimant to set out in detail the facts upon
which he bases his claim. Instead, Rule 8(a)(2) requires a short and plain statement of the claim
showing that the pleader is entitled to relief in order to give the defendant fair notice of what the
claim is and the grounds upon which it rests. See Bell Atlantic Corp. v. Twombly, 127 S. Ct.
1955, 1964 (2007)(citation omitted). As such, a plaintiff is required to allege “more than labels
and conclusions, and a formulaic recitation of the elements of a cause of action will not do.” Id.
at 1965 (citation omitted). While the Court must assume that all of the allegations in the
complaint are true, dismissal is appropriate if the allegations do not “raise [the plaintiff’s] right
to relief above the speculative level.” Id. (citation omitted). The standard on a 12(b)(6) motion
is not whether the plaintiff will ultimately prevail in his or her theories, but whether the
allegations are sufficient to allow the plaintiff to conduct discovery in an attempt to prove the
allegations. See Jackam v. Hospital Corp. of Am. Mideast, Ltd., 800 F.2d 1577, 1579 (11th Cir.
1986).
II. Background
Plaintiff alleges the following in her complaint (Doc. No.1): Plaintiff alleges that
Defendant Butler & Hosch, P.A., a law firm, attempts to collect debts using an unlawful form
debt collection letter (“the Letter”). The Letter attached to the complaint relates to Plaintiff’s
default under a note and mortgage. The Letter states the following, in relevant part:
This law firm represents the interest of your lender . . . regarding an
alleged unpaid debt. We have been requested to file suit against you
for a consumer debt and, as required by Federal law, we are sending
you this letter. If a federal bankruptcy action has been filed and a
discharge entered, no deficiency or personal judgment will be sought,
and an In Rem Judgment will be entered against you as the real
property title owners.
*
*
*
Unless you, within 30 days of receipt of this notice, dispute the
validity of the debt, or any portion thereof, the debt will be assumed
to be owed.
*
*
*
As of March 18, 2013, you owe $230,456.76. Because of the
interest, late charges, and other charges that may vary from day to
day, the amount due on the day you pay may be greater. Hence, if
you pay the amount shown above, an adjustment may be
necessary after we receive your check, in which event we will
inform you before depositing the check for collection.
(Doc. No. 1, Ex. A)(emphasis in original). As a result of receiving this Letter, Plaintiff filed this
lawsuit, in which she asserts claims for violations of Florida’s Consumer Collection Practices
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Act (“FCCPA”) and the Fair Debt Collection Practices Act (“FDCPA”).
III. Motion to Dismiss
In response to Plaintiff’s complaint, Defendant moves to dismiss each of the four claims
asserted against it. Accordingly, the Court will analyze Defendant’s motion with respect to each
claim.
A. Count Four
In Count Four, Plaintiff alleges that the Letter violates 15 U.S.C. § 1692g(a) of the
FDCPA. Section 1692g(a) provides that in the initial communication or within five days after
the initial communication, the debt collector shall send the consumer a written notice that
contains certain information, including “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.”
Plaintiff contends that the following language in the Letter violates § 1692g(a): “Unless
you, within 30 days of receipt of this notice, dispute the validity of the debt, or any portion
thereof, the debt will be assumed to be owed.” Plaintiff contends that this language violates
§ 1692g(a) in two ways: (1) it states that the debt will be assumed to be “owed,” rather than
assumed to be “valid;” and (2) it does not state that the only entity entitled to such an assumption
is the debt collector. Defendant disputes that this language violates the FDCPA and moves to
dismiss this claim.
“The absence of one or more of the statutory requirements [set forth in § 1692g(a) within
a communication from a debt collector] . . . is actionable as a violation of 15 U.S.C. § 1692e . . .
if the variance is one that would tend to mislead the least sophisticated consumer.” Caceres v.
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McCalla Raymer, LLC, 2014 WL 2884678, at *3 (11th Cir. June 26, 2014)(citation omitted).
The least sophisticated consumer standard has been described as follows:
The least sophisticated consumer can be presumed to possess a
rudimentary amount of information about the world and a willingness
to read a collection notice with some care. However, the test has an
objective component in that while protecting naive consumers, the
standard also prevents liability for bizarre or idiosyncratic
interpretations of collection notices by preserving a quotient of
reasonableness.
Id. (quoting LeBlanc v. Unifund CCR Partners, 601 F.3d 1185, 1194 (11th Cir. 2010)). As such,
if a communication is open to more than one reasonable interpretation, at least one of which is
inaccurate, then the communication would be considered deceptive under the least sophisticated
consumer standard. LeBlanc, 601 F.3d at 1195 n.18. Under this framework, the Court analyzes
Plaintiff’s allegations in Count Four.
1. Assumption by the Debt Collector
Plaintiff argues that the Letter violates the FDCPA because it does not state that if
Plaintiff does not dispute the debt within thirty days, the only entity entitled to assume the debt is
valid is the debt collector. There is case law supporting Plaintiff’s argument that such an
omission sufficiently states a claim. See Koch v, Atkinson, Diner, Stone, Mankuta, & Ploucha,
P.A., 2011 WL 4499100, at *3 (S.D. Fla. Sept. 27, 2011); Guerrero v. Absolute Collection
Service, Inc., 2011 WL 8183860, at *4 (N.D. Ga. Oct. 6, 2011); Orr v. Westport Recovery Corp.,
941 F. Supp.2d 1377, 1382 (N.D. Ga. 2013).
In Orr, the plaintiff challenged a letter that stated that if he failed to dispute the debt
within thirty days, “the debt will be assumed to be valid.” Id. at 1378. The plaintiff challenged
this language as violating the FDCPA, arguing that the failure to state that the assumption could
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only be made by the debt collector would lead the least sophisticated consumer to believe that
any entity, including a court, would assume that the debt was valid and such would be deceptive
with regard to the consumer’s rights. See id. at 1380. The Orr court agreed with the plaintiff,
explaining:
By including the term “by the debt collector,” § 1692g(a)(3)
expressly intended the notice to convey the specific validation
limitation to the consumer. In other words, the statute intended the
consumer to receive the message that the debt would be assumed
valid by only the debt collector and only for collection purposes.
“The statutorily required validation notice is intended to convey to
the consumer that failure to dispute the debt permits the debt
collector to proceed for collection purposes on the ‘temporary fiction’
that the debt is valid [, that f]ailure to dispute a debt has no legal
effect on a debtor's rights . . . [and that i]n any subsequent collection
action, the burden would remain on the debt collector . . . to prove the
validity of the debt.”
*
*
*
As defendants correctly argue, there is no requirement in the FDCPA
that a debt collector quote the statute's language verbatim. “When
reviewing a debt validation notice, [the court] must review the
document as a whole in order to evaluate whether the notice would
inform sufficiently a least sophisticated debtor of his debt validation
rights.”
*
*
*
A reading of the Letters in their entirety does not inform plaintiff that
his debt will be assumed to be valid by the debt collector. In fact,
there is no language in the Letters that identifies the person or entity
that will assume the debt to be valid. “Defendants' omission of
language indicating that it is the debt collector that will assume the
validity of the debt . . . fuels the confusion. Though [d]efendants need
not use the verbiage ‘by the debt collector,’ courts have held that they
must include some language that makes clear it is only the debt
collector that may assume validity and only for collection purposes;
otherwise the debtor is left uncertain about what entity will make the
assumption and for what purpose.” “When read in the context of the
entire [Letters], the phrase ‘will be [assumed] valid’ and the
subsequent omission of any reference to the entity that will be
‘[assuming]’ the debt [might] confuse or mislead the least
sophisticated debtor into believing that her debt would be determined
to be valid by an entity of authority [other than the debt collector].”
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Therefore, the court cannot conclude at this time that the omission
was not material or harmless. The court concludes that defendants'
failure to include “by the debt collector” or its equivalent is sufficient
to allege a claim for which relief may be granted.
Id. at 1381-82 (internal citations omitted).
Based on the above, this Court finds that Plaintiff has sufficiently stated a claim in Count
Four to the extent that she alleged that the Letter was deceptive because Defendant failed to
communicate that only Defendant could assume the debt to be valid if she did not dispute it
within thirty days. To this extent, the motion to dismiss is denied.
2. Assumed to be Owed
Next, Plaintiff argues that the Letter is deceptive because it states that if she does not
dispute the debt, it will be assumed to be “owed.” Thus, Plaintiff takes issue with the fact that
§ 1692g(a) provides that the failure to dispute the debt will allow the debt collector to assume the
debt to be “valid,” rather than “owed.” According to Plaintiff, the words “valid” and “owed”
have different meanings which render the Letter misleading. Specifically, Plaintiff argues that
by using the word “owed,” the least sophisticated consumer might read the sentence to believe
that the failure to dispute the debt within thirty days would make the debt conclusively “owed,”
as if it was admitted and legally indisputable in future court proceedings. Plaintiff, however,
cites to no case that has held that substituting the word “valid” with “owed” renders the
communication misleading, and the Court is not persuaded by Plaintiff’s argument on the issue.
Instead, the Court concludes that the substitution is permissible because the context of the word
“valid” in § 1692g(a)(3)—that the debt will be assumed to be valid—appears to encompass that
the debt will be assumed to be owed. Accordingly, the Court concludes that the substitution of
the word “owed” for “valid” in the Letter is not a basis for an FDCPA claim, and to that extent,
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the motion to dismiss is granted.
B. Count Two
In Count Two, Plaintiff alleges that the Letter violates Florida Statute § 559.72(9) of the
FCCPA. Section 559.72(9) provides, in relevant part, that in collecting a debt, a person shall not
“assert the existence of . . . [a] legal right when such person knows that the right does not exist.”
Plaintiff contends that the following language in the Letter violates this provision: “Unless you,
within 30 days of receipt of this notice, dispute the validity of the debt, or any portion thereof,
the debt will be assumed to be owed.” Plaintiff contends that because this language violates
§ 1692g(a) (as discussed above), Defendant has asserted the existence of a legal right despite
knowing that the right does not exist, in violation of § 559.72(9).
Defendant responds that the Letter does not violate § 1692g(a). However, as explained
above, the Court has concluded that the failure to indicate that only the debt collector would
assume the debt to be owed if Plaintiff failed to dispute it within thirty days is misleading. To
that extent, the Court concludes that Plaintiff has stated a claim in Count Two that Defendant
violated Florida Statute § 559.72(9) by asserting the misleading communication regarding who
could assume that the debt was owed. Accordingly, to that extent, the Court denies Defendant’s
motion to dismiss this claim.
C. Count Three
In Count Three, Plaintiff alleges that the Letter violates 15 U.S.C. § 1692e(10) of the
FDCPA. Section 1692e(10) provides, in relevant part, that a debt collector shall not use any
false representation or deceptive means to attempt to collect any debt. Plaintiff contends that the
following three statements in the Letter, when read together, are misleading and violate this
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provision: (1) “If a federal bankruptcy action has been filed and a discharge entered, no
deficiency or personal judgment will be sought, and an In Rem Judgment will be entered against
you as the real property title owners;” (2) “Unless you, within 30 days of receipt of this notice,
dispute the validity of the debt, or any portion thereof, the debt will be assumed to be owed;” and
(3) “As of March 18, 2013, you owe $230,456.76. Because of the interest, late charges, and
other charges that may vary from day to day, the amount due on the day you pay may be
greater.”
According to Plaintiff, those statements would confuse the least sophisticated consumer
that had filed for bankruptcy and had been discharged regarding whether they still had to
personally pay the debt at issue and whether a court would assume that the consumer still owed
the debt at issue if Plaintiff did not dispute it within thirty days. The Court agrees that these
statements are misleading, and the Court notes that the language that “an In Rem Judgment will
be entered against you” could be perceived by the least sophisticated consumer that they will not
be allowed to contest an In Rem judgment before it is entered against them. Therefore, the Court
concludes that Plaintiff has stated a claim in Count Three, and Defendant’s motion to dismiss
this claim is denied.
D. Count One
In Count One, Plaintiff seeks declaratory and injunctive relief under Florida Statute
§ 559.77(2) of the FCCPA. Section 559.77(2) provides that the Court may award equitable
relief for violations of the FCCPA. Because the Court has found that Plaintiff has stated an
FCCPA claim in Count Two, Plaintiff may seek declaratory and injunctive relief. As such, the
Court denies Defendant’s motion to dismiss Count One.
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IV. Conclusion
Accordingly, it is ORDERED AND ADJUDGED that Defendant’s Motion to Dismiss
(Doc. No. 12) is GRANTED IN PART AND DENIED IN PART: The motion is granted to the
extent that Defendant’s substitution of the word “owed” for “valid” is not a violation of the
FDCPA or FCCPA; otherwise, the motion is denied.
DONE AND ORDERED at Tampa, Florida, this 18th day of July, 2014.
Copies to:
Counsel of Record
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