Keasey v. Judgment Enforcement Law Firm, PLLC et al
Filing
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OPINION; signed by Judge Gordon J. Quist (Judge Gordon J. Quist, jmt)
UNITED STATES DISTRICT COURT
FOR THE WESTERN DISTRICT OF MICHIGAN
SOUTHERN DIVISION
__________________________
SUSAN KEASEY,
Plaintiff,
Case No. 1:13-CV-420
v.
HON. GORDON J. QUIST
JUDGMENT ENFORCEMENT LAW
FIRM, PLLC and MERCHANTS
CREDIT RESOURCE INC,
Defendants.
_________________________________/
OPINION
Plaintiff, Susan Keasey, sued Defendants, Judgment Enforcement Law Firm, PLLC (JELF)
and Merchants Credit Resources Inc. (MCR), alleging violations of the Fair Debt Collection
Practices Act (FDCPA), 15 U.S.C. § 1692 et seq., the Michigan Collection Practices Act (MCPA),
M.C.L. § 445.251 et seq., and the Michigan Occupational Code (MOC), M.C.L. § 339.901 et seq.
Defendants filed a motion for summary judgment, and Plaintiff filed a cross-motion for partial
summary judgment. Those motions are presently before the Court.
Background
Plaintiff previously borrowed money from an entity named CashCall, Inc. (Dkt. #1, Page
ID #4, ¶ 9.) She allegedly failed to repay that loan. (Id. ¶ 10.) CashCall sold the alleged debt to
MCR, and MCR retained JELF to collect the debt. (Id. ¶¶ 13-14.) On March 22, 2013, JELF sent
Plaintiff a form collection letter. (Id. ¶15.) JELF sent the letter in an envelope with a return address
that stated “JUDGMENT ENFORCEMENT LAW FIRM” at the top. (Compl. Ex. A.)
Discussion
1.
FDCPA Claims
Congress enacted the FDCPA “to eliminate abusive debt collection practices by debt
collectors, to ensure that debt collectors who abstain from such practices are not competitively
disadvantaged, and to promote consistent state action to protect consumers.” 15 U.S.C. § 1692(e).
To establish a claim under the FDCPA, a plaintiff must demonstrate that she is a consumer, that she
incurred a debt, that the defendant was a debt collector, and that the defendant engaged in conduct
prohibited by the FDCPA. See Wallace v. Washington Mut. Bank, 683 F.3d 323, 326 (6th Cir.
2012). Defendants do not dispute that they are debt collectors and that Plaintiff is a consumer that
incurred a debt. Thus, the only dispute is whether Defendants engaged in prohibited conduct.
To determine whether conduct violates the FDCPA, courts in this circuit use the “least
sophisticated consumer” standard. Barany-Snyder v. Weiner, 539 F.3d 327, 333 (6th Cir. 2008).
The purpose of the least sophisticated consumer standard is to protect “all consumers, the gullible
as well as the shrewd.” Id. “[A]lthough this standard protects naive consumers, it also prevents
liability for bizarre or idiosyncratic interpretations of collection notices by preserving a quotient of
reasonableness and presuming a basic level of understanding and willingness to read with care.”
Fed. Home Loan Mortg. Corp. v. Lamar, 503 F.3d 504, 507 (6th Cir. 2007) (alteration in original)
(internal quotation marks omitted).
Plaintiff alleges that Defendants violated the FDCPA by (1) failing to effectively disclose
the name of the creditor to whom the debt was owed; (2) failing to communicate to Plaintiff her right
to require Defendants to obtain and mail to Plaintiff a copy of the underlying judgment; (3) falsely
representing that a judgment had been entered against Plaintiff; and (4) including the name of JELF
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on the envelope of the collection letter.1 Plaintiff alleges that this same conduct also violated the
MCPA and MOC. Defendants have moved for summary judgment on three of the claims.2 Plaintiff
has moved for summary judgment on the final claim only. The Court will address each claim in
turn.
A.
Name of the Creditor
The FDCPA requires that a debt collector provide a debtor with certain information,
including “the name of the creditor to whom the debt is owed,” in the initial communication or
within five days thereafter. 15 U.S.C. § 1692g(a)(2). To comply with that requirement, a debt
collector must effectively convey the required information to the debtor. See Smith v. Computer
Credit, Inc., 167 F.3d 1052, 1054 (6th Cir. 1999).
In this case, the initial communication between the parties was the March 22, 2013 letter,
which stated:
Please be advised that this office has been retained by our client, MERCHANTS CREDIT
RECOURSE, INC, to collect a debt in connection with your default on your above
referenced CashCall, Inc. account 1207141.
(Dkt. # 1-1, Page ID # 17.) Plaintiff asserts that the letter did not effectively communicate that MCR
was the creditor to whom the debt was owed, arguing that the least sophisticated consumer could
reasonably come away with the belief that MCR was merely hired as a collection agency.
Plaintiff’s argument is unavailing. The letter clearly stated that JELF had been retained by
MCR to collect a debt. The reasonable conclusion from that statement is that MCR is the creditor
to whom the debt is owed. This case is unlike those cases in which a defendant made an equivocal
1
Plaintiff initially alleged that Defendants violated the FDCPA by falsely representing that Plaintiff was
required to telephone JELF to discuss the debt, but she expressly abandoned that claim. (Dkt. # 35 at Page ID # 147.)
2
Although Defendants’ motion purports to request summary judgment on all Plaintiff’s claims, it does not
include any argument as to the claim that Defendants falsely represented that a judgment had been entered against
Plaintiff. Accordingly, this claim will remain.
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statement regarding the identity of the creditor. See Zapp v. Trott & Trott, P.C., No. 13-12998, 2013
WL 6631670, at *2 (E.D. Mich. Dec. 17, 2013) (finding an FDCPA violation where a collection
letter stated that the creditor was a creditor or the loan servicer of the creditor). It is also dissimilar
from those cases in which the name of the creditor was merely mentioned without explanation. See
Lee v. Foster & Garbus LLP, 926 F. Supp. 2d 482, 486-87 (E.D.N.Y. 2013) (finding an FDCPA
violation where the name of the creditor was in the subject line of the letter only, and not identified
as a creditor). In this case, the least sophisticated consumer would reasonably understand that MCR
was the creditor to whom the debt was owed, and that JELF had been retained to collect the debt.
Accordingly, Defendants are entitled to summary judgment on this claim.
B.
Right to Obtain the Underlying Judgment
Plaintiff next alleges that Defendants violated the FDCPA’s requirement that a debt collector
notify a debtor that, upon the debtor’s request, the debt collector will obtain a “verification of the
debt or a copy of a judgment” against the debtor and mail it to the debtor. 15 U.S.C. § 1692g(a)(4)
(emphasis added). In this case, the March 22, 2013 letter stated: “If you notify this office in writing
within 30 days of receiving this notice, this office will obtain verification of the debt and mail a copy
of it to you.” (Dkt. #1-1 at Page ID # 17.)
It is undisputed that there was no judgment against Plaintiff. Nonetheless, Plaintiff contends
that the letter implied that there was such a judgment because it was on JELF’s letterhead. Thus,
Plaintiff argues, the FDCPA required Defendants to notify Plaintiff of her right to obtain a copy of
the judgment against her.
Plaintiff’s argument defies reason. Defendants were not obligated to notify Plaintiff of her
right to obtain a copy of a non-existent judgment. See Fed. Home Loan Mortg. Corp. v. Lamar, 503
F.3d 504, 507 (6th Cir. 2007) (finding that language notifying the plaintiff of her right to obtain
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verification of the debt complied with the technical requirements of the FDCPA). In fact, including
reference to a non-existent judgment could easily confuse a debtor by causing her to believe there
was a judgment against her. See Stojanovski v. Strobl & Manoogian, P.C., 783 F. Supp. 319, 324
(E.D. Mich. 1992) (“If the defendant did falsify and state that it would provide a non-existent
judgment against plaintiffs, that would . . . very likely mislead[] unsophisticated plaintiffs into a
belief that there had already been a judgment rendered against them.”). Accordingly, the Court will
grant summary judgment on this claim.
C.
Use of JELF’s Name on the Envelope
Section 1692f(8) of the FDCPA prohibits the following:
Using any language or symbol, other than the debt collector’s address, on any envelope
when communicating with a consumer by use of the mails or by telegram, except that a debt
collector may use his business name if such name does not indicate that he is in the debt
collection business.
15 U.S.C. § 1692f(8).
“The purpose of this specific provision is apparently to prevent
embarrassment resulting from a conspicuous name on the envelope, indicating that the contents
pertain to debt collection.” Rutyna v. Collection Accounts Terminal, Inc., 478 F. Supp. 980, 982
(N.D. Ill. 1979).
Plaintiff argues that Defendants violated § 1692f(8) by including “JUDGMENT
ENFORCEMENT LAW FIRM” on the envelope of the March 22, 2013 mailing. Plaintiff relies
primarily on Rutyna, 478 F. Supp. 980, in which a district court found a violation under similar
circumstances. In that case, the court found that the defendant’s name, Collection Accounts
Terminal, indicated that it was in the debt collection business, and that the FDCPA thus prohibited
using the name on a collection letter envelope. Id. at 982.
Defendants argue that the envelope was not a communication as defined by the FDCPA, and
thus § 1692f(8) is not applicable. The FDCPA prohibits a debt collector from putting language on
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“any envelope when communicating with a consumer by use of the mails.” It further defines a
communication as the “conveying of information regarding a debt.” 15 U.S.C. § 1692(a)(2).
Defendant seems to argue that the envelope itself, and not its contents, must convey information
about a debt in order for § 1692f(8) to apply. This is a tortured reading of the statute, which
prohibits putting language on any envelope when communicating with a debtor by mail. There is
no dispute that the letter constituted a communication for purposes of the FDCPA. Thus, § 1692f(8)
applied to the mailing, regardless of whether the envelope alone would constitute a communication.
Defendants further argue that the use of JELF’s name did not violate § 1692f(8) because the
name does not indicate that the sender is in the debt collection business. The Court disagrees. A
person viewing the mailing, including the least sophisticated consumer, could reasonably conclude
that a law firm dedicated to enforcing judgments is in the debt collection business. Contrary to
Defendants’ argument, JELF’s name is not as innocuous as those names and phrases that courts have
found do not violate § 1692f(8). See Johnson v. NCB Collection Servs., 799 F. Supp. 1298, 1305
(D. Conn. 1992) (finding that the phrase “Revenue Department” on the envelope of a collection
letter did not violate § 1692f(8)); Masuda v. Thomas Richards & Co., 759 F. Supp. 1456, 1466 (C.D.
Cal. 1991) (finding that the phrase “Personal & Confidential” on the envelope of a collection letter
did not violate § 1692f(8)). The other cases that Defendants cite merely stand for the proposition
that a message that does not convey information about a debt is not transformed into an FDCPA
communication simply because the debt collector mentions an innocuous-sounding company name.
See Marx v. Gen. Revenue Corp., 668 F.3d 1174, 1177 (10th Cir. 2011) (finding that a fax to verify
employment was not a communication because it did not convey information about the debt); Brody
v. Genpact Servs., LLC, No. 13-cv-11125, 2013 WL 5925168, at *3 (E.D. Mich. Oct. 28, 2013)
(finding that a voice mail that stated the debt collector’s name was not a communication). Because
the mailing at issue was a communication for purposes of the FDCPA, those cases have little bearing
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on the question at issue.
Because JELF’s name indicates that it is in the debt collection business, use of the name on
the envelope of a collection letter violated the FDCPA. Accordingly, Plaintiff is entitled to
summary judgment on this claim.
2.
State Law Claims
Defendants have moved for summary judgment on Plaintiff’s state law claims, arguing that
these claims must fail for the same reasons as Plaintiff’s FDCPA claims. For the reasons set forth
above, Defendants are entitled to summary judgment as to those state law claims based on
Defendants’ alleged failure to disclose the name of the creditor and notify Plaintiff of her right to
obtain a copy of the judgment against her. Plaintiff’s state law claims based on the use of JELF’s
name on the envelope of the March 22, 2103 mailing, specifically those claims brought under
M.C.L. § 339.915(m) and § 445.252(m), will remain.
Conclusion
The Court will grant summary judgment in favor of Defendants on Plaintiff’s federal and
state law claims related to Defendants’ alleged failure to disclose the name of the creditor and notify
Plaintiff of her right to obtain a copy of the judgment against her. The Court will grant summary
judgment in favor of Plaintiff on her FDCPA claim related to the use of JELF’s name on the
envelope of the March 22, 2013 mailing. Plaintiff’s state law claims based on that mailing will
remain, as will Plaintiff’s federal and state law claims related to the alleged representation that a
judgment had been entered against her.
An order consistent with this Opinion shall issue.
Dated: April 30, 2014
/s/ Gordon J. Quist
GORDON J. QUIST
UNITED STATES DISTRICT JUDGE
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