Glackin v. LTD Financial Services, L.P.

Filing 13

MEMORANDUM AND ORDER : IT IS HEREBY ORDERED that plaintiff's motion for partial summary judgment as to FDCPA liability [Doc. # 6 ] is granted. IT IS FURTHER ORDERED that defendant's motion for summary judgment [Doc. # 10 ] is denied.. Signed by District Judge Carol E. Jackson on 8/1/13. (KKS)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF MISSOURI
EASTERN DIVISION
ALISHA GLACKIN,
Plaintiff,
vs.
LTD FINANCIAL SERVICES, L.P.,
Defendant.

)
)
)
)
)
)
)
)
)

No. 4:13-CV-00717 (CEJ)

MEMORANDUM AND ORDER
This matter is before the Court on the parties’ cross motions for summary
judgment on the issue of liability. The issues are fully briefed.
I.

Background

Plaintiff brings this action alleging that defendant, a debt collection firm, violated
the Fair Debt Collection Practices Act (FDCPA), 15 U.S.C. § 1692, et seq., while
attempting to collect a consumer debt allegedly owed by plaintiff to a third party.
Plaintiff alleges that defendant violated the FDCPA by demanding payment during the
30-day dispute period, thereby overshadowing her dispute, validation, and verification
rights under § 1692g.
II.

Legal Standard

Rule 56(a) of the Federal Rules of Civil Procedure provides that summary
judgment shall be entered if the moving party shows “that there is no genuine dispute
as to any material fact and the movant is entitled to a judgment as a matter of law.”
In ruling on a motion for summary judgment the court is required to view the facts in
the light most favorable to the non-moving party and must give that party the benefit
of all reasonable inferences to be drawn from the underlying facts. AgriStor Leasing
v. Farrow, 826 F.2d 732, 734 (8th Cir. 1987). The moving party bears the burden of

showing both the absence of a genuine issue of material fact and its entitlement to
judgment as a matter of law. Anderson v. Liberty Lobby, Inc., 477 U.S. 242 (1986);
Matsushita Electric Industrial Co. v. Zenith Radio Corp., 475 U.S. 574, 586-87 (1986).
Once the moving party has met its burden, the non-moving party may not rest on the
allegations of his pleadings but must set forth specific facts, by affidavit or other
evidence, showing that a genuine issue of material fact exists. United of Omaha Life
Ins. Co. v. Honea, 458 F.3d 788, 791 (8th Cir. 2006) (quoting Fed. R. Civ. P. 56(e)).
Rule 56 “mandates the entry of summary judgment, after adequate time for discovery
and upon motion, against a party who fails to make a showing sufficient to establish
the existence of an element essential to that party’s case, and on which that party will
bear the burden of proof at trial.” Celotex Corporation v. Catrett, 477 U.S. 317, 322
(1986).
III.

Discussion

The FDCPA prohibits a debt collector from using “any false, deceptive, or
misleading representation or means in connection with the collection of any debt.” 15
U.S.C. § 1692e. To prevail on a claim pursuant to the FDCPA, plaintiff must allege and
prove that “(1) the plaintiff is a ‘consumer’ within the meaning of the statute; (2) the
defendant collecting the debt is a ‘debt collector’ within the meaning of the statute;
[and] (3) the defendant has violated by act or omission a provision of the FDCPA.” Hart
v. Franklin Credit Mg’t Corp., No. 4-12-CV-1126 (E.D. Mo. Feb. 11, 2013) (citing
Creighton v. Emporia Credit Serv., Inc., 981 F. Supp. 411, 414 (E.D. Va. 1997)). In the
instant case, the first two elements are satisfied as defendant has conceded that it is
a debt collector and plaintiff is a consumer as defined by the FDCPA. (Doc. ## 8, 9-1).

-2-

In order to satisfy the third element, plaintiff contends that defendant violated
§ 1692g of the FDCPA. Subsection (a) of § 1692g requires debt collectors to provide
certain information to the consumer within five days after their initial communication.
One requirement includes “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.” 15 U.S.C. § 1692g(a)(3).
Subsection (b) then states, in pertinent part: “Any collection activities and
communication during the 30-day period may not overshadow or be inconsistent with
the disclosure of the consumer’s right to dispute the debt[.]” 15 U.S.C. § 1692g(b)
(emphasis added). Plaintiff admits that the initial communication from defendant
contained the basic language required by § 1692g(a), but argues that this message
was contradicted and overshadowed by a later request for payment within the 30-day
dispute period.
The evidence establishes that defendant sent a collection letter to plaintiff dated
March 8, 2013 regarding a debt allegedly owed to Macy’s Department Store. (Doc. #
7-3). The letter, received on March 11, 2013, stated that plaintiff had thirty days from
the date of receipt to dispute the validity of the debt or any portion of the debt. The
evidence also establishes that plaintiff called defendant on March 15, 2013 to inquire
about the debt. (Doc. # 9-1). An audio recording of the telephone conversation
includes the following dialogue:
Plaintiff: How long do I have to take care of this[?]
Defendant: Usually when we send out a letter we usually ask you to
make some kind of arrangement, or make some payment within that
month before this month is over with. So we want a payment in our office
by the 29th, partial payment, half of it, or make some arrangements. You

-3-

can set up a payment plan over the phone . . . or you can just pay it off
over a couple of months, what are you able to do?
Plaintiff: Are you guys considering taking any legal action? Suing me?
Defendant: No we don’t do anything like that, no ma’am, no not in this
office[.]
(Doc. # 7, Ex. 3).
Plaintiff alleges that the March 29 deadline was inconsistent with her right to
dispute the debt because it was within the 30-day dispute period and “caused [her] to
believe that either [she] had no such right to dispute the debt, or that [d]efendant was
going to ignore that right.” (Doc. # 7-2). In response, defendant argues that this
conversation did not amount to a demand for payment and did not cause any confusion
as to overshadow plaintiff’s dispute or validation rights.
A debt collector is free to continue its collection activities and communications
during the 30-day period as long as the consumer has not disputed the debt in writing.
See 15 U.S.C. § 1692g(b). If the debt collector chooses to continue communication
with the consumer during the 30-day period, the debt collector is not required to
reiterate the validation notice. Durkin v. Equifax Check Servs., Inc., 406 F.3d 410, 417
(7th Cir. 2005). However, the debt collector “may not overshadow or be inconsistent
with the disclosure of the consumer’s right to dispute the debt.” 15 U.S.C. § 1692g(b).
“Whether collection activities or communications within the 30-day validation
period overshadow or are inconsistent with a validation notice is determined under the
‘unsophisticated consumer’ standard.” Read v. Messerli and Kramer, P.A., 2012 WL
1439046, *2 (D. Minn. 2012) (citing Strand v. Diversified Collection Serv., Inc., 380
F.3d 316, 317 (8th Cir. 2004)). “[A] debt collector violates the FDCPA if [the]
communication would mislead or confuse” an unsophisticated debtor. Beasley v.
-4-

Rogers, P.A., 2010 WL 1980083, *3 (E.D.N.C. Mar. 1, 2010). “The unsophisticated
consumer may be uninformed, naive, and trusting, but still has ‘rudimentary
knowledge about the financial world’ and is ‘capable of making basic logical deductions
and inferences.’” Peterson v. Midland Credit Management, Inc., 2011 WL 781538, *4
(N.D. Ind. Feb. 28, 2011) (quoting Wahl v. Midland Credit Mgmt., Inc., 556 F.3d 643,
645 (7th Cir. 2009)). The unsophisticated consumer is an individual with below average
intelligence but not “tied to the very last rung on the sophistication ladder.” Duffy v.
Landberg, 215 F.3d 871, 874 (8th Cir. 2000). The standard also has an “objective
element of reasonableness,” which “protects debt collectors from liability for unrealistic
or peculiar interpretations[.]” Jang v. A.M. Miller & Assocs., 122 F.3d 480, 483-84 (7th
Cir. 1997).
From the standpoint of an unsophisticated consumer, defendant’s instruction to
make a payment or arrange a payment plan on or before March 29, 2013 is confusing
when compared to the 30-day dispute period, which would have run until April 10,
2013. See Bartlett v. Heibl, 128 F.3d 497, 501 (7th Cir. 1997) (When a due date is set
within the 30-day dispute period, the “net effect . . . turn[s] the required disclosure on
its head.”). For instance, if plaintiff made payment arrangements on or before March
29, 2013, it is unlikely that plaintiff, an unsophisticated consumer, would understand
that she could still dispute the debt despite making such arrangements.
In Crowder v. Kelly, 1999 WL 199615 (N.D. Ill. 1999), the defendant sent a
collection letter that contained both a 30-day validation notice and instructions to call
the defendant within 30 days in order for the plaintiff to make payment arrangements.
Although the letter did not demand payment within the 30-day period, the court found
that the requirement to make payment arrangements within that period was confusing
-5-

to an unsophisticated consumer. Id. The court explained that “[a]n unsophisticated
consumer might easily believe that once he had made such payment arrangements (or
even a payment), there would be no point in exercising his validation right; indeed, the
unsophisticated consumer might even believe he could no longer exercise that right.”
Id. at *2.
Although the facts of the instant case are slightly different from Crowder, the
rationale is the same in that an unsophisticated consumer would likely believe that
setting up payment arrangements would act as a waiver of the right to dispute the
debt. Accordingly, the Court finds that defendant’s request for plaintiff to make a
payment or make payment arrangements on or before March 29 improperly
overshadowed and was inconsistent with the validation notice.
***
For the foregoing reasons,
IT IS HEREBY ORDERED that plaintiff’s motion for partial summary judgment
as to FDCPA liability [Doc. # 6] is granted.
IT IS FURTHER ORDERED that defendant’s motion for summary judgment
[Doc. #10] is denied.

____________________________
CAROL E. JACKSON
UNITED STATES DISTRICT JUDGE
Dated this 1st day of August, 2013.

-6-