RIDGEWAY v. AR RESOURCES, INC.
OPINION. Signed by Judge Noel L. Hillman on 8/30/2017. (dmr)
UNITED STATES DISTRICT COURT
DISTRICT OF NEW JERSEY
Civil No. 16-1188 (NLH/KMW)
AR RESOURCES, INC.,
RC LAW GROUP, PLLC
By: Yaakov Saks, Esq.
285 Passaic Street
Hackensack, New Jersey 07601
Counsel for Plaintiff
HIGH SWARTZ, LLP
Mark Fischer, Jr., Esq.
40 East Airy Street
Norristown, Pennsylvania 19404
Counsel for Defendant
HILLMAN, District Judge:
This is a Fair Debt Collections Practices Act (“FDCPA”), 15
U.S.C. § 1692 et seq., suit. 1
Plaintiff Ridgeway asserts that
she disputed a debt with Defendant AR Resources, Inc., a debt
collector, but AR Resources failed to identify the debt as
disputed or delete the debt.
The Court has federal question subject matter jurisdiction
pursuant to 28 U.S.C. § 1331.
AR Resources moves for summary judgment on the one-count
For the reasons stated herein, the Motion will be
denied in part and denied without prejudice in part.
In October, 2015, Defendant AR Resources received a onepage letter by fax, with no coversheet. (Fischer, Jr., Cert. Ex.
At the top of the page, the letter states that it is “FROM:”
Plaintiff Christine Ridgeway, and bears Ridgeway’s home address
in New Jersey. (Id.)
No other sender is identified, although
the fax header printed on the letter bears a fax number with an
area code of 414, and the time stamp is in Mountain Daylight
The letter goes on to identify the debt at issue by name
on the account (Christine Ridgeway), the last four digits of
Ridgeway’s social security number, Ridgeway’s date of birth, the
creditor, and the balance of the debt.
The remainder of
the letter appears to be a boilerplate form stating, among other
things, “I dispute this debt.” (Id.)
The letter bears the
electronic “/s/” signature of Christine Ridgeway. (Id.)
Ridgeway testified at her deposition that she did not draft
the letter. (Ridgeway Dep. p. 6)
A “credit repair agency,”
Collection Shield 360 (“CS360”), wrote the letter after Ridgeway
The parties do not dispute that 414 is the area code for
Milwaukee, Wisconsin. (Plaintiff’s response to Defendant’s
Statement of Undisputed Facts ¶ 10)
called the company. (Id. at p. 6-7)
Ridgeway testified that she
specifically asked CS360 to dispute the AR Resources debt. (Id.
at p. 8, 16)
The summary judgment record contains a one-page “Collection
Shield Service Agreement” electronically signed by both CS360
and Ridgeway. (Fischer, Jr., Cert. Ex. B)
The agreement states
in relevant part, “I, Christine Ridgeway, hereby authorize,
[CS360], to make, receive, sign, endorse, execute, acknowledge,
deliver, and process such applications, correspondence,
contracts, or agreements to credit reporting agencies and
creditors/collection agencies as necessary to improve my
The agreement is undated. (Id.)
Summary judgment is appropriate where the Court is
satisfied that “‘the pleadings, depositions, answers to
interrogatories, and admissions on file, together with the
affidavits, if any,’ . . . demonstrate the absence of a genuine
issue of material fact” and that the moving party is entitled to
a judgment as a matter of law. Celotex Corp. v. Catrett, 477
U.S. 317, 322-23 (1986)(citing Fed. R. Civ. P. 56).
An issue is “genuine” if it is supported by evidence such
that a reasonable jury could return a verdict in the nonmoving
party’s favor. Anderson v. Liberty Lobby, Inc., 477 U.S. 242,
A fact is “material” if, under the governing
substantive law, a dispute about the fact might affect the
outcome of the suit. Id.
“In considering a motion for summary
judgment, a district court may not make credibility
determinations or engage in any weighing of the evidence;
instead, the non-moving party’s evidence ‘is to be believed and
all justifiable inferences are to be drawn in his favor.’”
Marino v. Indus. Crating Co., 358 F.3d 241, 247 (3d Cir.
2004)(citing Anderson, 477 U.S. at 255).
Initially, the moving party bears the burden of
demonstrating the absence of a genuine issue of material fact.
Celotex, 477 U.S. at 323 (“[A] party seeking summary judgment
always bears the initial responsibility of informing the
district court of the basis for its motion, and identifying
those portions of ‘the pleadings, depositions, answers to
interrogatories, and admissions on file, together with the
affidavits, if any,’ which it believes demonstrate the absence
of a genuine issue of material fact.”); see also Singletary v.
Pa. Dept. of Corr., 266 F.3d 186, 192 n.2 (3d Cir. 2001)
(“Although the initial burden is on the summary judgment movant
to show the absence of a genuine issue of material fact, ‘the
burden on the moving party may be discharged by ‘showing’ -that is, pointing out to the district court -- that there is an
absence of evidence to support the nonmoving party’s case’ when
the nonmoving party bears the ultimate burden of proof.”)(citing
Celotex, 477 U.S. at 325).
Once the moving party has met this burden, the nonmoving
party must identify, by affidavits or otherwise, specific facts
showing that there is a genuine issue for trial. Celotex, 477
U.S. at 324.
A “party opposing summary judgment ‘may not rest
upon the mere allegations or denials of the . . . pleading[s.]’”
Saldana v. Kmart Corp., 260 F.3d 228, 232 (3d Cir. 2001).
“the non-moving party[ ] to prevail, [that party] must ‘make a
showing sufficient to establish the existence of [every] element
essential to that party’s case, and on which that party will
bear the burden of proof at trial.’” Cooper v. Sniezek, 418 F.
App’x 56, 58 (3d Cir. 2011)(citing Celotex, 477 U.S. at 322).
Thus, to withstand a properly supported motion for summary
judgment, the nonmoving party must identify specific facts and
affirmative evidence that contradict those offered by the moving
party. Anderson, 477 U.S. at 257.
AR Resources makes two arguments in support of its motion.
First, it argues that Ridgeway cannot demonstrate that she
validly disputed the debt, therefore AR Resources cannot be
liable for allegedly failing to mark the debt as disputed.
Second, AR Resources alternatively argues that even if
summary judgment is denied on the merits of Ridgeway’s FDCPA
claim, her claim for attorney’s fees under the statute must be
dismissed because the agreement between Ridgeway and her
attorney “was illegal and invalid” because it allegedly violated
New York law and the Rules of Professional Conduct. 3
The Court is aware that a judge of the United States
District Court for the Southern District of New York recently
ruled in favor of Defendants in a case that, the parties agree,
is almost identical to this case.
See Taylor-Burns v. AR
Resources, Inc., 2017 WL 3034353 (S.D.N.Y. July 14, 2017).
However, for the reasons set forth herein, the undersigned
respectfully disagrees with the Taylor-Burns court’s analysis.
AR Resources argues that the agreement between Ridgeway and
CS360: (1) fails to comply with the Credit Repair Organizations
Act, 15 U.S.C. § 1679 et seq., and therefore, AR Resources
maintains, (2) the dispute letter CS360 sent to AR Resources on
Ridgeway’s behalf was legally invalid, and therefore, (3) “CS360
had no authority to send the letter on Ridgeway’s behalf.”
(Moving Brief p. 6)
Indeed, this is exactly what the Taylor-Burns court held,
without explanation: “The lack of a CROA–compliant contract
between CS360 and Plaintiff - and therefore the lack of a valid
The fee agreement is governed by New York law.
contract between CS360 and Plaintiff - means that CS360 had no
authority to send the Letter on Plaintiff’s behalf.” TaylorBurns, 2017 WL 3034353, at *4.
In the undersigned’s view, however, even if (1) the
Ridgeway-CS360 Agreement violates the CROA, and even if (2) that
violation of law invalidates the Agreement (both issues the
undersigned need not, and does not, decide), it does not follow
that (3) CS360 had no authority to send the letter on Ridgeway’s
As Ridgeway persuasively argues, issues of material fact
exist as to whether CS360 had actual or apparent authority to
send the dispute letter.
The basic law of agency is clear: the
agent and principal need not have a written contract at all to
create an agency relationship.
“An agency relationship is
created when one party consents to have another act on its
behalf, with the principal controlling and directing the acts of
There need not be an agreement between parties
specifying an agency relationship; rather, the law will look at
their conduct.” Sears Mortg. Corp. v. Rose, 134 N.J. 326, 337
(1993)(internal citations and quotations omitted); see also
Restatement (Second) of Agency § 15 (1958)(“An agency relation
exists only if there has been a manifestation by the principal
to the agent that the agent may act on his account, and consent
by the agent so to act.”).
A reasonable factfinder could find on this record that
CS360 had authority to act on Ridgeway’s behalf, and therefore
Ridgeway, through her agent, CS360, disputed the debt at issue
even if Ridgeway and CS360 did not have a CROA-compliant
Independent from the disputed written agreement,
Ridgeway testified that she called CS360 and asked them to
dispute the debt at issue, and in response, CS360 faxed the
above-quoted correspondence. 4
Our review of the CROA as a whole confirms our
It is clear from the statute’s “findings and
purposes” section that Congress was motivated by what it saw as
a need to protect consumers from unfair and deceptive practices
by credit reporting agencies. 15 U.S.C. § 1679(b).
We share Defendant’s concerns about what appear to be
significant discrepancies between Plaintiff’s affidavit and her
deposition testimony regarding her communications with CS360.
We reject Defendant’s claim, however, that the proffered
versions are so wildly divergent as to make Plaintiff’s
affidavit a sham designed solely to defeat summary judgment. See
Baer v. Chase, 392 F.3d 609, 624 (3d Cir. 2004)(noting that
“summary judgment [is] improper even though party’s testimony
was ‘not a paradigm of cogency or persuasiveness,’ [if the
testimony is] not a ‘transparent sham.’”)(quoting Choudhry v.
Jenkins, 559 F.2d 1085, 1090 (7th Cir. 1977)). We note that by
whatever communication method Plaintiff used to contact CS360 or
the lawyers associated with it, she has stated consistently in
this case that she authorized CS360’s communications with the
defendant. Defendant is free, of course, to use any conflicts
in her testimony, and any other valid attacks on her
credibility, in an attempt to persuade the factfinder as to the
non-existence or scope of any alleged agency relationship
between Plaintiff and CS360.
the statute sets forth detailed requirements for the contents of
contracts between such agencies and consumers, 15 U.S.C. §
1679d, and as Defendant has noted, makes such contracts void and
unenforceable. 15 U.S.C. § 1679f.
However, we view these sections as voiding such contracts
as between the parties to such agreements, i.e., the consumer
and the credit agency, not provisions intended to shield third
party debt collectors from conduct that may violate another
consumer protection law.
It truly would be ironic to deny a
plaintiff the protections of the FDCPA because she had been a
victim of the CROA.
Here, as we have noted, Plaintiff makes no
complaint of CS360 under the CROA.
To the contrary, she insists
they acted with her knowledge and approval.
She alone – not
Defendant – has standing to void any contract she may have with
CS360 under the CROA. 5
AR Resources’ Motion for Summary Judgment on the FDCPA
claim will be denied.
The CROA does have some provisions that protect third parties
from certain misleading conduct, directly or indirectly, by a
credit reporting agency. See 15 U.S.C. § 1679b. However,
Defendant makes no allegation that CS360, a non-party in this
action, violated those provisions much less that such conduct,
even if it occurred, bars Plaintiff’s claims in this case.
As to AR Resources’ Motion for Summary Judgment on the
claim for statutory attorneys’ fees, Ridgeway asks this Court to
defer ruling on the issue at this stage of the case.
suggests that the Court may rule on her entitlement to
attorneys’ fees upon a fully briefed application for fees if the
Court, as factfinder 6, finds liability in her favor. (Opposition
Brief, p. 9-10)
AR Resources responds that “this Court may address on
summary judgment ARR’s request to strike attorneys’ fees as a
[sic] element of damages.” (Reply Brief, p. 5)
While the Court may certainly decide the issue now, it is
not obligated to do so at this stage of the proceedings.
Ridgeway’s entitlement to attorneys’ fees is dependent on a
finding of liability on her FDCPA claim; a finding which has not
The Court exercises its discretion to defer
decision on the attorneys’ fees issue unless and until liability
The parties can be assured that any award of
attorney’s fee will comply with both the statute and all
applicable Rules of Professional Conduct and that lawyers acting
outside such rules act at their peril.
AR Resources’ Motion for Summary Judgment on the claim for
attorneys’ fees will be denied without prejudice.
Neither party has filed a jury demand in this suit.
For the reasons stated above, Defendant’s Motion for
Summary Judgment will be denied in part and denied without
prejudice in part.
An appropriate order accompanies this
Dated: August 30, 2017
At Camden, New Jersey
__s/ Noel L. Hillman ___
NOEL L. HILLMAN, U.S.D.J.
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