NEPOMUCENO v. MIDLAND CREDIT MANAGEMENT, INC. et al

Filing 74

OPINION. Signed by Judge Susan D. Wigenton on 5/24/2017. (JB, )

NOT FOR PUBLICATION

UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF NEW JERSEY

LUZVIMID NEPOMUCENO on behalf of all
others similarly situated,

Civil Action No. 14-05719-SDW-SCM

Plaintiff,
v.

OPINION

MIDLAND CREDIT MANAGEMENT, INC.
& JOHN DOES 1 to 10,
Defendants.

May 24, 2017

WIGENTON, District Judge.
Before this Court are Defendant Midland Credit Management, Inc.’s (“Defendant”) Motion
for Summary Judgment and Plaintiff Luzvimid Nepomuceno’s (“Plaintiff”) Cross-Motion for
Summary Judgement, both pursuant to Federal Rule of Civil Procedure (“Rule”) 56. Jurisdiction
is proper pursuant to 28 U.S.C. § 1331. Venue is proper pursuant to 28 U.S.C. § 1391. This
Opinion is issued without oral argument pursuant to Federal Rule of Civil Procedure 78.
For the reasons stated herein, Defendant’s Motion for Summary Judgment is GRANTED
in part and DENIED in part. Plaintiff’s Cross-Motion is DENIED.
I.

BACKGROUND
This matter pertains to a September 14, 2013 debt collection letter (the “collection letter”)

Defendant Midland Credit Management, Inc. sent Plaintiff Luzvimid Nepomuceno in an attempt

1

to collect a credit card debt (“the debt”) Plaintiff owed to non-party Midland Funding, LLC
(“Midland Funding”). (See Dkt. No. 73, Ex. A; Dkt. No. 37-5 (the “Collection Letter”); see
generally Def.’s Statement of Material Facts (“Def.’s SMF”); Pl.’s Statement of Material Facts
(“Pl.’s SMF”).) Plaintiff alleges Defendant violated several provisions of the Fair Debt Collection
Practices Act (“FDCPA”), 15 U.S.C. § 1692, et seq (“Section 1692”), by sending the collection
letter. (See generally Am. Compl.)

Plaintiff originally owed the debt to Citibank, N.A.

(“Citibank”) “regarding a Home Depot branded account.” (Def.’s SMF ¶ 5.) Citibank charged off1
the debt on approximately April 12, 2012. (Pl.’s SMF ¶ 2.) Defendant concedes that Midland
Funding subsequently purchased the debt in September of 2013. (Dkt. No. 69-1 ¶ 3.)2
The collection letter consists of three pages. (See the Collection Letter at 1-3.) The first
page of the collection letter (the “Statement”), contains the following information:

Charging off a debt is defined as “treat[ing] (an account receivable) as a loss or expense because payment
is unlikely . . . .” CHARGE OFF, Black’s Law Dictionary (10th ed. 2014).
2
The parties are in agreement that Plaintiff is a “consumer,” Defendant is a “debt collector,” and the debt
is a “debt,” as those terms are defined under 15 U.S.C. § 1692a. (Def.’s SMF ¶¶ 1-3.)
1

2

REDACTED

REDACTED

(See id. at 1.) The second page of the collection letter, labeled as a “NOTICE OF NEW
OWNERSHIP AND PRE-LEGAL REVIEW,” states in part:

3

(See id. at 2.) The second page also provides a “Payment Certificate” notifying Plaintiff of
Defendant’s business hours as well as methods by which Plaintiff may contact and/or make a
payment to Defendant. (Id.) In addition, the second page lists “Current Balance: $7919.80”
immediately adjacent to either “Due Date: 10-29-2013” or “Payment Due Date 10-29-2013” in
two locations. (Id.)

Finally, the third page of the collection letter contains “Disclosure

Information.” (Id. at 3.) Although the text on the third page is not fully legible, a portion of the
text states that the “offer in this letter to settle your account remains open until 10-29-2013.” (Id.)
Plaintiff alleges that the contents of the collection letter violate the FDCPA under what
may be summarized as three theories of liability. First, Plaintiff claims “Defendant falsely
represented that there was a ‘Due Date’ [sic] for the amount allegedly owed.” (Pl.’s Br. Supp.
Cross-Mot. Summ. J. (“Pl.’s Br. Supp.”) at 2 n.2; see Am. Compl. ¶ 14.) According to Plaintiff,
the October 29, 2013 due date “appears . . . [to be] a made up date intended to scare the Plaintiff
into payment and the possible consequences of not paying by that made up date.” (Pl.’s Br. Opp.
Mot. Summ. J. (“Pl.’s Br. Opp.”) at 8-9.) Accordingly, Plaintiff contends that Defendant’s
inclusion of a due date on the collection letters violated 15 U.S.C. § 1692e(2)(A) by falsely
representing “the character, amount, or legal status” of Plaintiff’s debt. (See Pl.’s Br. Supp. at 7.)
Plaintiff also claims that Defendant’s inclusion of the due date violated 15 U.S.C. § 1692e(10) by
using “any false representation or deceptive means to collect or attempt to collect any debt or to
obtain information concerning a consumer.” (Id.) 3 For purposes of this Opinion, this Court refers
to these claims as the “due date claims.”4

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It bears noting that although Plaintiff contends that including a due date in the collection letter without
any basis for asserting that payment was due on that date violated 15 U.S.C. §§ 1692e(2)(A) and e(10), she
does not argue that the letter was deceptive, misleading, or unclear as to what amount Defendant requested
that Plaintiff pay by the due date.
4
Plaintiff’s brief in support of her Cross-Motion for Summary Judgment contains one reference to 15
U.S.C. § 1692f in the context of her due date claims. (See Pl.’s Br. Supp. at 8.) However, the Amended
4

Second, Plaintiff alleges Defendant also violated the FDCPA by including an unauthorized
interest charge at a 6% interest rate in the collection letter (the “accrued interest claims”).5 (Am.
Compl. ¶¶ 16, 20-22, 60-61.) As stated in the collection letter, Defendant sought payment from
Plaintiff for a total balance of $7919.80, including accrued interest of $231.27. (Collection Letter
at 1.) The Statement also reflects an interest rate of 6%. (Id.) Moreover, Defendant admits that the
interest charge began accruing on April 12, 2012, after Citibank charged off Plaintiff’s debt. (Dkt.
No. 37-4 at 10.)
According to Plaintiff, charging interest at the rate of 6% “was not authorized under the
original credit card agreement [between Plaintiff and Citibank].” (Am. Compl. ¶ 22.) In addition,
Plaintiff claims the 6% interest rate was in excess of the rate authorized by New Jersey law. (Id.
¶ 23.) As a result, Plaintiff argues, Defendant’s attempt to charge the “Accrued Interest” in the
Statement violated 15 U.S.C. §§ 1692e(2)(A), e(2)(B), and f(1).6 (Pl.’s Br. Opp. at 9-16.)
Third, Plaintiff claims that Midland Funding did not have the appropriate license to act as
a consumer lender until January 6, 2015, and that, as a result, Defendant “was not entitled to
demand or collect interest accrued after an account was charged off by the original creditor for any
consumer loan” on Midland Funding’s behalf (the “license claim”). (Id. ¶ 27.) As a result, Plaintiff

Complaint does not include a claim under Section 1692f as part of Plaintiff’s due date claims and Plaintiff
will not be permitted to add such a claim via her brief.
5
Although it is unclear in the Amended Complaint, Plaintiff’s brief in opposition to Defendant’s Motion
for Summary Judgment limits the accrued interest claims to a challenge to the rate at which Defendant
charged interest, as opposed to a broad challenge to Defendant charging any interest. (See Pl.’s Br. Opp. at
9-13.)
6
Although Plaintiff’s brief in opposition does not explicitly state that the accrued interest claims includes
a claim under 15 U.S.C. § 1692f(1), this Court construes the accrued interest claims as including a claim
under that provision of the FDCPA for purposes of this Opinion.
5

claims, Defendant violated 15 U.S.C. § 1692e(10), by falsely representing that Midland Funding
was entitled to collect interest on the debt.7 (Pl.’s Br. Opp. at 13.)
Having conducted discovery, and after reviewing Defendant’s files as to Plaintiff, Plaintiff
sought class certification pursuant to Rule 23 on March 18, 2016. (Dkt. No. 37.) This Court
subsequently granted Plaintiff’s Motion for Class Certification but limited the class to only the due
date claims. (Dkt. Nos. 45-46.) Defendant subsequently filed a Motion for Summary Judgement
on December 2, 2016. (Dkt. No. 67.) Plaintiff filed a Cross-Motion for Summary Judgment the
same day. (Dkt. No. 68.) The parties subsequently filed briefs in opposition on December 23,
2016. (Dkt. Nos. 69-70.) Neither party filed a brief in reply.
Defendant’s Motion seeks summary judgment as to all of Plaintiff’s claims and, in the
alternative, requests that this Court compel arbitration of Plaintiff’s claims. (See generally Def.’s
Br. Supp.) In turn, Plaintiff’s Cross-Motion seeks summary judgment only as to Plaintiff’s due
date claims. (See generally Pl.’s Br. Supp.)
II.

LEGAL STANDARD
Summary judgment is appropriate “if the movant shows that there is no genuine dispute as

to any material fact and the movant is entitled to judgment as a matter of law.” FED. R. CIV. P.
56(a). The “mere existence of some alleged factual dispute between the parties will not defeat an
otherwise properly supported motion for summary judgment; the requirement is that there be no
genuine issue of material fact.” Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247-48 (1986). A
fact is only “material” for purposes of a summary judgment motion if a dispute over that fact
“might affect the outcome of the suit under the governing law.” Id. at 248. A dispute about a

Plaintiff’s brief in support of her Cross-Motion for Summary Judgment explicitly limits her license claim
to a violation of 15 U.S.C. § 1692e(10). This Court construes the license claim accordingly.
7

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material fact is “genuine” if “the evidence is such that a reasonable jury could return a verdict for
the nonmoving party.” Id. The dispute is not genuine if it merely involves “some metaphysical
doubt as to the material facts.” Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574,
586 (1986).
The moving party must show that if the evidentiary material of record were reduced to
admissible evidence in court, it would be insufficient to permit the non-moving party to carry its
burden of proof. Celotex Corp. v. Catrett, 477 U.S. 317, 322-23 (1986). Once the moving party
meets its initial burden, the burden then shifts to the non-moving party to set forth specific facts
showing a genuine issue for trial and may not rest upon the mere allegations, speculations,
unsupported assertions, or denials of its pleadings. Shields v. Zucc arini, 254 F.3d 476, 481 (3d
Cir. 2001). “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) (quoting Anderson, 477 U.S. at
255).
The non-moving party “must present more than just ‘bare assertions, conclusory
allegations or suspicions’ to show the existence of a genuine issue.” Podobnik v. U.S. Postal Serv.,
409 F.3d 584, 594 (3d Cir. 2005) (quoting Celotex Corp., 477 U.S. at 325). Further, the nonmoving party is required to “point to concrete evidence in the record which supports each essential
element of its case.” Black Car Assistance Corp. v. New Jersey, 351 F. Supp. 2d 284, 286 (D.N.J.
2004) (citing Celotex Corp., 477 U.S. at 322-23.) If the non-moving party “fails to make a showing
sufficient to establish the existence of an element essential to that party’s case, and on which . . .

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[it has] the burden of proof,” then the moving party is entitled to judgment as a matter of law.
Celotex Corp., 477 U.S. at 322-23.
Furthermore, in deciding the merits of a party’s motion for summary judgment, the court’s
role is not to evaluate the evidence and decide the truth of the matter, but to determine whether
there is a genuine issue for trial. Anderson, 477 U.S. at 249. The non-moving party cannot defeat
summary judgment simply by asserting that certain evidence submitted by the moving party is not
credible. S.E.C. v. Antar, 44 F. Appx. 548, 554 (3d Cir. 2002).
III.

DISCUSSION
A. Arbitration
In moving for summary judgment, Defendant argues that Plaintiff’s claims are subject to a

valid arbitration provision present in the original credit card agreement between Plaintiff and
Citibank. (Def.’s Br. Supp. at 16-32.) In response, Plaintiff contends that even if her claims were
subject to a valid arbitration agreement, Defendant has waived its right to compel arbitration of
the claims in this matter both by litigating the merits of this matter and by first seeking to compel
arbitration nearly two years after Plaintiff filed her initial Complaint in this matter. (Pl.’s Br. Opp.
at 16-20.) Therefore, this Court must determine whether Defendant waived any right to compel
arbitration through its litigation conduct. See Ehleiter v. Grapetree Shores, Inc., 482 F.3d 207, 221
(3d Cir. 2007) (“[W]aiver of the right to arbitrate based on litigation conduct remains
presumptively an issue for the court to decide.”) (citations omitted).
‘“Consistent with the strong preference for arbitration in federal courts, waiver is not to be
lightly inferred,’ and ‘will normally be found only where the demand for arbitration came long
after the suit commenced and when both parties had engaged in extensive discovery.’” In re
Pharmacy Ben. Managers Antitrust Litig., 700 F.3d 109, 117 (3d Cir. 2012) (internal quotation

8

marks omitted) (quoting Nino v. Jewelry Exch., Inc., 609 F.3d 191, 208 (3d Cir. 2010)). In light
of this standard, a court must consider the extent to which “a ‘party has acted inconsistently with
the right to arbitrate, and [must determine whether] . . . a sufficient showing of prejudice has been
made by the party seeking to avoid arbitration.” In re PBM, 700 F.3d at 117 (quoting Nino, 609
F.3d at 208). Prejudice in this context “need not necessarily be ‘substantive prejudice to the legal
position of the party claiming waiver,’ but also extends to ‘prejudice resulting from the
unnecessary delay and expense incurred by the plaintiffs as a result of the defendants’ belated
invocation of their right to arbitrate.’” In re PBM, 700 F.3d at 121 (quoting Nino, 609 F.3d at
209). In order to determine whether a defendant’s delay in seeking arbitration has created
sufficient prejudice to a plaintiff such that a finding of waiver is appropriate, courts within the
Third Circuit consider the Hoxworth factors, a list of “six nonexclusive factors to guide the
prejudice inquiry”:
(1) timeliness or lack thereof of the motion to arbitrate; (2) extent to which the party
seeking arbitration has contested the merits of the opposing party's claims; (3)
whether the party seeking arbitration informed its adversary of its intent to pursue
arbitration prior to seeking to enjoin the court proceedings; (4) the extent to which
a party seeking arbitration engaged in non-merits motion practice; (5) the party's
acquiescence to the court's pretrial orders; and (6) the extent to which the parties
have engaged in discovery.
Gray Holdco, Inc. v. Cassady, 654 F.3d 444, 451 (3d Cir. 2011) (citing Hoxworth v. Blinder,
Robinson & Co., 980 F.2d 912, 926-27 (3d Cir. 1992)). Importantly, although the Hoxworth
factors “generally are indicative of whether a party opposing arbitration would suffer prejudice
attributable to the other party’s delay in seeking arbitration,” the waiver determination is ultimately
“case specific and thus depends on the circumstances and context of each case.” Gray Holdco,
Inc., 654 F.3d at 451 (citing Nino, 609 F.3d at 209).
In considering the first Hoxworth factor, the timeliness of Defendant’s motion seeking
arbitration, this Court notes that Defendant first sought leave to file a motion to compel arbitration
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on August 1, 2016. (See Dkt. No. 51.) Defendant made this request nearly two years after Plaintiff
filed the initial Complaint in this matter on September 12, 2014. (See Dkt. Not. 1.) This delay is
significantly longer than the delays in cases in which the Third Circuit found a party waived any
right to arbitration. See, e.g., In re PBM, 700 F.3d at 118 (holding that a ten-month delay weighed
in favor of waiver); see also Nino, 609 F.3d at 210 (“[T]he fifteen-month delay in this case . . .
dwarfs the delay involved in cases where we have found no waiver.”). Moreover, Defendant has
not offered any explanation for its delay in seeking arbitration. See Gray Holdco, Inc., 654 F.3d at
455 (finding “[i]t significant that . . . [the defendant] offered no explanation to the District Court
for its delay” in seeking arbitration). In fact, Defendant has not offered any response to Plaintiff’s
argument that Defendant waived any right to arbitration. The first Hoxworth factor, therefore,
weighs heavily in favor of waiver in this instance.
In contrast to the first Hoxworth factor, the second factor, “the degree to which the party
seeking to compel arbitration has contested the merits of its opponent’s claims,” Hoxworth, 980
F.2d at 926, weighs slightly against waiver in this instance. Although Defendant did file a brief in
opposition to Plaintiff’s motion for class certification, (Dkt. No. 41), Defendant has not previously
filed a dispositive motion in this matter. Similarly, the third Hoxworth factor, “whether the party
seeking arbitration informed its adversary of its intent to pursue arbitration prior to seeking to
enjoin the court proceedings,” Gray Holdco, Inc., 654 F.3d at 451 (citing Hoxworth, 980 F.2d at
926), also weighs slightly against waiver in this instance.
Defendant raised the possibility of arbitration as one of its seventeen affirmative defenses
in its Answers to both Plaintiff’s initial Complaint, (Dkt. No. 8 at 17), and Amended Complaint,
(Dkt. No. 22 at 16). Defendant, however, did not raise the issue of arbitration again until over
seven months later when it filed its opposition to Plaintiff’s motion for class certification on April

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18, 2016. (Dkt. No. 41 at 19-22.) Finally, after this Court issued an Opinion regarding Plaintiff’s
motion for class certification, Defendant waited another seven weeks before seeking leave to file
a motion to compel arbitration. (Dkt. No. 51.) Accordingly, although this factor does weigh against
waiver in this instance, the significance of Defendant’s references to the prospect of arbitration is
greatly diminished by the long period of time Defendant participated in this litigation after each
reference. See Nino, 609 F.3d at 212 (finding that “the affirmative defense contained in [the
defendant’s] answer to the complaint ‘informed [[the plaintiff]] of the intention to seek arbitration,’
but the significance of this notice diminished the longer [the defendant] delayed in moving to
compel arbitration.” (citation omitted)).
The fourth Hoxworth factor, the extent to which Defendant engaged in non-merits motion
practice, also weighs against waiver because non-merits motion practice has been limited in this
matter. That said, “this factor is not an absolute requirement, and [the Third Circuit has] found
waiver even where no significant non-merits motion practice occurred.” In re PBM, 700 F.3d at
119.
In contrast, the fifth Hoxworth factor weighs in favor of waiver.

The fifth factor,

Defendant’s acquiescence to pretrial orders, weighs in favor of waiver because Defendant has
complied with numerous pretrial orders throughout the duration of this case, including orders
scheduling pretrial conferences and managing discovery between the parties. (See Dkt. Nos. 9-10,
12, 16, 18, 24, 27- 29, 35.) Moreover, it does not appear that Defendant objected to any of these
orders before filing its Motion for Summary Judgment.
Finally, the sixth Hoxworth factor is the extent to which the parties have engaged in
discovery. Hoxworth, 980 F.2d at 926. The parties have participated in significant discovery
activity throughout the course of this case. The parties submitted interrogatories and responses to

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one another, produced documents, and participated in a deposition. The parties also made several
submissions to this Court regarding discovery disputes. (See Dkt. Nos. 24, 34.) Therefore, this
factor also weighs in favor of waiver.
Overall, three of the six Hoxworth factors weigh against waiver. However, this Court finds
that the extended duration of Defendant’s delay in seeking arbitration, along with Defendant’s
failure to explain the delay (much less respond to Plaintiff’s waiver argument), weigh heavily in
favor of waiver. This unnecessary delay along with the expense of litigating this matter over the
course of this prolonged time period have caused sufficient prejudice to Plaintiff such that
Defendant has waived any right it may have had to compel arbitration of Plaintiff’s claims.
Accordingly, Defendants request to compel arbitration is denied.
B. FDCPA Claims
In order to succeed on a claim under the FDCPA, a plaintiff must establish that “(1) [the
plaintiff] is a consumer, (2) the defendant is a debt collector, (3) the defendant’s challenged
practice involves an attempt to collect a ‘debt’ as the [FDCPA] defines it, and (4) the defendant
has violated a provision of the FDCPA in attempting to collect the debt.” Douglass, 765 F.3d at
303 (citing Piper v. Portnoff Law Assocs., Ltd., 396 F.3d 227, 232 (3d Cir. 2005)). The parties in
this matter agree that the first three elements are satisfied. (Def.’s SMF ¶¶ 1-3). Therefore, the
issue before this Court is whether Defendant’s collection letter violated the FDCPA.
Under Section 1692e of the FDCPA, a debt collector is prohibited from “us[ing] any false,
deceptive, or misleading representation or means in connection with the collection of any debt.”
Section 1692e also provides a non-exhaustive list of actions which violate its provisions, including
falsely representing “the character, amount, or legal status of any debt,” § 1692e(2)(A), and “[t]he
use of any false representation or deceptive means to collect or attempt to collect any debt . . . , ”

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§ 1692e(10). As discussed above, Plaintiff contends that Defendant violated these provisions by
including a due date in the collection letter. (See Pl.’s Br. Supp. at 7-10.) Plaintiff also claims
Defendant violated Section 1692e(10) by attempting to collect interest on the debt when Midland
Funding lacked a consumer lender license. (See id. at 13-16.) Finally, Plaintiff alleges Defendant
violated Section 1692e(2)(A), as well as Sections 1692e(2)(B) and 1692f(1), by attempting to
collect interest on the debt at a rate of 6%. (See id. at 9-13.)
15 U.S.C. § 1692e(2)(B) provides that it is a violation of the FDCPA to falsely represent
“any services rendered or compensation which may be lawfully received by any debt collector for
the collection of a debt.” Under Section 1692f, a debt collector is prohibited from using “unfair
or unconscionable means to collect or attempt to collect any debt.” Relevant in this instance,
Section 1692(f)(1) provides that it is a violation of the FDCPA to collect or attempt to collect “any
amount (including any interest, fee, charge, or expense incidental to the principal obligation)
unless such amount is expressly authorized by the agreement creating the debt or permitted by
law.”
Defendant seeks summary judgment as to the due date, accrued interest, and license claims.
(See Def.’s Br. Supp. at 5-15.) Plaintiff seeks summary judgment only as to the due date claims.
(Pl.’s Br. Supp. at 7-10.) For the reasons that follow, this Court grants summary judgment to
Defendant as to the due date claims and denies summary judgment as to the accrued interest and
license claims. Consequently, Plaintiff’s Cross-Motion for Summary Judgment is denied.
a. Due Date Claims
Plaintiff contends that Defendant violated Sections 1692e(2)(A) and 1692e(10) of the
FDCPA by including a due date in the collection letter. (See Pl.’s Br. Supp. at 7-10.) According
to Plaintiff, by including a due date in the collection letter, Defendant “would cause the least

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sophisticated consumer to be confused as to the status of the debt, whether payment was actually
due by the due date and, if so, what the consequences would be for non-payment.” (Id. at 9-10.)
In seeking summary judgment as to these claims, Defendant argues that its inclusion of a due date
in the collection letter would not mislead or deceive the least sophisticated consumer and that it,
therefore, did not violate the FDCPA. (See Def.’s Br. Supp. at 5-10.) This Court agrees.
In order to determine whether Defendant’s collection letter violates the FDCPA, this Court
must consider whether inclusion of the due date “would deceive or mislead the least sophisticated
debtor.” Simon v. FIA Card Servs. NA, 639 F. App’x 885, 888 (3d Cir. 2016) (quoting Jensen v.
Pressler & Pressler, 791 F.3d 413, 419 (3d Cir. 2015) (internal quotation marks omitted)). “This
judge-made standard is objective, ‘meaning that the specific plaintiff need not prove that she was
actually confused or misled, only that the objective least sophisticated debtor would be.’” Simon,
639 F. App’x at 888 (quoting Jensen, 791 F.3d at 419). That said, although the least sophisticated
debtor standard is lower than a “reasonable debtor” standard, “[t]he debtor is still held to a quotient
of reasonableness, a basic level of understanding, and a willingness to read with care, and the debt
collector accordingly cannot be held liable for bizarre or idiosyncratic interpretations. For
example, even the ‘least sophisticated debtor’ is expected to read any notice in its entirety.” Caprio
v. Healthcare Revenue Recovery Grp., LLC, 709 F.3d 142, 149 (3d Cir. 2013) (first citing Wilson
v. Quadramed Corp., 225 F.3d 350, 354 (3d Cir. 2000), as amended (Sept. 7, 2000); then citing
Lesher v. Law Offices Of Mitchell N. Kay, PC, 650 F.3d 993, 997 (3d Cir. 2011)). Finally, the
issue of “[w]hether language in a collection letter violates the FDCPA is a question of law.”
Szczurek v. Prof’l Mgmt. Inc., 627 F. App’x 57, 60 (3d Cir. 2015) (citing Wilson v. Quadramed
Corp., 225 F.3d 350, 353 n. 2 (3d Cir. 2000)).

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According to Plaintiff, the due date in the collection letter is a “false, deceptive or
misleading representation” because although the collection letter represents that payment is due
on October 29, 2013, “there was no real ‘Due Date’ [sic].” (Pl.’s Br. Opp. 8-9).8 It appears that
Plaintiff essentially takes issue with two aspects of Defendant’s inclusion of a due date. (See Pl.’s
Br. Supp. at 9-10.) First, that the meaning of “due” is unclear or confusing. (Id.) Second, that
Defendant did not outline what the consequences of Plaintiff’s inaction would be. (Id.) However,
neither of these issues identify a basis on which Defendant’s inclusion of a due date in the
collection letter violated Section 1692e.
Plaintiff first seems to contend that the least sophisticated debtor would be misled or
deceived by the inclusion of the phrase “due date” in the collection letter because it is unclear or
confusing what “due” means in the context of the letter. (See Pl.’s Br. Supp. at 9-10.) However,
as discussed above, the least sophisticated consumer “is expected to read any notice in its entirety.”
Caprio, 709 F.3d at 149 (citing Lesher, 650 F.3d at 997). Review of the letter, in its entirety,
shows that Defendant sought payment of the balance of the debt by October 29, 2013. (See
Collection Letter at 1-2.) The letter also provided an alternative to paying the balance by that date:
“Mail in $750.00 and call to set up your remaining payments.” (Id. at 2.) In addition, the letter
provided that Defendant was “considering forwarding this account to an attorney . . . for possible
litigation[]” and that if Plaintiff did not contact Defendant or send “payment by 10-29-2013, we
may proceed with forwarding this account to an attorney.” (Id.) Finally, the letter provides a list

Although Plaintiff does use the word “deceive” at times in her submissions, she does not actually
appear to claim that the phrase “due date” in the letter is deceptive, i.e., that “it can be reasonably
read to have two or more different meanings, one of which is inaccurate.” Szczurek, 627 F. App’x
at 60 (3d Cir. 2015).
8

15

of “benefits of paying,” including that “No additional Interest [sic] will be charged to your
account.” (Id.) In other words, when read in context, “due date” as used in the collection letter,
means that Defendant sought payment (or at least communication) by that date and that, if Plaintiff
did not contact or pay Plaintiff by that date, Defendant would potentially pursue litigation and
would potentially seek additional interest. (Id.) Plaintiff does not offer an alternative interpretation
of the phrase “due date” and to the extent she implies in her briefing that the least sophisticated
debtor would understand “due date” to mean something else (for example, that there would be
some other consequences or penalties associated with non-payment) these are idiosyncratic
interpretations which are excluded from consideration under the least sophisticated consumer
standard.” Caprio, 709 F.3d at 149 (citing Wilson, 225 F.3d at 354). Furthermore, the collection
letter clearly identifies the consequences of inaction by the October 29 due date: potential litigation
and the possibility that Defendant would attempt to charge additional interest. (See Collection
Letter at 2.) Accordingly, inclusion of a due date in the collection letter would not deceive or
mislead the least sophisticated debtor. Defendant is therefore entitled to summary judgment as to
the due date claims and Plaintiff’s Cross-Motion for Summary Judgment is denied.
b. Accrued Interest Claims
Plaintiff claims Defendant was neither authorized by law, nor contract, to collect interest
on the debt at a rate of 6%. (See Pl.’s Br. Opp. at 9-13.) As a result, Plaintiff argues, Defendant’s
attempt to collect accrued interest at a rate of 6% in the collection letter violated FDCPA Sections
1692e(2)(A), e(2)(B), and f(1). In seeking summary judgment as to the accrued interest claims,
Defendant argues that it was not prohibited by law from collecting accrued interest at a rate of 6%
and, also, that charging interest at that rate was authorized by Plaintiff’s credit agreement with

16

Citibank. (See Def.’s Br. Supp. at 11-13.) Therefore, this Court must first determine whether
Defendant was affirmatively prohibited by law from collecting interest on the debt.
In arguing that Defendant was not authorized to collect interest on the debt at a rate of 6%,
Plaintiff claims that New Jersey Court Rule 4:42-11(b) limited the interest Defendant could have
collected on the debt to .25%. (Pl.’s Br. Opp. at 11-12.) However, N.J. Ct. R. 4:42-11 pertains to
the rate at which a court may, within its discretion, asses prejudgment interest. See McCabe v.
Eichenbaum & Stylianou, LLC, No. CIV.A. 11-7403 MAS, 2012 WL 6624229, at *3 (D.N.J. Dec.
19, 2012) (“However, the assessment of prejudgment interest is a matter of discretion for the trial
court, not the parties involved.”) (citing Pignataro v. Port Auth. of N.Y. & New Jersey, 593 F.3d
265, 274 (3d Cir. 2010)). N.J. Ct. R. 4:42-11 does not address whether a debt collector may,
pursuant to a contract, collect interest on a debt. Moreover, Plaintiff has not identified, nor has
this Court found, any New Jersey law which expressly prohibits assessment of interest under these
circumstances. Therefore, this Court must next determine whether Defendant has shown Plaintiff
entered an agreement by which Defendant would be entitled to collect accrued interest on the debt
at a rate of 6%. See Pollice v. Nat’l Tax Funding, L.P., 225 F.3d 379, 407–08 (3d Cir. 2000)
(explaining that if state law “neither affirmatively permits nor expressly prohibits” a debt collector
from assessing interest on a debt, the debt collector may only charge interest if the consumer
“expressly agrees to it in the contract [creating the debt].” (quoting Tuttle v. Equifax Check, 190
F.3d 9, 13 (2d Cir. 1999))).
According to Defendant, it is authorized to collect 6% interest on the debt pursuant to the
original credit card agreement between Plaintiff and Citibank. (See Def.’s Br. Supp. at 11.) In
support of this argument, Defendant submitted a document which Defendant contends is “the
applicable Citibank, N.A. Card Agreement.” (See Def.’s SMF ¶ 9; Dkt. No. 67-4.) However, the

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document, which was not authenticated, provides no basis for this Court to determine that it is
actually the agreement Plaintiff entered with Citibank. Moreover, even if this was the governing
agreement, Defendant has not cited any provision in the agreement which authorizes Defendant to
charge a 6% interest rate on the debt. Accordingly, Defendant is not entitled to summary judgment
as to the accrued interest claims.
c. License Claim
Defendant also seeks summary judgment as to Plaintiff’s license claim. (See Def.’s Br.
Supp. at 14-15.) According to Plaintiff, Midland Funding did not have the license required under
the New Jersey Consumer Finance Licensing Act (“NJCFLA”), N.J.S.A § 17:11C, et seq., to act
as a consumer lender until January 6, 2015. (Am. Compl. ¶ 27.) As a result, Plaintiff contends,
Defendant “was not entitled to demand or collect interest accrued after an account was charged off
by the original creditor for any consumer loan,” at the time Defendant sent Plaintiff the collection
letter. (Am. Compl. ¶ 27.) Accordingly, Plaintiff claims Defendant violated 15 U.S.C. § 1692e(10)
by falsely representing that Midland Funding was entitled to collect interest on the debt. (Pl.’s Br.
Opp. at 13-14.)
Under the NJCFLA, a “consumer lender;” defined as “a person licensed, or a person who
should be licensed, under [the NJCFLA] to engage in the consumer loan business;” is prohibited
from “engag[ing] in business as a consumer lender or sales finance company without first
obtaining a license . . . .” N.J.S.A. § 17:11C-3. Moreover, the NJCFLA specifies that “[a]ny person
directly or indirectly engaging in the business . . . of buying, discounting or endorsing notes, or of
furnishing, or procuring guarantee or security for compensation in amounts of $50,000 or less,
shall be deemed to be engaging in the consumer loan business.” Id. § 17:11C-2. Based on these
criteria, Plaintiff claims, and Defendant does not deny, Midland Funding is a “consumer lender”

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under the NJCFLA. (Pl.’s Br. Supp. at 13.) In addition, Plaintiff claims, and Defendant does not
deny, that Midland Funding did not obtain the license the NJCFLA requires before Defendant sent
the collection letter on Midland Funding’s behalf. (Id.) Rather, Defendant argues that it is entitled
to summary judgment as to the license claim because there is no private right of action under a
third statute, the New Jersey Consumer Fraud Act, N.J.S.A. § 56:8, et seq. (See Def.’s Br. Supp.
at 14-15.)
Although Defendant acknowledges that “Plaintiff has not advanced a claim against
[Defendant] pursuant to the New Jersey Consumer Fraud Act,” it nonetheless contends that the
lack of a private right of action under the Consumer Fraud Act somehow deprives Plaintiff of a
cause of action under the FDCPA. (Id.) Yet, this Court has previously held that “a debt collector’s
representation in a collection complaint that it had the right to collect a debt when, in fact, it lacked
the license required to initially purchase the debt, would violate, at minimum, FDCPA [S]ection
e(10).” Lopez v. Law Offices of Faloni & Assocs., LLC, No. 16-CV-01117-SDW-SCM, 2016 WL
4820629, at *5 (D.N.J. Sept. 14, 2016) (citing Veras v. LVNV Funding, LLC, No. CIV. 13-1745
RBK/JS, 2014 WL 1050512, at *6 (D.N.J. Mar. 17, 2014)). Certainly, the same is true of a
representation in a collection letter that the owner of a debt is entitled to collect interest on a debt
when, in fact, the owner of the debt lacked the license required to charge interest on the debt.
Accordingly, Defendant’s argument that there is no private right of action under the Consumer
Fraud Act does not entitle Defendant to summary judgment as to Plaintiff’s license claim.
IV.

CONCLUSION
For the reasons set forth above, Defendant’s Motion for Summary Judgment is GRANTED

in part and DENIED in part. Plaintiff’s Cross-Motion for Summary Judgment is DENIED. An
appropriate Order follows.

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s/ Susan D. Wigenton
SUSAN D. WIGENTON
UNITED STATES DISTRICT JUDGE

Orig:
cc:

Clerk
Steven C. Mannion, U.S.M.J.
Parties

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