FONTANEZ v. STERN & EISENBERG, P.C.
OPINION. Signed by Judge Esther Salas on 12/5/16. (cm )
NOT FOR PUBLICATION
UNITED STATES DISTRICT COURT
DISTRICT OF NEW JERSEY
MILAGROS FONTANEZ, on behalf
of herself and all others similarly
STERN & EISENBERG, P.C.,
Civil Action No.: 16-1562 (ES) (JAD)
SALAS, DISTRICT JUDGE
This matter comes before the Court on Defendant Stern & Eisenberg’s motion to dismiss
Plaintiff Milagros Fontanez’s Complaint pursuant to Federal Rule of Civil Procedure 12(b)(6) for
failure to state a claim upon which relief may be granted. (D.E. No. 6). The Court has subject
matter jurisdiction pursuant to 28 U.S.C. § 1331.
The Court has considered the parties’
submissions and decides the motion without oral argument pursuant to Federal Rule of Civil
Procedure 78(b). For the following reasons, the Court DENIES Defendant’s motion.
Factual Background and Procedural History
Plaintiff Milagros Fontanez is an individual who, at some point prior to September 15,
2015, incurred and defaulted on a personal mortgage loan (the “Ocwen Mortgage”) on her
residence in Union, New Jersey. (D.E. No. 1, Class Action Complaint and Jury Demand,
(“Compl.”) ¶ 24; see also D.E. No. 9, Plaintiff’s Opposition to Defendant’s Motion to Dismiss
(“Pl. Opp. Br.”) at 2). Ocwen Loan Servicing, LLC (“Ocwen”) serviced the Ocwen Mortgage.
(Compl. ¶ 24).
Defendant Stern & Eisenberg is a professional corporation engaged in the business of
foreclosing on security deeds and collecting on defaulted promissory notes for mortgage servicers
and other entities in the State of New Jersey. (Id. ¶ 3). Plaintiff alleges that at some point prior to
September 15, 2015, Ocwen “either directly or through intermediate transactions assigned, placed,
or transferred” the Ocwen Mortgage to Defendant. (Id. ¶ 29).
On September 15, 2015, Defendant mailed a collection letter concerning the Ocwen
Mortgage to Plaintiff (the “Collection Letter”). (See D.E. No. 1-1). The Collection Letter provides
in relevant part:
Unless you dispute the validity of the debt or any portion thereof within 30
days of this letter, we will assume that the debt is valid. If you notify our office
during the 30 day period that the debt, or any portion thereof, is disputed, we will
obtain verification of the debt or a copy of a judgment, if any, and a copy of such
verification of the debt or a copy of a judgment, if any, will be mailed to you.
Upon your written request within the 30 day period, we will provide you with the
name and address of the original creditor, if different from the current creditor.
(Id.). The Collection Letter also states the amount of the debt ($552,414.44) and to whom the debt
was owed (Ocwen). (Id.). Plaintiff states that she read the Collection Letter upon receiving it.
(Compl. ¶ 36).
That same day, Defendant alleges that it sent Plaintiff a second letter executed by Justin
M. Strausser, Esq., which contained a “Notice Pursuant to the Fair Debt Collection Practice Act”
(the “Strausser Letter”). (D.E. No. 6-3, Brief in Support of Defendant’s Motion to Dismiss (“Def.
Mov. Br.”) at 2). The Strausser Letter provides in relevant part:
Unless you notify this office within 30 days after receiving this notice that you
dispute the validity of this debt or any portion thereof, this office will assume this
debt is valid. If you notify this office in writing within 30 days from receiving this
notice, this office will obtain verification of the debt or obtain a copy of a judgment
and mail you a copy of such judgment or verification. If you request this office in
writing within 30 days after receiving this notice this office will provide you with
the name and address of the original creditor, if different from the current creditor.
(Id.). Defendant represents that it sent the Strausser Letter by certified mail and regular mail to
the same address it sent the Collection Letter. (Id.). Defendant further represents that the “certified
copy of the Strausser Letter went unclaimed by [Plaintiff]” and that the “copy of the Strausser
Letter sent to [Plaintiff] by Regular Mail was not returned to Stern & Eisenberg.” (Id.).
On March 21, 2016, Plaintiff brought suit pursuant to Federal Rule of Civil Procedure 23
on behalf of herself and all others similarly situated, alleging that Defendant’s collection practices
violate the Fair Debt Collection Practices Act (“FDCPA”), 15 U.S.C. § 1692 et seq. (Compl. ¶ 8).
Specifically, Plaintiff asserts that Defendant violated § 1692g(a)(4) by providing instructional
language that would confuse the least sophisticated consumer and make her uncertain as to what
she must do to dispute the alleged debt. (Id. ¶¶ 60-63).
On May 24, 2016, Defendant filed the instant motion to dismiss. (D. E. No. 6). Plaintiff
filed opposition on June 21, 2016. (Pl. Opp. Br.). The motion is now ripe for adjudication.
For a complaint to survive dismissal pursuant to Rule 12(b)(6), it “must contain sufficient
factual matter, accepted as true, to state a claim to relief that is plausible on its face.” Ashcroft v.
Iqbal, 556 U.S. 662, 678 (citing Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 570).1 “A claim
has facial plausibility when the plaintiff pleads factual content that allows the court to draw the
reasonable inference that the defendant is liable for the misconduct alleged.” Id. (citing Twombly,
550 U.S. at 556). “The plausibility standard is not akin to a probability requirement, but it asks
for more than a sheer possibility that a defendant has acted unlawfully.” Id.
Unless otherwise indicated, all internal citations and quotation marks are omitted, and all emphasis is added.
In evaluating the sufficiency of a complaint, a court must accept all well-pleaded factual
allegations contained in the complaint as true and draw all reasonable inferences in favor of the
non-moving party. See Phillips v. Cnty. of Allegheny, 515 F.3d 224, 234 (3d Cir. 2008). However,
“the tenet that a court must accept as true all of the allegations contained in a complaint is
inapplicable to legal conclusions,” and “[a] pleading that offers labels and conclusions or a
formulaic recitation of the elements of a cause of action will not do.” Iqbal, 556 U.S. at 678
(quoting Twombly, 550 U.S. at 555).
Furthermore, a district court deciding a motion to dismiss generally does not consider
materials beyond the pleadings. In re Burlington Coat Factory Sec. Litig., 114 F.3d 1410, 1426
(3d Cir. 1997). “In deciding a Rule 12(b)(6) motion, a court must consider only the complaint,
exhibits attached to the complaint, matters of public record, as well as undisputedly authentic
documents if the complainant’s claims are based upon these documents.” Mayer v. Belichick, 605
F.3d 223, 230 (3d Cir. 2010). An “exception to the general rule is that a document integral to or
explicitly relied upon in the complaint may be considered without converting the motion [to
dismiss] into one for summary judgment.” In re Burlington Coat Factory, 114 F.3d at 1426
(emphasis in original). “Otherwise, a plaintiff with a legally deficient claim could survive a motion
to dismiss simply by failing to attach a dispositive document on which it relied.” Pension Benefit
Guar. Corp. v. White Consol. Indus., 998 F.2d 1192, 1196 (3d Cir. 1993).
A. The FDCPA
Congress enacted the FDCPA in 1977 in response to the “abundant evidence of the use of
abusive, deceptive, and unfair debt collection practices by many debt collectors.” Lesher v. Law
Offices of Mitchell N. Kay, PC, 650 F.3d 993, 996 (3d Cir. 2011) (quoting 15 U.S.C. § 1692(a)).
The FDCPA “imposes civil liability on debt collector[s] for certain prohibited debt collection
practices.” Jerman v. Carlisle, McNellie, Rini, Kramer & Ulrich LPA, 559 U.S. 573, 573 (2010).
“A debt collector who fails to comply with any [FDCPA] provision . . . with respect to any person
is liable to such person for actual damage[s], costs, a reasonable attorney’s fee as determined by
the court, and statutory additional damages.” Id. (quoting § 1692k(a)). Additionally, the FDCPA
is a strict liability statute, so liability is imposed without proof of knowledge or intent. Allen ex
rel. Martin v. LaSalle Bank, N.A., 629 F.3d 364, 368 (3d Cir. 2011).
Section 1692g(a) of the FDCPA specifically requires a debt collector to provide the
following information to the debtor within five days after the initial communication with a
consumer in connection with the collection of any debt:
(1) the amount of the debt;
(2) the name of the creditor to whom the debt is owed;
(3) 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;
(4) a statement that if the consumer notifies the debt collector in writing within the
thirty-day period that the debt, or any portion thereof, is disputed, the debt
collector will obtain verification of the debt or a copy of a judgment against the
consumer and a copy of such verification or judgment will be mailed to the
consumer by the debt collector; and
(5) a statement that, upon the consumer’s written request within the thirty-day
period, the debt collector will provide the consumer with the name and address
of the original creditor, if different from the current creditor.
15 U.S.C. § 1692g(a). Paragraphs 3 through 5 of § 1692g(a) comprise the validation notice, i.e.,
“statements that inform the consumer how to obtain verification of the debt and that he has thirty
days in which to do so.” Caprio v. Healthcare Revenue Recovery Grp., LLC, 709 F.3d 142, 147
(3d Cir. 2013).
A validation notice “is to be interpreted from the perspective of the least sophisticated
debtor.” Graziano v. Harrison, 950 F.2d 107, 111 (3d Cir. 1991). Under this standard, a collection
communication violates the FDCPA “when it can be reasonably read to have two or more different
meanings, one of which is inaccurate.” Caprio, 709 F.3d at 149. The least-sophisticated-debtor
standard is “lower than simply examining whether particular language would deceive or mislead
a reasonable debtor.” Wilson v. Quadramed Corp., 225 F.3d 350, 354 (3d Cir. 2000), as amended
(Sept. 7, 2000).
To be sure, the least-sophisticated-debtor standard “does not go so far as to
provide solace to the willfully blind or non-observant”; the 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.” Caprio,
709 F.3d at 149. Whether language in a collection letter violates the FDCPA is a question of law.
Wilson, 225 F.3d at 353 n.2.
B. The Parties’ Arguments
Defendant presents two primary arguments in support of its motion to dismiss. First,
Defendant argues that it satisfied its obligation under § 1692g(a)(4) because the Collection Letter
adequately advises Plaintiff that if Plaintiff disputes the debt in writing, Defendant will obtain
verification of the debt. (Id. at 9). Second, Defendant argues that, in any event, it complied with
its obligation under § 1692g(a)(4) because it sent the Strausser Letter—which contains a verbatim
recitation of § 1692g’s validation notice—within five days of initially contacting Plaintiff. (Def.
Mov. Br. at 8-9).
In response, Plaintiff argues that the Court, as an initial matter, should not consider the
Strausser Letter at the motion-to-dismiss stage because it is not part of the pleadings or otherwise
a matter of public record. (Pl. Opp. Br. at 10). Consequently, Plaintiff argues that Defendant
violated § 1692g(a)(4) of the FDCPA because the Collection Letter fails to inform Plaintiff that
only a written dispute notification will prompt the Defendant to obtain verification of the debt.
(Id. at 9). In the alternative, Plaintiff argues that even if the Court considers the Strausser Letter,
Plaintiff’s Complaint states a legally sufficient claim because the Strausser Letter contains
contradictory and overshadowing language that would leave the least sophisticated debtor guessing
as to the proper method required to obtain debt verification. (Id. at 12).
C. Plaintiff’s Complaint Adequately States a Claim for Relief under the FDCPA
The Court finds that Plaintiff’s Complaint adequately states a claim for relief under the
FDCPA.2 First, the Court finds that the Collection Letter, by itself, appears to omit the statutorily
required notice that only a written dispute notification will prompt the Defendant to obtain
verification of the debt. Second, the Court finds that, even if it considers the Strausser Letter,
Plaintiff states a claim because it appears that the Collection Letter and the Strausser Letter, when
read in conjunction, may fail to advise Plaintiff of the proper method required to obtain debt
a. The Collection Letter
First, the Court rejects Defendant’s argument that the Collection Letter, by itself, forecloses
Plaintiff’s FDCPA claim. The Collection Letter does not appear to advise Plaintiff that only a
written dispute notification will prompt the Defendant to obtain verification of the debt. While the
Collection Letter advises Plaintiff that a request for the name and address of the original creditor
must be in writing, this instruction concerns § 1692g(a)(5) of the FDCPA. See Beasley v. Sessoms
& Rogers, P.A., No. 5:09-CV-43-D, 2010 WL 1980083, at *7 (E.D.N.C. Mar. 1, 2010) (finding
For purposes of the Fair Debt Collection Practices Act (“FDCPA”), the Collection Letter is a
“communication,” Plaintiff is a “consumer,” the Ocwen Mortgage is a “debt,” and Defendant is a “debt collector.” 15
U.S.C. §§ 1692a(2), (3), (5), and (6).
that debt collector violated FDCPA where communication satisfied § 1692g(a)(5) but not §
1692g(a)(4)). As the court in Beasley explained, “[a]lthough the language ‘in writing’ is included
in the same paragraph as the notice regarding plaintiff’s rights to dispute her debt, it is contained
in a sentence concerning a request for the name of the original creditor.” Id. Under these
circumstances, the least sophisticated debtor “cannot be expected to make the inferential leap” that
if a request for the name of the original creditor must be made in writing, then a dispute prompting
verification of the debt must also be made in writing. Id.
Here, Plaintiff states a claim under § 1692g(a)(4) because the Collection Letter does not
appear to advise Plaintiff that only a written dispute notification will prompt the Defendant to
obtain verification of the debt. Accordingly, the Court finds that Plaintiff adequately states a claim
under the FDCPA. See Bicking v. Law Offices of Rubenstein and Cogan, 783 F. Supp. 2d 841,
844-45 (E.D. Va. 2011); Welker v. Law Office of Daniel J. Horwitz, 699 F. Supp. 2d 1164, 1170
(S.D. Cal. 2010); Bankston v. Phycom Corp., No. C 07-03982JF(PVT), 2007 WL 4170627, at *3
(N.D. Cal. Nov. 19, 2007).
b. The Strausser Letter
Second, even assuming arguendo that the Court may consider the Strausser Letter,3 the
Court nonetheless finds that Plaintiff states a claim under the FDCPA because it appears that the
Strausser Letter, when read in conjunction with the Collection Letter, may fail to advise Plaintiff
that she must dispute the debt in writing to obtain verification of the debt. As discussed above,
under the least-sophisticated-debtor standard, a collection communication violates the FDCPA
“when it can be reasonably read to have two or more different meanings, one of which is
The Court notes that Defendant failed to submit any argument why it is proper for the Court to consider the
Strausser Letter on a motion to dismiss. Nevertheless, the Court concludes that the language contained in the Strausser
Letter does not alter the Court’s ultimate finding that Plaintiff adequately states a claim under the FDCPA.
inaccurate.” Caprio, 709 F.3d at 149. Moreover, the validation notice must not be overshadowed
or contradicted by accompanying messages from the debt collector. Graziano, 950 F.2d at 111.
As the Court explained above, it appears that the Collection Letter omits the statutorily
required notice informing Plaintiff that she must dispute the debt in writing to obtain verification
of the debt. The fact that the Strausser Letter expressly advises Plaintiff of § 1692g(a)(4)’s writing
requirement does not, by itself, necessarily eliminate the confusion stemming from the Collection
Letter. See Caprio, 709 F.3d at 149 (finding that defendant’s collection letter violated § 1692g(a)
even where it contained a proper validation notice because it also contained an improper
solicitation for the debtor to dispute the debt by phone). Indeed, the Strausser Letter does not
indicate that it supersedes or otherwise controls over the Collection Letter; in fact, the Strausser
Letter does not refer to the Collection Letter at all. Accordingly, the Strausser Letter and the
Collection Letter, when read in conjunction, convey two methods for obtaining verification of a
debt: Plaintiff can dispute the debt (i) orally or (ii) in writing. Therefore, Defendant’s collection
communications “can be reasonably read to have two or more different meanings, one of which is
Defendant argues that it complied with § 1692g(a) by sending a proper validation notice—
i.e., the Strausser Letter—within five days of initially contacting Plaintiff. (Def. Mov. Br. at 8).
This argument is unavailing because, under the least-sophisticated-debtor standard, confusion can
still arise even where the debtor receives a proper validation notice. See, e.g., Caprio, 709 F.3d at
149. Furthermore, Defendant’s reliance on cases involving debt collectors that sent multiple
collection letters but did not violate the FDCPA (see Def. Mov. Br. at 8) is unpersuasive, as those
cases are easily distinguishable.
In Brenker v. Creditors Interchage, Inc., the debt collector sent the plaintiff a letter
containing a proper validation notice, then a second letter five days later containing the exact same
validation notice. No. 03-6500, 2004 WL 594502 (D.N.J. Mar. 25, 2004). In that case, the only
difference between the two letters is that the second letter identified Chase Bank as the original
creditor and apologized for any inconvenience or confusion the original letter may have caused.
Id. at *1. Accordingly, the Brenker court found that “the two letters created no reasonable
possibility of confusion in derogation of the debtor’s rights.” Id. at *2. Similarly, in Montgomery
v. Trident Asset Mgmt., L.L.C., the debt collector sent two collection letters approximately eleven
days apart, each containing a proper validation notice. No. 15-6617, 2016 U.S. Dist. LEXIS
62672, at *1 (D.N.J. May 12, 2016). The Montgomery court, adopting the reasoning from Brenker,
found that the debt collector did not violate the FDCPA because the two letters did not create any
reasonable possibility of confusion. Id. at 3. Finally, in Bridges v. Performant Recovery, Inc., the
debt collector sent two collection letters approximately one month apart, each containing a proper
validation notice. No. 5:15-CV-38 (CAR), 2015 WL 8773340 (M.D. Ga. Dec. 14, 2015). Because
both letters accurately reflected the validation notice set forth in § 1692g, the court found that the
second letter did not overshadow or contradict the first letter. Id. at *4. These cases are inapposite
because the Strausser Letter contained different instructions from the Collection Letter for
obtaining verification of the debt. Thus, even considering the Strausser Letter, the Court finds that
Plaintiff adequately states a claim under the FDCPA.
For the foregoing reasons, the Court DENIES Defendant’s motion to dismiss.
appropriate Order accompanies this Opinion.
s/ Esther Salas
Esther Salas, U.S.D.J.
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