O'NEILL v. NORTHLAND GROUP, INC. et al

Filing 22

AMENDED OPINION. Signed by Judge Kevin McNulty on 5/4/17. [NOTICE TO COUNSEL: The amended opinion filed herewith corrects typographical errors in the opinion filed yesterday (ECF no. 20). There is no change in substance. The Order (ECF no. 21) remains in effect.] (nic, )

UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF NEW JERSEY

BARBARA O’NEILL,
Plaintiff,

Civ. No. 16-4266 (KM) (MAH)

v.

AMENDED OPINION

NORTHLAND GROUP, INC., et al.,
Defendants.

KEVIN MCNULTY, U.S.D.J.:

Barbara O’Neill sues Northland Group, Inc., a debt collector, for damages
and declaratory relief under the Fair Debt Collection Practices Act (“FDCPA”),
15 U.S.C.

§

1692 et seq. Her claim is essentially that a debt collection letter,

dated July 15, 2015, contained a misleading statement concerning settlement
for less than the full amount owed. For the reasons stated herein, I find that
the face of the letter and prior case law permit me to rule as a matter of law
that the language in this letter is not misleading within the meaning of FDCPA.
I therefore grant Northland’s Rule 12(b)(6) motion to dismiss the Complaint for
failure to state a claim upon which relief may be granted.
BACKGROUND
The Complaint (ECF no. 1), filed on July 13, 2016, alleges as follows:
The plaintiff, Ms. O’Neill, is a “consumer” within the meaning of FDCPA.
She had a credit card account with TD Bank USA/Target Cards (“TD Bank”).
O’Neill defaulted on the obligation, and the account was transferred to
defendant Northland, which is a debt collector within the meaning of FDCPA.
(Cplt. ¶j 14—20)

1

Northland sent O’Neill a one-page letter dated July 14, 2015. (“Letter”,
ECF no. 1 at 13; a copy is attached for ease of reference.) The Letter has a box
at the top that identifies the creditor as TD Bank, states the account number
(masked), and states that the “Account Balance” is $344.42.
The first paragraph of the body of the Letter reads as follows:
The above referenced client has assigned your account to our office
for collections. Your creditor has authorized us to extend an offer
to settle this account with you at a reduced amount. In order to
take advantage of this money saving opportunity, please contact us
at the number listed below. We are not obligated to renew this
offer.
(Letter; see also Cplt.

¶

27) This language is alleged to be misleading in that it

would lead the recipient to believe “that the creditor had authorized only a
singular, pre-set settlement offer” (Cplt.

¶

33), when in reality Northland “was

authorized by the creditor to accept a range of settlement offers and terms”
(Cplt.

¶

34).

Count 1 alleges a claim that the quoted passage was deceptive and that
it constituted an unconscionable means to collect or attempt to collect a debt,
in violation of FDCPA, 15 U.S.C.

§

1692e and 1692f.

DISCUSSION
Rule 12(b)(6), Fed. R. Civ. P., provides for the dismissal of a complaint if
it fails to state a claim upon which relief can be granted. For the purposes of a
motion to dismiss, the facts alleged in the complaint are accepted as true and
all reasonable inferences are drawn in favor of the plaintiff. New Jersey
Carpenters & the Trustees Thereof v. Tishman Const. Corp. of New Jersey, 760
F.3d 297, 302 (3d Cir. 2014). Federal Rule of Procedure 8(a) requires that the
complaint’s factual allegations must be sufficient to raise a plaintiff’s right to
relief above a speculative level, so that a claim is “plausible on its face.” Bell Atl.
Corp. v. Twombly, 550 U.S. 544, 570 (2007); see also Ashcroft v. Iqbal, 556 U.S.
662, 678 (2009).

2

The courts construe FDCPA broadly to further its remedial purpose and
goal of “eliminat[ing] abusive debt collection practices by debt collectors.”
Lesher v. Law Offices of Mitchell N. Kay, PC, 650 F.3d 993, 997 (3d Cir. 2011);
15 U.S.C.

§ 1692(e). In assessing communications to debtors, the courts adopt

the perspective of the “least sophisticated debtor,” so that the law protects the
gullible as well as the shrewd. Lesher at 997; accord McLaughlin v. Phelan
Hallinan & Schmeig, LLP, 756 F.3d 240, 246 (3d Cir. 2014). That said, this
framework “preserv[es] a quotient of reasonableness and presum[es] a basic
level of understanding and willingness to read with care.” Id. (quoting Wilson v.
Quadramed Corp., 225 F.3d 350, 354-55 (3d Cir. 2000) (internal quotation
marks and citation omitted)).
An offer to settle, as such, does not violate the FDCPA. See, e.g.,
Campuzano-Burgos v. Midland Credit Management, Inc., 550 F.3d 294, 299 (3d
Cir. 2008). Nor need the creditor lead with its last and best offer. See DeKoven
v. Plaza, 599 F.3d 578, 579 (7th Cir. 2010).
The passage from the Letter, quoted in full at p. 2, above, is said to be
deceptive, but it actually does not say that much. It conveys that Northland is
authorized to settle the debt for an unspecified “reduced amount.” It tells the
recipient to contact Northland to take advantage of this “money saving
opportunity.” And it states that “[wie are not obligated to renew this offer.”
The Complaint alleges that the Letter misleadingly implies that this is a
one-time, take-it-or-leave-it offer, and that Northland is not authorized to offer
any other terms at any other time. I don’t think it does. To begin with, the
“offer” has no dollar amount, terms, or deadline; it seems to be no more than
an invitation to negotiate. And the Letter states that Northland is “not
obligated to renew this offer.” Case law has held that this very language is a
safe harbor. It adequately discloses to the consumer that other settlement
offers may be, but need not necessarily be, in the offing:
We think the present concern can be adequately addressed yet the
unsophisticated consumer still be protected against receiving a
3

false impression of his options by the debt collector’s including
with the offer the following language: “We are not obligated to
renew this offer.” The word “obligated” is strong and even the
unsophisticated consumer will realize that there is a renewal
possibility but that it is not assured.
Evory v. RJM Acquisitions Funding LLC, 505 F.3d 769, 775-76

(7th

Cir. 2007)

(emphasis added); see also Kryluk v. Northland Group, Inc., No. 14-3198, 2014
WL 6676728, at *7 (E.D. Pa., Nov. 25, 2014).
In commonsense terms, the Seventh Circuit in Evory pointed out that a
ruling finding such language “deceptive” would be highly impractical and
unrealistic:
There is nothing improper about making a settlement offer. The
concern is that unsophisticated consumers may think that if they
don’t pay by the deadline, they will have no further chance to settle
their debt for less than the full amount; for the offers are in the
idiom of limited-time or one-time sales offers, clearance sales,
going-out-of-business sales, and other temporary discounts. In fact
debt collectors, who naturally are averse to instituting actual
collection proàeedings for the often very modest sums involved in
the consumer debt collection business, frequently renew their
offers if the consumer fails to accept the initial offer.
505 F.3d at 775.
In slightly more acerbic terms, Evory cautions that such a ruling
might make beneficial settlements impossible and require creditors to
insist on full payment:
The objection to allowing [FDCPAj liability to be based on such
offers is that the settlement process would disintegrate if the debt
collector had to disclose the consequences of the consumer’s
rejecting his initial offer. If he has to say, “We’ll give you 50 percent
if you pay us by May 14, but if you don’t, we’ll probably offer you
the same or even better deal later, and if you refuse that, we’ll
probably give up and you’ll never have to pay a cent of the debt
you owe,” there will be no point in making offers.
Id.

4

It is axiomatic that statements in a brief cannot amend a complaint.
Nevertheless I consider the Plaintiff’s refinement of her argument in her brief as
a proffer of an amendment. The language in the letter, says plaintiff’s counsel,
is susceptible of two meanings, and the first is inaccurate:
•

That TD Bank authorized Defendant to settle the debt for
only the “reduced amount” of “$344.42”, or;

•

That TD Bank authorized Defendant to settle the debt for
any number less than or equal to $344.42. Put another way,
if Plaintiff does not agree to settle the debt for the “reduced
amount” of $344.42, TD has still authorized Defendant to
settle the debt for Less than $344.42.

(P1. Brf. 5)
I cannot read the letter in the manner suggested. At the top, in a box, the
letter lists the “Account balance” as being $344.42. Plaintiff’s counsel seems to
be saying that the reader could interpret this as being the “reduced amount”
that is being offered in settlement in the body of the letter. I do not believe that
even the least sophisticated reader would read it that way.
I am persuaded by the reasoning of Evory, and in any event I do not read
the Letter as bearing the misleading implication that plaintiff’s counsel draws
from it. It is not deceptive or unconscionable within the meaning of the FDCPA.
CONCLUSION
For the foregoing reasons, Northland’s motion to dismiss the complaint is
GRANTED. Because this ruling is based on the face of a document, which
cannot be amended, an opportunity to amend would be futile. This dismissal is
therefore with prejudice.
Dated: May3, 2017

/t/\\ç_
KEVIN MCNULTY
United States District Judge

5

_____

Case 2:16-cv-04266-KM-MAH

Document 1 FUed

age 13 o

P0. BOX 129
TFIOROFARE, NJ 08086-0129

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4

July 14, 2015

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TI) BANK USA, NA/TARGET
CARDS
XXXXXXXXXX679O

Barbara Oneill

$34442

Dear Barbara Oneill:
The above referenced client has assigned your account to our office for collections, Your creditor has authorized us to extend an offer to
settle this account with you at a reduced amount. In order to take advantage of this money saving opportunity, please contact us at the
number listed below. We are not obligated to renew this offer.
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 noti1’ this office in writing within 30 days after receivmg this notice that you dispute the
validity of this debt, or any portion thereof, this office will obtain venfication of the debt or obtain a copy of a judgment and mail you a
copy of such judgment or verification. If you request of this office in writing within 30 days after receiving this notice thts office will
provide you with the name and address of the onginal creditor, if different from the current creditor.
Our customer service agents are available to assist you in handling this matter and can be reached at 866-932-6731.
For information requests and general questions pertaining to this notice, please call us directly at 1-866-606-5390.

This is an attempt to collect a debt by a debt collector and any information obtained will be used for that purpose.
This communication is sent to you by Northland Group, Inc., a debt collector and a member of ACA International.

Barbara Oneill

TI) BAJ’il( USA, NA] ARGET CARDS
XXXXXX2CXXX679O

(Pay Online at www.armlpayments.com

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,ARD HOLDER NAAE

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DATE

Northland Group, Inc.
P.0. BOX 129
THOROFARE, NJ 08086-0129

SIGNAtURE

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1551
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