RICCIO v. ALLIANCE ONE RECEIVABLES MANAGEMENT, INC. et al

Filing 24

MEMORANDUM and ORDER that Defendant, Alliance One Receivables Management, Inc.'s motion to dismiss the Complaint is GRANTED; Plaintiff's Complaint is dismissed with prejudice. Signed by Judge Peter G. Sheridan on 10/9/2014. (mmh)

NOT FOR PUBLICATION
UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF NEW JERSEY

MAUREEN RICCIO
on behalf of herself and all others similarly
situated,
Plaintiff,

Civil Action No.: 13-4445 (PGS)
MEMORANDUM AND ORDER

v.
ALLIANCE ONE RECEIVABLES
MANAGEMENT, INC.
Defendant.

This matter is before the Court on a motion for to dismiss by Alliance One Receivables
Management, Inc. (“Alliance One”) pursuant to Fed. R. Civ. P. 12(c). [ECF No. 12.]
The Complaint seeks to certify a class of all New Jersey residents who have been subject
to violations of the Fair Debt Collection Act by Defendant Alliance One. The named Plaintiff,
1
Maureen Riccio, bases her complaint on receiving one communication from Alliance One and one
response received from Alliance One by her lawyer in response to a “cease and desist all collection
efforts” letter sent by him to Alliance One. The communication to Ms. Riccio is haifa page (the
second half is a payment coupon which is not depicted here). Under Alliance One’s letter head,
Plaintiffs name and account number, the following language appears:

Although the complaint seeks class certification, no motion to certify the purported class has been filed. Therefore,
this issue will not be addressed in this opinion.

We cait settle your pest duo account (or 30% off the balncJ
We will accept $252781 as a settlement,
Please lollow he Instructions outlined’
1.
2.

tlako your money order or cheek payable to CAPITAL ONE DANK (USA), N.A
Docuinonl payment as ‘Settled”

Jpon receipt nci clearance ol your paymoni, we will nalify oar client Ihat you have satIsfIed your a0000nI. (you have any quoslions or
oncerIls, please coil our office and a friendly agent will assist you
Telephone: [phone]
w
0 long as you haven’t made other urrangemenls to repay this debt, you are eligible (or thIs offer. For accounting purposes, your settlement
‘nust be received withIn 30 calendar days after the dale on thIs letter. II you wish to make a different payment proposal, please call us to
liscuss it.
3y sending ue check or gIving 115 your checkIng account Information for payment, you authorize AlilancoOne to collect funds eloctronicelly
or lIre agreed dates and amounts. tn whIch case your check may riot be returned to you. We can alcr arrange (or dIrect
debit from your
a
:hoclcjng accut,

\s of the dale of this lelter, you owe S361 1.16. Your account balance may be periodIcally Increased duo to (lie rntdmtton of accrued lrtlerest
or
tlher charges (so providut in your agreement ivilh your original creditor
‘ayments curt be made online at iwrvi,capitalone,com/solurions
‘lease be advised thai any sotllomont wrmlc-oft of $6(to or more Cray be reported to the Internal Revenue Service by our clIent
niorrrtoliorr contact your tax professional.

For addlliormal

communicatIon Is from a debt collector This is an attertipt to culled a debt, and any Information oblalned will be used tar that purpose

In response to Plaintiffs attorney’s letter to Alliance One, Alliance One forwarded a
statement of account, and several other paragraphs which are not depicted below. The statement
of account reads:
Principal

$3,611.16

Interest

$.OO

Attorney’s Fees

$.OO

Costs

$00

Credits

$.00

BalanceDue

$3,611.16

Plaintiff argues that the communication from Alliance One to Ms. Riccio is misleading
because it “requires the least sophisticated debtor to question whether, or not, interest will accrue
on the debt, thereby “threatening to add interest or other charges when there was no legal basis

2

•

.

to do so.” The Plaintiff reaches this conclusion by comparing the language in the

communications “[y]our account balance may be periodically increased due to the addition of
accrued interest or other changes if so provided in your agreement with your original creditor”

—

with the later statement received by her attorney which states no interest is due. Additionally,
plaintiff claims that the least sophisticated debtor would be confused by the payment figures listed
in the communication from Alliance One—the “balance due” of S3611.16. and the “settlement
amount” of S2527.81. Plaintiff also claims that the procedures for payment of the settlement
amount are unclear on the face of the letter, and that the least sophisticated debtor would question
whether. when, and how to make a payment that would be considered satisfactory to eliminate the
debt owed.
Alliance One has moved for dismissal of the complaint, arguing that the letter speaks for
itself and has but one interpretation. Therefore, Alliance One argues, because there can be only
one interpretation of the letter, there can be no possible deception or confusion, with the result that
plaintiffs complaint fails to state a claim upon which relief may be granted.
DISCUSSION
1.

Standard of Review

A party may make a motion for judgment on the pleadings pursuant to Fed. R. Civ. P.
12(c) “{ajfter the pleadings are closed—but early enough not to delay trial.” Fed. R. Civ. P.
12(c). The standard for a decision pursuant to Rule 12(c) is nearly identical to that for failure to
state a claim pursuant to Fed. R. Civ. P. 12(b)(6). See Turbe v. Gov’t oft”]., 938 F.2d 427, 428
(3d Cir. 1991). The Court is required to accept as true all allegations in the Complaint and all
reasonable inferences that can be drawn therefrom, and to view them in the light most favorable
to the non-moving party. See Oshiver v. Levin, Fishbein,

3

Sedran

& Berman, 38 F.3d 1380, 1384

(3d Cir. 1994). “To survive a motion to dismiss, a complaint 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 (2009) (quoting Bell AlL Corp.

i’.

Twombly, 550 U.S. 544, 570, 127 S. Ct.

1955. 167 L. Ed. 2d 929 (2007)). While a court will accept well-pleaded allegations as true for
the purposes of the motion, it will not accept bald assertions. unsupported conclusions,
unwarranted inferences, or sweeping legal conclusions cast in the form of factual allegations.
Iqhal. 556 U.S. at 678-79: see also Morse v. Lower Merion School District. 132 F.3d 902, 906

(3d Cir. 1997). A complaint should be dismissed only if the well-pleaded alleged facts, taken as
true, fail to state a claim. See In re Waijirin Sodium, 214 F.3d 395. 397-98 (3d Cir. 2000).
The question is whether the claimant can prove any- set of facts consistent with his or her
allegations that will entitle him or her to relief,

not

whether that person will ultimately prevail.

Sernerenko v. Cendant Corp., 223 F.3d 165, 173 (3d Cir.), cerl. denied, Forbes v. Semerenko,

53 1 U.S. 1149, 121 5. Ct. 1091(2001). The pleader is required to ‘set forth sufficient
information to outline the elements of his claim or to permit inferences to be drawn that these
elements exist.” Kost v. Kozakewicz, 1 F.3d 176, 183 (3d Cir. 1993) (quoting 5A Wright &
Miller, Fed. Practice & Procedure: Civil 2d

§

1357 at 340). “While a complaint attacked by a

Rule 12(b)(6) motion to dismiss does not need detailed factual allegations, a plaintifrs obligation
to provide the ‘grounds’ of his ‘entitle[mentj to relief’ requires more than labels and conclusions,
and a formulaic recitation of the elements of a cause of action will not do
allegations must be enough to raise a right to relief above the speculative level,

Factual
.

.

.

on the

assumption that all the allegations in the complaint are true (even if doubtful in fact).” Twomnbly,
550 U.S. at 555. 127 S. Ct. at 1964-65 (internal citations and quotations omitted).

4

II.

The Collection Letter As An Offer Of Settlement

The collection letter which forms the basis for this purported class action suit contains
settlement language. The Third Circuit has found that such settlement letters in collection
matters are not, of themselves, inherently improper. Campuzano-Burgos v. Midland Credit
Mgnit., 550 F.3d 294, 299 (3d Cir. 2008). “Forbidding them would force honest debt collectors
seeking peaceful resolution of the debt to file suit in order to advance efforts to resolve the
debt—something that is clearly at odds with the language and purpose of the [FDCPA].” Id.
(internal quotation marks omitted). However, such letters are nevertheless “within the ambit of

§ 1 692e, which prohibits the use of ‘any false, deceptive, or misleading representation or means
in connection with the collection of any debt.” Campuzano, 550 F3.d at 300 (quoting 15 U.S.C.

§ 1692e). In analyzing the allegedly deceptive practices of a debt collector, courts in this Circuit
“have analyzed the statutory requirements from the perspective of the least sophisticated debtor.”
Id. at 298 (internal quotation marks omitted).
Plaintiff argues that using the “least sophisticated debtor” standard required by the Third
Circuit, the settlement letter violates 15 U.S.C.

§ 1692e(10), which prohibits “{t]he use of any

false representation or deceptive means to collect or attempt to collect any debt or to obtain
information concerning a consumer.” Plaintiff has asserted that the use of the word “payment”
in one line of the letter could be confusing, as a debtor may not know whether the word refers to
payment of the settlement or of the total balance due. The exact language of which plaintiff
complains appears in the letter as follows:
We can settle your past due account for 30% off the balance!

We will accept $2527.81 as a settlement.
Please follow the instructions outlined:

5

1. Make your money order or check payable to CAPITAL ONE BANK
(USA),N.A
2. Document payment as “Settled”
Upon receipt and clearance of your payment, we will notify our client that you
have satisfied your account. If you have any questions or concerns, please call
our office and a friendly agent will assist you.
Telephone: [phone]

As long as you haven’t made other arrangements to repay this debt, you are
eligible for this offer. For accounting purposes, your settlement must be
received within 30 calendar days after the date on this letter. If you wish to
make a different payment proposal, please call us to discuss it.
(Compi., Exhibit A.)
Taking this provision in its entirety, it is clear that the word “payment” refers to the
settlement payment. The term is surrounded by instructions for payment of the settlement
amount, which this Court notes is exactly 30% less than the total balance due noted in two other
places in the letter. While the court is obliged to construe the statutory language of 15 U.S.C.

§

1692e from the perspective of the least sophisticated debtor, that standard does not require the
Court “ignore [the] rational characteristics of even the least sophisticated debtor and instead rely
on unrealistic and fanciful interpretations of collection communications that would not occur to
even a reasonable or sophisticated debtor.” Campuzano, 550 F.3d at 299. “Even the least
sophisticated debtor is bound to read collection notices in their entirety.” Id. In light of these
requirements, plaintiffs argued interpretation of the language is unreasonable.
III.

The Collection Letter’s Mention of Interest Pursuant To The Agreement

Plaintiff has argued that the mention of the addition of interest on the account may be
confusing to the least sophisticated debtor because it is clear that the defendant did not, in fact,
add interest to the account, and this was a threat used to collect a debt. Plaintiff has argued that
this communication violates 15 U.S.C. §sS 1692e(2)(A), 1692e(5), and 1692e(l0), which state in
6

relevant part:
A debt collector may not use any false, deceptive, or misleading
representation or means in connection with the collection of any
debt. Without limiting the general application of the foregoing, the
following conduct is a violation of this section:

(2) The false representation of—
(A) the character, amount, or legal status of any debt.

(5) The threat to take any action that cannot legally be taken or
that is not intended to be taken.

(10) The use of any false representation or deceptive means to
collect or attempt to collect any debt or to obtain information
concerning a consumer.
.

15 U.S.C.

§ 1692e. Pursuant to 15 U.S.C. § 1692f(1), debt collectors are prohibited from “[t]he

collection of 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.”
Here, the language complained of by the plaintiff is as follows:
As of the date of this letter, you owe $3611.16. Your account
balance may be periodically increased due to the addition of accrued
interest or other charges if so provided in your agreement with your
original creditor.
Compl., Exhibit A.
Utilizing the “least sophisticated debtor” standard as articulated by the Third Circuit in
C’ampaizano, 550 F.3d at 298, the court views this statement, when reviewed with the entirety of
the letter, as having only one meaning: that the agreement with the original creditor would

7

govern whether any interest would be added to the amount owed. There was no threat of action
“not intended to be taken” articulated in that sentence, nor was there a misrepresentation as to the
amount owed. The language merely informs the debtor of the potential for the addition of
interest should the agreement with the original creditor call for same. See generally, Miller v.
McCalla, Raymer, Fadriek, Cobb, iVichols

and

Clark, LLC. 214 F.3d 872, 876 (7th Cir. 2000)

(creating safe harbor” language for letters that apprise debtors that the amount owed may
change due to accumulating interest or late charges).
CONCLUSION

Defendant has brought a motion to dismiss pursuant to Fed. R. Civ. P. 12(c). Based upon
the foregoing, defendant’s motion to dismiss is GRANTED.

8

___________________________

ORDER
It is, on this 9th day of October, 2014,
ORDERED that Defendant, Alliance One Receivables Management, Inc.’s motion to
dismiss the complaint be and is hereby GRANTED; and it is further
ORDERED that Plaintiff’s complaint is dismissed in its entirety with prejudice; and it is
further
ORDERED that this case is closed.

Dated: October 9, 2014
PETER 0. SHERIDAN, U.S.D.J.

9