KASSIN v. AR RESOURCES, INC. et al
OPINION filed. Signed by Judge Freda L. Wolfson on 3/22/2017. (km)
*NOT FOR PUBLICATION*
UNITED STATES DISTRICT COURT
DISTRICT OF NEW JERSEY
RAFAEL KASSIN, on behalf of himself
and all others similarly situated
Civ. Action No. 16-4171 (FLW)
AR RESOURCES, INC.
WOLFSON, District Judge:
Plaintiff Rafael Kassin (“Plaintiff”) filed this putative class action against a collection
agency, Defendant AR Resources (“Defendant” or “ARR”), on behalf of himself and all other
similarly situated individuals, asserting violations of the Fair Debt Collection Practices Act
(“FDCPA” or “Act”), 15 U.S.C. § 1692, et seq., in connection with a debt collection letter that he
received from Defendant. In lieu of an answer, Defendant moves to dismiss the Complaint
pursuant to Fed. R. Civ. P. 12(b)(6). For the reasons set forth below, Defendant’s Motion to
Dismiss is DENIED.
On February 18, 2016, Plaintiff received a debt collection letter from Defendant, a debt
collection agency. Complaint (“Compl.”) ¶ 29, Ex. A. The one page letter demanded payment on
behalf of “SELECT MEDICAL – KESSLER” (“Select Medical”) in the amount of $3756.55,
and directed Plaintiff to contact ARR in the event that the subject debt was covered by Plaintiff’s
insurance: “If you carry any insurance that may cover this obligation, please contact [ARR’s]
office at the number above.” Compl. ¶ 29, Ex. A. The letter concluded with a validation notice
written in bold text, as mandated by the FDCPA:
Unless you notify this office within 30 days from 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 of 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
from 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.
Compl. ¶ 29, Ex. A. Subsequent to the receipt of the debt collection letter, Plaintiff filed this
Complaint, in which he alleges that the letter is in violation of two separate sections of the
FDCPA, i.e., § 1692g and § 1692e. In response, ARR filed a Motion to Dismiss Plaintiff’s
Complaint for Plaintiff’s failure to state a claim pursuant to Rule 12(b)(6). Plaintiff opposes the
STANDARD OF REVIEW
Federal Rule of Civil Procedure 12(b)(6) provides that a court may dismiss a claim “for
failure to state a claim upon which relief can be granted.” When reviewing a motion to dismiss,
courts must first separate the factual and legal elements of the claims, and accept all of the wellpleaded facts as true. See Fowler v. UPMC Shadyside, 578 F.3d 203, 210-11 (3d Cir. 2009). All
reasonable inferences must be made in the plaintiff's favor. See In re Ins. Brokerage Antitrust
Litig., 618 F.3d 300, 314 (3d Cir. 2010). In order to survive a motion to dismiss, the plaintiff
must provide “enough facts to state a claim to relief that is plausible on its face.” Bell Atl. Corp.
v. Twombly, 550 U.S. 544, 570 (2007). This standard requires the plaintiff to show “more than a
ARR has not replied to Plaintiff’s Opposition.
sheer possibility that a defendant has acted unlawfully,” but does not create as high of a standard
as to be a “probability requirement.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009).
The Third Circuit requires a three-step analysis to meet the plausibility standard
mandated by Twombly and Iqbal. First, the court should “outline the elements a plaintiff must
plead to a state a claim for relief.” Bistrian v. Levi, 696 F.3d 352, 365 (3d Cir. 2012). Next, the
court should “peel away” legal conclusions that are not entitled to the assumption of truth. Id.;
see also Iqbal, 556 U.S. at 678-79 (“While legal conclusions can provide the framework of a
complaint, they must be supported by factual allegations.”). It is well-established that a proper
complaint “requires more than labels and conclusions, and a formulaic recitation of the elements
of a cause of action will not do.” Twombly, 550 U.S. at 555 (internal quotations and citations
omitted). Finally, the court should assume the veracity of all well-pled factual allegations, and
then “determine whether they plausibly give rise to an entitlement to relief.” Bistrian, 696 F.3d at
365 (quoting Iqbal, 556 U.S. at 679). A claim is facially plausible when there is sufficient factual
content to draw a “reasonable inference that the defendant is liable for the misconduct alleged.”
Iqbal, 556 U.S. at 678. The third step of the analysis is “a context-specific task that requires the
reviewing court to draw on its judicial experience and common sense.” Id. at 679.
In the instant matter, Plaintiff asserts that Defendant acted in violation of the FDCPA by
mailing a letter which incorporated language that overshadowed and contradicted the validation
notice. Memorandum of Law in Opposition to Defendant’s Motion to Dismiss (“Pl.’s Opp’n”), at
7. Specifically, Plaintiff points to a portion of the letter that directs him to call Defendant if the
subject debt is covered by the terms of Plaintiff’s insurance plan. Pl’s Opp’n, at 10-13.
According to Plaintiff, this language is in violation of the FDCPA, because it mistakenly
suggests that the debt may be disputed by telephone, when, in actuality, a dispute must be sent in
writing in order to be legally effective.
Congress enacted the FDCPA in order to accomplish the following goals: “to eliminate
abusive debt collection practices, to ensure that debt collectors who abstain from such practices
are not competitively disadvantaged, and to promote consistent state action to protect
consumers.” DeHart v. US Bank, N.A. ND, 811 F. Supp. 2d 1038, 1054 (D.N.J. 2011) (quoting
Jerman v. Carlisle, McNellie, Rini, Kramer & Ulrich LPA, 130 S. Ct. 1605, 1608 (2010)). In that
connection, § 1692g(a) of the Act requires debt collectors to include the following information
whenever a debt collection letter is mailed to a consumer:
(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.
Wilson v. Quadramed Corp., 225 F.3d 350, 353 (3d Cir. 2000) (citing 15 U.S.C. § 1692g(a)).
“Paragraphs 3 through 5 of section 1692g(a) contain the validation notice—the
statements that inform the consumer how to obtain verification of the debt and that he has thirty
days in which to do so.” Id. at 353-54. In order for a debt collector to comply with the validation
notice requirement, “‘more is required than the mere inclusion of the statutory debt validation
notice in the debt collection letter—the required notice must also be conveyed effectively to the
debtor.’” Caprio v. Healthcare Revenue Recovery Group, LLC, 709 F.3d 142, 148 (3d Cir. 2013)
(quoting Wilson, 225 F.3d at 354)). In other words, “[t]he validation notice . . . ‘must be in print
sufficiently large to be read, and must be sufficiently prominent.’” Id. (quoting Graziano v.
Harrison, 950 F.2d 107, 111 (3d Cir. 1991)). In addition, “‘the notice must not be overshadowed
or contradicted by accompanying messages from the debt collector.’” Id. (quoting Graziano, 950
F.2d at 111). In that respect, a collection letter is in violation of the FDCPA, if its validation
notice “‘is printed on the back and the front of the letter does not contain any reference to the
notice’ or, more generally, where ‘the validation notice is overshadowed or contradicted by
accompanying messages or notices from the debt collector.’” Id. (quoting Wilson, 225 F.3d at
In determining whether the validation notice is in compliance with the requirements of
the FDCPA’s provisions, the Third Circuit has adopted the “least sophisticated debtor” standard.
Id. at 149 (citing Wilson, 225 F.3d at 354; Graziano, 950 F.2d at 111). The least sophisticated
debtor standard, which endeavors to protect all types of consumers, “‘is less demanding than one
that inquires whether a particular communication would mislead or deceive a reasonable
debtor.’” Id. (quoting Campuzano-Burgos v. Midland Mgmt., Inc., 550 F.3d 294, 298-99 (3d Cir.
2008)). Instead, under that standard, a validation notice is deemed “‘overshadowing or
contradictory if it would make the least sophisticated consumer uncertain as to her rights.’” Id.
(quoting Russell v. Equifax A.R.S., 74 F.3d 30, 35 (2d Cir. 1996)).
Plaintiff relies extensively on the Third Circuit’s decision in Caprio, a case involving
debt validation notices under the FDCPA. There, the plaintiff challenged a collection letter’s
instruction for him to call or write to defendant, if he felt as though he were not responsible for
the debt in connection with the service described therein. Id. at 145 (“If we can answer any
questions, or if you feel you do not owe this amount, please call us toll free at 800-984-9115 or
write us at the above address.”) (emphasis removed). The Third Circuit held that this language
overshadowed the letter’s validation notice, because it directed the plaintiff to call or write in
order to dispute the debt, even though a consumer is required to raise a debt dispute in writing
under the FDCPA. Id. at 152. In other words, the Third Circuit found that the letter was invalid,
because the complained-of language could “‘be reasonably read to have two or more different
meanings, one of which is inaccurate.’” Id. (quoting Russell, 74 F.3d at 35). Thus, while the
Caprio decision is factually distinguishable from the case at hand, it articulated a standard for
determining whether a debt collection letter vis-à-vis a validation notice, fails to facially comply
with the FDCPA’s requirements.
Here, Defendant argues that the collection letter is in compliance with the standard set
forth in Caprio, because it does not explicitly direct a debtor to dispute a debt by telephone.
Def.’s Motion to Dismiss, at 5. According to Defendant, the letter instead presents “[Plaintiff]
with two mutually exclusive options: (1) call ARR with insurance information that should cover
the debt or (2) write to ARR within thirty days to dispute the debt.” Def.’s Motion to Dismiss, at
6. The Court disagrees and finds that the statement in regard to Plaintiff’s insurance plan, as
alleged, may reasonably be interpreted to suggest that the debt could be disputed by calling
Defendant cites to Szcurek v. Prof’l Mgmt., Inc., 59 F. Supp. 3d 721 (E.D. Pa. 2014) and
argues that that the substance of the letter is in compliance with the FDCPA’s requirements.
Defendant emphasizes that the Szcurek Court upheld a debt collection letter that stated: “If this
debt is for medical services and you have insurance that may pay all or a portion of this debt, that
information can be submitted by calling 800-220-0260 or by completing the information on the
reverse side of this letter and returning the entire letter to this office.” Id. at 723, n.1. Defendant’s
reliance on Szcurek, however, is misplaced, as that court’s analysis was solely confined to
whether the following statement contained in the letter—“To avoid further contact from this
office regarding your past due account, please send the balance due to our office and include the
top portion of this letter with your payment,”—was in violation of the FDCPA. Id. at 724. In
fact, the language concerning the plaintiff’s medical insurance was not challenged by the parties
The debt collection letter, here, begins by explaining that a debt, in the amount of
$3756.55, has been referred to ARR by Select Medical for collection purposes, and then directs
Plaintiff to call Defendant in the event that the debt is covered under Plaintiff’s insurance policy.
Compl. ¶ 29, Ex. A. Although the letter concludes with a validation notice, in which Plaintiff’s
rights pursuant to the FDCPA are explained, Compl. ¶ 29, Ex. A, the insurance policy language
may be susceptible to different meanings under the least sophisticated debtor standard. For
example, a least sophisticated debtor could reasonably believe that he or she does not owe, or is
not responsible for, a debt, because it is covered under the terms of his or her insurance plan. Or,
in an alternative scenario, a least sophisticated debtor may mistakenly receive a debt collection
notice, when the original service provider was already compensated by the debtor’s insurance
policy. Hence, the debtor, in either situation, may mistakenly dispute the debt by calling the
collection agency, because the letter instructs that issues with coverage under an insurance policy
can be handled by telephone. See Caprio, 709 F.3d at 151. Given that the complained-of
language may mislead the least sophisticated debtor, it is therefore inappropriate for the Court to
dismiss Plaintiff’s Complaint. 3 Ashkenazi v. Certified Credit & Collections Bureau, No. 147627, 2016 U.S. Dist. LEXIS 41000, at *5, (D.N.J. Mar. 29, 2016) (concluding that the least
sophisticated debtor could plausibly be misled by a debt collection letter that directed the debtor
in Szcurek, nor did the court discuss the propriety of the insurance language in the debt collection
letter. Therefore, the Szcurek decision is distinguishable from the facts at hand.
The insurance coverage provision in the debt collection letter may also be deceptive if the
collection agency is unable to discuss any insurance coverage issues with the consumer because
those issues are typically resolved through the insurance company and the medical provider.
to contact the debt collector by telephone, if the debt was covered under the debtor’s insurance
For the foregoing reasons, Defendant’s Motion to Dismiss is DENIED.
Dated: March 22, 2017
/s/ Freda L. Wolfson
Freda L. Wolfson
United States District Judge
The Complaint further alleges that the substance of the letter is in violation of § 1692(e)
of the FDCPA. Compl. at ¶¶ 42-46. That section of the FDCPA prohibits the use of any “false,
deceptive, or misleading representation or means in connection with the collection of any debt.”
15 U.S.C. § 1692(e). Because the letter’s language could potentially mislead the least
sophisticated debtor, the Court cannot dismiss Plaintiff’s claim pursuant to § 1692(e) of the
FDCPA. Caprio, 709 F.3d at 155 (“[W]hen allegations under 15 U.S.C. § 1692e(10) are based
on the same language or theories as allegations under § 15 U.S.C. § 1692g, the analysis of the §
1692g claim is usually dispositive.”) (internal quotations omitted).
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