Sharon v. CAC Financial Corp.
Filing
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MEMORANDUM DECISION AND ORDER. The defendant's motion for summary judgment is granted. The Clerk of Court is respectfully directed to enter judgment in favor of the defendant and close the case. Ordered by Judge Ann M. Donnelly on 9/28/2020. (Greene, Donna)
UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF NEW YORK
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:
ELLA SHARON, on behalf of herself and all others
:
similarly situated,
: MEMORANDUM
Plaintiff,
: DECISION AND ORDER
- against -
: 17-CV-5174 (AMD) (CLP)
:
CAC FINANCIAL CORP.,
:
Defendant.
:
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ANN M. DONNELLY, United States District Judge:
On September 1, 2017, the plaintiff filed this putative class action in connection with a
Defendant.
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series of collection letters the defendant sent her in 2016. She claims that the defendant violated
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the Fair Debt Collection Practices Act (“FDCPA”), 15 U.S.C. § 1692 et. seq., because the letters
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did not tell her if the defendant was assessing interest:or fees on the account. On November 30,
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2018, the defendant moved for summary judgment. (ECF No. 17.)1 For the reasons that follow,
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the defendant’s motion is granted in its entirety.
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BACKGROUND
In 2016, the plaintiff owed approximately two thousand dollars on a credit card account
with Synchrony Bank. (ECF No. 17, Ex. A (“Def. 56.1”) ¶ 3; ECF No. 20 (“Pl. 56.1”) ¶ 5.) In
April of 2016, Synchrony placed the account in collection and transferred the account to EGS
Financial Care, a collection agency. (Def. 56.1 ¶ 1; Pl. 56.1 ¶¶ 1-2.) EGS sent the plaintiff a
letter on April 20, 2016 in an effort to collect an outstanding balance of $1,751.00. (Pl. 56.1 ¶ 4-
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Both parties filed pre-motion conference letters; in keeping with my individual rules, the defense also
filed a 56.1 statement, to which the plaintiff did not respond. At the pre-motion conference, I invited the
parties to submit supplemental letters instead of formal briefing.
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5.) The parties agree that on August 16, 2016, Synchrony “charged-off” the plaintiff’s account,
and transferred her account to the defendant, another collection agency. (Def. 56.1 ¶ 1; Pl. 56.1 ¶
1-2; ECF No. 22 at 2-3.)2 On September 2, 2016, the defendant sent its first letter to the plaintiff
trying to collect the outstanding balance of $2,018.79. (ECF No. 22-1 at 8-9.) The letter said
that the plaintiff’s “POST C/O INTEREST” and “POST C/O FEES” were zero, and listed a
“POST C/O AMOUNT” of $2,018.79. (Id. at 8.)3 The defendant sent a second letter to the
plaintiff on October 16, 2016, listing the same balance due. (ECF No. 22-1 at 10-11.)
According to the plaintiff, the defendant’s letters were misleading because it was not
clear whether the balance was still accruing interest; she believed it might be because the amount
listed as due in EGS’s letter was lower than the amount specified in the defendant’s letters. As a
result, she says she did not know if she would satisfy the debt by paying the balance stated in the
defendant’s letters. The defendant says that it did not include an amount for interest or fees in
the letters because the plaintiff’s account was charged-off, and charged-off accounts do not
accrue interest or fees. Thus, the defendant contends, the plaintiff’s debt was static throughout
the period the defendant tried to collect the debt, and the defendant’s letters accurately reflect
that the amount did not change or accrue interest or fees.
On September 1, 2017, the plaintiff brought this action on behalf of herself and “all other
similarly situated consumers,” alleging one violation of the FDCPA. (ECF Nos. 1, 14.)4 The
defendant moved for summary judgment, and the plaintiff opposes.
An original creditor “charges off” a debt by characterizing the debt as a loss due to the likelihood that
the debtor will never pay it off. See Charge off, Black’s Law Dictionary (11th ed. 2019).
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Although neither party addresses or explains this language, “POST C/O” seems to be an abbreviation for
“post charge-off.”
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The plaintiff amended her complaint on October 10, 2018. (ECF No. 14.)
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STANDARD OF REVIEW
Summary judgment is appropriate only if the parties’ submissions show 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); see also Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247-48
(1986). The movant has the burden of showing the absence of any genuine dispute as to a
material fact. McLee v. Chrysler Corp., 109 F.3d 130, 134 (2d Cir. 1997) (citation omitted). A
fact is “material” when it “might affect the outcome of the suit under the governing law,” and an
issue of fact is “genuine” if “the evidence is such that a reasonable jury could return a verdict for
the nonmoving party.” Barlow v. Male Geneva Police Officer Who Arrested Me on Jan. 2005,
434 F. App’x 22, 25 (2d Cir. 2011) (citations omitted). Once the moving party has met its
burden, the opposing party must identify specific facts and affirmative evidence that contradict
those offered by the moving party to demonstrate that there is a genuine issue for trial.
Ethelberth v. Choice Sec. Co., 91 F. Supp. 3d 339, 349 (E.D.N.Y. 2015) (citing Celotex Corp. v.
Catrett, 477 U.S. 317, 324 (1986)).
DISCUSSION
“Congress enacted the FDCPA to protect against the abusive debt collection practices
likely to disrupt a debtor’s life,” Cohen v. Rosicki, Rosicki & Assocs., P.C., 897 F.3d 75, 81 (2d
Cir. 2018) (quotations and citation omitted), and prohibit the use of “false, deceptive, or
misleading representation or means in connection with the collection of any debt.” 15 U.S.C. §§
1692, 1692e. “In the Second Circuit, ‘the question of whether a communication complies with
the FDCPA is determined from the perspective of the ‘least sophisticated consumer.’”
Kolbasyuk v. Capital Mgmt. Servs., LP, 918 F.3d 236, 239 (2d Cir. 2019) (quoting Jacobson v.
Healthcare Fin. Servs., Inc., 516 F.3d 85, 90 (2d Cir. 2008)). This standard requires “an
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objective analysis that seeks to protect the naive from abusive practices, while simultaneously
shielding debt collectors from liability for bizarre or idiosyncratic interpretations of debt
collection letters.” Greco v. Trauner, Cohen & Thomas, LLP, 412 F.3d 360, 363 (2d Cir. 2005)
(citations and quotations omitted). “[I]n crafting a norm that protects the naïve . . . the courts
have carefully preserved the concept of reasonableness,” and may assume that “even the least
sophisticated consumer . . . possess[es] a rudimentary amount of information about the world and
a willingness to read a collection notice with some care.” Id. (quoting Clomon v. Jackson, 988
F.2d 1314, 1318-19 (2d Cir. 1993)). Thus, the defendant’s communication is viewed “from the
perspective of a debtor who is uninformed, naive, or trusting, but is making basic, reasonable and
logical deductions and inferences.” Dewees v. Legal Servicing, LLC, 506 F. Supp. 2d 128, 132
(E.D.N.Y. 2007) (internal citation omitted). While the least sophisticated consumer is not as
savvy as the “average, everyday consumer,” she is “neither irrational nor a dolt.” Ellis v.
Solomon & Solomon, P.C., 591 F.3d 130, 135 (2d Cir. 2010) (citation omitted).
The plaintiff accuses the defendant of violating Sections 1692e, 1692e(2)(A) and
1692e(10) of the FDCPA because the defendant’s letters did not specify whether her debt was
still accruing fees or interest, or whether paying the balance due would erase her debt.
Under Section 1692e(2), a debt collector violates the FDCPA if it makes a false representation of
either the “character, amount, or legal status of any debt,” or “any services rendered or
compensation which may be lawfully received by any debt collector for the collection of a debt.”
15 U.S.C. § 1692e(2). Section 1692e(10) prohibits 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(10).5 However, the Second Circuit has held that “a collection
A “collection notice is deceptive when it can be reasonably read to have two or more different
meanings, one of which is inaccurate.” Russell v. Equifax A.R.S., 74 F.3d 30, 35 (2d Cr. 1996). “When a
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notice that fails to disclose that interest and fees are not currently accruing on a debt is not
misleading within the meaning of Section 1692e.” Taylor v. Fin. Recovery Servs., Inc., 886
F.3d 212, 214-15 (2d Cir. 2018). Put differently, “failing to disclose that a debt is static is not
misleading within the meaning of Section 1692e.” Id. at 215.
Taylor resolves this case decisively against the plaintiff. The parties agree that
Synchrony charged-off the plaintiff’s account on August 16, 2016, and that the defendant sent its
first collection notice to the plaintiff two weeks later. Even if the plaintiff’s account might have
been collecting interest before Synchrony charged-off the account, or when another collection
agency was trying to collect the debt, the debt stopped collecting interest and fees on August 16,
2016. At that time, the balance due was $2,018.79—the amount the defendant listed in its
September and October collection letters. That amount did not change while the defendant
attempted to collect the debt, and the defendant’s letters accurately stated the balance, interest
and fees the plaintiff owed. While “being informed that [her] debts were not accruing interest or
fees could have been advantageous to [the plaintiff], as it would have alerted [her] to the fact that
[she] could delay repayment without their debts increasing. . . . [t]his supposed harm falls short
of the obvious danger facing consumers in Avila.” Taylor, 886 F.3d at 214-15 (citing Avila v.
Riexinger & Assocs., LLC, 817 F.3d 72, 77 (2d Cir. 2016)). There is nothing misleading or
deceptive about the defendant’s letters.
The plaintiff’s efforts to analogize this case to Avila and to distinguish it from Taylor are
not persuasive. As the Second Circuit in Taylor observed in distinguishing the two decisions, the
Avila collection notice was misleading because Avila’s debt was still accruing interest. In that
statement is susceptible [to] only one reasonable interpretation, the court should determine whether that
interpretation is false in violation of section 1692e(10), ignoring any unreasonable interpretations.”
Ghulyani v. Stephens & Michaels Assocs., Inc., No. 15-CV-5191, 2015 WL 6503849, at *2 (S.D.N.Y.
Oct. 26, 2015).
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situation, the least sophisticated consumer might believe that “‘she could pay her debt in full by
paying the amount listed on the notice,’ . . . whereas, in reality, such a payment would not settle
the debt.” Taylor, 886 F.3d at 214 (quoting Avila, 817 F.3d at 76). It is undisputed in this case
that while the plaintiff’s debt might have been accumulating interest before the defendant
acquired it, Synchrony charged-off the debt on August 16, 2016, and then transferred the account
to the defendant for collection. The evidence, including the defendant’s affidavits and the
content of the letters it sent to the plaintiff, demonstrate that the outstanding debt was static
during the period the defendant was trying to collect on the debt. Thus, all the plaintiff had to
do was pay $2,018.79 to settle the debt. Nothing in the record supports the plaintiff’s assertions
to the contrary.
CONCLUSION
Accordingly, for the reasons set forth above, the defendant’s motion for summary
judgment is granted. The Clerk of Court is respectfully directed to enter judgment in favor of the
defendant and close the case.
SO ORDERED.
s/Ann M. Donnelly
______________________
ANN M. DONNELLY
United States District Judge
Dated: Brooklyn, New York
September 28, 2020
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