Lotito v. Recovery Associates, Inc.

Filing 18

OPINION & ORDER granting in part and denying in part 7 Motion to Dismiss for Failure to State a Claim. SO ORDERED that (1) the branch of deft's motion seeking dismissal of plaintiffs claim alleging violations of 15 U.S.C. § 1692g pursua nt to Rule 12(b)(6) of the Federal Rules of Civil Procedure is granted, plaintiff's claim alleging violations of 15 U.S.C. § 1692g (first claim for relief) is dismissed in its entirety with prejudice for failure to state a claim for relief, and deft's motion is otherwise denied; and (2) plaintiff's application for leave to amend the complaint pursuant to Rule 15(a)(2) of the Federal Rules of Civil Procedure is denied on the basis that the proposed amendment is futile. Ordered by Judge Sandra J. Feuerstein on 9/17/2014. (Florio, Lisa)

.,
FILED
IN CLERK'S OFFICE
U S DISTRICT COURT E D N Y

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF NEW YORK

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JANET LOTITO, individually and on behalf of a class,

*

SEP 17 Z014

*

LONG ISLAND OFFICE
Plaintiff,
-against-

13-CV-5833 (SJF)(AKT)

RECOVERY ASSOCIATES INC.,

OPINION & ORDER

Defendant.

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FEUERSTEIN, District Judge:

On October 22, 2013, plaintiff Janet Lotito ("plaintiff') commenced this putative class
action against defendant Recovery Associates Inc. ("defendant") pursuant to the Fair Debt
Collection Practices Act ("FDCPA"), 15 U.S.C. §§ 1692, et seq. Pending before the Court are:
(!)defendant's motion to dismiss the complaint pursuant to Rule 12(b)(6) of the Federal Rules of
Civil Procedure for failure to state a claim for relief; and (2) plaintitr s application for leave to
amend the complaint. For the reasons set forth below, defendant's motion is granted in part and
plaintitrs application is denied.

I.

BACKGROUND
A.

Factual Background

On or about May 17, 2013, defendant sent, or caused to be sent, through the mail a form
debt collection letter addressed to plaintiff ("the May letter"), (Complaint ["Compl."], ~ 8),
indicating, inter alia:

I

.,
COURTESY NOTE
This will notifY you that our above named client has referred your
seriously past due account to us for collection.
While it is possible that your non-payment reflects a
misunderstanding or oversight, we wish to advise that this balance
as shown on the books and records of our client is long past due
and must be paid at once.
You are advised that unless you notifY the office within 30 days
that you dispute the validity of the debt or any portion thereof, we
will assume that this debt is valid. If you notifY this office in
writing within 30 days of receipt of this notice, we will obtain
verification of this debt or obtain judgment and mail you a copy of
of [sic] such judgment or verification. If you request this office in
writing within 30 days of receipt of this notice, we will provide you
with the name and address of the original creditor, if different.
(Compl., Ex. A).
Defendant sent plaintiff a second letter, dated June 18, 2013 ("the June letter"), (Compl.,
, 12), indicating, inter alia:
We have received no communication from you in response to our
previous letter. We urge you to review your records as soon as
possible so that you may advise us if our information is incorrect.
If you require additional information concerning this matter please
do not hesitate to contact the undersigned. If you wish, you may
use the back of this letter to communicate with us. If you would
like to talk about it, feel free to contact us at the number above.
Be advised that should you not dispute this matter in writing within
30 days of our first communication to you, we will assume that our
information is correct and proceed accordingly.
(Compl., Ex. B).
The back of both the May and June letters also contain the following validation notice in
bold type:
2

UNLESS YOU NOTIFY US THIS OFFICE [sic] 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 .. [sic] IF XYOU [sic]
REQUEST THIS OFFICE IN WRITING WITHIIN [sic] 30
DAAYS [sic] AFTER RECEIVING THIS NOTICE THIS OFFICE
WILL PROVIDE YOU WITH THE NAME AND ADDRESSOF
[sic] THE ORIGINAL CREDITOR, IF DIFFERENT FROM THE
CURRENT CREDITOR. THIS IS AN ATTEMPT TO COLLECT
A DEBT. ANY INFORMATION YOU PROVIDE WILL BE
USED FOR THAT PURPOSE.
(Plaintiff's Response to Defendant's Motion to Dismiss ("Plf. Opp."], Ex. A)'.

B.

Procedural History

On October 22, 2013, plaintiff commenced this putative class action against defendant
pursuant to the FDCPA. Specifically, plaintiff alleges: (1) that defendant violated 15 U.S.C. §
1692g by having a "policy and practice [of] mak[ing]

* * * 'unelaborated demands' for

immediate payment and in doing so, [of] violat[ing] the FDCPA's prohibition against
communication in a manner which overshadows or is inconsistent with the disclosure of the
consumer's right to dispute the debt or request the name and address of the original creditor[,]"
(Compl., ~ 29); and (2) that defendant violated 15 U.S.C. § 1692e because the June letter

1

The copies of the May and June letters attached to the complaint contained only the front of
those documents. Plaintiff attached copies of the entire letters, front and back, as exhibits to her
response to the motion to dismiss. The validation notice on the back of both letters are identical,
typographical errors and all. As the complete documents are integral to the complaint, they are
properly considered on this motion to dismiss.
3

"falsely, deceptively and misleadingly informs the Plaintiff that if she fails to dispute the debt in
writing, that the Defendant is free to assume its validity[,]" (Compl., ~ 35) (emphasis in

original).
Defendant now moves to dismiss the complaint pursuant to Rule 12(b)(6) of the Federal
Rules of Civil Procedure for failure to state a claim for relief and plaintiff moves pursuant to
Rule 15(a)(2) for leave to amend the complaint to add a claim alleging that the May letter
violated 15 U.S.C. § 1692g(a)(3).

II.

Discussion
A.

Standard of Review

The standard of review on a motion made pursuant to Rule 12(b)(6) of the Federal Ru1es
of Civil Procedure is that a plaintiff plead sufficient facts "to state a claim for relief that is
plausible on its face." Bell Atlantic Com. v. Twombly, 550 U.S. 544, 127 S. Ct. 1955, 1974, 167
L. Ed. 2d 929 (2007). "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." Ashcroft v. Iqbal, 556 U.S. 662, 678, 129 S. Ct. I 937, 1949, 173 L. Ed. 2d
868 (2009). The plausibility standard requires "more than a sheer possibility that a defendant has
acted unlawfully." Iqbal, 556 U.S. at 678, 129 S. Ct. 1937.
"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, 129 S. Ct. 1937 (quoting Twombly,
550 U.S. at 555, 127 S. Ct. 1955). "Nor does a complaint suffice if it tenders 'naked

assertion[s]' devoid of'further factual enhancement."' Id. (quoting Twombly. 550 U.S. at 557,
4

'•
127 S. Ct. 1955). "Factual allegations must be enough to raise a right to relief above the
speculative level, on the assumption that all the allegations in the complaint are true (even if
doubtful in fact)." Twombly, 550 U.S. 544, 127 S. Ct. at 1959.
In deciding a motion pursuant to Rule 12(b)(6), the Court must liberally construe the
claims, accept all factual allegations in the complaint as true, and draw all reasonable inferences
in favor of the plaintiff. See Aegis Ins. Services. Inc. v. 7 World Trade Co .. L.P ., 73 7 F .3d 166,
176 (2d Cir. 2013); Grullon v. Citv of New Haven, 720 F.3d 133, 139 (2d Cir. 2013). However,
this tenet "is inapplicable to legal conclusions. Threadbare recitals of the elements of a cause of
action, supported by mere conclusory statements, do not suffice." Iqbal, 556 U.S. at 678, 129 S.
Ct. !93 7. "While legal conclusions can provide the framework of a complaint, they must be
supported by factual allegations." ld. at 679, 129 S. Ct. 1937. "In keeping with these principles
a court considering a motion to dismiss can choose to begin by identifYing pleadings that,
because they are no more than conclusions, are not entitled to the assumption of truth." ld.;

~

also Ruston v. Town Board for Town of Skaneateles, 610 F.3d 55, 59 (2d Cir. 2010).
Nonetheless, a plaintiff is not required to plead "specific evidence or extra facts beyond
what is needed to make the claim plausible." Arista Records. LLC v. Doe 3, 604 F.3d 110, 120-1
(2d Cir. 2010); see also Matson v. Board of Education ofCitv School District ofNew Yor!s, 631
F.3d 57, 63 (2d Cir. 201 I) ("While a complaint need not contain detailed factual allegations, it
requires more than an unadorned, the defendant-unlawfully-harmed-me accusation." (internal
quotations and citation omitted)). "When there are well-pleaded factual allegations, a court
should assume their veracity and then determine whether they plausibly give rise to an
entitlement to relief." Iqbal, 556 U.S. at 679, 129 S. Ct. I 937.

5

••
In deciding a motion pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure,
the Court must limit itself to the facts alleged in the complaint, which are accepted as true; to any
documents attached to the complaint as exhibits or incorporated by reference therein; to matters
of which judicial notice may be taken; or to documents upon the terms and effect of which the
complaint "relies heavily" and which are, thus, rendered "integral" to the complaint. Chambers
v. Time Warner. Inc., 282 F.3d 147, 152-53 (2d Cir. 2002); see also ASARCO LLC v. Goodwi!J,
756 F.3d 191, 198 (2d Cir. 2014).

B.

The FDCPA

For purposes of this motion, the parties do not dispute that plaintiff is a "consumer," the
sum defendant attempted to collect from plaintiff is a "debt," and defendant is a "debt collector,"
as those terms are defined by the FDCPA. See 15 U.S.C. §§ 1692a(3), (5) and (6), respectively.

I.

15 U.S.C. § 1692g

The FDCP A requires that debt collectors provide "fair notice to debtors of their rights."
Weber v. Computer Credit. Inc., 259 F.R.D. 33, 37 (E.D.N.Y. 2009). To that end, "15 U.S.C. §
1692g requires debt collectors to include a 'validation notice' either in the initial communication
with a consumer in connection with the collection of a debt or within five days of that initial
communication, which must inform the consumer that he or she has certain rights, including the
rights to make a written request for verification of the debt and to dispute the validity of debt."
Miller v. Wolpoff & Abramson. L.L.P., 321 F.3d 292, 309 (2d Cir. 2003); see also Spira v.
Ashwood Financial. Inc., 358 F. Supp. 2d 150, 156 (E.D.N.Y. 2005) ("Section 1692g(a) of the
6

FDCPA requires that a debt collector who sends a letter requesting payment of a debt provide the
alleged debtor with a 'validation notice' in its initial communication, or no later than five days
thereafter. ") 2
Section 1692g "was enacted to 'eliminate the recurring problem of debt collectors
dunning the wrong person or attempting to collect debts which the consumer has already
paid[,]"' Ellis v. Solomon and Soloman. P.C., 591 F.3d 130, 134 (2d Cir. 2010) (quoting S. Rep.
No. 95-382, at 4 (1977), reprinted in 1977 U.S. Code Cong. & Admin. News 1659, 1699), by
giving "the consumer the right to dispute a debt claimed by a debt collector, and to seek
verification of the validity of the debt." Jacobson v. Healthcare Financial Services. Inc., 516
F.3d 85, 89 (2d Cir. 2008). The complaint does not allege that the language of the May letter
omitted any of the information required by Section 1692g(a) of the FDCPA.

2

Section 1692g(a) of Title 15 of the United States Code provides, in relevant part:
Within five days after the initial communication with a consumer
in connection with the collection of any debt, a debt collector shall,
unless the following information is contained in the initial
communication or the consumer has paid the debt, send the
consumer a written notice containing- (I) 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.

7

..
"After receiving a validation notice, the conswner has thirty days to mail a notice to the
debt collector disputing the debt or requesting the name and address of the original creditor."
Ellis, 591 F.3d at 134. "If the conswner disputes the debt or requests the name and address of the
original creditor during the thirty-day 'validation period,' the debt collector must 'cease
collection of the debt, or any disputed portion thereof until the debt collector verifies the debt or
obtains the name and address of the original creditor and 'a copy of such verification ... or name
and address of the original creditor, is mailed to the conswner by the debt collector.'" Id. at 13435 (quoting 15 U.S.C. § 1692g(b)); see also Jacobson, 516 F.3d at 89 ("If the conswner notifies
the debt collector in writing, within the thirty-day period afforded by the Act, that she disputes
the debt or any portion of the debt, the debt collector must cease collection.

* * * The debt

collector may reswne collection activities only when it has obtained verification of the debt, and
has mailed a copy of the verification to the conswner." (quotations and citation omitted)).
"However, the validation period 'is not a 'grace period'; in the absence of a dispute notice, the
debt collector is allowed to demand immediate payment and to continue collection activity."
Ellis, 591 F.3d at 135 (quoting Jacobson, 516 F.3d at 89); see also 15 U.S.C. § 1692g(b)
("Collection activities and communications that do not otherwise violate this subchapter may
continue during the 30-day period referred to in subsection (a) of this section unless the
conswner has notified the debt collector in writing that the debt, or any portion of the debt, is
disputed or that the conswner requests the name and address of the original creditor.") Plaintiff
does not allege that she ever notified defendant in writing that she disputed the debt, or any
portion thereof, or that she ever requested the name and address of the original creditor prior to
receiving the June letter.
8

Nonetheless, "validation period collection activities and communications must not
overshadow or co~tradict the validation notice." Ellis, 591 F.3d at 135 (quotations and citations
omitted); see also 15 U.S.C. § 1692g(b) ("Any collection activities and communication during
the 30-day period may not overshadow or be inconsistent with the disclosure of the consumer's
right to dispute the debt or request the name and address of the original creditor."); Jacobson, 516
F.3d at 90 ("[A] debt collector violates§ 1692g(a), even if the collector includes an accurate
validation notice, if that notice is overshadowed or contradicted by other language in
communications to the debtor."); McStay v. I.C. System. Inc, 308 F.3d 188, 190 (2d Cir. 2002)
("[E]ven if the debt collector's notice contains all the information required by [the FDCPA], it
will still violate Section 1692g if the letter also 'contains language that "overshadows or
contradicts" other language informing a consumer of her rights."' (quoting Russell v. Equifax
A.R.S., 74 F.3d 30, 34 (2d Cir. 1996))). "Whether collection activities or communications
within the validation period overshadow or are inconsistent with a validation notice is
determined under the 'least sophisticated consumer' standard." Ellis, 591 F.3d at 135 (quoting
Greco v. Trauner. Cohen & Thomas. L.L.P., 412 F.3d 360, 363 (2d Cir. 2005)); see also Miller,
321 F.3d at 309 (accord). Pursuant to that objective standard, "[a] collection activity or
communication 'overshadows or contradicts the validation notice if it would make the least
sophisticated consumer uncertain as to her rights."' Ellis, 591 F.3d at 135 (quoting Jacobson,
516 F.3d at 90 (internal quotations and citation omitted)); see also Savino v. Computer Credit.
Inc., 164 F.3d 81, 85 (2d Cir. 1998) ("A debt collection notice is overshadowing or contradictory
if it fails to convey the validation information clearly and effectively and thereby makes the least
sophisticated consumer uncertain as to her rights.") "By its very nature,
9

* * * the least

sophisticated consumer test pays no attention to the circumstances of the particular debtor in
question***." Easterling v. Collecto. Inc., 692 F.3d 229,234 (2d Cir. 2012); see also
Jacobson, 516 F.3d at 91 ("[I]n order to prevail [on a FDCPA claim], it is not necessary for a
plaintiff to show that she herself was confused by the communication she received; it is sufficient
for a plaintiff to demonstrate that the least sophisticated consumer would be confused.")
"The hypothetical least sophisticated consumer does not have the astuteness of a
'Philadelphia lawyer' or even the sophistication of the average, everyday, common consumer, but
is neither irrational nor a dolt." Ellis, 591 F.3d at 135 (quotations and citation omitted); see also
Spira, 358 F. Supp. 2d at 156 (holding that the "last sophisticated consumer" standard "requires
the Court to analyze the collection letters from the perspective of a debtor who is uninformed,
naive, or trusting, but is making basic, reasonable and logical deductions and inferences.") Lack
of sophistication is not to be conflated with unreasonableness. Ellis, 591 F.3d at 135; see also
Jacobson, 516 F .3d at 90 ("[I]n addition to protecting consumers against deceptive debt
collection practices, the objective ['least sophisticated consumer'] test* * *protects debt
collectors from unreasonable constructions of their communications. Even in 'crafting a norm
that protects the naive and the credulous,' [the Second Circuit] ha[s] 'carefully preserved the
concept of reasonableness."' (quoting Clomon v. Jackson, 988 F.2d 1314, 1319 (2d Cir. 1993))).
"Accordingly, the FDCPA does not aid plaintiffs whose claims are based on 'bizarre or
idiosyncratic interpretations of collection notices."' Jacobson, 516 F .3d at 90 (quoting Clomon,
988 F.2d at 1320); see also Ellis, 591 F.3d at 135 (accord).
"[B]ecause the least sophisticated consumer standard is objective, the determination of
how the least sophisticated consumer would view language in a defendant's collection letter is a
10

.'
question oflaw." Castro v. Green Tree Servicing LLC, 959 F. Supp. 2d 698, 707 (S.D.N.Y.
2013); ~.!<&Russell, 74 F.3d at 33 (finding that questions of whether language in collection
notices violated 15 U.S.C. §§ 1692g and 1692e(10) presented "[o1nly legal issues"); Vu v.
Diversified Collection Services. Inc., 293 F.R.D. 343, 361 (E.D.N.Y. 2013) (finding that the
issue of whether language in a collection Jetter overshadowed a validation notice was a question
oflaw); Diaz v. Residential Credit Solutions. Inc., 965 F. Supp. 2d 249, 256 (E.D.N.Y. 2013)
(recognizing that "the trend in the Second Circuit is to treat th[e1 question [of whether a
collection Jetter violates Section 1692g of the FDCPA1 as a matter of Jaw that can be resolved on
a motion to dismiss.")
No language in the May Jetter would make the least sophisticated consumer uncertain
about her rights to dispute the debt or to request verification of the debt within thirty (30) days
after her receipt of that letter under Section 1692(a) of the FDCPA. Although the body of text on
the front of the May Jetter indicates, in relevant part, "[w1hile it is possible that your nonpayment [of the past due balance1 reflects a misunderstanding or oversight, we wish to advise
you that this balance as shown on the books and records of our client is long past due and must
be paid at once[,]" (Compl., Ex. A) (emphasis added), that sentence merely informed plaintiff
that the creditor is seeking repayment of a balance it believes to be due and owing based upon its
books and records. The challenged sentence does not demand that actual immediate payment be
made within a specified time, nor threaten any adverse consequences for a failure to make
immediate payment. The text on the front of the May Jetter then proceeds to explain in clear
terms plaintiff's rights to dispute the debt and to seek verification of the debt, i.e., to seek to
correct any misunderstanding or oversight reflected in the past due balance as shown on the
11

'

'
books and records of defendant's client, within thirty (30) days of her receipt of that letter. The
back of the May letter contains a second validation notice further explaining clearly and
accurately plaintiff's rights to dispute the debt and to seek verification of the debt within the
thirty (30)-day validation period. Thus, reading the May letter in its entirety, even the least
sophisticated consumer would understand that she had the option to submit a notice of dispute or
to seek verification of the debt, i.e., to challenge the accuracy of the past due balance claimed by
the creditor, during the thirty (30)-day validation period, rather than pay the balance claimed to
be due and owing by the creditor.

See,~

Jacobson, 516 F.3d at 92; Rumpler v. Phillips &

Cohen Associates, Ltd., 219 F. Supp. 2d 251, 259 (E.D.N.Y. 2002) (finding that a request for
payment that did not demand immediate payment within a specified time or threaten adverse
consequences in the event of nonpayment was "not 'confusing' or "contradictory" such that the
least sophisticated consumer would be unclear that she had thirty days to dispute the validity of
the debt.")
"[A] request for immediate payment [does] not, standing alone, violate the FDCP A."
Savino, 164 F.3d at 85-86; see also Jacobson, 516 F.3d at 92 (accord). A debt collector has the
"right to demand payment, even within the thirty-day period, unless the customer submits a
notice of dispute," Jacobson, 516 F.3d at 89 n. 4; see also Spira, 358 F. Supp. 2d at 158
("[A]bsent notification from the consumer that she disputes the debt, the debt collector may
continue its collection efforts during the validation period." (quotations and citation omitted)),
which plaintiff did not do prior to her receipt of the June letter. Although demands for
immediate payment "may cause confusion about the right to dispute [a debt], and will
sometimes, in that way, lead debt collectors to run afoul of the [FDCPA]," Jacobson, 516 F.3d at
12

91, "only if the demand for payment obscures the right to dispute the debt within 30 days is an
issue of overshadowing raised." Weber, 259 F.R.D. at 39 (quotations, emphasis and citation
omitted).
No language in the May letter obscures the validation notice. Even the least sophisticated
consumer could not be misled by the language in the May letter into thinking that she should
forego requesting validation of the debt within the thirty (30)-day period, as set forth in clear
language on both the front and back of the May letter, in favor of paying the balance claimed to
be due and owing by the creditor.

See,~

Jacobson, 516 F.3d at 92 (finding that although the

validation letter contained a demand for immediate payment, the body of the letter adequately
explained the plaintiff's rights to dispute the debt and seek verification of the debt so that "even
the least sophisticated debtor would understand that she had the option to submit a notice of
dispute, rather than pay the claimed sum."); Spira, 358 F. Supp. 2d at 157 (finding no "actual or
apparent contradiction" in a collection letter that presented the plaintiff with two options, i.e., to
pay the debt or dispute it, and did not "suggest that [the plaintiff] forego the second option in
favor of payment.") Accordingly, the branch of defendant's motion seeking dismissal of
plaintiff's claim alleging a violation of Section 1692g of the FDCPA (first claim for relief) is
granted and plaintiff's first claim for relief is dismissed in its entirety with prejudice pursuant to
Rule 12(b)(6) of the Federal Rules of Civil Procedure for failure to state a claim for relief.

2.

15 U.S.C. § 1692e

"The FDCPA creates a general prohibition against the use of 'false, deceptive, or
misleading representation or means in connection with the collection of any debt."' Miller, 321
13

••

F .3d at 300. 3 "Section 1692e contains a non-exhaustive list of practices within the purview of
this prohibition* * *[,]"ilL including "[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." 15
U.S.C. § 1692e(IO).
"[A] collection notice is deceptive when it can be reasonably read to have two or more
different meanings, one of which is inaccurate." Russell, 74 F.3d at 35; see also Easterling, 692
F.3d at 233 (accord). "The fact that the notice's terminology was vague or uncertain will not
prevent it from being held deceptive under§ 1692e(IO) of the [FDCPA.]" Russell, 74 F.3d at 35.
A collection notice that is "reasonably susceptible to an inaccurate reading" is deceptive within
the meaning of the FDCPA. Id., 74 F.3d at 35.
Like claims under Section 1692g, courts "apply an objective test based on the
understanding of the 'least sophisticated consumer' in determining whether a collection letter
violates section 1692e." Bentley v. Great Lakes Collection Bureay, 6 F.3d 60, 62 (2d Cir. 1993);
see also Easterling, 692 F.3d at 233 ("Whether a collection letter is 'false, deceptive, or
misleading' under the FDCPA is determined from the perspective of the objective 'least
sophisticated consumer."') "Additionally, several* * * circuit courts, as well as a number of
district courts in this Circuit, read a materiality requirement into the FDCPA's prohibition of
false, deceptive, or misleading practices in the collection of a debt." Gabriele v. American Home
Mortgage Servicing. Inc., 503 F. App'x 89,94 (2d Cir. Nov. 27, 2012) (summary order) (citing
3

Section 1692e of the FDCPA provides, in relevant part:
"A debt collector may not use any false, deceptive, or misleading
representation or means in connection with the collection of any
debt."
14

''

cases); see also Vu, 293 F.R.D. at 360 ("Some courts have incorporated a materiality prong into
th[e] analysis" under Section 1692e); Castro, 959 F. Supp. 2d at 710 (accord); Fritz v. Resurgent
Capital Services. LP, 955 F. Supp. 2d 163, 170 (E.D.N.Y. 2013) ("Many courts have read a
materiality requirement into § 1692e.
pronouncement, but it did cite

* * * The Second Circuit has not made an analogous

* * * cases with apparent approval in a recent summary order.

[citing Gabriele, 503 F. App'x at 94]

* * * While Gabriele is not binding precedent, the Court

agrees that only material misrepresentations are actionable under the FDCP A.") "Thus, in
determining whether a plaintiff has stated a claim under § 1692e of the FDCP A, courts have
considered whether the false representations rest on material misrepresentations." Castro, 959 F.
Supp. 2d at 710 (quotations and citation omitted); see also Sussman v. I.C. System. Inc., 928 F.
Supp. 2d 784, 795 (S.D.N.Y. 2013) (accord). "[C]ommunications and practices that could
mislead a putative-debtor as to the nature and legal status of the underlying debt, or that could
impede a consumer's ability to respond to or dispute collection, violate the FDCPA." Gabriele,
503 F. App'x at 94; ~also Fritz, 955 F. Supp. 2d at 170 (accord); Sussman, 928 F. Supp. 2d at
795 (accord). Although "debt collection practices that are contradictory, vague, or threatening
create FDCPA liability as well[,]" Gabriele, 503 F. App'x at 95; see also Sussman, 928 F. Supp.
2d at 795 (accord), "mere technical falsehoods that misle[a]d no one" are insufficient to impose
liability under Section 1692e. Gabriele, 503 F. App'x at 95 (brackets omitted) (quoting Donohue
v. OuickCollect. Inc., 592 F.3d 1027, 1034 (9th Cir. 2010)).
"Debt collectors that violate the FDCPA are strictly liable, meaning that 'a consumer
need not show intentional conduct by the debt collector to be entitled to damages."' Easterling,
692 F.3d at 234 (quoting Russell, 74 F.3d at 33). Moreover, "[a] single violation of§ 1692e is
15

••

sufficient to establish civil liability under the FDCP A." Clomon, 988 F .2d at 1318 (citation
omitted);~

also Bentley, 6 F.3d at 62 (accord).

As noted above, Section 1692g(a)(3) of the FDCPA requires a debt collector to send
consumer debtors a validation notice that contains, inter alia, "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[.]" The Second Circuit
has held that Section 1692g(a)(3) "does not impose a writing requirement." Hooks v. Forman.
Holt. Eliades & Ravin. LLC, 717 F.3d 282, 286 (2d Cir. 2013).
Initially, defendant's contention, in essence, that the June letter does not constitute a
collection activity or communication sent to plaintiff during the thirty (30)-day validation period,
is disingenuous. The last paragraph of the June letter advised plaintiff that "should [she] not
dispute this matter in writing within 30 days of[the May letter], [defendant] will assume that [its]
information is correction and proceed accordingly," thus indicating that the June letter was sent
prior to the expiration of the validation period. If the June letter was sent after the expiration of
the validation period, when plaintiff could not longer dispute the debt, the last paragraph of that
letter would be rendered superfluous.
Although the May letter did not impose a writing requirement upon plaintiff's right to
dispute the debt pursuant to Section 1692g(a)(3), (see Plf. Opp., Ex. A), the June letter indicates,
in relevant part: "Be advised that should you not dispute this matter in writing within 30 days of
our first communication to you, we will assume that our information is correct and proceed
accordingly." (Compl., Ex. B) (emphasis added). "Even when the initial validation notice is
adequate, a defendant 'may still be liable under*** § 1692e(10) if it sends a subsequent
16

communication within the validation period that "overshadows or contradicts" such notice."'
Foti v. NCO Financial Systems. Inc., 424 F. Supp. 2d 643, 660-61 (S.D.N.Y. 2006) (quoting
Barrientos v. Law Offices of Mark L. Nichter, 76 F. Supp. 2d 510,513 (S.D.N.Y. 1999)).
The "operative inquiry" under Section 1692e is whether "the hypothetical least
sophisticated consumer could reasonably interpret" the challenged statement in the June letter to
represent, incorrectly, that a debt dispute must be made in writing. See, ~ Easterling. 692 F .3d
at 234 ("[T]he operative inquiry in this case is whether the hypothetical least sophisticated
consumer could reasonably interpret the Collection Letter's statement that 'Your account is NOT
eligible for bankruptcy discharge,'

* * *, as representing, incorrectly, that the debtor is

completely foreclosed from seeking bankruptcy discharge of the debt in question.") Since the
challenged language in the June letter can reasonably be interpreted by the least sophisticated
consumer as representing, incorrectly, that a debt dispute must be made in writing, the June letter
violates Section 1692e of the FDCPA as a matter oflaw. 4 Accordingly, the branch of
defendant's motion seeking dismissal of plaintiffs claim alleging a violation of 15 U.S.C. §
1692e (second claim for relief) is denied. 5

4

Even if a materiality prong applies to any analysis under Section 1692e, the challenged
statement in the June letter is clearly material since it "could impede a consumer's ability to
respond to or dispute collection." Gabriele, 503 F. App'x at 94.
5

Since, inter alia, plaintiff has not cross-moved for judgment on the pleadings or summary
judgment pursuant to Rules 12(c) and 56 of the Federal Rules of Civil Procedure, and "[a] debt
collector may not be held liable ... if the debt collector shows by a preponderance of evidence
that the violation was not intentional and resulted from a bona fide error notwithstanding the
·maintenance of procedures reasonably adapted to avoid any such error[,]" 15 U.S.C. § 1692k(c),
judgment is not sua sponte granted in favor of plaintiff on this claim.
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C.

Leave to Amend
Plaintiff moves pursuant to Rule 15(a)(2) of the Federal Rules of Civil Procedure for

leave to amend her complaint to allege that defendant violated 15 U.S.C. § 1692g(a)(3) by failing
to include a statement in the May letter 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[.]"
Although Rule 15(a)(2) of the Federal Rules of Civil Procedure provides that a party shall
be given leave to amend "when justice so requires," leave to amend is not required where, inter

alia, a proposed amendment would be futile. See Grullon, 720 F .3d at 140; Anderson News.
L.L.C. v. American Media. Inc., 680 F.3d 162, 185 (2d Cir. 2012), cert. denied sub nom Curtis
Circulation Co. v. Anderson News. L.L.C., 133 S. Ct. 846, 184 L. Ed. 2d 655 (2013). "Futility is
a determination, as a matter of law, that proposed amendments would fail to cure prior
deficiencies or to state a claim under Rule 12(b)(6) of the Federal Rules of Civil Procedure."
Panther Partners. Inc. v. Ikanos Communications. Inc., 681 F.3d 114, 119 (2d Cir. 2012).

"In

assessing whether the proposed [amended] complaint states a claim, [courts] consider the
proposed amendments along with the remainder of the complaint,

* * * accept as true all non-

conclusory factual allegations therein, and draw all reasonable inferences in plaintiffs favor to
determine whether the allegations plausibly give rise to an entitlement to relief." Id.; see also
MetLife Investors USA Ins. Co. v. Zeidm!!!J, 734 F. Supp. 2d 304,311 (E.D.N.Y. 2010), affd,
442 Fed. Appx. 589 (2d Cir. Sept. 19, 2011) ("[A] complaint amendment would be futile only if
the amended complaint would not contain enough allegations of fact to state a claim for relief
that is plausible on its face." (quotations and citation omitted)).
18

·.Section 1692g(a)(3) of the FDCPA requires a validation notice to contain "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[.]"
The validation notice on the front of the May letter provides, in relevant part:
"You are advised that unless you notify the office within 30 days
that you dispute the validity ofthe debt or any portion thereof, we
will assume that this debt is valid. If you notify this office in
writing within 30 days of receipt of this notice, we will obtain
verification of this debt or obtain judgment and mail you a copy of
such judgment or verification. If you request this office in writing
within 30 days of receipt of this notice, we will provide you with
the name and address of the original creditor, if different."
(Compl., Ex. A). In addition, the back ofthe May letter also contains the following validation
notice in bold type:
"UNLESS YOU NOTIFY US THIS OFFICE [sic] 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 TIDS NOTICE, THIS OFFICE
WILL OBTAIN VERIFICATION OF THE DEBT OR OBTAIN A
COPY OF A WDGMENT AND MAIL YOU A COPY OF SUCH
WDGMENT OR VERIFICATION .. [sic] IF XYOU [sic]
REQUEST THIS OFFICE IN WRITING WITHIIN [sic]30
DAAYS [sic] AFTER RECEIVING THIS NOTICE THIS OFFICE
WILL PROVIDE YOU WITH THE NAME AND ADDRESSOF
[sic] THE ORIGINAL CREDITOR, IF DIFFERENT FROM THE
CURRENT CREDITOR. THIS IS AN ATTEMPT TO COLLECT
A DEBT. ANY INFORMATION YOU PROVIDE WILL BE
USED FOR THAT PURPOSE."
(Plf. Opp., Ex. A).
Although the first sentence of the validation notice on the front of the May letter does not
include the phrase "after receipt of the notice" and, thus, is ambiguous,
19

see,~

Jacobson, 516

••

F.3d at 93; McStay, 308 F.3d at 191, it does not affirmatively misstate the consumer's time to
dispute the debt. Cf. Cavallaro v. Law Office of Shapiro & Kreism!ll, 933 F. Supp. 1148, 1151
(E.D.N.Y. 1996) (finding that a validation notice that contained the inaccurate statement that the
consumer could dispute the debt "within thirty (30) days from the date ofth[e] notice" violated
Section 1692g(a)(3)). Even the least sophisticated consumer would understand that the thirty
(30)-day period to dispute the debt commenced when the notice was received since the two (2)
sentences immediately following the challenged sentence on the front of the May letter properly
designate the validation period as "within 30 days of receipt of this notice" and the validation
notice on the back of the letter clearly and accurately indicates three (3) times, in bold capital
letters, that the validation period is "30 days after receiving this notice." (Plf. Opp., Ex. A) (case
converted to lowercase and emphasis omitted). While the first sentence of the validation notice
may be ambiguous as to when the thirty (30)-day period begins, that ambiguity is clarified by five
(5) other sentences in the May letter setting forth clear and accurate statements of the starting
date for the thirty (30)-day validation period.

See,~

Jacobson, 516 F.3d at 93 (rejecting the

argument that a statement in a collection notice indicating that further action would be taken
unless payment or a notice of dispute was submitted "within 30 days," without specifYing when
the period starts, casted doubt on the starting day for the thirty-day period to dispute a debt
because the validation notice, which contained a clear and accurate statement of the starting date,
clarified any possible ambiguity created by that sentence);McStay, 308 F.3d at 191 (finding that
a collection notice that included the statement, "Please be advised that if after 30 days your
account is not paid in full or otherwise closed, the account information will be forwarded to the
National Credit Reporting Agencies" was ambiguous, but that "any confusion created by the
20

•

•'
ambiguity on the front of the letter dissipate[d] when read in conjunction with the language on
the back," which stated three times that the thirty (30)-day time period begins "after receiving
this notice.") Since "[e]ven the least sophisticated consumer, reading the [May letter] in its
entirety, would understand that the thirty-day dispute period started running from the day she
received the letter[,]" Jacobson, 516 F .3d at 93, plaintiff cannot state a plausible claim that the
May letter violated Section 1692g(a)(3) of the FDCPA. Accordingly, plaintiff's application
seeking leave to amend the complaint to add a claim that the May letter violated Section
1692g(a)(3) of the FDCPA is denied on the basis that the proposed amendment is futile.

III.

Conclusion
For the reasons set forth above, (1) the branch of defendant's motion seeking dismissal of

plaintiffs claim alleging violations of 15 U.S.C. § 1692g pursuant to Rule 12(b)(6) of the
Federal Rules of Civil Procedure is granted, plaintiff's claim alleging violations of 15 U.S.C. §
1692g (first claim for relief) is dismissed in its entirety with prejudice for failure to state a claim
for relief, and defendant's motion is otherwise denied; and (2) plaintiff's application for leave to
amend the complaint pursuant to Rule 15(a)(2) of the Federal Rules of Civil Procedure is denied
on the basis that the proposed amendment is futile.
SO ORDERED.

s/ Sandra J. Feuerstein
I Sandra J. Fbderstein
United States District Judge

Dated: September 17,2014
Central Islip, New York

21