Duran v. Midland Credit Management, Inc.
Filing
26
OPINION AND ORDER: For the foregoing reasons, IT IS HEREBY ORDERED THAT Defendant's motion to dismiss Plaintiffs second amended complaint is DENIED, except to the extent it seeks the dismissal of the alleged violations of Sections 1692c(b) and 1692f of the FDCPA. The Clerk of the Court is respectfully directed to terminate the motion pending at docket number 15. IT IS FURTHER ORDERED THAT the discovery stay in this matter is lifted. The parties shall submit a proposed case management pl an and scheduling order by July 7, 2016. A template for the order is available at: http://www.nysd.uscourts.gov/cases/show.php?db=judge info&id= 1059. (As further set forth in this Order.) (As further set forth in this Order.) (Signed by Judge Richard J. Sullivan on 6/30/2016) (cf)
UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK
USDSSDNY
DOCUMENT
ELECTRONICALLY FILED
DOC#:~~~--,,--~~
DATE FILED:
"2/3 oj /~
JONATHAN DURAN,
Plaintiff,
No. 15-cv-5940 (RJS)
OPINION AND ORDER
-v-
MIDLAND CREDIT MANAGEMENT, INC.,
Defendant.
RICHARD J. SULLIVAN, District Judge:
Plaintiff Jonathan Duran brings this action under the Fair Debt Collection Practices Act,
15 U.S.C. § 1692 et seq. ("FDCPA"), alleging that Defendant Midland Credit Management, Inc.,
violated Sections 1692c(b), 1692c(a)(l), and 1692f of the FDCPA when it mailed a debt collection
letter to Plaintiff at the address of Plaintiffs brother, where Plaintiff has never resided . Now before
the Court is Defendant's motion to dismiss Plaintiffs second amended complaint (Doc. No. 13
(" Compl.")) pursuant to Federal Rule of Civil Procedure 12(b)(6) for failure to state a claim upon
which relief can be granted. (Doc. No. 15.) For the reasons set forth below, Defendant's motion
is denied, except to the extent it seeks the dismissal of the alleged violations of Sections l 692c(b)
and l 692f of the FDCPA.
I. BACKGROUND 1
The alleged facts are straightforward. Defendant is a Kansas corporation registered to do
business in New York, and its principal purpose is the collection of debts. (Compl.
~~
4- 5.) On
November 21 , 2014, Defendant sent a letter to Plaintiff, a resident of the Bronx, in an attempt to
collect a debt Plaintiff allegedly owed to Citibank.
(Id~~
3, 6-7.) Defendant addressed the letter
to Plaintiff by name but mailed it to the address of Plaintiff's brother, Jose Duran, who also resides
in the Bronx. (Id.
~
6.) Plaintiff has never resided at his brother's address, never gave that address
to Citibank or to Defendant, has never had a credit account that used that address, and has never
had a joint credit account with his brother. (Id.
~
9.) Prior to sending the November 21, 2014
letter, Defendant had sent correspondence to Plaintiff's correct address. (Id.
~
8.) Based on these
alleged facts, Plaintiff asserts that Defendant "knew" or "should have known" that the address to
which it mailed the November 21 , 2014 letter was not Plaintiff's address.
(Id. ~
IO.)
Plaintiff's brother opened the letter and, upon reviewing it, learned that Plaintiff allegedly
owed a debt to Citibank. (Id.
~
7.) As a result, Plaintiff's brother concluded that Plaintiff had
incurred the debt after fraudulently opening a credit card account in his name.
(Id.~
12.) Although
Plaintiff's brother eventually verified that the Citibank account was not listed on his own credit
reports and accepted that Plaintiff had not opened a credit card account in his name (id.), Plaintiff
alleges that Defendant's actions "strain[ed] [Plaintiff's] relationship with his brother, caus[ed] him
emotional distress and embarrassment, and damag[ed] his reputation" (id.
~
13).
1
The following facts, unless otherwise noted, are drawn from the second amended complaint. (Doc. No. 13.) See
ATS! Commc 'ns, Inc. v. Shaar Fund, Ltd., 493 F.3d 87, 98 (2d C ir. 2007). In resolving Defendant 's motion, the Court
has also considered Defendant's memorandum of law in support of the motion to dismiss (Doc. No. 16 ("Def. Mem .")),
Plaintiffs memorandum of law in opposition to the motion (Doc. No. 20 ("Pl. Opp.")), and Defendant's reply (Doc.
No. 21 ("Def. Reply")). Because the Court must accept Plaintiff's well-pleaded factual allegations as true and draw
all reasonable inferences from those allegations in Plaintiffs favor, see ATS! Commc'ns, 493 F.3d at 98, the Court
does not consider Defendant's " Statement of Material Facts Not in Dispute" (Doc. No. 16-1 ), which in any event
simply restates certain allegations from the second amended complaint (see id. ~if 1- 3 (citing Comp!. if~ 6- 13)).
2
Plaintiff initiated this action by filing a complaint on July 29, 20I 5. (Doc. No. I.)
Thereafter, Plaintiff filed his first amended complaint on September 8, 2015 (Doc. No. I I), and,
following an initial conference on September 9, 20I5, filed his second amended complaint on
September 25, 20 I 5 (Doc. No. 13). As noted above, Plaintiff alleges that Defendant violated
Sections I 692c(b), I 692c(a)(l ), and I 692f of the FDCPA by mailing a debt collection letter to
Plaintiff at the address of Plaintiffs brother, where Plaintiff has never resided. (Id.
iii! I 8- 20.)
On
October 8, 20 I 5, Defendant filed the instant motion to dismiss the second amended complaint.
(Doc. No. 14.) Defendant argues that dismissal is appropriate because Plaintiffs brother violated
federal criminal law when he opened the November 2I, 2014 letter, and thus it was Plaintiffs
brother's criminal conduct - not Defendant's alleged violations of the FDCPA - that caused
Plaintiffs alleged damages. (Def. Mem. at 2.) Defendant also argues that mailing a debt collection
letter to the correct addressee but to an improper address does not constitute a violation of the
FDCPA. (Id. at 7.)
II. LEGAL STANDARD
To survive a motion to dismiss pursuant to Federal Rule of Civil Procedure 12(b)(6), a
complaint must "provide the grounds upon which (the] claim rests." ATS! Commc 'ns, 493 F.3d at
98; see also Fed. R. Civ. P. 8(a)(2) ("A pleading that states a claim for relief must contain ... a
short and plain statement of the claim showing that the pleader is entitled to relief .... "). To meet
this standard, a plaintiff must allege "enough facts to state a claim to relief that is plausible on its
face." Bell At!. Corp. v. Twombly, 550 U.S. 544, 570 (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 (2009).
In reviewing a Rule 12(b)(6) motion, a court must accept as true all factual allegations in the
complaint and draw all reasonable inferences in favor of the plaintiff. ATS! Commc 'ns, 493 F.3d
3
at 98. However, that tenet "is inapplicable to legal conclusions." Iqbal, 556 U.S. at 678. Thus, a
pleading that offers only "labels and conclusions" or "a formulaic recitation of the elements of a
cause of action will not do." Twombly, 550 U.S. at 555. If the plaintiff "ha[s] not nudged [his]
claims across the line from conceivable to plausible, [his] complaint must be dismissed." Id. at
570.
Ill.
DISCUSSION
Congress passed the FDCPA to "'eliminate abusive debt collection practices by debt
collectors, to insure that those debt collectors who refrain from using abusive debt collection
practices are not competitively disadvantaged, and to promote consistent State action to protect
consumers against debt collection abuses."' Avila v. Riexinger & Assocs., LLC, 817 F.3d 72, 75
(2d Cir. 2016) (quoting 15 U.S.C. § 1692(e)). Accordingly, the Second Circuit has '"consistently
interpreted the statute with these congressional objects in mind,"' id. (quoting Jacobson v.
Healthcare Fin. Servs. , Inc., 516 F.3d 85, 95 (2d Cir. 2008) (brackets omitted)), and '" in liberal
fashion to achieve the underlying Congressional purpose,"' id. (quoting Vincent v. Money Store,
736 F.3d 88, 98 (2d Cir. 2013) (brackets omitted)). Of course, as with any statute, the Court's
interpretation of the FDCPA "begin[s] with [the statute's] language and proceed[s] under the
assumption that the statutory language, unless otherwise defined, carries its plain meaning." Chen
v. Major League Baseball Props., Inc. , 798 F.3d 72, 76 (2d Cir. 2015). Thus, the Court begins by
"consider[ing] the ordinary, common-sense meaning of the words used in the statute," and,
" [a]bsent ambiguity, interpretation of the statute will generally end there." Id. (internal quotation
marks omitted).
A. Section 1692c(b)
Plaintiffs principal claim is that Defendant violated Section 1692c(b) of the FDCPA by
mailing a single debt collection letter bearing Plaintiffs name to Plaintiffs brother's address.
4
(Compl. ~ 18.) Section l 692c(b) prohibits debt collectors from communicating with parties other
than the consumer, as follows:
Except as provided in section l 692b of this title, without the prior
consent of the consumer given directly to the debt collector, or the
express permission of a court of competent jurisdiction, or as
reasonably necessary to effectuate a postjudgment judicial remedy,
a debt collector may not communicate, in connection with the
collection of any debt, with any person other than the consumer, his
attorney, a consumer reporting agency if otherwise pennitted by
law, the creditor, the attorney of the creditor, or the attorney of the
debt collector.
15 U.S.C. § 1692c(b). Defendant argues that dismissal of Plaintiffs Section 1692c(b) claim is
appropriate because the November 21, 2014 letter "was properly addressed to the [P]laintiff," and
Plaintiffs brother only learned of Plaintiffs alleged debt after he violated federal criminal law by
opening an envelope that was not addressed to him. (Def. Mem. at 2.)
But whether or not Plaintiffs brother committed a crime by opening Plaintiffs mail, the
Court concludes that Defendant did not "communicate ... with" Plaintiffs brother as required by
Section l 692c(b). Section 1692c(b) uses the verb "communicate" intransitively; in other words,
without an object. The Merriam-Webster Online Dictionary defines "communicate," in the only
intransitive definition applicable here, as "to transmit infonnation, thought, or feeling so that it is
satisfactorily
received
or
understood."
Merriam-Webster
Online
Dictionary,
http://www.merriam-webster.com/dictionary/communicate (last visited June 29, 2016).
This
definition implies a degree of intent on the part of the communicator that his communication will
be received or understood by another.
Furthermore, Section 1692c(b)'s use of the phrase
"communicate ... with" makes explicit that the debt collector must to some degree intend that his
communication will be received or understood by someone "other than the consumer" or a
permissible third party. Based on these considerations, the Court concludes that a debt collector
who addresses a sealed envelope to a consumer, as Defendant did here, does not "communicate
5
... with any person other than the consumer" "in connection with the collection of a debt," except
to the extent the envelope itself reveals that the mailing is "in connection with the collection of a
debt." 15 U.S.C. § 1692c(b). A broader interpretation of "communicate with" would stretch that
phrase beyond its plain meaning and subject debt collectors to potential FDCP A liability when a
debt collector sends a letter to the consumer at the correct address, but a third party, for example,
steals the Jetter in violation of federal criminal law, receives the Jetter due to a mistake by the post
office, or cohabitates with the consumer and physically receives the Jetter.
It would be
unreasonable to construe "communicate with" so broadly as to encompass the accidental
transmittal of information to an eavesdropper or interceptor. It simply cannot be said that John
Gotti "communicated with" the law enforcement agents who were listening to his phone calls via
wiretap, or that the Nazis "communicated with" the Allies when the Allies cracked the Enigma
code. While the FDCPA was passed to "eliminate abusive debt collection practices" and must be
construed "in liberal fashion to achieve the underlying Congressional purpose," Avila, 817 F.3d at
75, that tenet does not support liberality to the point of absurdity.
The Court's interpretation of "communicate ... with any person other than the consumer"
is consistent with most of the handful of decisions identified in the parties' briefs, and by the
Court's own research, that have interpreted this clause in the context of mail addressed solely to
the consumer but sent to an incorrect address. See Strouse v. Enhanced Recovery Co., 956 F. Supp.
2d 627, 634-35 (E.D. Pa. 2013) (granting summary judgment because defendant "addressed all its
communications to either [plaintiff] or counsel," and thus mailings delivered to plaintiffs parents'
home "d[id] not qualify as communications with a third party" in violation of Section 1692c(b));
Moore v. Fein, Such, Kahn & Shepard, P.C. , No. 12-cv-1 157 (JLL), 2012 WL 3945539, at *2-3
(D.N.J. June 13, 20 12) (dismissing Section 1692c(b) claim where plaintiff had not alleged that a
6
letter addressed to her but mailed to her father's address "gave an indication to her father that the
'communication' was one concerning a debt"); Segal v. Nat'/ Action Fin. Servs. , Inc., No. 04-cv2388 (JSM), 2006 WL 449176, at *7 (M.D. Fla. Feb. 22, 2006) (granting summary judgment
because "[t]he act of sending one letter addressed to a consumer but sent to the wrong address does
not alone appear to indicate a violation by [d]efendant of [Section] l 692c(b)," where "[t]he record
is devoid of evidence as to any other indicators on the envelope that would have 'communicated'
to a third party that such letter was connected with the collection of a debt against [plaintiff]"); see
also Davis v. Phelan Hallinan & Diamond, PC, No. 15-cv-3621 (RBK), 2016 WL 1078166, at
*5 (D.N.J. Mar. 18, 2016) (observing that, "[e]ven if the letters were delivered to" third-party
addresses, the letters "[we]re still not properly considered communications" because they "were
addressed to [p]laintiff only, and there [wa]s no indication that the envelopes in which the letters
were sent contained any information which would indicate the [letters] were in connection with
debt"), appeal docketed, No. 16-1952 (3d. Cir. Apr. 19, 2016). 2 The Court's interpretation is also
consistent with Federal Trade Commission commentary on Section l 692c(b) of the FDCPA,
which, although not binding on the Court, distinguishes between an envelope that displays
information about a debt and an envelope that does not. See Statements of General Policy or
2
In light of the Court's interpretation of "communicate with," the Court finds unpersuasive the two decisions relied
on by Plaintiff that sustained Section 1692c(b) claims based on mailings addressed to the consumer but sent to
incorrect addresses, see Burnside v. AFNI, Inc., No. I 3-cv-2957 (RWG), 2013 WL 5718438, at *2 (N.D. 111. Oct. 21,
2013) (holding that "a letter bearing plaintiffs name but the street address of plaintiffs parents c[ ould] be considered
a communication under the meaning of the [FDCPA)" because the mere fact that "the letter bore plaintiff's name and
not his parents' does not negate the fact that a third party learned of plaintiff's alleged debt" after defendant mailed a
letter to that third party's address); Schwinn v. Shapiro & Ingle, LLP, 12-cv-5 (LWF), 2013 WL 1010457, at *1 , 4-5
(E.D.N.C. Mar. 13, 2013) (holding that plaintiff had pied a violation of Section 1692c(b) because " there [wa]s no
allegation in the complaint to support an inference that defendant simply used the wrong address where defendant
mailed the letter to plaintiff at three addresses, one of which being plaintiffs residence and the other two being
addresses of plaintiff's relatives"), though the allegations in those cases may have supported a claim under Section
I 692c(a)( I), as similar allegations do here, see Section 111.B below. The remaining decision on which Plaintiff relies
for his Section J692c(b) claim is distinguishable from the facts alleged here. See Evon v. law Offices of Sidney
Mickell, 688 F.3d 101 5, 1019, 1024-26 (9th Cir. 20 12) (holding that defendant violated Section 1692c(b) by
"sen[ding] a debt collection letter addressed directly to [p]laintiff ... in 'care of' her employer").
7
Interpretation Staff Commentary on the Fair Debt Collection Practices Act, 53 Fed. Reg. 50097,
50104 (Dec. 13, 1988) ("A debt collector may not send a written message that is easily accessible
to third parties. For example, he may not use a computerized billing statement that can be seen on
the envelope itself."). Applying the Court's interpretation of "communicate with" as set forth
above, the Court finds that Defendant did not "communicate ... with any person other than"
Plaintiff"in connection with the collection of a debt" when it allegedly addressed a sealed envelope
to Plaintiff, included no information on the envelope itself concerning a debt, but sent that envelope
to Plaintiffs brother's address, where Plaintiff does not reside. Accordingly, the Court grants
Defendant's motion to dismiss as to Plaintiffs Section 1692c(b) claim.
B. Section 1692c(a)(l)
The Court reaches a different conclusion on Plaintiffs Section l 692c( a)(l) claim, which
is based on the same factual allegations underlying Plaintiffs Section 1692c(b) claim. Section
1692c(a)(l) prohibits debt collectors from communicating with consumers at an "unusual" or
"inconvenient" time or place, as follows:
Without the prior consent of the consumer given directly to the debt
collector or the express permission of a court of competent
jurisdiction, a debt collector may not communicate with a consumer
in connection with the collection of any debt ... at any unusual time
or place or a time or place known or which should be known to be
inconvenient to the consumer. In the absence of knowledge of
circumstances to the contrary, a debt collector shall assume that the
convenient time for communicating with a consumer is after 8
o'clock antemeridian and before 9 o'clock postmeridian, local time
at the consumer's location ....
15 U.S.C. § l 692c(a)(l). By alleging that Defendant- after sending correspondence to Plaintiffs
correct address - sent correspondence to Plaintiff at Plaintiffs brother's address, where Plaintiff
does not reside (Compl.
iii! 6, 8- 10), Plaintiff has sufficiently pied that Defendant communicated
8
with him at an "unusual . . . place or a . . . place known or which should be known to be
inconvenient to" Plaintiff. 15 U.S.C. § 1692c(a)(l ).
Defendant's arguments in favor of dismissal are unavailing. First, Defendant asserts that
its "records reflect that it sent the November 21, 2014 letter to the [P]laintiff ... at an address the
[D]efendant ... believed was the correct address for him." (Def. Mem. at 7.) While this argument,
if supported by the evidence, may ultimately carry the day on summary judgment or at trial in light
of the affirmative defense provided by Section 1692k(c) of the FDCPA, see Russell v. Equifax
A.R.S., 74 F.3d 30, 33-34 (2d Cir. 1996) ("a debt collector may escape liability if it can
demonstrate by a preponderance of the evidence that its 'violation [of the FDCPA] was not
intentional and resulted from a bona fide error notwithstanding the maintenance of procedures
reasonably adapted to avoid any such error"' (quoting 15 U.S.C. § 1692k(c))), this is an affirmative
defense based on Defendant's own assertions outside the second amended complaint and thus
cannot be considered on a motion to dismiss, see Roth v. Jennings, 489 F.3d 499, 509 (2d Cir.
2007) ("In considering a motion under [Rule] 12(b)(6) ... , the district court is normally required
to look only to the allegations on the face of the complaint.").
Second, Defendant asserts that it did not communicate with Plaintiff at an "unusual" or
"inconvenient" time because "no communication would have taken place but for the improper
conduct of the [P]laintiffs brother in violation of federal law." (Def. Mem. at 9.) But the fact that
Plaintiffs brother opened the letter, improperly or not, has no bearing on the alleged facts
supporting Plaintiffs Section 1692c(a)(l) claim: if Plaintiff's brother had simply delivered the
envelope to Plaintiff without opening it, Defendant still would have communicated with Plaintiff
by mailing a letter to Plaintiffs brother's residence - an "unusual" or "inconvenient" place.
9
Third, Defendant asserts that "[P]laintiff did not respond to two prior letters sent to his
correct address regarding his outstanding debt obligation" and therefore "cannot be rewarded for
ignoring initial communications at his home." (Def. Reply at 6.) But it is Congress's role, not the
Court's, to make the policy decision that, notwithstanding the protections of the FDCPA, a
consumer "cannot be rewarded" for certain conduct. Defendant points to no provision in the
FDCPA - and the Court is aware of none - that entitles a debt collector to communicate with a
consumer at an " unusual" or "inconvenient" time if the consumer has "ignor[ed] initial
communications at his home." (Id.) Defendant's policy argument is thus misplaced and fails as a
basis for dismissing the second amended complaint. Accordingly, Defendant's motion to dismiss
must be denied as to Plaintiffs Section 1692c(a)(l) claim.
C. Section 1692f
Finally, Plaintiff claims that Defendant violated Section 1692f (Compl.
if 20), which
generally prohibits debt collectors from "us[ing] unfair or unconscionable means to collect or
attempt to collect any debt," see 15 U.S.C. § 1692f. "Eight subsections [of Section 1692f] list
certain practices that violate the section[;] however, conduct that may be deemed ' unfair or
unconscionable' is not limited to the acts enumerated in [those] subsections .... " Foti v. NCO
Fin. Sys., Inc., 424 F. Supp. 2d 643, 667 (S.D.N.Y. 2006) (internal quotation marks omitted).
"Instead, [Section] l 692f allows the court to sanction improper conduct that the FDCPA fails to
address specifically." Id. (internal quotation marks omitted). However, "' [w]here the allegations
do not identify any misconduct beyond that which plaintiff asserts violates other provisions of the
FDCPA, plaintiff has not stated a claim for relief under [S]ection 1692f. ' " See Ghulyani v.
Stephens & Michaels Assocs. , Inc., No. 15-cv-5191 (SAS), 2015 WL 6503849, at *2 (S.D.N.Y.
Oct. 26, 2015) (quoting Suquilanda v. Cohen & Slamowitz, LLP, No. 10-cv-5868 (PKC), 2011
WL 4344044, at *9 (S.D.N.Y. Sept. 8, 2011)); see also Sussman v. J.C. Sys., Inc., 928 F. Supp. 2d
IO
784, 797 (S.D.N.Y. 2013) (same); Foti, 424 F. Supp. 2d at 667 (same). Since Plaintiffs Section
l 692f claim is based entirely on the alleged conduct underlying his claims under Sections 1692c(b)
and l692c(a)(l), the Court dismisses the Section 1692f claim.
IV. CONCLUSION
For the foregoing reasons, IT IS HEREBY ORDERED THAT Defendant's motion to
dismiss Plaintiffs second amended complaint is DENIED, except to the extent it seeks the
dismissal of the alleged violations of Sections l 692c(b) and 1692f of the FDCPA. The Clerk of
the Court is respectfully directed to terminate the motion pending at docket number 15. IT IS
FURTHER ORDERED THAT the discovery stay in this matter is lifted. The parties shall submit
a proposed case management plan and scheduling order by July 7, 2016. A template for the order
is available at: http://www.nysd.uscourts.gov/cases/show.php?db=judge_info&id= 1059.
SO ORDERED.
Dated:
June 30, 2016
New York, New York
UNITED STATES DISTRICT JUDGE
11
Disclaimer: Justia Dockets & Filings provides public litigation records from the federal appellate and district courts. These filings and docket sheets should not be considered findings of fact or liability, nor do they necessarily reflect the view of Justia.
Why Is My Information Online?