Gissendanner v. Enhanced Recovery Company, LLC
Filing
27
DECISION AND ORDER finding as moot 21 Motion to Certify Class; granting 22 Motion to Dismiss; finding as moot 22 Motion to Stay; granting 22 Motion for Judgment on the Pleadings. Signed by Hon. Michael A. Telesca on 12/06/18. (AFB)-CLERK TO FOLLOW UP-The Clerk of Court is directed to close this case.
UNITED STATES DISTRICT COURT
WESTERN DISTRICT OF NEW YORK
ANDREW GISSENDANER, individually
and on behalf of all others
similarly situated
No. 6:18-cv-06158(MAT)
DECISION AND ORDER
Plaintiff,
-vsENHANCED RECOVERY COMPANY, LLC,
Defendant.
I.
Introduction
Represented by counsel, Andrew Gissendanner (“Plaintiff”)
instituted this action alleging a violation of the Fair Debt
Collection Practices Act, 15 U.S.C. § 1692, et seq. (“the FDCPA”)
against Enhanced
Recovery
Company,
LLC
(“Defendant”).
Pending
before the Court are Plaintiff’s Motion for Class Certification
(Docket No. 21) and Defendant’s Cross-Motion for Judgment on the
Pleadings or to Stay the Proceeding (Docket No. 22). For the
reasons discussed below, the Court grants Defendant’s Cross-Motion
for Judgment on the Pleadings, denies Plaintiff’s Motion for Class
Certification, and denies as moot Defendant’s alternative request
to stay.
II.
Factual Background and Procedural History
The factual background of this case is simple, and consists of
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a single letter dated February 5, 2018 (“the Collection Notice”),
sent to Plaintiff by Defendant for purpose of collecting a debt
owed on a credit card. The Collection Notice indicated in part that
“[u]pon receipt of [Plaintiff’s] payment and clearance of funds in
the amount of $2,562.06, [Plaintiff’s] account will be considered
paid in full.” Docket No. 1-3. Plaintiff claims that the following
two
statements
in
the
Collection
Notice
are
misleading
and
therefore violative of the FDCPA: (1) “Interest Accrued: N/A” and
(2)
“Non-interest
Charges
&
Fees:
N/A.”
Based
on
these
two
statements, Plaintiff filed his Complaint alleging that Defendant’s
Collection Notice was in violation of 15 U.S.C. § 1692e. Defendant
answered the Complaint, and the parties engaged in an unsuccessful
mediation session.
Plaintiff
subsequently
filed
a
motion
seeking
class
certification and proposing to act as a representative of a class
consisting of natural persons who reside in New York and who,
within one year prior to the filing of this action, received a
letter from
Defendant
in substantially
the
same
form
as
the
February 5, 2018 letter Plaintiff received, in which Defendant was
collecting on a credit card debt.
Defendant filed a cross-motion for judgment on the pleadings
pursuant to Rule 12(c) of the Federal Rules of Civil Procedure
(“Rule 12(c)”). Plaintiff opposed the Rule 12(c) motion but did not
object to staying the action pending the Court’s decision on the
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Rule 12(c) motion. Defendant filed a reply brief.
III. Discussion
A.
Rule 12(c)
Rule 12(c) provides that “after the pleadings are closed but
within such time as not to delay the trial, any party may move for
judgment on the pleadings.” Fed. R. Civ. P. 12(c). “Judgment on the
pleadings is appropriate where material facts are undisputed and
where a judgment on the merits is possible merely by considering
the contents of the pleadings.” Sellers v. M.C. Floor Crafters,
Inc., 842 F.2d 639, 642 (2d Cir. 1988) (citing National Fidelity
Life Ins. Co. v. Karaganis, 811 F.2d 357, 358 (7th Cir. 1987) (“The
court may consider only matters presented in the pleadings and must
view the facts in the light most favorable to the nonmoving
party.”)).
B.
The FDCPA
Under the FDCPA, a “debt collector may not use any false,
deceptive, or misleading representation or means in connection with
the collection of any debt.” 15 U.S.C. § 1692e (“§ 1692e”). In
particular,
a
debt
collector
may
not
falsely
represent
“the
character, amount, or legal status of any debt.” Id. § 1692e(2).
Nor may a debt collector “use . . . any false representation or
deceptive means to collect or attempt to collect any debt or to
obtain information concerning a consumer.” Id. § 1692e(10).
When determining whether § 1692e has been violated, the court
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applies
“an
objective
standard,
measured
by
how
the
‘least
sophisticated consumer’ would interpret the notice received from
the debt collector . . . .” Russell v. Equifax A.R.S., 74 F.3d 30,
34 (2d Cir. 1996) (citing
Clomon v. Jackson, 988 F.2d 1314, 1318
(2d Cir. 1993); Bentley v. Great Lakes Collection Bureau, 6 F.3d
60,
62
(2d
Cir.
sophisticated
1993)).
consumer—‘one
This
test
not
“ask[s]
having
the
how
the
astuteness
least
of
a
‘Philadelphia lawyer’ or even the sophistication of the average,
everyday, common consumer’—would understand the collection notice.”
Avila v. Riexinger & Assocs., LLC, 817 F.3d 72, 75 (2d Cir. 2016)
(quoting
Russell,
74
F.3d
at
34).
“Under
this
standard,
a
collection notice can be misleading if it is ‘open to more than one
reasonable interpretation, at least one of which is inaccurate.’”
Avila,
817
F.3d
at
75
(quoting
Clomon,
988
F.2d
at
1319).
Nonetheless, the Second Circuit “has been careful not to conflate
lack of sophistication with unreasonableness.” Ellis v. Solomon &
Solomon, P.C., 591 F.3d 130, 135 (2d Cir. 2010). Thus, “even the
‘least
sophisticated
consumer’
can
be
presumed
to
possess
a
rudimentary amount of information about the world and a willingness
to read a collection notice with some care.” Clomon, 988 F.2d at
1318–19.
C.
Plaintiff Has Failed to Allege a False or Deceptive Debt
Collection Practice
Plaintiff argues that the following two statements in the
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Collection Notice sent by Defendant are materially misleading under
§ 1692e: “Interest Accrued: N/A” and “Non-interest Charges & Fees:
N/A.” According to Plaintiff, because every debt accrues interest,
it is misleading for Defendant to make these two statements because
the least sophisticated consumer could be led to think that his or
her debt had never accrued interest. Defendant responds that the
two statements are true, insofar as Plaintiff’s debt did not accrue
interest, charges, or fees, once it was placed into collection.
Defendant asserts that Plaintiff erroneously has ignored clear
language in the Collection Notice stating unambiguously that if
Plaintiff paid the amount of the “balance due” indicated therein,
his
debt
would
have
been
satisfied.
Defendant
argues
that
Plaintiff’s claim is governed by the Second Circuit’s recent cases,
Taylor v. Fin. Recovery Servs., Inc., 886 F.3d 212 (2d Cir. 2018),
and Avila, 817 F.3d 72, supra.
In Avila, the Second Circuit held that a collection letter
must disclose that a debt is accruing interest—if such interest is
actually accruing. Avila, 817 F.3d at 76-77; see also id. at 74
(“The question presented is whether a collection notice that states
a consumer’s ‘current balance,’ but does not disclose that the
balance may increase due to interest and fees, complies with this
provision. We hold that Section 1692e requires debt collectors,
when they notify consumers of their account balance, to disclose
that
the
balance
may
increase
due
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to
interest
and
fees.”).
Following Avila, lack of uniformity existed among the district
courts on the issue of whether a debt collector must expressly
state when interest is not accruing. Maleh v. United Collection
Bureau,
Inc.,
287
F.
Supp.3d
265,
272
n.5
(E.D.N.Y.
2018)
(collecting cases). The Second Circuit’s recent decision, Taylor,
886 F.3d 212, supra, answered the question left open by Avila in
the negative.
The plaintiffs in Taylor, relying on Avila, argued that the
defendant’s collection notices were misleading because the least
sophisticated consumer could have interpreted them to mean either
that interest and fees on the debts in question were accruing or
that interest and fees were not accruing. Id. at 214. In effect,
the plaintiffs argued, “a debt collector commits a per se violation
of Section 1692e whenever it fails to disclose whether interest or
fees are accruing on a debt.”
Id.
The Taylor panel rejected this argument and distinguished
Avila,
stating
that
the
collection
notice
in
that
case
was
“misleading because ‘[a] reasonable consumer could read the notice
and be misled into believing 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
(citing Avila, 817 F.3d at 76). In fact, one of the plaintiffs in
Avila paid the balance stated on the collection notice only to
learn that she still owed an unpaid balance that was accumulating
-6-
interest at an exorbitant rate. Id. (citing Avila, 817 F.3d at 76).
Thus, in Avila, “[t]he debt collector could[—and did—] still seek
the interest and fees that accumulated after the notice was sent
but before the balance was paid,” as well as any interest or fees
that accumulated thereafter. Id. (quoting Avila, 817 F.3d at 76).
This rendered the language of the notice misleading.
In Taylor, however, the collection notices did not discuss
interest or fees but did state the amounts of the respective
balances due by the plaintiffs. Therefore, these notices could have
been read to mean that prompt payment of the amounts stated would
satisfy the debts in question. Taylor, 886 F.3d at 214. While this
message “was prejudicially misleading on the facts of Avila, on the
facts of [Taylor] it was accurate: prompt payment of the amounts
stated in [the plaintiffs’] notices would have satisfied their
debts.” Id.
Thus, Taylor held, it is not misleading “within the
meaning of Section 1692e for a debt collection letter to state the
amount of a debt without disclosing that the debt, which once
accrued interest or fees, no longer does so.” Id. at 213.
The
Second
Circuit
summarized
its
holding
in
Taylor
follows:
[I]f a collection notice correctly states a consumer’s
balance without mentioning interest or fees, and no such
interest or fees are accruing, then the notice will
neither be misleading within the meaning of Section
1692e, nor fail to state accurately the amount of the
-7-
as
debt under Section 1692g.1 If instead the notice contains
no mention of interest or fees, and they are accruing,
then the notice will run afoul of the requirements of
both Section 1692e and Section 1692g.
Taylor, 886 F.3d at 215. Here, the Collection Notice received by
Plaintiff “correctly state[d],” id., his balance without mentioning
interest or fees. However, as he admits, “no such interest or
[were] accruing[.]” Id.
Plaintiff’s case is governed by Taylor,
and Plaintiff has supplied no convincing reason why the Court
should
find
Taylor
distinguishable.
Therefore,
under
Taylor,
Defendant’s Collection Notice was not misleading within the meaning
of Section 1692e. Id. Plaintiff’s FDCPA claim accordingly lacks
merit.
IV.
Conclusion
For
Judgment
the
on
foregoing
the
reasons,
Pleadings
is
Defendant’s
granted,
and
Cross-Motion
the
Complaint
for
is
dismissed. Plaintiff’s Motion for Class Certification is denied as
moot. Defendant’s alternative request to stay the case likewise is
denied as moot.
SO ORDERED.
S/ Michael A. Telesca
HON. MICHAEL A. TELESCA
United States District Judge
Dated:
December 6, 2018
Rochester, New York
1
Plaintiff here does not raise a claim under Section 1692g of the FCDPA.
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