TEPPER et al v. AMOS FINANCIAL, LLC

Filing 51

DECISION SIGNED BY HONORABLE J. CURTIS JOYNER ON 8/9/17. 8/11/17 ENTERED AND COPIES E-MAILED.(ti, )

IN THE UNITED STATES DISTRICT COURT
FOR THE EASTERN DISTRICT OF PENNSYLVANIA

JAMES TEPPER and
ALLISON TEPPER,
Plaintiffs,
v.
AMOS FINANCIAL, LLC,
Defendant.

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CIVIL ACTION
NO. 15-cv-5834

DECISION
Joyner, J.

August 9, 2017

This action, which Plaintiffs brought pursuant to the Fair
Debt Collection Practices Act (“FDCPA”), 15 U.S.C. § 1692, et
seq., was tried non-jury before the undersigned on April 5, 2017.
The parties have submitted their proposed factual findings and
legal conclusions and the matter is now ripe for adjudication.
Having carefully considered all of the evidence, we now make the
following:
FINDINGS OF FACT
1.

Plaintiff James Tepper (“Mr. Tepper”) is an adult

individual and citizen of the Commonwealth of Pennsylvania
residing at 2111 Spring Garden Street, Philadelphia,
Pennsylvania.
2.

(N.T. 4/5/17, at p. 7).

Plaintiff Allison Tepper (“Ms. Tepper”) is an adult

individual and citizen of the Commonwealth of Pennsylvania also
residing at 2111 Spring Garden Street, Philadelphia,

Pennsylvania.
3.

Ms. Tepper is married to Mr. Tepper.

Plaintiffs own the home at 2111 Spring Garden Street

(the “Tepper Residence”).
4.

Id.

Id.

Defendant Amos Financial, LLC (“Amos”) is a limited

liability company existing and operating under the laws of the
State of Illinois, having an office and principal place of
business at 3330 Skokie Valley Road, Suite 301, Highland Park,
Illinois.

(Plaintiffs’ Complaint (“Compl.”), Doc. No. 1, at ¶ 2;

Defendant’s Answer, Doc. No. 3, at ¶ 2).

Amos is exclusively in

the business of acquiring and servicing non-performing and semiperforming consumer and commercial loans.
135).

Amos first registered to do business in Pennsylvania on

October 25, 2015.
5.

(N.T., 4/5/17, at p.

Pl. Ex. 31.

On November 27, 2009, the Plaintiffs entered into a home

equity line of credit (the “Tepper Loan”) with NOVA Bank by
executing the Credit Agreement and Disclosure (the “Credit
Agreement”).

(Credit Agreement, Plaintiffs’ Exhibit (“Pl. Ex.”)

1; Joint Pretrial Memorandum, Doc. No. 24, at pp. 1-2).

The

purpose of the Tepper Loan was for personal, family, and
household purposes or personal investment purposes.

The Tepper

Loan was secured by a mortgage (the “Mortgage”) on the Tepper
Residence.
6.

(Doc. No. 24, at pp. 2, 10).

The Credit Agreement provides for a variable interest

rate with a floor and a ceiling, based on an index published in

2

the Wall Street Journal or, if such an index were to become
unavailable, a different index chosen by NOVA Bank.

Id.

The

Credit Agreement requires the Teppers to make minimum monthly
payments in the amount of the interest accrued for each month.
Id.

The method of calculating minimum monthly payments under the

Credit Agreement is based on the outstanding daily principal,
number of days in a given month, advances made to the Plaintiffs,
and payments made by the Plaintiffs.

Id.

If the Plaintiffs make

a payment in excess of the minimum monthly payment, such excess
would be applied to the Tepper Loan principal.

Id.

All unpaid

Tepper Loan principal would have to be paid in one balloon
payment upon maturity of the Tepper Loan.
7.

Id.

The Credit Agreement provides for the possibility of an

increase to the interest rate:
Rate Increase. In addition to our other rights during
termination and acceleration, we may increase the
variable ANNUAL PERCENTAGE RATE under this Agreement to
5.000 percentage points over the then applicable ANNUAL
PERCENTAGE RATE. The ANNUAL PERCENTAGE RATE will not
exceed the maximum rate permitted by applicable law.
If we do not increase the ANNUAL PERCENTAGE RATE upon
termination or acceleration of your Credit Line
Account, it will continue at the variable rate in
effect as of the date of termination or acceleration of
your Credit Line Account.
(Pl. Ex. 1).
8.

The Credit Agreement makes multiple references to

“periodic statements” and “statement cycle.”
pp. 2, 10).

(Doc. No. 24, at

For example, with regard to checks provided to the

3

Plaintiffs by NOVA Bank under the Credit Agreement, and the
Plaintiffs’ use of such checks, the Credit Agreement states: “We
may choose not to return NOVA BANK Credit Line Checks along with
your periodic statements; however, your use of each NOVA BANK
Credit Line Check will be reflected on your periodic statement as
a credit advance.”

Id.

With regard to calculating finance

charges, which are the minimum monthly payments under the Credit
Agreement, the Credit Agreement provides the following method:
A daily FINANCE CHARGE will be imposed on all credit
advances made under your Credit Line imposed from the
date of each credit advance based on the “average daily
balance” method. To get the average daily balance, we
take the beginning balance of your Credit Line Account
each day, add any new advances and subtract any
payments or credits and any unpaid FINANCE CHARGES.
This gives us a daily balance. Then, we add up all the
daily balances for the statement cycle and divide the
total by the number of days in the statement cycle.
This gives us the “average daily balance.”
(Doc. No. 24, at pp. 2-3, 10).

The Credit Agreement specifically

provides that “your [the Plaintiffs’] most current periodic
statement is the best evidence of your [the Plaintiffs’]
obligation to pay.”
9.

Id.

The Plaintiffs began receiving monthly statements from

NOVA Bank after the execution of the Credit Agreement.
4/5/17, at p. 12).

(N.T.

The monthly statements sent by NOVA Bank to

the Plaintiffs provided the details regarding the Tepper Loan,
such as the principal amount of the Tepper Loan, the minimum
monthly payment due, the interest rate used to calculate the

4

minimum monthly payment, the changes to the interest rate during
the month, the number of days during which the applicable
interest rate was used to calculate the minimum monthly payment,
any amounts past due, and any late charges.

See id. at pp. 12-

13; Pl. Ex. 8.
10.

During the time period when NOVA Bank serviced the

Tepper Loan, the minimum monthly payments differed from month to
month.

(N.T. 4/5/17, at p. 18).

Plaintiffs sometimes made

monthly payment in an amount greater than the minimum monthly
payment.

Id.; Pl. Ex. 7.

Pursuant to the Credit Agreement, the

amounts of the monthly payments made by the Teppers in excess of
the minimum monthly payment amounts were applied to the Tepper
Loan principal.
11.

On October 26, 2012, the Pennsylvania Department of

Banking and Securities closed NOVA Bank, and the Federal Deposit
Insurance Corporation (“FDIC”) was appointed as receiver for NOVA
Bank.

(Doc. No. 24, at pp. 3, 11).

12.

After NOVA Bank’s closure, the Plaintiffs stopped

receiving monthly statements regarding the Tepper Loan.

(N.T.

4/5/17, at p. 14).
13.

FDIC sent the Plaintiffs two letters informing them of

NOVA Bank’s closure, FDIC’s role as receiver, and FDIC’s
intention to market and sell all of NOVA Bank’s assets, including
the Tepper Loan.

Id. at pp. 19-20; Pl. Exs. 9-10.

5

14.

Sometime after being contacted by FDIC, Mr. Tepper

mailed a check to FDIC for the amount of the last monthly payment
sent to NOVA Bank.

(N.T., 4/5/17, at pp. 23-25).

neither cashed nor returned.
15.

That check was

Id. at p. 24.

In lieu of sending further payments, Plaintiffs

thereafter waited for their next periodic statement, which Mr.
Tepper believed would be forthcoming from whatever bank acquired
the Tepper Loan out of the FDIC receivership.
16.

Id.

On January 16, 2013, FDIC declared the Tepper Loan to

be in default.

Pl. Ex. 11.

FDIC sent Mr. Tepper a letter

informing him that the Tepper Loan was in default.
17.

Id.

On March 28, 2013, Amos purchased the Tepper Loan by

exercising a Bill of Sale for a loan package containing the
Tepper Loan.

See Pl. Exs. 4-5.

The Mortgage securing the Tepper

Loan was likewise assigned by FDIC to Amos.

See Pl. Ex. 6; Doc.

No. 24, at pp. 4, 11.
18.

At the time of the purchase, Amos considered the Tepper

Loan to be in default.
19.

(Doc. No. 24, p. at 19).

By letter dated March 28, 2013, FDIC informed Mr.

Tepper that the service of the Tepper Loan was being transferred
from FDIC as Receiver for NOVA Bank to Amos effective April 12,
2013.

Id. at 27; Pl. Ex. 12 (the “FDIC Assignment Letter”).

The

FDIC Assignment Letter provided contact information for Amos and
instructed that all payments on the Tepper Loan would need to be

6

sent to Amos.
20.

Pl. Ex. 12.

No information regarding principal, accrued interest,

or applicable interest rate was provided in the FDIC Assignment
Letter.
21.

See Pl. Ex. 12.
On June 5, 2013, Amos sent a letter to the Plaintiffs

(the “First Amos Letter”), wherein Amos provided the following
information regarding the Tepper Loan:
The records of [NOVA] Bank indicate that you executed
and delivered to the Bank a Credit Agreement and
Disclosure (the “Credit Agreement”) dated November 27,
2009, in the principal amount of $150,000.00 (the
“Loan”) Amos Financial LLC is now the owner and holder
of the Credit Agreement and the Loan, also identified
by the Loan Number 75000710-6.
. . .
Your loan is presently past due. Pursuant to the terms
of the Credit Agreement your regular monthly payment is
equal to amount of your accrued finance charges. As of
May 10, 2013, your loan had $3,897.25 in accrued
finance charges. The amount necessary bring [sic] your
loan current through May 10, 2013 is $3,897.25. This
amount does not include the next regularly scheduled
monthly payment of $573.73 which is due on June 10,
2013. Thereafter your regular monthly payments will be
due on the 10th of each month. Please continue to make
regular monthly payments of $573.73 until you are
notified by us that the interest rate and the amount of
your regular monthly payments have changed.
(Pl. Ex. 13) (emphasis in original).
22.

On July 24, 2013, Amos sent another letter (the “Second

Amos Letter”), wherein Amos provided only the following
information regarding the Tepper Loan:
In a letter dated June 5, 2013 you received notice that
your account was delinquent and that you were required
to pay $3,897.25 to bring your account current through
5/10/13. We never received the payment of $3,897.25.
We also have not received your monthly payments of
7

$573.73 that were due on June 10, 2013, and July 10,
2013. Your failure to pay the Credit Agreement within
its terms constitutes a default under the Credit
Agreement and Loan Documents. In order to bring your
account current though July 10, 2013, you need to mail
us a check for $5,044.71. If you fail to bring your
account current within 30 days of the date of this
letter, we will declare your loan to be in default. If
we declare a default, then your interest rate under the
loan will increase by an additional 5% to 9.49%
pursuant to the terms of the Credit Agreement, and we
reserve the right to exercise any other remedies under
the terms of the Credit Agreement or applicable law.
We urge you to give this matter your immediate
attention. Please contact us at your earliest
convenience to let us know when we will receive payment
and the amount you will be sending.
(Pl. Ex. 14) (emphasis in original).
23.

On September 20, 2013, Amos sent yet another letter to

the Plaintiffs (the “Third Amos Letter”), wherein Amos provided
the following information regarding the Tepper Loan:
The records of [NOVA] Bank indicate that you executed
and delivered to the Bank a Credit Agreement and
Disclosure (the “Credit Agreement”) dated November 27,
2009, with a revolving credit line in the principal
amount of $150,000.00 (the “Credit Line”). Amos
Financial LLC is now the owner and holder of the Credit
Agreement and the Credit Line, also identified by the
Loan Number 75000710-6.
. . .
In a letter dated July 24,2013 you received notice from
Amos Financial LLC that if you failed to bring your
account current within 30 days, that Amos Financial LLC
would declare your loan to be in default, and that your
interest rate under the loan would increase by an
additional 5% to 9.49% pursuant to the terms of the
Credit Agreement. Your failure to pay the Credit
Agreement within its terms constitutes a default under
the Credit Agreement, the Credit Line and the Loan
Documents. You are hereby notified that Amos Financial
LLC has declared your loan to be in default and that
your interest rate under the loan has increased by an
additional 5% to 9.49% effective as of the date of this
letter.
8

(Pl. Ex. 15) (emphasis in original).
24.

Sometime in November of 2014, the Plaintiffs received

from Amos an Act 91 Notice, which stated that the Plaintiffs had
not made monthly payments on the Mortgage since November 2012,
the Mortgage was in default, Amos intended to foreclose on the
Tepper Residence, and the amount purportedly past due was
“$22,445.99.”
25.

(Doc. No. 24, at p. 19; Pl. Ex. 16).

After receiving the Act 91 Notice, Mr. Tepper contacted

local counsel for Amos by telephone and by letter dated November
28, 2014, in which Mr. Tepper requested itemized statements of
account relative to the Tepper Loan.

(Doc. No. 24, at p. 19; Pl.

Ex. 33).
26.

Amos local counsel informed Amos of Mr. Tepper’s

request for itemized statements of account.
19).

(Doc. No. 24, at p.

However, Amos has never generated itemized statements of

account relative to the Tepper Loan and accordingly has never
provided them to the Plaintiffs.
27.

Id.

On January 12, 2015, a fire occurred at the Tepper

Residence.

(N.T., 4/5/17, at pp. 19, 174).

As a result, the

house was completely gutted and rebuilt, predominantly at the
expense of Plaintiffs’ homeowner’s insurer.

Id. at p. 19.

Plaintiffs, along with their two children, were forced to
relocate to a significantly smaller apartment, where they resided
for roughly 18 months.
28.

Id. at pp. 169-71.

On March 26, 2015, Amos commenced a foreclosure action
9

against the Plaintiffs in the Court of Common Pleas of
Philadelphia County, Pennsylvania (the “Foreclosure Action”) by
filing a Complaint in Mortgage Foreclosure.

See Pl. Ex. 17; Doc.

No. 24, at 19.
29.

The Plaintiffs have retained counsel to defend

themselves in the Foreclosure Action.
30.

(Doc. No. 24, at 19).

On April 6, 2015, Mr. Tepper called Amos and requested

two years of itemized statements of account relative to the
Tepper Loan.
31.

Id. at 20.

At the time of the phone call, Mr. Tepper wanted Amos

to “understand that I’m going through something, sort of like to
humanize this thing and just say, ‘Hey, I’m dealing with
something.
with.

Let’s just give me a statement.

Let’s get this over

I’m dealing with a lot here.’” (N.T., 4/5/17, at p. 62).

32.

In particular, Mr. Tepper wanted Amos to understand

that he was having difficulties in dealing with his insurance
carrier in rebuilding his home as a result of the fire.

Id. at

61-63.
33.

Later on April 6, 2015, Mr. Tepper received a return

phone call from Nareg Korogluyan (“Mr. Korogluyan”).
4/5/17, at p. 47).

(N.T.,

Mr. Korogluyan is the operations officer for

Amos and he is second in command in Amos’ management hierarchy.
Id. at pp. 113-14.
34.

The Parties disagree about what transpired on the April

6, 2015 phone call between Mr. Tepper and Mr. Korogluyan.
10

Mr.

Tepper testified that he began the phone call by saying, “Hey,
Jim Tepper, how are you?

I got this letter.”

Id. at p. 50.

Mr.

Tepper testified that he then “explained the house, and wanted to
see what was going on.”

Id.

Mr. Tepper testified that Mr.

Korogluyan responded with a “little yelling and screaming” and
that, during the course of the phone call, Mr. Korogluyan made
the following statements:
• “We’re foreclosing.

We’re foreclosing.”

• “You don’t deserve statements.
statements. We’re foreclosing.”

You don’t deserve

• “I don’t care about your family.”
• “This is our house. You don’t deserve your house.
You didn’t pay your loan. You don’t pay your car, your
car is ours, not ours. You don’t pay your house. I
don’t care about your family. That’s up to you.”
• “That’s your problem.
deserve a statement.”

You didn’t pay.

You don’t

• “You don’t deserve it. Your house is mine. Your
house is ours. We’re taking your house. There is
nothing you can do. You can’t do anything.”
• “You don’t pay your car.

Your car is ours.”

• “You don’t need to know [how the amount due was
calculated]. That’s our business. You didn’t pay.
You owe.”
• “I’m going to take your house.
Id. at pp. 50-54, 59.

Your house is mine.”

Mr. Tepper further testified that the

conversation was “was like around and around and around” and
“like 30 to 40 minutes” in duration.
35.

Id. at pp. 50, 52.

Mr. Korogluyan testified that he remembers having a

11

telephone conversation with Mr. Tepper around April of 2015 “when
there was a fire in the home and he had called asking for two
years of statements and wanting to discuss what he needed to do
to kind of –- I think it was kind of around insurance proceeds
and signing off on checks and whatnot.”
36.

Id. at p. 146.

Mr. Korogluyan further testified that “it didn’t stand

out as a conversation” and “at the time, there was nothing
extraordinary about it.

Obviously, there was an event.

fire, that was extraordinary.

The home

But as far as our conversation,

there was nothing that, you know, I recall that was
extraordinary.”
37.

Id. at p. 147.

Mr. Korogluyan also testified that he disagrees with

Mr. Tepper’s characterization of the phone call and that he “did
not make any threats.”

Id. at p. 146.

keep any notes of the phone call.
38.

Mr. Korogluyan did not

Id. at pp. 148-49.

Ms. Tepper testified that she remembers the day of Mr.

Tepper’s phone conversation with Mr. Korogluyan.

Id. at p. 164.

Ms. Tepper testified that, after the phone call, her husband was
“like beside himself.

He was just blown away that he wasn’t able

to get anywhere with the conversation that he had just had with
this person.
39.

He was just blown away.”

Id.

The Court finds by a preponderance of the evidence that

Mr. Korogluyan made statements in the April 6, 2015 phone call
substantially similar to those described by Mr. Tepper in his
testimony.

In making this finding we consider it significant
12

that Mr. Korogluyan never testified that any of the specific
statements ascribed to him by Mr. Tepper are inaccurate.

See,

e.g., Defendant’s Proposed Findings of Fact and Conclusions of
Law, Doc. No. 40, at ¶ 29 (“Mr. Korogluyan is certain that he
made no threatening statements to Mr. Tepper during their
telephonic conversation on April 6, 2015.”).
40.

On April 8, 2015, John Carroll, on behalf of Amos, sent

Mr. Tepper an email (“Amos Email”).

(Doc. No. 24, at p. 20).

In

its entirety, the Amos Email stated:
Dear James Tepper:
I am writing to follow up on your request to our office
on 4/6/15 for an updated reinstatement amount. I have
attached to this email the Act 91 Notice that you
previously received. For your reference the
reinstatement amount that was included in the Act 91
Notice is on page 4 of the pdf.
Pursuant to your request, I am providing you with an
updated reinstatement amount through 4/10/15. Your
reinstatement amount through 4/10/15 is $29,132.06
which consists of $28,390.58 in interest, and $741.48
in legal fees and costs. If you intend to reinstate
your loan then please contact us for wiring
instructions. Please send me a reply email to confirm
that you received this email.
Sincerely,
(Pl. Ex. 18).
41.

Mr. Tepper testified that the April 6, 2015 phone call

“set me into probably the deepest depression, the deepest
anything I can ever imagine going through in my life.”
4/5/17, at p. 51).

(N.T.,

Ms. Tepper also testified that her husband’s

attitude changed after the telephone call.
13

In particular, Ms.

Tepper testified that Mr. Tepper “stopped sleeping,” “wasn’t
looking good,” “wasn’t as active as he had been,” and “didn’t
want to go out.”

Id. at p. 165.

She also testified that in the

wake of the April 6, 2015 phone call Mr. Tepper became less
reliable and began drinking more.
42.

Id. at pp. 166-67.

Soon after the April 6, 2015 phone call, Mr. Tepper was

prescribed Ambien CR as a sleep aid.
43.

Id. at p. 58.

In the months following the April 6 phone call and the

Amos Email, Mr. Tepper’s career suffered.

At all relevant times

Mr. Tepper has worked as an independent contractor who represents
vendors that wish to appear on QVC.1

(N.T., 4/5/17, at p. 8).

In the wake of his phone call with Mr. Korogluyan, Mr. Tepper
testified that as a result of his emotional distress he missed
QVC airings and failed to follow through on calls and emails.
Id. at 63-64.
44.

In 2015, Mr. Tepper’s income was $291,300.

Pl. Ex. 30.

In 2016, his income dropped to $158,850.

4/5/17, at 68; Pl. Ex. 29).

Id. at 68;
(N.T.,

Mr. Tepper testified that the

$132,450 difference in income year over year is the result of
speaking with Mr. Korogluyan and his other contacts with Amos in
2015.

(N.T., 4/5/17, at 68).

1

“QVC” stands for “Quality, Value and Convenience” and refers to
live merchandise-focused televised shopping programs marketed and sold
by QVC, Inc., a multimedia retailer whose principal executive offices
are located in West Chester, Pennsylvania. See QVC, Inc., Annual
Report (Form 10-K)(Feb. 28, 2017). We take judicial notice of this
information pursuant to Fed. R. Evid. 201.

14

45.

Mr. Tepper also testified that his home life suffered.

He testified that he missed out on time with his family and that
he needed a tutor to do homework with his child, because he was
not present.
46.

Id. at 65.

Although it is clear that Mr. Tepper’s income in 2016

fell far short of his income in 2015, the Court finds that
Plaintiffs have failed to demonstrate by a preponderance of the
evidence that any harm suffered (financial or otherwise) is a
result of Amos’s actions, as distinct from Plaintiffs’ unrelated
financial troubles and other difficulties.
47.

The Court further finds that Mr. Tepper, being an

educated businessman, had the ability to make a significant
living while dealing with various life obstacles, including the
January 2015 fire that occurred at the Tepper residence, as well
as managing a stressful and demanding job.

Finally, the Court

finds that the Teppers’ testimony relating to the personal trauma
experienced by Mr. Tepper as it pertains to his phone call with
Mr. Korogluyan is not credible.
DISCUSSION
The FDCPA was enacted in 1977 in order “to protect consumers
from a host of unfair, harassing, and deceptive collection
practices without imposing unnecessary restrictions on ethical
debt collectors.”

F.T.C. v. Check Investors, Inc., 502 F.3d 159,

165 (3d Cir. 2007) (citations omitted), abrogated on other

15

grounds by Henson v. Santander Consumer USA Inc., 137 S.Ct. 1718
(2017).

“The primary goal of the FDCPA is to protect consumers

from abusive, deceptive, and unfair debt collection practices,
including threats of violence, use of obscene language, certain
contacts with acquaintances of the consumer, late night phone
calls, and simulated legal process.”

Id. (citation omitted).

“A

basic tenet of the Act is that all consumers, even those who have
mismanaged their financial affairs resulting in default on their
debt, deserve the right to be treated in a reasonable and civil
manner.”

Id. (citation omitted).

In order to carry out its

purposes, “the FDCPA enlists the efforts of sophisticated
consumers as ‘private attorneys general’ to aid their less
sophisticated counterparts, who are unlikely themselves to bring
suit under the Act, but who are assumed by the Act to benefit
from the deterrent effect of civil actions brought by others.”
Jensen v. Pressler & Pressler, 791 F.3d 413, 419 (3d Cir. 2015)
(alteration and citation omitted).
“In the most general terms, the FDCPA prohibits a debt
collector from using certain enumerated collection methods to
collect a ‘debt’ from a consumer.”

Check Investors, 502 F.3d at

166 (alteration and citation omitted).

In order for the FDCPA’s

protections to apply, “two threshold requirements must be
satisfied.

First, the person or entity engaging in the

prohibited practice must be a ‘debt collector’ within the meaning

16

of the statute.”

McDermott v. Nationstar Mortg., LLC, 143 F.

Supp. 3d 290, 296 (E.D. Pa. 2015) (citing Pollice v. Nat’l Tax
Funding, L.P., 225 F.3d 379, 403 (3d Cir. 2000).

“Second, the

prohibited practice must have been used in an attempt to collect
on a ‘debt.’”

Id. (citing Pollice, 225 F.3d at 400).

A. FDCPA Applies to Amos and the Tepper Loan
As a threshold matter, we must determine whether the FDCPA
applies to Amos and the Tepper Loan at all.

For if Amos is not a

debt collector, or if the Tepper Loan is not a debt, Plaintiff
can have no FDCPA claim however objectionable Defendant’s conduct
may be.

We write in the wake of the Supreme Court’s opinion in

Henson v. Santander Consumer USA Inc., 137 S.Ct. 1718 (2017),
which was decided after the bench trial was held in this case and
which upended Third Circuit law that both parties had relied on.
This Court thereafter ordered additional briefing regarding Amos’
status as a “debt collector” in light of Henson, which the
parties duly provided.

(Doc. Nos. 47-49).

Following the Supreme Court’s lead, “we begin, as we must,
with a careful examination of the statutory text.”
S.Ct. at 1721.

Henson, 137

In relevant part, the FDCPA tells us that:

The term “debt collector” means any person who uses any
instrumentality of interstate commerce or the mails in
any business the principal purpose of which is the
collection of any debts, or who regularly collects or
attempts to collect, directly or indirectly, debts owed
or due or asserted to be owed or due another.
15 U.S.C. § 1692a.

In other words, the statute provides two
17

possible paths for a plaintiff to prove that a particular
defendant is a “debt collector.”

Subject to certain exceptions

not relevant here, the defendant will be a debt collector if
either (1) its “principal purpose . . . is the collection of any
debts,” or (2) it “regularly collects or attempts to collect . .
. debts owed or due . . . another.”

Id.

In Henson, the Court held that an entity that regularly
purchases debts originated by a third party and then seeks to
collect those debts for its own account is not a “debt collector”
under the second statutory definition.

Amos is precisely such an

entity, and so Plaintiff’s FDCPA claims necessarily fail to the
extent Plaintiff seeks to rely on the statutory definition at
issue in Henson.

Plaintiff appropriately directs our attention

then to the first possible path provided by § 1692a, which the
Supreme Court explicitly noted was outside the scope of its
review.

See Henson, 137 S.Ct. at 1721.

Plaintiff’s footing is more sure.

And on the first path,

While the second definition is

limited to “debts owed . . . another,” the first definition
applies to “any debts,” provided only that the entity’s principal
purpose is the collection of such debt.

We agree with Plaintiff

that the evidence shows that Defendant meets that first
definition.

Indeed, any other conclusion is untenable in light

of Mr. Korogluyan’s testimony that Defendant’s business focuses
exclusively on acquiring and servicing non-performing and semi-

18

performing loans.

(N.T., 4/5/17, at p. 135).

We also conclude that the Tepper Loan is a “debt” as defined
by statute.

“The term ‘debt’ means any obligation or alleged

obligation of a consumer to pay money arising out of a
transaction in which the money, property, insurance, or services
which are the subject of the transaction are primarily for
personal, family, or household purposes, whether or not such
obligation has been reduced to judgment.”

15 U.S.C. § 1692a(5).

The parties do not dispute that the purpose of the Tepper Loan
was for personal, family, household purposes or personal
investment purposes, and the Court has so found.

The Plaintiffs

are also clearly “consumers,” as defined by Congress at 15 U.S.C.
§ 1692a(3).

Having crossed all statutory thresholds, Plaintiffs

are and were entitled to the FDCPA’s protections in their
interactions with Amos regarding the Tepper Loan.
B. Amos Violated § 1692e of the FDCPA
Plaintiffs contend that Defendant committed multiple
violations of 15 U.S.C. § 1692e on account of both its written
communications with Plaintiffs and the April 6, 2015 phone call
between Mr. Tepper and Mr. Korogluyan.
false or misleading representations.

That provision governs
In relevant part, it

states:
A debt collector may not use any false, deceptive, or
misleading representation or means in connection with
the collection of any debt. Without limiting the
general application of the foregoing, the following
19

conduct is a violation of this section:
. . .
(2) The false representation of--(A) the character,
amount, or legal status of any debt;
. . .
(5) The threat to take any action that cannot legally
be taken or that is not intended to be taken.
. . .
(10) 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.A. § 1692e.

The FDCPA is a remedial statute, and so

courts are instructed to “construe its language broadly, so as to
effect its purpose.”
(3d Cir. 2006).

Brown v. Card Serv. Ctr., 464 F.3d 450, 453

Any lender-debtor communications should

accordingly “be analyzed from the perspective of the least
sophisticated debtor.”

Id. at 454.

“The least sophisticated debtor standard requires more than
‘simply examining whether particular language would deceive or
mislead a reasonable debtor’ because a communication that would
not deceive or mislead a reasonable debtor might still deceive or
mislead the least sophisticated debtor.”

Id. (quoting Wilson v.

Quadramed Corp., 225 F.3d 350, 354 (3d Cir. 2000)).

This lower

standard gives meaning to Congress’s intent to protect “all
consumers, the gullible as well as the shrewd, the trusting as
well as the suspicious, from abusive debt collection practices.”
Id. (internal quotations omitted).

“However, while the least

sophisticated debtor standard protects naive consumers, ‘it also
prevents liability for bizarre or idiosyncratic interpretations

20

of collection notices by preserving a quotient of reasonableness
and presuming a basic level of understanding and willingness to
read with care.’”

Id. (quoting Quadramed, 225 F.3d at 354-55).

Against this backdrop, we now consider each of Defendant’s
communications with the Plaintiffs regarding the Tepper Loan.
(1) Written Communications
Plaintiffs contend that all of Defendant’s written
communications regarding the Tepper Loan violated § 1692e(2)(A)
and § 1692e(10) by, inter alia, falsely representing the amount
and character of the alleged debt under the Tepper Loan.

There

are five such communications: (a) the First Amos Letter; (b) the
Second Amos Letter; (c) the Third Amos Letter; (d) the Act 91
Notice; and (e) the Amos Email.

Defendant responds in part by

invoking FDCPA’s statute of limitations.

An FDCPA claim must be

brought “within one year from the date on which the violation
occurs.”

15 U.S.C. § 1692k(d).

on October 26, 2015.

Plaintiffs filed their Complaint

(Doc. No. 1).

Because the First, Second,

and Third Amos Letters were all sent more than one year prior to
that date, we agree with Defendant that their contents cannot
give rise to liability under FDCPA’s one-year statute of
limitations.2

2

Plaintiffs argue that the “continuing violation doctrine”
applies because the violations contained in the First, Second, and
Third Amos Letters were not discrete isolated acts, but were rather
part of a pattern of misrepresentations and deceptive means that
extended into the limitations period. (Doc. No. 38). “Under the
continuing violation doctrine, when a defendant’s conduct is part of a

21

As to the Act 91 Notice and Amos Email, Plaintiffs argue
that both run afoul of § 1692e for failure to properly disclose
the amount and character of the alleged debt due under the Tepper
Loan.

The Act 91 Notice declares the “TOTAL AMOUNT PAST DUE” to

be $22,445.99, and indicates that this amount due is the result
of the Teppers’ failure to make payments on the Tepper Loan
beginning in November 2012 and continuing every month thereafter.
(Pl. Ex. 16).

The Amos Email, sent about four months later,

indicates that the “reinstatement amount” is $29,132.06 as of
April 10, 2015, which consists of $23,390.58 in interest and
$741.48 in legal fees and costs.

(Pl. Ex. 18).

As Plaintiffs

note, neither document provides any details on the principal,
current interest rate or past interest rate.
Referring to the Third Circuit’s “least sophisticated
debtor” standard, Plaintiffs argue that the letters violate §
1692e in that they provide only a lump sum of the debt owed
without further explanation of how such amount is calculated.

We

agree with Plaintiffs that both letters are deficient in this
respect.

See Grubb v. Green Tree Servicing, LLC, No. CIV.A.

continuing practice, an action is timely so long as the last act
evidencing the continuing practice falls within the limitations
period; in such an instance, the court will grant relief for the
earlier related acts that would otherwise be time barred.” Snyder v.
Baxter Healthcare, Inc., 393 F. App’x 905, 909 (3d Cir. 2010). It is
not applicable in this case. Each written contact from Amos regarding
the Tepper Loan is different from the last; they are independent
events, each to be scrutinized on its own terms. See Lukawski v.
Client Servs., Inc., No. 3:12-CV-02082, 2013 WL 4647482, at *3 (M.D.
Pa. Aug. 29, 2013).

22

13-07421 FLW, 2014 WL 3696126, at *9 (D.N.J. July 24, 2014)
(declining to dismiss FDCPA claim under where a written letter
provided a lump sum with no further information regarding how the
amount of debt was calculated) (citing Fields v. Wilber Law Firm,
P.C., 383 F.3d 562 (7th Cir. 2004); Miller v. McCalla, Raymer,
Padrick, Cobb, Nichols, and Clark, L.L.C., 214 F.3d 872, 875 (7th
Cir. 2000)); Jones v. Midland Funding, LLC, 755 F. Supp. 2d 393,
397 n.4 (D. Conn. 2010) (noting that analysis under §
1692e(2)(A), § 1692e(10), and § 1692g(a)(1) is “essentially the
same”).

At trial, Mr. Korogluyan, who has a degree in finance,

struggled to recreate the amount stated in the Amos Email,
eventually arriving at $26,270.41, which represented a 4.49
percent loan interest rate from February 20, 2013 to September
20, 2013, and then a 9.49 percent loan interest rate from
September 20, 2013 through April 8, 2015 and which was $2,861.65
less than the amount stated in the Amos Email.

(N.T., 4/5/17, at

pp. 140-46).
Nowhere in the Act 91 Notice or Amos Email did Amos offer
any detail as to how the amounts due were calculated, nor did it
disclose in those documents that it was relying on a heightened
interest rate dating back to September 2013.

On this record and

judging both documents from the perspective of the least
sophisticated debtor, we hold that Amos’s statements as to the
character and amount of debt owed were so incomplete and

23

misleading that they amounted to false representations within the
meaning of § 1692e(2)(A) and § 1692e(10).
We further conclude that Amos misstated the amount of the
debt by relying on a 9.49 percent interest rate, which Amos
invoked contrary to the terms of the Credit Agreement.
Ex. 1.

See Pl.

Pursuant to the Credit Agreement, the Lender enjoyed the

right to increase the variable annual percentage interest rate
only in the event of termination and acceleration.

Id.

But, at

trial, Mr. Korogluyan testified that Amos hiked the interest rate
without ever notifying the Teppers that it was terminating and
accelerating the Tepper Loan.

(N.T., 4/5/17, at pp. 154-57).

Amos’s misplaced reliance on a heightened interest rate
necessarily operates as a false representation of the character,
amount and legal status of the Teppers’ debt and by itself
triggers FDCPA liability.
(2) April 6, 2015 Phone Call
Plaintiffs argue that Mr. Korogluyan’s statements on the
April 6, 2015 phone call amount to a violation of § 1692e(5)’s
prohibition on threats to take action that cannot legally be
taken or are not intended to be taken, as well as § 1692e(10)’s
prohibition on the use of any false representation or deceptive
means to collect or attempt to collect any debt or to obtain
information concerning a consumer.

In particular, Plaintiffs

allege that Amos violated the statutory provisions when Mr.

24

Korogluyan said that a) the Teppers were not entitled to receive
a statement on the Tepper Loan since the Tepper Loan was in
default, (b) the Tepper Residence belonged to Amos, and (c) there
was nothing the Teppers could do to get the Tepper Residence from
Amos.
We agree that Mr. Korogluyan’s statements that Amos owned
the Tepper Residence and the Teppers’ car amounted to false
representations or deceptive means in an attempt to collect on a
debt.

We likewise conclude that Mr. Korogluyan’s statement that

Mr. Tepper could do nothing to avoid repossession of the Tepper
Residence was a false representation or deceptive means, in
violation of § 1692e(10).
However, we conclude that Plaintiffs have failed to prove a
violation of § 1692e(5).

Integral to Plaintiffs’ argument on

that score is their contention that Amos was not registered to do
business in Pennsylvania and thus could not bring a foreclosure
action under 15 Pa. C.S.A. §§ 8587(a) and 8981(a).

Amos responds

that it was not required to register in Pennsylvania in order to
collect on debt.

(N.T., 4/5/17, at p. 116).

Given that Amos

eventually registered in Pennsylvania, Pl. Ex. 32, and has in
fact brought a foreclosure action against the Teppers in state
court, we are unable to conclude that the threats of legal action
against the Teppers could not legally be taken or were not
intended to be taken.

Accordingly, Amos is not liable for any

25

violation of § 1692e(5).
C. Damages
In the case of an action brought by an individual, a debt
collector who fails to comply with any provision of the FDCPA is
liable for:
(1) any actual damage sustained by such person as a
result of such failure;
(2) . . . such additional damages as the court may
allow, but not exceeding $1,000; . . . and
(3) in the case of any successful action to enforce the
foregoing liability, the costs of the action, together
with a reasonable attorney’s fee as determined by the
court.
15 U.S.C. § 1692k(a).

In determining the amount of liability, we

are to consider, among other relevant factors, “the frequency and
persistence of noncompliance by the debt collector, the nature of
such noncompliance, and the extent to which such noncompliance
was intentional.”

15 U.S.C.A. § 1692k(b)(1).

Having proven

multiple violations of the FDCPA, including some particularly
boorish conduct on the part of Mr. Korogluyan, we will award
Plaintiffs $1,000 in statutory damages,3 along with the costs of
the action and a reasonable attorney’s fee to be determined at a
later date.

The Court does not, however, find Defendant to be

liable for any actual damages as a result of its FDCPA
violations.
3
Statutory damages are limited to $1,000 per successful court
action, regardless of how many independent violations are proven. See
Goodmann v. People’s Bank, 209 F. App’x 111, 114 (3d Cir. 2006).

26

In light of the foregoing, the Court now states the
following:
CONCLUSIONS OF LAW
1.

The Court has original jurisdiction over this action

pursuant to 28 U.S.C. § 1331 as it arises from the Fair Debt
Collection Practices Act, a law of the United States.
2.

This Court has jurisdiction over the parties and venue

is proper in the Court pursuant to 28 U.S.C. § 1391 in that (a)
Defendant has placed telephone calls to Plaintiff in
Philadelphia, Pennsylvania attempting to collect a debt; (b)
Defendant entered this jurisdiction on March 26, 2015 by filing
the Foreclosure Action in the Court of Common Pleas of
Philadelphia County.
3.

Plaintiffs have established by a preponderance of the

evidence that Defendant violated § 1692e(2)(A) and § 1692e(10) of
the Fair Debt Collection Practices Act.
4.

Plaintiffs have failed to establish by a preponderance

of the evidence any actual damages resulting from Defendant’s
violation of the Fair Debt Collection Practices Act.
5.

Plaintiffs are entitled to $1,000 in statutory damages,

pursuant to 15 U.S.C. § 1692k(a)(2)(A).
6.

Plaintiffs are entitled to an award of reasonable

attorney fees and costs incurred in prosecuting this action,
pursuant to 15 U.S.C. § 1692k(a)(3).

27

An Order of Judgment follows.

28