Ramos v. Bobell Co.

Full title: CARLOS RAMOS Plaintiff -v- BOBELL CO., A DIVISION OF MARCAND, INC…

Court: United States District Court, S.D. New York

Date published: Nov 20, 2003

03 Civ. 1666 (DLC) (S.D.N.Y. Nov. 20, 2003)

Opinion

03 Civ. 1666 (DLC)

November 20, 2003

Adam J. Fishbein, Esq., Cedarhurst, New York, for the Plaintiff

Mark Krassner, Esq., Cohen Krassner, New York, for the Defendant

OPINION AND ORDER

DENISE COTE, District Judge

On March 11, 2003, Carlos Ramos ("Ramos") filed the instant class action against Bobell Co. ("Bobell") for violations of the Fair Debt Collection Practices Act ("FDCPA"), 18 U.S.C. § 1692 et. seq. Ramos asserts that Bobell issued a misleading debt collection letter and failed to comply with the FDCPA's requirements for debt collectors. Prior to taking any discovery in the case, Ramos filed a motion dated August 19 for a partial judgment on the pleadings on the issue of whether Bobell misrepresented its identity by portraying itself as a third-party debt collector. Defendant filed a cross-motion for summary judgment on August 26. For the reasons that follow, Ramos' motion is denied, and defendant's is granted. Background

The following facts are taken from the complaint, unless otherwise noted. On April 12, 2001, Ramos purchased furniture from Bobell, a furniture dealer. On February 19, 2003, Ramos received a debt collection letter (the "Letter") requesting payment of $3,620.25. The Letter, which is attached to the complaint, states, in pertinent part: "Your account has been turned over to us by Bobell Co. for collection." The Letter warns that if payment is not made within three days, " [w]e have no recourse but to notify our attorney to serve you with a SUMMONS, to obtain a judgement [sic] against you for the entire `amount due." (Emphasis in original.) The Letter continues, "I am sure you wish to settle this small amount due our client without going through all these legal maneuvers and paying these unnecessary fees." The Letter directs Ramos to "send out a check or a money order for the total amount due, made payable to Bobell Co."

The Letter is printed on Bobell letterhead, which includes Bobell's name, address, and two telephone numbers. Nothing is printed on the reverse side of the Letter. In an affidavit submitted by Bobell's president ("Defendant's Affidavit"), the defendant maintains that the Letter was issued by Bobell's in-house collection department, and mailed in an envelope bearing Bobell's return address. The plaintiff does not dispute this fact and has not resisted summary judgment in Bobell's favor on the ground that it requires discovery to test this assertion. See Rule 56(f), Fed.R.Civ.P.

Discussion

Summary judgment may not be granted unless the submissions of the parties taken together "show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." Rule 56(c), Fed.R.Civ.P. The moving party bears the burden of demonstrating the absence of a material factual question, and in making this determination the Court must view all facts in the light most favorable to the non-moving party. Anderson v. Liberty Lobby Inc., 477 U.S. 242, 247 (1986); Celotex Corp v. Catrett, 477 U.S. 317, 323 (1986). When the moving party has asserted facts showing that the non-movant's claims cannot be sustained, the opposing party must "set forth specific facts showing that there is a genuine issue for trial," and cannot rest on the "mere allegations or denials" of his pleadings. Rule 56(e), Fed.R.Civ.P.; accord Burt Rigid Box. Inc. v. Travelers Property Cas. Corp., 302 F.3d 83, 91 (2d Cir. 2002). Thus, in determining whether to grant summary judgment, this Court must (1) determine whether a genuine factual dispute exists based on evidence in the record; and (2) determine, based on the substantive law at issue, whether the fact in dispute is material.

"The FDCPA was passed to protect consumers" from deceptive or harassing actions taken by debt collectors." Kropelnicki v. Siegel, 290 F.3d 118, 127 (2d Cir. 2002); 15 U.S.C. § 1692 (e).

The FDCPA "establishes certain rights for consumers whose debts are placed in the hands of professional debt collectors for collection, and requires that such debt collectors advise the consumers whose debts they seek to collect of specified rights." Kropelnicki, 290 F.3d at 127 (citation omitted). Among other things, a debt collector must inform the consumer in writing that he has thirty days in which to dispute the validity of the debt; that upon written request, the consumer will be provided with the name and address of the original creditor; and that, if the consumer disputes the debt, the debt collector will obtain verification of the debt and mail a copy of such verification to the consumer. See 15 U.S.C. § 1692 (g). Debt collectors are held strictly liable for failing to comply with any of the provisions of the statute.

The FDCPA only governs conduct by "debt collectors." A debt collector is defined as:

[A]ny 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 . . . [T]he term includes any creditor who, in the process of collecting his own debts, uses any name other than his own which would indicate that a third person is collecting or attempting to collect such debts.

15 U.S.C. § 1692(a)(6). Generally, creditors do not qualify as debt collectors, and thus are not subject to the FDCPA. Maguire v. Citicorp Retail Services. Inc. 147 F.3d 232, 235 (2d Cir. 1998). Similarly, a creditor's in-house collection division is not considered a debt collector so long as "it collects its own debts in the true name of the creditor or a name under which it has consistently done business."Id.

As the statutory language indicates, however, a creditor or its in-house collection division becomes subject to the FDCPA if the creditor "uses a name other than his own" which might lead a debtor to believe that a third party has become involved in collecting the debt. See 15 U.S.C. § 1692(a)(6). "A creditor uses a name other than its own when it uses a name that implies that a third party is involved in collecting its debts, pretends to be someone else, or uses a pseudonym or alias." Maguire, 147 F.3d at 235 (citation omitted).

FDCPA violations are reviewed under the "least sophisticated consumer" standard. A disputed collection letter "must be assessed in terms of the impression likely to be left upon" such an "unsophisticated" consumer.Maguire, 147 F.3d at 236 (citation omitted). This standard: u(1) ensures the protection of all consumers, even the naive and the trusting, against deceptive debt collection practices, and (2) protects debt collectors against liability for bizarre or idiosyncratic interpretations of collection notices." Kropelnicki, 290 F.3d at 127 (citation omitted).

The threshold inquiry in this case, then, is whether Bobell acted as a debt collector in the Letter to Ramos. Only if Bobell is considered a debt collector under the FDCPA can it be held liable for its failure to comply with the statute's requirements for communicating with consumers.

The plaintiff has not shown that there is sufficient evidence to support a finding that Bobell is a debt collector. It is undisputed that Bobell's "principal purpose" is not the collection of debts, but rather the sale of furniture. In addition, Bobell's Letter was an attempt to collect its own debt, and not, as required by the FDCPA, a debt "owed or due another." 15 U.S.C. § 1692(a)(6). Bobell may still, however, be held liable under the FDCPA if it misrepresents itself as a third-party collector by using "a name other than his own." Id. While the Letter states that Ramos' account "has been turned over to us by Bobell Co.," and refers once to Bobell as "our client," there are substantial indicators precluding even the least sophisticated consumer from believing that the account had been forwarded to a third party.

The most compelling evidence that a third party did not issue the Letter is that it is written on Bobell letterhead. In Maguire,supra, the Second Circuit found that an in-house collection division was a debt collector under the FDCPA. It placed significant emphasis on the fact that the disputed letter "is not written on stationary which bears the [creditor's] letterhead or logo." Maguire, 147 F.3d at 237. See also Karp v. Siecfel, No. 96 Civ. 7477 (JFK), 1998 WL 314769, at *4 (an in-house attorney's use of American Express letterhead in his communications with the plaintiff is evidence that American Express "did not use a name other than its own to collect' the debt").

Unlike the defendant's letter in Maguire, the Letter prominently displays Bobell's letterhead, which includes the company's name, address, and two telephone numbers — the same telephone numbers that are replicated in the body of the Letter. In addition, the Letter was mailed in an envelope bearing Bobell's return address. Even the least sophisticated consumer would assume that such a letter was issued by Bobell itself, and not an independent collection agency.

Moreover, the Letter never names any other agency, or uses any pseudonym, as a stand-in for Bobell. The Letter directs Ramos to make a check or money order "payable to Bobell Co.," and to send the payment "in the enclosed postage envelope." The Letter is signed by "A. Allen," and the body of the Letter advises Ramos to contact "Mrs. Allen" at the same telephone numbers as are identified as belonging to Bobell in the letterhead. The signature line contains no title or affiliation that would lead even an unsophisticated consumer to believe that "Mrs. Allen" or "A. Allen" is somebody other than an employee of Bobell. Thus, it cannot be said that Bobell, "in the process of collecting [its] own debts, use[d] a name other than [its] own which would indicate that a third person [was] collecting or attempting to collect such debts." See 15 U.S.C. § 1692(a)(6). Since, as a matter of law, the Letter would not lead even the least sophisticated consumer to believe that it was issued by a third-party debt collector, Bobell does not meet the definition of a debt collector under the FDCPA.

Conclusion

Plaintiff's motion for a partial judgment on the pleadings is denied. Defendant's motion for summary judgment is granted. The Clerk of Court shall close the case.