Summary
declining to hold "that a settlement offer which expires on a date certain becomes deceptive when an agency later offers a lower settlement amount upon expiration of the first offer," in part because "[s]uch a holding would necessarily deter agencies from ever offering a lower settlement amount, and thus eliminate settlement possibilities"
Summary of this case from Kraus v. Prof'l Bureau of Collections of Md., Inc.Opinion
No. CV 02-2486 (NG)(VVP).
March 3, 2005
REPORT AND RECOMMENDATION
Judge Gershon has referred to me for a Report and Recommendation, pursuant to Title 28 U.S.C § 636(b)(1), the plaintiff's motion and the defendant's cross-motion for a judgment on the pleadings regarding the plaintiff's claim for statutory damages under the Fair Debt Collection Practices Act. For the reasons enumerated below, the undersigned recommends that the plaintiff's motion be DENIED and that the defendant's cross-motion be GRANTED.
BACKGROUND
The plaintiff, Beauty B. Sarder, is a resident of Queens County, NY. Complaint (attached to Pl. Notice of Motion) ¶ 0.2. She is a consumer who allegedly owed a debt of approximately $9,000 plus interest to Citibank. Id. at 0.1, 1.2. At some point, the debt was referred to the defendant, Academy Collection Service, Inc., which has its principal place of business in Philadelphia. Id. at 0.3, 1.3. The plaintiff received a letter from the defendant dated January 21, 2002, which states, in relevant part: "This is to advise you that your delinquent account has been transferred to our office for collection by CITIBANK (SOUTH DAKOTA) N.A.(S). They are willing to accept * * * $6,447.42 * * * as settlement . . . This settlement offer valid until 03-02-02." Id. at 1.4-1.6. The letter also provides: "Please check the appropriate box below . . . 1. () I have enclosed the above settlement amount of $6,447.42. 2. () I cannot settle now, but call me at the below listed number to discuss my account." Def. Letter of Jan. 21, 2002 (attached to Complaint; attached to Def. Notice of Motion as Ex. A). The plaintiff then received a second letter from the defendant dated March 5, 2002, in which the defendant offered to settle the plaintiff's debt for $6,192.38. Compl. at 1.7, 1.8. The plaintiff did not respond to either of the defendant's letters. See id.
In her complaint, the plaintiff claims that the March 2, 2002 deadline for the settlement offer contained in the first letter is a "false and deceptive representation" in violation of the Fair Debt Collection Practices Act ("FDCPA"), 15 U.S.C. §§ 1692e and 1692e(10). The plaintiff requests statutory damages pursuant to 15 U.S.C. § 1692k. Both the plaintiff and the defendant have moved for a judgment on the pleadings pursuant to Rule 12(c).
DISCUSSION
A. Motion for Judgment on the Pleadings Standard
Rule 12(c) of the Federal Rules of Civil Procedure provides for a judgment on the pleadings "when the pleadings are closed but within such time as not to delay the trial." F.R.C.P. 12(c). A judgment pursuant to Rule 12(c) 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). The applicable standard in deciding a Rule 12(c) motion is the same as in a motion to dismiss pursuant to Rule 12(b)(6). Sheppard v. Beerman, 18 F.3d 147, 150 (2d Cir. 1994). Thus, on a motion for a judgment on the pleadings, as in a motion to dismiss, "the allegations in the complaint are presumed true and all reasonable inferences are construed in the plaintiff's favor." Village on Canon v. Bankers Trust Co., 920 F. Supp. 520 (S.D.N.Y. 1996) (citing Gant v. Wallingford Bd. of Educ., 69 F.3d 669, 673 (2d Cir. 1995); Hernandez v. Coughlin, 18 F.3d 133, 136 (2d Cir.), cert. denied, 513 U.S. 836 (1994)). On such a motion, the court may generally consider those facts alleged in the complaint, documents attached as an exhibit thereto or incorporated by reference. See Cortec Indus. Inc. v. Sum Holding L.P., 949 F.2d 42, 46-48 (2d Cir. 1991). As with a motion to dismiss, a motion for a judgment on the pleadings should not be granted in favor of the defendant "unless it appears beyond a doubt that the plaintiff can prove no set of facts in support of his claim which would entitle him to relief." Conley v. Gibson, 355 U.S. 41, 46 (1957).
B. The Fair Debt Collection Practices Act
Section 1962e of the Fair Debt Collection Practices Act ("FDCPA") states in general terms that it is unlawful for a debt collector to "use any false, deceptive or misleading representation or means in connection with the collection of any debt." 15 U.S.C. § 1692e; Necci v. Universal Fidelity Corp., 297 B.R. 376, 377-78 (E.D.N.Y. 2003). Section 1962e(10) makes it unlawful to use any "false representation or deceptive means to collect any debt . . ." 15 U.S.C. § 1692e (10); Necci, 297 B.R. at 378.
Some general propositions are applicable to the interpretation of these sections. In the first instance, it is a "familiar canon of statutory construction that the starting point for interpreting a statute is the language of the statute itself . . . Absent a clearly expressed legislative intention to the contrary, that language must ordinarily be regarded as conclusive." Karpes v. Credit Rating Bureau, Inc., CV 98-5305 (VVP), at 4 (E.D.N.Y. Dec. 14, 1999) (citing Consumer Prod. Safety Comm'n v. GTE Sylvania, Inc., 447 U.S. 102, 108 (1980); Heintz v. Jenkins, 514 U.S. 291, 298 (1982) (employing plain language analysis to interpret FDCPA); Romea v. Heiberger, 163 F.3d 111, 117 (2d Cir. 1998) (same); Beggs v. Rossi, 145 F.3d 511, 512 (2d Cir. 1998) (same); Paulemon v. Tobin, 30 F.3d 307, 309-10 (2d Cir. 1994) (same)).
The Second Circuit has held that the standard by which a court is to judge a defendant's alleged deceptive or misleading correspondence under Section 1962e is that of the "least sophisticated consumer." E.g., Clomon v. Jackson, 988 F.2d 1314, 1318 (2d Cir. 1993). "The basic purpose of the least-sophisticated-consumer standard is to ensure that the FDCPA protects all consumers, the gullible as well as the shrewd." Id.
C. Defendant's Allegedly Deceptive Letter
Only the defendant's first letter, dated January 21, 2002, is alleged to be deceptive here. The plaintiff argues that the least sophisticated consumer would read the first letter, which states that the settlement offer of $6,447.42 would expire on March 2, 2002, as the final offer and the final date past which any settlement whatsoever would be accepted by the collection agency. The plaintiff contends that by issuing a second letter on March 5, 2002, after the expiration of the first deadline, offering to settle for a lower amount than that provided in the first letter, the settlement offer in the first letter becomes deceptive. The court does not agree.
Specifically, the plaintiff contends that:
[w]hile a more savvy consumer may call the defendant and further negotiate, the least sophisticated consumer will take the letter at face value. A consumer may engage in great efforts to assemble the amount of money demanded to settle the debt. That consumer may then be unable to pay the amount by the deadline. The consumer would then correctly believe that the settlement offer has expired and that the full amount is due. However, at the time of the first collection letter, the defendant did not intend for the deadline to be a true deadline, but defendant offered a lower settlement amount with a new deadline in the second letter.
Pl. Reply Memo in Supp. at 3; see Pl. Memo in Supp. at 5. The plain language of the defendant's first letter, dated January 21, 2002, however, does not give rise to this interpretation. The plaintiff's contention that an unsophisticated consumer would actually take the mental steps enumerated above is mere speculation. There is simply no indication in the letter that the agency will not accept less than $6,447.42 before March 2, 2002, nor is there any indication that it will not settle after March 2, 2002 for a lesser amount. In fact, the letter offered the plaintiff the alternative to indicate that she could not settle for the offered amount and that she desired the agency to call her to "discuss [her] account." Thus, the plain language provides, even to the least sophisticated consumer, that there is potential for negotiation of both the price and the date. The first letter, therefore, is not deceptive in any way and does not violate the FDCPA.
In addition, a holding by the court that a settlement offer which expires on a date certain becomes deceptive when an agency later offers a lower settlement amount upon expiration of the first offer would have a number of undesirable results for consumers and courts alike. Such a holding would necessarily deter agencies from ever offering a lower settlement amount, and thus eliminate settlement possibilities. Such a holding might also make the plaintiff's prophecy come true: if an agency could not offer a lower settlement amount upon expiration of its initial offer, a debtor would be justified in believing he or she had to accept the agency's first offer or the entire sum would be due upon the expiration date. Put simply, it would be unwise and against the consumers' best interests to restrict opportunities for settlement in such a manner.
Both parties concede that there is no controlling case law that specifically addresses the plaintiff's claim under FDCPA Section 1692e, Pl. Memo in Supp. at 5; see Def. Memo in Supp. at 8, and the court can find none. The plaintiff purports to use as persuasive authority for her case cases in which courts have found a violation of FDCPA Section 1692g — where a debt collector has improperly notified or failed to notify consumers of their statutorily-provided rights — also to be a violation of Section 1692e as a deceptive or misleading communication. The plaintiff contends that a defendant's good intentions are irrelevant in Section 1692g cases and should be so here. See Pl. Reply Memo in Supp. at 3. Such an attempt to analogize this case to Section 1692g "notice" cases, however, is based on faulty logic. While a claim under 1692g may also be a claim under Section 1692e, the opposite is not necessarily true. Here, the plaintiff's case has nothing whatsoever to do with statutorily required notice and is based solely on an alleged violation of Section 1692e; thus, the court need not find reasoning of courts in 1692g cases controlling or illuminating.
CONCLUSION
The court should DENY the plaintiff's motion for a judgment on the pleadings and should GRANT the defendant's cross-motion.* * * * * * *
Any objections to the Report and Recommendation above must be filed with the Clerk of the Court with a copy to the undersigned within 10 days of receipt of this report. Failure to file objections within the specified time waives the right to appeal any judgment or order entered by the District Court in reliance on this Report and Recommendation. 28 U.S.C. § 636(b)(1); Fed.R.Civ.P. 72(b); IUE AFL-CIO Pension Fund v. Herrmann, 9 F.3d 1049, 1054 (2d Cir. 1993); Frank v. Johnson, 968 F.2d 298 (2d Cir.), cert. denied, 113 S. Ct. 825 (1992); Small v. Secretary of Health and Human Serv., 892 F.2d 15, 16 (2d Cir. 1989) (per curiam).