Opinion
18-CV-01468 (LDH) (RER) 18-CV-01470 (LDH) (RER)
2019-09-13
Christopher WITT, on behalf of himself and all others similarly situated, Plaintiff, v. MIDLAND FUNDING LLC and Midland Credit Management, Inc., Defendants. Candice Moore, on behalf of herself and all others similarly situated, Plaintiff, v. Midland Funding LLC and Midland Credit Management, Inc., Defendants.
Mitchell L. Pashkin, Huntington, NY, for Plaintiff. Ellen Beth Silverman, Matthew B. Corwin, Hinshaw & Culbertson, LLP, New York, NY, for Defendants.
Mitchell L. Pashkin, Huntington, NY, for Plaintiff.
Ellen Beth Silverman, Matthew B. Corwin, Hinshaw & Culbertson, LLP, New York, NY, for Defendants.
MEMORANDUM AND ORDER
LaSHANN DeARCY HALL, United States District Judge:
Plaintiffs Christopher Witt and Candice Moore, in related cases, bring individual actions against Defendants Midland Funding LLC ("Midland Funding") and Midland Credit Management, Inc. ("Midland Credit"), alleging violations of the Fair Debt Collection Practices Act, 15 U.S.C. § 1692e ("FDCPA"). Defendants move to dismiss each complaint pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure.
Although the facts of the individual complaints differ in some respects, the facts are otherwise materially identical. For this reason, on July 11, 2018, Chief Judge Dora L. Irizarry ordered that the matter of Candice Moore v. Midland Funding LLC et al. , No. 18-cv-01470, be deemed related to the matter of Christopher Witt v. Midland Funding LLC et al. , No. 18-cv-1468, which was reassigned to this Court on March 8, 2019. Accordingly, on June 17, 2019, Moore was also reassigned to this Court. Therefore, this memorandum and order resolves both matters.
Plaintiffs each originally brought the following four causes of action: (1) Defendants' classification as "current balance" was in violation of 15 U.S.C. § 1692e if the amount owed was accruing interest, late charges, and/or other charges; (2) Defendants failed to notify Plaintiffs that their balance may increase due to accruing interest, late charges, and/or other charges; (3) the letter sent by Defendants to each Plaintiff was a false, deceptive, or misleading means in connection with the collection of a debt, in violation of §§ 1692e, 1692e(2)(A), and 1692e(10) ; and (4) the letter sent by Defendants to each Plaintiff was in violation of the validation of debts provision in § 1692g. By stipulation dated September 10, 2019, Plaintiffs each voluntarily dismissed their third and fourth causes of action.
The following facts are taken from the complaints and are assumed to be true unless otherwise indicated.
Plaintiff Witt was issued a Lowe's brand credit card issued by Synchrony Bank for his individual use. (Witt Compl. ¶ 9, ECF No. 7.) Witt incurred charges on the credit card and ultimately failed to make payments on the balance. (Id. ) Plaintiff Moore was issued a credit card by Credit One Bank, N.A. for her individual use. (Moore Compl. ¶ 9, ECF No. 6.) Moore incurred charges on the card, which she too failed to pay. (Id. ) Midland Credit is a debt-collection agency, the principal purpose of which is the collection of debts. (Id. ¶ 13.) On or about October 12, 2016, Midland Credit, on behalf of Midland Funding, sent each Plaintiff a letter in an attempt to collect the past due debts due to Midland Funding. (Witt Compl. ¶¶ 7, 8; Moore Compl. ¶¶ 7, 8.) The letter to Moore set forth a "current balance" of $587.62. (Moore Compl. ¶ 30.) The letter to Witt set forth a "current balance" of $775.06. (Witt Compl. ¶ 30.)
STANDARD OF REVIEW
To withstand a Rule 12(b)(6) motion to dismiss, a complaint "must contain sufficient factual matter, accepted as true, to ‘state a claim to relief that is plausible on its face.’ " Ashcroft v. Iqbal , 556 U.S. 662, 678, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009) (quoting Bell Atl. Corp. v. Twombly , 550 U.S. 544, 570, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007) ). A claim is facially plausible when the alleged facts allow the court to draw a "reasonable inference" of a defendant's liability for the alleged misconduct. Id . While this standard requires more than a "sheer possibility" of a defendant's liability, id. , "[i]t is not the Court's function to weigh the evidence that might be presented at trial" on a motion to dismiss. Morris v. Northrop Grumman Corp. , 37 F. Supp. 2d 556, 565 (E.D.N.Y. 1999). Instead, "the Court must merely determine whether the complaint itself is legally sufficient, and, in doing so, it is well settled that the Court must accept the factual allegations of the complaint as true." Id . (citations omitted).
DISCUSSION
Plaintiffs allege that the collection letters they each received were in violation of the FDCPA. Each collection letter describes the outstanding balance on their respective accounts as the "current balance." (Witt Compl. ¶ 30; Moore Compl. ¶ 30.) As such, Plaintiffs contend that if each debt were not in fact accruing interest, late charges, and/or other charges on the balance, then describing the balance as "current" was a false representation in violation of the FDCPA. (Witt Compl. ¶ 31; Moore Compl. ¶ 31.) Defendants contend that Plaintiffs' allegations fail, because use of the word "current" in this case is not misleading as a matter of law. (Mem. Law Supp. Def.' Midland Funding, LLC, & Midland Credit Mgmt., Inc.'s Combined Mot. Dismiss ("Mot") 7, Witt ECF No. 15, Moore ECF No. 14.) The Court agrees.
The question of whether a communication complies with the provisions of the FDCPA is answered with reference to the hypothetical "least sophisticated consumer." Kolbasyuk v. Capital Mgmt. Servs., LP , 918 F.3d 236, 239 (2d Cir. 2019). That is, courts "ask how the least sophisticated consumer—one not having the astuteness of a Philadelphia lawyer or even the sophistication of the average, every day, common consumer—would understand the collection notice." Taylor v. Fin. Recovery Servs. , 886 F.3d 212, 214 (2d Cir. 2018). Pursuant to this standard, a collection notice is deemed misleading if it is "open to more than one reasonable interpretation, at least one of which is inaccurate." Avila v. Riexinger & Assocs. LLC , 817 F.3d 72, 75 (2d Cir. 2016).
In Taylor v. Financial Recovery Services , the Second Circuit grappled with whether a collection notice is misleading within the meaning of the FDCPA when it fails to disclose that interest and fees are not currently accruing on a debt. 886 F.3d at 214-15. The Second Circuit found in favor of the debt collector, reasoning that "if a collection notice correctly states a customer'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 debt under Section 1692g." Id. at 215 ("[A] collection notice that fails to disclose that interest and fees are not currently accruing on a debt is not misleading within the meaning of Section 1692g."). Since Taylor , district courts have followed this reasoning to hold that use of the word "current" to describe a balance does not violate the FDCPA when interest is not accruing because a consumer would correctly understand that paying the amount in the letter would satisfy the debt. E.g., Bella v. Bureaus Inv. Grp. Portfolio No. 15 LLC , 17-cv-6115, 2019 WL 2295840, at *3-4 (E.D.N.Y. May 30, 2019) (holding where collection letter clearly indicated plaintiff's "total current balance" was not accruing, "the ‘least sophisticated consumer’ would not have been prejudicially misled by the language"); McAdams v. Stoneleigh Recovery Assocs., LLC , No. 16-CV-5517, 2018 WL 7982269, at *4 (E.D.N.Y. Sept. 27, 2018) ("[T]he phrase ‘Current Account Balance’ cannot reasonably be construed, under the least sophisticated consumer standard, as implying that the debts at issue may (or will) accrue interest or late fees, particularly when the collection letters also state that no interest and fees have accrued since charge-off."); Hussain v. Alltran Fin., LP , 17-cv-3571, 2018 WL 1640584, at *2 (E.D.N.Y. Apr. 4, 2018) (acknowledging that a reasonable consumer is likely to assume that paying the amount listed on a debt collection letter will satisfy his debt and finding where Plaintiffs did not allege that the debt is accruing interest was fatal to claim for violation of § 1692e ).
Here, Plaintiffs have not alleged that interest was in fact accruing on their accounts. If they had, arguably, the use of the word "current" could result in confusion. Instead, Plaintiffs contend that use of the word "current" is misleading because it implies that the debt may change. As noted above, this argument has been soundly rejected by courts in this district, as it is here. Perhaps recognizing the consequence of Taylor and its progeny, Plaintiffs direct the Court to the Seventh Circuit decision Chuway v. National Action Financial Services, Inc. , 362 F.3d 944 (7th Cir. 2004), which was cited in a footnote by the court in Taylor . Plaintiffs' reliance on Chuway is misplaced. Even if Chuway were binding, it is inapposite. There, the court did not hold that use of the phrase "current balance" to describe a debt that was in fact static was misleading. Indeed, that issue was not before the court. The Chuway court instead dealt with a collection letter stating one balance, yet urged the recipient call a 1-800 number in order to receive "[the] most current balance information," which may have revealed a different balance. Id. at 947-48. In other words, the collection letter implied that the balance listed likely would have increased and would no longer be "current" by the time the plaintiff called. However, here, Plaintiffs' respective collection letters do not suggest that the amount owed was different than the amount stated in the letter. Instead, the collection letters received by Plaintiffs are similar in substance to the letter received by the plaintiff in Bella v. Bureaus Investment Group Portfolio No. 15 LLC , which stated, "current balance due." 2019 WL 2295840, at *1. There, the court determined that "the ‘least sophisticated consumer’ would not have been prejudicially misled by the language of the collection letter that [the plaintiff] received." Id. at *4. The same conclusion is warranted here.
Notably, the only plausible instance of Plaintiffs alleging that each respective debt was accruing interest and/or fees occurred with respect to the second cause of action, which was voluntarily withdrawn. Compared to the first cause of action, Plaintiffs' second cause of action presumes interest is accruing. Judge Bianco asked for an express clarification in light of these inconsistencies. (See ECF No. 18.) Rather than expressly indicating whether interest was accruing, Plaintiffs withdrew their second cause of action. (See ECF No. 19.) Plaintiffs' voluntary dismissal of their second cause of action, the basis of which assumed the debt was accruing interest, suggests the debt was in fact not accruing interest.
CONCLUSION
For the foregoing reasons, Defendants' motions to dismiss is GRANTED. Plaintiffs' complaints are dismissed with prejudice.
SO ORDERED.