United States District Court, E.D. New York
April 8, 2004.
ANDREY KOLGANOV, on behalf of himself and all others similarly situated, Plaintiff,
PHILLIPS & COHEN ASSOCIATES, LTD., Defendant.
The opinion of the court was delivered by: SANDRA J. FEUERSTEIN, District Judge
OPINION & ORDER
Plaintiff Andrey Kolganov ("plaintiff" or "Kolganov") commenced
this suit against defendant Phillips & Cohen Associates, Ltd.
("defendant" or "P&C") alleging violations of the Fair Debt
Collection Practices Act (the "FDCPA" or the "Act"),
15 U.S.C. § 1692 et seq., and the Florida Consumer Collection Practices Act
(the "FCCPA"), Fla. Stat. § 559.72. P&C moves for summary
judgment pursuant to Rule 56 of the Federal Rules of Civil
Procedure. For the reasons set forth below, the motion is GRANTED
in part and DENIED in part.
Plaintiff received a collection letter from P&C dated January
11, 2002. (Compl., exh. A). On June 25, 2002, plaintiff filed
this action alleging that P&C violated §§ 1692e and 1692g of the
FDCPA. Specifically, plaintiff claims that the letter fails to
specify the amount of debt owed and requires an immediate oral
communication in violation of 15 U.S.C. § 1692g(a)(1) and (a)(4). (Id. at 5). Plaintiff further alleges that the letter
overshadows 15 U.S.C. § 1692g by demanding immediate contact.
(Id.). Although plaintiff originally claimed that the use of
"Esq." after the name "Adam S. Cohen" violated
15 U.S.C. § 1692e(3) and F.S.A. § 559.72 in that it deceptively implies that
P&C is a law firm, (id. at 6), he has since withdrawn this
claim. (Pl.'s Mem. of Law in Opp'n to Def.'s Mot. for Summ. J. at
III. Summary Judgment Standard of Review
Summary judgment should not be granted unless "the pleadings,
depositions, answers to interrogatories, and admissions on file,
together with the affidavits, if any, show that there is no
genuine issue as to any material fact and that the moving party
is entitled to judgment as a matter of law." Fed.R.Civ.P.
56(c). A fact is material "if it might affect the outcome of the
suit under the governing law." Holtz v. Rockefeller & Co.,
258 F.3d 62, 69 (2d Cir. 2001). An issue of fact is genuine only if a
jury could reasonably find in favor of the nonmoving party based
on that fact. Id. The moving party bears the initial burden of
establishing the absence of any genuine issue of material fact,
after which the burden shifts to the nonmoving party to establish
the existence of a factual question that must be resolved at
trial. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 256,
91 L.Ed.2d 202, 106 S.Ct. 2505 (1986). The trial court is required
to construe the evidence in the light most favorable to the
nonmoving party, and draw all reasonable inferences in its favor.
Id. at 252; Cifarelli v. Vill. of Babylon, 93 F.3d 47, 51 (2d
Congress enacted the FDCPA to protect consumers from abusive,
threatening, deceitful and otherwise unscrupulous debt collection practices. Russell v.
Equifax A.R.S., 74 F.3d 30, 33 (2d Cir. 1996). A written
validation notice stating the amount of the debt and the name of
the creditor, among other requirements, is mandated by
15 U.S.C. § 1692g when a debt collector solicits payment from a consumer.
The FDCPA is a strict liability statute, and thus "a consumer
need not show intentional conduct by the debt collector to be
entitled to damages." Grief v. Wilson, Elser, Moskowitz, Edelman
& Dicker, LLP, 217 F. Supp.2d 336, 339 (E.D.N.Y. 2002) (quoting
Russell, 74 F.3d at 36).
In order to determine whether the FDCPA has been violated, a
court must apply an objective standard, measured by how the
"least sophisticated consumer" would interpret the debt
collector's notice. DeSantis v. Computer Credit, Inc.,
269 F.3d 159, 161 (2d Cir. 2001); Schweizer v. Trans Union Corp.,
136 F.3d 233, 237 (2d Cir. 1998). The purpose of this objective
standard is to "ensure that the FDCPA protects all consumers, the
gullible as well as the shrewd." Clomon v. Jackson,
988 F.2d 1314, 1318 (2d Cir. 1993). Using this standard, the court must
determine whether the collection letter "can be reasonably read
to have two or more different meanings, one of which is
inaccurate." Russell, 74 F.3d at 35 (emphasis added).
A debt collection letter must include: (1) the amount of the
debt; (2) the name of the creditor to whom the debt is owed; (3)
a statement indicating that, unless the debtor disputes the
validity of the debt within thirty days of receiving the debt
collection letter, the debt will be presumed valid; (4) a
statement indicating that, if the debtor notifies the debt
collector in writing within thirty days of receiving the debt
collection letter that the debt is disputed, the debt collector
will obtain verification of the debt and mail a copy of the
verification to the debtor; and (5) a statement indicating that,
if requested in writing by the debtor within thirty days of receiving the debt collection letter, the debt collector will
provide the debtor with the name and address of the original
creditor, if different from the current creditor.
15 U.S.C. § 1692g(a)(1)-(5). This information, commonly referred to as a
"validation notice," arms the consumer with the facts necessary
to challenge the debt allegedly owed prior to submitting payment
to the collection agency. Russell, 74 F.3d at 32-33; Rumpler
v. Phillips & Cohen Assocs., 219 F. Supp.2d 251, 258 (E.D.N.Y.
"However, `it is not enough for a debt collection agency simply
to include the proper debt validation notice in a mailing to a
consumer Congress intended that such notice be clearly
conveyed.'" Rumpler, 219 F. Supp.2d at 258 (quoting Russell,
74 F.3d at 35). The FDCPA is violated where a debt collection
letter contains language that "overshadows or contradicts"
language in the validation notice. Russell, 74 F.3d at 34. A
debt collection letter is overshadowing or contradictory if it
"fails to convey the validation information clearly and
effectively and thereby makes the least sophisticated consumer
uncertain" as to their rights. Miller v. Wolpoff & Abramson,
L.L.P., 321 F.3d 292, 309 (2d Cir. 2003) (quoting Savino v.
Computer Credit, Inc., 164 F.3d 81, 85 (2d Cir. 1998)); see
also Orenbuch v. N. Shore Health Sys., 250 F. Supp.2d 145, 153
(E.D.N.Y. 2003) (same). The FDCPA is also violated if the
collector conveys the required information "in a confusing or
contradictory fashion so as to cloud the required message with
uncertainty." DeSantis v. Computer Credit, Inc., 269 F.3d 159,
161 (2d Cir. 2001); Rumpler, 219 F. Supp.2d at 258.
A. Amount of the Debt
The collection letter's second paragraph reads: "You are hereby
notified that the above balance does not include the most recent
charges assessed, any applicable over the limit fees, or your most recent daily interest charges. In order to obtain your
most current balance information, please call 1-800-889-2223."
(Compl., exh. A). Plaintiff claims that although the letter lists
the outstanding balance as $7,562.00, it fails to include the
amount of debt owed by referring to additional unspecified
charges, in violation of § 1692g(a)(1). (Id. at 5).
The FDCPA's objective is to require debt collectors to clearly
specify the amount of debt owed. Listing a balance of $7,562.00
while simultaneously noting that additional fees and charges
apply fails to state the debt owed. See Miller v. McCalla,
Raymer, Cobb, Nichols & Clark, 214 F.3d 872, 875 (7th Cir.
2000) ("The unpaid principal balance is not the debt; it is only
part of the debt; the Act requires statement of the debt."). The
least sophisticated consumer could reasonably interpret P&C's
collection letter to have two different meanings regarding the
size of the debt, the first of which is inaccurate: (1) $7,562.00
or (2) $7,562.00 plus recent charges, over the limit fees, and
recent daily interest charges. See McDowall v. Leschack &
Grodensky, P.C., 279 F. Supp.2d 197, 200 (S.D.N.Y. 2003) ("By
leaving an indeterminate amount of interest in the balance due, a
collection letter leaves the least sophisticated consumer unsure
of the magnitude of the debt."); Grief v. Wilson, Elser,
Moskowitz, Edelman & Dicker, LLP, 217 F. Supp.2d 336, 341
(E.D.N.Y. 2002) (letter stating "Amount: $1,962.87 plus
attorneys' fees up to $294.43" presented the least sophisticated
consumer "with, at best, an unclear and, at worst, contradictory
message regarding the amount of money she owes"). Accordingly,
since the description of amount of debt owed was contradictory,
and not clearly conveyed, the letter does not comply with § 1692g
of the FDCPA.
Although the Seventh Circuit has suggested a statement to
satisfy a debt collector's duty to specify the amount of the debt
in cases where the amount varies from day to day, see Miller, 214 F.3d at 876, a better solution may be to require debt
collectors to state the amount of debt, including interest and
all other charges, due on a date certain in the future after the
debtor's receipt of the letter.*fn1 A debtor that chooses to
timely pay the debt is advised of the amount of payment that will
completely satisfy his obligation. On the other hand, a debtor
that neglects his or her account is notified of the
ever-increasing amount that accrues by the failure to promptly
satisfy the debt.
B. Immediate Demand for Payment
In the instant case, the debt collection letter contains the
required validation notice at the bottom of the page. Yet
plaintiff alleges that the letter overshadows and contradicts his
rights under 15 U.S.C. § 1692g by demanding immediate contact.
(Compl. at 5). The text contained in the letter at issue in
Rumpler v. Phillips & Cohen Assocs., 219 F. Supp.2d 251
(E.D.N.Y. 2002), is virtually identical to the letter in the
instant case, except that the former did not contain the
paragraph regarding current balance information. The language of
the Rumpler letter stated:
Your account has been referred to our office for
collection on behalf of the above referenced
creditor. To resolve this matter and prevent any
further collection activity, full payment must be
sent to this office at the address above.
IT IS NOT IN YOUR BEST INTEREST TO NEGLECT THIS
ACCOUNT ANY FURTHER! IF YOU HAVE ANY QUESTIONS,
IMMEDIATELY CONTACT OUR OFFICE AT THE ABOVE TELEPHONE
Id. at 258. These paragraphs were followed by the same
validation notice as contained in the letter at issue here. Id.
Judge I. Leo Glasser held that even though "the Letter states
that payment must be sent in order to prevent further collection activity,
nothing in this language `overshadows' the validation notice at
the bottom of the Letter." Id. I agree.
The letter at issue here neither demands immediate payment of
the alleged debt within a certain amount of time nor overshadows
the provisions afforded to Kolganov under the FDCPA. In essence,
the first paragraph of the letter merely advises Kolganov of
P&C's role and suggests that full payment would resolve the
matter. Conversely, the validation notice clearly outlines the
procedure for Kolganov to follow if he wishes to dispute the
debt. Thus, the first paragraph's language regarding resolution
of the debt does not overshadow or contradict the fourth
paragraph's instructions regarding the right to dispute the debt.
"It does not follow that simply because a collection letter
instructs a consumer to contact a debt collector that the
validation notice is necessarily overshadowed or contradicted."
Lerner v. Forster, 240 F. Supp.2d 233, 238 (E.D.N.Y. 2003);
see also Shapiro v. Dunn & Bradstreet Receivable Mgmt.
Servs., Inc., 209 F. Supp.2d 330, 332-33 (S.D.N.Y. 2002)
(holding that information instructing the consumer how to resolve
the debt did not overshadow validation notice located on the back
of the collection letter); Kramsky v. Mark L. Nichter, P.C.,
116 F. Supp.2d 912, 917 (S.D.N.Y. 2001) ("The FDCPA does not
prohibit debt collectors from encouraging consumers to pay their
Indeed, the letter's content is quite different from cases in
which language was held to be overshadowing. See, e.g.,
Savino, 164 F.3d at 85-86 (collection letter stating "the
hospital insists on immediate payment or a valid reason for your
failure to make payment" overshadowed validation notice);
Russell, 74 F.3d at 34-35 (collection letter stating "if you do
not dispute this claim and wish to pay it within the next 10 days
we will not post this collection to your file" overshadowed
validation notice); Laster v. Cole, No. 99-2837, 2000 WL
306848, at *3-4 (E.D.N.Y. Mar. 20, 2000) (collection letter noting the client's
request for "litigation recommendations" if payment not received
in seven days overshadowed validation notice).
The third paragraph of P&C's letter, stating that "it is not in
your best interest to neglect this account any further" similarly
does not overshadow or contradict the validation notice.
Plaintiff contends that the phrase "if you have any questions,
immediately contact our office at the above telephone number"
overshadows his validation rights by demanding immediate contact.
(Compl. at 5). Contrary to plaintiff's unpersuasive assertion,
the third paragraph does not "demand" immediate contact. If the
consumer has an inquiry, P&C has offered a forum in which
questions can be answered. Such an instruction falls short of
demanding immediate contact, and does not leave consumers
uncertain as to their statutory rights. Thus, the aforementioned
paragraphs of the collection letter are in compliance with the
FDCPA. V. Conclusion
For the foregoing reasons, defendant's motion for summary
judgment is GRANTED in part and DENIED in part. The parties are
directed to appear in my courtroom at 1010 Federal Plaza, Central
Islip, New York on May 6, 2004 at 10:00 am for a settlement
and/or scheduling conference with authority or persons with
authority to resolve this action. Further, the parties are
directed to engage in good faith settlement negotiations prior to
IT IS SO ORDERED.