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United States District Court, E.D. New York

April 8, 2004.

ANDREY KOLGANOV, on behalf of himself and all others similarly situated, Plaintiff,

The opinion of the court was delivered by: SANDRA J. FEUERSTEIN, District Judge


I. Introduction

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.

  II. Background

  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 at 6), he has since withdrawn this claim.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 12).

  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 Cir. 1996).

  IV. Analysis

  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. 2002).

  "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.
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 debts.").

  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 the conference.


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