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PUJOL v. UNIVERSAL FIDELITY CORPORATION

United States District Court, E.D. New York


June 9, 2004.

ALFONSO PUJOL, Plaintiff,
v.
UNIVERSAL FIDELITY CORPORATION, Defendant.

The opinion of the court was delivered by: JOHN GLEESON, District Judge

MEMORANDUM AND ORDER

Plaintiff Alfonso Pujol ("Pujol" or "debtor") has filed this putative class action against defendant Universal Fidelity Corporation ("Fidelity" or "defendant") alleging violations of the Fair Debt Collection Practices Act ("FDCPA" or the "Act"), 15 U.S.C. § 1692 et seq. Fidelity now moves to dismiss Pujol's complaint pursuant to Federal Rule of Civil Procedure 12(b)(6) for failure to state a claim on which relief can be granted. In the alternative, it moves for summary judgment pursuant to Federal Rule of Civil Procedure 56. For the reasons set forth below, I grant summary judgment in favor of Fidelity on all claims. BACKGROUND

  The case arises out of a debt collection letter (the "Letter") regarding money Pujol purportedly owed to Sprint PCS ("Sprint" or "creditor"), one of Fidelity's clients. The Letter is from John Lee Jackson, an in-house corporate attorney for Fidelity. The Letter reads as follows:

Dear ALFONSO R. PUJOL,
I serve as In-House Attorney and I am an employee of Universal Fidelity Corporation. Universal Fidelity Corporation is my only source of employment and one of my responsibilities is to oversee the collection process and advise them in matter of corporate law.
OUR CLIENT HAS AGREED TO ACCEPT 80% OF THE ABOVE BALANCE*fn1 AS SETTLED IN FULL. THE FUNDS OF $349.70 MUST BE RECEIVED IN THIS OFFICE WITHIN (10) TEN DAYS OF THE RECEIPT OF THIS LETTER OR THE OFFER IS RESCINDED. UPON RECEIPT OF FUNDS AND CLEARANCE THROUGH THE BANKING SYSTEM, WE WILL CONSIDER THE ABOVE ACCOUNT AS SETTLED.
Do not consider this letter a notification of intent to sue, since I do not have the legal authority to sue. I have not, nor will I, review each detail of your account status, unless you so request.
For your convenience we will accept your payment by phone through electronic check, Visa, Mastercard and American Express. We are pleased to assist you in this matter.
DISCUSSION
A. Converting a Motion to Dismiss to a Summary Judgment Motion

  Fidelity has moved for a dismissal of the complaint for failure to state a claim, or, in the alternative, for summary judgment. On a motion to dismiss, my consideration is limited to the complaint, to "documents attached to the complaint as an exhibit or incorporated in it by reference, to matters of which judicial notice may be taken, or to documents either in [plaintiff's] possession or of which [plaintiff] had knowledge and relied on in bringing suit." Brass v. American Film Technologies, Inc., 987 F.2d 142, 150 (2d Cir. 1993); see also Chambers v. Time Warner, Inc., 282 F.3d 147, 152-53 (2d Cir. 2002); Rothman v. Gregor, 220 F.3d 81, 88 (2d Cir. 2000). Thus, I may properly consider the disputed dunning letter that Pujol has annexed to his complaint in determining the motion under Rule 12(b)(6).

  I cannot properly consider under that rule the two affidavits that Fidelity has submitted in support of its motion. The affidavits are from Jackson and from Gary B. Goolsby, President of Fidelity. Consideration of these extra-pleading attachments is only permissible if I treat the motion as a motion for summary judgment. See Fed.R.Civ.P. 12(b);*fn2 Chambers, 282 F.3d at 154 (conversion to summary judgment strictly enforced whenever extra-pleading material is considered in a motion to dismiss).

  Conversion is appropriate here. There is no surprise to Pujol in treating the motion as one for summary judgment.*fn3 Fidelity's motion expressly sought summary judgment in the alternative; it submitted affidavits to that end; and Pujol's papers in opposition are written in terms of summary judgment. (See Pl's Mem. Opp. Def's Mot. Summ. J. ("Pl's Mem.") at 6.) Furthermore, because there are no disputed issues of material fact and no demonstrated need or desire by the plaintiff for discovery of the defendant, conversion here is especially appropriate.*fn4

  B. The Summary Judgment Standard

  Under Rule 56 of the Federal Rules of Civil Procedure, the moving party is entitled to summary judgment "if 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). The substantive law governing the case identifies the facts that are material, and "only disputes over facts that might affect the outcome of the suit under the governing law will properly preclude the entry of summary judgment." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). Summary judgment is warranted only if "the evidence is such that a reasonable jury could not return a verdict for the nonmoving party." Id.

  Moreover, "the inferences to be drawn from the underlying facts . . . must be viewed in the light most favorable to the party opposing the motion." Matsushita Elec. Indus. Co., Ltd. v. Zenith Radio Corp., 475 U.S. 574, 587 (1986) (internal quotation marks omitted). Once the moving party has met its burden, the opposing party "must do more than simply show that there is some metaphysical doubt as to the material facts. . . . [T]he non-moving party must come forward with `specific facts showing that there is a genuine issue for trial.'" Id. at 586-87 (quoting Fed.R.Civ.P. 56(e)).

  C. The Fair Debt Collection Practices Act The FDCPA was enacted to "eliminate abusive debt collection practices by debt collectors, [and] to insure that those debt collectors who refrain from using abusive debt collection practices are not competitively disadvantaged." 15 U.S.C. § 1692(e); see also Kropelnicki v. Siegel, 290 F.3d 118, 127 (2d Cir. 2002) ("The FDCPA was passed to protect consumers from deceptive or harassing actions taken by debt collectors.") In particular, the Act's legislative history reveals that the need for the law "arose because of collection abuses such as use of `obscene or profane language, threats of violence, telephone calls at unreasonable hours, misrepresentation of a consumer's legal rights, disclosing a consumer's personal affairs to friends, neighbors, or an employer, obtaining information about a consumer through false pretense, impersonating public officials and attorneys, and simulating legal process.'" Kropelnicki, 290 F.3d at 127 (quoting S. Rep. No. 95-382, at 2 (1977), reprinted in 1977 U.S.C.C.A.N. 1695, 1696). The Act tries to prevent and punish debt collection practices that are "unfair, deceptive, or harassing." Id.

  Under the Act, the court must interpret the offending communication as the "least sophisticated consumer" would interpret it. See Clomon v. Jackson, 988 F.2d 1314, 1319-20 (2d Cir. 1993). "This objective standard is designed to protect all consumers, the gullible as well as the shrewd, while at the same time protecting debt collectors from liability for bizarre or idiosyncratic interpretations of collection notices." Maguire v. Citicorp Retail Servs., Inc., 147 F.3d 232, 236 (2d Cir. 1998) (quotations and citation omitted). In applying this objective standard, a court is required to determine, for example, whether the collection letter is "overshadowing or contradictory," or whether it "can be reasonably read to have two or more different meanings, one of which is inaccurate." Russell v. Equifax A.R.S., 74 F.3d 30, 35 (2d Cir. 1996). D. Pujol's Claims

  1. Deceptive Means to Collect a Debt: Section 1692e(10)

  Section 1692e(10) prohibits "[t]he use of any false representation or deceptive means to collect or attempt to collect any debt or to obtain information concerning a consumer." 15 U.S.C. § 1692e(10). Pujol charges that the Letter violates this provision because it stated that if he paid 80% of the debt, the debt would be settled in full. Pujol does not state in the complaint or in his papers why this statement is deceptive. In opposition to the motion for summary judgment, he states: "Because defendant has not conducted any discovery, defendant has not learned the theory of plaintiff's case. Therefore, plaintiff submits that it is premature for the defendant to move at this time. When plaintiff is served with appropriate discovery requests, plaintiff will set forth why plaintiff has alleged that there are deceptive representations in the letter." (Pl's Mem. at 6.)

  This statement is not enough to fend off summary judgment. The President of Fidelity, Gary Goolsby, states in an affidavit that the challenged statement — promising Pujol that paying 80% of his debt would settle his account — was true, and that if Pujol had made such a payment, his account would have been closed. Thus, there was no deception. Moreover, under the "least sophisticated consumer" standard, the Letter's language is sufficiently clear and straightforward to convey that promise. Pujol cannot force Fidelity to trial by saying there was some deception he will disclose only if asked in discovery.

  It is true that a party may avoid summary judgment by a proper showing that it needs discovery to demonstrate the existence of fact issues requiring trial. "[A] party resisting summary judgment on the ground that it needs discovery in order to defeat the motion must submit an affidavit showing (1) what facts are sought [to resist the motion] and how they are to be obtained, (2) how those facts are reasonably expected to create a genuine issue of material fact, (3) what effort affiant has made to obtain them, and (4) why the affiant was unsuccessful in those efforts." Miller v. Wolpoff & Abramson L.L.P., 321 F.3d 292, 303 (2d Cir. 2003) (quotation marks and citation omitted, brackets in original). "Fed.R.Civ.P. 56(f) provides, as interpreted by court opinions, that when a party facing an adversary's motion for summary judgment reasonably advises the court that it needs discovery to be able to present facts needed to defend the motion, the court should defer decision of the motion until the party has had the opportunity to take discovery and rebut the motion." Id. (quotation marks and citation omitted);*fn5 Littlejohn v. Henderson, No. 01-CV-2772 (JG), 2003 WL 21738608, at *3 (E.D.N.Y. June 19, 2003) (same); Amaker v. Haponik, No. 98 Civ. 2663 (JGK), 2002 WL 523385, at *7 (S.D.N.Y. Mar. 29, 2002) (same).

  However, Pujol has neither contradicted Goolsby's testimony that the statement at issue was true, nor requested, in a Rule 56(f) affidavit or otherwise, discovery to challenge that statement. Instead, Pujol has stated that discovery by the defendant is necessary to elucidate Pujol's claim. This argument is entirely unpersuasive. Where a defendant has properly asserted that its challenged representation was true, the plaintiff must present evidence upon which a jury could conclude otherwise. Pujol has failed to do so, and thus summary judgment is appropriate on this issue.*fn6 2. False Representation that Letter is From an Attorney: Section 1692e(3)

  Section 1692e(3) prohibits "[t]he false representation or implication that any individual is an attorney or that any communication is from an attorney." 15 U.S.C. § 1692e(3). Generally, when an attorney signs a letter, that attorney is creating the impression on the least sophisticated consumer that the attorney had "some degree . . . of involvement" in that consumer's case, Miller, 321 F.3d at 301, "at least in the absence of language to the contrary," Clomon, 988 F.2d at 1321. Pujol charges that the Letter violates this provision because it gives the false representation that Jackson, an attorney, had reviewed Pujol's file when, in fact, he was not personally involved in Pujol's case. I disagree.

  The controlling case in our circuit in this area of law is Clomon v. Jackson, 988 F.2d 1314 (2d Cir. 1993). In Clomon, the Second Circuit held that,

the use of an attorney's signature on a collection letter implies that the letter is "from" the attorney who signed it; it implies, in other words, that the attorney directly controlled or supervised the process through which the letter was sent. . . . [T]he use of an attorney's signature implies — at least in the absence of language to the contrary — that the attorney signing the letter formed an opinion about how to manage the case of the debtor to whom the letter was sent.
Id. at 1321 (emphasis supplied); see also Avila v. Rubin, 84 F.3d 222, 228 (7th Cir. 1996) ("Clomon establishes that an attorney sending dunning letters must be directly and personally involved in the mailing of the letters in order to comply with the strictures of FDCPA. This may include reviewing the file of individual debtors to determine if and when a letter should be sent or approving the sending of letters based on the recommendations of others.") Clomon involved a computerized mass mailing system in which the creditor provided account information that was fed into the collection agency's computer, which automatically inserted the debtor's name, address, account number, and balance due information into boilerplate letters. The collection agency maintained a program for assessing the reliability of its computer data, but no agency employee reviewed the file of an individual debtor. The Second Circuit explained that,

 

This impression [from the attorney's signature] was false and misleading because in fact [the attorney] did not review each debtor's file; he did not determine when particular letters should be sent; he did not approve the sending of particular letters based upon the recommendations of others; and he did not see particular letters before they were sent. . . . In short, the fact that [the attorney] played virtually no day-to-day role in the debt collection process supports the conclusion that the collection letters were not "from" [the attorney] in any meaningful sense of that word.
Clomon, 988 F.2d at 1320. The Clomon Court acknowledged that it was mindful of the economic necessity of mass mailing in the debt collection industry, but made it clear that no misleading communications could be tolerated.

  Since Clomon, courts in this circuit have denied summary judgment where the attorney signed the dunning letter but it was unclear how much involvement (if any) the attorney had in reviewing the debtor's file and there was no statement in the letter disavowing personal involvement. Conversely, courts have granted summary judgment for debt collectors where the requisite personal involvement was clear, and for the plaintiffs where the lack of personal involvement was clear.*fn7 Here, unlike the disputed letters in most cases, the Letter would not lead the least sophisticated consumer to believe that Jackson, the signing attorney, had individually reviewed his or her file and made a judgment about how to collect the debt. Indeed, it states the opposite: "I have not, nor will I, review each detail of your account status, unless you so request." Jackson's affidavit confirms that the Letter accurately states that although he was communicating the creditor's desire to settle the debt, he did not make the decision for the creditor or review the debtor's file.*fn8

  Concededly, the Letter would have been clearer if the word "the" was substituted for "each," so that the Letter read: "I have not, nor will I, review the details of your account status." But I do not believe the least sophisticated consumer could read Jackson's letter and reasonably conclude that he had reviewed some of the details in the file, but not others. Furthermore, Clomon recognized that an attorney's signature does not necessarily mean that the attorney was involved in the debtor's case: "The use of an attorney's signature implies — at least in the absence of language to the contrary — that the attorney signing the letter formed an opinion about how to manage the case. . . .". Clomon, 988 F.2d at 1321 (emphasis supplied). Jackson's language here was sufficiently to the contrary, and I therefore hold that the Letter is not actionable under the FDCPA.

  CONCLUSION

  For the foregoing reasons, the defendant's motion for summary judgment is granted in its entirety. The Clerk of Court is directed to enter judgment for the defendant and to close the case.

  So Ordered.


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