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Leone v. Ashwood Financial

May 9, 2009

ANGELA LEONE, ON BEHALF OF HERSELF AND ALL OTHERS SIMILARLY SITUATED PLAINTIFF,
v.
ASHWOOD FINANCIAL, INC. DEFENDANT.



The opinion of the court was delivered by: Spatt, District Judge.

MEMORANDUM OF DECISION AND ORDER

I. BACKGROUND

On October 19, 2006, the plaintiff, Angela Leone, filed this action under the Fair Debt Collection Practices Act ("FDCPA"), 15 U.S.C. § 1692, on behalf of herself and approximately 117 putative class members against the defendant debt collection agency, Ashwood Financial, Inc. ("Ashwood"). The plaintiff contends that the defendant violated Sections 1692e(5) and (10) of the FDCPA by transmitting false and misleading information in connection with an attempt to collect a debt, as well as falsely threatening the plaintiff with legal action.

The letter complained of stated, in pertinent part:

Please be advised that your account has been assigned to Ashwood Financial. Unless arraignments can be made to pay this debt we may have no alternative than to turn this debt over to an attorney. This action may result in a civil suit being filed against you.

Letter to Angela Leone, June 22, 2006 (emphasis added)

On March 16, 2009, the Court denied the defendant's motion for summary judgment and granted the plaintiff's motion for summary judgment on the ground that it was without authority to carry out its threatened action. In addition, the Court found that the defendant failed to obtain additional approval or authorization from the client creditor to commence civil actions against any of the 117 persons in the class prior to sending substantially the same letter to those persons.

Further, the Court granted the plaintiff's motion to certify a class pursuant to Fed. R. Civ. P. 23 (b)(3). The Court certified the class as:

[A]ll persons whom Defendant's records reflect resided in the State of New York and who were sent a collection letter (a) bearing the defendant's letterhead in substantially the same form as the letter sent to the plaintiff on or about June 22, 2006 sent within one year prior to the date of the within complaint; (b) the collection letter was sent to a consumer seeking payment of a consumer debt; (c) the collection letter was not returned by the postal service as undelivered; and (d) that the letter contained violations of 15 U.S.C. §§ 1692e(5) and 1692e(10).

Finally, the Court ordered that the plaintiff submit a proposed class action notice and provided a five day period for objections to the proposed notice. On March 23, 2009, the plaintiff submitted a proposed class action notice for the Court's consideration. To date, no objections have been filed.

Fed. R. Civ. P. 23(c)(2)(B) provides that

[f]or any class certified under Rule 23(b)(3), the court must direct to class members the best notice that is practicable under the circumstances, including individual notice to all members who can be identified through reasonable effort. The notice must clearly and concisely state in plain, easily understood language:

(i) the nature of the action;

(ii) the definition of the class certified;

(iii) the class claims, issues, or defenses;

(iv) that a class member may enter an appearance through an attorney if the member so desires;

(v) that the court will exclude from the class any member who requests exclusion;

(vi) the time and manner for requesting exclusion; and

(vii) the binding effect of a class judgment on members under Rule 23(c)(3).

The plaintiff's proposed class notice makes several references to a settlement. However, the Court has not been informed of any proposed settlement between the parties and any award in this matter will be in the form of a judgment. Thus, all references to a settlement should be removed from the notice. Further, the Court finds that in order to render the class description adequate, a copy of the letter received by Leone, with personal identifying information redacted, must be attached to the notice. See Ayzelman v. Statewide Credit Serv's. Corp., 238 F.R.D. 358, 367 n.14 (E.D.N.Y. 2006).

In addition, the proposed notice lacks language informing class members that they "may enter an appearance through counsel if the member so desires." Fed. R. Civ. P. 23(c)(2)(B). Finally, the notice should identify the charity to which uncollected monies will be donated. Accordingly, Court approves ...


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