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Diaz v. Residential Credit Solutions, Inc.

United States District Court, E.D. New York

April 29, 2013

ALTAGRACIA DIAZ, on behalf of herself and all others similarly situated, Plaintiff,
v.
RESIDENTIAL CREDIT SOLUTIONS, INC., Defendant

Page 250

[Copyrighted Material Omitted]

Page 251

For the Plaintiff: Abraham Kleinman, Esq., Of Counsel, Kleinman LLC, Uniondale, NY.

For the Plaintiff: Cathleen M. Combs, Esq., & Tiffany N. Hardy, Esq., of Counsel, Edelman, Combs, Latturner & Goodwin, LLC, Chicago, IL.

For the Defendant: John A. Doonan, Esq., Stephen M. Valente, Esq., & Reneau J. Longoria, Esq., of Counsel, Doonan, Graves & Longoria, LLC, Beverly, MA.

OPINION

Page 252

MEMORANDUM OF DECISION AND ORDER

ARTHUR D. SPATT, United States District Judge.

On July 31, 2012, the Plaintiff Altagracia Diaz (" the Plaintiff" ), on behalf of herself and all others similarly situated, commenced this action against the Defendant Residential Credit Solutions, Inc. (" the Defendant" or " RCS" ) for alleged unlawful credit and collection practices engaged in by the Defendant in violation of the Fair Debt Collection Practices Act, 15 U.S.C. § 1692 et seq. (" FDCPA" ). Presently before the Court is the Defendant's motion to dismiss, to which the Plaintiff has responded and simultaneously filed an Amended Complaint. For the reasons set forth below, this Court denies the Defendant's motion.

I. BACKGROUND

The following facts are drawn from the Plaintiff's Amended Complaint and construed in a light most favorable to the Plaintiff.

A. Underlying Facts

On or about May 5, 2012, the Defendant sent a validation notice to the Plaintiff seeking to collect an alleged consumer debt. In this regard, the validation notice claimed that the Plaintiff owed a sum to JP Morgan Mortgage Acquisition Corporation (" JP Morgan" ) in connection with a mortgage loan. The total debt was for $370,430.91.

According to the Plaintiff, the validation notice " is a form letter (designated OL0315) which [the] [D]efendant uses for the purpose of attempting to comply with 15 U.S.C. § 1692g." (Amend. Compl., ¶ 9.) In addition, the " Plaintiff did not receive any other document from [the] [D]efendant purporting to contain the initial disclosures required by 15 U.S.C. § 1692g." (Amend. Compl., ¶ 10.)

The Defendant's May 5, 2012 letter advised the Plaintiff as follows:

You may notify RCS in writing within thirty days of receipt of this letter that the debt or any portion of the debt is disputed. If no notice is received by RCS within the 30 day period, it will be assumed that the above information is accurate and the debt is valid. If/once written notice is received within the 30 day period, RCS will obtain verification of the debt or a copy of a judgment against you, the consumer. A copy of

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the verification of debt or judgment will be mailed to the mailing address on record for you along, with, if requested in writing, a statement that provides the name and address of the original creditor.

(Amend. Compl., Exh. A.)

The Plaintiff asserts that this passage violates the FCPA, specifically 15 U.S.C. § § 1692g(a), 1692e, 1692e(2) and 1692e(10). In this regard, the Plaintiff alleges that the letter (1) " [s]tates that any dispute that the debtor elects to send is to be in writing, when a writing is only necessary to obtain verification of the debt or the identification of the original creditor" ; (2) indicates that the Defendant needs to receive notice that the debt is being disputed within the 30 day period, when the Plaintiff is only required to send her notice within that period and is not required to guarantee receipt; (3) " [s]tates that '[i]f no notice is received by RCS within the 30 day period, it will be assumed that . . . the debt it is valid," without limitation, when only RCS and its principal may assume that it is valid" ; and (4) " [s]tates that all information set forth in the letter concerning the debt will be assumed to be valid, including information which the debtor knows nothing about and can know nothing about, such as whether RCS is holding any 'unapplied funds' and whether there is a negative 'escrow balance,'" even though there is no authorization for this found in 15 U.S.C. § 1692g. (Amend. Compl, ¶ 12.)

B. Procedural History

As mentioned above, on July 31, 2012, the Plaintiff commenced this action by filing the Original Complaint in the Eastern District of New York seeking " (1) [a] declaration that [the D]efendant's letter violates the FDCPA; (2) [s]tatuory damages; [and] (3) [a]ttorney's fees, litigation expenses and costs of suit[.]" (Orig. Compl., " WHEREFORE" ¶ .) The Original Complaint asserted only one cause of action for violations of the FDCPA and also sought to bring this action on behalf of a class, pursuant to Fed.R.Civ.P. 23(a) and 23(b)(3). The sole allegation included in the Original Complaint is that the Defendant's May 5, 2012 letter " fail[ed] to comply with [] 15 U.S.C. § 1692g(a)(3) because it state[d] that the notice must be in writing." (Orig. Compl., ¶ 10.)

On October 23, 2012, pursuant to Fed.R.Civ.P. 12(b)(6), the Defendant moved to dismiss the Plaintiff's Original Complaint for failure to state a claim. The Defendant argues that its correspondence and communication with the Plaintiff regarding the Plaintiff's debt complied with all state and federal laws, including the FDCPA.

On November 6, 2012, the Plaintiff filed her opposition to the Defendant's motion to dismiss. In addition, also on November 6, 2012 and pursuant to Fed.R.Civ.P. 15(a)(1), the Plaintiff filed an Amended Complaint. In the Amended Complaint, the Plaintiff asserted the same cause of action as the Original Complaint, still sought to bring the action on behalf of a class and requested the same relief. However, the Plaintiff provided additional factual allegations in support of her lawsuit, as set forth above.

On November 14, 2012, the Defendant filed its reply in further support of its motion to dismiss. In its reply, the Defendant contends that the Plaintiff's Amended Complaint is not materially different ...


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