United States District Court, E.D. New York
BLIMA KRAUS, On Behalf of Herself and All Other Similarly Situated Consumers, Plaintiff,
PROFESSIONAL BUREAU OF COLLECTIONS OF MARYLAND, INC., Defendant.
MEMORANDUM AND ORDER
GLASSER, SENIOR UNITED STATES DISTRICT JUDGE
Blima Kraus ("Kraus") brings this putative class
action against Professional Bureau of Collections of
Maryland, Inc. ("PBCM"), alleging violations of the
Fair Debt Collection Practices Act ("FDCPA"), 15
U.S.C. § 1692 et seq. Before the Court is
PBCM's motion to dismiss the complaint under Rule
12(b)(6) of the Federal Rules of Civil Procedure.
claim is essentially as follows: She alleges that PBCM's
June 6, 2016 letter to her (the "Letter"), which
transmitted an offer to settle her debt for 40% of her
account balance, violated 15 U.S.C. § 1692e because it
listed her account balance but did not indicate that the
account balance might increase due to interest or other
charges. Section 1692e prohibits the use of "any false,
deceptive, or misleading representation or means in
connection with the collection of any debt, " including
"[t]he false representation of. . . the character,
amount, or legal status of any debt." 15 U.S.C.
§§ 1692e, 1692e(2)(A). In Avila v. Riexinger
& Associates, LLC, the Second Circuit held that a
debt collector violates § 1692e if it notifies a
consumer of his or her account balance but fails to disclose
that the consumer's balance may increase due to interest
and fees. See 817 F.3d 72, 76-77 (2d Cir. 2016). But
Avila also provides a safe harbor for a debt
collector who "fail[s] to disclose that the
consumer's balance may increase due to interest and
fees" but nonetheless "clearly states that the
holder of the debt will accept payment of the amount set
forth in full satisfaction of the debt if payment is made by
a specified date." Id. at 77. The questions
facing the Court are whether Avila applies to the
Letter and, if so, whether the settlement offer in the Letter
brings PBCM within the safe harbor.
the Court concludes that, though Avila applies, the
Letter falls within the safe harbor, the Court grants
PBCM's motion and dismisses the complaint. The Letter
clearly communicated that PBCM would accept payment of the
settlement amount-40% of the account balance, or $1,
552.45-in full satisfaction of Kraus's debt if the
payment was received by June 20, 2016; this brings PBCM
within the safe harbor. Significantly, Kraus alleges no
confusion as to the terms of the settlement offer,
transmittal of which was the purpose of the Letter. Kraus
does not allege-nor plausibly could she-that she was (or that
the hypothetical "least sophisticated consumer"
would have been) misled as to (i) whether payment of the 40%
settlement offer would fully satisfy the debt, (ii) the
precise amount of the settlement offer, or (iii) the date by
which the payment would need to be received by PBCM to
satisfy the debt. To hold PBCM liable in these circumstances
would be to reward a creative yet ostensibly unharmed
plaintiff at the expense of a non-abusive debt collector
that, by making a discounted settlement offer, was acting in
consumers' best interests. The law does not demand such
an absurd result.
PBCM is in the business of collecting debts owed to others.
ECF 1 ("Compl."), ¶¶ 5-6. Plaintiff Kraus
is a resident of New York who allegedly incurred a consumer
debt, which alleged debt PBCM then sought to collect.
Id. ¶¶ 2-3, 9. On or about April 11, 2016,
PBCM sent to Kraus a letter (the "Validation
Notice") that, among other things, (i) stated that her
debt to Comenity Bank had been assigned to PBCM; (ii)
notified her of the account balance; and (iii) provided other
information required by 15 U.S.C. § 1692g(a), including
a statement that the debt's validity would be assumed
unless disputed by the consumer within thirty days and an
offer to obtain verification of the debt if it were to be
disputed. See ECF 9-1, Ex. A.
about June 6, 2016, PBCM sent to Kraus the Letter, which
reads, in relevant part, as follows:
Your account has been assigned to Professional Bureau of
Collections of Maryland, Inc.
40% SETTLEMENT OFFER
We have been authorized by our client Comenity Bank to offer
you an opportunity to pay less than the amount due. This
settlement as offered shall be in the amount of 40% of the
This settlement offer will expire unless we receive your
payment of $1, 552.45 due in our office on or before
This notice is sent by a professional debt collector.
This is an attempt to collect a debt and any information
obtained will be used for that purpose.
Compl.¶10 & Ex. 1.
Letter identifies Kraus's "Account Balance" as
$3, 881.13. Id., Ex. 1. The Letter does not indicate
what portion of this account balance was the original
principal or what portion, if any, was attributable to
interest or other charges, nor does it indicate whether the
account balance might increase due to interest and fees.
See Id. Kraus alleges that she was unsure whether
the account balance was accruing interest or whether it would
accrue interest or other charges going forward. Id.
¶¶ 16, 19, 21. She further alleges that the account
balance in fact was accruing interest daily and,
moreover, that the account balance listed in the letter
included the original principal, fees, and contractual
interest. Id. ¶¶ 15, 18, 26.
filed this action on June 6, 2017. ECF 1. She purports to
bring the action on behalf of two classes: (i) Class A,
consisting of New York residents who received collection
letters in the same form as the Letter; and (ii) Class B,
consisting of New York residents who suffered a series of
other FDCPA violations allegedly committed by PBCM (which
series of alleged violations is ungrammatically and,
consequently, confusingly enumerated in paragraph 77 of the
complaint). Id. ¶¶ 76-77.
7, 2017, PBCM moved the Court to dismiss the complaint under
Rule 12(b)(6). ECF 9. Kraus did not timely file an opposition
brief. The Court heard oral argument on September 15, 2017.
See ECF 15.
complaint must contain a "short and plain statement of
the claim showing that the pleader is entitled to
relief." Fed.R.Civ.P. 8(a)(2). To survive a motion to
dismiss under Rule 12(b)(6), "a complaint must contain
sufficient factual matter, accepted as true, to 'state a
claim to relief that is plausible on its face.'"
Ashcroft v. Iqbal, 556 U.S. 662, 663 (2009) (quoting
Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 570
(2007)). "A claim has facial plausibility when the
plaintiff pleads factual content that allows the Court to
draw the reasonable inference that the defendant is liable
for the misconduct alleged." Id. at 678. In
deciding a Rule 12(b)(6) motion, the Court must accept the
non-moving party's factual allegations as true and draws
all reasonable inferences in its favor. ATSI
Commc'ns, 493 F.3d at 98. But the Court may
consider, in addition to the facts stated in the complaint,
"any written instrument attached to the complaint,
" as well as "documents possessed by or known to
the plaintiff and upon which it relied in bringing the
The Fair Debt Collection Practices Act
FDCPA was enacted in response to a "serious national
problem" of debt collection abuse. S. Rep. 95-382, at 2
(1977), reprinted in 1977 U.S.C.C.A.N. 1695, 1696.
The enacted purpose of the statute was "to eliminate
abusive debt collection practices, " while
simultaneously ensuring that non-abusive debt collectors
"are not competitively disadvantaged." 15 U.S.C.
§ 1692(e). Section 1692e "establishes a general
prohibition against the use of 'false, deceptive, or
misleading representation or means in connection with the
collection of any debt.'" Clomon v.
Jackson,988 F.2d 1314, 1318 (2d Cir. 1994) (quoting 15
U.S.C. § 1692e). The ...