Puglisi v. Debt Recovery Solutions, LLC

822 F.Supp.2d 218

Michael PUGLISI, Plaintiff,

v.DEBT RECOVERY SOLUTIONS, LLC, Defendant.

No. 08–CV–5024 (JFB)(WDW).

United States District Court, E.D. New York.

Sept. 30, 2011.

Adam J. Fishbein, Cedarhurst, NY, for plaintiff.

Lawrence W. Rader, New York, NY, for defendant.

MEMORANDUM AND ORDER

JOSEPH F. BIANCO, District Judge.

Plaintiff Michael Puglisi (“Puglisi” or “plaintiff”) brought this putative class action on behalf of himself, and on behalf of individuals similarly situated, alleging violations of the Fair Debt Collection Practices Act (“FDCPA”), 15 U.S.C. § 1692 et seq., and the Electronic Fund Transfer Act (“EFTA”), 15 U.S.C. § 1693 et seq., by defendant Debt Recovery Solutions, LLC (“Debt Recovery Solutions” or “defendant”).¹ Plaintiff and defendant have cross-moved for summary judgment. For the reasons set forth herein, plaintiff's motion is denied in its entirety and defendant's motion is granted in part and denied in part.

I. Facts

The Court has taken the facts set forth below from the parties' depositions, affidavits, and exhibits, and from the parties' respective Rule 56.1 statements of facts. Upon consideration of the motions for summary judgment, the Court shall construe the facts in the light most favorable to the non-moving party. See Capobianco v. City of New York, 422 F.3d 47, 50 (2d Cir.2005). Unless otherwise noted, where a party's 56.1 statement is cited, that fact is undisputed or the opposing party has pointed to no evidence in the record to contradict it.²

For purposes of this opinion, the Court assumes familiarity with the January 26, 2010 Memorandum and Order issued by this Court in the instant case which denied defendants' motion to dismiss, but held that to the extent plaintiff alleges violations of the FDCPA that occurred prior to December 12, 2007, those claims are barred by the statute of limitations. See Puglisi v. Debt Recovery Solutions, LLC, No. 08–CV–5024 (JFB)(WDW), 2010 WL 376628 (E.D.N.Y. January 26, 2010).

Defendant Debt Recovery Solutions is a debt collector, which has been in business for eight years and employs twelve collectors. (Def.'s 56.1 ¶ 1.) Plaintiff originally owed a debt to Verizon, which defendant Debt Recovery Solutions attempted to collect from plaintiff. (Def.'s 56.1 ¶¶ 2–4; Pl.'s Aff. ¶ 3.)

A. Collection Efforts and Communication

Defendant's representative and plaintiff communicated regarding the debt and plaintiff agreed to make two payments in full settlement of the debt. (Def.'s 56.1 ¶¶ 3–4; Pl.'s Aff. ¶¶ 4–5.) On November 2, 2007, defendant sent plaintiff a letter memorializing that agreement; under its terms, plaintiff agreed to a payment of $100.00 by November 23, 2007, and a payment of $154.38 by December 23, 2007, and that both payments would be automatically deducted from his bank account by defendant. (Def.'s 56.1 ¶¶ 5–7; Pl.'s Aff. ¶¶ 8, 10, 16–17, Pl.'s 56.1 ¶ 2.)

According to defendant's log entries for plaintiff's account (“account log”) ³, defendant attempted to withdraw the initial payment of $100.00 on November 16, 2007. (Pl.'s Ex. 6 at 4.) ⁴ Plaintiff called defendant to complain that the payment was supposed to be due on November 23, 2007, and that his bank imposed fees for checks returned for insufficient funds.⁵ ( Id.) Defendant agreed to refund plaintiff $60.00 in bounced check fees, which defendant sent to plaintiff on December 7, 2007. ( Id. at 5.)

Subsequent to December 16, 2007, in an undated letter, defendant wrote to plaintiff:

Dear Michael Puglisi:

Please be advised that this office has purchased the above referenced account from VERIZON.

Specific terms of repayment were agreed upon and acknowledged. As of this date, you are in default of this payment arrangement and your immediate response is required in order to avoid additional collection efforts.

Please remit payment immediately.

(Pl.'s Ex. 9 at 2; Def.'s Resp. to Pl.'s Reqs. for Adms., No. 14.) In addition, at the top right, the letter references plaintiff's account number, a balance due of $125.00 and “Repayment term: 100.00 was due on 12/16/2007.” ( Id.) According to plaintiff, the balance due reflects $100.00 owed by plaintiff and $25.00 bounced check fee imposed by defendant.

On December 17, 2007, defendant attempted to withdraw the next payment of $154.38 one week early. (Def.'s 56.1 ¶¶ 8, 10; Pl.'s Ex. 6 at 5.) ⁶ According to defendant, the attempted early withdrawal was a clerical error. (Def.'s 56.1 ¶ 10.)

B. Discovery

Following the January 26, 2010 Memorandum and Order, discovery commenced. In response to plaintiff's requests for admissions, Donald Schwartz, President of defendant Debt Recovery Solutions (“Schwartz” or defendant's “president”), was inconsistent with regard to whether defendant attempted to impose bounced check fees on plaintiff. Specifically, Schwartz stated:

12. The defendant attempted to impose two $25.00 fees for representing [sic] bounced check fees.

Denied. Defendant did not impose the fees; defendant was charged the fees by its bank.

14. In the said undated letter, the $125.00 reflected $100 still owing on the account and a $25.00 bounced check fee.

Admitted. But do not recall if it was $25 or $30.

(Pl.'s Ex. 7 at 2–3, Ex. 8 at 1–2.)

In response to plaintiff's interrogatories, which asked for the names of each “collection representative who spoke with the plaintiff and on what date,” defendant submitted:

+------------------------------+
¦Name            ¦Date         ¦
+----------------+-------------¦
¦Leo Garzon      ¦Oct. 30, 2007¦
+----------------+-------------¦
¦Kimberly David  ¦Nov. 1, 2007 ¦
+----------------+-------------¦
¦Leshawn Lukes   ¦Nov. 26, 2007¦
+----------------+-------------¦
¦Theresa Brown   ¦Nov. 26, 2007¦
+----------------+-------------¦
¦Maxine Fletcher ¦Dec. 5, 2007 ¦
+----------------+-------------¦
¦Ellen Scurry    ¦Dec. 6, 2007 ¦
+------------------------------+

Walter [last name unknown]

Dec. 26, 2007[ ]
Jan. 9, 2008
Nadia Walters     Dec. 29, 2007

(Pl.'s Ex. 7 at 3, Ex. 8 at 2.)

C. Declaration of Defendant's President

By declaration dated December 20, 2010, defendant's president set forth defendant's policies and procedures “intended to prevent any errors or inadvertent violation of the FDCPA and EFTA” to demonstrate defendant's basis for a bona fide error defense. (Donald Schwartz Declaration In Opp. of Pl.'s Mot. and In Support of Def.'s Cross–Mot. (“Schwartz Decl.”) ¶¶ 1–2.) ⁷

Schwartz declared that, after being hired, all new employees are given written procedures in the form of defendant's Company Manual and its Training Manual. (Schwartz Decl. ¶ 4.) The employees then receive “one-on-one” classroom training by a supervisor, followed by mentoring by defendant's “longest tenured and most knowledgeable senior collectors.” ( Id. ¶¶ 4–5.) In addition, a new employee typically has to undergo two to three weeks of training before taking “live calls” and “[w]e have a series of three examinations that are given to all new employees. All collectors must pass at least one exam before they are allowed to commence any collection activity.” ( Id. ¶ 5.) Schwartz further declared that:

As part of our membership with our trade association, our management is invited to and regularly attends various seminars and training programs. Additionally, our trade association keeps us apprised of any new laws that affect our industry in all states throughout the country. We provide additional training as these laws are passed.

(Schwartz Decl. ¶ 6.)

In addition, all written communication to customers are reviewed by management and “company policy currently dictates that prior to the commencement of any collection activity a letter is mailed to the debtor detailing the amount of the debt and the name of the original creditor.” ( Id. ¶¶ 7–8.) Schwartz also declared that “[p]ost-dated payments are actively solicited by our staff, and once received they are calendared both manually and electronically prior to deposit.” ( Id. ¶ 9.) In addition, Schwartz personally investigated the error, and despite the “extraordinary measures” to avoid any such occurrence, the inadvertent posting of the check was “an error by a data entry clerk, who had keyed in the wrong date.” ( Id.) Finally, Schwartz discussed the error with the clerk and cautioned him to be more careful and comply with the training provided by defendant to prevent such error. ( Id. ¶ 9 (“There have been no such incidents since.”).)

Plaintiff never deposed Schwartz or any of the collection representatives who communicated with plaintiff.

D. Procedural History

Plaintiff filed the complaint in this action on December 12, 2008. On October 15, 2009, plaintiff filed an amended complaint. On November 23, 2009, defendant moved to dismiss the amended complaint. By Memorandum and Order dated January 26, 2010, the Court denied defendant's motion in its entirety. Defendant answered on April 29, 2010. On November 19, 2010, plaintiff submitted his motion for summary judgment. Defendant cross-moved for summary judgment on December 20, 2010.⁸ Plaintiff submitted his reply to defendant's opposition to plaintiff's motion for summary judgment and opposition to defendant's motion for summary judgment on January 10, 2011. On March 2, 2011, defendant submitted its reply to plaintiff's opposition to defendant's cross-motion for summary judgment. The Court held oral argument on March 25, 2011. On March 28, 2011, counsel for plaintiff filed a letter requesting leave to address an issue raised at oral argument. In an abundance of caution, the Court granted plaintiff's request. Plaintiff filed his post-argument letter on July 18, 2011 and defendant responded on July 31, 2011. This matter is fully submitted and the Court has fully considered the submissions of the parties.

II. Standard of Review

The standards for summary judgment are well settled. Pursuant to Federal Rule of Civil Procedure 56(c), a court may not grant a motion for summary judgment unless “the pleadings, depositions,...