Schik v. Miramed Revenue Grp.

SUSSIE SCHIK, individually and on behalf of all other similarly situated Plaintiff, v. Miramed Revenue Group, LLC, Defendant.

18-cv-7897 (NSR)

UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF NEW YORK

September 23, 2020

OPINION & ORDER

NELSON S. ROMÁN, United States District Judge

Plaintiff Sussie Schik, individually and on behalf of all others similarly situated, ("Plaintiff") brings this action against Miramed Revenue Group, LLC ("Defendant") for alleged violations of the Fair Debt Collection Practices Act, 15 U.S.C. § 1692 ("FDCPA"). Defendant moves pursuant to Rule 12(b)(6) to dismiss on the basis that Plaintiff's complaint fails to state a claim upon which relief can be granted. For the following reasons, the motion to dismiss is GRANTED, with prejudice.

BACKGROUND

The following facts are taken from Plaintiff's complaint and attached exhibit. Defendant is regularly engaged in the for-profit collection of debts allegedly owed by consumers. ECF No. 1 at ¶ 8. Defendant alleges Plaintiff owes a debt (the "Debt"). ECF No. 1 at ¶ 10. The Debt was incurred "primarily for personal, family or household purposes." ECF No. 1 at ¶11. At some point, the Debt was assigned or transferred to Defendant for collection. ECF No. 1 at ¶ 13. On April 12, 2018, Defendant sent an initial communication to Plaintiff (the "Collection Notice") in an effort to collect the Debt.

The Collection Notice, which is attached to the complaint, is one side of a single sheet of paper. It includes text in varying sizes, some of which is bolded. ECF No. 1 at ¶ 28-30. Located about one-third down the page, in larger and non-bolded typeface is a box that contains four lines: "**** PLEASE CALL ****"; "Phone: [Defendant's phone number] · Fax: [Defendant's fax number]"; "Outside Illinois: [Defendant's phone number]"; "To make your payment online, please visit us at [Defendant's website]". See ECF No. 1-1.

Near the middle of the page, in a smaller and non-bolded typeface is the following statement (the "Validation Rights"):

Unless you notify this office within 30 days after receiving this notice that you dispute the validity of this debt, or any portion thereof, this office will assume this debt is valid. If you notify this office in writing within 30 days from receiving this notice that you dispute the validity of this debt, or any portion thereof, this office will obtain verification of the debt or obtain a copy of a judgment, if one exists, and mail you a copy of such judgment or verification. If you request of this office in writing within 30 days after receiving this notice, this office will provide you with the name and address of the original creditor, if different from the current creditor.

Located about two-thirds down the page, in larger and bolded typeface, is the statement: "Mail All Written Notices, Including Bankruptcy and Dispute Notices, To [Defendant's Address]." Id.

Immediately prior to the Validation Rights, in the same typeface are two paragraphs: "We request payment in full. If you cannot pay the amount due, but wish to make payments on this overdue debt, please call this office with your proposal and we will discuss payment terms." and "You can mail payment to us at the address listed above. We will also accept payment by credit card or check-by-phone at the phone numbers listed above, or you can pay online at [Defendant's website].". Immediately following the Validation Rights, in the same typeface is one paragraph: "Our client has authorized us to investigate settlement opportunities. Should you be interested in pursuing a settlement of this matter please call our office." Id.

While the Collection Notice primarily consists of black-on-white text, there are four white-on-black text boxes that read: "ADDRESSEE:"; "NOTICE OF AMOUNT DUE"; "MAKE CHECKS PAYABLE & MAIL TO:" and "MAKE CHECKS PAYABLE & MAIL TO:." Id.

On August 29, 2018, Plaintiff filed a complaint alleging that the Collection Notice violates the FDCPA. See ECF No. 1. Specifically, Plaintiff alleges the formatting of the Collection Notice overshadows disclosure of the rights required by § 1692g. Id. Further, Plaintiff alleges the Collection Notice falsely suggests Plaintiff may only dispute the Debt in writing, in violation of §§ 1692g(a)(3) and 1692e. Id.

STANDARD ON A MOTION TO DIMISS

On a motion to dismiss under Fed. R. Civ. P. 12(b)(6), dismissal is proper unless the complaint "contain[s] 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, 678 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)). When there are well-pleaded factual allegations in the complaint, "a court should assume their veracity and then determine whether they plausibly give rise to an entitlement to relief." Id. at 679. "Although for the purpose of a motion to dismiss [a court] must take all of the factual allegations in the complaint as true, [it is] 'not bound to accept as true a legal conclusion couched as a factual allegation.'" Id. (quoting Twombly, 550 U.S. at 555). It is not necessary for the complaint to assert "detailed factual allegations," but must allege "more than labels and conclusions." Twombly, 550 U.S at 555. The facts in the complaint "must be enough to raise a right to relief above the speculative level on the assumption that all the allegations in the complaint are true." Id.

In ruling on a motion to dismiss, a "court may consider the facts as asserted within thefour corners of the complaint together with the documents attached to the complaint as exhibits, and any documents incorporated in the complaint by reference." Peter F. Gaito Architecture, LLC v. Simone Dev. Corp., 602 F.3d 57, 64 (2d Cir. 2010) (internal quotation marks and citation omitted). Courts also may consider "matters of which judicial notice may be taken" and "documents either in plaintiffs' possession or of which plaintiffs had knowledge and relied on in bringing suit." Brass v. Am. Film Techs., Inc., 987 F.2d 142, 150 (2d Cir. 1993).

DISCUSSION

Congress enacted the FDCPA, in part, "to eliminate abusive debt collection practices" and "protect consumers from deceptive or harassing actions taken by debt collectors." 15 U.S.C. § 1692; Gabriele v. Am. Home Mortg. Servicing, Inc., 503 Fed.Appx. 89, 93 (2d Cir. 2012) (internal citations omitted); see Vincent v. The Money Store, 736 F.3d 88, 101 (2d Cir. 2013) (citing Pipiles v. Credit Bureau of Lockport, Inc., 886 F.2d 22, 27 (2d Cir. 1989)) ("Congress painted with a broad brush in the FDCPA to protect consumers from abusive and deceptive debt collection practices."). To achieve these ends, the FDCPA imposes, "among other things, notice and timing requirements on efforts by 'debt collectors' to recover outstanding obligations." Goldstein v. Hutton, Ingram, Yuzek, Gainen, Carroll & Bertolotti, 374 F.3d 56, 58 (2d Cir. 2004). Pursuant to Section 1692k of the FDCPA, "any debt collector who fails to comply with any provision of [the FDCPA] with respect to any person is liable to such person." 15 U.S.C. § 1692k.

To state a claim under the FDCPA, a plaintiff must demonstrate that: (1) the plaintiff is a person who was the object of efforts to collect a consumer debt; (2) the defendant is a debt collector as defined in the statute; and (3) the defendant has engaged in an act or omission in violation of the FDCPA. Cohen v. Ditech Fin. LLC, 15-CV-6828, 2017 WL 1134723, at *5(E.D.N.Y. Mar. 24, 2017) (citing Scaturro v. Northland Grp., No. 16-CV-1314, 2017 WL 415900 at *2 (E.D.N.Y. Jan. 9, 2017)). In evaluating potential violations of the FDCPA, courts must apply an objective standard based on whether the "least sophisticated consumer" would be deceived by the collection practice. See Clomon v. Jackson, 988 F.2d 1314, 1318 (2d Cir. 1993). The "least sophisticated consumer" standard is consistent with the overall purpose of the FDCPA, which is to limit harassing, misleading, and deceptive contacts and communications with or about consumer debtors.

Section 1692g requires a debt collector to provide debtors with written notice of their validation rights. 15 U.S.C. § 1692g. However, the obligation is not simply to convey the validation rights, but rather to convey them clearly. See Jacobson v. Healthcare Fin. Servs., Inc., 516 F.3d 85, 90 (2d Cir. 2008) (citing Russell v. Equifax A.R.S., 74 F.3d 30, 33 (2d Cir.1996)). A debt collection notice that overshadows or contradicts the validation notice violates Section 1692g. Savino v. Computer Credit, Inc., 164 F.3d 81, 85 (2d Cir. 1998); Clomon, 988 F.2d at 1319. A debt collection letter is considered overshadowing or contradictory "if it would make the least sophisticated consumer uncertain as to her rights." Russell, 74 F.3d at 35.

Section 1692e prohibits a debt collector from using or relying on "false representation[s] or deceptive means to collect or attempt to collect any debt or to obtain information concerning a customer." 15 U.S.C. § 1692e(10). Applying the "least sophisticated consumer" standard, a collective notice can be deceptive is if is "open to more than one reasonable interpretation, at least one of which is inaccurate." Easterling v. Collecto, Inc., 692 F.3d 229, 232 (2d Cir. 2012) (quoting Clomon, 988 F.2d at 1319). "[N]ot every technically false representation by a debt collector amounts to a violation of the FDCPA." Cohen v. Rosicki, Rosicki & Assocs., P.C., 897 F.3d 75, 85 (2d Cir. 2018) (quoting Gabriele, 503 F. App'x 89 at 94) (summary order)). For thealleged false representation to violate the FDCPA, the statement must be material such that it would frustrate a consumer's ability to intelligently choose his or her response. Cohen, 897 F.3d at 87.

When evaluating whether a letter violates sections 1692g or 1692e, courts apply "an objective standard, measured by how the 'least sophisticated consumer' would interpret the notice received from the debt collector." Russell, 74 F.3d at 34 (discussing standard in...