Schmelczer v. Penn Credit Corp.

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NAFTALI SCHMELCZER, individually and on behalf of all others similarly situated, Plaintiff, v. PENN CREDIT CORPORATION, Defendant.

No. 20-CV-2380 (KMK)

United States District Court, S.D. New York

March 23, 2022

Craig B. Standers, Esq.

Jonathan M. Cader, Esq.

Kara McCabe, Esq.

Barshay Sanders, PLLC

Counsel for Plaintiff

Richard J. Perr, Esq.

Kaufman Dolowich & Voluck, LLP

Philadelphia, PA

Counsel for Defendant

OPINION & ORDER

KENNETH M. KARAS, UNITED STATES DISTRICT JUDGE.

Plaintiff Naftali Schmelczer (“Plaintiff”) brings this putative class action against Penn Credit Corporation (“Defendant”), alleging that Defendant engaged in unlawful credit and collection practices in violation of the Fair Debt Collection Practices Act (“FDCPA”), 15 U.S.C. §§ 1692, et seq. (See Compl. (Dkt. No. 1).) Before the Court are Defendant's and Plaintiff's Cross-Motions for Summary Judgment. (See Def.'s Not. of Mot. (Dkt. No. 28); Pl.'s Not. of Mot. (Dkt. No. 34).) For the foregoing reasons, Defendant's Motion is granted and Plaintiff's Motion is denied.

I. Background

A. Factual Background

The following facts are drawn from the Parties' statements pursuant to Local Rule 56.1, (see Def.'s Rule 56.1 Statement (“Def.'s 56.1”) (Dkt. No. 29); Pl.'s 56.1 Statement (“Pl.'s 56.1”) (Dkt. No. 37); Def.'s Rule 56.1 Counter-Statement (“Def.'s Counter 56.1”) (Dkt. No. 43); Pl.'s Rule 56.1 Counter-Statement (“Pl.'s Counter 56.1”) (Dkt. No. 48)), and the admissible evidence submitted by the Parties. The facts as described below are in dispute only to the extent indicated.^[1]

Plaintiff is “a citizen of the State of New York residing in Spring Valley, New York, ” and a “consumer” as defined by 15 U.S.C. § 1692(a)(3). (Pl.'s 56.1 ¶¶ 1-2; Def.'s Counter 56.1 ¶¶ 1-2.) Defendant is a “debt collector” as defined by 15 U.S.C. § 1692a(6). (Pl.'s 56.1 ¶ 3; Def.'s Counter 56.1 ¶ 3.) As relevant to the instant dispute, Defendant contracts with RevSpring-a company that provides document creation and delivery services for accounts receivable management companies, healthcare organizations, banking institutions, municipal and county governments, and telecommunication companies-to assist in its collection activities. (Def.'s 56.1 ¶¶ 4-5.)

On or about June 18, 2019, Suez New York (a utility company) placed Plaintiff's account, which at the time held a negative balance of $1, 448.28, in collections with Defendant. (Def.'s 56.1 ¶ 1; Pl.'s Counter 56.1 ¶ 1; see also Pl.'s 56.1 ¶¶ 4-5; Def.'s Counter 56.1 ¶¶ 4-5.) On June 19, 2019, Defendant transmitted an electronic request to RevSpring to prepare and send a collection letter to Plaintiff. (Def.'s 56.1 ¶ 3.) The following day, RevSpring sent Plaintiff a letter, dated June 19, 2019, that sought to collect on Plaintiff's unpaid balance with Suez New York on behalf of Defendant (the “Payment Letter”). (Def.'s 56.1 ¶ 6; Pl.'s Counter 56.1 ¶ 6; see also Pl.'s 56.1 ¶¶ 6-7; Def.'s Counter 56.1 ¶¶ 6-7.)

The Payment Letter states, in relevant part:

Our client has referred your delinquent account(s) referenced below for collection. Our client is serious about collecting all monies owed [to] them and I am sure your intentions are to honor your debt. Send payment using the enclosed envelope or you may go online to http://account.penncredit.com to make payment or contact our office to pay over the phone. Contact our office if you are unable to pay the amount due. 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 and mail you a copy of such judgment or verification.

(Def.'s 56.1 Ex. A (“Perrotta Aff.”) (Dkt. No. 29-1), Ex. 2 (“Payment Letter”).) The Payment Letter also notes that Plaintiff owed $1, 448.28 for a “delinquent utility bill” with a “service date” of May 17, 2019, and identifies “SUEZ New York” as the creditor. (Id.)

The bottom portion of the Payment Letter is a detachable coupon (the “Coupon”), which states: “DETACH AND RETURN WITH PAYMENT TO EXPEDITE CREDIT TO YOUR ACCOUNT.” (Id.) As relevant to the instant dispute, the Coupon contains three different mailing addresses. (Id.) The top-left corner of the Coupon lists the following address: “P.O. Box 1259, Department 91047, Oaks, PA 19456” (the “Oaks Address”). (Id.) The bottom-left corner of the Coupon lists an address for Plaintiff. (Id.) And, the bottom-right corner of the Coupon lists the following address: “PENN CREDIT, P[.]O[.] Box 69703, Harrisburg, PA 17106-9703” (the “Harrisburg Address”). (Id.) The Coupon also lists various instructions regarding different methods for how debtors may make payments. (Id.)

The Payment Letter also directs the recipient to the “reverse side for important information concerning your rights.” (Id.) The reverse side reads:

Please be advised that in accordance with the [FDCPA], debt collectors are prohibited from engaging in abusive, deceptive, and misleading debt collection efforts, including but not limited to: (i) the use or threat of violence; (ii) the use of obscene or profane language; and (iii) repeated phone calls made with the intent to annoy, abuse[, ] or harass.

(Id.) This side of the Payment Letter also informs recipients-in this case, Plaintiff-about a debt collector's right to sue to collect the debt, but notes that certain state and federal laws protect certain types of income from attachment. (See id.) Finally, there is an additional notice made pursuant to New York state law. (See id.)

The Payment Letter was mailed in an envelope with two glassine windows such that the Oaks Address and Plaintiff's address were visible from the outside. (Def.'s 56.1 ¶¶ 16-17; see also Def.'s 56.1 Ex. B (“Astheimer Decl.”) (Dkt. No. 29-2), Exs. 2, 3.) Defendant represents that RevSpring also included a return envelope in the envelope in which the Payment Letter was sent. (Def.'s 56.1 ¶ 18.) The return envelope had one glassine window such that if the Coupon was inserted into it, the Harrisburg Address would be visible from the outside. (Id. ¶ 20; see also Astheimer Decl. Exs. 4, 5.) Defendant represents that while correspondence or payments should be sent to Defendant at the Harrisburg Address, if a debtor sends any correspondence or payments to the Oaks Address-RevSpring's return address-RevSpring would have promptly either forwarded the mail to Defendant as a courtesy or returned the mail to the United States Postal Service as return to sender “if there was any doubt regarding the intended address for the enclosed correspondence.” (Def.'s 56.1 ¶¶ 21, 24.)

Plaintiff claims that the Payment Letter confused him when he received it for several reasons. First, Plaintiff was confused because he did not believe he owed Suez New York $1, 448.28. (Pl.'s 56.1 ¶ 8.) Second, Plaintiff was confused because he did not understand how to dispute the debt, (id. ¶ 9); while the Payment Letter explains that written disputes should be mailed to Defendant's “office, ” Plaintiff was confused as to whether the Oaks Address or the Harrisburg Address was Defendant's office address, (id. ¶¶ 10, 12). Plaintiff claims that he did not want to call Defendant to ask for clarification because he was afraid that Defendant “would not tell him about his right to dispute the [debt] but, instead, would try to get Plaintiff [to] agree to pay the [debt] that he believed to be in excess of the amount owed.” (Id. ¶ 13.) Plaintiff also claims that he “was further concerned because [he] never heard of [Defendant] before [he] got the [Payment Letter] and there are so many scams going around these days, [that] [Plaintiff] did not know if this was a legitimate business or if someone was just trying to get [Plaintiff's] credit card or bank information by making [him] believe that [he] was paying a debt that [he] supposedly owed.” (Decl. of Naftali Schmelczer in Supp. of Pl.'s Mot. (“Pl. Decl.”) ¶ 13 (Dkt. No. 36).) Plaintiff never mailed any written correspondence or payments to either the Harrisburg Address or the Oaks Address, (Def.'s 56.1 ¶¶ 25-26; Pl.'s Counter 56.1 ¶¶ 25-26); instead, Plaintiff gave the Payment Letter to his attorney, (Pl. Decl. ¶ 14).

B. Procedural History

Plaintiff filed his Complaint on March 18, 2020. (See Compl.) On June 2, 2020, Defendant filed a pre-motion letter in anticipation of filing a motion to dismiss. (Dkt. No. 7.) After receiving Plaintiff's response, (Dkt. No. 9), the court held a pre-motion conference on July 16, 2020 and adopted a briefing schedule, (see Dkt. (minute entry for July 16, 2020)). On July 31, 2020, Defendant filed its Motion To Dismiss. (See Not. of Mot. (Dkt. No. 13) Mem. of Law in Supp. of Mot. (Dkt. No. 14).) On August 21, 2020, Plaintiff filed his Opposition, (see Mem. of Law in Opp'n to Mot. (Dkt. No. 15)), and on August 28, 2020, Defendant filed its Reply, (see Reply Mem. of Law in Supp. of Mot. (Dkt. No. 16)). On February 1, 2020, the Court issued an Opinion & Order denying Defendant's Motion To Dismiss. (See Op. & Order (“MTD Op.”) (Dkt. No. 20).) The Court relied heavily on its then-recent Opinion & Order on the motion to dismiss filed in Adler v. Penn Credit Corporation, No. 19-CV-7084 (S.D.N.Y.), a nearly identical action brought against the same defendant and involving the same counsel for both parties, and ruled that “given the appearance of the Coupon and the lack of clear instructions in the Payment Letter, . . . Plaintiff has stated a plausible claim under the FDCPA and that [the Court] [could not] dismiss the Complaint at...