D’Addario v. Enhanced Recovery Company, L.L.C., No. 10-6131; U.S. District Court (DNJ); opinion by Irenas, S.U.S.D.J.; filed July 14, 2011. DDS No. 15-7-3200 [9 pp.]
Plaintiff, Adam D’Addario, alleges that defendant, Enhanced Recovery Company, L.L.C., violated the Fair Debt Collection Practices Act (FDCPA) by making a debt settlement offer that expired before the 30-day window for plaintiff to contest the debt’s validity elapsed.
Plaintiff is a “consumer” and Enhanced Recovery is a “debt collector” as defined by the FDCPA. Enhanced Recovery sent an initial letter to plaintiff dated Oct. 15, 2010, offering a “REPAYMENT OPPORTUNITY” on a debt of $8,744.70 to Chrysler Financial. On the back of the letter are the notices of plaintiff’s rights, including his right to dispute the debt within 30 days of receiving the letter.
Plaintiff alleges that this letter is a misleading and inaccurate demand for payment because Option 1 (i.e., payment on Oct. 30, 2010) falls within the 30-day window for disputing the debt. The complaint asserts one count — ­violation of the FDCPA.
Enhanced Recovery filed a motion to dismiss. Plaintiff filed a motion for class certification.
Held: The collection letter at issue is a permissible settlement offer, not a misleading demand for payment.
The FDCPA provides, “A debt collector may not use any false, deceptive or misleading representation or means in connection with the collection of any debt.” A communication is deceptive for the purposes of the act if it can be reasonably read to have two different meanings, one of which is inaccurate. Similarly, the statutorily required notices, including the validation notice, must be communicated effectively. Thus, a debt collector violates the FDCPA when the validation notice is overshadowed or contradicted by other portions of the communication.
Whether a communication is deceptive, and whether it overshadows or contradicts the validation notice, is evaluated from the perspective of the least sophisticated debtor.
Plaintiff argues that the letter he received was misleading because the first payment option offered payment on the debt prior to the expiration of the 30-day validation period. The court disagrees. Nothing in the statute prohibits settlement of a debt within the validation period. Moreover, even the least sophisticated debtor could not believe that the letter presented him with an either/or proposition — i.e., either dispute the debt’s validity or pay off the debt, but not both. The letter does not emphasize one option over the other, or suggest that plaintiff forgo disputing the debt’s validity in favor of immediate payment.
More important, the letter contains no threats or demands whatsoever. It does not even suggest the possibility of legal action on the debt. Thus, the letter here is analogous to the letter at issue in Wilson v. Quadramed Corp. , which was held to not violate the FDCPA. In Wilson , the debt collector’s letter sought immediate payment on a debt and then included the validation notice. The Third Circuit expressly rejected the debtor’s argument that affording him an opportunity to pay immediately and avoid further action is the equivalent of demanding payment within a period of less than 30 days. The court observed that the debt collector’s use of “immediately” was used to convey its interest in collecting the debt in a timely fashion and concluded that the least sophisticated debtor would not interpret “afford you the opportunity to pay this bill immediately” as a demand for payment within less than 30 days. The letter at issue here does not even use the word “immediately,” and is therefore arguably even less forceful than the letter in Wilson .
The court concludes that the letter at issue is a permissible settlement offer, not a misleading demand for payment. Defendant’s motion to dismiss is granted. Plaintiff’s motion to certify the class is dismissed as moot.
— By Debra McLoughlin
For plaintiff — Bruce K. Warren and Brent F. Vullings (Warren & Vullings). For defendant — Christopher G. FitzPatrick (Smith, Gambrell & Russell).