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Citibank South Dakota, N.A. v. Razvi


June 26, 2008


On appeal from the Superior Court of New Jersey, Law Division, Special Civil Part, Passaic, Docket No. DC-007300-06 in A-6714-06T3, and from Docket No. DC-017040-06 in A-1084-07T3.

Per curiam.


Submitted May 27, 2008

Before Judges Sabatino and Alvarez.

In these two appeals, calendared back-to-back and consolidated for the purpose of this opinion, we consider defendant Syed A. Razvi's pro se challenge to the entry of judgments against him for balances due on credit card accounts in favor of defendants Citibank South Dakota, N.A. (Citibank), and Chase Manhattan Bank (Chase). Citibank was granted judgment after trial; Chase obtained a default judgment. Defendant, who also acted pro se in the trial court, filed one notice of motion for reconsideration of the judgment awarded to Citibank, and three motions for reconsideration of the judgment awarded to Chase. The appeals are actually taken from those unsuccessful reconsideration orders. We affirm.

Citibank's judgment, which totaled $11,239.96, plus costs of suit, was entered on June 15, 2007. Chase's judgment for $3,545.28 issued on May 11, 2007.

On appeal, defendant contends that federal law required plaintiffs to produce original copies of a contract bearing his signature in order to collect unpaid balances. He is also of the belief that federal law required counsel for the plaintiffs to produce original signed agreements in order to be properly authorized to represent them. He also urges that we consider the following as to both Chase and Citibank: "[t]he [a]ppellant request[s] to re-evaluate and re-examine[] this alleged debt [u]nder the [l]aw [o]f FDCPA USC 15 § 1692g(a), USC 15 § 1643 (2005), USC 15 § 1692k, Federal Evidence Rule 1006, UCC 1006 § 1-205 [and] UCC Rule 1003 Admissibility Act."

At trial, Citibank produced a litigation analyst who testified that defendant opened his credit card account in 1998. Because Citibank retains those records for only seven years, it no longer has a copy of defendant's original credit card application. Citibank also introduced a copy of its current membership agreement of August 2004, however, which states that "if you use the card . . . you agree to the terms and conditions of its use."

Citibank moved into evidence eight years of statements, including charges after August 2004, as well as a number of electronic copies of defendant's cancelled checks in payment of monthly balances. These checks bore not only his name, but his address as well. Although defendant admitted living at that address since 1989, he would not agree that his "exact signature" appeared on the checks. He said he did not remember the credit card account on which he was being sued, would not directly answer questions about the facsimile of his signature on the checks, and further asserted that the proceeding was fraudulent, because Citibank had not authorized its counsel to sue him.

The trial judge found ample proofs had been presented by Citibank establishing the account, that defendant was the credit card user, and as to the amount of the unpaid balance. The judge noted that the signatures on the copies of defendant's checks were similar to his signature on the pleadings filed with the court. The judge further found that defendant's denials were "hedged a good deal," because defendant refused to admit or to deny that the credit card was his own.

Chase mailed its complaint to defendant on March 19, 2007. The attached summons stated that a written answer to the pleadings had to be filed within thirty-five days. Chase filed a motion for summary judgment on April 11, 2007. Defendant did not respond to the complaint nor did he oppose the motion, and accordingly, judgment was entered against him on May 11, 2007, nearly two months later. Defendant, during the course of his reconsideration motions, acknowledged receiving the summary judgment application from Chase on April 14, 2007, but claimed that he did not understand that he was expected to respond.

The same judge who presided over the trial in which Citibank was the plaintiff presided over the Chase matter. The judge found that defendant's prior experience with court proceedings, as well as the explicit language of the documents, added up to defendant being on notice that he needed to file a timely response. The judge said, in fact,

[t]hese [summary judgment] papers are no more complex than the other ones you received. They tell you exactly what to do.

I do not believe that you didn't understand them. I find that you chose not to answer them, because you are an intelligent - - who has responded to pleadings in this case and in other cases. You simply chose not to respond.

The only issue defendant raised specifically in his reconsideration motions was the applicability of 15 U.S.C.A. § 1692 to 1692o, the Fair Debt Collection Practices Act (FDCPA), and he raised it for the first time in those applications. Reconsideration is a matter left to a trial court's sound discretion. Capital Fin. Co. of Del. Valley, Inc. v. Asterbadi, 398 N.J. Super. 299, 310 (App. Div. 2008). Reconsideration is saved for those cases in which either the court has expressed a decision on a "palpably incorrect" basis, or the court did not consider the significance of competent evidence. Ibid. (quoting D'Atria v. D'Atria, 242 N.J. Super. 392, 401 (Ch. Div. 1990)).

Defendant did not raise the FDCPA at the time of the Citibank trial. He did not even oppose Chase's motion for summary judgment entered against him by default, much less raise this supposed issue of federal law.

The purpose of the FDCPA is to "eliminate abusive debt collection practices by debt collectors, to insure that those debt collectors who refrain from using abusive debt collection practices are not competitively disadvantaged, and to promote consistent State action to protect consumers against debt collection abuses." 15 U.S.C.A. § 1692(e). The language has been found to be inapplicable to creditors collecting their own debts. See Aubert v. Am. Gen. Fin., Inc., 137 F.3d 976, 978 (7th Cir. 1998) (credit union and its corporate affiliate are not debt collectors under the FDCPA when they collect under their own name). It did apply, however, to the initial contacts between the attorneys who correspond with a defendant about the credit card balances they are attempting to collect. See Heintz v. Jenkins, 514 U.S. 291, 299, 115 S.Ct. 1489, 1493, 131 L.Ed. 2d 395, 402 (1995) (The FDCPA "applies to attorneys who 'regularly' engage in consumer-debt-collection activity, even when that activity consists of litigation."). The FDCPA governs the manner and time within which a debt collector may communicate with a consumer as to the collection of a debt prior to the institution of an action against him. 15 U.S.C.A. § 1692c. In contrast, Citibank and Chase are defined as creditors, "any person who offers or extends credit." 15 U.S.C.A. § 1692a(4). It is "well-settled" that "a creditor is not a debt collector for the purposes of the FDCPA and creditors are not subject to the FDCPA when collecting their accounts." Stafford v. Cross Country Bank, 262 F. Supp. 2d 776, 794 (W.D. Ky. 2003).

With regard to Citibank, the record establishes that notice was sent to defendant by plaintiff's counsel on April 25, 2006, and in that notice defendant was informed he had thirty days in which to dispute the debt. The correspondence directed that replies should be made to West Caldwell, New Jersey. Defendant, instead of complying with the instructions in the letter, sent a response to Citibank's offices in New York City, requesting a "valid verified firm offer." Defendant also requested an affidavit signed by you in your unlimited commercial capacity showing what goods and services were provided establishing a liability equal to the "alleged" balance of Acct. No. . . . , in the form of a certified copy as described herein, thus substantiating validation "in Fact" and thereby forming a legitimate firm offer.

Defendant's response did not explicitly dispute the Citibank debt; in fact, his intent is unclear. As he did not send the letter to the correct address, nor clearly state that he was disputing the debt, Citibank's agents were not required to either cease collection of the debt or to verify it. 15 U.S.C.A. § 1692g(b). Defendant did dispute the debt in a December 7, 2006 letter addressed to Citibank in Clifton, New Jersey. Pursuant to the FDCPA, however, the thirty days in which he could have disputed the debt pursuant to 15 U.S.C.A. § 1692g had long since elapsed. Defendant cannot properly invoke federal law challenging Citibank's counsel's failure to verify the debt prior to trial when defendant did not follow the procedures spelled out in the FDCPA, or in counsel's letter. Because defendant did not properly request verification of the debt, nor contest it, within the required time frame, he cannot now justifiably complain of any purported failures by Citibank's attorneys prior to the filing of the collection suit.

In accord with the FDCPA, counsel for Chase notified defendant on September 6, 2006, that it was seeking to collect payment on the account, and that defendant had thirty days in which to dispute the debt. Defendant disputed the debt on September 16, 2006. Thereafter, on October 10, 2006, Chase's counsel responded, in compliance with the FDCPA, by supplying defendant with additional documentation regarding the account. Unfortunately, defendant did not provide us with any copies of this documentation in his appendix. Rather, the appendix includes an October 12, 2006 letter addressed to Chase's counsel in which he states that:

As you know my request with your [b]ank, Chase Manhattan Bank USA, N.A[.] as [s]uccessor in interest to Bank One of Delaware, N.A[.] was the validation of the loan in accordance with [15 U.S.C.A.] § 1692g(a)(4), which should be sworn to and subscribed by the Notary Public. Please do not send these copies because these copies are not authentic. Only you have to investigate the alleged debt and get the validation from the bank under oath[] that they lent this alleged debt to the above account.

Contrary to defendant's stated belief, federal law does not prohibit the use of photocopies for the verification of account balances. 15 U.S.C.A. § 1692g(a)(4). All the debt collector is required to do is to "obtain verification of the debt or a copy of a judgment against the consumer and a copy of such verification or judgment will be mailed to the consumer by the debt collector." Ibid. Since defendant did not supply us with copies of the documents we can only assume they indeed verified the balances due. Again, defendant cannot be heard to complain about the asserted failures of Chase in verifying the debt based on his misunderstanding of the law.

Defendant also urges us to examine other statutes which have minimal or no applicability. Because we have considered these contentions as well, and find them not to be of sufficient merit to warrant further discussion in a written opinion, only the briefest mention will suffice. R. 2:11-3(e)(1)(E).

Defendant cites to 15 U.S.C.A. § 1643(b), which provides that "[i]n any action by a card issuer to enforce liability for the use of a credit card, the burden of proof is upon the card issuer to show that the use was authorized." Nothing contained in that statute provides a basis for affording defendant any relief, as both plaintiffs were found to have met their burden of proof and defendant does not even suggest to the contrary.

Defendant also directs our attention to 15 U.S.C.A. § 1692k concerning civil liability for "any debt collector who fails to comply with any provision of this title." Since defendant has not established plaintiffs' failure to comply with any provision of any federal law, the statute is irrelevant.

Similarly, defendant cites to Fed. R. Evid. 1006. The Federal Rules of Evidence would not have applied to these state court proceedings.

Defendant also cites to U.C.C. § 1-205(a) (2004) which provides that the issue of whether an action taken pursuant to the Uniform Commercial Code is reasonable "depends on the nature, purpose, and circumstances of the action." He fails to explain how this section of the Code applies to these appeals.

Defendant's reference to "UCC Rule 1003 Admissibility Act" is entirely confusing. There is no such law.



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