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D'Allesandro v. Vision Financial Corp.


March 31, 2009


On appeal from Superior Court of New Jersey, Law Division, Burlington County, Docket No. L-514-07.

Per curiam.


Argued November 18, 2008

Before Judges Winkelstein and Fuentes.

Plaintiff Nicholas D'Allesandro, a debtor, appeals from the order of the Law Division granting the summary judgment motion of defendant Vision Financial Corporation (Vision Financial), a debt collection agency. Plaintiff argues that a series of correspondence sent by defendant characterizing a debt he allegedly incurred as "valid," is deceptive, misleading, and violates the Fair Debt Collection Practices Act (FDCPA or the Act). 15 U.S.C.A. §§ 1692 -- 1692p. We affirm.

We describe the following facts from the evidence presented before the motion court in support of and in opposition to defendant's summary judgment motion. According to the certification filed by Stewart Dauman, the president of Vision Financial, plaintiff allegedly owes membership fees to Retro Fitness for the privilege of using its physical fitness facility. When direct attempts at collecting this delinquent account proved unsuccessful, Retro Fitness transferred the debt to defendant for collection.

On September 13, 2006, Vision Financial sent plaintiff its first correspondence, which read in pertinent part as follows:

We have been asked to contact you by our client, 8338-Retro Fitness Lumberton, regarding your past due invoice with them. Their records indicate that your payment has not been received or processed as of the date of this correspondence, and therefore is listed with us for collection.

If you feel you have a suitable explanation for this balance remaining open, or you are unsure of its validity, you may contact us directly . . . .

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 of receiving this notice, this office will pull and obtain verification of the debt or obtain a copy of such judgment or verification.

According to Dauman, plaintiff did not respond to this letter. On October 16, 2006, Vision Financial sent plaintiff a second letter stating in part: "Thirty days ago we wrote you advising you of a possible outstanding debt owed to our client, 8338-Retro Fitness Lumberton. Since we have not received a response from you, we are legally permitted to pursue collecting on this account as allowed by State and Federal law."

Again, defendant alleges that plaintiff failed to respond to its letter. On November 14, 2006, twenty-eight days after the date of the second letter, Vision Financial sent plaintiff a third letter stating in part:

You have chosen to ignore all our previous notices. If there is justification on your part to disregard your obligation to 8338-Retro Fitness Lumbertion, this is your opportunity to provide us with a response. They provided you with a health club membership and they have the right to be paid for their service.

We have been hired by our client to collect on a valid debt owed to them and will continue to pursue this outstanding amount until your account is fully resolved.

Against this backdrop, plaintiff filed a complaint in the Law Division dated February 20, 2007, against Vision Financial and Andrew Kaplan (denoted in the complaint as "an employee of Defendant Vision Financial"), seeking class action certification on behalf of himself and "all natural persons within the preceding 12 months to whom the Defendants directed correspondence similar to that received by the Plaintiff alleging debts were due to third parties." Plaintiff alleged that defendants' conduct violated the Fair Debt Collection Practices Act, specifically, that:

The correspondence sent by [Vision Financial dated November 14, 2006,] did not contain a statement of validation rights, nor was any such statement sent within 5 days, in violation of 15 [U.S.C.A. §] 1692g(a). [Vision Financial's] correspondence does not notify of the consumer's right to dispute a debt, in violation of 15 [U.S.C.A. §] 1692g(a). [Vision Financial's] correspondence overshadows Plaintiff's statutory rights to a 30 day window to dispute the debt, . . . in violation of 15 [U.S.C.A. §] 1692e(10) and/or 15 [U.S.C.A. §] 1692g(a)(4) and/or Graziano v. Harrison, 950 F.2d 107 (3rd Cir. 1991).

[Vision Financial's] correspondence is deceptive because it refers to the debt being collected as "valid", implying that a decision regarding validity has been made by a neutral third party or court.

Without providing consumers such as the Plaintiff with all required notices and disclosures and then imparting that debt has already been determined to be valid [Vision Financial's] correspondence directed Plaintiff to "Remit Balance due now!", thus attempting to collect a debt by use of deceptive means or to obtain information about the consumer, in violation of 15 [U.S.C.A. §]1692e(10).

As framed by the parties before the motion judge, the central issue is whether the third and final letter complied with the Act. Plaintiff argued that by using the word "valid" in its third letter, Vision Financial implied that the debt had been deemed legally enforceable by a third party and no longer subject to challenge by plaintiff.

In response, Vision Financial argued that its actions here strictly complied with the requirements of the Act. According to Vision Financial, the use of the word "valid" in this correspondence is permitted because, under the Act, a debt collector may consider the debt "valid" if the debtor does not respond to a notice within thirty days.

The court agreed with Vision Financial's position, finding that the language used in the third letter conformed with the provisions in 15 U.S.C.A. § 1692g(a)(3). Quoting from this statute, the court held that "unless the consumer within 30 days after receipt of the notice disputes the validity of the debt or any portion thereof, the debt will be assumed to be valid by the debt collector." (Emphasis added.)

This appeal now follows. Because the motion court decided this matter through summary judgment, we will be guided by the standards articulated by the Supreme Court in Brill v. Guardian Life Ins. Co. of Am., 142 N.J. 520, 540 (1995) and R. 4:46-2. See EMC Mortg. Corp. v. Chaudhri, 400 N.J. Super. 126, 136 (App. Div. 2008) (citing Liberty Surplus Ins. Corp. v. Nowell Amoroso, P.A., 189 N.J. 436, 445-46 (2007)). That is, the judgment sought shall be rendered only if "the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." Brill, supra, 142 N.J. at 528-29 (quoting R. 4:46-2).

Here, we are satisfied that there are no material facts in dispute. The case brought by plaintiff is based entirely on the correspondence sent by Vision Financial. The matter is thus ripe for adjudication as a matter of law.

Congress enacted the FDCPA 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 Act prohibits a debt collector from using "any false, deceptive, or misleading representation or means in connection with the collection of any debt" including "the false representation of the character, amount or legal status of the [the] debt[.]" 15 U.S.C.A. § 1692e, (2)(A).

A legitimate collection notice must contain specific information including "a statement that unless the consumer, within thirty days after receipt of the notice, disputes the validity of the debt, or any portion thereof, the debt will be assumed to be valid by the debt collector." 15 U.S.C.A. § 1692g(a)(3). "Those provisions permit a consumer to halt debt collection by disputing the debt, but also permit a debt collector to resume collection efforts by verifying the debt." Hodges v. Sasil Corp., 189 N.J. 210, 229-30 (2007) (citing Spencer v. Hendersen-Webb, Inc., 81 F. Supp. 2d 582, 593 (D. Md. 1999)).

We analyze a debt collector's actions under the "least-sophisticated debtor" standard. Graziano v. Harrison, 763 F. Supp. 1269, 1279 (D.N.J. 1990). Under this objective standard, "[t]he question is not whether [the plaintiff here was] deceived or mislead, but rather whether an unsophisticated consumer would have been mislead." Beattie v. D.M. Collections, Inc., 754 F. Supp. 383, 392 (D. Del. 1991) (citing Wright v. Credit Bureau of Georgia, Inc., 548 F. Supp. 591, 600 (N.D. Ga. 1982), on reconsideration, 555 F. Supp. 1005 (N.D. Ga. 1983)).

When applying the least-sophisticated consumer standard, we must keep in mind that Congress intended the FDCPA to protect all consumers, "the gullible as well as the shrewd." Clomon v. Jackson, 988 F.2d 1314, 1318 (2d Cir. Conn. 1993). The standard is thus designed to serve a dual purpose: "(1) [to] ensure[] the protection of all consumers, even the naive and the trusting, against deceptive debt collection practices; and (2) to protect debt collectors against liability for bizarre or idiosyncratic interpretations of collection notices." Id. at 1320. Toward that end, "the 'least sophisticated consumer' can be presumed to possess a rudimentary amount of information about the world and a willingness to read a collection notice with some care." Id. at 1319.

With these principles as our guide, we return to the issue at hand, namely: whether Vision Financial's reference to plaintiff's debt as "valid" in the November 14, 2007 letter was false, deceptive or a misleading representation of the debt, as prohibited under § 1692e of the Act. Because plaintiff has included all three letters as the factual basis for his cause of action, we infer that he received and read them. Despite this, it is undisputed that plaintiff chose not to respond to the letters.

Vision Financial argues that since plaintiff did not contest the debt within thirty days of receiving the first notice, the inclusion of the word "valid" in reference to the debt was not deceptive pursuant to § 1692g(a)(3) of the Act, which reads as follows:

[A] debt collector shall . . . . send the consumer a written notice containing . . . a statement that unless the consumer, within thirty days after receipt of the notice, disputes the validity of the debt, or any portion thereof, the debt will be assumed to be valid by the debt collector. (Emphasis added.)

[15 U.S.C.A. § 1692g(a)(3).]

Plaintiff argues that a "valid debt" is materially different from an "alleged" or "unpaid debt" because it conveys that the debt has been sanctioned by a third party such as a judge or arbitrator. Citing the Merriam-Webster website, plaintiff defines valid as "having legal efficacy or force." Since the debt was "simply a claim that money was due," plaintiff argues that it did not have "legal efficacy or force," and is therefore misleading.

We reject this argument because based on a plain reading of 15 U.S.C.A. § 1692g(a)(3), Vision Financial was statutorily authorized to state to plaintiff: "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." The word "valid" in this context was not selected by Vision Financial; Congress specifically included the word in the statute as a means of apprising the consumer of his or her obligation to respond to the notice. Under the Act, plaintiff's inactions have legal consequences. One of those consequences is the right of a creditor to assume that the debt is valid.



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