EDUARDO C. ROBRENO, District Judge.
I. BACKGROUND ..............................................................................248 II. PROCEDURAL HISTORY ......................................................................251 III. STANDARD OF REVIEW ......................................................................252 IV. DISCUSSION .............................................................................252 A. COUNT I: FDCPA ......................................................................252 1. Claims Against Defendant Home ...................................................253 2. Claims Against Defendant FCO ....................................................254 a. § 1692g(a): FCO's dunning letters do not adequately provide the required information ....................................................255 i. The AV2 and HD1AC letters ..............................................256 ii. The HD1A letter ........................................................256 b. § 1692g(b): FCO failed to verify the debt and improperly continued its collection attempts ...........................................262 c. §§ 1692e(11) and 1692d(6): FCO failed to self-identify as a debt collector over the telephone ...........................................264 d. §§ 1692f(1), 1692e(2), and 1692e(10): FCO attempted to collect a debt that Plaintiff did not owe ...........................................266 B. COUNT II: FCEUA .....................................................................269 1. Claims Against Defendant Home ...................................................269 a. No notice fee provision in the lease agreement ..............................270 b. Home sends accounting letters to prior addresses ............................272 c. Home continually changed the amount due .....................................272 d. Plaintiff's alleged debt to Home is bogus and illegal........................273 2. Claims Against Defendant FCO.............................................274 C. COUNT III: UTPCPL ...................................................................274 1. Claims Against Defendant Home ....................................................275 2. Claims Against Defendant FCO .....................................................275 D. COUNT IV: Landlord and Tenant Act ...................................................276 1. Home Improperly Withheld the Security Deposit ...................................276
2. Home Did Not Send a Timely Accounting ...........................................277 E. COUNT V: Civil Conspiracy ...........................................................278 F. Defendant Home's Counterclaim .......................................................279 G. Defendant Home's Request for Sanctions ..............................................279 V. CONCLUSION ..............................................................................279 VI. APPENDIX A: Sample Form AV2 Letters from Defendant FCO ..................................282 VII. APPENDIX B: Sample Form HD1AC Letters from Defendant FCO ................................286
This case, despite the relative simplicity of its claims, has proceeded along an unusually circuitous and contentious path: through fifteen months of discovery battles under the supervision of a Special Master, several iterations of the Complaint, and protracted but unsuccessful settlement negotiations. Now the parties have all filed dispositive motions and the Court, briefs in hand (totaling 320 pages at last count), is ready to bring the matter one step closer to a final disposition.
Plaintiff Mariusz Jarzyna ("Plaintiff") brings this action on behalf of himself and others similarly situated against Defendant Home Properties L.P. ("Home") and Defendant Fair Collections and Outsourcing, Inc. ("FCO"), alleging violations of the Fair Debt Collection Practices Act ("FDCPA"), 15 U.S.C. § 1692 et seq., Pennsylvania's Fair Credit Extension Uniformity Act ("FCEUA"), 73 P.S. § 2270.1 et seq., Pennsylvania's Unfair Trade Practices and Consumer Protection Law ("UTPCPL"), 73 P.S. § 201-1 et seq., and Pennsylvania's Landlord and Tenant Act, 68 P.S. § 250.101. Plaintiff also brings a claim of civil conspiracy under Pennsylvania common law. Each party has moved for summary judgment. For the reasons that follow, the Court will grant these motions in part and deny them in part.
In January 2008, Plaintiff entered into a residential lease agreement with Defendant Home, which operates and manages the Glen Brook Apartments in Glenolden, Pennsylvania ("Glen Brook"). Home's Br. Ex. E, Pl. Dep. 11:22-12:22, Mar. 18, 2011 [hereinafter Pl. Dep.]; id. at 1.
On November 17, 2008, in anticipation of the end of his lease, Plaintiff entered into a new lease agreement with Home, Home's Br. Ex. D, at 2, with a term lasting from January 12, 2009, to August 11, 2009, id.; Pl. Dep. 13:2-7. The $500.00 security deposit from the first lease carried over to the second lease. Pl. Dep. 22:10-15; Home's Br. Ex. D, at 2, 5. The second lease agreement contained the following provisions:
Home's Br. Ex. D, at 3-8.
On August 11, 2009, Plaintiff did not vacate his apartment, and his lease converted to a month-to-month tenancy. Pl. Dep. 23:10-14; Home's Br. 5. On September 1, 2009, Plaintiff gave Home the required one month's notice, stating that he planned to vacate on October 1, 2009. Pl. Dep. 72:12-20; Home's Br. 7. The next day, Home offered Plaintiff a deal if he
On October 23, 2009, Plaintiff received a late notice under his door with a balance due of $1,415.30.
On November 1, 2009, Plaintiff accessed his online balance with Home and learned that it had increased to $2,200. Pl.'s Resp. to Home 8 n. 39; Home's Br. 10. Based on a Statement of Deposit prepared by Home on November 16, 2009 — by which date the balance had increased to $2,397.92
In February 2010, Home retained Defendant FCO — a national debt collection company that regularly contracts with Home — to pursue recovery of Plaintiff's alleged debt. TAC ¶ 54; Home's Br. 11; FCO's Br. 22. Home and FCO's relationship at that time was governed by a Collection Services Agreement ("CSA"), dated April 28, 2008. Home's Br. Ex. K. As part of its collection effort, FCO made several attempts to contact Plaintiff. For example, FCO sent Plaintiff its AV2 dunning letter on March 3, 2010; its HD1A dunning letter on March 22, 2010, and May 21, 2010; its HD1AC dunning letter on April
On June 21, 2010, FCO mailed a dunning letter which Plaintiff did receive, and which the parties have produced. See TAC Ex. 11; see also Pl. Dep. 30:16-31:11; First Am. Compl. ¶ 57, ECF No. 21. The June 21, 2010, letter demanded payment of a "past due account" in the amount of $1,897.92. TAC Ex. 11. On July 17, 2010, Plaintiff sent a letter to FCO disputing the debt and requesting verification. Id. Ex. 12; FCO's Br. 21. FCO responded by furnishing Plaintiff with the Statement of Deposit mentioned above. TAC Ex. 13; FCO's Br. 21. Plaintiff alleges that FCO also called him and his family members numerous times throughout the spring and summer of 2010, despite having received notice that Plaintiff was represented by his brother as counsel. TAC ¶¶ 64-65.
Plaintiff brings the following six claims: FDCPA violations, against Home and FCO (Count I); FCEUA violations, against Home and FCO (Count II); UTPCPL violations, against Home and FCO (Count III); Landlord and Tenant Act violations, against Home only (Count IV); civil conspiracy, against Home and FCO (Count V); and unjust enrichment, against Home and FCO (Count VI).
II. PROCEDURAL HISTORY
On August 18, 2010, Plaintiff filed his initial Complaint. ECF No. 1. In light of myriad discovery disputes among the parties, the Court on August 31, 2011, appointed Stephanie Blair, Esquire, as Special Master in the case to address all pretrial discovery matters. ECF No. 153. On November 21, 2012, Special Master Blair submitted her Final Report and Recommendation, ECF No. 190, which the Court adopted in full on April 4, 2013, over Plaintiff's objections, ECF No. 202.
On April 8, 2013, pursuant to the Court's Order, Plaintiff filed a Third Amended Class Action Complaint against Defendants. ECF No. 205. Defendants filed motions to dismiss for failure to state a claim as to Plaintiff's claim for unjust enrichment (Count VI of the Third Amended Class Action Complaint). ECF Nos. 207-208. Following a hearing, the Court granted these motions. ECF No. 220.
On December 19, 2013, Plaintiff filed a motion for class certification. ECF No. 222. The Court thereafter set deadlines for summary judgment motions and ordered that Defendants were to respond to Plaintiff's motion for class certification within twenty days of the disposition of all motions for summary judgment. ECF No. 227.
On December 30, 2013, Plaintiff filed a motion for summary judgment. ECF No. 225. On January 16, 2014, Defendant
On March 10, 2014, the Court issued an order staying all further proceedings in this case, pending the outcome of settlement negotiations by the parties before Magistrate Judge Rueter. ECF No. 239. The parties participated in settlement conferences on March 31, 2014, and August 11, 2014, to no avail. On February 12, 2015, the Clerk removed the case from suspense. The motions have been fully briefed and are now ripe for disposition.
III. STANDARD OF REVIEW
Summary judgment is appropriate if there is no genuine dispute as to any material fact and the moving party is entitled to judgment as a matter of law. Fed. R.Civ.P. 56(a). "A motion for summary judgment will not be defeated by `the mere existence' of some disputed facts, but will be denied when there is a genuine issue of material fact." Am. Eagle Outfitters v. Lyle & Scott Ltd., 584 F.3d 575, 581 (3d Cir.2009) (quoting Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247-48, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986)). A fact is "material" if proof of its existence or nonexistence might affect the outcome of the litigation, and a dispute is "genuine" if "the evidence is such that a reasonable jury could return a verdict for the nonmoving party." Anderson, 477 U.S. at 248, 106 S.Ct. 2505.
The Court will view the facts in the light most favorable to the nonmoving party. "After making all reasonable inferences in the nonmoving party's favor, there is a genuine issue of material fact if a reasonable jury could find for the nonmoving party." Pignataro v. Port Auth., 593 F.3d 265, 268 (3d Cir.2010). While the moving party bears the initial burden of showing the absence of a genuine issue of material fact, meeting this obligation shifts the burden to the nonmoving party who must "set forth specific facts showing that there is a genuine issue for trial." Anderson, 477 U.S. at 250, 106 S.Ct. 2505.
The guidelines governing summary judgment are identical when addressing cross-motions for summary judgment. See Lawrence v. City of Philadelphia, 527 F.3d 299, 310 (3d Cir.2008). When confronted with cross-motions for summary judgment, "[t]he court must rule on each party's motion on an individual and separate basis, determining, for each side, whether a judgment may be entered in accordance with the Rule 56 standard." Schlegel v. Life Ins. Co. of N. Am., 269 F.Supp.2d 612, 615 n. 1 (E.D.Pa.2003) (quoting 10A Charles A. Wright, Arthur R. Miller & Mary Kay Kane, Federal Practice and Procedure § 2720 (1998)) (internal quotation marks omitted).
A. COUNT I: FDCPA
Congress's purposes in enacting the FDCPA were "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. § 1692(e). Plaintiffs claim that Defendants violated numerous provisions of the FDCPA, as discussed below.
1. Claims Against Defendant Home
In his summary judgment brief, Plaintiff makes no mention of Defendant Home in connection with the FDCPA claim. However, the Third Amended Class Action Complaint alleges the following:
TAC ¶¶ 9-10 (first and second alterations in original). Thus, although Plaintiff does not allege that Home directly collected the debt, he nevertheless alleges that Home is subject to the FDCPA via the conduct of FCO, which did directly attempt to collect the debt.
"The FDCPA's provisions generally apply only to `debt collectors.' Creditors — as opposed to `debt collectors' — generally are not subject to the FDCPA." Pollice v. Nat'l Tax Funding, L.P., 225 F.3d 379, 403 (3d Cir.2000) (citation omitted). For the purposes of this action, the FDCPA defines a "debt collector" as
15 U.S.C. § 1692a(6). "Creditor" is defined as "any person who offers or extends credit creating a debt or to whom a debt is owed, but such term does not include any person to the extent that he receives an assignment or transfer of a debt in default solely for the purpose of facilitating collection of such debt for another." § 1692a(4).
In the portion of the Third Amended Class Action Complaint quoted above, Plaintiff appears to make two separate arguments. First, he asserts that Home is a debt collector by nature of seeking to have its debts collected by FCO. But as Judge Jones recently and convincingly articulated in a similar case brought by Plaintiff's counsel here against Defendants Home and FCO,
Brignola v. Home Props., L.P., No. 10-3884, 2013 WL 1795336, at *6 (E.D.Pa. Apr. 26, 2013) (Jones, J.).
Second, Plaintiff argues that Home, though a creditor, fits within the § 1692a(6) exception for creditors who collect their own debts using a name other than their own. In other words, Home's attempt to collect its debt using FCO renders Home itself a debt collector. The Brignola court addressed an identical argument, finding that it
Id. The Court finds this reasoning to be persuasive. Home is a creditor under the FDCPA, not a debt collector, and thus is not subject to the provisions at issue in this case.
Perhaps anticipating this result, Plaintiff also argues that Home is vicariously liable for FCO's alleged violations of the FDCPA. Pl.'s Resp. to Home 33. However, although the Third Circuit has held that "an entity which itself meets the definition of `debt collector' may be held vicariously liable for unlawful collection activities carried out by another on its behalf," Pollice, 225 F.3d at 404, the Court has already found that Home is a creditor and not a debt collector. Plaintiff having offered no authorities to the contrary,
The facts are undisputed that Home transferred the alleged debt to FCO and FCO proceeded to collect on it. As a matter of law, this Court finds Home to be a creditor for which no vicarious liability under the FDCPA can attach based on the actions of FCO as debt collector. Therefore, related to Count I of the Third Amended Class Action Complaint, Plaintiff's motion for summary judgment will be denied as to Defendant Home, and Home's motion for summary judgment will be granted.
2. Claims Against Defendant FCO
As presented in his motion for summary judgment, Plaintiff's FDCPA claims against Defendant FCO
a. § 1692g(a): FCO's dunning letters do not adequately provide the required information
Under the FDCPA, a debt collector must include the following information in its initial communication to a debtor, or in a communication to be sent within five days after the initial communication:
15 U.S.C. § 1692g(a).
When a debt collector conveys this information, "more is required than the mere inclusion of the statutory debt validation notice in the debt collection letter — the required notice must also be conveyed effectively to the debtor." Wilson v. Quadramed Corp., 225 F.3d 350, 354 (3d Cir.2000). In determining whether a particular validation notice meets the statutory requirements, it must "be interpreted from the perspective of the least sophisticated debtor." Graziano v. Harrison, 950 F.2d 107, 111 (3d Cir.1991) (internal quotation marks omitted). This is a relatively low standard, as the Third Circuit has observed:
Brown v. Card Serv. Ctr., 464 F.3d 450, 454 (3d Cir.2006). But the standard "does not go so far as to provide solace to the willfully blind or non-observant." Campuzano-Burgos v. Midland Credit Mgmt., Inc., 550 F.3d 294, 299 (3d Cir.2008). Rather, it works to "prevent liability for bizarre or idiosyncratic interpretations of collection notices by preserving a quotient of reasonableness and presuming a basic level of understanding and willingness to read with care." Brown, 464 F.3d at 454 (quoting Wilson, 225 F.3d at 354-55) (internal quotation marks omitted). Specific to a § 1692g claim, a statutorily compliant validation notice will "be in print sufficiently large to be read, and must be sufficiently prominent to be noticed. More importantly ..., the notice must not be overshadowed or contradicted by accompanying messages from the debt collector."
Here, Plaintiff references at least three of FCO's standard dunning letters — forms AV2, HD1A, and HD1AC — each of which is alleged either to have omitted the § 1692g validation notice or to have overshadowed such notice with other language. See Pl.'s Br. 20.
i. The AV2 and HD1AC letters
FCO concedes that its standard AV2 and HD1AC letters (attached as Appendices to this memorandum) do not contain the mandatory FDCPA disclosures, but notes that "these letters are designed as follow up correspondence that is sent after the mailing of the initial letter that includes the § 1692g disclosures." FCO's Br. 29. The parties do not address whether FCO also sent an initial letter (which Plaintiff did not receive) that included the required disclosures. Assuming that, for purposes of the motions for summary judgment, the initial letter contained the required disclosures, it remains a question of fact as to whether the letter was ever sent or received.
ii. The HD1A letter
Following is the HD1A letter, dated June 21, 2010, that Plaintiff received from FCO:
TAC Ex. 11, HD1A Letter 1-2.
Plaintiff complains that this letter is structured so that the payment demand overshadows the statutorily required validation notice, and thus the letter violates § 1692g. Specifically, Plaintiff takes issue with the following:
See Pl.'s Br. 25-27; TAC Ex. 11, HD1A letter 1-2.
In Graziano, the Third Circuit's seminal case on the overshadowing of validation notices, a debt collector sent the plaintiff a collection notice that, on the first page, "threatened legal action within ten days unless the debt was resolved in that time"; at the bottom of the first page, noted, "See
In Wilson, the Third Circuit reached the opposite conclusion. There, the collection letter at issue contained three paragraphs, each "printed in the same font, size and color type-face." 225 F.3d at 352. The first paragraph read: "Our client has placed your account with us for immediate collection. We shall afford you the opportunity to pay this bill immediately and avoid further action against you." Id. The second paragraph read: "To insure immediate credit to your account, make your check or money order payable to ERI. Be sure to include the top portion of this statement and place your account number on your remittance." Id. The third paragraph provided the validation notice. Noting that "the debt collection letter here presents a close question," id. at 353, the court nevertheless held that it "did not violate section 1692g of the Act for the reason that the first two paragraphs of the collection letter neither overshadow nor contradict the validation notice," id. at 356.
Id. (footnote omitted).
After closely examining the collection letter in the instant case, the Court finds that it falls much closer to Wilson's letter than to Graziano's. Looking at the letter's formal elements, although "Payment demand — $1897.92" is bolded and certainly draws the eye, the validation notice is clearly printed on the front of the form, in the middle of the page, and in a font that appears as big as, if not slightly bigger than, the text in the body of the letter. The direction to see the reverse side for important legal information is located below the validation notice and, although it is capitalized, it does not appear to be in appreciably larger font size than the notice. Thus, although the payment demand is highlighted to a greater extent than in Wilson (and is not incorporated into one of three similar paragraphs), the demand and the validation notice are clearly perceptible and in reasonable proximity on the front of the form. This retains the effect that the letter's recipient has a choice, as in Wilson, between paying the debt and disputing its validity.
Moreover, neither the demand nor the letter's main text contains the kind of "screaming" headlines, blunt imperatives, and copious use of capital letters and exclamation points used by letters other courts have found to be violative of § 1692g. See, e.g., Miller v. Payco-Gen. Am. Credits, Inc., 943 F.2d 482, 484 (4th Cir.1991) ("The front of the ... form demands `IMMEDIATE FULL PAYMENT' and commands the consumer to `PHONE U.S. TODAY,' emphasized by the word `NOW' emblazoned in white letters nearly two inches tall against a red background.").
Looking to the letter's substance, Plaintiff argues that the payment demand "insisted on immediate payment of the bogus debt and did not even afford the alleged debtor the 10 days in Graziano," Pl.'s Br. 28 n. 34. Plaintiff also considers the letter's offer to "Pay in full online anytime" and its notice of acceptance of payment by check and credit card to constitute inappropriately "immediate and urgent" demands. Id. at 27. However, unlike in Graziano, nowhere does FCO's letter require action by a certain time. In fact, the payment demand does not use the word "immediately" at all, as the Wilson letter did. Any immediacy in the payment demand is perhaps implicit in its central location, bolded text, and larger size. However, these features also serve the purpose of alerting the recipient to the fact and amount of the debt.
The letter's other features do not change this result. First, Plaintiff surmises a "sinister" purpose in the letter's several mentions of FCO's telephone number, which is that it obscures the fact that, under § 1692g, a debtor must dispute the debt in writing in order to have it validated. See Pl.'s Br. 2930. In Caprio v. Healthcare Revenue Recovery Group, LLC, the Third Circuit considered this question in the context of a collection letter that included the following notice: "If we can answer any questions, or if you feel you do not owe this amount, please call us toll free at 800-984-9115 or write us at the above address." 709 F.3d 142, 150 (3d Cir.2013). The court found that this language overshadowed the validation notice because "this `please call' language basically instructed [the] debtor to call or write in order to dispute the debt itself" — an action insufficient to dispute the debt under § 1692g. See also, e.g., Hishmeh v. Cabot Collection Sys., L.L.C., No. 13-4795, 2014 WL 460768, at *1 (E.D.Pa. Feb. 5, 2014) (finding a collection letter violated § 1692g where it directed the debtor to "advise" or "contact" the debt collector in order to dispute the debt, but did not specifically instruct the debtor to do so in writing).
Here, by contrast, there is no indication in the collection letter that the debtor must call FCO in order to dispute the debt. After announcing the payment demand, the letter merely states, "Our professional debt collectors are here to help you resolve this matter," and follows this with the telephone number. TAC Ex. 11. Underneath the telephone number is the phrase "Check by phone, Visa, and Master Card accepted." Id. A space of several lines then separates this portion of the letter from the validation notice. The letter's reverse side reads, "The collection agent assigned to your account may
Second, and finally, neither the notice to see the reverse side for important legal information nor the reverse side itself has any bearing on this analysis. Although Plaintiff is correct that the reverse side does not contain adequate § 1692g disclosures, see Pl.'s Resp. to FCO 55, this is irrelevant since such disclosures were adequately presented on the letter's face. Furthermore, the notice to see the reverse side, appearing below the validation notice and apparently referring to additional state and federal laws, does not overshadow or contradict the validation notice. The remaining disclosures on the reverse side relate to state law and are not applicable here.
For all of the above reasons, and considering the perspective of the least sophisticated debtor, the HD1A collection letter as a whole does not overshadow or contradict the validation notice under § 1692g. Plaintiff's motion for summary judgment on this claim will be denied and FCO's cross-motion for summary judgment will be granted.
b. § 1692g(b): FCO failed to verify the debt and improperly continued its collection attempts
Plaintiff claims that, upon sending a letter to FCO disputing the alleged debt, FCO verified the debt by sending him "just another copy of the same bill or invoice sent by Home to FCO for collection in the first place." Pl.'s Br. 31. As noted above, FCO sent Plaintiff the Statement of Deposit, listing the individual charges that comprised the alleged debt. See TAC Ex. 13. This was insufficient, according to Plaintiff, because it did not provide "some proof of the grounds or basis for the alleged debt in addition to any itemization of the amounts claimed." Pl.'s Br. 31. Instead, Plaintiff argues that FCO should have at least sent the Resident Ledger Detail Report, which "list[s] all financial transactions for each tenant." Id. at 32-33. In addition, Plaintiff believes FCO should have attempted "to verify the validity of the debt for plaintiff ... by ... inquiring of Home whether the debt was invalid and uncollectible under state landlord-tenant law." Id. at 33. By continuing to pursue the debt after improperly verifying it, Plaintiff contends that FCO violated § 1692g(b).
Section 1692g(b) provides, in relevant part:
15 U.S.C. § 1692g(b). Aside from its opinion in Graziano, the Third Circuit has not had occasion to articulate definitively what "verification" might entail. See Sasscer v. Donnelly, No. 10-464, 2011 WL 1522320, at *4 (M.D.Pa. Apr. 20, 2011) (noting Graziano to be "the one reported Third Circuit case that addresses the adequacy of the verification supplied by a debt collector"). In Graziano, the defendant debt collector verified the alleged debt by furnishing "a bill and computer printout for [the] debt." 950 F.2d at 109. The Court affirmed the district court's conclusion that these materials were sufficient: "The computer printouts provided to Graziano were sufficient to inform him of the amounts of his debts, the services provided, and the dates on which the debts were incurred." Id. at 113.
Here, FCO's provision of the Statement of Deposit was sufficient verification of the alleged debt. The collection letter that Plaintiff received included only the amount of the payment demand. The Statement of Deposit itemized the charges that made up the total payment demand. This document sufficiently informed Plaintiff of the amount of the debt, the "services provided" (here, charges included), and the dates to which these charges related. See id. Although Plaintiff complains in retrospect that FCO should have sent the Resident Ledger Detail Report as well, as the Court suggests in the discussion of Plaintiff's FCEUA claims below, the Statement of Deposit is consistent with the Resident Ledger Detail Report. The fact that this latter document provides a full history of Plaintiff's transactions does not change the Court's conclusion that the Statement of Deposit — which fully supports the amount of alleged debt — is sufficient verification.
Moreover, Plaintiff's suggestion that FCO was required to verify the alleged debt with Home is ill-founded. In support of this argument, Plaintiff relies on Casterline v. Credit Protective Services of I.C. Systems, Inc., No. 89-3951, 1991 U.S. Dist. LEXIS 21728 (D.N.J. June 26, 1991). In that case, the plaintiff complained that the defendant debt collector failed to properly verify a late fee for a videotape that had not been returned. Id. at *4. The court agreed, finding that the defendant should have provided plaintiff with an "agreement to pay a late fee for a non-returned videotape." Id. at *5. The court noted that "[w]ithout verification which includes at least a colorable claim of entitlement to the debt, the provisions of the FDCPA ... are less effective." Id.
The problem with Plaintiff's narrow focus on Casterline's "colorable claim of entitlement" language is that it seems to impose a duty on debt collectors over and above that imposed by Graziano. Plaintiff misinterprets § 1692g(b) to require the debt collector to perform its own verification against the creditor's files. However, while courts interpreting this section have
The debt collector is not charged with auditing the creditor's records or opining on the debt's validity. In other words, the debt collector is not the judge of the merits of the creditor's claim against the debtor. Rather, the debt collector must merely forward supporting information along to the debtor, so that the debtor can better understand the alleged debt's origin and perhaps dispute it further, if warranted.
In sum, the Third Circuit has only held that verification entails informing the debtor of the amount of the debt, the services provided, and the dates on which the debts were incurred. See Graziano, 950 F.2d at 113. FCO's provision of the Statement of Deposit fulfilled these criteria and to the extent that Casterline requires more than Graziano, the Court does not follow it. Plaintiff complains that FCO sent him "just another copy of the same bill or invoice sent by Home to FCO for collection in the first place," Pl.'s Br. 31, but this is exactly what FCO was supposed to do. Accordingly, the Court finds that FCO did not violate § 1692g(b) by continuing to collect on the debt after providing verification, and Plaintiff's claim under this section fails. Plaintiff's motion for summary judgment on this claim will be denied and FCO's cross-motion for summary judgment will be granted.
c. §§ 1692e(11) and 1692d(6): FCO failed to self-identify as a debt collector over the telephone
Plaintiff asserts that FCO violated sections 1692e(11) and 1692d(6) when its employees left voice messages on his cell phone but did not disclose that the caller was seeking to collect a debt. Pl.'s Br. 33.
Section 1692e(11) provides that the following violates the FDCPA:
Section 1692d(6) prohibits, "[e]xcept as provided in section 1692b of this title, the placement of telephone calls without meaningful disclosure of the caller's identity." Section 1692b prevents debt collectors from disclosing to third parties the nature of the communication or that the debtor owes any debt.
Here, the parties do not dispute that FCO made several telephone calls to Plaintiff's cell phone and left corresponding voice messages. Indeed, FCO's president, Michael Sobota, submitted an affidavit which provides details on at least eleven voice messages that FCO left on Plaintiff's cell phone
Neither do the parties dispute that the voice messages were communications that in theory violated § 1692e(11) by failing to include the required disclosures or violated § 1692d(6) by failing to meaningfully disclose the caller's identity. See, e.g., Everage v. Nat'l Recovery Agency, No. 142463, 2015 WL 1071757, at *4 (E.D.Pa. Mar. 11, 2015) (noting that "meaningful disclosure" "has been held to require the debt collector `to disclose the caller's name, the debt collection company's name, and the nature of the debt collector's business'" (quoting Gryzbowski v. I.C. Sys., Inc., 691 F.Supp.2d 618, 625 (M.D.Pa.2010))); see also, e.g., Inman v. NCO Fin. Sys., Inc., No. 08-5866, 2009 WL 3415281, at *3-4 (E.D.Pa. Oct. 21, 2009) (holding that voice messages requesting a return call but not identifying the caller or the purpose of the call are "communications" under the FDCPA); Foti v. NCO Fin. Sys., Inc., 424 F.Supp.2d 643, 657 (S.D.N.Y.2006) (holding similarly and noting that "the FDCPA should be interpreted to cover communications that convey, directly or indirectly, any information relating to a debt, and not just when the debt collector discloses specific information about the particular debt being collected").
On this claim, then, the parties' only dispute is a legal one: whether a
The cases that FCO cites to the contrary are distinguishable: (1) a debt collector placed a telephone call to debtor but hung up without leaving a message, see Zortman v. J.C. Christensen & Assocs., Inc., 870 F.Supp.2d 694, 705-08 (D.Minn. 2012) (granting debt collector's motion for summary judgment); Wilfong v. Persolve, LLC, No. 10-3083, 2011 WL 2678925, at *4 (D.Or. June 2, 2011) (same); and (2) a debt collector placed several unanswered calls to a wrong number, see Worsham v. Account Receivables Mgmt., No. 10-3051, 2011 WL 5873107, at *3-4 (D.Md. Nov. 22, 2011) (holding that unanswered calls are not "communications" under the FDCPA and granting debt collector's motion for summary judgment), aff'd, 497 Fed.Appx. 274 (4th Cir.2012).
Here, by contrast, messages were left on Plaintiff's cell phone, which he could have accessed at any time. It is clear that, by leaving a message on Plaintiff's voicemail, FCO "conveyed information" indirectly to Plaintiff and thus implicated FDCPA liability.
For these reasons, the Court finds that FCO violated sections 1692e(11) and 1692d(6) when its employees left voice messages on Plaintiff's cell phone but did not properly identify who was calling. On this claim, Plaintiff's motion for summary judgment will be granted and FCO's cross-motion for summary judgment will be denied.
d. §§ 1692f(1), 1692e(2), and 1692e(10): FCO attempted to collect a debt that Plaintiff did not owe
In his motion for summary judgment, Plaintiff claims that FCO "attempt[ed] to collect monies neither lawfully owed nor collectable." Pl.'s Br. 34. Although he does not further elaborate the claim, his response to FCO's cross-motion for summary judgment suggests that the claim is based on FCO's attempt to collect the thirty-day notice fee that Defendant Home assessed.
In response, FCO puts forward the bona fide error defense, which has been codified by the FDCPA:
15 U.S.C. § 1692k(c). The Third Circuit has held that, in order to avail itself of the bona fide error defense, a debt collector must establish: "(1) the alleged violation was unintentional, (2) the alleged violation resulted from a bona fide error, and (3) the bona fide error occurred despite procedures designed to avoid such errors." Beck v. Maximus, Inc., 457 F.3d 291, 297-98 (3d Cir.2006).
The particular error here — attempting to collect an amount that is not supported by Plaintiff's lease agreement — may be characterized as a mistake of law, and contract law in particular. The Supreme Court has ruled that the bona fide error defense "does not apply to a violation of the FDCPA resulting from a debt collector's incorrect interpretation of the requirements of that statute." Jerman v. Carlisle, McNellie, Rini, Kramer & Ulrich LPA, 559 U.S. 573, 604-05, 130 S.Ct. 1605, 176 L.Ed.2d 519 (2010) (emphasis added). However, the Supreme Court did not reach the question of whether mistakes of state or contract law are similarly outside the scope of the bona fide error defense. Id. at 580 n. 4, 130 S.Ct. 1605. The Court sees no reason why such mistakes should not be covered by the defense. See Jenkins v. Heintz, 124 F.3d 824, 833 (7th Cir.1997) (finding that the bona fide error defense covers the mistaken collection of legally invalid debts because to find otherwise would "limit a debt collector to only collecting legally valid claims," thereby causing the bona fide error defense to "be read out of the statute with respect to the violations of 15 U.S.C. §§ 1692e and 1692f").
With respect to the elements of the bona fide error defense, the Court's analysis can begin and end with the third element: that FCO maintained procedures designed to avoid the particular error here. FCO has failed to establish by a preponderance of the evidence that such procedures were in place. See § 1692k(c). FCO claims that it "reasonably relied on Home's data" upon referral of Plaintiff's debt, FCO's Br. 41, and that it "maint[ained] ... procedures reasonably adapted to avoid errors," id. at 42-43. Upon further investigation, these "procedures" are based on two summary statements:
Moreover, in each of the cases FCO cites in support of its position, the debt collector had offered evidence of procedures much more robust than those FCO offers here.
. . . .
In sum, on Count I of the Third Amended Class Action Complaint, and as to Defendant FCO, Plaintiff's motion for summary judgment will be denied and FCO's cross-motion for summary judgment will be denied with respect to the claim that FCO's AV2 and HD1AC letters lacked the required notice, in violation of 15 U.S.C. § 1692g(a).
Plaintiff's motion for summary judgment will be granted and FCO's cross-motion for summary judgment will be denied with respect to the following claims: (1) failing to identify as a debt collector when leaving voice messages on Plaintiff's cell phone, in violation of §§ 1692e(11) and 1692d(6); and (2) attempting to collect a debt that Plaintiff did not owe, in violation of §§ 1692f(1), 1692e(2), and 1692e(10).
Plaintiff's motion for summary judgment will be denied and FCO's cross-motion for summary judgment will be granted with respect to the following claims: (1) lacking the required notice on the HD1A letter, in violation of § 1692g(a); (2) failing to properly verify the disputed debt, in violation of § 1692g(b); and (3) all other claims Plaintiff may have under the FDCPA.
Therefore, the only remaining claim against FCO under Count I is the following: the AV2 and HD1AC letters lacked the required notice, in violation of § 1692g(a).
B. COUNT II: FCEUA
The FCEUA prohibits, among other things, "unfair or deceptive acts or practices with regard to the collection of debts," 73 P.S. § 2270.2, and applies to both debt collectors and creditors, see § 2270.4.
1. Claims Against Defendant Home
The Court has already held above that Defendant Home is not a "debt collector" under the FDCPA and cannot be liable as such. For this reason, Home cannot be per se liable under the FCEUA. However, Plaintiff also alleged that Home's "conduct... constitutes separate and independent substantive violations of the FCEUA." TAC ¶ 93. The Court therefore must consider whether Home's actions as a creditor implicate the FCEUA.
Plaintiff does not specify which of Home's alleged actions violated the FCEUA, but assumes that his presentation of the allegations establishes Home's FCEUA liability. See, e.g., Pl.'s Resp. to Home 35 (noting that "plaintiff Jarzyna is entitled to summary judgment on his claims ... directly against Home under the FCEUA"). Separately, Plaintiff indicates
73 P.S. § 2270.4(b). Upon review of Plaintiff's briefing, the Court finds only four allegations as to Home that implicate concerns of "any false, deceptive or misleading representation" or "unfair or unconscionable means," and which therefore may plausibly implicate the FCEUA. The Court considers each in turn.
a. No notice fee provision in the lease agreement
Plaintiff claims the lease agreement made no mention of a fee for failing to give proper notice. See Pl.'s Resp. to Home 23 ("Home's standard form lease does not mention a word about any `notice' fee or any penalty at all ...."). This is incorrect. The second lease agreement that Plaintiff signed on November 17, 2008, has a "Notice to Vacate at End of Lease Term" section that reads, in relevant part: "You must give us at least sixty (60) days written notice of your intention to vacate the Apartment at the end of the term. If you fail to give this notice, you will be held liable for rent for the period for which you failed to give us notice." Home's Br. Ex. D, at 7.
Here, the situation is slightly different, in that Plaintiff was a holdover tenant at the time Home assessed the notice fee. In a section entitled "Failure to Vacate at End of Lease Term," Plaintiff's November 17, 2008, lease agreement reads: "[I]f we accept rent for the period after the end of the Lease Term, then you shall be deemed a holdover Resident and your tenancy shall be month-to-month.... Either you or we can terminate the month-to-month lease as of the last day of any calendar month by giving one calendar month's written notice to the other party." Id. at 8.
Under Pennsylvania law,
Bohler-Uddeholm Am., Inc. v. Ellwood Grp., Inc., 247 F.3d 79, 92-93 (3d Cir. 2001). Finally, if a contract provision is found to be ambiguous, "doubtful language is construed most strongly against the drafter thereof." Rusiski v. Pribonic, 511 Pa. 383, 515 A.2d 507, 510 (1986).
In the instant case, the section of the lease agreement entitled "Failure to Vacate at End of Lease Term" is the only section discussing what notice is required once the lease has been converted to a month-to-month tenancy. This section makes no mention of any fee or penalty for failure to provide the required one month's notice before vacating. Although Home may have intended to include a thirty-day notice fee associated with month-to-month tenancies — which seems likely, given that it included a sixty-day notice fee for tenants with contractual lease terms — it did not do so. The Court, reading no ambiguous terms in the lease agreement, must interpret the agreement "as manifestly expressed, rather than as, perhaps, silently intended." Steuart, 444 A.2d at 661. Accordingly, the Court construes the lease agreement against the drafter, Home, as containing no thirty-day notice fee.
b. Home sends accounting letters to prior addresses
Plaintiff complains of the following:
Pl.'s Br. 5-6 (footnotes omitted). Despite Plaintiff's strong language, he offers no evidence supporting his allegation that Home sent an accounting to his prior Glen Brook address. Instead, Plaintiff cites to a document Home filed in response to a request by the Special Master. However, contrary to Plaintiff's averment, the document merely states: "Home Properties L.P. has calculated 19.4% of the post-lease communications to former lease tenants did use other zip codes for mailings beyond the lease address zip code." Pl.'s Mot. Ex. 36, at 7. This statement makes no mention of "first-letter" accountings, nor does it confirm that accountings were sent to tenants' prior addresses, as there is quite a difference between a single address and a zip code. Such paltry evidence clearly fails to establish an FCEUA violation for this allegation, at least with respect to Plaintiff.
c. Home continually changed the amount due
Plaintiff alleges that, toward the end of his tenancy and after, he received multiple notices from Home with differing amounts due. See TAC ¶¶ 42, 47, 49; Pl.'s Br. 5 n. 12. Specifically, he claims that (1) he received a bill for approximately $1,400 in October 2009; (2) later, he received an updated bill for $1,300.40; (3) per his account online, the amount due had risen to approximately $2,200 in November 2009; (4) shortly thereafter, he received an "Apartment Inspection Report" listing only $982.62; (5) a statement of deposit, which he never received, later listed the total amount due as $2,397.92; and (6) after applying his security deposit, the amount due was reduced to $1,897.92. See Pl.'s Mot. 5 n. 12.
Although Plaintiff characterizes these differing amounts as part of a practice of deceptive debt collection by Home, these amounts are readily explained by the documents Plaintiff himself has submitted. For example, after receiving the notice that he owed approximately $1,400, Plaintiff disputed the charge; the reduced amount of $1,300.40 appears to be a result of Plaintiff's complaint to the leasing office.
d. Plaintiff's alleged debt to Home is bogus and illegal
Plaintiff alleges generally that Home attempted to collect — and forwarded to Defendant FCO in order to collect — a debt that is "bogus," Pl.'s Br. 6, and based on illegal fees, id. at 38. Plaintiff contends that he owed Home nothing when he vacated his Glen Brook apartment on October 31, 2009. Pl.'s Resp. to Home 20 & n. 59. In support of this allegation, Plaintiff points to two documents, the Statement of Deposit and the Resident Ledger Detail Report ("the Ledger"). Notably, he does not dispute the payment information or method of calculation of these reports. Instead, he focuses his argument on the lack of contractual support for the fees and penalties therein. Plaintiff writes: "Tellingly, not a single one of the provisions Home points to in its standard form lease discloses any of the fees and penalties Plaintiff would not pay." Pl.'s Suppl. 8. The Court examines the Statement of Deposit and Ledger in turn.
The Statement of Deposit, prepared on November 16, 2009, and printed on December 1, 2009 — although allegedly not received by Plaintiff until some later date
With respect to the late fee, Plaintiff argues that it "was derived and assessed... against Plaintiff only because he refused to pay Home the undisclosed 30 day notice penalty[,] rent for November[,] the pro-rated unit-swap fee ... [,] or their (ironically) `final admin fee.'" Pl.'s Resp. to Home 25. However, a review of the Ledger, produced by Home during discovery, shows that this late fee was assessed, in accordance with the lease agreement's late fee provision, for Plaintiff's failure to pay timely rent in August, September, and October 2009. See Pl.'s Suppl. Ex. D.
With respect to the "9/30/2009" rental charge, Plaintiff argues that this improperly related to "the pro-rated unit-swap fee that was to be waived." Pl.'s Resp. to Home 25. Again, the Ledger indicates to the contrary that this $379.20 charge actually relates to the portion of unpaid rent from August and September 2009. See Pl.'s Suppl. Ex. D.
With respect to the "10/31/2009" rental charge, Plaintiff argues that this improperly related to "rent for November." Pl.'s Resp. to Home 25. The Ledger belies this
In Plaintiff's supplemental brief, he again argues that his alleged debt to Home is based entirely on "illegal fees," although he makes a further contention that Home owes him approximately $1,700. Pl.'s Suppl. 6-8. Essentially, he argues that Home steadily and inexplicably increased his average monthly bill from July through November 2009. Id. at 6. However, a brief review of the Ledger reveals Plaintiff's error. The additional charges Plaintiff complains of comprise late fees legitimately assessed; a utility bill true-up which Plaintiff has acknowledged, Pl. Dep. 43:3-44:21; the increased rent associated with his month-to-month tenancy, which Plaintiff has also acknowledged, id. at 23:10-20; the thirty-day notice fee; and rent for November which (Plaintiff fails to note) was subsequently credited back to his account. See Pl.'s Supp. Ex. D. In other words, aside from the thirty-day notice fee, Plaintiff's argument is completely unsupported by the record; he has not shown that Home has violated the FCEUA by generally attempting to collect a bogus or illegal debt.
. . . .
In sum, the Court finds that Plaintiff is entitled to summary judgment on his FCEUA claim as it relates to the thirty-day notice fee only. On Plaintiff's other claims under the FCEUA, and taking the evidence in the light most favorable to Defendant Home as the nonmoving party, Plaintiff has not established that summary judgment is appropriate. Moreover, considering Home's motion for summary judgment on these claims, and taking the evidence in the light most favorable to Plaintiff as the nonmoving party, Plaintiff has not shown that a genuine dispute of material fact exists sufficient to survive summary judgment. Accordingly, on Count II of the Third Amended Class Action Complaint, Plaintiff's motion for summary judgment will be granted as to the thirty-day notice fee claim and denied as to all other claims. Likewise, Home's motion for summary judgment will be denied as to the thirty-day notice fee claim and granted as to all other claims.
2. Claims Against Defendant FCO
As stated above, a debt collector's violation of the FDCPA is a per se violation of the FCEUA. See 73 P.S. § 2270.4(a). Having previously granted summary judgment in favor of two of Plaintiff's claims under the FDCPA, the Court will follow this course for Plaintiff's claims under the FCEUA.
Accordingly, on Count II of the Third Amended Class Action Complaint, Plaintiff's motion for summary judgment will be granted and FCO's cross-motion for summary judgment will be denied to the extent the Court granted summary judgment to Plaintiff on his FDCPA claims. Plaintiff's motion for summary judgment will be denied and FCO's cross-motion for summary judgment will be denied to the extent the Court denied summary judgment to both parties on Plaintiff's FDCPA claims. Plaintiff's motion for summary judgment will be denied and FCO's cross-motion for summary judgment will be granted on all other claims.
C. COUNT III: UTPCPL
Pennsylvania's UTPCPL provides that
73 P.S. § 201-9.2. The act declares unlawful "[u]nfair methods of competition and unfair or deceptive acts or practices in the conduct of any trade or commerce," § 201-3, and sets out a nonexhaustive listing of such prohibited conduct. See § 201-2.
1. Claims Against Defendant Home
Plaintiff argues principally that Home's FCEUA violations constitute per se violations of the UTPCPL. See TAC ¶ 98; Pl.'s Resp. to Home 36. As the FCEUA provides, "[i]f a debt collector or creditor engages in an unfair or deceptive debt collection act or practice under this act, it shall constitute a violation of the act of December 17, 1968 (P.L. 1224, No. 387), known as the Unfair Trade Practices and Consumer Protection Law." 73 P.S. § 2270.5(a). Accordingly, because the Court found above that Home violated the FCEUA — albeit with respect to the thirty-day notice fee claim only — it follows that Home's conduct amounts to a per se violation of the UTPCPL as well. Furthermore, Home suggests that Plaintiff suffered no loss as a result of Home's actions, as the UTPCPL requires. Home's Br. 26. However, as the Court pointed out previously, "Plaintiff alleges that he was forced to retain counsel to resist FCO's collection efforts and in his prayer for relief requests all reasonable attorneys' fees." Jarzyna v. Home Props., L.P., 763 F.Supp.2d 742, 749 (E.D.Pa.2011) [hereinafter Jarzyna I]. Likewise, Plaintiff retained counsel here to effectively dispute the improperly charged thirty-day notice fee. Plaintiff's UTPCPL claim as to this charge thus withstands summary judgment.
Although Plaintiff states that Home "also [is] liable for separate, independent substantive violations of the UTPCPL," he only generally alleges Home's "misrepresentation that Plaintiff owed the debt" and that Home "engaged in deceptive and/or fraudulent conduct that created likelihood [sic] of confusion or of misunderstanding prohibited by [the UTPCPL]." TAC ¶ 101. Upon review of Plaintiff's briefing, the Court notes that he alleges the same conduct for both his FCEUA and UTPCPL claims. See Pl.'s Br. 34-39; Pl.'s Resp. to Home 34-36. The Court therefore finds that — as with his FCEUA claims — not only has Plaintiff not established that summary judgment is appropriate on these UTPCPL claims, he has not shown that a genuine dispute of material fact exists sufficient to allow these claims to survive Home's motion for summary judgment.
In sum, on Count III of the Third Amended Class Action Complaint, Plaintiff's motion for summary judgment will be granted as to the thirty-day notice fee claim and denied as to all other claims. Likewise, Defendant Home's motion for summary judgment will be denied as to the thirty-day notice fee claim and granted as to all other claims.
2. Claims Against Defendant FCO
Similarly, because the Court found above that FCO violated the FCEUA (by way of certain FDCPA violations), it follows that FCO's conduct amounts to a per se violation of the UTPCPL as well. See 73 P.S. § 2270.5(a). FCO argues that Plaintiff suffered no "ascertainable loss of money or property" as a result of Home's actions, as the UTPCPL requires. FCO's Br. 48. However, as the Court pointed out previously, "Plaintiff alleges that he was
Accordingly, on Count III of the Third Amended Class Action Complaint, Plaintiff's motion for summary judgment will be granted and FCO's cross-motion for summary judgment will be denied to the extent the Court granted summary judgment to Plaintiff on his FDCPA claims. Plaintiff's motion for summary judgment is denied and FCO's cross-motion for summary judgment is denied to the extent the Court denied summary judgment to both parties on Plaintiff's FDCPA claims. Plaintiff's motion for summary judgment will be denied and FCO's cross-motion for summary judgment will be granted on all other claims.
D. COUNT IV: Landlord and Tenant Act
Pennsylvania's Landlord and Tenant Act regulates landlords' holding of security deposits as follows: "No landlord may require a sum in excess of two months' rent to be deposited in escrow for the payment of damages to the leasehold premises and/or default in rent thereof during the first year of any lease." 68 P.S. § 250.511a(a). In addition,
Plaintiff claims that Home violated the above-quoted provisions by (1) improperly withholding the security deposit, and (2) failing to mail Plaintiff an accounting of damages within thirty days after he left Glen Brook. See TAC ¶¶ 105-109. The Court considers each of these allegations below.
1. Home Improperly Withheld the Security Deposit
Plaintiff asserts that "Home's `30 day notice fee' does not and cannot possibly be classified as `rent' because it is a one-time penalty (and not a regular, periodic payment) that Home itself assesses
2. Home Did Not Send a Timely Accounting
Plaintiff also alleges that Home failed to send an accounting of the security deposit within the required thirty days. Home responds that its failure to send the accounting did not violate the Landlord and Tenant Law "because [P]laintiff failed to meet the prerequisite of providing a forwarding address to Home pursuant to Subsection 512(e)." Home's Br. 34. Plaintiff rejoins by pointing to several instances where he had "provide[d] Home with a plethora of forwarding information." Pl.'s Resp. to Home 37. He cites to his provision of (1) his mother's and brother's addresses on the "Resident Consent for Release of Personal Property and Deposits/Refunds," attached to the November 11, 2008, lease agreement, see TAC Ex. 5, at 21; Pl. Dep. 27:10-28:16; (2) his cell phone number and email address on his September 1, 2009, notice letter, see TAC Ex. 6; and (3) the address of his brother as counsel, listed on the termination letter his brother sent Home on October 28, 2009, see TAC Ex. 7.
However, none of this information is responsive to § 250.512(e), which plainly requires the tenant to provide a forwarding address in writing at the time of the lease's termination. In other words, in the absence of a written communication from the tenant to the landlord advising the landlord of tenant's forwarding information, Pennsylvania law does not require the landlord to investigate or track down the departing tenant's new address.
E. COUNT V: Civil Conspiracy
Under Pennsylvania law, "[t]he essential elements of a claim for civil conspiracy are as follows: (1) a combination of two or more persons acting with a common purpose to do an unlawful act or to do a lawful act by unlawful means or for an unlawful purpose, (2) an overt act done in pursuance of the common purpose, and (3) actual legal damage." Phillips v. Selig, 959 A.2d 420, 437 (Pa.Super.Ct.2008); see also Thompson Coal Co. v. Pike Coal Co., 488 Pa. 198, 412 A.2d 466, 472 (1979). Furthermore, "[p]roof of malice, i.e., an intent to injure, is essential in proof of a conspiracy." Id.
Plaintiff's civil conspiracy claim — brought against both Defendants — is based on the following allegations: (1) "Home and FCO contracted for a series of illegal, self-styled `pre-collection' activities that involve the use of illegal letters ..."; (2) "Home and FCO jointly and systematically, through common and uniform practice, pursue the collection of debts that are forfeited, waived and uncollectable under state statutory law and under Home's own standard form Lease Agreement ..."; and (3) "Home and FCO jointly and systematically, through common and uniform practice, pursue the collection of debts which include unlawful `30 day notice' charges and other illegal fees ..., which charges and fees both Home and FCO know to be unlawful and, therefore, uncollectable." TAC ¶¶ 115-117.
However, in support of these allegations, Plaintiff offers little more than a restatement of the arguments he made with respect to his other claims. Regarding the first allegation, Plaintiff makes much of a "pre-collection" arrangement between the Defendants wherein, for an initial thirty-day period after the transfer of a debt, "FCO retains as its compensation 15% of the amount recovered." Pl.'s Br. 43. But aside from painting this arrangement as a "blitzkrieg" designed to "exploit" debtors, Plaintiff does not explain why it is illegal or even improper to incentivize the efficient collection of past-due debts, and does not establish that this "pre-collection" period involves procedures that flout any legal requirement. See id.
Regarding the second and third allegations, Plaintiff complains primarily of the notice fee, and points to Home's "standard, uniform policies and procedures and, most especially, automated processes and systems." Pl.'s Br. 40. Although, as discussed above, Home's assessment of the thirty-day notice fee was not supported by Plaintiff's lease agreement, the fact that Home may have had an automated process to charge such fees does not mean that Home was involved in a conspiracy with FCO. Plaintiff alleges that "[Home] and FCO rigged the system so that tenants would not receive lawful notice that their security deposits had been wiped out and bogus charges applied." Id. But Plaintiff does not offer any evidence that an agreement existed between the two Defendants to illegally assess these charges or that Defendants had any "intent to injure." Merely stating that a conspiracy exists will not suffice.
Finally, although Plaintiff holds out the Collection Services Agreement as evidence of conspiratorial agreement, nothing in the agreement displays an intent to conspire to commit illegal acts. See Home's Br. Ex. K, Collection Services Agreement. In fact, the CSA cuts against Plaintiff's position,
In sum, viewing the facts in the light most favorable to Plaintiff, and making all reasonable inferences in his favor, no reasonable jury could find for Plaintiff on his civil conspiracy claim. Therefore, on Count V of the Third Amended Class Action Complaint, Plaintiff's motion for summary judgment will be denied, Defendant Home's motion for summary judgment will be granted, and Defendant FCO's cross-motion for summary judgment will be granted.
F. Defendant Home's Counterclaim
In Home's Answer to the Third Amended Class Action Complaint, it brings a Counterclaim, asserting one count of breach of the lease agreement. ECF No. 231. In essence, Home seeks from Plaintiff the very $1,897.92 (albeit now bolstered with attorneys' fees and costs) which Home had referred to FCO and which forms the basis of this entire lawsuit. In its motion for summary judgment, Home argues that Plaintiff "has not contested the final balance demanded by Home or provided any proof or substantiation [sic] the amount demanded by Home is not, in fact, due to Home by [Plaintiff]." Home's Br. 16. However, this overlooks that Plaintiff did contest the final balance throughout his briefing, up to and including his Supplemental Brief. Moreover, as the Court held above, the thirty-day notice provision was not supported by the lease agreement. Because the amount Plaintiff actually owes Home, if any, is uncertain and Home has not shown the absence of a genuine dispute of material fact on this question, the Court denies Home's motion for summary judgment on the Counterclaim.
G. Defendant Home's Request for Sanctions
Finally, Home requests that sanctions under 28 U.S.C. § 1927 be imposed upon Plaintiff's counsel for his "design to multiply the proceedings, unreasonably and vexatiously, for what appears to be the purpose of creating unnecessary cost[s] and expenses for Home." Home's Br. 40. The Court declines to make a determination on Home's request at this time, and will instead deny the request without prejudice. Should Home wish to pursue sanctions at the conclusion of the proceedings, it may properly file a motion at that time.
For the foregoing reasons, the Court grants in part and denies in part the parties'
In addition, Defendant Home's motion for summary judgment on its Counterclaim is denied and Home's motion for sanctions is denied without prejudice.
Therefore, the only remaining claims in this case are the following:
An appropriate order follows.
VI. APPENDIX A: Sample Form AV2 Letters from Defendant FCO
The Third Circuit has provided:
Pub. Interest Research Grp. of N.J., Inc. v. Magnesium Elektron, Inc., 123 F.3d 111, 116-17 (3d Cir.1997) (citations omitted) (internal quotation marks omitted).
In the case at bar, no new evidence has been provided on the § 1692g claim; indeed, the Court denied the motion to dismiss as a matter of law, based on its review of the very HD1A collection letter that remains at issue here. See Jarzyna I, 763 F.Supp.2d at 748-49. Likewise, in the time since the Court ruled on the motion to dismiss, no supervening new law has been announced, and no controlling court decision has come down.
Nevertheless, the Court finds that certain other factors render this an extraordinary circumstance that warrants the Court's reconsideration of the issue. First, as FCO notes, the Court mistakenly denied as moot its motion for leave to file a reply brief, see Jarzyna I, 763 F.Supp.2d at 747 n. 2, which was FCO's only opportunity to address whether the validation notice was overshadowed by other language, given that Plaintiff raised that argument for the first time in its response to the motion to dismiss. The section of FCO's summary judgment brief addressing this question is carefully reasoned and cogent, and deserves the Court's attention. Second, although no new, on-point authority requires this Court to reverse its earlier decision, a number of courts have continued to examine the question of overshadowing under § 1692g, and these decisions provide helpful guidance. Not least among these is Caprio v. Healthcare Revenue Recovery Group, LLC, 709 F.3d 142 (3d Cir.2013), which analyzed the "please call" language debt collectors, and FCO here, include in collection letters. See id. at 150-54. Also highly relevant is Velazquez v. Fair Collections & Outsourcing, Inc., No. 12-4209, 2013 WL 4659564 (N.D.Ill. Aug. 30, 2013), in which the court considered the identical defendant and claim as here, and specifically disagreed with this Court's ruling in Jarzyna I. See id. at *4-5. Finally, the Court recognizes that a deeper look at the reasoning of relevant Third Circuit cases — particularly Wilson and Graziano — merits reconsideration of its previous ruling. For these reasons, the Court will proceed afresh with its analysis of the overshadowing question.
Specifically, when the Court considered the motion to dismiss, it believed that FCO "provided verification [for Plaintiff's debt] by simply copying the same bill or invoice sent in the June 21, 2010, letter." Jarzyna I, 763 F.Supp.2d at 749. The Court held that "[s]imply copying the invoice used in the dunning letter is insufficient." Id. On closer look, however, Plaintiff has never shown that a bill or invoice accompanied the HD1A letter dated June 21, 2010. Per Plaintiff's submissions, the HD1A letter was sent without any attachments. See TAC Ex. 11. The Court's error justifies another look at this issue. See Pub. Interest Research Grp., 123 F.3d at 116-17.
Second, Plaintiff asserts a violation of § 1692c(b), which prohibits debt collectors from communicating with third parties in connection with the collection of the debt except as necessary to obtain location information. See also § 1692b. FCO argues that Plaintiff has offered no evidence and made no argument that FCO's calls to his family members violated the FDCPA. FCO's Br. 45-46. Plaintiff apparently concedes this, as he does not reply. As such, the Third Circuit's recent case dealing with the burden of proof when alleging § 1692b's location-information exception is not applicable here. Evankavitch v. Green Tree Servicing, LLC, 793 F.3d 355, 367-68 (3d Cir.2105) (placing the burden of proof on the debt collector).
On each of the above claims, the Court will grant FCO's cross-motion for summary judgment and deny Plaintiff's motion for summary judgment.