Document ID: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-almb-1_07-ap-01139/USCOURTS-almb-1_07-ap-01139-0/pdf.json

Parties Involved:
Hasson Turner
Plaintiff
Universal Debt Solutions, Inc.,
Defendant

Document Text:

UNITED STATES BANKRUPTCY COURT

MIDDLE DISTRICT OF ALABAMA

In re Case No. 07-11450-DHW

 Chapter 13

HASSON TURNER

 Debtor.

HASSON TURNER,

Plaintiff,

v. Adv. Proc. No. 07-1139-DHW

UNIVERSAL DEBT SOLUTIONS, INC.,

Defendant.

REPORT AND RECOMMENDATION OF UNITED STATES 

BANKRUPTCY JUDGE DWIGHT H. WILLIAMS, JR.

Debtor Hasson Turner (“debtor”) filed a complaint against Universal

Debt Solutions, Inc., for damages for alleged violations of the Fair Debt

Collection Practices Act (“FDCPA”), 15 U.S.C. § 1692 et seq. The alleged

violations are predicated on two collection letters sent by the defendant

prepetition. 

The debtor filed a motion for summary judgment, and the defendant

filed a cross motion for summary judgment. Upon consideration of the

motions at the hearing and the briefs and arguments of counsel, the court

makes the following proposed findings of fact and conclusions of law.

The bankruptcy court does not have jurisdiction to enter a final order

or judgment on the debtor’s claim because it is not a core proceeding but

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 28 U.S.C. §§ 157(b)(3) and 1334(b). An action is related to the chapter 1

13 bankruptcy case if “‘the outcome of the proceeding could conceivably have

an effect on the estate being administered in bankruptcy.’” Miller v. Kemira, Inc.

(In re Lemco Gypsum, Inc.) 910 F.2d 784, 788 (11th Cir.1990) (quoting Pacor,

Inc. v. Higgins, 743 F.2d 984, 994 (3 Cir. 1984). rd

With limited exceptions, a “debt collector” is defined as “any person who 2

uses any instrumentality of interstate commerce or the mails in any business the

principal purpose of which is the collection of any debts, or who regularly

collects or attempts to collect, directly or indirectly, debts owed or due or

2

merely “related to” the chapter 13 case. 28 U.S.C. § 157(c)(1). 1

Proposed Findings of Fact

The parties do not dispute the following facts. The defendant mailed

two collection notices, identical in material respects, to the debtor on or

about August 30, 2007, seeking to collect an alleged consumer debt. The

top left of each letter contained an ID Number, a Reference Number, and

the following notation: 

Original Creditor: 531.37

Balance: $531.37

The numbers and amounts differed in each letter, but the format was

the same. The body of each letter contained the following language: 

If we do not receive payment or you do not notify us in

writing, that you dispute this debt within thirty (30) days from

the date of this letter, we will proceed with recovery of the

debt based on the laws allowed in your state.

The two letters are the only communication sent by the defendant to

the debtor. The defendant’s principal purpose is to collect debts using the

mail and telephone. The defendant regularly attempts to collect debts

alleged to be due another and is a debt collector as defined by the FDCPA.

2

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asserted to be owed or due another.” 15 U.S.C. § 1692a(6).

3

The debtor filed a petition for relief under chapter 13 of the Bankruptcy

Code on October 17, 2007.

Summary Judgment Standard

The debtor filed a motion for summary judgment contending that the

letters violate 15 U.S.C. § 1692g in several respects. The debtor amended

the motion with leave of the defendant to allege that the letters also violate

section 15 U.S.C. § 1692e.

The standard for summary judgment established by Fed. R. Civ. P. 56

is made applicable to adversary proceedings in bankruptcy by Fed. R.

Bankr. P. 7056. The rule provides in part:

The judgment sought shall be rendered forthwith 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.

Fed. R. Civ. Proc. 56(c).

Summary judgment is appropriate when “there is no genuine issue

as to any material fact.” Celotex Corp. v. Catrett, 477 U.S. 317, 322, 106

S. Ct. 2548, 2552, 91 L. Ed. 2d 265 (1986). “In making this determination,

the court must view all evidence and make all reasonable inferences in

favor of the party opposing summary judgment.” Chapman v. AI Transp.,

229 F.3d 1012, 1023 (11 Cir. 2000). The party moving for summary th

judgment “bears the burden of proving that no genuine issue of material

fact exists.” Info. Sys. & Networks Corp. v. City of Atlanta, 281 F.3d 1220,

1224 (11 Cir. 2002). Once met, the burden shifts to the non-movant to th

“show a genuine dispute regarding any issue for which it will bear the

burden of proof at trial.” Id. at 1224-25.

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Proposed Conclusions of Law

Section 1692g(a) states as follows: 

Within five days after the initial communication with a

consumer in connection with the collection of any debt, a debt

collector shall, unless the following information is contained in

the initial communication or the consumer has paid the debt,

send the consumer a written notice containing—

(1) the amount of the debt;

(2) the name of the creditor to whom the debt is owed;

(3) 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;

(4) a statement that if the consumer notifies the debt

collector in writing within the thirty-day period that the

debt, or any portion thereof, is disputed, the debt collector

will 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; and

(5) a statement that, upon the consumer’s written

request within the thirty-day period, the debt collector will

provide the consumer with the name and address of the

original creditor, if different from the current creditor.

15 U.S.C. § 1692g(a). In addition, section 1692g(b) requires the debt

collector to cease collection of the debt upon written notice from the

consumer within the thirty-day period that the debt is disputed. 

Section 1692e prohibits a debt collector from using “any false,

deceptive, or misleading representation or means in connection with the

collection of any debt.” 15 U.S.C. § 1692e. 

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Section 1692g(a)(2) – Name of Creditors?

First, the debtor contends that the letters violate § 1692g(a)(2) by

failing to state the name of the creditors to whom the debts are owed. 

The defendant responds that it is not required to disclose the name

of the original creditor except on written request and that the letters

properly identify the defendant as the creditor. The letters were on the

defendant’s corporate letterhead and state that the accounts have been

“transferred to our office for final action.” The signature line states the

defendant’s name, and the payment slip is deliverable to the defendant.

However, there is no evidence in the record that the defendant is the

assignee of the debts. If the defendant is not the assignee, the letters do

not identify the creditors to whom the debts are owed. The issue of

assignment is a genuine issue of material fact. Therefore, this court

recommends that summary judgment be denied as to this count. 

Section 1692g(a)(3) – Written Notice Required?

Second, the debtor contends that the letters violate § 1692g(a)(3) by

requiring written notice that a debt is disputed. The statute does not limit

the method of notice and would permit oral notice of dispute. The creditor

responds that requiring written notice of dispute does not violate the

statute. 

The issue has been examined and well-addressed by two circuit

courts reaching opposite conclusions. See Graziano v. Harrison, 950 F.2d

107 (3 Cir. 1991) (requiring written notice of dispute does not violate the

rd

statute) and Camacho v. Bridgeport Fin., Inc., 430 F.3d 1078 (9 Cir. 2005) th

(requiring written notice of dispute violates the statute). 

The rub stems from the inclusion of a requirement for written notice

from the consumer in other pertinent subdivisions of § 1692g. For

example, written notice is required to obtain verification of the debt under

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§ 1692g(a)(4) and the name of the original creditor under § 1692g(a)(5).

In addition, under § 1692g(b), written notice of dispute forces a debt

collector to cease collection until meeting other requirements of the

section. 

Graziano held that, although the plain language of § 1692g(a)(3) does

not require written notice of dispute, the plain language produces an

absurd result. The court reasoned as follows:

Adopting [the plaintiff’s] reading of the statute would thus

create a situation in which, upon the debtor’s non-written

dispute, the debt collector would be without any statutory

ground for assuming that the debt was valid, but nevertheless

would not be required to verify the debt or to advise the

debtor of the identity of the original creditor and would be

permitted to continue debt collection efforts. We see no

reason to attribute to Congress an intent to create so

incoherent a system.

Graziano, 950 F.2d at 112. The court further noted “that there are strong

reasons to prefer that a dispute of a debt collection be in writing: a writing

creates a lasting record of the fact that the debt has been disputed, and

thus avoids a source of potential conflicts.” Id. 

The Camacho court reached a different result, concluding that the

plain language of the statute does not produce an absurd result because an

oral notice of dispute triggers protections in other sections of the FDCPA:

Oral dispute of a debt precludes the debt collector from

communicating the debtor’s credit information to others

without including the fact that the debt is in dispute. 15 U.S.C.

§ 1692e(8). Additionally, if a consumer owes multiple debts

and makes a payment, the debt collector is prohibited from

applying such payment to a debt which is in dispute. 15

U.S.C. § 1692h. 

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Camacho, 430 F.3d at 1082 (case citations omitted). While acknowledging

that “policy considerations weigh in favor of” the Graziano decision, the

court concluded that “we can only insert language into a statute if the result

of the statute’s plain meaning is absurd.” Id. The court also noted that 

[a] statute need not contain parallel language in all of its

subsections in order to be internally consistent. Rather,

“[w]here Congress includes particular language in one section

of a statute but omits it in another section of the same Act, it

is generally presumed that Congress acts intentionally and

purposely in the disparate inclusion or exclusion.” If Congress

had intended to impose a writing requirement in

§ 1692g(a)(3), it could have done so in the subsection itself, as

it did in the later subsections of § 1692g(a). 

Id. at 1081 (citations omitted).

The court finds the reasoning of Camacho persuasive. A district

court in the Eleventh Circuit has sided with Camacho. See Baez v. Wagner

& Hunt, P.A., 442 F. Supp. 2d 1273 (S.D. Fla. 2006). Other district courts

have held similarly. See Sanchez v. Robert E. Weiss, Inc. (In re Sanchez),

173 F. Supp. 2d 1029 (N.D. Cal. 2001); Ong v. Am. Collections Enter.,

1999 U.S. Dist. LEXIS 409 (E.D.N.Y. 1999); Young v. McDowell Serv., Inc.,

1991 U.S. Dist. LEXIS 21814 (N.D. Ga. 1991) (decided before Camacho).

The letters sent by the defendant do not contain the statement

required by § 1692g(a)(3) 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.” The

letters merely state that the debt collector “will proceed with recovery of

the debt” absent written notice of dispute from the debtor. Section

1692g(a)(3) does not require written notice of dispute. Therefore, this

court recommends summary judgment for the debtor on this count.

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1692g(a)(3) – Date of Letter vs. Date of Receipt

Third, the debtor contends that the letters violate § 1692g(a)(3) by

requiring notice of dispute “within thirty (30) days from the date of this

letter.” The statute requires notice of dispute “within thirty days after

receipt” of the collection notice. 15 U.S.C. § 1692g(a)(3) (emphasis

added). 

The debtor argues that this disparity effectively shortens the statutory

period for providing notice of dispute. The debtors cite to Rivera v.

Amalgamated Debt Collection Serv., Inc., 462 F. Supp. 2d 1223 (S.D. Fla.

2006) and Cavallaro v. Law Office of Shapiro & Kreisman, 933 F. Supp. 1148

(E.D.N.Y. 1996) which hold that such misstatements violate the statute

because they lead debtors to believe that they have less than thirty days to

respond. The Cavallaro court declined to treat the violation as “de

minimis,” noting that Congress intended to protect “against abusive tactics

of debt collectors, such as the backdating of notices or other practices that

might shorten debtors [sic] time to respond.” Cavallaro, 933 F. Supp. at

1154. 

The creditor relies on Reed v. Bailey, 1988 U.S. Dist. LEXIS 19456

(N.D. Ala. 1988) in which the court stated: 

The violations asserted by plaintiffs are either not supported by

the evidence or else are examples of technical noncompliance

which, under the unaggravated circumstances presented here,

this court does not feel the FDCPA was intended to address. 

Reed, 1988 U.S. Dist. LEXIS 19456, *4-5. In that case, the debt collector

had, inter alia, failed to notify the consumer that he could dispute any

portion of the debt as well as the debt as a whole. However, the notice in

that case properly advised the debtor that he had 30 days from the date of

receipt of the letter to respond. Therefore, Reed involved a different

violation from the one at issue in this case. 

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This court finds the rationale of the Rivera and Cavallaro courts

persuasive and declines to regard the instant violation as merely technical

or de minimis. The plain language of § 1692g(a)(3) requires the defendant

to notify the debtor that the validity of the debt must be disputed “within

thirty days after receipt of the notice.” Although the plain language could

produce issues of proof regarding the date of receipt, the plain language

does not produce absurd results. Accordingly, this court recommends that

summary judgment enter in favor of the debtor on this count.

1692e – False, Deceptive, or Misleading?

Fourth, the debtor contends that the two letters are “false, deceptive,

or misleading” and therefore violate § 1692e. The letters are allegedly

false, deceptive or misleading because they require notice of dispute in

writing within 30 days of the date of the letters. However, the court has

already addressed these issues and found violations of the statute,

rendering these contentions superfluous and moot.

Additional Contentions

Finally, the debtor contends that other parts of the letters not

addressed above also violate the FDCPA. However, these violations were

not alleged in the complaint and are not appropriate for consideration on

summary judgment. 

Conclusion

For the reasons stated above, the court recommends that summary

judgment enter in favor of the debtor under 15 U.S.C. § 1692g(a)(3)

because the letters violate the statute by requiring a consumer to dispute

the debts in writing and within thirty days from the date of the letters. The

court recommends denial of summary judgment on the count under 15

U.S.C. § 1692g(a)(2) due to a genuine issue of material fact (assignment of

the debt). The court recommends summary judgment in favor of the

defendant on the counts under 15 U.S.C. § 1692e because these counts are

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superfluous and moot.

Accordingly, the court recommends that judgment enter in favor of

the debtor in the amount of $1,000 plus reasonable attorney’s fees.

Done this 5 day of September, 2008. th

/s/ Dwight H. Williams, Jr.

United States Bankruptcy Judge

c: David G. Poston, Attorney for Debtor

 Stephen A. Yaklin, Attorney for Creditor

 

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