Court Opinion

ID: 218162
Source: CourtListenerOpinion
Date Created: 2011-06-06 19:56:17+00
Date Added: 2024-06-11T17:28:35.188635
License: Public Domain

NOT PRECEDENTIAL

                  IN THE UNITED STATES COURT OF APPEALS
                           FOR THE THIRD CIRCUIT

                            Case Nos: 10-2824 & 10-4013

                                ROBERT PETERSON,

                               Appellee/Cross-Appellant

                                             v.

                   PORTFOLIO RECOVERY ASSOCIATES, LLC,

                                 Appellant/Cross-Appellee

                                    Appeals from the
               United States District Court for the District of New Jersey
                  District Judge: The Honorable Anne E. Thompson
                           District Court No. 3-09-cv-02707

                                 Argued April 28, 2011

            Before: BARRY, HARDIMAN, and TASHIMA,* Circuit Judges
                             (Filed: June 6, 2011 )

Donald S. Maurice, Jr., Esq. (Argued)
Thomas R. Dominczyk, Esq.
Maurice & Needleman, P.C.
5 Walter Foran Boulevard, Suite 2007
Flemington, NJ 08822

Counsel for Appellant/Cross-Appellee

      *
        The Honorable A. Wallace Tashima, Senior United States Circuit Judge, United
States Court of Appeals for the Ninth Circuit, sitting by designation.
Susan Schneiderman, Esq. (Argued)
Sergei Lemberg, Esq.
Lemberg & Associates L.L.C.
1100 Summer Street, 3rd Floor
Stamford, CT 06905

Counsel for Appellee/Cross-Appellant

                                OPINION OF THE COURT

TASHIMA, Circuit Judge.

       Robert Peterson (“Peterson”) sued Portfolio Recovery Associates, LLC (“PRA”),

in the District Court for the District of New Jersey, alleging violations of the federal Fair

Debt Collection Practices Act (“FDCPA”). On cross-motions for summary judgment, the

District Court granted summary judgment in favor of Peterson, and ordered the entry of

judgment in favor of Peterson in the amount of $1,000.1 The District Court subsequently

granted Peterson’s motion for attorney’s fees, but reduced the amount of fees requested

by 65 percent. PRA appeals from the grant of summary judgment in favor of Peterson,

and Peterson cross-appeals the attorney’s fees order. We have jurisdiction to hear these

appeals pursuant to 28 U.S.C. § 1291.

                                              I.

       1
              The District Court also granted PRA’s motion for summary judgment on
several claims that were withdrawn by Peterson.

                                              2
       PRA is in the business of purchasing old debts from creditors and seeking to

collect on these accounts. On December 19, 2002, it acquired a receivable in the amount

of $2,936.32 from Fleet Bank. This amount was owed by a debtor named Robert

Peterson with an address in Colonia, New Jersey. Appellee Peterson disputes that he is

the same Robert Peterson who owed that amount and states that he has never lived at the

address in Colonia. On December 7, 2003, PRA sent a letter seeking to collect the debt to

the address in Colonia (the “2003 Letter”). The 2003 Letter contained a so-called

“validation notice” as required by the FDCPA, 15 U.S.C. § 1692g(a).2 Peterson did not

receive that letter.

       In 2007, PRA made a series of phone calls regarding the debt to Peterson and his

parents. Peterson denied owing the debt and gave PRA his current address. PRA sent a

letter to Peterson’s then-current address in October 2008. This letter contained an offer to

settle the debt at a discounted amount and did not contain a validation notice. In

       2
                 The FDCPA requires that a debt collector either include a validation notice
in its initial communication with a consumer or send the consumer a written validation
notice within five days of the initial communication. The validation notice must advise
the consumer of: (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 of receipt of the
notice, disputes the validity of the debt, the debt collector will assume the debt is valid;
(4) a statement that the debt collector will obtain verification of the debt or a copy of a
judgment and mail the same to the consumer if the consumer notifies the debt collector
within the thirty-day window that it disputes the debt or any portion thereof; and (5) a
statement that the debt collector will provide the name and address of the original creditor
upon the consumer’s written request within the thirty-day period. 15 U.S.C. §
1692g(a)(1)-(5).

                                             3
December 2008, PRA’s Disputes Department sent Peterson a letter stating that it

understood that Peterson wished to dispute the debt because he had been a victim of

identity theft or fraud and asking that he send an official identity theft report or written

statement so that they could investigate the dispute. This letter also did not contain a

validation notice.

          Then, in January 2009, Peterson emailed PRA asking for additional information

about the debt. This email explained again that he had been a victim of identity theft and

provided details on how the identity theft had occurred. A PRA representative responded

by email approximately an hour later; the response contained more information about the

debt and a request that Peterson complete and return the previously sent identity

theft/fraud packet. Peterson then requested that another identity theft/fraud packet be

mailed to him, as he did not have the one previously sent. The PRA representative

replied that the account would continue to be treated as disputed and another identity

theft/fraud packet would be sent to him. A month or so after this exchange, in February

2009, PRA sent Peterson a letter stating that it could not investigate the dispute because

he had not returned the completed identity theft/fraud packet and that the account would

no longer be treated as a disputed account but instead would be “returned to the collection

floor.”

          On June 3, 2009, Peterson filed suit alleging that PRA’s collection efforts violated

the FDCPA. On cross-motions for summary judgment, the District Court concluded that

                                                4
the validation notice included with the 2003 Letter did not comply with 15 U.S.C. §

1692g(a) because that letter was not actually sent to Peterson, but instead went to an

address at which he had never resided. Accordingly, the Court found that PRA had been

obligated to provide a new validation notice when it made its initial contact with Peterson

by phone in 2007. Because it failed to do so, it violated 15 U.S.C. § 1692g(a). The

District Court also held that Peterson’s claim was not barred by the FDCPA’s one-year

statute of limitations, see 15 U.S.C. § 1692k(d), because, even though Peterson filed his

complaint more than a year after the 2007 phone calls from PRA, PRA had sent him

letters in October 2008 and February 2009, which could serve as the basis for a non-time-

barred action. The District Court granted summary judgment for Peterson and awarded

him the maximum statutory damages amount of $1,000.

       Peterson then moved for attorney’s fees pursuant to 15 U.S.C. § 1692k(a)(3).

Peterson requested fees in the amount of $29,577, but the District Court awarded

$10,351.95 (a 65 percent reduction), having found that the amount of time expended was

unreasonable in light of the simplicity of the case, the fact that Peterson’s attorneys

specialized in FDCPA cases, and the fact that Peterson had been successful on only one

of multiple claims.

                                              II.

       We exercise plenary review over the District Court’s summary judgment order and

apply the same standard that the District Court should have applied. Howley v. Mellon

                                              5
Fin. Corp., 625 F.3d 788, 792 (3d Cir. 2010). Summary judgment is appropriate if there

is no genuine issue of material fact and the moving party is entitled to judgment as a

matter of law. Id.; Fed. R. Civ. P. 56(a).

III.

       We address first whether the District Court erred in holding that Peterson’s claim

under 15 U.S.C. § 1692g(a) is not barred by the one-year statute of limitations for

FDCPA suits set forth in 15 U.S.C. § 1692k(d). The District Court held that the letters

that PRA sent to Peterson in late 2008 and early 2009 can support a non-time-barred

cause of action under § 1692g(a). We disagree.

       The FDCPA states clearly that a validation notice must accompany or follow a

debt collector’s “initial communication” with a consumer. 15 U.S.C. § 1692g(a). We

agree with the common-sense conclusion reached by other courts that “there can be only

one ‘initial communication’ between a debt collector and a consumer, and any

communication that follows the ‘initial communication’ is necessarily not an ‘initial’

communication.” Derisme v. Hunt Leibert Jacobson, PC, 2010 WL 4683916, at *5 (D.

Conn. Nov. 10, 2010). Faced with cases in which a validation notice did accompany an

initial communication, but the plaintiff argued that the FDCPA was violated by

subsequent communications lacking such a notice, courts have concluded that a debt

collector has no obligation to send a validation notice with any communication other than

the initial communication. Weber v. Computer Credit, Inc., 259 F.R.D. 33, 39 (E.D.N.Y.

                                             6
2009); Spira v. Ashwood Fin., Inc., 358 F. Supp. 2d 150, 158-59 (E.D.N.Y. 2005); see

also Ehrich v. RJM Acquisitions LLC, 2009 WL 4545179, at *2 (E.D.N.Y. Dec. 4, 2009)

(“Any letters after [the first communication between a debt collector and a consumer] are

irrelevant for purposes of the notice requirement in Section 1692g(a).”).

       Without commenting on any implications that § 1692g(a) claims, standing alone,

might have for § 1692g(b) claims, we do not believe that the former are subject to a so-

called “continuing violations” rule that would re-set the statute of limitations clock with

each separate communication. Other circuits have held, entirely reasonably, that the

FDCPA statute of limitations should begin to run on the date of “the debt collector’s last

opportunity to comply with” the Act. Naas v. Stolman, 130 F.3d 892, 893 (9th Cir. 1997)

(quoting Mattson v. U.S. West Commc’ns, 967 F.2d 259, 261 (8th Cir. 1992)); see also

Maloy v. Phillips, 64 F.3d 607, 608 (11th Cir. 1995) (endorsing the Eighth Circuit’s

reasoning in Mattson). Regardless of whether PRA had included a validation notice with

its 2008 and 2009 letters to Peterson, it would have violated § 1692g(a) by not sending a

notice within five days of its first 2007 phone conversation with him. That conversation,

as the statutory “initial communication,” was PRA’s last opportunity to comply with that

provision.

       Because PRA’s initial communication with Peterson took place in 2007 and he did

not file suit until June 2009, any claim based on § 1692g(a) is barred by the one-year

statute of limitations. We will therefore reverse the grant of summary judgment for

                                              7
Peterson on his § 1692g(a) claim and remand with instructions to enter summary

judgment for PRA on that claim.

                                            IV.

       Peterson also brought claims based on 15 U.S.C. §§ 1692g(b), 1692e(2), and

1692e(10). The District Court did not address these claims.3

       In its summary judgment order, the District Court asked Peterson to inform the

court whether he intended to pursue his claims under § 1692e(2) and (10), which were not

addressed in that order. He declined to do so because he had already received the

maximum statutory damages based on his § 1692g(a) claim. Because we now order the

District Court to enter judgment for PRA on the § 1692g(a) claim, the District Court

should provide Peterson with another opportunity to pursue his claims under § 1692e(2)

and (10), if he wishes to do so. In addition, because the District Court did not address

Peterson’s § 1692g(b) claim in its opinion, it should do so on remand. We leave the

scope and conduct of any proceedings on this claim, on remand, to the District Court’s

sound discretion.

                                            V.

       3
               It is true that the District Court mentioned that Peterson had also brought a
§ 1692g(b) claim in its order granting summary judgment. However, it did not discuss
any of the elements of a § 1692g(b) claim. To find a violation under § 1692g(b), the
District Court would have needed to find that (1) Peterson’s initial email to PRA triggered
the verification requirement of § 1692g(b); (2) PRA’s response did not satisfy the
verification requirement; and (3) the letter sent by PRA in February of 2009 constituted
collection activity in violation of § 1692g(b). See 15 U.S.C. § 1692g(b).

                                             8
       Because we will reverse the grant of summary judgment in favor of Peterson, we

shall also vacate the District Court’s order awarding attorney’s fees. Having vacated the

award of attorney’s fees, Peterson’s cross-appeal challenging the amount of the award is

rendered moot, and we will dismiss the cross-appeal.

       The judgment of the District Court granting summary judgment in favor of

Peterson will be reversed and the District Court will be directed to enter summary

judgment on Peterson’s § 1692g(a) claim in favor of PRA. The order of the District

Court awarding attorney’s fees to Peterson will be vacated, and Peterson’s cross-appeal of

that award will be dismissed as moot. The case will be remanded to the District Court for

further proceedings consistent with this opinion.

                                             9