RIVERA ALMODOVAR v. P & V COLLECTION SERVICES INC

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IN THE UNITED STATES BANKRUPTCY COURT FOR
THE DISTRICT OF PUERTO RICO
IN RE:
MIGUEL ANGEL RIVERA ALMODOVAR 	CASE NO. 09-07002 BKT
MARILEN DE LOS ANGELES MARTINEZ
GARCIA
Debtors
MIGUEL ANGEL RIVERA ALMODOVAR
Chapter 13
ADVERSARY NO. 09-0251
Plaintiff
v.
P.V. COLLECTION SERVICES INC. 	FILED & ENTERED ON 02/03/2011
Defendant
OPINION AND ORDER
This proceeding is before the Court upon the Plaintiff’s motion for partial summary judgment
[Dkt. No. 25], the Defendant’s opposition to the Plaintiff’s motion for partial summary judgment
[Dkt. No. 28], the Defendant’s motion for summary judgment [Dkt. No. 29], the Plaintiff’s
opposition to the Defendant’s motion for summary judgment [Dkt. No. 30], and the Defendant’s
reply to the Plaintiff’s opposition to the Defendant’s motion for summary judgment [Dkt. No. 31].
For the reasons set forth below, the Plaintiff’s motion for partial summary judgment is GRANTED.
I. SUMMARY JUDGMENT STANDARD:
Under Federal Rule of Civil Procedure 56(c), made applicable in bankruptcy by Federal Rule
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of Bankruptcy Procedure 7056, summary judgment is available 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 judgment as a matter of
law. Fed. R. Civ. P. 56(c); Borges ex rel. S.M.B.W. v. Serrano-Isern, 605 F.3d 1, 4 (1st Cir. 2010).
As to issues on which the movant, at trial, would be compelled to carry the burden of proof, it must
identify those portions of the pleadings which it believes demonstrates that there is no genuine issue
of material fact. 	In re Edgardo Ryan Rijos & Julia E. Cruz Nieves v. Banco Bilbao Vizcaya &
Citibank (In re Rijos), 263 B.R. 382, 388 (B.A.P. 1st Cir. 2001). ). A fact is deemed "material" if it
potentially could affect the outcome of the suit. Borges at 5. 	Moreover, there will only be a
"genuine" or "trial worthy" issue as to such a "material fact," "if a reasonable fact-finder, examining
the evidence and drawing all reasonable inferences helpful to the party resisting summary judgment,
could resolve the dispute in that party's favor." Id. at 4. The Court must view the evidence in a light
most favorable to the nonmoving party. Alt. Sys. Concepts, Inc. v. Synopsys, Inc., 374 F.3d 23, 26
(1st Cir. 2004). Therefore, summary judgment is “inappropriate if inferences are necessary for the
judgment and those inferences are not mandated by the record.” Rijos at 388.
II. FACTUAL BACKGROUND:
The Plaintiff Debtor filed the present adversary proceeding alleging that the Defendant
collection agency violated the Fair Debt Collection Practices Act (hereinafter "FDCPA"), 15 U.S.C.
§ 1692, et seq. There is no dispute that Plaintiff is a consumer debtor and that Defendant is a debt
collector. Hence the provisions of this law apply to the facts before us. Specifically, the Plaintiff
alleges that the Defendant’s collection letter (1) insisted that the Plaintiff contact the Defendant
collection agency within five (5) days of receipt of the letter; (2) failed to contain a statement
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indicating that, if the Plaintiff did not dispute the validity of the debt, or any portion thereof, within
thirty (30) days of receipt of the letter, the debt will be assumed to be valid by the debt collector; (3)
failed to contain a statement that, upon the Plaintiff’s written request within the thirty-day period, the
debt collector will provide the Plaintiff with the name and address of the original creditor; and (4)
failed to advise the Plaintiff that he had the option of disputing the debt orally. The Defendant’s own
translation of the collection letter in question confirms the veracity of each allegation outlined above
[Dkt. No. 29], thus there are no material facts in dispute and summary judgment is appropriate. The
matter is submitted.
III. LEGAL ANALYSIS AND DISCUSSION:
In evaluating whether communications or conduct violates the FDCPA, courts utilize the so-
called “least sophisticated debtor” standard. Taylor v. Perrin, Landry, de Launay & Durand, 103 F.3d
1232, 1236 (5th Cir.1997); Clomon v. Jackson, 988 F.2d 1314, 1318-19 (2d Cir.1993); Smith v.
Transworld Systems, Inc., 953 F.2d 1025, 1028-29 (6th Cir.1992); see also Gammon v. GC Services
L.P., 27 F.3d 1254 (7th Cir.1994) (“unsophisticated consumer” standard). 	The phrase least
sophisticated (or unsophisticated) debtor/consumer is used “to describe the hypothetical consumer
whose reasonable perceptions will be used to determine if collection messages are deceptive or
misleading,” while at the same time the reasonableness element “shields complying debt collectors
from liability for unrealistic or peculiar interpretations of collection letters.” Gammon at 1257. The
Seventh Circuit has stated that “[a]nyway it's viewed, the standard is low.” Avila v. Rubin, 84 F.3d
222, 226 (7th Cir.1996).
Defendant's violation of the FDCPA must be evaluated from the standpoint of the least
sophisticated consumer, with a strict liability analysis.
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The FDCPA requires:
(a) 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. (Emphasis added).
15 U.S.C. § 1692g(a). Reading the collection letter sent to Plaintiff, submitted as part of Defendant's
Motion for Summary Judgment [Dkt. No. 29], from the perspective of the least sophisticated
consumer, the statement “it is extremely important that you contact our office within the next five (5)
days” suggests that, if the reader does not contact the collection agency within five days, there may
be adverse consequences. This language fails to convey the reasons for, or consequences of, this
demand, and is exactly what Congress intended to prevent when it enacted the FDCPA. The FDCPA
requires that collection letters indicate that consumers have thirty days after receipt of the letter to
dispute the debt stated therein, and collection notices suggesting a shorter time period may confuse
unsophisticated consumers into misunderstanding their statutory rights. Similarly, because the letter
does not include a statement indicating that the collection agency may assume the debt to be valid
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unless disputed within thirty days, it also fails to notify the consumer of the collection agency’s right
to change its treatment of the debt based upon whether or not a consumer responds to a collection
request. 	Furthermore, the letter’s failure to contain a statement that, upon the Plaintiff’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, is also a clear violation of the
statute.
The final question to be resolved, whether the letter failed to advise the Plaintiff that he had a
statutory right to dispute the debt orally, has produced a split between two Courts of Appeals. Both
Courts agreed this is a question of statutory construction; whether section 1692g(a)(3) of the FDCPA
requires the consumer to dispute the validity of a debt in writing, even though from its face such a
requirement is not imposed. The Third Circuit has held that the rights enumerated by 15 U.S.C. §
1692g(a)(3) may only be invoked in writing because a literal reading of the statute would result in an
incoherent debt collection scheme. 	Graziano v. Harrison, 950 F.2d 107, 112 (3rd Cir. 1991).
Contrarily, the Ninth Circuit maintains that consumers may dispute debts either in writing or orally,
as indicated by the omission of a writing requirement from 15 U.S.C. § 1692g(a)(3). Camacho v.
Bridgeport Financial, Inc., 430 F.3d 1078, 1081 (9th Cir. 2005). This Court agrees that the absence
of a writing requirement in 15 U.S.C. § 1692g(a)(3), and the presence of a writing requirement in the
two subsequent subsections, indicates that Congress intended to give consumers the right to dispute
debts orally. 	Such a scheme seems not only coherent, but progressive, and perhaps intended to
benefit undereducated or handicapped consumers who are unable to communicate in writing. For
these reasons, and the other reasons enunciated by the court in Camacho, this Court concurs with the
Ninth Circuit and holds that debtors can trigger the rights under 15 U.S.C. § 1692g(a)(3) either orally
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or in writing. Accordingly, the collection letter sent by the Defendant to the Plaintiff misstated the
rights available to him under 15 U.S.C. § 1692g(a)(3).
WHEREFORE, IT IS ORDERED that the Plaintiff’s motion for partial summary judgment
shall be, and hereby is, GRANTED. The Clerk's Office will schedule a status conference forthwith
to consider the procedures for resolving the awarding of damages and attorney's fees. Judgment will
be entered accordingly.
IT IS SO ORDERED.
San Juan, Puerto Rico, this 3rd day of February, 2011.
Brian K. Tester
U.S. Bankruptcy Judge
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