Suing on a time barred debt is illegal

It IS also a violation of the FDCPA. Here are a few cases that discuss this. It is also against state law as well not to mention Frivolous litigation. If they file a lawsuit knowing full well it can't be filed, knowing the debt is time barred but they file a lawsuit anyway. it is frivolous. I have heard one person on here state it is not a violation of the FDCPA when it clearly states they cannot take action that connot legally be taken and also it is false, deceptive, or misleading.


Kimber v. Fed. Fin. Corp., 668 F. Supp. 1480 (M.D. Ala. 1987)

Shorty v. Capital One Bank, 90 F. Supp. 2d 1330 (D.N.M. 2000)

Goins v. JBC & Assoc., 352 F. Supp. 2d 262 No. 05-3970 (D. Conn. 2005)


Here is the text from one of those cases.

363 F.Supp.2d 345

Gilbert J. GERVAIS, Plaintiff,
v.
RIDDLE & ASSOCIATES, P.C., Defendant.

No. 3:03 CV 2102(PCD).

United States District Court, D. Connecticut.

March 31, 2005.

Zenas Zelotes, Groton, CT, for Plaintiff.

David S. Samuels, Jason Marc Kuselias, Robinson & Cole, Hartford, CT, for Defendant.

RULING ON CROSS-MOTIONS FOR SUMMARY JUDGMENT AND PLAINTIFF'S MOTION FOR CONDITIONAL CERTIFICATION

DORSEY, District Judge.

Plaintiff and Defendant cross-move for summary judgment. Plaintiff also moves


for conditional certification to the Connecticut Supreme Court. For the reasons stated herein, Defendant's motion for summary judgment is denied, Plaintiff's motion for summary judgement is granted, and Plaintiff's motion for conditional certification is denied.

I. Background1

Defendant Riddle & Associates, P.C. ("Riddle") is a professional corporation organized under the laws of Utah and operates as a law firm specializing in consumer debt collection.

Plaintiff Gilbert J. Gervais had a credit card issued by MBNA American. He ceased making payments and defaulted on this account in the amount of $8,115.92, not including interest. The most recent activity on the MBNA account was in September 1993. Defendant waived interest of more than ten years on the amount owed.

In November 2003, Capital Acquisitions and Management Company, Inc. ("CAMCO") retained Defendant to recover on Plaintiff's past due account. Plaintiff's account was originally owed to MBNA, but now it is owed to and owned by CAMCO. On November 7, 2003, Defendant sent Plaintiff a collection letter seeking payment on the debt and offering a discount for prompt payment. Defendant's President, Jesse L. Riddle, who is an attorney, personally drafted and approved the language and template used in this letter. From mid-November until the end of November, Defendant attempted unsuccessfully to contact Plaintiff by telephone eleven times, leaving several messages instead. The messages generally stated

Hello. This is the law firm of Riddle & Associates at 1-800-225-5050 with a message regarding an important legal matter. Please call our office at 1-800-225-5050 and refer to reference number [].

The last message was left on or about November 30, 2003. Plaintiff did not return any of these messages, nor did Defendant ever speak directly with Plaintiff, At no time did Plaintiff ever dispute the debt, either in writing or orally.

At the time the letter was sent to Plaintiff, Defendant was authorized and licensed as a "Consumer Collection Agency" by and through the Banking Commissioner, of the State of Connecticut, Department of Banking, license no. 9166, to collect debts under the name "Riddle & Associates, P.C."

On or about December 4, 2003, Defendant was contacted by Plaintiff's attorney Zenas Zelotes who claimed, on behalf of Plaintiff, that Defendant's collections efforts violated the Fair Debt Collection Practices Act. Zelotes threatened to bring suit. Defendant immediately ceased all further collection activity. Over the course of the next several days, Defendant told Attorney Zelotes that its collection actions complied with the FDCPA, provided him with relevant case law, and told him that any suit would be frivolous.

On December 8, 2003 Plaintiff filed this action. Count One alleges that Defendant "willfully and/or negligently" violated the Fair Debt Collection Practices Act, 15 U.S.C. § 1692 et seq. ("FDCPA") "by making false, deceptive and/or misleading statements in connection with the collection of a debt, in violation of 15 U.S.C. § 1692e, and/or by using unfair means in attempting to collect a debt, in violation of 15 U.S.C. § 1692f." Count Two alleges that Defendant violated the Connecticut Unfair Trade Practices Act, Conn. Gen. Stat. § 42-110a et seq. ("CUTPA"). Defendant filed a counterclaim requesting a declaratory judgment that (1) seeking voluntary payment on a time-barred debt does not violate the FDCPA (Def. Counterclaim Count One); (2) nothing in Defendant's November 7, 2003 letter or subsequent telephone messages contained a threat of litigation or was a false, misleading, or deceptive statement made or was an unfair means of collecting a debt; (3) it did not violate 15 U.S.C. §§ 1692g, 1692e, or 1692f in pursuing collection efforts during the 30-day dispute period absent receipt of a written dispute from Plaintiff; and (4) its collection efforts did not violate CUTPA. In March 2004 Plaintiff's motion to strike Defendant's counterclaims [Doc. No. 6] was denied [Doc. No. 10].

Now, the parties have filed cross-motions for summary judgment, and Plaintiff has filed a motion for conditional certification.

II. Summary Judgment Standard

A party moving for summary judgment must establish that there are no genuine issues of material fact in dispute and that it is entitled to judgment as a matter of law. Fed. R. Civ. P. 56(c); Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). "A party opposing a properly brought motion for summary judgment bears the burden of going beyond the pleadings, and `designating specific facts showing that there is a genuine issue for trial.'" Amnesty Am. v. Town of W. Hartford, 288 F.3d 467, 470 (2d Cir.2002) (quoting Celotex Corp. v. Catrett, 477 U.S. 317, 324, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986)). In determining whether a genuine issue has been raised, all ambiguities are resolved and all reasonable inferences are drawn against the moving party. United States v. Diebold, Inc., 369 U.S. 654, 655, 82 S.Ct. 993, 8 L.Ed.2d 176 (1962); Quinn v. Syracuse Model Neighborhood Corp., 613 F.2d 438, 445 (2d Cir.1980). Summary judgment is proper when reasonable minds could not differ as to the import of evidence. Bryant v. Maffucci, 923 F.2d 979, 982 (2d Cir.1991). "Conclusory allegations will not suffice to create a genuine issue." Delaware & H.R. Co. v. Consolidated Rail Corp., 902 F.2d 174, 178 (2d Cir.1990). Determinations as to the weight to accord evidence or credibility assessments of witnesses are improper on a motion for summary judgment as such are within the sole province of the jury. Hayes v. N.Y. City Dep't of Corr., 84 F.3d 614, 619 (2d Cir.1996).

III. Discussion

A. Plaintiff's Motion for Summary Judgment

Plaintiff alleges that: (1)(a) Defendant knew or should have known that the debt was subject to a complete limitations defense; (b) Defendant's communications violated sections 1692e(2)(A), 1692e(5), and 1692e(10) because the least sophisticated debtor might reasonably have interpreted Defendant's collection letter and eleven telephone calls as an implicit threat of suit, when suit was not intended and may reasonably have mislead or confused the least sophisticated debtor as related to the time-barred debt's legal status by impressing upon Plaintiff a false sense of urgency; (2) Defendant impermissibly overshadowed the § 1692g(a) notice by conditioning substantial advertised savings upon its receipt of payment on a date preceding the passing of the § 1692g(a) validation period; (3) Defendant cannot avail itself of the affirmative defense set out in section 1692k; and (5) Defendant violated CUTPA to the extent that it had violated the FDCPA.

1. Plaintiff's Claims under 15 U.S.C. §§ 1692e(2)(A), 1692e(5), and 1692e(10)

The FDCPA establishes a general prohibition against the use of "false, deceptive, or misleading representation or means in connection with the collection of any debt." 15 U.S.C. § 1692e. "Because the list in the sixteen subsections [of § 1692e] is non-exhaustive, a debt collection practice can be a `false, deceptive, or misleading' practice in violation of § 1692e even if it does not fall within any of the subsections of § 1692e." Clomon v. Jackson, 988 F.2d 1314, 1318 (2d Cir.1993). A single violation of § 1692e is sufficient to establish civil liability under the FDCPA. See 15 U.S.C. § 1692k (establishing civil liability for "any debt collector who fails to comply with any provision of this subchapter").

The Second Circuit has adopted the objective "least sophisticated consumer" standard for cases under § 1692e. Clomon, 988 F.2d at 1318. "The basic purpose of the least-sophisticated-consumer standard is to ensure that the FDCPA protects all consumers, the gullible as well as the shrewd." Id. At the same time, "in crafting a norm that protects the naive and the credulous the courts have carefully preserved the concept of reasonableness." Id. at 1319. The "least sophisticated consumer" standard simultaneously. "(1) ensures the protection of all consumers, even the naive and the trusting, against deceptive debt collection practices, and (2) protects debt collectors against liability for bizarre or idiosyncratic interpretations of collection notices." Id. at 1320.

a. Statute of Limitations

Plaintiff argues that Defendant knew or should have known that the statute of limitations for collecting on the debt had expired and, thus, improperly threatened legal action that it could not legally take in its communications to Plaintiff. Defendant argues that it did not threaten Plaintiff and that it merely attempted to seek Plaintiff's voluntary payment of his outstanding debt.

"The Statute of Limitations creates a defense to an action." Wells v. Carson, 140 Conn. 474, 476, 101 A.2d 297 (Conn.1953). "It does not erase the debt." Id. Accordingly, a debt collector may seek voluntary payment on a time-barred debt, as long as there is no threat of legal action. Reese v. Arrow Financial Serv., LLC, 202 F.R.D. 83, 92-93 (D.Conn.2001). This Court must therefore assess whether a genuine issue of material fact exists regarding Plaintiff's claim that Defendant's communications threatened legal action.

b. 15 U.S.C. §§ 1692e(5) & (10)

Plaintiff argues generally that "[w]hen an attorney (so held out) attempts to collect a debt, both prima facie and implicit is a threat of suit." (Pl.'s Mem at 6.) He contends that "Defendant's implicit threat of litigation is not ... limited to [its] use of attorney letterhead," and argues that the threat is manifest in the "cumulative effect" of Defendant's language both in the telephone messages and the dunning letter. (Pl.'s Mem. at 14-16.) More specifically, Plaintiff contends that the following constituted both threats of action Defendant did not intend to take and false representations: (1) the attorney letterhead, identifying Defendant as "Attorneys and Counselors at Law"; (2) language in the letter, stating that (a) "Our law firm has been retained to collect from you,"(b) "Our client has agreed to," and (c) "If you want to resolve this matter ... call our law firm at ..."; and (3) language in the recorded telephone messages, stating that "This is the law firm of Riddle & Associates calling you about an important legal matter." (Pl.'s Mem. at 15.)

15 U.S.C. § 1692e generally provides that "[a] debt collector may not use any false, deceptive, or misleading representation or means in connection with the collection of any debt." Subsection (5) prohibits "[t]he threat to take any action that cannot legally be taken or that is not intended to be taken," 15 U.S.C. § 1692e(5), and subsection (10) prohibits "[t]he use of any false representation or deceptive means to collect or attempt to collect any debt...", 15 U.S.C. § 1692e(10). In determining whether a collection letter threatens legal action under § 1692e(5), courts look to whether a debt collection letter indirectly or impliedly states that legal action is underway or contemplated imminently.

Pipiles v. Credit Bureau of Lockport, Inc., 886 F.2d 22, 25-26 (2d Cir.1989), the United States Court of Appeals for the Second Circuit found an implied threat to take legal action in the following statements: "Notice is Hereby Given That This Item Has Already Been Referred For Collection Action"; "We Will At Any Time After 48 Hours Take Action As Necessary And Appropriate to Secure Payment In Full"; and "Pay This Amount If Action Is To Be Stopped." The court explained that, although a close question, "[t]he clear import of the language, taken as a whole, is that [some] type of legal action has already been or is about to be initiated and can be averted from running its course only by payment." Id.

A few years later, Bentley v. Great Lakes Collection Bureau, Inc., 6 F.3d 60, 62 (2d Cir.1993), the Second Circuit again found an implied threat of litigation, notwithstanding the fact that the second of two letters sent to the debtor concluded with the statement that "No legal action has been or is now being taken against you." The first letter stated that "our client has instructed us to proceed with whatever legal means is necessary to enforce collection." A second letter provided in part that "Your delinquent account has been referred to my desk where a decision must be made as to what direction must be taken to enforce collection. Were our client to retain legal counsel in your area, and it was determined that suit should be filed against you, it could result in a judgment." The court concluded that the "least sophisticated consumer" would interpret the language contained in the two letters, on whole, to mean that legal action was authorized, likely and imminent.

Defendant correctly cites to Veillard v. Mednick, 24 F.Supp.2d 863, 867 (N.D.Ill.1998) for the proposition that the mere inference that legal action could be taken because a letter is on law firm letterhead is not sufficient to create FDCPA liability. Indeed, even the mere fact that a debt collection letter comes from an attorney does not vest the communication with an implied threat of legal action. Sturdevant v. Jolas, 942 F.Supp. 426, 430 (D.Wis.1996). "Courts have required more than the fact that a collection letter is from an attorney to find a § 1692e(5) violation." Kapeluschnik v. LeSchack & Grodensky, 96-CV-2399(ERK)(CLP), 1999 U.S. Dist. LEXIS 22883, at *20 (E.D.N.Y. Aug. 26, 1999). Although this is true, "in cases where the likelihood of legal action is not clear from the language, the letter's source can be determinative, especially if it purports to be from an attorney." Jenkins v. Union Corp., 999 F.Supp. 1120, 1137 (N.D.Ill.1998). In this case, the implied threat of litigation is not dependent solely on Defendant's use of law firm letterhead. As a result, in the absence of express language threatening legal action, the source of the letter is a persuasive factor to be considered in conjunction with the statements contained in the collection letters and over the telephone.

Here, Defendant stated to Plaintiff, in eleven recorded telephone messages, that their law firm was calling regarding an
important legal matter. In addition, Defendant's collection letter stated that "our law firm has been retained to collect from you," and that should Plaintiff "want to resolve this matter ... call our law firm." (Pl.'s Mem. at 15.) This Court is persuaded that the accretion of references, both within the letter and accompanying letterhead, and in the telephone messages, would indicate to the "least sophisticated consumer" that "[t]he clear import of the language, taken as a whole, is that [some] type of legal action has already been or is about to be initiated and can be averted from running its course only by payment." See Pipiles, 886 F.2d at 26.