Consumer Protection – FDCPA – ‘Misleading’ Statements

A lawyer’s initial letter to debtor’s husband asserting the husband signed a note securing a deed of trust on property purchased by debtor, and threatening legal action for husband’s default, states a claim for violation of the Fair Debt Collection Practices Act, says an Alexandria U.S. District Court.

First, because plaintiff’s second amended complaint satisfies the requirements of Fed. R. Civ. P. 15(c)(1)(B), counts V-X of that complaint relate back to the original complaint and are not time-barred. Defendant lawyer’s motion for reconsideration must be denied, and these counts survive a motion to dismiss under the FDCPA’s one-year statute of limitations.

A debt collector is sensibly required to send a written notice containing only the information omitted from the initial communication. This is so because the function of the § 1692g(a) notice is limited to curing any omissions in the initial communication.

Here, neither plaintiff claims the initial communication did not contain the amount of the debt pursuant to § 1692g(a)(1). Instead, counts I-IV of the second amended complaint allege that the June 2, 2008 letter addressed to plaintiff Liliana Vitullo – the “initial communication” between Liliana and defendant Mancini – did not contain the information specified in § 1692g(a)(2)-(5), and therefore Mancini was statutorily required to send a second written notice conveying this information within five days of sending the initial communication.

When read as a whole, the statement at issue makes clear that it is the debt collector who will assume the debt to be valid if it is not disputed, as it is the debt collector who is tasked with verifying a disputed debt. The least sophisticated consumer reading Mancini’s letters would plainly understand that he is entitled to request the name and address of the original creditor from Mancini, and hence the June 2 and June 16 letters are not deficient in this regard because the information was effectively conveyed. Because the statements made in the initial communication satisfy 15 U.S.C. § 1692g(a)(3)-(5), counts II-IV and VI-VIII must be dismissed.

In counts IX-X, Julio Vitullo complains that Mancini violated 15 U.S.C. § 1692e by falsely stating in the June 16, 2008 letter 1) that Julio Vitullo signed a note secured by a deed of trust on the Capon Bridge property, and 2) that Julio was in default on this note. The second amended complaint asserts that these statements were false because Julio signed neither the note nor the deed of trust. These allegations adequately state a claim on which relief can be granted, as a “false representation” under 15 U.S.C. § 1692e(2)(A). Also, the statement that Julio’s election not to cure the default will result in accelerated payments on the note and, if necessary, foreclosure, is a threat to take action that cannot legally be taken. The lawyer’s motion to dismiss these counts is denied.

However, the court dismisses the FDCPA claim based on the lawyer having sent a communication directly to debtor, knowing she was represented by counsel, as required under state law. Here, as in Hulse v. Ocwen Fed. Bank FSB, 195 F. Supp. 2d 1188 (D. Or. 2002), the notice of acceleration and foreclosure was sent to the address appearing on the deed of trust, as directed by state law, specifically, W.Va. Code § 38-1-4. Because the lawyer was required by West Virginia law to send the notice of acceleration and foreclosure to the grantor’s address, and because Liliana Vitullo did not provide the beneficiary or the beneficiary’s agent with an alternate mailing address pursuant to state law, the Aug. 29, 2008 letter does not violate § 1692c(a)(2).

Vitullo v. Mancini (Ellis, J.) No. 1:09cv614, Jan. 26, 2010; USDC at Alexandria, Va. VLW 010-3-041, 17 pp.