AVERN COHN, District Judge.
This is a Fair Debt Collection Practices Act ("FDCPA"), 15 U.S.C. § 1692 et seq., case. Plaintiff William Cooper ("Cooper"), a Michigan resident, is suing Defendant Portfolio Recovery Associates, LLC ("PRA"), a Virginia company, for attempting to collect a debt from him in a manner that violated the FDCPA, the Michigan Occupational Code ("MOC"), M.C.L. §339.915(e), the Michigan Collection Practices Act ("MCPA"), M.C.L. § 445.251 et seq., and Michigan tort law. Cooper seeks actual damages, FDCPA statutory damages of $1000, the greater of MOC treble damages or $150, damages for fraud, costs and attorney's fees, and punitive damages in excess of $10,000,000.
PRA has moved for summary judgment or dismissal (Doc. 9), to which Cooper has responded and cross-motioned for summary judgment on liability (Doc. 19). Along with its motion for summary judgment, PRA filed a statement of material facts not in dispute (Doc. 10). Cooper did not file a response statement of facts, so PRA independently filed a joint statement of material facts not in dispute (Doc. 22). This document does not represent a concurrence between the parties, but only reflects the facts that PRA says Cooper did not refute in his other papers. Just before oral argument, Cooper filed a response statement of facts (Doc. 26).
For the reasons that follow, PRA's motion for summary judgment is GRANTED, and Cooper's motion for summary judgment is DENIED.
On July 13, 2015, Cooper received a debt collection letter from PRA indicating that Cooper owed $3,177.19 to PRA (Doc. 1, Exhibit 1). The letter named U.S. Bank National Association ("U.S. Bank") as the original creditor. Cooper wrote to PRA in response requesting that PRA verify the debt through various means, including by providing a copy of the written agreement that created the obligation between Cooper and U.S. Bank (Doc. 1, Exhibit 2).
On August 10, 2015, PRA responded to Cooper by letter with verification information including:
(Doc. 10, Exhibit 2). The letter stated that Cooper should contact PRA if he wanted to receive a history of payments that had been made since PRA acquired the account. The letter did not include a copy of the original agreement between Cooper and U.S. Bank as Cooper requested in his first response letter (Doc. 1, Exhibit 2). It did, however, include an identity theft affidavit that Cooper could have completed and returned in order to dispute that the debt belonged to him. Cooper says he did not return this affidavit because he did not want to provide personal information to PRA without further assurance of PRA's trustworthiness and the validity of the debt (Doc. 19 at 10).
On the same day, Cooper sent PRA a second letter requesting verification of the $3,177.19 debt (Doc. 1, Exhibit 4).
PRA sent a letter to Cooper three days later, stating that the investigation of the dispute was complete and enclosing three Comerica Bank credit card statements as additional verification of the debt (Doc. 10, Exhibit 3). The first statement, dated April 2013, displayed a payment of $52.00. The second statement, dated January 2014, displayed a total balance of $3,177.19. The third statement, dated February 2014, displayed that the account was being charged off. PRA's letter did not explain the connection between Comerica Bank and U.S. Bank.
On August 20, 2015, PRA sent Cooper two letters. The first was a verification letter (Doc. 10, Exhibit 4) identical to the verification letter PRA sent on August 10, 2015 (Doc. 10, Exhibit 2). The second was a letter stating that because PRA had already responded to "a previous dispute substantially the same as your present dispute," it would conduct no further investigation into Cooper's dispute (Doc. 1, Exhibit 6-2).
Shortly afterward, Cooper sent a letter to PRA requesting verification of the debt for the third time, stating that the information PRA had provided in its previous responses was insufficient to prove the validity of the debt (Doc. 1, Exhibit 5). Cooper emphasized that the only sufficient proof would be a copy of the original U.S. Bank contract that created the debt and one year of credit card statements.
On July 15, 2016, PRA sent to Cooper a letter (Doc. 1, Exhibit 6-1) identical to one sent on August 20, 2015 (Doc. 1, Exhibit 6-2), stating that PRA would not respond to a dispute that it already resolved.
Between September 8, 2015, and August 16, 2016, PRA shared information regarding the debt with credit reporting agencies TransUnion, Equifax, and Experian. Each time it shared the information, PRA included a designation indicating that Cooper disputed the debt (Doc. 23, Exhibit 6). On August 16, 2016, PRA requested that the information be deleted from Cooper's credit report (Id. at ¶ 22).
Cooper filed a complaint on August 15, 2016 (Doc. 1) with allegations as described above.
Summary judgment will be granted if the moving party demonstrates that there is "no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." Fed. R. Civ. P. 56(a). There is no genuine issue of material fact when "the record taken as a whole could not lead a rational trier of fact to find for the non-moving party." Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587 (1986). The Court must decide "whether the evidence presents a sufficient disagreement to require submission to a jury or whether it is so one-sided that one party must prevail as a matter of law." In re Dollar Corp., 25 F.3d 1320, 1323 (6th Cir. 1994) (quoting Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 251-52 (1986)). In doing so, the Court "must view the evidence in the light most favorable to the non-moving party." Emp'rs Ins. of Wausau v. Petrol. Specialties, Inc., 69 F.3d 98, 101 (6th Cir. 1995).
The FDCPA provides in relevant part that
15 U.S.C. § 1692g(b).
The FDCPA also provides that "[a] debt collector may not use any false, deceptive, or misleading representation or means in connection with the collection of any debt." 15 U.S.C. § 1692e. This includes, but is not limited to, false representation of "the character, amount, or legal status of any debt" as well as "[t]he use of any false representation or deceptive means to collect or attempt to collect any debt." 15 U.S.C. §§ 1692e(2), (10). It also includes "[c]ommunicating or threatening to communicate to any person credit information which is known or which should be known to be false, including the failure to communicate that a disputed debt is disputed." 15 U.S.C. § 1692e(8).
Likewise, the Michigan Occupational Code forbids a debt collector from "[m]aking an inaccurate, misleading, untrue, or deceptive statement or claim in a communication to collect a debt or concealing or not revealing the purpose of a communication when it is made in connection with collecting a debt." M.C.L. § 339.915(e). This language is mirrored in the Michigan Collection Practices Act, M.C.L. § 445.252(e).
In order to sustain a simple fraud claim under Michigan common law, a plaintiff must show that:
Roberts v. Saffell, 280 Mich.App. 397, 403 (2008).
PRA says that its response to Cooper's request for verification of the debt fulfilled statutory requirements. It also says that the documentation it submitted was not fraudulent.
Cooper says that PRA's response to his request for verification of the debt did not fulfill statutory requirements, which means that the collection activities PRA undertook after sending its response violated the FDCPA verification provisions. Cooper also says that the verification documents PRA submitted were fraudulent, in violation of the FDCPA misrepresentation provisions, the MOC/MCPA, and Michigan tort law.
The parties do not disagree about the contents of the documents PRA sent to Cooper in response to his verification requests. They only disagree about which legal standard should be applied to determine whether PRA met the verification requirements under 15 U.S.C. §1692g(b), which is not a question of fact.
PRA relies on Laues v. Roberts, 2015 WL 1412631 (E.D. Mich. Mar. 25, 2015), in which the court applied the Sixth Circuit's approval of the FDCPA verification requirement:
Id. at *23-24 (quoting Haddad v. Alexander, Zelmanski, Danner & Fioritto, PLLC, 758 F.3d 777, 783 (6th Cir. 2014)) (internal citations and quotation marks omitted). The Laues court further stated that the "baseline" for proper verification is that it "enables the consumer to sufficiently dispute the payment obligation." Id. at *24 (quoting Haddad, 758 F.3d at 785).
PRA says that it met this standard by providing Cooper with the amount of the debt owed, the name of the original creditor, and the name, address, and telephone number of the current creditor. It cites in support Poulin v. Thomas Agency, 760 F.Supp.2d 151, 159 (D. Me. 2011) ("[C]onfirmation of the amount of the debt and the identity of the creditor, which is then relayed to the debtor—is sufficient.") and Clark v. Capital Credit & Collection Servs., 460 F.3d 1162, 1173-74 ("[V]erification of a debt involves nothing more than the debt collector confirming in writing that the amount being demanded is what the creditor is claiming is owed.") (quoting Chaudry v. Gallerizzo, 174 F.3d 394, 406 (4th Cir. 1999)).
Cooper says that Haddad itself should control, as opposed to Laues' interpretation of Haddad. While Haddad supports the notion that the minimum verification required is that which will "enable the consumer to sufficiently dispute the payment obligation," Haddad, 758 F.3d at 785 (internal quotation marks omitted), it creates additional requirements for achieving this purpose that PRA did not cite:
Id. at 785-86.
Cooper also says Haddad "suggests" that the verification requirement include a "running account of the debt amount, a description of every transaction, and the date on which the transaction occurred." Haddad, 758 F.3d at 783 (quoting Chaudry, 174 F.3d at 406). While he notes that a running account would be impossible in this case since the account never existed, Cooper offers that a "running total of transactions" or a complete record of billing statements since the account's inception would have fulfilled this requirement (Doc. 19 at 7).
Further, Cooper admits that Haddad did not speak to a situation such as his own in which a debtor disputes the existence of a debt. In Haddad, the debtor knew he owed a debt to the creditor, but the creditor could not identify the source of a remaining $50 balance on the account. Haddad, 758 F.3d at 780. Here, Cooper says that no debt ever existed. Cooper asks the Court to "elevate" the Haddad standard to require proof of an original contract in his situation, relying on dicta from Juarez v. Portfolio Recovery Assocs., LLC, 2015 U.S. Dist. LEXIS 105746, *7-8, 2015 WL 4764226 (N.D. Ill. Aug. 12, 2015) (granting summary judgment to PRA on FDCPA claims). Cooper also relies on Juarez and on a Consumer Financial Protection Bureau ("CFPB") consent judgment to argue that in the past, PRA has displayed a pattern and practice of contacting debtors without sufficient investigation of the existence of debts. Portfolio Recovery Associates, LLC, CFPB No. 2015-CFPB-0023, 2015 WL 5667141 (Sept. 09, 2015).
Finally, Cooper says that PRA's verification documents failed to meet the "least sophisticated consumer" standard from Smith v. Transworld Systems, Inc., 953 F.2d 1025 (6th Cir. 1992), which asks "whether the least sophisticated consumer would be deceived by a collection agency's letters." Id. at 1028 (internal quotation marks omitted). Cooper says that PRA's response was misleading because the verification letters referred to U.S. Bank, while the billing statements displayed a Comerica Bank logo. Cooper also says that because neither Comerica Bank, U.S. Bank, nor Elan Financial Services appeared in his June 9, 2015 credit report, he could not have known that PRA was referring to an account he owned. Cooper also cites inconsistent typeface, typographical irregularities, and an incorrect address as evidence that he should not have been expected to trust in the authenticity of the PRA documents.
Under the plainest reading of Haddad, a debt collector must only provide information regarding "how and when the debt was originally incurred or other sufficient notice from which the consumer could sufficiently dispute the payment obligation." Haddad, 758 F.3d at 786. Exactly what is "sufficient" will depend on the facts of each case. Id. at 785.
Since Cooper claims that the debt never existed, PRA could meet the Haddad standard by giving Cooper information about how and when the debt came into existence. PRA's first verification letter from August 10, 2015 (Doc. 10, Exhibit 2) did just that by notifying Cooper that an account in his name had been opened with U.S. Bank on January 1, 2008. The letter also listed the account number and the last four digits of Cooper's social security number, and later provided billing statements from the account. This information was sufficient to allow Cooper to dispute the debt. Not only that, but PRA also expressly gave Cooper an opportunity to dispute the debt by enclosing an identity theft affidavit in two of its verification letters. There is no question that Cooper had the information necessary to complete these affidavits. PRA was therefore not required to provide a copy of an original contract because Cooper would not have needed an original contract in order to sufficiently dispute the debt.
Further, a debt collector is not required to independently verify the existence of a debt, but may rely on representations of the original creditor as to its existence. Clark, 460 F.3d at 1174 ("[Debt collectors] were entitled to rely on their client's statements to verify the debt. . . . Moreover, the FDCPA did not impose upon them any duty to investigate independently the claims."). See also Chaudry, 174 F.3d at 406 ("[V]erification only requires a debt collector to confirm with his client that a particular amount is actually being claimed, not to vouch for the validity of the underlying debt"); Poulin, 760 F. Supp. 2d at 160; Ducrest v. Alco Collections, Inc., 931 F.Supp. 459, 462 (M.D. La. 1996); Azar v. Hayter, 874 F.Supp. 1314, 1317 (N.D. Fla. 1995), aff'd, 66 F.3d 342 (11th Cir. 1995); Wittenberg v. Wells Fargo Bank, N.A., 852 F.Supp.2d 731, 753 (N.D.W. Va. 2012), aff'd sub nom. Wittenberg v. First Indep. Mortg. Co., 599 F. App'x 463 (4th Cir. 2013). Thus, in order to comply with its FDCPA obligations, PRA did not have to prove to Cooper that the debt was valid before continuing collection activities.
Cooper's reliance on Juarez is misplaced; the decision makes no mention of an original contract requirement, and the "dicta" he referenced was merely the Plaintiff's argument, not the court's commentary. His reliance on a CFPB consent judgment is likewise misplaced because whether or not PRA acted inappropriately in the past does nothing to prove how it acted in this case.
PRA's verification documents also fulfilled the "least sophisticated consumer" standard. Failing to explain the business relationships between creditors and all of the names under which they do business does not amount to deception. Since Cooper's claim is that he never opened an account with either Comerica Bank, U.S. Bank, or Elan Financial Services, he would have had to dispute that the account belonged to him whether or not PRA provided an explanation. Further, even the least sophisticated consumer is still a reasonable person. Wallace v. Diversified Consultants, Inc., 745 F.3d 1235, 1235 (6th Cir. 2014). See also Ellis v. Solomon & Solomon, P.C., 591 F.3d 130, 135 (2d Cir. 2010) ("[T]his Court has been careful not to conflate lack of sophistication with unreasonableness."). Cooper's claim that the account statements must have been entirely fabricated because they contained typographical irregularities and an incorrect address belongs in the category of "bizarre or idiosyncratic interpretations of collection notices" that the FDCPA does not condone. Fed. Home Loan Mortg. Corp. v. Lamar, 503 F.3d 504, 511 (6th Cir. 2007) (quoting Jacobson v. Healthcare Fin. Servs., Inc., 434 F.Supp.2d 133, 139 (E.D.N.Y. 2006), aff'd in part, vacated in part, rev'd in part, 516 F.3d 85 (2d Cir. 2008)).
Because PRA's letters and identity theft affidavits clearly communicated to Cooper that he could dispute the validity of the debt, they were sufficient under the FDCPA. See Lamar, 503 F.3d at 512 ("In reading the entirety of the document, the least sophisticated consumer would understand that she had a right to challenge the validity of the debt described in the notice and complaint, the errors notwithstanding."). Cooper could have contacted U.S. Bank or called the customer service phone number provided on the Comerica Bank statements to find out whether he had an account with either entity, regardless of whether he was already aware that such an account existed or whether the documents contained typographical or address errors.
Since the parties agree as to the content of the verification documents and PRA fulfilled its obligations under the FDCPA, PRA is entitled to summary judgment on the issue of verification.
The parties disagree about whether the verification documents were fraudulent and so constituted an inaccurate or deceptive statement in violation of 15 U.S.C. § 1692e and M.C.L. § 339.915(e). Because the two statutes contain parallel language, claims that invoke both may be considered together. Boone v. Portfolio Recovery Assocs., LLC, No. 2:14-CV-12281, 2014 WL 5473082, at *3 (E.D. Mich. Oct. 27, 2014) (citing Gamby v. Equifax Info. Servs. LLC, 462 F. App'x 552, 556 (6th Cir. 2012)); Lovelace v. Stephens & Michaels Assocs., Inc., No. 07-10956, 2007 WL 3333019, at *2 (E.D. Mich. Nov. 9, 2007).
PRA says that none of the documentation it sent to Cooper was fabricated or fraudulent. To support this claim, PRA has offered:
In opposition, Cooper says that PRA's documents were fraudulent. To support this claim, he offers the following evidence:
Cooper also says that PRA's declarants do not have personal knowledge of what they attested to because of PRA's deficient "pattern and practices" as described in the Juarez case and the CFPB consent order. Under the same reasoning, he very briefly claims that PRA did not exercise due diligence to ensure that the debt was valid. However, he provides no evidence regarding PRA's practices in this case.
Cooper finally says that PRA committed fraud by putting negative credit information onto Cooper's credit report. PRA responds by showing that PRA included the proper 15 U.S.C. § 1692e(8) "dispute" designation when it reported the information (Doc. 23, Exhibits 6 and 6A).
Cooper's sworn statement that he never opened a charge account with U.S. Bank, Comerica Bank, or Elan Financial Services is insufficient to overcome summary judgment. The fact that Cooper never opened a charge account would be consistent with the explanation that PRA (and therefore U.S. Bank) forged the account documents. However, it would also be consistent with other explanations, such as that a third person stole Cooper's identity and opened the account in his name. Cooper has provided no evidence to suggest that PRA acted fraudulently other than a CFPB consent judgment which suggested that PRA exercised improper practices in the past.
Cooper's sworn statement that he never received the billing statements likewise does nothing to show that PRA acted fraudulently. The same is true of the fact that the "Mount" address is apparently not a valid postal address today, and the fact that no credit account from U.S. Bank, Comerica Bank, or Elan Financial Services appeared on Cooper's credit report before PRA put it there. While these facts do reflect inconsistencies, Cooper's evidence fails to provide even one suggestion as to how they could be a result of fraudulent actions by PRA, as opposed to other possible explanations.
Cooper's other arguments are inconsequential. His name was not misspelled on the statements that used wide spacing in the address bar. Rather, the capital letter "I" was consistently pushed to the left in that typeface, often making it appear to combine with the letter before it. The rest of the typographical characteristics were consistent with the statements provided by U.S. Bank, which simply appears to have changed the formatting of its statements after 2012. Further, the Comerica Bank documents addressed to a different person were not of the same type as the statements sent to Cooper, so they are not suitable for comparison. PRA has also explained why the account continued to generate statements after the date of closing (Doc. 23, Exhibit 2, ¶¶7-8) and shown that its placement of information on Cooper's credit report was proper (Doc. 23, Exhibits 6 and 6A), neither of which Cooper has refuted.
Finally, just as for the verification provisions of the FDCPA, many courts have held that debt collectors do not need to independently investigate the validity of a debt to comply with 15 U.S.C. § 1692e. Smith, 953 F.2d at 1032 ("The district court correctly determined, however, that the statute does not require an independent investigation of the debt referred for collection.") (internal quotation marks omitted); Wittenberg v. Wells Fargo Bank, N.A., 852 F.Supp.2d 731, 753 (N.D.W. Va. 2012), aff'd sub nom. Wittenberg v. First Indep. Mortg. Co., 599 F. App'x 463 (4th Cir. 2013) ("[T]he FDCPA does not require a debt collector to engage in an independent investigation of the debt referred for collection." (quoting Sayyed v. Wolpoff & Abramson, LLP, 733 F.Supp.2d 635, 646 (D.Md. 2010)). Rather, debt collectors may reasonably rely on representations of the original creditor. Beattie v. D.M. Collections, Inc., 754 F.Supp. 383, 392 (D. Del. 1991) ("Generally, a debt collector may reasonably rely upon information provided by a creditor who has provided accurate information in the past."). See also Bleich v. Revenue Maximization Grp., Inc., 233 F.Supp.2d 496, 500 (E.D.N.Y. 2002) ("[A debt collector] . . . was entitled to rely, in the first instance, on the Hospital's representation that the debt was valid."); Ducrest, 931 F. Supp. at 462 ("[D]efendant relied on the information provided to it by Broadmoor Plantation Apartments in demanding payment of this debt. Plaintiff's claim . . . has no merit because she has not shown that any misrepresentation of the amount of the debt claimed was knowing or intentional."). Thus, Cooper's bare assertion that PRA did not exercise due diligence, unsupported by any evidence of unreasonable reliance, also fails.
Because Cooper has failed to provide evidence that PRA's fraudulent activity caused the inconsistencies present in this case, PRA is entitled to summary judgment on the issue of collection fraud.
Because Cooper has failed to provide evidence that PRA made a false representation, PRA is also entitled to summary judgment on Cooper's simple fraud claim.
SO ORDERED.
