Opinion
Case No. 8:21-bk-03123-RCT Adv. Pro. 8:21-ap-00299-RCT
2022-03-01
IN RE: Melvin WECHSLER, Debtor. Beth Ann Scharrer, as Chapter 7 Trustee of the estate of Melvin Wechsler, Plaintiff, v. First National Bank of Omaha, Defendant.
Benjamin W. Raslavich, Attorney for Trustee, Kuhn Raslavich, P.A., Tampa, FL, for Plaintiff. Eric S. Haug, Proper Law, Tallahassee, FL, for Defendant.
Benjamin W. Raslavich, Attorney for Trustee, Kuhn Raslavich, P.A., Tampa, FL, for Plaintiff.
Eric S. Haug, Proper Law, Tallahassee, FL, for Defendant.
ORDER GRANTING PLAINTIFF'S MOTION FOR PARTIAL SUMMARY JUDGMENT AS TO DEFENDANT'S SECOND AND THIRD AFFIRMATIVE DEFENSES
Robert A. Colton, United States Bankruptcy Judge
This matter came before the Court, without a hearing, on Plaintiff's Motion for Partial Summary Judgment as to Defendant's Second and Third Affirmative Defenses. (Doc. 10). Defendant opposes the motion (Doc. 11), and Plaintiff has filed a reply brief (Doc. 12). As explained below, Plaintiff's motion is granted.
I. Standard of Review
Summary judgment is appropriate if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law. The Court must draw all inferences from the evidence in the light most favorable to the non-movant and resolve all reasonable doubts in that party's favor. The moving party bears the initial burden of showing the Court, by reference to materials on file, that there are no genuine issues of material fact that should be decided at trial. When a moving party has discharged its burden, the non-moving party must then go beyond the pleadings, and by its own affidavits, or by depositions, answers to interrogatories, and admissions on file, designate specific facts showing there is a genuine issue for trial.
Fed. R. Civ. P. 56(a) as incorporated by Fed. R. Bankr. P. 7056.
See Porter v. Ray , 461 F.3d 1315, 1320 (11th Cir. 2006) (citation omitted).
See id. (citation omitted).
See id. (citation omitted).
II. Background
Debtor Melvin Wechsler applied for and received a credit card from Defendant First National Bank of Omaha ("FNBO"). (Doc. 11-1, ¶ 5). After incurring debt on the credit card, Debtor obtained counsel. Counsel wrote a letter to FNBO advising FNBO that Debtor was represented by counsel with respect to the debt and directing FNBO to send all collection communications to counsel. (Doc. 11-1, ¶ 6; Doc. 11-1, p. 4). After receiving counsel's letter on February 9, 2021, FNBO coded Debtor's account so that no future communications would go directly to Debtor other than communications that FNBO was federally mandated to send directly to Debtor. (Doc. 11-1, ¶ 6-7).
On May 17, 2021, FNBO sent Debtor a letter that states the following, in relevant part:
Dear MELVIN WECHSLER:
We are writing to notify you that your account has been closed as a result of delinquency. As a result, you will no longer be able to utilize your credit line and any other credit card features. Please destroy all cards and checks issued on the above referenced account. No further charging will be allowed, however, you are still responsible for paying any outstanding balance.
Payment can be made using the enclosed envelope or you can pay online using the website address on your billing statement.
* * *
Sincerely,
Collections Department
* * *
This communication is from First National Bank of Omaha. This communication is an attempt to collect a debt and any information obtained will be used for that purpose.
(Doc. 11-1, p. 13).
On September 7, 2021, Debtor filed a petition for relief under Chapter 7 of the Bankruptcy Code. Thereafter, Plaintiff-Trustee Beth Ann Scharrer commenced this adversary proceeding against FNBO, alleging a claim under the Florida Consumer Collection Practices Act ("FCCPA"). Plaintiff alleges that FNBO violated the FCCPA when it sent the May 17, 2021 letter, because FNBO was communicating directly with Debtor with respect to the credit card debt when FNBO knew that Debtor was represented by counsel. (Doc. 1).
In response, FNBO filed an answer and affirmative defenses. (Doc. 4). Among its affirmative defenses, FNBO contends: (1) the letter it sent to Debtor was not a communication attempting to collect a debt; and (2) the letter it sent to Debtor was mandated by federal law to be sent directly to Debtor. (Doc. 4, p. 4). Plaintiff now moves for partial summary judgment on those two affirmative defenses.
III. Motion for Summary Judgment
Plaintiff moves for partial summary judgment, arguing that: (1) FNBO's letter was a communication in an attempt to collect a debt; and (2) FNBO's letter contained language that was not required under federal law. As explained below, the Court agrees with Plaintiff and finds that Plaintiff is entitled to partial summary judgment on these two affirmative defenses. A. Communication in an Attempt to Collect a Debt
Plaintiff argues that FNBO violated Florida Statute § 559.72(18) when it sent the May 17, 2021 letter to Debtor. Section 559.72(18) provides the following:
In collecting consumer debts, no person shall ... [c]ommunicate with a debtor if the person knows that the debtor is represented by an attorney with respect to such debt and has knowledge of, or can readily ascertain, such attorney's name and address, unless the debtor's attorney fails to respond within 30 days to a communication from the person, unless the debtor's attorney consents to a direct communication with the debtor, or unless the debtor initiates the communication.
Fla. Stat. § 559.72(18). In response, FNBO argues that its letter was not a communication attempting to collect a debt. The Court rejects FNBO's argument.
First, FNBO's letter was a communication. A communication is broadly defined under the FCCPA, and it "means the conveying of information regarding a debt directly or indirectly to any person through any medium." Fla. Stat. § 559.52(2). FNBO's letter conveyed information regarding Debtor's debt, and as such, it constitutes a communication.
Second, FNBO's letter was an attempt to collect a debt. The letter itself states that it "is an attempt to collect a debt." (Doc. 11-1, p. 13). Furthermore, the letter states that Debtor is "still responsible for paying any outstanding balance" and that "[p]ayment can be made using the enclosed envelope or you can pay online using the website address on your billing statement." (Doc. 11-1, p. 13). Finally, the letter states that it is being sent by FNBO's "Collections Department." (Doc. 11-1, p. 13). These statements within the letter show that one if its purposes is to collect a debt. See Pinson v. Albertelli Law Partners LLC , 618 Fed. Appx. 551, 554 (11th Cir. 2015) (finding that letters that stated that they were sent for the purpose of collecting a debt, stated the amount of the debt, and described how payment could be made were sent with a purpose to collect a debt).
Pinson analyzed claims under the Fair Debt Collection Practices Act. See Pinson , 618 Fed. Appx. at 553. The FCCPA provides that "due consideration and great weight shall be given to the interpretations of ... the federal courts relating to the federal Fair Debt Collection Practices Act." Fla. Stat. § 559.77(5).
Third, FNBO argues that the purpose of the letter was to provide certain information to Debtor that was required under federal law to be sent directly to Debtor. The flaw in this argument is that "[a] communication can have more than one purpose." See id. at 553. In this case, while there may have been another purpose for the letter, one of its purposes was to collect a debt.
B. Language Used in FNBO's Letter Not Required by Federal Law
One of FNBO's affirmative defenses is that the letter it sent to Debtor was mandated by federal law to be sent directly to Debtor. Specifically, FNBO contends that the Equal Credit Opportunity Act ("ECOA") required that it convey certain information to Debtor when it took an "adverse action" against him. An adverse action under the ECOA includes a revocation of credit and/or a change in the terms of an existing credit arrangement. 15 U.S.C. § 1691(d)(6). Because FNBO was changing the terms of its credit arrangement with Debtor by revoking his credit, FNBO contends that ECOA required the following:
Each applicant against whom adverse action is taken shall be entitled to a statement of reasons for such action from the creditor. A creditor satisfies this obligation by ... providing statements of reasons in writing as a matter of course to applicants against whom adverse action is taken ... [and the statement of reasons must] contain[ ] the specific reasons for the adverse action taken.
15 U.S.C. § 1691(d)(2)(A) & (d)(3).
While the information described above was mandated by the ECOA, FNBO does not point to any legal authority showing that the debt collection language included in the letter was also required to be included by the ECOA. The fact that one of the purposes of FNBO's letter was to comply with the ECOA does not prevent the letter from also being an attempt to collect a debt, given that the debt collection language was not required to be included by the ECOA. See, e.g., Reese v. Ellis, Painter, Ratterree & Adams, LLP , 678 F.3d 1211, 1217 (11th Cir. 2012) (finding that a letter that was required to be sent under a Georgia statute in order to enforce a security interest through a non-judicial foreclosure did not prevent the letter from also relating to the collection of a debt and violating a debt collection statute).
FNBO argues that the ECOA preempts the FCCPA because compliance with the ECOA was not possible without violating the FCCPA. However, FNBO fails to show any statements that were required to be conveyed under the ECOA that would necessarily violate the FCCPA. In its response brief, FNBO states:
The adverse action notice that FNBO sent to the Debtor contained all of the requisite verbiage that it is required to send, i.e., (1) an adverse action was being taken (the closure of the account); (2) the reason for the adverse action (the delinquency); and (3) the § 701(a) Notice required by the Act.
(Doc. 11, p. 4). None of those statements violate the FCCPA; it is the inclusion of the debt collection statements that were not required by the ECOA that violate the FCCPA. The "ECOA provides for federal preemption only if ‘the laws of any State with respect to credit discrimination’ are inconsistent with [the] ECOA, and then only to the extent of the inconsistency." See Abbett v. Bank of Am. , No. 3:04CV01102WKW VPM, 2006 WL 581193, at *6 (M.D. Ala. Mar. 8, 2006) (quoting 15 U.S.C. § 1691d ).
IV. Conclusion
Based on the above, the Court GRANTS Plaintiff's Motion for Partial Summary Judgment as to Defendant's Second and Third Affirmative Defenses. (Doc. 10).
It is SO ORDERED.