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Edstrom v. All Services and Processing

February 22, 2005


The opinion of the court was delivered by: Bernard Zimmerman United States Magistrate Judge


On April 19, 2004, plaintiffs Daniel and Teri Edstrom filed a complaint alleging violations of the Fair Debt Collection Practices Act ("FDCPA"), 15 U.S.C. § 1692 et seq., and the Rosenthal Fair Debt Collection Practices Act ("RFDCPA"), California Civil Code §§ 1788-1788.32, against defendant All Services and Processing, also known as A.S.A.P. Collection Services. Now before me are the parties' cross-motions for summary judgment.*fn1

When plaintiffs bought their house in Brentwood, California, they became members of the Apple Hill Association ("Association"). Joint Statement of Undisputed Facts ¶8. As members of the Association, plaintiffs became subject to the Association's Covenants, Conditions, and Restrictions ("CC&R's") and Assessment Collection Policy ("Collection Policy"). Id. at ¶9. Defendant contends, and plaintiffs do not dispute, that they fell behind on their monthly payments, and incurred financial obligations to the Association. Id. at ¶10. The Association granted defendant authority to collect on the debt. Id. at ¶11. Defendant subsequently sent a letter to plaintiff regarding the debt owed to the Association dated July 18, 2003, which plaintiffs received. Id.

The only issue in dispute is whether the July 18, 2003 letter complies with the FDCPA and the RFDCPA.*fn2 The letter explains that the Association retained defendant to represent it in the collection of plaintiffs' delinquent account. Declaration of Robert L. Hyde, Esq. ("Hyde Decl."), Ex. 1; Tom Fier's Aff. in Support of Def's. Mot. for Summ. Judgment ("Fier Aff."), Ex. G. It states that on August 18, 2003, plaintiffs' account balance will be $955.49. Id. It also breaks down the account balance to include $644.00 in regular assessments, $60.00 in late fees, $28.72 in interest, a $180 collection fee, and $42.77 in collection costs. Id. It requests "payment in full to A.S.A.P. in the amount stated above, payable to the Association and postmarked by the due date." Id. It states, "In accordance with the Fair Debt Collection Practices Act we will assume that this debt is valid unless you dispute it in writing within 30 days of the date of this letter." Id. It further states, "Upon receipt of written disputes, a $75.00 Dispute Claim Processing Fee is added to the account and will remain if the Association's records are correct or if a request for a credit is denied by the Board." Id. In bold lettering, it states, "Partial payments received without an established payment plan will be returned and a $45.00 processing fee will be added to your account to return the payment." Id. A copy of the Collection Policy is attached to the letter. Id. The letter also notifies plaintiffs that they may obtain additional information about the Association's collection rights and remedies by referring to the "Assessments Section" of the CC&R's. Id.

Plaintiffs contend that the July 18, 2003 letter violated section 1692g(a) of the FDCPA.*fn3 15 U.S.C. § 1692g(a). Section 1692g(a) provides:

(a) Notice of debt; contents 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.

15 U.S.C.A. § 1692g(a). "The FDCPA is a strict liability statute and thus does not require a showing of intentional conduct on the part of the debt collector." Irwin v. Mascott, 112 F. Supp. 2d 937, 958 (N.D. Cal. 2000). "Validation requirements are strictly construed under the least sophisticated consumer standard." Irwin, 112 F. Supp. 2d at 953 (citing Baker, 677 F.2d at 778) (internal quotation marks ommitted); see also Smith v. Financial Collection Agencies, 770 F. Supp. 232, 235 (D. Del. 1991) ("Generally, a validation notice will comport with section 1692(g) if the content of the notice complies with the literal terms of the statute. At a minimum, this requires that the validation notice is actually included with either the initial communication or within five days of the initial communication, ... and if included, that it contains all the information dictated by the statute.").

The statement in the letter that defendant "will assume the debt is valid unless you dispute it in writing within 30 days of the date of the letter" violates section 1692g(a)(3). In interpreting the FDCPA, words and phrases must be given their natural and ordinary meaning. See Romine v. Diversified Collection Services, Inc., 155 F.3d 1142, 1146-47 (9th Cir. 1998) (citing Heintz v. Jenkins, 514 U.S. 291, 294 (1995)). I am also obliged to "give effect, if possible, to every word Congress used." Baker, 677 F.2d at 778 (citing Reiter v. Sonotone Corp., 442 U.S. 330, 339 (1979)). "Where, as here, the language of the statute is plain and unambiguous, resort to legislative history is unnecessary." Rucker v. Davis, 203 F.3d 627, 636 (9th Cir. 2000).

The statute clearly requires the letter to state that the debtor may dispute the debt "within thirty days after receipt of this notice." 15 U.S.C. ยง 1692g(a)(3). Because defendant's letter requires plaintiffs to dispute the letter within thirty days of the date of the letter, it violates section 1692g(a)(3). See Cavallaro v. Law Office of Shapiro & Kreisman, 933 F. Supp. 1148 (E.D.N.Y. 1996) (holding that a letter stating that a dispute had to be made "within thirty days from the date of this notice" violated section 1692g(a)). Defendant's contention that this violation is de minimis because plaintiff still likely had approximately thirty days to respond is erroneous. "Congress has ...

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