In Rock v. Greenspoon Marder LLP, Judge Vazquez of the District Court for the District of New Jersey granted the defendant’s motion to dismiss the plaintiff’s Fair Debt Collection Practices Act (FDCPA) claim in part and dismissed it in part. In its ruling, the court suggested that when sending a debt collection letter to collect on a debt owed by an estate, a debt collector should (1) clearly address the letter to the executor/executrix of an estate in his/her capacity as executor/executrix (rather than address the estate itself); (2) provide clear validation notice language indicating that it may resume its collection activities after mailing verification of the debt; and (3) provide clear language indicating that the executor/executrix of the estate is not personally obligated to pay any portion of the debt using his/her own personal funds.

In that case, the plaintiff, the executrix of the estate of Isabel Schick, received a debt collection letter from the defendant Greenspoon Marder LLP regarding an alleged debt Isabel Schick owed to Liberty Home Equity Solutions, Inc. The letter was addressed to the “Estate of Isabel Schick.” The plaintiff subsequently filed suit — alleging the defendant violated the FDCPA by (1) failing to address the letter to the executor; (2) failing to explain debt calculation methods or “other charges” associated with the amount that was due; (3) failing to clearly state “how long the debt collector must cease its collection efforts if Plaintiff exercised her validation rights”; and (4) “failing to explain who ‘you’ refers to in the Letter.”

The primary issues in the case were (1) whether the plaintiff had standing under the FDCPA to bring a claim against defendant, and (2) whether the plaintiff failed to state a claim under which relief could be granted under the FDCPA.

The court denied the defendant’s Rule 12(b)(1) motion to dismiss for lack of standing. In order to maintain Article III standing, a plaintiff must “demonstrate (1) an injury-in-fact, (2) sufficient causal connection between the injury and the conduct complained of, and (3) a likelihood that the injury will be redressed by a favorable decision.” The defendant contended that that plaintiff did not “suffer a concrete injury” as a result of the defendant’s alleged FDCPA violation, as Congress did not intend to protect individuals such as the plaintiff, the letter was merely misaddressed rather than misleading, and the plaintiff paid the debt in full. However, the court found the defendant’s contention unpersuasive, reasoning that while Spokeo, Inc. v. Robins held that “a bare procedural violation does not satisfy the injury-in-fact requirement,” other courts had emphasized that “various types of” alleged violations of § 1692e of the FDCPA can give rise to “concrete, substantive injuries sufficient to establish Article III standing.” Here, the court reasoned that the plaintiff’s claim that the defendant’s letter was “false and misleading” fell within that category.

The court granted the defendant’s Rule 12(b)(6) motion to dismiss on one count, but denied it on the other three counts. To maintain an FDCPA claim, “a plaintiff must demonstrate that ‘(1) she is a consumer, (2) the defendant is a debt collector, (3) the defendant’s challenged practice involves an attempt to collect a “debt” as the Act defines it, and (4) the defendant has violated a provision of the FDCPA in attempting to collect the debt.'” Here, the court emphasized that the only element at issue was the fourth element — “whether any part of the Letter violated the FDCPA.” The court analyzed each of the plaintiff’s contentions in turn.

The court granted the defendant’s motion to dismiss regarding the plaintiff’s claim that the defendant failed to explain debt calculation methods or “other charges” associated with the amount that was due. Specifically, while the court recognized that the Third Circuit had not addressed issues of safe harbor language, it found that Seventh Circuit cases provided ample persuasive authority for the contention that safe harbor language accounting for the fluctuation of the amount of debt at issue, similar to the language the defendant included in its letter, did not violate the FDCPA. Indeed, it further reasoned that the plaintiff was not “alleg[ing] that the amount listed in the Letter was incorrect; that [defendant] could not actually assess interest, late charges, or other charges; or that other language in the letter made the Safe Harbor language false or misleading.”

However, the court denied the defendant’s Rule 12(b)(6) motion to dismiss on the other three counts.

First, the court held that the plaintiff’s claim that the letter violated the FDCPA as it was “addressed. . . to the Estate of Isabel Schick, rather than to the attention of Plaintiff as the Executrix of the Estate,” stated a claim under which relief could be granted. Specifically, finding that neither party provided ample persuasive authority, it reasoned that as § 1692c(b) required the letter to be addressed to “the consumer” (which “includes the consumer’s spouse, parent (if the consumer is a minor), guardian, executory, or administrator”) and the defendant instead addressed the letter to the “Estate of Isabel Schick,” the defendant “technically” violated the FDCPA. Therefore, the court denied the defendant’s motion to dismiss on that ground.

Second, the court held that the plaintiff’s claim that the defendant’s letter violated the FDCPA because it failed to clearly state “how long the debt collector must cease its collection efforts if Plaintiff exercised her validation rights” stated a claim under which relief could be granted. The court reasoned that the following pertinent language in the letter may confuse the least sophisticated consumer regarding whether the debt collector “must cease [debt collection] efforts for the remainder of the 30-day [validation] period”: “This firm, the debt collector, may continue with collection activities and communications in its efforts to collect the debt during the 30-day debt validation period, unless you exercise your validation rights described in this Letter.”

Third, the court held that the plaintiff’s claim that the defendant’s letter violated the FDCPA because it failed to explain “who ‘you’ refers to in the Letter [for purposes of who defendant could collect the debt from]” stated a claim under which relief could be granted. Although the court found that the letter only mentioned the “Estate of Isabel Schick” and did not mention the plaintiff by name, it emphasized that the defendant failed to utilized one of two disclosures presented by the Federal Trade Commission “to prevent deception” on the issue of who is responsible for paying the debt. Specifically, it reasoned that the defendant did not state that it was “seeking payment from the estate’s assets” or that “the individual could not be required to use the individual’s assets to pay the decedent’s debts,” and thus, the least sophisticated consumer could be misled.