Rosa v. Mandarich Law Group LLP

Background

Mandarich Law Group, LLP (MLG), a law firm that specializes in creditors’ rights, represented Cavalry SPV I, LLC in attempting to collect an account originally opened with Citibank, N.A. The account was opened under William R. Rosa’s name on December 20, 2017. It had charges including purchases from Amazon Prime and Walmart.com, and it was later charged off with a balance of $9,427.70.

MLG sent Rosa an initial collection letter in December 2020 and later filed a debt-collection lawsuit against him in New York City Civil Court. Rosa answered that he did not owe the claimed amount. MLG eventually learned that Rosa claimed to be a victim of identity theft. On January 25, 2022, MLG sent a letter to Rosa through his attorneys. The letter asked him to complete an identity-theft affidavit and provide a police report, identification, and proof of residency so MLG could investigate his claim. Rosa did not respond and instead filed this action.

Rosa alleged that the letter violated Sections 1692e(2)(A), 1692e(10), 1692f, and 1692f(1) of the Fair Debt Collection Practices Act (FDCPA). He alleged that the letter falsely represented the debt’s character, amount, or legal status; used deceptive means; and used unfair or unconscionable collection methods. He brought the case for himself and a proposed class of New York consumers who received similar MLG letters. In an earlier order, the court dismissed some claims concerning alleged government affiliation and rejected claims based on the affidavit’s notarization or witness requirements. MLG then moved for summary judgment on the remaining claims.

Summary-judgment standard

Summary judgment is appropriate when the evidence shows no genuine dispute about a fact that could affect the result and the moving party is entitled to judgment under the law. The court must view the evidence favorably to the party opposing the motion, but that party must identify admissible evidence that could allow a reasonable jury to rule in its favor.

Consumer debt

The FDCPA covers debts arising primarily from personal, family, or household purposes. MLG argued that Rosa could not prove this threshold requirement because he claimed the account was not his. The court rejected MLG’s argument at the summary-judgment stage.

The card agreement stated that the account was for consumer purposes and could not be used for business purposes. The account’s charges were also consistent with consumer use, including mostly small purchases from Walmart and Amazon and a recurring Amazon Prime charge. The court also considered that the account holder was an individual, the account address appeared residential, and Rosa stated that he had not made purchases for the Metropolitan Transit Authority through his employment. Considering the transaction as a whole, the court held that a reasonable jury could infer that the account was a consumer account. A genuine factual dispute therefore existed on this issue.

Whether the letter was covered by the FDCPA

MLG argued that the letter was not an FDCPA “communication” because it was sent to Rosa’s attorneys rather than directly to him. The court rejected that categorical argument. The FDCPA defines a communication broadly as conveying information about a debt, directly or indirectly, to any person through any medium.

The letter was sent to Rosa through his attorney, was addressed to Rosa, concerned the disputed debt, and required Rosa—not only his attorney—to provide information and complete forms. The court held that a jury could find that the letter was a covered communication. The court also held that the letter was sufficiently connected to debt collection because it referred to the ongoing collection lawsuit, identified MLG as a debt collector, requested information concerning the identity-theft claim, and could help determine whether the collection effort would proceed.

Claims under Sections 1692e(2)(A) and 1692e(10)

Section 1692e prohibits false, deceptive, or misleading representations in connection with debt collection. Section 1692e(2)(A) specifically prohibits false representations about a debt’s character, amount, or legal status. Section 1692e(10) prohibits false representations or deceptive means used to collect a debt or obtain information about a consumer.

The court held that no reasonable jury could find that the letter falsely represented the debt’s character, amount, or legal status. Read as a whole, the letter acknowledged Rosa’s claim that he might be an identity-theft victim and sought information to investigate that claim. It did not state that Rosa was responsible for the account, state the amount due, or tell him where to make payment. The court concluded that investigating whether Rosa was responsible for the account was not itself a false representation.

The court reached the same conclusion under Section 1692e(10). The letter clearly explained that MLG was seeking information about Rosa’s identity-theft claim as part of its collection efforts. Asking for information to evaluate such a claim was not deceptive or materially misleading, even though the information could be used to determine whether the debt should be collected from someone who had used Rosa’s identity.

Claims under Section 1692f

Section 1692f prohibits unfair or unconscionable methods of collecting a debt. Section 1692f(1) specifically prohibits collecting an amount that is not authorized by the agreement creating the debt or permitted by law.

The court held that Rosa’s claim—that MLG sought payment from the wrong person—did not establish a Section 1692f violation. Section 1692f(1) concerns whether the amount collected was authorized, not whether the collector pursued the correct individual. MLG submitted the account’s card agreement, and Rosa did not claim that the letter sought an amount greater than the amount associated with the account. The court also found no evidence that MLG’s request for information about the identity-theft claim gave it an unfair advantage or was inherently abusive.

Disposition

The court granted MLG’s motion for summary judgment. The Clerk was directed to close the motion and the case.