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PETTIT v. RETRIEVAL MASTERS CREDITORS BUREAU

March 10, 1999

LORI PETTIT, ON BEHALF OF HERSELF AND ALL OTHERS SIMILARLY SITUATED, PLAINTIFF,
v.
RETRIEVAL MASTERS CREDITORS BUREAU, INC. AND RUSSELL FUCHS, DEFENDANTS.



The opinion of the court was delivered by: Pallmeyer, District Judge.

MEMORANDUM OPINION AND ORDER

Plaintiff Lori Pettit ("Pettit") filed this class action complaint on February 24, 1998, against Defendants Retrieval Masters Creditors Bureau, Inc. ("RMCB") and RMCB's owner, Russell Fuchs ("Fuchs"), alleging that the Defendants violated the Fair Debt Collection Practices Act, 15 U.S.C. § 1692e, 1692e(10), 1692e(16) ("FDCPA") when they sent her a collection letter requesting payment on behalf of a company from which she had ordered merchandise. Pettit claims that the Defendants' use of the name "Creditors Bureau," along with references to her "file" and to the "National Delinquent Debtor File" ("NDDF") falsely suggest that RMCB is a credit bureau. Furthermore, she alleges that references in the letter to the NDDF in the letter falsely convey the impression that a debtor will face serious consequences for continued non-payment.

The parties filed cross-motions for summary judgment. Pettit's motion for partial summary judgment asserts that the text of the collection notice violates the FDCPA. In addition, Plaintiff argues that not only RMCB, but Fuchs also is liable as a matter of law for choosing the allegedly misleading name of the company and allowing the continued use of the name.

Defendants RMCB and Fuchs filed separate motions for summary judgment. Fuchs' motion is based on the proposition that he is neither a debt collector, nor personally involved in the alleged offending behavior and thus cannot be personally liable for the actions of the corporation. RMCB argues that it did not violate the FDCPA because the name of the company is not misleading to the unsophisticated consumer and because reference to the NDDF in the collection letter does not deceptively indicate that the consumer will face serious consequences for a failure to pay.

FACTS

August 12, 1997 letter to Plaintiff

Plaintiff Lori Pettit owed $20.70 to an entity known as Crafting and Decorating Made Simple for literature she ordered from that company. (Defendants' Joint Rule 12(m) Statement (hereinafter "Defendants' 12(m)") ¶ 8.) Despite repeated requests, Pettit did not make payment, so Crafting and Decorating Made Simple turned the matter over to RMCB. On August 12, 1997, RMCB sent Pettit a letter in which it requested payment on behalf of Crafting and Decorating Made Simple. (Id. ¶ 8.) The letter, dated August 12, 1997, reads as follows:

NOTICE BEFORE DEBTOR FILE NOTIFICATION [surrounded by asterisks]

Dear L PETTIT:

  For an amount of $20.70, are you willing
  to let Crafting and Decorating Made
  Simple record your name on a delinquent
  debtor file, computerized on a national
  basis?
  You have had ample opportunity to explain
  why you have not paid our client,
  Crafting and Decorating Made Simple,
  for the order shipped to you.
  It is essential that you mail payment in
  full by 09/12/97.
  Remember, your account is now being
  handled by debt collectors who want to
  see this matter resolved. Clear your
  record with us once and for all. Remit
  the $20.70 owed and keep Crafting and
  Decorating Made Simple from putting
  your name on the National Delinquent
  Debtor File, which could affect your
  ability to obtain certain types of credit
  with direct marketing companies.

SINCERELY

/s/ Joseph Howard

  JOSEPH HOWARD
  COLLECTION MANAGER

(Id. ¶ 11; Collection Letter, Ex. A to Plaintiffs Complaint.) The front of the letter includes a notice to "SEE REVERSE FOR IMPORTANT INFORMATION"; the information on the reverse is a statement in light type: "This is an attempt to collect a debt. Any information obtained will be used for that purpose. This communication is from a debt collector. New York City Department of Consumer Affairs License Number 808906." (Collection Letter, Ex. A to Plaintiff's Complaint) (original quotation marks omitted.)

At her deposition, Pettit initially acknowledged that she knew the letter was from a collection agency, but went on to testify that she was misled by the letter and thought the letter was from a credit bureau. (Defendants' 12(m) ¶ 43.) She cited Defendant's name and the contents of the letter as her basis for this belief:

Q. Did you know who sent you the letter?

A. Yes.

Q. Who is that?

A. Retrieval Masters Creditors Bureau.

  Q. And you knew they were a debt collector, didn't you?

A. Yes.

  Q. You didn't think that Retrieval Masters Creditors Bureau was
  a credit bureau, did you?

A. Yes, I did.

Q. Why did you think that?

A. Because it states that in ...


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