William Borysewicz v. Target National Bank (2011)

MEMORANDUM OF DECISION

I. BACKGROUND

This vigorously contested debt collection matter was presented to this court on the basis of an Amended Complaint dated June 23, 2011, which, in one count, alleged a violation by Target National Bank (Target) of the provisions of § 36a–645 of the General Statutes (the statute) and § 36a–647–4(a)(2) of the Regulations of Connecticut State Agencies (the regulations).   The single plaintiff, William Borysewicz, alleges that the collection efforts of Target violated the terms of the statute and regulations.   Prior to and at the trial on the record, the plaintiff, through counsel, made it clear that no specific damages were sought other than possible “statutory damages,” attorneys fees and costs.   Target denied the claims and alleged a Special Defense that the plaintiff did not suffer the requisite “harm” as required by the statute.   The matter was tried to this court on November 17, 2011.   Both parties were well represented by counsel.   Briefs were filed on December 8, 2011 by both parties.

II. STATUTES

The statute and the regulations promulgated by the Banking Commissioner pursuant to the statute are set forth in pertinent part as follows:

THE STATUTE

(a) A creditor, as defined in § 36a–645, who uses any abusive, harassing, fraudulent, deceptive or misleading representation, device or practice to collect or attempt to collect a debt in violation of § 36a–646 or the regulations adopted pursuant to § 36a–647 shall be liable to a person who is harmed by such conduct in an amount equal to the sum of:  (1) Any actual damages sustained by such person, (2) if such person is an individual, such additional damages as the court may award, not exceed one thousand dollars, and (3) in the case of any successful action to enforce liability under the provisions of this subsection, the costs of the action and, in the discretion of the court, a reasonable attorneys fee.

(b) In determining the amount of liability in an action brought pursuant to subsection (a) of this section, the trier of fact shall consider, among other relevant factors, the frequency and persistence of noncompliance by the creditor, the nature of such noncompliance and the extent to which such noncompliance was intentional ․

THE REGULATIONS

Sec. 36a–647–4.  Communications

(a) Communication with the consumer debtor or consumer debtor agent generally.   Without the prior consent of the consumer debtor or consumer debtor agent given directly to the creditor or the express permission of a court of competent jurisdiction, a creditor shall not communicate with a consumer debtor or consumer debtor agent in connection with the collection of any debt.

(1) At any unusual time or place or a time or place or that should be known to be inconvenient or embarrassing to the consumer debtor or consumer debtor agent.   In the absence of knowledge of circumstances to the contrary, a creditor shall assume that the convenient time for communicating with a consumer debtor or consumer debtor agent is after 8:00 a.m. and before 9:00 p.m., local time at the consumer debtor's or consumer debtor agent's location;

(2) If the creditor knows the consumer debtor or consumer debtor agent is represented by an attorney with respect to such debt and has knowledge of such attorney's name and address, unless the attorney fails to respond within a reasonable period of time to a communication from the creditor, not to exceed thirty days after such communication, unless the attorney consents to direct communication with the consumer debtor or consumer debtor agent, provided that a creditor may send to a consumer debtor or consumer debtor agent normal periodic billing statements which do not contain any message that violates the provisions of § 36a–647–5 or § 36a–647–6 of the Regulations of Connecticut State Agencies.

III. FINDING OF FACTS

From the evidence produced at trial, including the reasonable and logical inferences from the same, and taking into account the court's evaluation of the credibility of the witnesses, the following facts are found.

At all relevant times the plaintiff was a consumer debtor indebted to Target.   Target was a bank/creditor in the process of collecting said debt.

While there is evidence of several attempts to contact the plaintiff by telephone, only two calls actually reached the plaintiff from the Target representatives.   One call by Jacob on July 4, 2009 and one call by Melissa on July 18, 2009.   Prior to the two calls the plaintiff had consulted with Attorney Falvey of Groton, Connecticut, in connection with the management of his various obligations, including the debt to Target.   Attorney Falvey gave specific instructions to the plaintiff as to what he should say if called by a creditor, including providing the name, address and phone number of his attorney.   Those instructions were written down and kept near the telephone at plaintiff's residence.   During both of the calls from the Target representative the plaintiff informed them that an attorney had been engaged in connection with this debt and provided the name, address and telephone number of Attorney Falvey.

Target, at the time, did not have a procedure in place to instruct its representatives to comply with the regulations which provide for communications with the debtor to stop calling if Target knows the debtor is represented by counsel.   The second call was made after the plaintiff notified the Target representative of his legal representation.

On cross-examination by the Target attorney the following information was elicited from the plaintiff:

Q And you admit that at the time they were calling, that you owed the debt;  you had not obtained a discharge in bankruptcy at that point in time, correct?

A Yeah. Again, I owed the debt.

Q Okay. You would agree that you were not subjected to any disparaging comment by the Target representatives that called you on those two occasions, correct?

A Correct.

Q No one called you a deadbeat, correct?

A No one called me a deadbeat.

Q No one called you to disparage you for not paying the debt saying you owed the debt for some moral obligation?

A No, they did not.

Q Nobody used profanity when they called you?

A Nope.

Q Nobody called at odd hours, early, early in the morning or late at night?

A Nope.

Q Nobody called you at your place of business;  is that correct?

A Nope.

Q Nobody called and spoke with an employer or supervisor to say that you owed them this money?

A Nope.

Q You've testified that there were two phone calls where you talked with Target folks, correct?

A Correct.

Q One was with Jacob on July 4th, correct?

A Correct.

Q And then there was a call on July 18, 2009, where you talked with Melissa?

A. Correct.

Q How long was the phone call with Melissa approximately?

A I don't recall the length of that phone call.

Q And is it fair to characterize Melissa's conversation with you as being civil?

A She was civil.   She was the only one that took the time to have me repeat the address.

Q Did you feel that based on your conversation with her that she was trying to get your information and get an understanding of where you stood with respect to this debt?

A I did.

Q You were never told by any of the Target people that you spoke with that could you not file for bankruptcy?

A No.

Q And certainly nothing that any of the Target people, nothing that they said to you induced you to actually make a payment on the debt that you owed, correct?

A Nope.

Q And you never delayed in filing the bankruptcy because of anything that these Target representatives said to you during these two conversations?

A That's correct.

Q Did they ever give you the impression that you did not have the legal right to file bankruptcy for this debt owed to Target?

A I would say yes.   They would not take the information when we gave them the information the first time.   He would not take the information, and he kept talking over me because he needed to know if it was for bankruptcy.   And I kept telling the individual that it was—we had an attorney who was there to handle our debt with this.

Q Were you ever told by Jacob in that conversation that you had no legal right to file for bankruptcy?

A He never brought that—that never came up in the conversation, no.

* * * * * *

Q Final question.   Mr. Borysewicz, were you ever threatened with any criminal action by any Target representative or told that any item of personal property was going to be repossessed during this phone call with Jacob on July 4, 2009?

A No.

The second call by the Target representative was a violation of the regulations but was not intentional or done with any intent to abuse, deceive, harass, mislead or commit fraud upon the plaintiff.   There was no credible evidence that the plaintiff suffered any actual damages by reason of the conduct of Target.   There was no credible evidence that the plaintiff suffered any harm by reason of the calls from Target representatives or that there was any abuse, deception, harassment, misrepresentation or fraud involved in the communications.

IV. ISSUE

First, there is the question of whether the evidence established a violation of the statute or regulations.

Second, if the answer to the first question is in the affirmative, then the issue is whether, based upon the specific facts of this case, the plaintiff is entitled to any relief under the statute.

V. CLAIMS OF THE PARTIES

The plaintiff claims that by contacting the plaintiff after being notified of the name, address and telephone number of an attorney engaged by him to deal with this debt Target violated the specific terms of the regulations which were promulgated pursuant to the statute.

The defendant argues that the plaintiff does not have the requisite standing under the statute to obtain relief because it is claimed he did not suffer the “harm” required by the language of the statute which says a creditor is liable to any “․ person who is harmed by such conduct.”

While there was some testimony concerning postage and transportation expenses there was no evidence of actual damages and the plaintiff is not requesting actual damages, but claims instead that statutory damages and attorneys fees and costs do not depend upon or require actual damages.

Thus, the question for the court involves a proper interpretation of the statute in that regard and, if necessary, the proper application of the statute as it relates to statutory damages and attorneys fees.

The plaintiff has briefed a CUTPA claim but no such allegations are found in the complaint, nor were they mentioned in the Joint Trial Management Report or during trial.

VI. ANALYSIS

First, the court does find from the evidence that there was at least a technical violation of the Banking Commissioner's Regulations when Target contacted the plaintiff a second time after being properly notified about the representation of Attorney Falvey.   The court did credit the plaintiff's testimony in that regard.

The real question then is what meaning to give to the legislature's use of the phrase “a person who is harmed by such conduct” in the statute.

The plaintiff claims that no evidence of actual damages is required for him to be entitled to statutory damages and attorneys fees.   The term “harmed” is not defined by the statute nor by the legislature in Title 1, Chapter 1 of the General Statutes.

The plaintiff has asked the court to be guided by the Federal law, the Fair Debt Collection Practices Act, 15 U.S.C. § 1692 (federal statute) and the cases which apply that law.   That statute reads in pertinent part as follows:

15 U.S.C. § 1640.   Civil Liability

(a) Individual or class action for damages;  amount of award;  factors determining amount of award—Except as otherwise provided in this section, any creditor who fails to comply with any requirement imposed under this part, including any requirement imposed under this part, including any requirement under section 1635 of this title, subsection (f) or (g) of section 1641 of this title, or part D or E of this subchapter with respect to any person is liable to such person in an amount equal to the sum of—

(1) any actual damage sustained by such person as a result of the failure;

(2)(A)(I) in the case of an individual action twice the amount of any finance charge in connection with the transaction, (ii) in the case of an individual action relating to a consumer lease under part E of this subchapter, 25 per centum of the total amount of monthly payments under the lease, except that the liability under this subparagraph shall not be less than $200 nor greater than $2,000, (iii) in the case of an individual action relating to an open end consumer credit plan that is not secured by real property or a dwelling, twice the amount of any finance charge in connection with the transaction, with a minimum of $500 and a maximum of $5,000, or such higher amount as may be appropriate in the case of an established pattern or practice of such failures;  or (iv) in the case of an individual action relating to a credit transaction not under an open end credit plan that is secured by real property or a dwelling, not less than $400 or greater than $4,000 ․ (Emphasis added.)

However, as can be seen above, the federal statute does not use the term “harmed by such conduct” to modify “person”;  that statute simply says “with respect to any person ․” Nor is the term “harmed” used in the federal Truth In Lending Act to which plaintiff refers the court.  15 U.S.C. § 1640.   That statute reads in pertinent part as follows:

15 U.S.C. § 1692k.   Civil Liability

(a) Amount of damages—Except as otherwise provided by this section, any debt collector who fails to comply with any provision of this sub-chapter with respect to any person is liable to such person in an amount equal to the sum of

(1) any actual damage sustained by such person as a result of such failure;

(2)(A) in the case of any action by an individual, such additional damages as the court may allow, but not exceeding $1,000;  or ․ (Emphasis added.)

The cases decided under those federal acts are not helpful in regard to the issue here because of the different wording (i.e. the absence of the term “harmed”).

Our Supreme Court has indicated that the principles governing statutory construction are well established.  Grady v. Town of Somers, 294 Conn. 324, 332 (2009).  “The meaning of a statute shall, in the first instance, be ascertained from the text of the statute itself and its relationship to other statutes.   If, after examining such text and considering such relationship, the meaning of such text is plain and unambiguous and does not yield absurd or unworkable results, extra-textual evidence of the meaning of the statute shall not be considered.”  C.G.S. § 1–2z.   When construing a statute, “words and phrases shall be construed according to the commonly approved usage of the language.”  C.G.S. § 1–1(a).   Meaning that “[i]n interpreting the language of a statute, the words [are] given their plain and ordinary meaning and their natural and usual sense unless the context indicates that a different meaning was intended.”  In re Darlene C., 247 Conn. 1, 10 (1998).   Additionally, meaning must be given to every word in the statute.  Kaeser v. Zoning Bd. of Appeals, 218 Conn. 438, 443 (1991).   Connecticut courts interpret the word “may” as “directory rather than mandatory.”  Seals v. Hickey, 186 Conn. 337, 45–46 (1982).  “The word may, unless the context in which it is employed requires otherwise, ordinarily does not connote a command.   Rather the word generally imports permissive conduct and the conferral of discretion.”  City of Waterbury v. Town of Wash., 260 Conn. 506, 531 (Conn.2002).

Target's argument that the term “harmed” requires some proof of damage, loss or injury is buttressed by the fact that Section 2 (governing the statutory damages) states that they may be awarded as “such additional damages” immediately after the provision for actual damages.   Target contends that this means there must be some proof, even if it is a nominal sum, of some actual damages before the court can in its discretion award any statutory damages.   The word “additional” implies that there was some other form of actual damages sustained.   To construe this section in any other manner would ignore the deliberate use of the terms “harmed by” and “additional damages” and render then superfluous and without meaning in the statute.

The law requires us to use the plain meaning of terms in ordinary usage which may often be obtained from the dictionary.   Both parties have provided the court with a dictionary definition of the term “harm.”   The plaintiff has referred to Black's Law Dictionary where harm is defined as “The existence of loss or detriment in fact of any kind to a person from any cause.   See also Damages;  Injury;  Physical injury.”

Target looks to the 2011 edition of the Merriam–Webster Dictionary which defines harm as “physical or mental damage;  injury;  mischief, hurt.”

Ballentine's Law Dictionary, Third Edition, defines “harm” as “Hurt;  injury.   See bodily harm;  great bodily harm;  serious bodily harm.”   The varied definitions are not helpful to the plaintiffs.

The plaintiff's argument that any violation of the statute constitutes a depravation of a right the plaintiff has and therefore constitutes “harm” to the plaintiff does not survive analysis.   If one were to apply that logic to the application of the statute it would render the use of the term “harmed” by the legislature mere surplusage.   Any violation would result in damages.   That may be the way the federal statute is designed, but not the Connecticut statute.   Applying the rules of construction to this statute the court finds that evidence of “harm” is a condition precedent to the right of a person to be entitled to damages in the statute.   Any other interpretation, especially when contrasted against the federal statute's lack of the use of the term “harmed,” would violate the well established rule of interpretation that meaning must be given to every word used by the legislature.  “Statutes should be construed so that no part of a legislative enactment is to be treated as insignificant and unnecessary, and there is a presumption of purpose behind every sentence, clause or phrase in a legislative enactment.”  State ex rel Kennedy v. Frauwirth, 167 Conn. 165, 168 (1974);  84 Century Limited Partnership v. Board of Tax Review, 207 Conn 250, 263, (1988).

The defendant, Target, has provided the legislative history of the statute in its brief as requested by the court.   While it may not be necessary to consult such matters when the language of the statute is clear as it is here, a thorough review of the same in this case adds credit to an interpretation which suggests the types of activity the legislature was intending to regulate and the reason for the use of the term “harmed.”   The court finds that the plaintiff has not sustained the burden of proof with respect to his entitlement to statutory damages.   The plaintiff, having failed in the action to enforce liability, is not entitled to attorneys fees or costs.   Even if, for some reason, the plaintiff was found to be eligible to have attorneys fees considered, this court, in the circumstances found here, would not in its discretion award the plaintiff attorneys fees.   The defendant has sustained the burden of proof with regards to the Special Defense.

It is possible to have a violation of the regulations without causing harm, as here, and in that case the statute simply does not provide for damages.

Judgment may enter for the defendant Target as against the plaintiff Borysewicz, together with costs.

Robert C. Leuba, JTR

Leuba, Robert C., J.T.R.