KITTELSON v. MERCANTILE ADJUSTMENT BUREAU LLC (2025)

DECISION AND ORDER

INTRODUCTION

Plaintiff Kristy Kittelson (“Plaintiff”) commenced this action against defendant Mercantile Adjustment Bureau, LLC (“Defendant”), asserting violations of the Fair Debt Collection Practices Act, 15 U.S.C. § 1692, et seq. (hereinafter, the “FDCPA”) and state-law claims for negligence per se and negligence. (Dkt. 1-1). Before the Court is Defendant's motion for summary judgment. (Dkt. 15). For the following reasons, Defendant's motion is granted.

BACKGROUND

The following facts are taken from Defendant's Statement of Material Facts (Dkt. 15-1), Plaintiff's response thereto (Dkt. 19-1), and the exhibits submitted in support of and in opposition to the pending motion. Unless otherwise noted, the following factual background is undisputed.

In July 2022, Plaintiff retained The Ferrer Law Firm, PA (“Ferrer Law Firm”) to assist with a debt owed to Citizens Bank, N.A. (“Citizens”). (Dkt. 15-1 at ¶ 8; Dkt. 19-1 at 9; Dkt. 15-4; Dkt. 19-3; Dkt. 19-4). The Ferrer Law Firm sent two letters to Citizens on Plaintiff's behalf, one dated July 14, 2022, and the other dated August 30, 2022, stating that it had been retained by Plaintiff to assist with the debt. (Dkt. 19-1 at 9; Dkt. 19-4; Dkt. 19-5). The letter dated July 14, 2022, requested Citizens to cease all direct communications with Plaintiff and stated, in part, that “[i]f you use any agent, third-party debt collector, or sell this account to a debt buyer you are hereby instructed to provide this attorney information and notice of representation to such persons.” (Dkt. 19-4). Both letters included the Ferrer Law Firm's address and phone number. (See id.; Dkt. 19-5). Citizens sent a letter dated September 29, 2022, to the Ferrer Law Firm responding to the letters of representation. (Dkt. 19-1 at 9; Dkt. 19-6).

On June 21, 2023, Citizens transferred Plaintiff's debt to Defendant, a third-party debt collector. (Dkt. 15-1 at ¶ 5; Dkt. 15-3 at ¶ 3; Dkt. 15-4; Dkt. 19-1 at 3; Dkt. 19-3). Defendant then sent a letter dated June 22, 2023, directly to Plaintiff, attempting to collect the debt. (Dkt. 15-1 at ¶ 6; Dkt. 15-4; Dkt. 19-1 at 3; Dkt. 19-3). Plaintiff states she did not receive this letter until “[s]ometime in or around July 2023.” (Dkt. 19-2 at ¶ 9).

One of Defendant's employees also called Plaintiff. (Dkt. 15-1 at ¶ 9; Dkt. 15-3 at ¶ 7; Dkt. 19-1 at 3; Dkt. 19-2 at ¶ 15). The parties dispute when that call occurred and the information discussed. According to Defendant, the call happened on July 6, 2023, and Plaintiff did not tell the employee that she was represented by counsel, but stated she was “working with a debt settlement company.” (Dkt. 15-1 at ¶¶ 9-10; Dkt. 15-3 at ¶¶ 7-8). Plaintiff states the phone call occurred “[i]n or around June 2023” and acknowledges she may have said she was working with a “debt settlement company,” but that she did not know who Defendant was at the time of the call or what debt the call concerned. (Dkt. 19-1 at 3-4; Dkt. 19-2 at ¶¶ 15, 17). Plaintiff does not contend that she told Defendant's employee that she was represented by counsel during the phone call.

The Ferrer Law Firm then sent a letter dated July 6, 2023, to Defendant advising that it represented Plaintiff relative to the debt. (Dkt. 15-1 at ¶ 11; Dkt. 15-5; Dkt. 19-1 at 4; Dkt. 19-7). Defendant states that it received this letter on July 12, 2023. (Dkt. 15-1 at ¶ 11). After Defendant received the letter, it directed all future communications regarding the debt to the Ferrer Law Firm, rather than to Plaintiff. (Dkt. 15-1 at ¶ 12; Dkt. 19-1 at 4).

Plaintiff commenced this action on January 17, 2024, by filing a complaint in New York State Supreme Court, Erie County. (Dkt. 1-1). Defendant removed the lawsuit to federal court on February 9, 2024. (Dkt. 1). After the completion of discovery, Defendant filed its motion for summary judgment on all claims asserted by Plaintiff. (Dkt. 15). Plaintiff responded in opposition (Dkt. 19), and Defendant filed a reply (Dkt. 20).

DISCUSSION

I. Summary Judgment Standard

Rule 56 of the Federal Rules of Civil Procedure provides that summary judgment should be granted if the moving party establishes “that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.” Fed. R. Civ. P. 56(a). The Court should grant summary judgment if, after considering the evidence in the light most favorable to the nonmoving party, it finds that no rational jury could find for that party. Scott v. Harris, 550 U.S. 372, 380, 127 S.Ct. 1769, 167 L.Ed.2d 686 (2007) (citing Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 586-87, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986)). Once the moving party has met its burden, the opposing party “must do more than simply show that there is some metaphysical doubt as to the material facts․ [T]he nonmoving party must come forward with specific facts showing that there is a genuine issue for trial.” Caldarola v. Calabrese, 298 F.3d 156, 160 (2d Cir. 2002) (quoting Matsushita Elec., 475 U.S. at 586-87, 106 S.Ct. 1348). “[T]he mere existence of some alleged factual dispute between the parties will not defeat an otherwise properly supported motion for summary judgment․” Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247-48, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986).

II. Plaintiff's FDCPA Claims

In her opposition memorandum, Plaintiff withdraws her first three causes of action asserting violations of FDCPA §§ 1692c and 1692f for allegedly disclosing Plaintiff's debt to a third-party without her consent, negligence, and negligence per se. (Dkt. 19 at 2). Plaintiff's only remaining claim alleges Defendant violated § 1692c of the FDCPA by “[c]ommnuicating with Plaintiff after having knowledge that Plaintiff was represented by counsel; communicating with Plaintiff after having knowledge of Plaintiff's attorneys’ name and address; and communicating with Plaintiff after having knowledge Plaintiff provided a cease and desist to further communication directly.” (Dkt. 1-1 at ¶ 94). Defendant argues that summary judgment is warranted in its favor on this remaining claim because it did not have actual knowledge that Plaintiff was represented by counsel at the time Defendant called Plaintiff and sent the letter to Plaintiff dated June 22, 2023. (Dkt. 15-20 at 18). Plaintiff contends there are issues of fact about Defendant's actual knowledge, and even if not, that knowledge can be imputed to Defendant from Citizens. (Dkt. 19 at 11-16).

For the reasons discussed below, the Court agrees with Defendant that Plaintiff's arguments about its knowledge are wholly speculative, and the FDCPA does not impute Citizens’ knowledge to Defendant. Thus, summary judgment is warranted in favor of Defendant.

A. Section 1692c(a)(2)

Section 1692c(a)(2) provides in relevant part:

Without the prior consent of the consumer given directly to the debt collector or the express permission of a court of competent jurisdiction, a debt collector may not communicate with a consumer in connection with the collection of any debt ․ if the debt collector knows the consumer is represented by an attorney with respect to such debt and has knowledge of, or can readily ascertain, such attorney's name and address․

15 U.S.C. § 1692c(a)(2). It is uncontested that Plaintiff is a consumer and Defendant is a debt collector under the statute. Thus, the resolution of the pending motion depends on whether Defendant knew about Plaintiff's legal representation when it contacted her about the debt.

“Courts have construed the ‘knowledge’ component of 1692c(a)(2) to require that a debt collector possess ‘actual knowledge’ that the debtor was represented by an attorney.” Micare v. Foster & Garbus, 132 F. Supp. 2d 77, 80 (N.D.N.Y. 2001) (collecting cases). Because of this requirement, courts have consistently held that “[a] creditor's knowledge that a consumer is represented by an attorney cannot be automatically imputed to the debt collector.” Degonzague v. Weiss, Neuren & Neuren, 89 F. Supp. 2d 282, 284 (N.D.N.Y. 2000); see, e.g., Raymond v. Arcadia Recovery Bureau, LLC, 556 F. Supp. 3d 369, 374 (S.D.N.Y. 2021) (“Nothing in the statutory language suggests that Congress intended for a creditor's knowledge of a consumer's representation by counsel to be imputed to a debt collector․”). But Plaintiff relies on two notable exceptions to this principle from the Northern District of New York—both by the same judge. (Dkt. 19 at 13-16); see Micare, 132 F. Supp. 2d at 80-81; Powers v. Pro. Credit Servs., Inc., 107 F. Supp. 2d 166, 169 (N.D.N.Y. 2000).

In Powers, the court held on a motion to dismiss that under § 1692c(a)(2), “[k]nowledge can be imputed to the debt collector when the creditor has such knowledge and fails to convey it to its agent, the debt collector, at the time it seeks collection,” reasoning that to hold otherwise would permit “debt collector[s] [to] blatantly circumvent the intent of the FDCPA.” 107 F. Supp. 2d at 168-69. The court reaffirmed that position in Micare. 132 F. Supp. 2d at 80-81 (“[I]mputing knowledge to the debt collector when it does not inquire whether the debtor is represented by counsel gives full meaning ․ to the protections afforded by the FDCPA.”).

But contrary to these outliers, a majority of other courts, including two circuit courts, have rejected the “implied knowledge” approach. See Schmitt v. FMA All., 398 F.3d 995, 997 (8th Cir. 2005); Randolph v. IMBS, Inc., 368 F.3d 726, 729-30 (7th Cir. 2004). The Eighth Circuit expressly rejected the reasoning in Powers and Micare: “[t]he theory of implied knowledge contradicts established agency law, which dictates that while the knowledge of the agent is imputed to the principal, the converse is not true.” Schmitt, 398 F.3d at 997 (“We decline to follow either Powers or Micare and will not embrace the FDCPA as a special exception to general agency law.”); see also Raymond, 556 F. Supp. 3d at 375 (agreeing with the Eighth Circuit's reasoning). Indeed, other cases from the Northern District of New York have declined to adopt the same approach as Powers and Micare. See Jones v. Weiss, Neuren & Neuren, 95 F. Supp. 2d 105, 108-09 (N.D.N.Y. 2000) (“[A]n agent cannot be imputed with information that his principal has failed to give him.”); Degonzague, 89 F. Supp. 2d at 284 (“[The plaintiff] has presented no evidence that the creditor advised defendant that he was represented by counsel. A creditor's knowledge that a consumer is represented by an attorney cannot be automatically imputed to the debt collector.”); Filsinger v. Upton, Cohen & Slamowitz, No. 99-CV-1393, 2000 WL 198223, at *2 (N.D.N.Y. Feb. 18, 2000) (“An agent cannot be imputed with information that his principal has failed to give him.”).

It is undisputed here that Citizens, the creditor, knew Plaintiff was represented by counsel regarding the debt she owed to the bank but there is no evidence that Defendant knew of the representation. Plaintiff's attorney sent two letters to Citizens notifying it that the Ferrer Law Firm represented Plaintiff regarding the debt (see Dkt. 19-4; Dkt. 19-5), and Citizens responded to those letters (see Dkt. 19-6). Citizens referred the debt to Defendant after those communications with the Ferrer Law Firm, and Defendant then sent a letter dated June 22, 2023, directly to Plaintiff. (Dkt. 19-1 at 3).¹ Defendant contends, in a sworn declaration submitted by its Chief Compliance Officer, that it “had no actual knowledge that Plaintiff was represented by counsel” at the time it sent the letter. (Dkt. 15-3 at ¶ 11). Plaintiff responds by arguing:

[E]ither Citizens Bank withheld the information of Plaintiff's attorneys’ representation when it placed the account with Defendant and Defendant failed to inquire with Citizens Bank because it lacks procedures, or Defendant received notice of Plaintiff's attorneys’ representation in the placement file or had access to the same in the account level documentation provided to Defendant.

(Dkt. 19 at 16). But Plaintiff presents no evidence to support either theory.

Plaintiff's argument hinges on her speculation that the attorney letters to Citizens should have been forwarded to Defendant and that Defendant should have reviewed those letters before contacting her. Plaintiff suggests, relying on the allegations in her complaint and without citation to admissible evidence, that “it is standard practice within the accounts receivable management industry for creditors to inform debt collectors of consumers who are represented by an attorney․” (Dkt. 19 at 11) (citing Dkt. 1-1 at ¶¶ 35-39). Plaintiff goes on to argue that because a letter sent by Defendant to Plaintiff's attorneys dated August 7, 2023, included “account level documentation for Plaintiff's Citizens Bank account,” that necessarily means Defendant had access to Plaintiff's attorneys’ letters sent to Citizens. (Id. at 12). But again, this is wholly speculative. The August 7, 2023, letter with attachments contains no evidence that Plaintiff had retained counsel nor do the documents contain any evidence that Citizens transferred the attorney representation letters to Defendant. (See Dkt. 19-8; see also Dkt. 19-6).² A nonmoving party cannot “rely on mere speculation or conjecture as to the true nature of the facts to overcome a motion for summary judgment.” Knight v. U.S. Fire Ins. Co., 804 F.2d 9, 12 (2d Cir. 1986). Defendant has submitted admissible evidence that it had no knowledge that Plaintiff was represented by counsel, and in response Plaintiff fails to present or point to any evidence that the attorney representation letters were transferred to Defendant or that Defendant otherwise knew that she was represented by counsel regarding the debt. See Jones, 95 F. Supp. 2d at 108 (granting the defendant's summary judgment motion where “[t]he record is devoid ․ of any evidence indicating that defendant was aware plaintiffs were represented and defendant specifically denies any such knowledge”).

Plaintiff also contends that Defendant should have taken affirmative steps to determine whether Plaintiff was represented, arguing that “Defendant does not provide any evidence that it reviewed Plaintiff's account level documentation, or even at a bare minimum, inquired with Citizens as to whether Plaintiff was represented by counsel.” (Dkt. 19 at 13-14). But Defendant is under no obligation to take such action. See Raymond, 556 F. Supp. 3d at 374 (“Nothing in the statutory language suggests that Congress intended ․ that a debt collector has an affirmative duty to ascertain whether a debtor is represented by counsel before contacting [her] directly.”). Defendant has established its entitlement to summary judgment through the sworn declaration of its Chief Compliance Officer (Dkt. 15-3) and Plaintiff has failed to come forward with admissible evidence showing a genuine dispute of material fact.

Other district courts confronted with similar facts have held that the plaintiff needed to provide evidence that the debt collector, not the creditor, knew that the plaintiff was represented by counsel in order to survive summary judgment. In Jones, the court granted the defendant's summary judgment motion where the plaintiffs’ “only proof” that the defendant knew the plaintiffs were represented was that “their lawyers sent [the creditor bank] a letter before [the debt collector] attempted to contact them.” 95 F. Supp. 2d at 109. In Degonzague, the court similarly denied the plaintiff's summary judgment motion and dismissed the § 1692c(a)(2) claim where “[t]he plaintiff never notified the defendant” that he was represented on the debt and only alleged that a representation letter “was sent to the original creditor, not the defendant.” 89 F. Supp. 2d at 284. By comparison, in Mullery v. JTM Cap. Mgmt., LLC, the court held that an issue of fact precluded summary judgment on a § 1692c(a)(2) claim because there was proof that the creditor's file noting that the plaintiff was represented by counsel had been transferred to the debt collector. No. 18-CV-549-LJV-HKS, 2023 WL 8250343, at *8 (W.D.N.Y. Aug. 2, 2023). Here, there is no such proof—only Plaintiff's speculation. And thus, the Court grants Defendant's summary judgment motion on Plaintiff's § 1692c(a)(2) claim.

B. Section 1692c(c)

Section 1692c(c) states in relevant part that “[i]f a consumer notifies a debt collector in writing that the consumer ․ wishes the debt collector to cease further communication with the consumer, the debt collector shall not communicate further with the consumer․” 15 U.S.C. § 1692c(c). “As is the case with section 1692c(a)(2), actual knowledge of the written notification is required for liability under section 1692c(c).” Mullery, 2023 WL 8250343, at *8-9.

Plaintiff argues that Defendant's summary judgment motion “does not address the merits of Plaintiff's claims under § 1692c(c) of the FDCPA” and therefore this claim must proceed to trial. (Dkt. 19 at 17).³ Defendant contends in reply that it properly moved for summary judgment with respect to Plaintiff's complaint “in its entirety” and that its arguments about lack of actual knowledge of the Ferrer Law Firm's representation of Plaintiff and the letters it sent to Citizens resolve any claim under § 1692c(c). (Dkt. 20 at 7-8). The Court agrees with Defendant.

The cease communication claim under § 1692c(c) is based on the same issue that serves as the basis for any claim under § 1692c(a)(2)—the letters from the Ferrer Law Firm sent to Citizens. The Ferrer Law Firm letters told Citizens to cease all direct communications with Plaintiff regarding the debt. (Dkt. 19-4; Dkt. 19-5). But as discussed above, there is no evidence that those attorney letters were transferred to Defendant before Defendant contacted Plaintiff. Defendant expressly denies any knowledge in that regard. (See Dkt. 15-3 at ¶¶ 9, 11).

Thus, because Defendant has shown that it did not have actual knowledge of the attorney letters sent to Citizens, Plaintiff has offered no evidence to show otherwise, and a debt collector cannot be imputed with knowledge that the creditor failed to disclose, the Court accordingly grants Defendant summary judgment on Plaintiff's § 1692c(c) claim. See Jones, 95 F. Supp. 2d at 110 (“Plaintiffs have come forward with no proof that defendant had any actual knowledge of any communications by plaintiffs which required the cessation of communication and defendant specifically denies any such knowledge. This failure is fatal not only to plaintiffs’ summary judgment motion, but to their claim under 1692c(c). Consequently, plaintiffs’ motion for summary judgment on this cause of action is denied and defendant's cross-motion is granted.”).

On the record before the Court, no rational jury could find that Defendant was aware of the attorney letters sent to Citizens or otherwise knew that Plaintiff was represented by counsel when it sent Plaintiff the letter dated June 22, 2023, or called Plaintiff. Once obtaining actual notice of Plaintiff's counsel's involvement through the letter from the Ferrer Law Firm dated July 6, 2023, it is undisputed that Defendant ceased communications with Plaintiff directly. (Dkt. 15-1 at ¶ 12; Dkt. 19-1 at 4). The Court therefore grants summary judgment in favor of Defendant on the fourth and sole remaining cause of action.

CONCLUSION

For the foregoing reasons, Defendant's motion for summary judgment (Dkt. 15) is granted, and the Clerk of Court is directed to enter judgment in favor of Defendant and to close the case.

SO ORDERED.

FOOTNOTES

1.   It is unclear whether Plaintiff first received the letter or the phone call from Defendant. According to Plaintiff, Defendant called her “[i]n or around June 2023” and she received the letter “[s]ometime in or around July 2023.” (Dkt. 19-2 at ¶¶ 9, 15). Defendant contends that the letter was created and sent on June 22, 2023, and that the call occurred on July 6, 2023. (Dkt. 15-3 at ¶¶ 4, 7). That said, the exact sequence of the communications is inconsequential as Plaintiff does not claim that she told Defendant she was represented by counsel during the phone call.

2.   Plaintiff references the letter with attachments as Exhibit 6 to her opposition papers, but in fact it appears that Exhibit 8 is the correct exhibit. (See Dkt. 19 at 12) (citing Dkt. 19-6); (see also Dkt. 19-8). In either case, though, the exhibits referenced by Plaintiff contain no evidence that Defendant had notice of Plaintiff's representation by counsel.

3.   As Defendant notes, the complaint does not specifically allege a claim under § 1692c(c) and that specific provision is referenced nowhere in the complaint. (Dkt. 20 at 7-8). Indeed, Plaintiff's fourth cause of action asserts a claim under § 1692c, without specific reference to § 1692c(a)(2) or § 1692c(c). (See Dkt. 1-1 at ¶ 94).

ELIZABETH A. WOLFORD, Chief Judge