Lesher v. Law Offices of Mitchell N. Kay, PC

Summarized by Jonathan Myers , Credit Acceptance
14 years 8 months ago

Citation:

Case No. 10-3194 (3rd Cir. June 21, 2011)

Tag(s):

3rd Circuit

Ruling:

The Court of Appeals for the Third Circuit affirmed the order of the U.S. District Court for the Middle District of Pennsylvania granting summary judgment in favor of the Plaintiff's claim under Section 1692e of the Fair Debt Collection Practices Act (the "FDCPA"). The Court of Appeals reviewed similar rulings from the Second, Third, Fifth and Seventh Circuits to conclude that the Defendant violated the FDCPA.

Procedural context:

Appeal from order granting summary judgment in favor of Plaintiff under Section 1692e of the Fair Debt Collection Practices Act.

Facts:

The Defendant Kay Law Firm is a law firm that acts as a debt collector. In 2009, the Defendant sent two letters to Plaintiff seeking to recover a debt the Plaintiff owed on a home equity loan. The letters were presented on the Kay Law Firm's letterhead, which displayed the words "Law Offices of Mitchell N. Kay, P.C." in large characters at the top of the page. The letters, after referencing Plaintiff's account, contained a notice that the account was being handled by the Kay Law Firm. At the bottom of the letters, a notice directed the recipient to review various disclaimers on the reverse side. The revise side of the letters contained a disclaimer that "no attorney with this firm has personally reviewed the particular circumstances of your account." Plaintiff filed a complaint in the District Court alleging Defendant violated section 1692e of the FDCPA by misleading him to believe that an attorney was involved in collecting his debt and that the attorney could take legal action against him. Reviewing the letters from the perspective of the "least sophisticated debtor" standard, the District Court rejected the Kay Law Firm's contention that the disclaimer on the reverse side of the letters mitigated the impression of potential legal action. The District Court awarded Plaintiff $1,000 in damages. In affirming the District Court's ruling, the Third Circuit agreed that the disclaimers printed on the back of the letter did not make clear to the least sophisticated debtor that the Kay Law Firm was acting solely as a debt collector and not in any legal capacity in sending the letters. It further reasoned that the disclaimer contradicted the message on the front of the letters--that a law firm was retained to collect the debt. Borrowing a phrase from the Seventh Circuit, the Third Circuit concluded that "an unsophisticated consumer, getting a letter from an 'attorney,' knows the price of poker has just gone up." For that reason, the Third Circuit believed that it was misleading and deceptive for the Kay Law firm to raise the specter of potential legal action by using its law firm title to collect a debt when the firm was not acting in its legal capacity when it sent the letters. The Court of Appeals also noted that it was not deciding what appropriate language should be included in a letter in order to avoid a violation under the FDCPA, only that it was deciding that the Kay Law Firm's letters were misleading and deceptive.

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