Vincent v. The Money Store
736 F.3d 88
| 2d Cir. | 2013Background
- Plaintiffs are homeowners whose mortgages, originally payable to other lenders, were later assigned to The Money Store; after defaults they received "breach" letters on Moss Codilis law‑firm letterhead.
- The Money Store contracted Moss Codilis to generate and mail mass breach letters (flat fee per letter); Moss Codilis used its letterhead and stated it had been "retained" to collect the debts.
- Plaintiffs alleged (1) FDCPA violations: the letters falsely implied a third‑party law firm was collecting the debts (false‑name exception), and (2) TILA violations: The Money Store charged unauthorized fees and failed to refund credit balances.
- The district court granted summary judgment dismissing FDCPA claims and later granted summary judgment for The Money Store on TILA claims (holding The Money Store was not the initial "creditor" under TILA).
- On appeal, the Second Circuit (Katzmann, C.J.) held that triable issues exist on whether The Money Store “used” Moss Codilis’s name under the FDCPA false‑name exception (conduit/flat‑rating analysis), vacated the FDCPA dismissal, but affirmed dismissal of TILA claims because The Money Store was not the person to whom the debts were initially payable.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether creditor can be a "debt collector" under FDCPA §1692a(6) by using a third party's name (false‑name exception) | Money Store used Moss Codilis’s name to create impression a law firm was collecting, so creditor immunity pierced | The Money Store did not "use" Moss Codilis’s name — Moss Codilis independently sent letters and performed collection functions | Reversed: fact issues remain whether Money Store "used" Moss Codilis’s name and whether Moss Codilis merely acted as a conduit (not making bona fide collection efforts); remand for further proceedings |
| What "use" and "collect" mean for §1692a(6) application | Letters and contract show active involvement by Money Store in sending deceptive attorney letters | Money Store argues mere outsourcing/printing/mailings do not amount to creditor "use" of name that misleads consumers | Court adopts ordinary‑meaning test: creditor must actively employ the name; using a third party to send letters for the purpose of implying third‑party collection can satisfy "use"; whether third party made bona fide collection efforts is a fact question |
| Whether Moss Codilis was "collecting or attempting to collect" such that no deception existed | Plaintiffs: Moss Codilis only performed ministerial tasks (mass mail, minimal review) so it was a conduit, creating deception | Money Store: Moss Codilis reviewed data, corresponded with debtors, and did follow‑up — it bona fide collected | Reversed: reasonable jury could find Moss Codilis was a conduit not engaged in bona fide collection, so Money Store may be liable under false‑name exception |
| Whether The Money Store is a "creditor" under TILA (15 U.S.C. §1602(g)) for purposes of refunding credit balances | Plaintiffs: assignments to Money Store before disbursement/first payment make it the creditor; Money Store charged unauthorized fees | Money Store: TILA defines creditor as person to whom debt was initially payable on face of note; initial lenders named in notes are not The Money Store | Affirmed: The Money Store is an assignee, not the initial payee on the face of the notes; therefore not a "creditor" under TILA and not liable under §1666d (court notes gap but declines to rewrite statute) |
Key Cases Cited
- Clomon v. Jackson, 988 F.2d 1314 (2d Cir. 1993) (mass‑produced letters bearing attorney signature may violate §1692e absent meaningful attorney involvement)
- Maguire v. Citicorp Retail Servs., 147 F.3d 232 (2d Cir. 1998) (objective "least sophisticated consumer" test for false‑name exception; creditor "use" of a misleading name may trigger liability)
- Nielsen v. Dickerson, 307 F.3d 623 (7th Cir. 2002) (attorney who merely mass‑mailed letters without exercising professional judgment is a conduit; creditor may be liable under false‑name theory)
- Taylor v. Perrin, Landry, deLaunay & Durand, 103 F.3d 1232 (5th Cir. 1997) (creditor liable where it used law firm letterhead/form letters prepared for creditor — flat‑rating example)
- Miller v. Wolpoff & Abramson, L.L.P., 321 F.3d 292 (2d Cir. 2003) (requiring some degree of attorney involvement to avoid §1692e liability when letters bear an attorney's signature)
- Greco v. Trauner, Cohen & Thomas L.L.P., 412 F.3d 360 (2d Cir. 2005) (no §1692e misrepresentation where law firm clearly disclosed it was not acting as the debtor's attorney)