Judge: Lawyers Not Required to Disclose Status as Debt Collectors in Letters

by Lehr Beidelschies Daily Reporter

Recently, the 10th District Court of Appeals ruled that a law firm is not required to disclose its status as a debt collector within a cover letter accompanying the service of a motion or memoranda.

The court held that while such letters may have the tangential affect of conveying information regarding a debt, they also are communications inherent in an ordinary lawsuit and therefore do not violate the Fair Debt Collections Practice Act.

The case at issue stemmed from an instant action filed by Perry Silverman against the law firm of Roetzel and Andress on Jan. 17. Silverman alleged that Roetzel and Andress violated Section 1692e(11) of the FDCPA, which requires debt collectors to make certain disclosures when communicating with a debtor.

The ?communications? at issue were four cover letters sent to Silverman by Roetzel and Andress, after the firm had been substituted as representative counsel for Citibank in its complaint against Silverman.

According to court documents, Silverman had refused to pay a balance of $8,942.45 owed on a credit card that he maintained with Citibank, and the bank filed a complaint against him on Aug. 16, 2004.

The case was resolved in December 2005, when the trial court rendered summary judgment in Citibank?s favor. Silverman filed his January 2006 action against the law firm shortly thereafter, and Roetzel and Andress moved to dismiss his complaint on Jan. 31.

Silverman moved for summary judgment, but on April 17, 2004, the trial court denied his motion and granted Roetzel and Andress? motion to dismiss. Alleging that he should have been permitted to adjudicate his claims on their merits, Silverman appealed the decision to the 10th District Court of Appeals.

Upon review of the case, the appellate court had to first determine whether Roetzel and Andress was a ?debt collector? as defined by the FDCPA.

The court found that Section 1692a(6) of the act defines a ?debt collector? as any ?person? who uses interstate commerce ?in any business the principal purpose of which is the collection of any debts, or who regularly collects or attempts to collect, directly or indirectly, debts owed or due or asserted to be owed or due another.?

Roetzel and Andress denied its status as a ?debt collector? because Citibank does not fall within that definition as a creditor. Therefore, Roetzel and Andress alleged that as lawyers acting on behalf of Citibank, they also were not subject to the act.

Regardless, the appellate court found that Roetzel and Andress? argument ran counter to well-established legal precedent that the FDCPA applies to attorneys that regularly engage in consumer debt-collection litigation on behalf of creditor clients.

Therefore, assuming that Roetzel and Andress was in fact a debt collector for the purposes of the appeal, the appellate court then were faced with deciding whether the cover letters in question were considered ?communications? under the act. The FDCPA defines ?communication? as the ?the conveying of information regarding a debt directly or indirectly to any person through any medium,? pursuant to Section 1692a(2), Title 15.

The court found, however, that the purpose of the cover letters, sent pursuant to a universal practice employed by all professionals, was to identify the enclosure of the motions served on Silverman.

While the letters did convey that Citibank and Silver were litigating an indiscernible dispute, they did not request any information, state an amount owing, demand payment, or identify Silverman?s bank account, according to court documents.

Therefore, the appellate court found that the cover letters were not the type of ?communication? included within the scope of the FDCPA. Citing the Supreme Courts decision in the 1995 case of Heintz v. Jenkins, the appellate court found that the FDCPA does not apply to ? ?communications? inherent in an ordinary lawsuit.?

?Indeed, we would be hard-pressed to conceive of a ?communication? more inherent or incidental to an ?ordinary lawsuit? than a routine cover letter sent to accompany the service of a motion or memoranda,? wrote Judge Patrick M. McGrath, in writing the opinion of the court.

The court cited several cases in support of its conclusion, including Martinez v. Estate Recoveries Inc. (April 24, 1996), wherein the court held that ?neither a Statement of Claim, nor its accompanying cover letter, constituted ?communications? under the Act.?

Accordingly, the appellate court concluded that the cover letters sent by the law firm to Silverman during the course of the Citibank litigation could not be deemed ?communications,? as defined in Section 1692a(2) of the FDCPA.

Therefore, the appellant court affirmed the judgment of the trial court.

The case is Silverman v. Roetzel & Andress, L.P.A., 2006-Ohio-4785.

Reprinted with Permission of The Daily Reporter