in the united states district court for the middle ... · as defined by the fdcpa, and (3) the...

IN THE UNITED STATES DISTRICT COURT FOR THE MIDDLE DISTRICT OF FLORIDA

ORLANDO DIVISION

LAWRENCE MCGHIEY and NORENE MCGHIEY, Hon.

Plaintiff, Case No.

v. ORANGE LAKE COUNTRY CLUB, INC., dba ORANGE LAKE CAPITAL MANAGEMENT dba ORANGE LAKE RESORT & COUNTRY CLUB. Defendant.

COMPLAINT AND DEMAND FOR JURY TRIAL

NOW COME Plaintiffs, LAWRENCE AND NORENE MCGHIEY (“Plaintiffs” or

“McGhiey”), by and through their counsel, DC CAPITAL LAW, LLP, and file this Complaint

against the above listed Defendant, ORANGE LAKE COUNTRY CLUB, INC., dba ORANGE

LAKE CAPITAL MANAGEMENT dba ORANGE LAKE RESORT & COUNTRY CLUB

(“Orange Lake” or “Defendant”). In support of their Complaint, Plaintiffs state as follows:

I. PRELIMINARY STATEMENT

1. The Plaintiffs allege that Defendant’s collection practices violate both the Fair Debt

Collection Practices Act, 15 U.S.C. §§ 1692, et seq. (“FDCPA”) and The Florida Consumer

Collection Practices Act (“FCCPA”), 559.55 et seq., statutes enacted expressly to protect

consumers from the types of harm alleged herein. Defendant violated the FDCPA by, inter alia,

sending Plaintiffs collection notices that include the required Federal Dispute and Validation

disclosures regarding Plaintiff’s statutorily protected rights to dispute the debt only in

Case 6:18-cv-02076-JA-TBS Document 1 Filed 12/03/18 of 24 PageID 1

-2-

impermissibly small fonts and fine print to avoid Plaintiffs’ exercise of those rights pursuant to 15

U.S.C. § 1692g.

2. Importantly, the FDCPA and FCCPA expressly prohibit any further collection

efforts while a request for validation or verification is pending. Defendant improperly

circumvented Plaintiffs’ ability to make such a request by using impermissibly small fonts and

improper, attention-grabbing threats to distract Plaintiffs from timely exercising their rights to

verify and dispute the debts sought by Defendant.

3. Defendant is unlawfully continuing collection activities against Plaintiffs even

though it has failed to respond to Plaintiffs’ validation request.

4. By continuing its collection activities against Plaintiffs prior to validating the debt,

Defendant has violated the FDCPA. Haddad v. Alexander, Zelmanski, Danner & Fioritto, PLLC,

758 F. 3d 777 (6th Cir. 2014).

5. The FDCPA requires not only that debtors be given the right to dispute the debt and

seek verification thereof, but also, inter alia, that the debt collector demonstrate its authority to

recover the alleged debt from the debtor in the first place. See 15 U.S.C. §§ 1692g(a)1-5, 1692g(b).

Defendant failed to properly comply with any of those provisions.

II. RELEVANT STATUTES AND CASE LAW APPLICATION

6. The FDCPA regulates the behavior of debt collectors that seek to collect debts on

behalf of another. The United States Congress has found abundant evidence of the use of abusive,

deceptive, and unfair debt collection practices by many debt collectors, and has determined that

abusive debt collection practices contribute to a number of social and financial issues, including

personal bankruptcies, marital instability, loss of employment, emotional distress, and invasions

of individual privacy. Congress enacted the FDCPA to eliminate abusive debt collection practices


-3-

by debt collectors, to ensure that those debt collectors who refrain from using abusive debt

collection practices are not competitively disadvantaged, and to promote uniform State action to

protect consumers against debt collection abuses. 15 U.S.C. § 1692(a) - (e).

7. The FDCPA is a strict liability statute, which provides for actual or statutory

damages upon the showing of even just one violation. Courts use the “least sophisticated

consumer” standard, an objective test, when assessing whether a Defendant’s conduct violates the

FDCPA. “A debt collector's failure to provide the information required by § 1692g is actionable

as a violation of § 1692e ‘if the variance is one that would tend to mislead the least sophisticated

consumer.'" Leonard, 2017 WL 4979160, at *4 (quoting Caceres v. McCalla Raymer, LLC, 755

F.3d 1299, 1304 (11th Cir. 2014)).

8. The “least sophisticated consumer” standard assumes that the consumer

“posses[es] a rudimentary amount of information about the world and a willingness to read a

collection notice with some care.” Leonard, 2017 WL 4979160 at *2 (alteration in original)

(quoting LeBlanc v. Unifund CCR Partners, 601 F.3d 1185, 1193-94 (11th Cir. 2010) and Jeter

v. Credit Bureau, Inc., 760 F.2d 1168, 1175 (11th Cir. 1985)). Using this standard, the FDCPA

protects “naïve consumers” while at the same time “prevent[ing] liability for bizarre or

idiosyncratic interpretations of collections notices by preserving a quotient of reasonableness.”

Id. (quoting LeBlanc, 601 F.3d at 1194.)

9. To reduce the use of unconscionable and unfair practices by debt collectors, the

FDCPA at 15 U.S.C. § 1692f prohibits the use of unfair or unconscionable means to collect or

attempt to collect any debt and enumerates a non-exhaustive list of unconscionable or unfair debt

collection practices that constitute per se violations of the statute. 15 U.S.C. §§ 1692f (1)-(8).

Included among the per se violations prohibited by this section are the attempt to collect any


-4-

amount (including any interest, fee, charge, or expense incidental to the principal obligation)

unless such amount is expressly permitted by law, 15 U.S.C. § 1692f (1).

10. To assert a violation of the FDCPA, a Plaintiff must allege that (1) she has been the

object of collection activity arising from consumer debt, (2) the Defendant(s) are debt collectors

as defined by the FDCPA, and (3) the Defendant(s) have engaged in an act or omission prohibited

by the FDCPA. Salazar v. MFP, Inc., 847 F.Supp.2d 1329, 1331 (M.D. Fla. 2012) (internal

quotations and citations omitted).

11. The Florida Consumer Collection Practices Act (FCCPA), 559.55 et seq. is an act

promulgated to regulate the collection practices of certain persons; to provide for the powers and

duties of certain state agencies; and to provide penalties and civil fines in furtherance of protecting

consumers from unfair collection practices. Importantly, “in applying and construing” the FCCPA,

“due consideration and great weight shall be given to the interpretations of the Federal Trade

Commission and the federal courts relating to the federal Fair Debt Collection Practices Act.”

Florida Statutes at 559.77(5).

12. Under the FCCPA, 559.77(1) and (2), a person who suffers injury, loss, or damage,

or from whom money was collected using a method, act, or practice in violation of this act may

bring an action for actual damages and for additional statutory damages of up to $1,000, together

with court costs and reasonable attorney's fees incurred by the plaintiff. In determining the

Defendant's liability for any additional damages arising from a claim brought under this

subsection, the court shall consider the nature of the Defendant's noncompliance with the FCCPA,

the frequency and persistence of such noncompliance, and the extent to which such noncompliance

was intentional.


-5-

13. A Debt Collector means any person who uses any instrumentality of commerce

within this state, whether initiated from within or outside this state, in any business the principal

purpose of which is the collection of debts, or who regularly collects or attempts to collect, directly

or indirectly, debts owed or due or asserted to be owed or due another. The term "debt collector"

includes any creditor who, in the process of collecting her or his own debts, uses any name other

than her or his own which would indicate that a third person is collecting or attempting to collect

such debts. Florida Statutes, Sections 559.55 (6). Defendant is a debt collector.

14. The FCCPA defines communication as the conveying of information regarding a

debt, directly or indirectly, to any person through any medium. Florida Statutes, Sections 559.55

(2).

15. "Debtor" or "consumer" means any natural person obligated or allegedly

obligated to pay any debt. Florida Statutes, Sections 559.55 (8). Plaintiffs are debtors under both

the FCCPA and FDCPA.

16. At all material times, the Debt was a consumer debt, incurred primarily for

personal, household or family use.

17. At all material times, the Defendant was a “person” subject to Florida Statutes,

Section 559.72. See Florida Statutes, Section 559.55(3); Schauer v. General Motors Acceptance

Corp., 819 So. 2d. 809 (Fla. 4th DCA 2002).

18. At all times herein, Defendant was attempting to collect a debt, including but not

limited to, a balance allegedly owed on a consumer timeshare financing contract and

maintenance fee account. See Exhibits 2-7 and 9.

19. Florida courts give great deference to FTC guidance and the interpretations of

federal courts analyzing FDCPA matters when considering FCCPA cases.


-6-

20. In the instant case, Defendant violated numerous provisions of the FCCPA through

its unlawful conduct, including, but not limited to, when it:

a. violated 559.72 (5) by threatening to communicate private and

false debt information to the credit report and public records of

Orange County through a lien and foreclosure process on personal

property without proper validation before continuing to collect.

Please see Exhibits 2-4 and 6-9;

b. violated 559.72 (14) by communicating private and false debt

information to the public records and by virtue of those actions,

credit reports post validation that was not property conducted

generally and did so through Exhibits 2-4 and 6-9;

c. violated 559.72 (7) by engaging in conduct that can reasonably be

expected to abuse or harass the debtor by threatening to

communicate and publish private and false debt information to the

public records and credit reports generally and did so through

Exhibits 2-4 and 6-9;

d. violated 559.72 (9) by asserting a legal right that does not exist

with the use of an overshadowed or small printed dispute and

validation notice through Exhibits 2-4 and 6-9.

21. “Communicate” under both the FDCPA and FCCPA means the conveying of

information regarding a debt directly or indirectly to a person through any medium.

22. 15 U.S.C. § 1692g provides:

§ 1692g. Validation of debts


-7-

(a) Notice of debt; contents. Within five days after the initial communication with a consumer in connection with the collection of any debt, a debt collector shall, unless the following information is contained in the initial communication or the consumer has paid the debt, send the consumer a written notice containing— (1) the amount of the debt; (2) the name of the creditor to whom the debt is owed; (3) a statement that unless the consumer, within thirty days after receipt of the notice, disputes the validity of the debt, or any portion thereof, the debt will be assumed to be valid by the debt collector; (4) a statement that if the consumer notifies the debt collector in writing within the thirty-day period that the debt, or any portion thereof, is disputed, the debt collector will obtain verification of the debt or a copy of a judgment against the consumer and a copy of such verification or judgment will be mailed to the consumer by the debt collector; and (5) a statement that, upon the consumer’s written request within the thirty-day period, the debt collector will provide the consumer with the name and address of the original creditor, if different from the current creditor.

(b) Disputed debts. If the consumer notifies the debt collector in writing within the thirty-day period described in subsection (a) that the debt, or any portion thereof, is disputed, or that the consumer requests the name and address of the original creditor, the debt collector shall cease collection of the debt, or any disputed portion thereof, until the debt collector obtains verification of the debt or a copy of a judgment, or the name and address of the original creditor, and a copy of such verification or judgment, or name and address of the original creditor, is mailed to the consumer by the debt collector.

23. The validation notice may not be either "overshadowed" or contradicted by other

language or material in the original or subsequent collection letters sent within 30 days after

receipt of the first one. Swanson v. Southern Oregon Credit Service, Inc., supra, 869 F.2d 1222

(9th Cir. 1988); Harris v. Payco General American Credits, Inc., 98 C 4245, 1998 U.S. Dist.

LEXIS 20153 (N.D. Ill. Dec. 9, 1998)."A notice is overshadowing or contradictory if it would

make the least sophisticated consumer uncertain as to her rights." Russell v. Equifax A.R.S., 74,

F.3d 30 (2d Cir. 1996).


-8-

24. The basic test for determining whether language in a communication from a

collector violates § 1692g of the FDCPA depends on whether it is "likely to deceive or mislead a

hypothetical " "least sophisticated debtor." Id. at 1431. In short, language of the validation

notice:

. . . must be effectively conveyed to the debtor. It must be large enough to be easily read and sufficiently prominent to be noticed -- The notice must not be overshadowed or contradicted by other messages or notices appearing in the . . . communication from the collection agency.

Swanson v. So. Oregon Credit Service, Inc., 869 F.2d 1222, 1225 (9th Cir. 1989).

25. Numerous courts have recognized that the FDCPA’s purpose—to eliminate

abusive debt collection practices—would be frustrated and undermined if subsequent debt

collectors were excused from complying with the requirements contained in section 1692g.

Wright v. Ocwen Loan Servicing, LLC, 12-14762, 2013 WL 5532687, at 4-5 (E.D. Mich. Oct.7,

2013), See also Lewis v. Nationstar Mortgage, 2014 WL 1089557, at 7-10 (E.D. Mich. March

18, 2014).

26. Section 1692g(a)(4) states that if the debtor disputes the debt in writing within

thirty days, the debt collector must obtain verification of the debt and must send the debtor a

copy of the verification (emphasis added). Subsection (a)(5) states that, if the debtor makes a

written request, the debt collector must provide the name and address of the original creditor.

Subsection (b) states that if the debtor disputes the debt in writing within thirty days, the debt

collector must cease collection efforts until the debt collector has verified the debt. Graziano v.

Harrison, 950 F. 2d 107 (3d Cir. 1991). Critically, each of the foregoing requirements are

mandatory rather than permissive; the debt collector is unequivocally obligated by the FCDPA to

act in accordance with its provisions.


-9-

27. The FDCPA’s bona fide error defense at 15 U.S.C. § 1692k(c) does not apply to a

violation of the FDCPA resulting from a debt collector’s incorrect interpretation of a legal

requirement of the FDCPA. Jerman v. Carlisle, McNellie, Rini, Kramer & Ulrich LPA, 130 S.

Ct. 1605, 1611-12 (2010). "[W]here Congress includes particular language in one section of a

statute but omits it in another section of the same Act, it is generally presumed that Congress acts

intentionally and purposely in the disparate inclusion or exclusion." Russello v. United States,

464 U.S. 16, 23, 104 S. Ct. 296, 78 L. Ed. 2d 17 (1983).

28. Defendant Orange Lake is a Florida corporation with its principal place of

business at 8505 West Irlo Bronson Memorial Highway, Kissimmee, Florida 34747. As the

owner of the resort at issue, Orange Lake was considered a creditor or managing entity until it

began improperly collecting on Plaintiffs’ debt. As discussed more fully below, Orange Lake’s

unfair and deceptive debt collection practices bring it within the purview of both the FDCPA and

FCCPA. Defendant corresponded with Plaintiffs as Orange Lake Resorts and Orange Lake

Capital Management, making threats and seeking payments using both names.

29. The Plaintiffs are natural persons and consumer debtors who purchased a

condominium timeshare that is the subject of the debt sold to them by Defendant in Orange

County, Florida, and are “consumers” and “persons” as the terms are defined and used in the

FDCPA and FCCPA. Please see Plaintiffs’ Warranty Deed, attached hereto as Exhibit 1.

III. JURISDICTION & VENUE

30. Jurisdiction arises under 15 U.S.C. § 1692k (d) and 28 U.S.C. §§ 1331, 1337.

31. Supplemental jurisdiction for Plaintiff’s state law claims arise under 28 U.S.C. §

1367. The factual basis of the FCCPA claim is the same as the factual basis of the FCCPA claim

and this district court has “supplemental jurisdiction over all other claims that are so related to the


-10-

claims in the action within such original jurisdiction that they form part of the same case or

controversy under Article III of the United States Constitution. 28 U.S.C. § 1367(a). Additionally,

as previously noted at Paragraph 11, supra, Florida courts give great deference to FTC guidance

and the interpretations of federal courts analyzing FDCPA matters when considering FCCPA

cases.

32. Declaratory relief is available under 28 U.S.C. §§ 2201, 2202.

33. Venue is appropriate in this federal district pursuant to 28 U.S.C. §1391(b) because

a substantial part of the debt collection under the FDCPA giving rise to Plaintiff’s claims occurred

within this federal judicial district at the time this action is commenced.

IV. FACTS CONCERNING PLAINTIFF

34. On or about December 15, 2016, Plaintiffs allegedly incurred a financial obligation

on the purchase of a timeshare condominium involving the “Developer” (in sale documents) and

Defendant, Orange Lake Country Club, Inc. Please see Exhibit 6. Plaintiffs received a warranty

deed supposedly transferring the subject property to them. Please see Exhibit 1.

35. On or around July 25, 2018, Defendant sent a collection letter that stated in

LARGE TYPE AND FONT, “10 DAYS PAST DUE” and sought payments on a mortgage the

Plaintiffs held with Wilson Resort Finance, LLC. Please See Exhibit 2. Orange Lake advised

that it was attempting to collect a debt and that any information would be used for that purpose

under a notice that stated, NOTICE TO CONSUMER PURSUANT TO THE FAIR DEBT

COLLECTION PRACTICES ACT.

36. The letter threatened the Plaintiffs’ credit report and failed to provide Plaintiffs

with adequate notice of their rights to dispute the debt and seek verification of the same,


-11-

including the necessary language required by the FDCPA only in small, nearly illegible print

many times smaller than the rest of the contents of the letter, as shown here:

37. The language required by the FDCPA at 1692g is purposely written so small that

consumers will remain unaware of their rights and focus only on the Defendant’s threats and

demands for payment. Please see Exhibit 2.

38. On or about September 3, 2018, Defendant sent another letter stating it was

collecting a debt while seeking payments and a past due balance. Please see Exhibit 3. This letter

stated in large font and type, 50 DAYS PAST DUE. This letter again threatened the Plaintiffs’

credit reports too and also offered the requisite FDCPA notice only in extremely, impermissibly

small print, a mere fraction of the size of the rest of the text, as shown here:


-12-

39. On or about September 24, 2018, Defendant sent another letter stating it was

collecting a debt and in large and bold print warned, “WARNING LETTER.” Dark and bold print

also warned that “Your account is under review to be sent to a Foreclosure Attorney.” Please see

Exhibit 4. The Letter also declared in bold letters that it was providing “TWO POSSIBLE

OPTIONS,” which, along with the “WARNING LETTER” language, again overshadowed the

illegibly, impermissibly small print and font of the FDCPA language:


-13-

40. On or about October 3, 2018, and in response to Defendant’s “50 DAY LETTER,”

Plaintiffs sent a validation request seeking proof of why the debt amount was owed and to whom.

The letter further advised Defendant that all debt collection must cease until the validation request

is honored under 15 U.S.C. § 1692g(b). Please see the Validation Request at Exhibit 5.

41. On or about October 15, 2018, Orange Lake wrote a letter back to Plaintiffs in

response to the validation request, stating “Please be advised that Developer does not qualify as a

“debt collector” under the Fair Debt Collection Practices Act.” The “Developer” is identified in


-14-

the paperwork attached to the October 15 letter as “Orange Lake Country Club, Inc.” Please see

Exhibit 6.

42. Defendant never did validate the debt. The October 15 letter sent by Orange Lake

originated from the “Legal Department” in Dallas, Texas, and failed to provide any proof of the

debt amount and why it was owed and to whom it was owed. Please see Exhibit 6.

43. On or about November 2, 2018, Defendant sent another collection letter titled in

bold and large type, “FINAL COLLECTION LETTER.” Though the letter stated the Plaintiffs

had 30 days from the date of the letter, the letter was disingenuously not even placed in the mail

to Plaintiffs until November 6, 2018. Please see the envelope at Exhibit 7, showing the date it was

mailed. The “FINAL COLLECTION LETTER” stated as follows:


-15-

44. Like the first letter from Defendant at Exhibit 2, the 1692g Notice was essentially

illegible, while the threats and warnings were written in a font at least three to four times larger.

Further, while the impermissibly small print stated that Plaintiffs had 30 days from the date of

receipt of the letter to dispute the debt and seek validation, the larger language above stated that

the Plaintiffs must make a full payment or restructure the debt “no later than thirty (30) days from

the date of this letter” or the note would be accelerated and “we will proceed with foreclosure.”


-16-

Again, the letter was not sent by Defendant until four days after the date of the letter on November

6, 2018. Please see Exhibit 7.

45. Chauncey v. JDR Recovery Corp.,118 F.3d 516, 519 (7th Cir.1997), held that

"if we were to hold that the validation request must be received by the thirtieth day, we

would be rewriting Section 1692g, which we are not entitled to do."

46. Jacobson v. Healthcare Financial Services, Inc., 516 F.3d 85, 93 (2d Cir.

2008), specifically requires the validation notice to state that the debtor may dispute the debt

"within thirty days after receipt of the notice" (emphasis added by the Jacobson court here).

47. On or about October 15, 2018, Orange Lake Resorts sent another demand for

payment on the debt to Plaintiffs. Please see Exhibit 8.

48. The 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. See S.O.G. San Ore Gardner v. Mo. Pac. R.R. Co., 658 F.2d 562, 567 (8th Cir. 1981);

Schmitt v. FMA Alliance, 398 F.3d 995, 997 (8th Cir. 2005).

49. On or about November 14, 2018, another letter was sent by Defendant Orange Lake

Resorts advising Plaintiffs they had 30 days from the date of the letter to make a payment to avoid

both an acceleration of the full mortgage and a judicial foreclosure and sale of the property. Please

see Exhibit 9.

50. This time, the letter from Orange Lake Resorts at Exhibit 9 stated that it was an

attempt to collect a debt under a “NOTICE TO CONSUMER PURSUANT TO THE FAIR DEBT

COLLECTION PRACTICES ACT.” However, at this point, Defendant had still not responded to

the validation and verification request sent on October 3, 2018, and merely claimed not to be a

debt collector in the validation response. Now, Orange Lake Resorts—originally just the creditor


-17-

in this case—claimed to be a debt collector itself. Orange Lake Resorts and Orange Lake Capital

Management used their identities interchangeably, giving Plaintiffs the false impression that

multiple entities were being used to collect on this debt, and further circumventing Plaintiffs’ rights

by including the necessary FDCPA language in impermissibly small type they knew Plaintiffs

would be unable to read, or at the very least, would be distracted from reading.

51. Orange Lake Capital Management had not validated the debt as required under 15

U.S.C. § 1692g(a) and 15 U.S.C. § 1692g(b) with the response by Orange Lake Resorts. Please

see Exhibit 7.

52. Defendant continued to collect on the debt subsequent to the October 3, 2018,

validation and verification request of Plaintiffs in violation of 15 U.S.C. § 1692g(b). See Exhibit

2-4 and Exhibit 6-9.

53. After Defendant violated the Plaintiffs’ rights under the FDCPA, specifically the

Plaintiffs’ right to dispute and verify the debt, and to be spared any further collection efforts unless

and until the debt was verified, Defendant continued collection efforts on the in violation of both

the FDCPA and FCCPA at Exhibit 2-4 and Exhibit 6-9.

54. Specifically, the FDCPA states at 15 U.S.C. § 1692g(b) as follows and has a

mandatory cease and desist on collection efforts once the debtor is afforded the opportunity to

dispute and seek verification of the debt:

DISPUTED DEBTS If the consumer notifies the debt collector in writing within the thirty-day period described in subsection (a) that the debt, or any portion thereof, is disputed, or that the consumer requests the name and address of the original creditor, the debt collector shall cease collection of the debt, or any disputed portion thereof, until the debt collector obtains verification of the debt or a copy of a judgment, or the name and address of the original creditor, and a copy of such verification or judgment, or name and address of the original creditor, is mailed to the consumer by the debt collector.


-18-

55. The letters offering the 1692g validation notice and rights of the consumer were

far too small and undeniably overshadowed by other, larger warnings and threats from Orange

Lake Capital Management (Exhibits 2, 3 and 4) or they gave Plaintiffs less than the 30 days

than Federal law requires such as in Exhibit 7.

56. In order to comply with§ 1692g(a), a debt collector "must ' effectively

convey' the notice to the debtor." Smith v. Computer Credit, Inc., 167 F.3d l 052, 1054 (6th

Cir. 1999). Section 1692g requires the validation notice to state that the debtor may

dispute the debt "within thirty days after receipt of the notice" (emphasis added).

57. Defendant’s failure to include the mandatory dispute and verification notice in

proper font and format to be read in their letters prevented Plaintiffs from meaningfully advocating

for themselves or otherwise disputing or seeking verification of the debt, essentially opening a

loophole through which Defendant felt it could continue collection efforts with impunity.

58. Indeed, Defendant felt they did not have to “cease collection of the debt, or any

disputed portion thereof, until the debt collector obtains verification of the debt or a copy of a

judgment,” under 15 U.S.C. § 1692g(b) if there was no pending dispute or request for verification

(emphasis added) or just it just responded with non-validation responses from Orange Lake Resorts

instead of the collector, Orange Lake Capital Management in Exhibit 6.

59. Essentially, Defendant has circumvented Plaintiffs’ federal rights—and those of

other Florida consumers receiving similar letters—to be free from continued unfair collection

practices by failing to even afford them a realistic opportunity to dispute the debt, or seek

verification thereof, in the first place.

60. The lack of a consumer dispute or demand for verification allows a debt collector

to continue with its collection efforts unfettered and charge and pursue any payment amounts it


-19-

wants as Defendant continued to do when it continued its threatened collection and foreclosure

activities against Plaintiffs.

61. In 2014, the Sixth Circuit expanded dispute verification rules under the FDCPA

with Haddad v. Alexander, Zelmanski, Danner & Fioritto, PLLC, 758 F. 3d 777 (6th Cir. 2014).

The Haddad Court announced a new standard for verification under § 1692g(b), holding that “the

verification provision must be interpreted to provide the consumer with notice of how and when

the debt was originally incurred or other sufficient notice from which the consumer could

sufficiently dispute the payment obligation.” Haddad at 785-786.

62. The Haddad Court went on to say further that such a notice requirement has the

advantage of providing a clear standard that courts are accustomed to enforcing and can apply

easily. Moreover, in today's world of computerized records management, it would not be a

significant burden to debt collectors or creditors to provide such a record. Haddad at 786. Here,

Defendant violated the verification standard of Haddad in its refusal to cease collection efforts and

continued the foreclosure process in violation of the FDCPA.

63. Defendant went ahead with the collection of the debt foreclosure in violation of

Federal law and Haddad precedent. The continued collection efforts further damaged the

Plaintiffs’ financial and credit reputation without properly validating the debt as required by

Federal law.

64. As Defendant Orange Lake Capital Management plainly states in its letters at

Exhibits 2-4, it is engaged in the act and/or practice of “debt collection” as that term is defined by

15 U.S.C. § 1692a (6).


-20-

65. Defendant’s letters attached hereto are “communications” as defined by the

FDCPA and FCCPA. The alleged debt at issue arose out of a transaction in which the money,

property, insurance, or services are the subject of the transaction that are primarily for personal,

family, or household purposes.

66. Pursuant to 15 U.S.C.§ 1692n, the FDCPA does not preempt state laws unless,

and only to the extent that, "those laws are inconsistent with any provisions of this subchapter."

§ 816. Relation to State laws [15 USC 1692n]

This title does not annul, alter, or affect, or exempt any person subject to the provisions of this

title from complying with the laws of any State with respect to debt collection practices, except

to the extent that those laws are inconsistent with any provision of this title, and then only to the

extent of the inconsistency. For purposes of this section, a State law is not inconsistent with this

title if the protection such law affords any consumer is greater than the protection provided by

this title.

67. It is the provisions of the FDCPA that by and of themselves determine what debt

collection activities are improper under federal law.” Romea v. Heiberger & Assocs., 163 F.3d

111, 119 (2d Cir. 1998). “A debt collector must comply with the FDCPA while complying with

a state foreclosure law.” Id. And, as initially discussed above, supra, “in applying and

construing” the state debt collection law applicable in this case, “due consideration and great

weight shall be given to the interpretations of the Federal Trade Commission and the federal

courts relating to the federal Fair Debt Collection Practices Act.” Florida Statutes at 559.77(5).

68. Plaintiffs have suffered an injury in fact and still face, or have been subject to,

damage to their financial and credit reputation, recording costs, and increased attorney fees and

foreclosure fees as a result of Defendant’s collection threats and demand for payment shown in


-21-

Exhibit 2-4 and Exhibits 6-9, and did suffer such injuries stated here and in Paragraphs 34-67

as stated above because of the Defendant’s unlawful and improper debt collection and validation

activities, including Defendant’s failure to notify Plaintiffs of their Federal right to dispute and

verify the debt in violation of the FDCPA and FCCPA.

V. FIRST CAUSE OF ACTION

VIOLATIONS OF THE FAIR DEBT COLLECTION PRACTICES ACT

69. Plaintiffs reallege and incorporate by reference the allegations in the preceding

paragraphs of this Complaint as if fully set forth herein

70. Defendant violated the FDCPA. Defendant’s violation, with respect to its written

communications in the form attached as Exhibits 2-4 and 6-9 include, but are not limited to, the

following:

a. Using false, deceptive, and misleading representations or means in connection with the

collection of any debt in violation of 15 U.S.C. § 1692e;

b. Making false, deceptive, and misleading representations concerning the character, amount,

or legal status of any debt in violation of 15 U.S.C. §1692e(2)(A) in Exhibits 2-4 and 6-9;

c. Making false, deceptive, and misleading representations concerning any services rendered

or compensation which may be lawfully received by any debt collector for the collection of a debt

in violation of 15 U.S.C. §1692e(2)(B);

d. Using false representations and/or deceptive means to collect or attempt to collect any debt

or to obtain information concerning a consumer in violation of 15 U.S.C. § 1692e (10);

e. Using an unfair or unconscionable means to collect or attempt to collect any debt in

violation of 15 U.S.C. § 1692f (1) without providing proper notice of Plaintiff’s right to dispute

and verify the debt as required by 15 U.S.C. § 1692g(a) (1-5) and 15 U.S.C. § 1692g(b) and change


-22-

the 30 day requirement to validate from the date of receipt of the letters in Exhibit 7 and 9;

f. Threatening to record false debts and expose private information to third parties and the

public record of Orange County and the Plaintiffs’ credit history in violation of 15 U.S.C.

§1692c(b) through Exhibits 2-4 6-9; and

g. Pursuing debt collection in violation of 15 U.S.C. § 1692g after having deprived Plaintiffs

of their proper right to seek verification and dispute the debts they are being charged and thus

entirely depriving Plaintiffs their rights to have Defendant cease and desist from making further

collection efforts pursuant to 15 U.S.C. § 1692g(b) with misleading letters at Exhibit 2-4 and 6-

9.

VI. SECOND CAUSE OF ACTION

VIOLATIONS OF THE FLORIDA CONSUMER COLLECTION PRACTICES ACT

71. Plaintiffs reallege and incorporate by reference the allegations in the preceding

paragraphs of this Complaint as if fully set forth herein.

72. Defendant violated Florida Statutes 559.72(9), 559.72(13), 559.72(14), and 559.72(5) as

evidenced by Exhibits 2-4 and 6-9, including that attempt to collect debt subsequent to not

properly validating the debt under the FDCPA.

VII. PRAYER FOR RELIEF

73. WHEREFORE, Plaintiffs respectfully request that the Court enter judgment in their favor

as follows:

A. For the FIRST CAUSE OF ACTION:

a) Awarding statutory and actual damages for Plaintiffs in an amount not less than

$1,000.00 pursuant to 15 U.S.C. 1692k(a)(2)(A);


-23-

b) Awarding Plaintiffs’ Costs and reasonable attorney’s fees pursuant to 15 U.S.C.

1692k(a)(3); and;

c) Such further relief as the court deems just and proper.

B. For the SECOND CAUSE OF ACTION:

a) Determining that Defendant violated Fla. Stat. § 559.72(9), (14), (5), and (13)

with respect to Plaintiffs; and

b) Awarding Plaintiffs actual damages, pursuant to Fla. Stat. § 559.77(2); and

c) Awarding Plaintiffs additional statutory damages, pursuant to Fla. Stat. §

559.77(2), in the amount of $1,000.00 each; and

d) Awarding Plaintiffs punitive damages, pursuant to Fla. Stat. § 559.77(2); and

e) Awarding Plaintiffs such equitable relief as the Court deems necessary or proper,

including enjoining Defendant from further violations of the FCCPA through the

letters at Exhibit 2-4 and 6-9 and, pursuant to Fla. Stat. § 559.77(2); and

f) Awarding Plaintiffs’ counsel reasonable attorneys’ fees and costs incurred in this

action pursuant to Fla. Stat. § 559.77(2); and

g) Awarding Plaintiffs pre-judgment and post judgment interest as permissible by

law; and

h) Awarding such other and further relief as the Court may deem just and proper.

VIII. JURY DEMAND

Plaintiffs hereby demand that this action be tried before a Jury.

/s/ Brian P. Parker_____ Dated: December 3, 2018 Brian P. Parker- Trial Counsel

DC CAPITAL LAW, LLP 700 12th Street NW #700 Washington, D.C. 20005 202-723-5905


-24-

[email protected] Counsel for the Plaintiffs


in the united states district court for the middle ... · as defined by the fdcpa, and (3) the...

Documents