District Court (NY) Holds that FDCPA Class-Rep. Has Standing Following Chapter 7 Bankruptcy Because She Adequately Disclosed the Claim in Her Schedules; Says Collection Letter was Deceptive Because it Failed to Disclose that Interest Would Accrue

Here, after receiving the Letter, Plaintiff filed for bankruptcy but did not initially disclose her FDCPA claim against Defendant (or the other three parties she sued) in her schedule of assets. (Def.’s Br. at 4.) While she amended the schedules to include “FDCPA Actions” valued at $2,000, Defendant argues that the disclosure was inadequate because it failed to identify the party against whom Plaintiff had a claim and did not sufficiently disclose the number or value of her FDCPA claims, which Defendant avers are worth $5,000 or more. (Def.’s Br. at 10-11; Def.’s Reply at 3-6.) Thus, Defendant contends, Plaintiff lacks standing or is barred by the doctrine of judicial estoppel from bringing this suit. (Def.’s Br. at 8-12.) Plaintiff counters that her disclosure was sufficient because it gave the bankruptcy trustee “ ‘inquiry notice’ sufficient to allow him to have duly investigated her financial affairs.” (Pl.’s Opp. at 7.) Specifically, Plaintiff argues that the description “FDCPA Actions” gave adequate notice of the nature of the claim and that the declared value of $2,000 was, at most, an undervaluation of her claims. (Pl.’s Opp. at 7-9.)  Defendant relies heavily on Romeo, in which a court in this District found that one plaintiff lacked standing to bring an FDCPA action and another plaintiff was judicially estopped from doing so. Romeo, 2016 WL 3647868, at *9-11, *14-15. The court held that plaintiff Romeo lacked standing to bring the action because he (1) filed two other actions one month after commencing his bankruptcy proceeding, without having initially disclosed the claims; (2) amended his petition after the bankruptcy trustee issued a “report of no distribution,” which advised the court-based on inaccurate schedules–that Romeo possessed no distributable assets; (3) withheld supporting details about the claims; and (4) despite having filed two actions, listed the assets as “only one ‘Possible Fair Debt Collection Claim.’ ” Id. at *9. The court found that Romeo’s disclosure was incomplete and that he lacked standing as a result. Id. at *1-3, *10-11. Additionally, the Romeo court found that plaintiff Arpino was judicially estopped from bringing her claim because she (1) filed a separate lawsuit within three weeks of filing for bankruptcy, without having initially disclosed the claim; (2) amended her filing to add one “possible” FDCPA claim, even though the claim was “actualized”; (3) failed to include supporting details about the claim; and (4) having disclosed only a single potential claim, subsequently commenced an additional four actions in four different districts. Id. at *3-4, *14-15.  This Court finds that Romeo is factually distinguishable and that Plaintiff’s disclosure–“FDCPA Actions” valued at $2,000–was adequate. First, “due to the specialized nature of the FDCPA,” Plaintiff’s description of the claim “gave basic notice of the underlying factual scenario.” Id. at *11. Second, the disclosure specified that she had several “Actions” and thus provided the trustee with notice that there was more than a single claim. The Court recognizes that Plaintiff had at least four FDCPA claims while her $2,000 valuation of the actions arguably suggested that she had only two, given the $1,000 cap on statutory damages available to a plaintiff in an FDCPA case. See Romeo, 2016 WL 3647868, at *11. However, the declared value was not facially deceptive because, among other things, a court may award less than $1,000 in statutory damages per case. See, e.g., Cordero v. Collection Co., No. 10-CV-5960, 2012 WL 1118210, at *2 (E.D.N.Y. Apr. 3, 2012) (noting that the size of a statutory damages award is committed to the sound discretion of the district court and awarding each plaintiff $250 for the defendant’s FDCPA violation). In any event, the disclosure gave the trustee notice of multiple actions; he could have investigated further to determine the exact number of Plaintiff’s claims. Third, while Plaintiff did not identify the parties against whom she had claims, “[t]he trustee would have needed only to take a cursory look at” the Letter (or the other three collection letters) to see that it was on Defendant’s (or the other creditors’) letterhead. Eun Joo Lee, 926 F. Supp. 2d at 490. “Although it would have been more helpful for” Plaintiff to itemize the actions she planned to bring, her failure to do so does not deprive her of standing. See Romeo, 2016 WL 3647868, at *12 (quoting Cusano v. Klein, 264 F.3d 936, 946–47 (9th Cir. 2001)). Fourth, it does not appear that Plaintiff attempted to deceive the trustee about the existence of the claims. Cf. id. at *9-10 (finding that plaintiff Romeo lacked standing and noting that his “inaccurate characterization of [his] claims was ‘deceptive’ and ‘cryptic’ ”). Unlike in Romeo, Plaintiff amended her bankruptcy schedules before the trustee issued his report of no distribution, so the trustee was able to consider the existence of Plaintiff’s claims before finding that she possessed no distributable assets. See id. Therefore, because Plaintiff’s disclosure was sufficiently detailed to provide the trustee with notice of this claim, the claim was abandoned at the close of the bankruptcy case and it reverted back to Plaintiff. Thus, Plaintiff has standing and is not judicially estopped from bringing this action. See Eun Joo Lee, 926 F. Supp. 2d at 489-90 (holding that plaintiff was “not barred from bringing [her FDCPA] action either on standing or judicial estoppel grounds” after determining that she sufficiently disclosed the claim during her bankruptcy proceeding)  Because Plaintiff has standing to bring this action, the Court next considers whether Plaintiff states a claim upon which relief can be granted.