Valentine Grden v. Leikin Ingber & Winters PC
Filing
OPINION and JUDGMENT filed: AFFIRMED in part, REVERSED in part and REMANDED, decision for publication pursuant to local rule 206. Danny J. Boggs; Raymond M. Kethledge (AUTHORING), Circuit Judges and Curtis L. Collier, Chief District Judge for the E. D. of TN.
Case: 10-1182
Document: 006110997180
Filed: 06/27/2011
Page: 1
RECOMMENDED FOR FULL-TEXT PUBLICATION
Pursuant to Sixth Circuit Rule 206
File Name: 11a0164p.06
UNITED STATES COURT OF APPEALS
FOR THE SIXTH CIRCUIT
_________________
X
No. 10-1182
v.
>
,
LEIKIN INGBER & WINTERS PC,
Defendant-Appellee. N
Appeal from the United States District Court
for the Eastern District of Michigan at Detroit.
No. 09-10579—Victoria A. Roberts, District Judge.
VALENTINE GRDEN,
Plaintiff-Appellant,
Argued: May 31, 2011
Decided and Filed: June 27, 2011
Before: BOGGS and KETHLEDGE, Circuit Judges; COLLIER, Chief District
Judge.*
_________________
COUNSEL
ARGUED: Stephen R. Felson, Cincinnati, Ohio, for Appellant. Robert G. Kamenec,
PLUNKETT COONEY, Bloomfield Hills, Michigan, for Appellee. ON BRIEF:
Stephen R. Felson, Cincinnati, Ohio, for Appellant. Christine D. Oldani, PLUNKETT
COONEY, Detroit, Michigan, for Appellee.
_________________
OPINION
_________________
KETHLEDGE, Circuit Judge. Valentine Grden says that Leikin, Ingber &
Winters, P.C. violated the Fair Debt Collections Practices Act in two ways. First, in a
state-court debt-collection action against Grden, Leikin served Grden with a document
*
The Honorable Curtis L. Collier, Chief United States District Judge for the Eastern District of
Tennessee, sitting by designation.
1
Case: 10-1182
No. 10-1182
Document: 006110997180
Filed: 06/27/2011
Grden v. Leikin Ingber & Winters PC
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appearing to be a motion for default judgment, although Grden had not missed the
deadline for answering the complaint. Second, when Grden thereafter called Leikin to
verify his account balance, Leikin responded with incorrect amounts. The district court
granted summary judgment to Leikin, finding that the motion for default was not
deceptive and that Leikin’s communications containing the wrong amounts were not
covered by the Act. We reverse as to the motion and affirm as to the balance statements.
I.
The essential facts are undisputed. Oakwood Healthcare treated Valentine Grden
for an infection. When Grden failed to pay for those services, Oakwood referred
Grden’s account to a collections agency, which later hired Leikin to collect the debt.
When Leikin received the account, Grden owed $2,902.35. For the most part, Grden
made monthly payments to Leikin for several years, though he missed two payments and
made several partial ones. By December 2008, Grden had paid his principal balance
down to $536.35. Leikin sued Grden in Michigan court for the outstanding amount,
which with interest totaled $678.27. Leikin attached to the complaint a document
entitled “Combined Affidavit of Open Account and Motion for Default Judgment.”
Leikin then served Grden with the collection complaint and the motion.
Shortly thereafter, Grden called Leikin to verify his account balance. A Leikin
employee incorrectly told Grden that he owed $1,016.20. Grden was surprised that the
amount due had increased by so much in “a matter of a week or so.” He asked for
verification in writing. Leikin sent him a letter with an attached “ledger card” that
reiterated the $1,016.20 balance due.
Grden later sued Leikin in federal court, alleging that Leikin had violated the Fair
Debt Collection Practices Act by making false statements about Grden’s outstanding
balance and by serving Grden with a motion for default judgment at the same time
Leikin served him with the collection complaint. Leikin moved for summary judgment,
which the district court granted. This appeal followed.
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II.
We review de novo the district court’s grant of summary judgment, viewing the
facts in the light most favorable to Grden, the non-moving party. Dowling v. Cleveland
Clinic Found., 593 F.3d 472, 476 (6th Cir. 2010).
The Fair Debt Collection Practices Act generally prohibits a debt collector from
using “any false, deceptive, or misleading representation or means in connection with
the collection of any debt.” 15 U.S.C. § 1692e. Grden says that Leikin’s motion and
misstatements violate this prohibition.
A.
Whether language used by a debt collector is deceptive or misleading is
determined from the perspective of the least-sophisticated consumer. See Hartman v.
Great Seneca Fin. Corp., 569 F.3d 606, 611-12 (6th Cir. 2009). The test is objective,
and asks whether there is a reasonable likelihood that an unsophisticated consumer who
is willing to consider carefully the contents of a communication might yet be misled by
them. See Miller v. Javitch, Block & Rathbone, 561 F.3d 588, 592 (6th Cir. 2009).
Truth is not always a defense under this test, since sometimes even a true statement can
be misleading. Id. at 591-92. (A familiar example is “Captain sober today,” written in
the ship’s log about a captain who never drinks.)
Grden argues that Leiken’s “motion for default” was misleading because it
falsely suggested that Grden had already missed the deadline to respond to Leikin’s
collection action. We think the record would allow a jury to agree with Grden on that
point. The relevant document was entitled a motion; and a motion’s factual basis usually
precedes the motion itself. That is not an abstruse concept: even unsophisticated people
understand that there are rules against filing baseless documents with the courts. And
thus an unsophisticated consumer who is served with a motion for entry of default
judgment might well think that he has somehow already defaulted. Grden was served
with such a motion here, so the question becomes whether other aspects of the document
would make it clear to an unsophisticated consumer that he had not already defaulted.
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See Kistner v. Law Offices of Michael P. Margelefsky, LLC, 518 F.3d 433, 441 (6th Cir.
2008) (statements “can be deceptive if they are open to more than one reasonable
interpretation, at least one of which is inaccurate” (internal quotation marks omitted)).
Leiken says the motion did precisely that, since it requested judgment “upon
default.” In Leiken’s view, the least sophisticated consumer would understand from
those two words that he had not already defaulted. But to us those words are an exercise
in studied ambiguity. They merely recite the necessary condition for relief, rather than
saying anything about whether the condition has already occurred. Thus, there is
nothing about the motion for default judgment that would upend the consumer’s natural
inclination to think there must be some factual basis for it—i.e., that he has already
defaulted. That means that a jury could find the motion to be misleading. And it bears
mention that the deception would not be trivial, since it could “suggest[] to an
unsophisticated consumer that any right he might have to challenge the demand for
payment had been extinguished[.]” Muha v. Encore Receivable Mgmt., Inc., 558 F.3d
623, 629 (7th Cir. 2009) (Posner, J.). We therefore reverse the district court’s grant of
summary judgment as to Grden’s claim with respect to the putative motion for default
judgment.
B.
Grden next claims that Leikin violated the Act when it gave him inaccurate
information regarding his outstanding balance both on the phone and in writing (the
“balance statements”). In response, Leikin admits that the figures were wrong, but says
that the statements are not actionable because they were not made “in connection with
the collection of any debt.” 15 U.S.C. § 1692e.
The text of § 1692e makes clear that, to be actionable, a communication need not
itself be a collection attempt; it need only be “connect[ed]” with one. Thus, we agree
with the Seventh Circuit that an “explicit demand for payment” is not always necessary
for the statute to apply. Gburek v. Litton Loan Serv. LP, 614 F.3d 380, 385 (7th Cir.
2010). But it is just as clear that “the statute does not apply to every communication
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between a debt collector and a debtor.” Id. at 384-85 (emphasis in original). So the
question is where to draw the line.
We draw it at the same place the Seventh Circuit did in Gburek: for a
communication to be in connection with the collection of a debt, an animating purpose
of the communication must be to induce payment by the debtor. See id. at 385 (“a
communication made specifically to induce the debtor to settle her debt will be sufficient
to trigger the protections” of the Act). Obviously, communications that expressly
demand payment will almost certainly have this purpose.
But so too might a
communication that merely refers the debtor to some other communication that itself
demands payment. See, e.g., id. at 386 (third-party letter directing debtor to contact
creditor was sent in connection with collection of a debt). Thus, to use the language of
§ 1692e, a letter that is not itself a collection attempt, but that aims to make a such an
attempt more likely to succeed, is one that has the requisite connection.
Here, on one hand, the balance statements obviously came from a debt
collector—indeed from one that had already sued Grden—and they stated a balance
“due.” On the other hand, the statements themselves did not demand payment or
threaten any consequences if Grden did not pay. But for us the decisive point is that
Leiken made the balance statements only after Grden called and asked for them. The
statements were merely a ministerial response to a debtor inquiry, rather than part of a
strategy to make payment more likely. See Gburek, 614 F.3d at 384 (letter that was
“merely a description of the current status of the debtor’s account” did not have the
requisite connection). Thus, under the circumstances present here, a reasonable jury
could not find that an animating purpose of the statements was to induce payment by
Grden. We therefore affirm the district court’s grant of summary judgment as to those
statements.
The district court’s judgment is reversed in part and affirmed in part, and the case
remanded for further proceedings consistent with this opinion.
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