COOPER v. MIDLAND CREDIT MANAGEMENT INC

Filing 16

ORDER granting 5 Motion to Dismiss for Failure to State a Claim Ordered by US DISTRICT JUDGE CLAY D LAND on 12/11/2018 (CCL)

IN THE UNITED STATES DISTRICT COURT
FOR THE MIDDLE DISTRICT OF GEORGIA
COLUMBUS DIVISION
KEITH COOPER,

*

Plaintiff,

*

vs.

*

MIDLAND CREDIT MANAGEMENT,
INC.,

*

CASE NO. 4:18-CV-82 (CDL)
*
Defendant.
*
O R D E R
Keith Cooper brought this putative class action alleging
that

Midland

letter

that

Credit

Management,

violates

the

Fair

Inc.
Debt

(“FDCPA”), 15 U.S.C. § 1692, et seq.

sent

him

Collection

a

collection

Practices

Act

Presently pending before

the Court is Midland Credit Management, Inc.’s motion to dismiss
(ECF No. 5).

As discussed below, the motion is granted.
MOTION TO DISMISS STANDARD

“To survive a

motion to dismiss” under Federal Rule of

Civil Procedure 12(b)(6), “a complaint must contain sufficient
factual matter, accepted as true, to ‘state a claim to relief
that is plausible on its face.’”

Ashcroft v. Iqbal, 556 U.S.

662, 678 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S.
544, 570 (2007)).

The complaint must include sufficient factual

allegations “to raise a right to relief above the speculative
level.”

Twombly, 550 U.S. at 555.

In other words, the factual

allegations must “raise a reasonable expectation that discovery
will reveal evidence of” the plaintiff’s claims.

Id. at 556.

But “Rule 12(b)(6) does not permit dismissal of a well-pleaded
complaint simply because ‘it strikes a savvy judge that actual
proof

of

those

facts

is

improbable.’”

Watts

v.

Fla.

Int’l

Univ., 495 F.3d 1289, 1295 (11th Cir. 2007) (quoting Twombly,
550 U.S. at 556).
FACTUAL ALLEGATIONS
Keith Cooper owes a debt to Midland Funding, LLC based on
Cooper’s use of a revolving line of credit he obtained from
Credit One Bank.

The debt servicer, Midland Credit Management,

Inc. (“Midland”) sent the following collection letter to Cooper:

2

Compl. Ex. A, Collection Letter (May 24, 2017), ECF No. 1-1.

At

the time of the letter, the debt was more than six years old, so
a lawsuit to recover the debt was time-barred under Georgia law.1
Cooper does not allege that he selected any of the payment
options.
payment,

Cooper does allege that if he did make a partial
that

“would

potentially

re-start

limitations on the debt under Georgia law.”
No.

1.

Cooper

further

alleges

that

the

statute

of

Compl. ¶ 31, ECF

Midland’s

letter

“is

misleading and deceptive since it fails to advise [Cooper] that
if

he

takes

advantage

of

any

of

the

payment

options,

such

payment(s) would be a new promise to pay that would restart the
statute of limitations clock in Georgia thus exposing him to a
potential lawsuit.”

Id. ¶ 32.

Cooper does not allege facts to

suggest that Midland would sue him following a partial payment,

1

Midland’s disclosure regarding the statute of limitations comes
directly from a consent decree between Midland, several related
companies, and the U.S. Consumer Financial Protection Bureau. Consent
Decree, CFPB Administrative Proceeding No. 2015-CFPB-0022 (Sept. 9,
2015), available at http://files.consumerfinance.gov/f/201509_cfpb_
consent-order-encore-capital-group.pdf.
The consent decree orders
that if Midland attempts to collect time-barred debt, it must make the
following disclosure to the consumer: “The law limits how long you can
be sued on a debt and how long a debt can appear on your credit
report. Due to the age of this debt, we will not sue you for it or
report payment or non-payment of it to a credit bureau.” Id.
¶ 133(b)(i).
The consent decree further states that Midland is
“permanently restrained and prohibited from . . . [m]aking any
representation or statement, or taking any other action that
interferes with, detracts from, contradicts, or otherwise undermines
the disclosures required in” ¶ 133(b).
Id. ¶ 133(c).
The consent
decree also prohibits resale of debt except in limited circumstances.
Id. ¶ 130.

3

and in fact, Cooper alleged that Midland unequivocally stated
that it will not sue him.

See id. ¶ 28.
DISCUSSION

To prevail on his FDCPA claim, Cooper must establish that:
(1)

he

was

the

object

of

collection

activity

arising

from

consumer debt; (2) Midland is a debt collector under the FDCPA;
and (3) Midland engaged in a practice prohibited by the FDCPA.
See LeBlanc v. Unifund CCR Partners, 601 F.3d 1185, 1193 (11th
Cir.

2010)

engaging

in

(per

curiam)

“collection

(explaining
activity”

that

to

a

“debt

recover

“consumer debt” “is subject to the FDCPA”).

an

collector”
outstanding

Here, Midland does

not dispute that Cooper was the object of collection activity
arising from consumer debt or that it is a debt collector under
the

FDCPA.

The

dispositive

question

is

whether

Cooper

adequately alleged an FDCPA violation.
The purpose of the FDCPA is “to eliminate abusive debt
collection practices by debt collectors, to insure that those
debt collectors who refrain from using abusive debt collection
practices are not competitively disadvantaged, and to promote
consistent

State

action

collection abuses.”

to

protect

consumers

15 U.S.C. § 1692(e).

against

debt

The FDCPA prohibits

debt collectors from using “any false, deceptive, or misleading
representation or means in connection with the collection of any
debt,”

including

false

representations

4

about

“the

character,

amount,

or

legal

status

or

deceptive

representation

collect any debt.”

of

any

means

debt”

to

and

collect

“any

or

false

attempt

15 U.S.C. §§ 1692e(2)(A) & 1692e(10).2

to
The

FDCPA also prohibits a debt collector from using “unfair or
unconscionable means to collect or attempt to collect any debt.”
15 U.S.C. § 1692f.

Thus, a debt collector may communicate with

a consumer and seek voluntary payment of a stale debt as long as
it does not threaten litigation, mislead the consumer about the
debt, or use an unfair means of attempting to collect a debt.
To

determine

whether

a

collection

letter

violates

the

FDCPA, the courts use a “least sophisticated consumer” standard.
LeBlanc,
“looks

601
to

F.3d

the

at

1193.

tendency

of

Under

this

language

to

standard,

the

Court

mislead

the

least

sophisticated recipients of a debt collector’s letters.” Id. at
1194 (quoting Jeter v. Credit Bureau Inc., 760 F.2d 1168, 1175
(11th

Cir.

1985)).

The

standard

presumes

that

the

least

sophisticated consumer has “a rudimentary amount of information
about the world and a willingness to read a collection notice
with some care.”

Id. at 1194 (quoting Clomon v. Jackson, 988

2

For example, it is clear that “a debt collector’s threatening to sue
on a time-barred debt and/or filing a time-barred suit in state court
to recover that debt violates” the FDCPA.
Crawford v. LVNV Funding,
LLC, 758 F.3d 1254, 1259 (11th Cir. 2014) (finding that a debt
collector violated the FDCPA by filing of a proof of claim to collect
a stale debt in a bankruptcy proceeding). Cooper does not appear to
argue that the least sophisticated consumer could be misled into
believing that Midland was threatening legal action if he did not pay
the debt.
Such a conclusion would be inconsistent with the plain
language of the letter Midland sent to Cooper.

5

F.2d 1314, 1319 (2d Cir. 1993)).

It is intended to protect

“naive

“liability

consumers”

idiosyncratic

while

preventing

interpretations

of

for

collection

bizarre

notices.”

or
Id.

(quoting United States v. Nat’l Fin. Servs., Inc., 98 F.3d 131,
136 (4th Cir. 1996)).
Here,
misleading

Cooper

argues

because

the

that

least

Midland’s

collection

sophisticated

consumer

letter

is

could

be

misled into making a partial payment, which could revive the
statute of limitations under Georgia law.

Cooper is correct

that in Georgia, a debtor’s underlying debt is not extinguished
by the statute of limitations even if an action to recover it is
time-barred.
1940).

Martin v. Mayer, 11 S.E.2d 218, 227 (Ga. Ct. App.

And, the statute of limitations could be revived if

there is a “new promise to pay,” which could be in the form of
“[a] payment entered upon a written evidence of debt by the
debtor or upon any other written acknowledgment of the existing
liability.”
renew

a

O.C.G.A. § 9-3-112.

right

of

action

already

“A new promise, in order to
barred

. . .

shall

be

in

writing, either in the party’s own handwriting or subscribed by
him or someone authorized by him.” O.C.G.A. § 9-3-110.
restart

the

statute

of

limitations

under

Georgia

Thus, to
law,

“the

acknowledgment of the debt must be communicated to the creditor
and it ‘must sufficiently identify the debt or afford the means
by

which

[the

debt]

might

be

6

identified

with

reasonable

certainty.’” SKC, Inc. v. EMAG Sols., LLC, 755 S.E.2d 298, 301–
02

(Ga.

Ct.

App.

2014)

(alterations

in

original)

(quoting

Middlebrooks v. Cabaniss, 20 S.E.2d 1012 (Ga. 1942)).
The

Georgia

courts

have

held

“that

when

payment

to

a

creditor is accompanied by some notation sufficient to identify
the debt being paid, that payment and notation constitute a new
promise
period.”

to

pay

Id.

which

renews

the

running

of

the

limitations

So, if a debtor makes a partial payment by check

or wire transfer to a creditor with a notation indicating that
the payment should be applied to the debt on his account, then
those payments with the notations constitute a new promise to
pay.

Given that a partial payment could revive the statute of

limitations under Georgia law if it is accompanied by a writing
evidencing a new promise to pay the debt, Cooper asserts that
Midland’s letter should have warned him of this possibility,
even though Midland stated in the letter that it would not sue
him for the debt.
The Court recognizes that at the motion to dismiss stage,
it

must

draw

all

reasonable

inferences

in

favor

of

Cooper.

Cooper alleges that if he made a partial payment, that could
“potentially re-start the statute of limitations” and that he
would be exposed to a “potential lawsuit.”

Compl. ¶¶ 31-32.

But Cooper did not allege any facts to suggest that Midland
would disregard its promise not to sue him for the debt and

7

instead pursue a claim against him if he made a partial payment
accompanied by a notation sufficient to revive the statute of
limitations.

In

the

absence

of

such

factual

allegations,

Midland’s letter would only be misleading or amount to an unfair
means of attempting to collect a debt if the Court inferred from
Cooper’s allegations that Midland would do exactly what it said
it would not do: sue Cooper for the debt.
have

to

infer

that

Midland’s

letter

So, the Court would

amounts

to

attempted

fraudulent inducement—that “we will not sue you for the debt”
actually means “we will not sue you for the debt unless you make
a partial payment.”

The Court finds that such an inference is

implausible and therefore concludes that Cooper’s claim must be
dismissed.

Of course, if Midland did renege on its promise not

to sue and instead recalculated the statute of limitations based
on a partial payment, then either sued Cooper on the debt or
resold the debt to someone who sued him on it, Cooper would have
a good argument that Midland used an unfair or unconscionable
means of collecting a debt.

And he could have a claim at that

time.
The Court acknowledges that while the Eleventh Circuit has
not spoken on this issue, other courts have arguably reached a
different

conclusion.

The

Court

is

not

persuaded

that

the

rationale of those cases applies under the factual allegations
here.

In Pantoja v. Portfolio Recovery Associates, LLC, 852

8

F.3d

679

(7th

Cir.

2017),

the

Seventh

Circuit

evaluated

a

collections letter that offered to “settle” a time-barred debt
and stated: “Because of the age of your debt, we will not sue
you for it and we will not report it to any credit reporting
agency.”

Pantoja, 852 F.3d at 682.

The letter cautioned the

consumer that the debt collector was “not obligated to renew
this offer.”

Id.

The Seventh Circuit found that the letter was misleading as
a matter of law at the summary judgment stage because it did not
“hint, let alone make clear to the recipient, that if he makes a
partial

payment

or

even

just

a

promise

to

make

a

partial

payment, he risks loss of the otherwise ironclad protection of
the statute of limitations.” Id. at 684.3

The Seventh Circuit

observed that “the FDCPA prohibits a debt collector from luring
debtors away from the shelter of the statute of limitations
without providing an unambiguous warning that an unsophisticated
consumer

would

understand.”

Id.

3

at

685.

Because

the

debt

A few district courts have reached similar conclusions for similar
reasons.
See, e.g., Baye v. Midland Credit Mgmt., Inc., No. CV 174789, 2017 WL 4918998, at *10 (E.D. La. Oct. 31, 2017) (concluding
that the court was bound by the Fifth Circuit’s opinion in Daugherty
v. Convergent Outsourcing, Inc., 836 F.3d 507 (5th Cir. 2016) and that
the Daugherty court held “that inviting partial payment, without
disclosing the possibility of reviving the time-barred claim, could
violate the FDCPA”); Smothers v. Midland Credit Mgmt., Inc., No. 162202-CM, 2016 WL 7485686 (D. Kan. Dec. 29, 2016) (concluding, as a
matter of law, that debt collector’s letter seeking to collect stale
debt violated the FDCPA even though it promised not to sue the
consumer for it because the letter did not contain a revival
disclosure and the debt collector could potentially resell the debt to
a collector who had not made a promise not to sue).

9

collector’s letter did not warn of the potential revival of the
statute of limitations, the Seventh Circuit concluded that it
violated the FDCPA as a matter of law.

Id. at 685-86.

This conclusion, however, is largely intertwined with the
Seventh Circuit’s second conclusion—that the offer to “settle”
the debt “did not make clear to the recipient that the law
prohibits the collector from suing to collect th[e] old debt.”
Id. at 684.

The letter in Pantoja offered to “settle” the

consumer’s debts and said, “we will not sue you” but did not
mention that the debt was time-barred.
debt

collector

was

not

obligated

to

And, it said that the
renew

the

offer.

The

Seventh Circuit determined that the least sophisticated consumer
might conclude based on this language that the debt was legally
enforceable but that the debt collector had simply chosen not to
sue him on it at that time.
Here, in contrast, Midland’s letter stated: “The law limits
how long you can be sued on a debt and how long a debt can
appear on your credit report.

Due to the age of this debt, we

will not sue you for it or report payment or non-payment of it
to

a

credit

bureau.”

Collection

Letter

at

1.

Based

on

Midland’s statement that the law limits how long a consumer can
be

sued

on

a

debt,

the

letter

would

not

mislead

the

least

sophisticated consumer into believing that Midland was seeking
to collect on a legally enforceable debt.

10

The Court agrees with the Seventh Circuit that it would be
an FDCPA violation to suggest to a consumer that his debt is
judicially enforceable when it is time-barred.

The Court also

agrees that it would be an FDCPA violation to try to lure a
consumer into reviving the statute of limitations on his debt so
that the debt collector may pursue legal action to collect the
debt.

But the Seventh Circuit disregarded the debt collector’s

express statement that it would not sue the consumer for the
debt, and that is where the Court disagrees with the rationale
of Pantoja.
In the Court’s view, an attempt to collect on a stale debt
only amounts to “luring” a consumer away from the statute of
limitations if that attempt could be a trap.

And, disclosure of

the

payment

potential

consequences

of

a

partial

would

be

material to a consumer only if the partial payment could harm
him.

Could Midland’s letter induce Cooper to make a partial

payment?

Yes.

But partially paying a non-extinguished debt, by

itself, is not a harm to Cooper.

A partial payment can only

harm Cooper if it constitutes a new promise to pay the entire
debt under Georgia law and if Midland uses the partial payment
to restart the statute of limitations.
expressly promised not to do so.

In its letter, Midland

It is difficult to see the

harm in requesting a voluntary payment of a debt that is timebarred but not extinguished if (1) the consumer is informed (as

11

Cooper

was)

that

the

debt

is

time-barred

and

(2)

the

debt

collector has promised not to sue the consumer on the debt and
would thus violate that promise if it used the partial payment
to restart the statute of limitations and sue the debtor.

Cf.

Koerner v. Midland Credit Mgmt., Inc., No. 8:17-CV-1396-T-27CPT,
2018 WL 5961285, at *2 (M.D. Fla. Oct. 26, 2018) (concluding, at
the

summary

judgment

stage,

that

the

failure

to

provide

a

revival disclosure did not violate the FDCPA because there was
“no

scenario

in

which

the

statute

of

limitations

would

be

revived and consequently, there is nothing misleading about the
collection letters”).
The Court understands that several appellate courts have,
in

dicta

concern

and

under

about

a

different

debt

factual

collector’s

allegations,

failure

to

expressed

disclose

the

possibility that a partial payment may revive the statute of
limitations for a stale debt.
Inc.,

776

F.3d

393,

399

See Buchanan v. Northland Grp.,

(6th

Cir.

2015)

(discussing

the

potential pitfalls for consumers in the absence of a revival
disclosure but holding that dismissal of an FDCPA claim should
be

reversed

“settlement”

because
of

the

debt

time-barred

collector’s

debt

without

letter

offering

disclosing

that

a

the

debt was time-barred could mislead a consumer to believe that
her time-barred debt is legally enforceable); see also Daugherty
v. Convergent Outsourcing, Inc., 836 F.3d 507, 513 (5th Cir.

12

2016) (same).

In both cases, the debt collector attempted to

“settle” the consumers’ time-barred debt without disclosing that
the debt was judicially unenforceable, and the courts found the
collection letters to be misleading on that ground.

The courts

did not have to decide whether the failure to provide a revival
disclosure, standing alone, violated the FDCPA under the fact
pattern here, where the debt collector did disclose that the
debt was time-barred and promised not to sue the consumer for
it.
debt

Notably, the Sixth Circuit in Buchanan suggested that the
collector

could

cure

the

problems

in

its

letter

by

providing the following notice: “The law limits how long you can
be sued on a debt. Because of the age of your debt, [debt
collector] will not sue you for it, and [debt collector] will
not report it to any credit reporting agency.” Buchanan, 776
F.3d at 400 (citing the record).

This disclosure is nearly

identical to the disclosure Midland provided to Cooper.
The Court hastens to add that if this were a case alleging
that the debt collector devised a scheme to mislead the consumer
to refresh a stale debt, then the outcome would be different.
But Cooper does not allege such a scheme, likely because there
is nothing to indicate that Midland would pursue a lawsuit to
collect the debt if a partial payment were voluntarily made.
Instead, Cooper seeks to have a class action certified based on
the remote possibility

that a consumer could be misled into

13

renewing an old debt and based on sheer speculation that the
debt collector would then pursue collection of that renewed debt
in court, notwithstanding the fact that it said it would not do
so.

Such speculation does not support an FDCPA claim.4
CONCLUSION
For

the

reasons

set

forth

above,

Midland’s

motion

to

dismiss (ECF No. 5) is granted.
IT IS SO ORDERED, this 11th day of December, 2018.
S/Clay D. Land
CLAY D. LAND
CHIEF U.S. DISTRICT COURT JUDGE
MIDDLE DISTRICT OF GEORGIA

4

The Court observes that if Midland would be entitled to summary
judgment if the Court let discovery proceed and discovery revealed
that Midland had no intention of pursuing a lawsuit to recover stale
debts revived under Georgia law by partial payments, then Midland is
entitled to dismissal at this stage if Cooper has failed to even
allege that Midland had any intention of suing Cooper on the debt.

14