Walls v. United Collection Bureau, Inc. et al

Filing 23

MEMORANDUM OPINION Signed by the Honorable John F. Grady on 5/16/2012. Mailed notice(cdh, )

11-6026.121-JCD

May 16, 2012

IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF ILLINOIS
EASTERN DIVISION
JOSHUA WALLS,

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Plaintiff,
v.
UNITED COLLECTION BUREAU, INC.;
LVNV FUNDING, LLC; and RESURGENT
CAPITAL SERVICES, L.P.,
Defendants.

No. 11 C 6026

MEMORANDUM OPINION
Before the court is the defendants’ motion to dismiss the
complaint pursuant to Federal Rule of Civil Procedure 12(b)(6).
For the reasons explained below, the motion is denied.
BACKGROUND
Plaintiff,

Joshua

Walls,

filed

a

class-action

complaint

against defendants United Collection Bureau, Inc., (“UCB”); LVNV
Funding,

LLC

(“Resurgent”).

(“LVNV”);

and

Resurgent

Capital

Services,

L.P.

Walls alleges that on February 8, 2011, defendants

sent him a debt-collection letter that violates the Fair Debt
Collection Practices Act (“FDCPA”) because it did not effectively
state certain required information--particularly, “the name of the
creditor to whom the debt is owed.”

See 15 U.S.C. § 1692g(a)(2).

Defendants move to dismiss the complaint.

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DISCUSSION
Under federal notice-pleading standards, a complaint need not
contain “detailed factual allegations,” but it must have more than
mere “labels and conclusions.”
U.S. 544, 555 (2007).

Bell Atl. Corp. v. Twombly, 550

The complaint must contain sufficient facts

to raise a plaintiff’s right to relief above a “speculative” level,
id. at 555, and the claim must be “plausible on its face,” id. at
570.

“A claim has facial plausibility when the plaintiff pleads

factual content that allows the court to draw the reasonable
inference that the defendant is liable for the misconduct alleged.”
Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009).
Walls alleges that the dunning letter he received from UCB,
which is attached as Exhibit C to the complaint, is confusing as to
whom the debt is owed because at the top of the page, it identifies
Resurgent as the “Client” and LVNV as the “Current Owner” (while
identifying Credit One Bank, N.A. as the “Original Merchant” and
“Original Creditor”).

He points out that there is no explanation

of the relationship between Resurgent and LVNV, or between the
“Client” and the “Current Owner.”

(Compl. ¶ 14.)

Neither one is

identified explicitly as the “creditor to whom the debt is owed.”
It is implicit in the FDCPA that a debt collector “may not
defeat the statute’s purpose by making the required [§ 1962g]
disclosures in a form or within a context in which they are
unlikely to be understood by the unsophisticated debtors who are

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the particular objects of the statute’s solicitude.”

Bartlett v.

Heibl, 128 F.3d 497, 500 (7th Cir. 1997). When considering whether
a collection letter could violate the FDCPA, we view it through the
eyes of this unsophisticated consumer, who might be “uninformed,
naive, [and/or] trusting” but does have “rudimentary knowledge
about the financial world” and can make basic logical deductions
and inferences. Fields v. Wilber Law Firm, P.C., 383 F.3d 562, 564
(7th

Cir.

2004).

Generally,

the

Seventh

Circuit

views

the

confusing nature of a collection letter as a question of fact that,
if well-pleaded, avoids Rule 12(b)(6) dismissal.

Zemeckis v.

Global Credit & Collection Corp., --- F.3d ----, 2012 WL 1650479,
at *2 (7th Cir. May 11, 2012); see also McMillan v. Collection
Professionals, Inc., 455 F.3d 754, 759 (7th Cir. 2006) (“We have
cautioned that a district court must tread carefully before holding
that a letter is not confusing as a matter of law when ruling on a
Rule 12(b)(6) motion because district judges are not good proxies
for

the

unsophisticated

consumer

whose

interest

protects.” (internal quotation marks omitted)).

the

statute

Nevertheless,

dismissal is appropriate when it is “apparent from a reading of the
letter that not even a significant fraction of the population would
be misled by it.”

Zemeckis, 2012 WL 1650479, at *2.

In defendants’ view, the “owner of the debt is accurately
listed” in the letter, and plaintiff is “attempting to exploit
Defendants’ accurate description of the business relationships

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between [sic] the Defendants contained in its notice.”
Mot. at 2, 3.)

(Defs.’

Defendants contend that “only the creative mind of

a career FDCPA plaintiffs’ attorney could concoct” a “hint of
abusive debt collection practices contained in Defendants’ dunning
letter,” and that if plaintiff or an unsophisticated consumer “must
know” why Resurgent is referred to as “Client,” “they can call UCB
and find out.”

(Defs.’ Reply at 7-8.)

Defendants’ arguments have no merit.

The confusion alleged

here is not the ingenious invention of an attorney, nor is it a
bizarre

interpretation

of

the

dunning

letter

Walls

received.

Defendants assert repeatedly that the letter is not confusing
because it accurately specifies that LVNV is the “current owner of
the debt.”
LVNV

First, LVNV is not so identified.

simply

as

“Current

Owner.”

Current

The letter refers to
owner

of

what?,

a

significant number of unsophisticated debtors might reasonably ask
themselves.

Second, defendants ignore the plain language of the

statute, which requires that the “creditor to whom the debt is
owed” be identified, not the “current owner of the debt.”

This

statutory language makes sense because an unsophisticated consumer
likely does not ask himself, “Who owns the debt?” or think about
debt in terms of “ownership.”
the money.

Rather, he wants to know who is owed

In addition, the letter’s designation of the “original

creditor” can be viewed as making the letter even more confusing in
light of the fact that no phrase like “current creditor” is used.

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We reject defendants’ contention in their reply brief that
what plaintiff is complaining of is “immaterial” information.

The

statute expressly requires identification of the creditor to whom
the debt is owed; when that information is presented in an arguably
confusing manner, it could influence the consumer’s decision.

For

example, it could cause an unsophisticated consumer to be concerned
about the possibility of being defrauded or about paying the
incorrect creditor and continuing to have outstanding debt.

See

Braatz v. Leading Edge Recovery Solutions, LLC, No. 11 C 3835, 2011
U.S. Dist. LEXIS 123118, at *4 (N.D. Ill. Oct. 21, 2011).
The letter at issue engenders confusion sufficient to state a
claim for violation of § 1692g of the FDCPA.

Accordingly, the

motion to dismiss will be denied.
CONCLUSION
For the foregoing reasons, defendants’ motion to dismiss the
complaint is denied.

This case is set for a status hearing on May

30, 2012, at 10:30 a.m. to discuss the next steps in the case.

DATE:

May 16, 2012

ENTER:

___________________________________________
John F. Grady, United States District Judge