GONON v. ALLIED INTERSTATE, LLC.

Filing 23

CLOSED DISMISSED - Allied's Motion to Dismiss for Lack of Subject Matter Jurisdiction, [dkt. 11 ], is GRANTED, and this action is DISMISSED WITHOUT PREJUDICE. Further, Mr. Gonon's Motion to Strike Exhibit "A" to Defendant's Motion to Dismiss, [dkt. 16 ], is DENIED, and his Motion for Class Certification, [dkt. 9 ], is DENIED AS MOOT. (SEE ORDER). Signed by Judge Jane Magnus-Stinson on 10/10/2012. (JKS)

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF INDIANA
INDIANAPOLIS DIVISION
RICHARD B. GONON,
Plaintiff,
vs.
ALLIED INTERSTATE, LLC,
Defendant.

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1:12-cv-00702-JMS-DML

ORDER
Presently before the Court in this action brought under the Fair Debt Collection Practices
Act (“FDCPA”) is Defendant Allied Interstate, LLC’s (“Allied”) Motion to Dismiss for Lack of
Subject Matter Jurisdiction, [dkt. 11]. For the following reasons, the Court grants Allied’s motion.
I.
BACKGROUND
A. Mr. Gonon’s Complaint
On May 22, 2012, Mr. Gonon filed a putative class action Complaint against Allied for
violations of the FDCPA. [Dkt. 1.] Specifically, Mr. Gonon alleges that Allied is a debt collector as defined by the FDCPA, [id. at 1, ¶ 5], and that it sent him a March 6, 2012 letter regarding
collection of an alleged debt he owed to GE Capital Retail Bank (“GE”) relating to account
number 2040, [id. at 2, ¶ 6]. Mr. Gonon alleges that the March 6, 2012 letter stated that he had
the option of making payment either to Allied or GE, urged him to make a payment promptly,
advised him that failing to do so would cause Allied to take further action to ensure payment, and
included a payment coupon instructing him to mail payment to GE rather than to Allied. [Id.;
see also dkt. 1-1.]

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Mr. Gonon alleges that GE then sent a letter to him on March 13, 2012, which advised
him that account number 2040 was delinquent. [Id. at 2, ¶ 7.] He asserts that throughout the
thirty-day period given to him to dispute the validity of the alleged debt related to account number 2040, “GE has consistently telephoned [him] at his home phone number as well as his cell
phone number,” [id. at 2, ¶ 8].
Mr. Gonon asserts claims for violations of Sections 1692e, 1692g, and 1692j of the
FDCPA. [Id. at 2-4, ¶¶ 9-11.] He brings his claims on behalf of the following putative classes:
Class A consists of: (i) all persons from whom [Allied] attempted to collect an alleged debt owed to GE using the same form letter as Exhibit A, (ii) where such
debt collection activity occurred on or after a date one year prior to the filing of
this lawsuit.
Class B consists of all persons from whom [Allied] attempted to collect an alleged
debt owed to GE using the same form letter as Exhibit A, and also received a
form letter or letters from GE, as evidenced in Exhibit B, and or communications
from GE, such as telephone calls during and subsequent to the thirty day validation of debt time frame period, (ii) (sic) where such debt collection activity occurred on or after a date one year prior to the filing of this lawsuit.
[Id. at 4, ¶¶ 13-14.]
Mr. Gonon states that “[t]he only individual question would appear to be the identification of the class members.” [Id. at 5, ¶ 17.] He seeks damages under 15 U.S.C. § 1692k, and
attorneys’ fees and costs. [Id. at 5.]
B. The Offer of Judgment
On June 11, 2012,1 Allied served an Offer of Judgment on Mr. Gonon pursuant to Federal

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The Certificate of Service on the Offer of Judgment indicates that it was actually served on Mr.
Gonon on June 8, 2012. [Dkt. 12-1 at 2.] For purposes of this Motion, however, the Court will
use the later June 11, 2012 service date Allied provided in its briefs. [Dkts. 12 at 2, 4; 18 at 4.]
As discussed below, this date discrepancy ends up being irrelevant since Mr. Gonon did not file
his Motion for Class Certification within fourteen days of this later date anyway.
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Rule of Civil Procedure 68, offering Mr. Gonon $1,500 in damages, and reasonable attorneys’
fees accrued to date to be determined by the Court. [Dkt. 12 at 2; see also dkt. 12-1.] Mr. Gonon rejected the Offer of Judgment on June 18, 2012. [Dkt. 12 at 4-5.] On June 28, 2012, Mr.
Gonon filed a Motion for Class Certification, [dkt. 9].
II.
STANDARD OF REVIEW
The purpose of a motion to dismiss under Federal Rule of Civil Procedure 12(b)(1) is to
test the sufficiency of the complaint, not to decide the merits of the case. Rule 12(b)(1) requires
dismissal of claims over which the federal court lacks subject-matter jurisdiction. Jurisdiction is
the “power to decide” and must be conferred upon the federal courts. In re Chicago, R.I. & P.R.
Co., 794 F.2d 1182, 1188 (7th Cir. 1986). Whether or not a plaintiff has standing to bring a lawsuit is a jurisdictional requirement which may be challenged through a motion made pursuant to
Rule 12(b)(1). Hoffman v. Gard, 2010 U.S. Dist. LEXIS 112245, *2 (S.D. Ind. 2010).
In ruling on a motion to dismiss, the Court must accept as true the factual allegations of
the complaint, viewing them in the light most favorable to the plaintiff, and making all reasonable inferences in their favor. Sanner v. Board of Trade, 62 F.3d 918, 925 (7th Cir. 1995). However, when faced with a challenge to its subject-matter jurisdiction, the Court may look beyond
the complaint and review any other evidence to resolve the jurisdictional issue. Halker v. United
States, 2010 U.S. Dist. LEXIS 72339, *6 (S.D. Ind. 2010). The burden is on the plaintiff to
prove, by a preponderance of the evidence, that subject-matter jurisdiction exists for his or her
claims. Lee v. City of Chicago, 330 F.3d 456, 468 (7th Cir. 2003).

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III.
DISCUSSION
A. Mr. Gonon’s Motion to Strike the Offer of Judgment
Mr. Gonon has moved to strike the Offer of Judgment, [dkt. 16], which is Exhibit A to
Allied’s Motion to Dismiss, [dkt. 11-1]. Mr. Gonon relies upon Rule 68(b), which states that
“[e]vidence of an unaccepted offer is not admissible except in a proceeding to determine costs,”
and argues that relying upon the Offer of Judgment outside of that context – as Allied does here
– violates Rule 68. The Seventh Circuit Court of Appeals has found that a Rule 68 offer of
judgment is admissible for a purpose other than proving liability under Federal Rule of Evidence
408, which states that “conduct or a statement made during compromise negotiations” is admissible unless offered “to prove or disprove the validity or amount of a disputed claim.” Thomas v.
Law Firm of Simpson & Cybak, 244 Fed. Appx. 741, 744 (7th Cir. 2007). It has noted that a
court may consider an offer of judgment “for the limited purpose of determining jurisdiction.”
Id. Therefore, the Court determines that the Offer of Judgment is admissible for this limited basis.
In any event, even assuming that the Offer of Judgment itself is not admissible in this
context, the Court can properly accept Allied’s counsel’s representations regarding the Offer of
Judgment and consider those representations when ruling upon the Motion to Dismiss. See
Halker, 2010 U.S. Dist. LEXIS 72339 at *6. And, significantly, Mr. Gonon does not dispute Allied’s characterization of the Offer of Judgment. See White v. Ally Fin. Inc., 2012 U.S. Dist.
LEXIS 101948, *7 (S.D. W.Va. 2012) (court can “‘look beyond the complaint and has wide discretion’ to consider outside documents and even outside testimony” and “[b]ecause there is no
disagreement between the parties as to the contents of [the offer of judgment], [the court] will

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consider the terms of the offer as described in [defendant’s brief] in resolving the jurisdictional
issue”). Accordingly, the Court denies Mr. Gonon’s Motion to Strike, [dkt. 16].
B. The Sufficiency of the Offer of Judgment
Mr. Gonon argues that Allied’s Offer of Judgment was not sufficient because it “did not
make any offer for ‘actual damages’ pursuant to 15 U.S.C. 169[2]k(a)(1) [and] did not provide
any relief to the putative class.” [Dkt. 17 at 2.] Allied asserts that Mr. Gonon “could not be
claiming actual damages were ‘inflicted’ by receiving the letter [at issue]; ascertaining actual
damages would require an individual inquiry, which is contrary to pursuing a class action.”
[Dkt. 18 at 3.] It also notes that Mr. Gonon stated in his Complaint that “the only individual
question would appear to be the identification of the class members,” so he must not be seeking
actual damages. [Id.]
1. Actual Damages
Mr. Gonon does not mention actual damages in his Complaint. While he does seek
“[d]amages as provided by 15 U.S.C. 1692k,” [dkt. 1 at 5], he does not provide any allegations
regarding any damage he may have suffered from receiving the letter at issue in the lawsuit, [id.
at 1-5]. Additionally, his assertion in support of his class allegations that “[t]he only individual
question would appear to be the identification of the class members,” [id. at 5, ¶ 17], cuts against
any argument that he is seeking actual damages.
Further, in response to Allied’s Motion to Dismiss, Mr. Gonon does not provide any
proof of actual damages or even any specific allegations of those damages. He simply states,
without elaboration, that the Offer of Judgment did not include an amount for actual damages.
[Dkt. 17 at 2.] If he had any proof of actual damages – or even any bases for alleging that he is
entitled to actual damages – the Court assumes he would have argued so. See, e.g., Greenlaw v.

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United States, 554 U.S. 237, 243-44 (2008) (“[W]e rely on the parties to frame the issues for decision and assign to courts the role of neutral arbiter of matters the parties present….Our adversary system is designed around the premise that the parties know what is best for them, and are
responsible for advancing the facts and arguments entitling them to relief”). Based on Mr. Gonon’s failure to mention actual damages specifically in his Complaint,2 and his complete lack of
proof (or allegations relating to any proof) regarding actual damages, the Court finds that the Offer of Judgment did not need to include an amount for actual damages.3
2. Recovery for Putative Class Members
Mr. Gonon’s argument that the Offer of Judgment is somehow insufficient because it
“did not provide any relief to the putative class and therefore did not offer full relief to Plaintiff,”
[dkt. 17 at 2], is without merit. Mr. Gonon does not cite any authority for his proposition but, to
the extent that this argument overlaps with his argument that an offer of judgment made before a
motion for class certification can never moot a FDCPA class action, [id.], the Court will address
it below.
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The Court may take judicial notice of its own records, In re Salem, 465 F.3d 767, 771 (7th Cir.
2006), and notes that Mr. Gonon filed a second lawsuit against Allied which relates to subsequent correspondence Allied allegedly sent Mr. Gonon regarding the same account at issue here,
[see Gonon v. Allied Interstate, LLC, No. 1:12-cv-00839-RLY-MJD]. There, unlike in this case,
Mr. Gonon specifically sought “statutory damages, actual damages, attorney fees, costs, and…all
other just and proper relief.” [Dkt. 1 in Gonon v. Allied Interstate, LLC, No. 1:12-cv-00839RLY-MJD at 3-4, ¶¶ 13, 16, 19, 22.] That lawsuit was resolved when Mr. Gonon voluntarily
dismissed Allied with prejudice because “all matters [were] settled.” [Dkt. 8 in Gonon v. Allied
Interstate, LLC, No. 1:12-cv-00839-RLY-MJD.]
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The Court notes that the Offer of Judgment arguably did include an amount for actual damages.
Mr. Gonon’s maximum statutory recover under the FDCPA was $1,000, plus reasonable attorneys’ fees and costs. 15 U.S.C. §§ 1692(a)(2)(A) and (a)(3). By offering $1,500, plus fees and
costs, the Offer of Judgment arguably included $500 for actual damages. [Dkt. 12 at 4 (“On June
11, 2012, Allied served [Mr. Gonon] with an Offer of Judgment offering [Mr. Gonon] $1,500 in
statutory and actual damages, and reasonable attorney’s fees accrued to date to be determined by
the Court”) (emphasis added).] Mr. Gonon does not address this extra $500, why it could not be
for actual damages and, if it was, why it might be insufficient.
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C. Whether the Offer of Judgment Moots Mr. Gonon’s Claims
Having found that Allied’s Offer of Judgment was sufficient to compensate Mr. Gonon
for all damages he seeks in this matter, the Court turns to the crux of this case: whether the Offer
of Judgment mooted Mr. Gonon’s claims. Allied relies heavily upon the Seventh Circuit Court
of Appeal’s recent decision in Damasco v. Clearwire Corp., 662 F.3d 891 (7th Cir. 2011), for its
argument that this Court lost subject-matter jurisdiction over Mr. Gonon’s action when Allied
made the Offer of Judgment to Mr. Gonon before he had filed a motion for class certification,
[dkt. 12 at 3-5]. For his part, Mr. Gonon argues that an offer of judgment does not moot a
FDCPA class action claim even without a pending motion for class certification, and that
Damasco is inapposite because: (1) it involved the Telephone Consumer Protection Act, which
does not have specific provisions related to class actions as the FDCPA does, [dkt. 17 at 2]; (2) it
involved a full settlement offer, not an Offer of Judgment under Rule 68, [id. at 3]; and (3) unlike
the offer of settlement in Damasco, which was made before a motion for class certification was
filed, the motion for class certification here “relates back to the filing of the Complaint,” and so
is deemed filed before Allied served the Offer of Judgment, [id.]. The Court will address each
argument in turn.
1. Damasco v. Clearwire Corporation
In Damasco, plaintiff brought a putative class action against Clearwire for alleged violations of the Telephone Consumer Protection Act related to unsolicited text messages Clearwire
sent to cellphone users. Id. at 893. Before Mr. Damasco moved for class certification, Clearwire
offered him the full relief he requested via a settlement offer; Mr. Damasco never responded. Id.
Clearwire argued that the full settlement offer mooted Mr. Damasco’s claims and the Seventh
Circuit Court of Appeals agreed, finding that the full settlement offer meant that Mr. Damasco

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no longer had a “stake” in the litigation. Id. at 896. It noted that “[t]o allow a case, not certified
as a class action and with no motion for class certification even pending, to continue in federal
court when the sole plaintiff no longer maintains a personal stake defies the limits on federal jurisdiction expressed in Article III.” Id. The Court finds Damasco to be directly relevant here,
and addresses Mr. Gonon’s attempts to distinguish it below.
2. The FDCPA’s Class Action Provisions
Mr. Gonon’s argument that the Offer of Judgment did not moot his claims because the
FDCPA, unlike the Telephone Consumer Protection Act at issue in Damasco, has “specific provisions and remedies related to a class action,” [dkt. 17 at 2], is unavailing. Mr. Gonon relies
upon Weiss v. Regal Collections, 385 F.3d 337 (3d Cir. 2004), but the Seventh Circuit recognized that four circuits – including the Third Circuit – disagree with the approach taken in
Damasco, specifically noting the Third Circuit’s decision in Weiss as an example. Damasco,
662 F.3d at 895-96. Accordingly, Weiss is not relevant precedent in this Circuit.
Additionally, before Damasco, at least one district court sitting in the Seventh Circuit
held that FDCPA claims are moot where the defendant has made a full offer of judgment under
Rule 68 and the plaintiff has not moved for class certification and does not do so during the offer’s ten-day pendency. Letellier v. First Credit Servs., 2001 U.S. Dist. LEXIS 10288, * 9-10
(N.D. Ill. 2001). See also Giblin v. Revenue Prod. Mgmt., 2008 U.S. Dist. LEXIS 22854, * 7-10
(N.D. Ill. 2008) (offer of judgment would have mooted FDCPA claims if plaintiff had not moved
for class certification within ten days of offer); Wilson v. Collecto, Inc., 2003 U.S. Dist. LEXIS
17795, *8 (N.D. Ill. 2003) (same principle).
There is no authority suggesting that the Seventh Circuit Court of Appeals would treat an
offer of judgment relating to FDCPA claims, made before plaintiff files a motion for class certi-

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fication, any differently than claims made under statutes that do not specifically provide for class
actions, and the Court declines to do so here.
3. Offer of Judgment Versus Settlement Offer
Mr. Gonon argues that, because Damasco involved a settlement offer and this case involves an Offer of Judgment, Damasco does not apply. [Dkt. 17 at 3.] However, the Damasco
Court addressed the potential distinction between a settlement offer and an offer of judgment,
and concluded that there was no difference. Damasco, 662 F.3d at 896 (“Although these decisions address offers that, unlike Clearwire’s, were made under Rule 68, their same analysis
seems to apply to any offer of complete relief”).
The Damasco Court also noted that, while some district courts in the Seventh Circuit
have “allowed plaintiffs to avoid mootness by seeking class certification within [Rule 68’s]
timeframe for accepting or rejecting an offer,” the issue was irrelevant there because the offer
was made while the suit was pending in state court. Id. at 897. At best, this statement recognizes that a plaintiff may avoid mooting its claims if it moves for class certification within the fourteen-day (formerly ten-day) period provided in Rule 68 for responding to offers of judgment.
See Fed. R. Civ. P. 68(a) (“If, within 14 days after being served [with an offer of judgment], the
opposing party serves written notice accepting the offer, either party may then file the offer and
notice of acceptance, plus proof of service”); Giblin, 2008 U.S. Dist. LEXIS 22854 at *9-10 (“allowing a plaintiff to move for class certification within ten days after receipt of an offer of judgment comports with both the letter and the spirit of Rule 68…. Because plaintiffs moved for
class certification within five days of receiving [defendant’s] offer of judgment, the Court holds
that their motion invalidates the offer and keeps this class action alive”).

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Here, Mr. Gonon does not dispute that Allied served its Offer of Judgment on June 11,
2012. Mr. Gonon did not file his Motion for Class Certification, [dkt. 9], until June 28, 2012 –
after the fourteen-day period in which to respond to the June 11, 2012 Offer of Judgment. Accordingly, while Damasco may indicate that Mr. Gonon could have avoided mooting his claims
by moving for class certification within fourteen days of the Offer of Judgment, that did not occur here so it is irrelevant.
4. Timing of the Motion for Class Certification
In a final attempt to escape the effect of Allied’s Offer of Judgment and his failure to
timely file his Motion for Class Certification, Mr. Gonon argues that the filing of the Motion for
Class Certification “relates back” to the filing of the Complaint. [Dkt. 17 at 3-4.] Mr. Gonon
again relies on Weiss v. Regal Collections, 385 F.3d 337 (3d Cir. 2004), a case specifically rejected by the Seventh Circuit in Damasco. See Damasco, 662 F.3d at 895-96 (noting that “[f]our
circuits [including the Third Circuit in Weiss] disagree” with the approach of finding a plaintiff’s
claims moot when he or she is presented with an offer of full relief before moving for class certification, but that “we have not been moved to reverse course”).
Allowing Mr. Gonon’s Motion for Class Certification to “relate back” to the filing of his
Complaint would be contrary to Damasco and other cases holding that an offer of full relief
moots a plaintiff’s claims when a motion for class certification has yet to be made. See, e.g.,
Wiskur v. Short Term Loans, LLC, 94 F.Supp.2d 937, 939 (N.D. Ill. 2000) (“because defendants’
Rule 68 offer…came before a motion for class certification was sought, and was for an amount
greater than [plaintiff] could have received had she gone to judgment, [her] claim was moot once
the offer was made. She could not persist in suing after having won”). There is simply no au-

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thority to support Mr. Gonon’s assertion that the Motion for Class Certification should be
deemed filed on a date earlier than June 28, 2012.
Accordingly, because the Motion for Class Certification was filed after the fourteen-day
period for responding to the Offer of Judgment, it does not save Mr. Gonon’s claims. For these
reasons, the Court finds that it does not have subject-matter jurisdiction over this matter because
Mr. Gonon’s claims are moot.
IV.
CONCLUSION
For the foregoing reasons, Allied’s Motion to Dismiss for Lack of Subject Matter Jurisdiction, [dkt. 11], is GRANTED, and this action is DISMISSED WITHOUT PREJUDICE.4
Further, Mr. Gonon’s Motion to Strike Exhibit “A” to Defendant’s Motion to Dismiss, [dkt. 16],
is DENIED, and his Motion for Class Certification, [dkt. 9], is DENIED AS MOOT.
10/10/2012
_______________________________
Hon. Jane Magnus-Stinson, Judge
United States District Court
Southern District of Indiana

Distribution via ECF only:
Nicholas David O'Conner
HINSHAW & CULBERTSON, LLP
[e-mail]
David M. Schultz
HINSHAW & CULBERTSON
[e-mail]
Tess A. White
WHITE AND CHAMPGNE
[e-mail]

4

“[W]hen a suit is dismissed for want of subject-matter jurisdiction, that is, because the court has
no power to resolve the case on the merits even if the parties are content to have it do so, it is error to make the dismissal with prejudice.” T.W. v. Brophy, 124 F.3d 893, 898 (7th Cir. 1997)
(citations omitted).
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