Surinta v. Sands et al

Filing 52

MEMORANDUM OF LAW & ORDER. IT IS HEREBY ORDERED that Defendant Credit Control Services, Inc.'s Motion for Judgment on the Pleadings 33 is GRANTED. (Written Opinion). Signed by Chief Judge Michael J. Davis on 2/10/14. (GRR) cc: Monco Law Offices, SC

UNITED STATES DISTRICT COURT
DISTRICT OF MINNESOTA

SHERRY SURINTA,
Plaintiff,
v.

MEMORANDUM OF LAW & ORDER
Civil File No. 13-CV-00817 (MJD/JJG)

CREDIT CONTROL SERVICES, INC.
dba CREDIT COLLECTION SERVICES, and
MONCO LAW OFFICES, SC,
Defendants.
Jonathan L.R. Drewes and Bennett Hartz, Drewes Law PLLC, Counsel for
Plaintiff.
Ashley M. DeMinck and Russell S. Ponessa, Hinshaw & Culbertson LLP,
Counsel for Defendant Credit Control Services, Inc. dba Credit Collection
Services.

I.

INTRODUCTION
This matter is before the Court on Defendant Credit Collection Services’

(“CCS”) Motion for Judgment on the Pleadings [Docket No. 33]. The Court
heard oral argument on November 8, 2013.
1

II.

BACKGROUND
A. Factual Background
Taking the facts alleged in the Amended Complaint and its Exhibits to be

true, on March 6, 2013, Plaintiff Sherry Surinta used Trans Union, LLC’s (“Trans
Union”) online dispute service to dispute a debt she had with her creditor (“debt
collector”), CCS. (Am. Compl. ¶ 12, Ex. A.) Specifically, Plaintiff stated that the
account with CCS “was paid to the original creditor prior to becoming a
collection or charge-off” and that CCS “agreed to remove this account from [her]
file.” (Am. Compl., Ex. A.) Sometime between March 6, 2013 and April 3, 2013,
Trans Union notified CCS of Plaintiff’s dispute as required by the Fair Credit
Reporting Act (“FCRA”), 15 U.S.C. § 1681(a)(2). (Am. Compl. ¶ 13, Ex. B
(providing that Trans Union “completed verification of the investigation”).)
Sometime between March 6, 2013 and April 3, 2013, CCS responded to
Trans Union’s inquiry by providing new information about the debt owed by
Plaintiff. (See Am. Compl., Ex. B.) This response was likely provided in a
communication occurring on March 14 or 15, 2013 from CCS to Trans Union
(“March 14/15 Communication”): the parties stipulated at the November 8, 2013

2

motion hearing that the March 14/15 Communication occurred and that it was an
update of debt information that did not contain a statement that Plaintiff’s debt
was disputed. (See Am. Compl. ¶ 15; Am. Compl., Ex. C, at 2–3; see also Pl.’s
Mem. Opp’n 3 (“According to records of the exchange recently provided by
Trans Union, CCS first communicated the disputed credit information to Trans
Union without noting the dispute on or about March 14 or March 15.”).)
These facts are the basis for Plaintiff’s claim that CCS violated 15 U.S.C. §
1692e(8), which requires debt collectors to indicate when a specific debt is
disputed in their communications. (Am. Compl. ¶¶ 10, 18.) In its Answer, CCS
affirmatively alleged that it submitted a report to Trans Union on March 19, 2013
(the “March 19 Report”) that contained the dispute code “XB,” which designated
Plaintiff’s account as disputed. (Answer, Docket No. 23, ¶ 15, Ex. 1.)
B. Procedural History
On April 8, 2013, Plaintiff filed suit in the United States District Court for
the District of Minnesota against Gerald Sands; Credit Management, LP; Monco
Law Offices, SC; and ResidentCollect, Inc. [Docket No. 1] Plaintiff then
amended her Complaint on May 2, 2013 [Docket No. 5], replacing Gerald Sands

3

and adding Trans Union and CCS as parties. Plaintiff’s Amended Complaint
alleges Counts I through III, which state claims against CCS, Monco Law Offices,
and ResidentCollect for violations of 15 U.S.C. § 1692e(8) (the Fair Debt
Collections Practices Act). In the alternative, the Amended Complaint also
alleged Count IV: Violation of 15 U.S.C. § 1681c(f) (the Fair Credit Reporting Act)
against Trans Union.
On June 28, 2013, Trans Union was dismissed from the lawsuit [Docket
No. 20] after a stipulation by Plaintiff and Trans Union. [Docket No. 19] Plaintiff
also voluntarily dismissed ResidentCollect, Inc. as a defendant to the suit.
[Docket Nos. 28, 29] CCS and Monco Law Offices are the only defendants that
remain in the suit. On December 5, 2013, default was entered against Defendant
Monco Law Offices. [Docket No. 51] CCS now files a Motion for Judgment on
the Pleadings. [Docket No. 33]

III.

DISCUSSION
A. Standard for Judgment on the Pleadings
Judgment on the pleadings is appropriate “where no material issue of fact

remains to be resolved and the movant is entitled to judgment as a matter of
4

law.” Poehl v. Countrywide Home Loans, Inc., 528 F.3d 1093, 1096 (8th Cir. 2008)
(citation omitted). The Court must view the facts pleaded by the nonmoving
party as true and grant all reasonable inferences in favor of that party. Id.
“When considering a motion for judgment on the pleadings . . . the court
generally must ignore materials outside the pleadings, but it may consider some
materials that are part of the public record or do not contradict the complaint, as
well as materials that are necessarily embraced by the pleadings.” Porous Media
Corp. v. Pall Corp., 186 F.3d 1077, 1079 (8th Cir. 1999) (citations omitted). In this
case, exhibits attached to the Complaint and Answer are necessarily embraced by
the pleadings. See id.
B. Whether CCS Violated the Fair Debt Collection Practices Act (15
U.S.C. § 1692e(8))
The Fair Debt Collection Practices Act (“FDCPA”) prohibits
“[c]ommunicating or threatening to communicate to any person credit
information which is known or which should be known to be false, including the
failure to communicate that a disputed debt is disputed.” 15 U.S.C. § 1692e(8).
To be actionable, the failure to communicate that a debt is disputed must be both

5

“false, deceptive, or misleading” and made “in connection with the collection of
any debt.” Id. § 1692e.
The material facts of this case are undisputed. Plaintiff claims that CCS
violated the FDCPA when it sent the March 14/15 Communication to Trans
Union because the communication failed to indicate that the debt was disputed.
The Court concludes that Plaintiff’s claim fails as a matter of law.
Regardless of whether the March 14/15 Communication was made “in
connection with the collection of any debt,” no violation of the FDCPA occurred
because Plaintiff cannot establish that the March 14/15 Communication in
response to Trans Union’s dispute notification was “false, deceptive, or
misleading.” Plaintiff cannot establish this first element because of the nature of
the communications between CCS and Trans Union, which are governed by the
FCRA. As Plaintiff notes in the Amended Complaint, the FCRA requires a credit
reporting agency like Trans Union to notify debt collectors like CCS of a
consumer’s dispute. (See Am. Compl. ¶ 13; 15 U.S.C. § 1681i(a)(2).)
Furthermore, the FCRA requires debt collectors to promptly respond to the
credit reporting agency’s dispute notification with information about the

6

completeness or accuracy of the information provided by the consumer; this
required response may either verify, modify, omit, or block reporting of dispute
information. 15 U.S.C. § 1681s-2(b).
Under this scheme, CCS’s March 14/15 Communication was not “false,
deceptive, or misleading” because the fact that Plaintiff’s debt was disputed was
inherent in CCS’s response to Trans Union’s dispute notification. See Neeley v.
Express Recovery Services, No. 2:10CV605, 2012 WL 1641198, at *2 (D. Utah May
9, 2012) (“Defendant acted reasonably in assuming that Plaintiff’s dispute of the
debts was inherent in Defendant’s response to the . . . dispute, and therefore that
the credit bureaus were aware of the dispute.”) Here, by virtue of its inquiry,
Trans Union was already aware that Plaintiff’s debt was disputed; “in other
words, if there were no disputes by Plaintiff, [Defendant] would not have had
anything to which to respond.” See id. at *1. The Court concludes that, because
CCS’s March 14/15 Communication was a required response in a dialogue
premised on mutual knowledge of Plaintiff’s dispute of the debt, it cannot
accurately be described as “false, deceptive, or misleading” merely because it

7

lacked express reiteration that a dispute existed. Accordingly, Plaintiff cannot
establish a violation under the FDCPA.
Plaintiff argues that this conclusion goes against the Eighth Circuit’s
decision in Wilhelm v. Credico, Inc., which provides that, “if a debt collector
elects to communicate ‘credit information’ about a consumer, it must not omit a
piece of information that is always material, namely, that the consumer has
disputed a particular debt.” 519 F.3d 416, 418 (8th Cir. 2008) (emphasis in
original).

Here, however, the debt collector did not “elect to communicate” but

was rather required to communicate by the FCRA. (CCS’s only election to
communicate occurred as the March 19 Report, which complied with the FDCPA
because it contained a dispute code.) Furthermore, in the context of the required
March 14/15 Communication, it can hardly be said that material information was
omitted, as it was understood by both participants that Plaintiff’s dispute was the
very occurrence that gave rise to the communication.
Finally, this Court concludes that CCS’s failure to include a dispute code in
this context “in no way exemplifies the abusive behavior or false or misleading
practices that Congress had in mind when it enacted the FDCPA.” McIvor v.

8

Credit Control Servs., Inc., Civil No. 13-956, 2013 WL 6596825, at *2 (D. Minn.
Dec. 17, 2013); see 15 U.S.C. § 1692e.
For these reasons, the Court concludes that the Amended Complaint,
taken to be true, does not show that CCS violated § 1692e(8) of the FDCPA. CCS
is thus entitled to judgment as a matter of law. Accordingly, the Court grants
CCS’s Motion for Judgment on the Pleadings.
Based on all the files, records, and proceedings herein, IT IS
HEREBY ORDERED that Defendant Credit Control Services, Inc.’s Motion
for Judgment on the Pleadings [Docket No. 33] is GRANTED.

Dated: February 10, 2014

s/ Michael J. Davis
Michael J. Davis
Chief Judge
United States District Court

9