McIvor v. Credit Control Services, Inc.

Filing 51

ORDER denying 32 Plaintiff's Motion for Summary Judgment; granting 38 Defendant's Motion for Summary Judgment.(Written Opinion). Signed by Senior Judge David S. Doty on 12/17/2013. (PJM)

UNITED STATES DISTRICT COURT
UNITED STATES DISTRICT COURT
DISTRICT OF MINNESOTA
Civil No. 13-956(DSD/JJK)
Sarah McIvor,
Plaintiff,
ORDER

v.
Credit Control Services, Inc.
and TransUnion, LLC,
Defendants.

Jonathan L.R. Drewes, Esq. and Drewes Law, PLLC, 1516
West Lake Street, Suite 300, Minneapolis, MN 55408,
counsel for plaintiff.
Russell S. Ponessa, Esq., Ashley M. DeMinck, Esq. and
Hinshaw & Culbertson, LLP, 333 South Seventh Street,
Suite
2000,
Minneapolis,
MN
55402,
counsel
for
defendants.

This matter is before the court upon the motion for summary
judgment by plaintiff Sarah McIvor and the motion for judgment on
the pleadings by defendant Credit Control Services, Inc., doing
business as Credit Collection Services (CCS). Based on a review of
the file, record and proceedings herein, and for the following
reasons, the court grants the motion by CCS.

BACKGROUND
This debt-reporting dispute arises out of an April 2013
communication

between

CCS

and

defendant

TransUnion,

(TransUnion) regarding a debt allegedly owed by McIvor.

LLC

McIvor

asserts that she disputed the debt with TransUnion, a credit
reporting agency, on April 2, 2013.

Am. Compl. ¶ 9.

TransUnion notified CCS of the dispute.

Id. ¶ 10.

Thereafter,

McIvor alleges

that CCS provided updated information to TransUnion that did not
reflect that the debt was disputed.

Id. ¶ 11.

On May 22, 2013, McIvor filed an amended complaint, alleging
violations of the Fair Debt Collection Practices Act (FDCPA) by CCS
and the Fair Credit Reporting Act (FCRA) by TransUnion.1

McIvor

moves for summary judgment and CCS moves for judgment on the
pleadings.

DISCUSSION
I.

Standard of Review
The same standard of review applies to motions under Federal

Rules of Civil Procedure 12(c) and 12(b)(6). Ashley Cnty., Ark. v.
Pfizer, Inc., 552 F.3d 659, 665 (8th Cir. 2009).

Thus, to survive

a motion for judgment on the pleadings, “a complaint must contain
sufficient factual matter, accepted as true, to state a claim to
relief that is plausible on its face.”

Braden v. Wal–Mart Stores,

Inc., 588 F.3d 585, 594 (8th Cir. 2009) (citation and internal
quotation marks omitted).

“A claim has facial plausibility when

the plaintiff [has pleaded] factual content that allows the court

1

On June 21, 2013, TransUnion was dismissed from this action.
See ECF No. 18.
2

to draw the reasonable inference that the defendant is liable for
the misconduct alleged.”

Ashcroft v. Iqbal, 129 S. Ct. 1937, 1949

(2009) (citing Bell Atl. Corp. v. Twombly, 550 U.S. 544, 556
(2007)).

Although a complaint need not contain detailed factual

allegations, it must raise a right to relief above the speculative
level. See Twombly, 550 U.S. at 555.

“[L]abels and conclusions or

a formulaic recitation of the elements of a cause of action” are
not sufficient to state a claim.

Iqbal, 129 S. Ct. at 1949

(citation and internal quotation marks omitted).
II.

FDCPA
McIvor argues that CCS violated the FDCPA by failing to note

in the updated credit information that the debt was disputed.
violation

of

the

FDCPA

is

reviewed

utilizing

“A
the

unsophisticated-consumer standard which ... protects the uninformed
or naive consumer, yet also contains an objective element of
reasonableness

to

protect

debt

collectors

from

liability

peculiar interpretations of collection [attempts].”

for

Strand v.

Diversified Collection Serv., Inc., 380 F.3d 316, 317-18 (8th Cir.
2004) (citations and internal quotation marks omitted).

“The

unsophisticated consumer test is a practical one, and statements
that are merely susceptible of an ingenious misreading do not
violate the FDCPA.”

Peters v. Gen. Serv. Bureau, Inc., 277 F.3d

1051, 1056 (8th Cir. 2002) (citations and internal quotation marks
omitted).

3

McIvor argues that CCS violated § 1692e of the FDCPA, which
provides that “[a] debt collector may not use any false, deceptive,
or misleading representation or means in connection with the
collection of any debt.”
collector

may

not

15 U.S.C. § 1692e.

“communicat[e]

...

to

Specifically, a debt
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.”

Id. § 1692e(8).

To be actionable, the failure to

report that the debt is disputed must be both “false, deceptive, or
misleading” and made “in connection with the collection of any
debt.”

See id. § 1692e; Carlson v. First Revenue Assurance, 359

F.3d 1015, 1018-19 (8th Cir. 2004).
CCS argues that its response was not in connection with the
collection of a debt.

McIvor responds that “[i]f a debt collector

knows that a debt is disputed by the consumer ... and reports it to
a credit bureau, he must report is as disputed.”

Wilhelm v.

Credico, Inc., 519 F.3d 416, 418 (8th Cir. 2008)(citations and
internal quotation marks omitted).

CCS argues, however, that

McIvor notified TransUnion rather than CCS that she disputed the
debt, and that TransUnion and CCS thereafter communicated regarding
the debt as part of the FCRA verification process.

“[W]hile the

FDCPA governs a debt collector’s verification of a disputed debt to
a consumer ..., a different statute — the FCRA — governs a debt
collector’s verification of a disputed debt to a [credit reporting

4

agency].”

Edeh v. Midland Credit Mgmt., Inc., 748 F. Supp. 2d

1030, 1036 (D. Minn. 2010) (citations omitted), aff'd, 413 F. App'x
925 (8th Cir. 2011) (per curiam).

As a result, “[i]t makes little

sense to view [the FCRA] verification as a prohibited attempt at
debt collection” in violation of the FDCPA.

Id.

“The debt

collector is acting not on its own initiative, but in response to
a notice sent by the [credit reporting agency], and the debt
collector is responding to that notice not to collect a debt, but
to avoid violating the [FCRA].”

Id.

Thus, the communication by

CCS to TransUnion was not in connection with the collection of a
debt under the FDCPA and judgment on the pleadings is warranted for
this reason alone.
Moreover, the response by CCS cannot reasonably be interpreted
as deceptive or misleading, as TransUnion already knew the debt was
in dispute.
814, 819
mislead,

See Hemmingsen v. Messerli & Kramer, P.A., 674 F.3d

(8th

Cir.

deceive

or

2012)

(noting

that

dupe

someone

for

a
it

representation
to

be

must

misleading).

Further, in order for a false statement to be actionable under the
FDCPA, it must be material.

Neill v. Bullseye Collection Agency,

Inc., No. 08-5800, 2009 WL 1386155, at *2 (D. Minn. May 14, 2009).
Representations

are

material

if

they

“frustrate

a

consumer's

ability to intelligently choose his or her response.”

Donohue v.

Quick Collect, Inc., 592 F.3d 1027, 1034 (9th Cir. 2010) (citation
omitted).

McIvor has not pleaded that the failure to reflect the

5

dispute undermined her ability to intelligently choose her response
regarding the debt.

In sum, the communication at issue in no way

exemplifies the abusive behavior or false or misleading practices
that Congress had in mind when it enacted the FDCPA.2

Therefore,

for this additional reason, judgment on the pleadings is warranted.

CONCLUSION
Accordingly, based on the above, IT IS HEREBY ORDERED that:
1.

Defendant’s motion for judgment on the pleadings [ECF No.

38] is granted; and
2.

Plaintiff’s motion for summary judgment [ECF No. 32] is

denied.
LET JUDGMENT BE ENTERED ACCORDINGLY.
Dated:

December 17, 2013
s/David S. Doty
David S. Doty, Judge
United States District Court

2

See 15 U.S.C. § 1692e(1)-(16) (setting forth a non-exhaustive
list of proscribed conduct, including misrepresenting the
character, amount or legal status of any debt; misrepresenting or
implying that a collection communication comes from an attorney and
misrepresenting or implying that the consumer committed a crime).
6