Olson v. Messerli & Kramer, P.A. et al
ORDER: Defendant's motion to dismiss [ECF No. 9 ] is GRANTED. Plaintiff's complaint [ECF No. 1 ] is DISMISSED. (Written Opinion) Signed by Judge Joan N. Ericksen on 2/12/2018. (CBC)
UNITED STATES DISTRICT COURT
DISTRICT OF MINNESOTA
Case No. 17-cv-4423 (JNE/SER)
Messerli & Kramer, P.A.,
Blake Bauer, Fields Law Firm, appeared for Ruth Olson.
Derrick N. Weber and Stephanie Shawn Lamphere, Messerli & Kramer, P.A., appeared
for Messerli & Kramer, P.A.
Ruth Olson brought this action against Messerli & Kramer, P.A. (“Messerli”) for
violations of the Fair Debt Collection Practices Act (“FDCPA”). Messerli moved to
dismiss Olson’s complaint. For the reasons set forth below, that motion is granted.
Sometime prior to December 2016, Olson defaulted on a debt to Barclays Bank in
the amount of $917.05. That debt was assigned to Midland Funding for collection.
Midland then hired Messerli to assist in the collection of the alleged debt, which stood at
On May 19, 2017, Olson called Messerli. Olson told the Messerli phone
representative that she was calling “to get more information” about her alleged debt and
to ask about her upcoming conciliation court trial in Washington County. Compl. ¶ 12;
ECF No. 1-1 at 5. She also mentioned “trying to work out a settlement.” ECF No. 1-1 at
5. According to a transcript of that call attached to Olson’s complaint, the
representative’s response and the ensuing exchanges were as follows:
MESSERLI REP: OK, I’ll be able to assist you with that. The hearing is set
for June 8, 2017 at 9:00, where the judgment will be entered, if it’s not paid
in full, and if you were to pay it in full today, the hearing cannot be
stopped, however, what they would do is order the judgment and show that
it was paid. Um, satisfied. So, um, are you able to pay the full $999.05?
OLSON: No, no I’m not, so that’s why I was calling, to get the
documentation, for one, to show, you know, why I owe this $917, and what
is this settlement agreement…
REP: We don’t do settlements on those balances. It is a payment in full, but
let me see what I can…
OLSON: Jupiter? Credit card? Jupiter?
REP: Mmhmm. Let me see if I can offer you more. We are limited, so um, I
can tell you that it was opened on August 7, 2009. The last time a payment
was made was February 28, 2014, in the amount of $20.00, and it was
charged off to our clients on October 30, 2014 for the $917.05. And then
our client retained us, and placed it with us, on 12/5/2016. The $82
additional cost is because we have requested a hearing. They charge us, so
that goes back on to your balance. And when we get charged, it
automatically goes on to your balance.
OLSON: OK, so you say there is no settlement agreement, because that’s
what they sent me in the mail, they told me that this is what, you know,
before, something that I need to pursue.
REP: What we can do, an option, um that is available to you, it is our firm’s
policy, anything other than a payment in full, we have to go through a brief
financial statement, basically what I would be asking you is your income
versus your expenses, and then we can determine what a monthly
repayment option would be.
OLSON: OK, well I just wanted to check in with you and get this
information before I get back to my attorney. I appreciate your time.
REP: Thank you for calling in this morning, Ruth.
OLSON: Yup, thank you. Good bye.
ECF No. 1-1 at 5-6.
Later in the day on May 19, 2017, Olson retained Blake Bauer as her attorney for
an FDCPA case against Midland and Messerli. Bauer was already Olson’s attorney “for
other matters of indebtedness.” ECF No. 1-1 at 8. In a letter dated May 19, 2017, Bauer
informed Midland that he was now representing Olson in an anticipated action against
Midland and Messerli for alleged FDCPA violations. 1
Olson’s conciliation court proceeding was held on June 8, 2017. Prior to the start
of the hearing itself, Olson met with a Messerli attorney to work out the terms of a
voluntary payment arrangement. The arrangement called for Olson to make monthly
payments of $50.00, beginning on July 31, 2017, until $900.00 had been paid.
Alternatively, Olson could pay a lump sum of $700.00 by September 30, 2017. The
parties then signed a Stipulation of Settlement codifying the agreed-upon terms. The
settlement agreement also stated: “The parties desire to fully and permanently settle,
discharge and release any and all claims that they may have against each other and/or
Bauer’s May 19, 2017 letter to Midland suggests (apparently in error) that the Olson-Messerli
call took place on May 17, 2017.
counsel pursuant to the terms contained herein.” ECF No. 1-1 at 10. Bauer did not attend
Olson filed this action on September 20, 2017, alleging that Messerli violated five
sections of the FDCPA:
15 U.S.C. §§ 1692e(2), 1692e preface, and 1692e(10) for giving a false
impression of the character and legal status of the alleged debt, and for using false,
misleading, and deceptive means to collect the alleged debt;
15 U.S.C. § 1692e(5) for taking or threatening to take action they could not legally
take or did not intend to take; and
15 U.S.C. § 1692c(a)(2) for attempting to negotiate and waive their FDCPA
liability directly with Olson when they knew her to be represented by an attorney
regarding her FDCPA claims.
Olson seeks damages based on both emotional suffering and expenses, including
Under Rule 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)). “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.”
Id. “A pleading that offers ‘labels and conclusions' or ‘a formulaic recitation of the
elements of a cause of action will not do.’” Id. (quoting Twombly, 550 U.S. at 555
(1955)). Plausibility is assessed by “draw[ing] on . . . judicial experience and common
sense.” Id. at 679, 129 S.Ct. 1937. Moreover, courts must “review the plausibility of the
plaintiff's claim as a whole, not the plausibility of each individual allegation.” Zoltek
Corp. v. Structural Polymer Grp., 592 F.3d 893, 896 n.4 (8th Cir. 2010).
The FDCPA’s purpose is “to eliminate abusive debt collection practices by debt
collectors, [and] to insure that those debt collectors who refrain from using abusive debt
collection practices are not competitively disadvantaged.” 15 U.S.C. § 1692(e); see also
Strand v. Diversified Collection Serv., Inc., 380 F.3d 316, 318-19 (8th Cir. 2004). The
FDCPA should be construed using an unsophisticated consumer standard that is
“designed to protect consumers of below average sophistication or intelligence without
having the standard tied to the very last rung on the sophistication ladder.” Duffy v.
Landberg, 215 F.3d 871, 874 (8th Cir. 2000) (quoting Taylor v. Perrin, Landry,
deLaunay & Durand, 103 F.3d 1232, 1236 (5th Cir. 1997)); see also Freyermuth v.
Credit Bureau Servs., Inc., 248 F.3d 767, 771 (8th Cir. 2001) (indicating that the
unsophisticated consumer standard applies to 15 U.S.C. §§ 1692d–1692f). Crucially,
“[t]his standard protects the uninformed or naive consumer, yet also contains an objective
element of reasonableness to protect debt collectors from liability for peculiar
interpretations of collections letters.” Duffy, 215 F.3d at 874-75.
Messerli makes two arguments in favor of dismissal. The first is that Olson waived
her right to sue under the FDCPA when she signed the settlement agreement in
conciliation court. And second, even if Olson did not waive her right to sue, Messerli’s
actions do not represent violations of the FDCPA. The Court need not reach the second of
these arguments because Olson clearly waived her right to sue under the FDCPA.
As noted above, the agreement that Olson signed on June 8, 2017 contains the
The parties desire to fully and permanently settle, discharge and release any
and all claims that they may have against each other and/or counsel
pursuant to the terms contained herein.
Messerli contends that pursuant to this provision, Olson waived her right to sue Messerli
(as Midland’s counsel) under the FDCPA. Olson counters that (a) the provision is
ambiguous as to whether it covers Olson’s FDCPA claim, making Rule 12 dismissal
inappropriate, and (b) Olson did not sign the provision knowingly, rendering the waiver
invalid. Both of these arguments are unsuccessful. The waiver is valid.
Under Minnesota law, “a settlement agreement is a contract,” Dykes v. Sukup Mfg.
Co., 781 N.W.2d 578, 581 (Minn. 2010), and a contract is only ambiguous “if it is
susceptible to two or more reasonable interpretations.” Id. at 582. Olson contends that the
release provision is ambiguous as to whether FDCPA claims are covered. She makes
three arguments in support of this position.
Olson first contends that the phrase “terms contained herein” limits the scope of
the release such that only those claims involving Olson’s payment of her debt – and not
Midland’s or Messerli’s debt collection practices – are covered. Compl. ¶ 17. Olson does
not adequately explain how this phrase limits the release in this way, nor is an
explanation self-evident. The release provision clearly states that the release of the
parties’ claims will be made “pursuant to the terms contained herein” – i.e., pursuant to
the terms of the settlement agreement, under which Olson pays on a monthly basis or
makes a lump-sum payment at a reduced amount. ECF No. 1-1 at 10. The phrase “terms
contained herein” does not create the ambiguity that Olson suggests.
Olson also argues that “any and all claims” does not include her FDCPA claims or
any other future claims. Compl. ¶ 18. But “any and all claims” is broad and unambiguous
language. See Marvin Lumber & Cedar Co. v. Marvin Architectural Ltd., 217 F.Supp.3d
1009, 1014 (D. Minn. 2016). Moreover, the provision covers all claims that the parties
“may have against each other” (emphasis added), not just those that they now have.
Therefore, the language used by the parties clearly and unambiguously shows that they
intended the release to be broad enough to include possible FDCPA claims.
Lastly, Olson contends that the agreement is ambiguous because there was no
bargained-for exchange between Olson and Messerli. Once again, Olson does not
explicate this position, leaving unclear how exactly an alleged lack of consideration could
create an ambiguity in the agreement. But whatever the theory, the fact that Messerli was
not a first party to the agreement does not nullify the release provision. See First State
Bank v. McNally, 2002 WL 31749164, at *6 (Minn. Ct. App. Dec. 10, 2002). Midland’s
clear intent was to protect its counsel from suit, and the extent to which Messerli and
Olson had or did not have a separate, bargained-for exchange does not have any bearing
on that intended result.
In sum, the agreement was not ambiguous. The parties clearly intended to release
each other from any and all claims that they might have in relation to the Olson debt. This
broad release included Olson’s FDCPA claims.
B. Knowing and Voluntary
Olson next argues that even if the waiver is unambiguous, it is unenforceable
because she did not sign it knowingly. Specifically, Olson asserts that because she “never
consented to negotiate her FDCPA claims against Messerli,” and because those claims
were not discussed at the June 8 pre-hearing meeting, she could not know that she was
waiving her rights under the FDCPA. Pl.’s Mem. Opp’n at 15.
The Eighth Circuit Court of Appeals has not yet addressed whether debtors can
waive their rights under the FDCPA. However, the Ninth Circuit has held that FDCPA
waivers are enforceable when they are made knowingly and voluntarily. Clark v. Capital
Credit & Collection Servs., Inc., 460 F.3d 1162, 1170-71 (9th Cir. 2006). In Clark, the
court held that a debtor’s request for information from a debt collector’s attorney
constituted a waiver of her right under § 1692c(c) of the FDCPA not to be contacted by
debt collectors. The Clark court explained that, in keeping with the purpose of the
FDCPA, such a waiver is enforceable “only where the least sophisticated debtor would
understand that he or she was waiving his or her rights under § 1692c(c).” Id. at 1171.
Several district courts, including two in this district, have adopted the Clark knowingand-voluntary standard in finding FDCPA waivers enforceable. See Scheffler v. Gurstel
Chargo, P.A., 2017 WL 1401278, at *3 (D. Minn. Apr. 19, 2017); Backlund v. Messerli
& Kramer, P.A., 964 F.Supp.2d 1010, 1015 (D. Minn. 2013).
Measured against this standard, Olson’s waiver is enforceable. Olson herself
acknowledges that Bauer “advised [her] of her rights under the FDCPA.” Mem. in Opp’n
at 11. This suggests that she knew more than the typical “unsophisticated consumer”
would know about the consequences of her decision to release Messerli from FDCPA
liability. But even a truly unsophisticated consumer – i.e., one who had not been advised
by an attorney – would have understood the effect of signing a settlement agreement
covering “any and all claims.” Therefore, whether Olson was in fact advised as to her
FDCPA rights or not, her signing of the agreement was knowing and voluntary, and the
release is therefore valid.
Based on the foregoing, and all the files, records, and proceedings herein, and for
the reasons stated above, IT IS ORDERED THAT:
1. Defendant’s motion to dismiss [ECF No. 9] is GRANTED.
2. Plaintiff’s complaint [ECF No. 1] is DISMISSED.
LET JUDGMENT BE ENTERED ACCORDINGLY.
Dated: February 12, 2018
s/ Joan N. Ericksen
JOAN N. ERICKSEN
United States District Judge
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