May v. Consumer Adjustment Company, Inc. et al
Filing
32
OPINION,MEMORANDUM AND ORDER -...IT IS HEREBY ORDERED that Defendants Motion to Dismiss [Doc. No. 24] is GRANTED IN PART AND DENIED IN PART. IT IS FURTHER ORDERED that Defendants Motion is GRANTED with respect to Plaintiffs claims und er 15 U.S.C. §§ 1692f(1) and 1692d. IT IS FURTHER ORDERED that Plaintiffs claims under 15 U.S.C. §§1692f(1) and 1692d are DISMISSED. IT IS FURTHER ORDERED that Defendants Motion is DENIED with respect Plaintiffs claims under 15 U.S.C.§§ 1692g(a)(1) and 1692e(2)(A).. Signed by District Judge Henry Edward Autrey on 7/24/2015. (MRC)
UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF MISSOURI
EASTERN DIVISION
DONNA MAY,
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Plaintiff,
v.
CONSUMER ADJUSTMENT
COMPANY, INC., et al.,
Defendants,
No. 4:14CV166 HEA
OPINION, MEMORANDUM AND ORDER
This litigation is before the Court having been removed to this Court pursuant to 28
U.S.C. § 1446(a), based on the Court’s federal question jurisdiction, 28 U.S.C. § 1331.
This matter is before the Court on Defendants’ Motion to Dismiss Plaintiff’s First
Amended Complaint. [Doc. No. 24]. Plaintiff has filed a response in opposition to the motion.
[Doc. No. 28]. Defendants have filed a Reply. [Doc. No. 31]. For the reasons set forth below, the
Motions is granted in part and denied in part.
Procedural Background
Plaintiff Donna May filed this putative class action in the Circuit Court of Jefferson
County, alleging that Defendants Consumer Adjustment Company, Inc. (“CACi”) and Roger
Weiss violated the Fair Debt Collection Practices Act, 15 U.S.C. § 1692, et seq. (“FDCPA”) by
sending Plaintiff a collection letter for her overdue utility bill that stated the full amount of the
debt without informing her that the amount owed included interest, and that the interest would
continue to accrue until the debt was paid. Plaintiff alleges that Defendants, who are “debt
collectors,” as defined by the FDCPA, attempted to collect a debt that arose from utilities
provided by Ameren Missouri.
On February 5, 2015 the Court granted Defendants’ Motion to Dismiss, and dismissed
Plaintiff’s Complaint, with leave to amend. Plaintiff filed her Amended Complaint on February
19, 2015, and Defendants again request dismissal.
Factual Background 1
Plaintiff allegedly incurred a debt to Ameren Missouri. Ameren hired Defendant CACi,
to collect the debt. Defendant Weiss is CACi’s principal officer. Defendants sent Plaintiff a
collection letter dated June 19, 2013 stating that she owed $495.02. 2 Defendants did not provide
Plaintiff any indication that the amount Plaintiff purportedly owed, and for which Defendants
were demanding payment, would change for any reason. In reality, Defendants, and not Ameren
as the original creditor, were actively assessing and attempting to collect interest on the debt
beyond what was factored into the amount due that Defendants listed on their collection letter.
Plaintiff alleges that at the time Defendants sent the collection letter, neither Defendants nor
Ameren was in possession of the original contract or agreement that permitted the assessment of
interest on Plaintiff’s Ameren account, much less at the rate Defendants were assessing and
attempting to collect.
After receiving Defendants’ collection letter, Plaintiff compared the amount Defendants
were attempting to collect with the last bill she received from Ameren a few days prior. The
Ameren bill stated that Plaintiff was only obligated to pay $493.92. On July 9, 2013, Plaintiff
called CACi to inquire why the two amounts were different. During the call, a representative of
Defendants admitted to charging interest, and attempted to collect an amount in excess of the
balance disclosed within the June 19, 2013 collection letter—approximately $497. Because
interest was constantly accruing, the amount Defendants were attempting to collect in the June
1
The recitation of facts is taken from Plaintiff’s First Amended Complaint and are taken as true for the purposes of
this motion. Such recitation in no way relieves any party from the necessary proof thereof in later proceedings.
2
Neither party has filed the collection letter in question with the Court.
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19, 2013 collection, $495.02, was less than the amount Defendants were attempting to collect
from Plaintiff on the day she received the letter.
Standard
A complaint must set out a “short and plain statement of [a plaintiff’s] claim showing that
the pleader is entitled to relief.” Fed. R. Civ. P. 8(a)(2). To test the legal sufficiency of a
complaint, a defendant may file a motion to dismiss for failure to state a claim upon which relief
can be granted. Fed. R. Civ. P. 12(b)(6). “To survive a motion to dismiss, 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 Atlantic Corp. v. Twombly, 550
U.S. 544, 570 (2007)). In other words, a plaintiff must plead facts from which the court can draw
a “reasonable inference” of liability. Iqbal, 556 U.S. at 678. The complaint need not contain
“detailed factual allegations” but must contain more than mere “labels and conclusions, and a
formulaic recitation of the elements” or “naked assertion[s]” devoid of “further factual
enhancement.” Twombly, 550 U.S. at 555, 557. An “unadorned, the-defendant-unlawfullyharmed-me accusation” will not suffice. Iqbal, 556 U.S. at 678. “While legal conclusions can
provide the framework of a complaint, they must be supported by factual allegations,” id. at 679,
which “raise a right to relief above the speculative level,” Twombly, 550 U.S. at 555.
Under Twombly and Iqbal, “[a] plaintiff . . . must plead facts sufficient to show that her
claim has substantive plausibility.” Johnson v. City of Shelby, 135 S. Ct. 346, 347 (2014). If the
plaintiff “inform[s] the [defendant] of the factual basis for [her] complaint, [she] [is] required to
do no more to stave off threshold dismissal for want of an adequate statement of [her] claim.” Id.
In evaluating a motion to dismiss, the court can “choose to begin by identifying pleadings
that, because they are no more than conclusions, are not entitled to the assumption of truth.”
Iqbal, 556 U.S. at 679. Turning to any “well-pleaded factual allegations,” the court should
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“assume their veracity and then determine whether they plausibly give rise to an entitlement to
relief.” Id. The court may only consider the initial pleadings. Brooks v. Midwest Heart Grp., 655
F.3d 796, 799 (8th Cir. 2011).
Discussion
In the sole count of Plaintiff’s Amended Complaint, she claims that Defendants violated
four provisions of the FDCPA: 1) Section 1692g(a)(1), which requires debt collectors to state the
amount of debt in collection letters; 2) Section 1692e(2)(A), which prohibits the false
representation of the character, amount, or legal status of any debt; 3) Section 1692d, which
prohibits conduct that harasses, oppresses, or abuses debtors; and 4) Section 1692f(1), which
prohibits collection of an amount not expressly authorized by the agreement creating the debt
and not permitted by law. The Court finds that Plaintiff has stated a claim for alleged violations
of Sections 1692g(a)(1) and 1692e(2)(A), but not for the alleged violations of Sections 1692f(1)
and 1692d. Accordingly, the Court will grant in part and deny in part Defendants’ Motion to
Dismiss.
A.
The FDCPA
“The FDCPA was enacted ‘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.’” McIvor v. Credit Control Servs., 773
F.3d 909, 913 (8th Cir. 2014) (alteration in original) (quoting 15 U.S.C. § 1692(e)). Alleged
violations of the FDCPA are “reviewed utilizing the unsophisticated-consumer standard which 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.’” Strand v. Diversified
Collection Serv., Inc., 380 F.3d 316, 317 (8th Cir. 2004) (quoting Duffy v. Landberg, 215 F.3d
871, 874 (8th Cir. 2000)). This standard is intended to “protect[] the uninformed or naive
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consumer,” while maintaining “an objective element of reasonableness to protect debt collectors
from liability for peculiar interpretations of collection letters.” Id. at 317–18.
Under the FDCPA, debt collectors must send a written validation notice to consumer
debtors within five days of initial communication with the consumer regarding the collection of a
debt. 15 U.S.C. § 1692g(a). The FDCPA requires the written notice to include information such
as: the amount of the debt, 15 U.S.C. § 1692g(a)(1); the name of the creditor, 15 U.S.C. §
1692g(a)(2); “a statement that unless the consumer, within thirty days after receipt of the notice,
disputes the validity of the debt, or any portion thereof, the debt will be assumed to be valid by
the debt collector[,]” 15 U.S.C. § 1692g(a)(3); “a statement that if the consumer notifies the debt
collector in writing within the thirty-day period that the debt, or any portion thereof, is disputed,”
the debt collector will provide verification of the debt, 15 U.S.C. § 1692g(a)(4); and “a statement
that, upon the consumer’s written request within the thirty-day period, the debt collector will
provide the name and address of the original creditor, if different from the current creditor,” 15
U.S.C. § 1692g(a)(5).
B.
15 U.S.C. §§ 1692g(a)(1) and 1692e(2)(A): The Amount of the Debt
The Court will address together Plaintiff’s claims for violations of § 1692g(a)(1),
requiring debt collectors to state the amount of debt in collection letters, and § 1692e(2)(A),
prohibiting the false representation of the character, amount, or legal status of any debt. See Ray
v. Resurgent Capital Servs., L.P., 2015 U.S. Dist. LEXIS 69391, at *15–16 (E.D. Mo. May 29,
2015). The FDCPA defines “debt” as “any obligation or alleged obligation of a consumer to pay
money arising out of a transaction in which the money, property, insurance, or services which are
the subject of the transaction are primarily for personal, family, or household purposes, whether
or not such obligation has been reduced to judgment.” 15 U.S.C. § 1692a(5).
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1.
Plaintiff’s Initial Complaint
In her initial Complaint, Plaintiff relied primarily on a line of Seventh Circuit cases to
argue that Defendants’ collection letter violated these provisions because the letter listed the full
amount of the debt without informing Plaintiff that the amount owed included interest, and that
the interest would continue to accrue until the debt was paid. See, e.g., Chuway v. Nat. Action
Fin. Servs., 362 F.3d 944 (7th Cir. 2004); Miller v. McCalla, Raymer, Padrick, Cobb, Nichols,
and Clark, LLC, 214 F.3d 872 (7th Cir. 2000). The collection letter in Miller listed the unpaid
principal balance of the loan and stated:
[T]his amount does not include accrued but unpaid interest, unpaid late charges,
escrow advances or other charges for preservation and protection of the lender’s
interest in the property, as authorized by your loan agreement. The amount to
reinstate or pay off your loan changes daily. You may call our office for complete
reinstatement and payoff figures.
214 F.3d at 875.
The Seventh Circuit found that the letter violated the FDCPA because “[t]he unpaid
principal balance is not the debt; it is only a part of the debt; the [FDCPA] requires; statement of
the debt.” Id. The Seventh Circuit held that the FDCPA requires the letter “to state the total
amount due—interest and other charges as well as principal—on the date the . . . letter was sent.”
Id. This Court agreed that this is a requirement of the FDCPA, and noted that the parties did not
dispute that the letter at issue stated the total amount of debt due on the date the letter was sent
and, thus, met this requirement.
However, Plaintiff based her claim in her initial Complaint on a suggestion the Miller
court made to debt collectors. “[I]n an effort to minimize litigation under the [FDCPA],” the
Miller court stated that, in the Seventh Circuit, the following “safe harbor” language will be
sufficient to satisfy a debt collector’s duty to state the “amount of the debt” in its collection
letters:
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“As of the date of this letter, you owe $ [the exact amount due]. Because of
interest, late charges, and other charges that may vary from day to day, the
amount due on the day you pay may be greater. Hence, if you pay the amount
shown above, an adjustment may be necessary after we receive your check, in
which event we will inform you before depositing the check for collection. For
further information, write the undersigned or call 1-800-[phone number].”
Id. at 876. The Miller court noted, “[o]f course we do not hold that a debt collector must use this
form of words to avoid violating the statute; but if he does, and . . . does not add other words that
confuse the message, he will as a matter of law have discharged his duty to state clearly the
amount due.” Id.
Some district courts have interpreted Miller as requiring “safe harbor” language like that
quoted above in order to satisfy § 1692g(a)(1)’s requirement that a debt collection letter state the
“amount of the debt.” See, e.g, Marucci v. Cawley & Bergmann, LLP, 2014 U.S. Dist. LEXIS
172852, at *17 (D.N.J. Dec. 15, 2014) (holding that “debt collectors must disclose the accrual of
interest to satisfy the obligation to ‘state the amount of the debt,’” and collecting cases); Jones v.
Midland Funding, LLC, 755 F. Supp. 2d 393, 397 (D. Conn. 2010) (“[W]hen a debt is accruing
interest, a validation notice fails to correctly state the amount of the debt as required by § 1692g
unless it discloses the fact that interest is accruing and informs the consumer of the applicable
interest rate.”). Other district courts have found that Miller merely offered helpful, though not
required, language. See, e.g., Leffler v. Miller & Steeno, P.C., 2014 U.S. Dist. LEXIS 55297, at *
12 (E.D. Mo. Apr. 22, 2014) (“Miller does not require that a collection letter include ‘safe
harbor’ language advising a consumer that interest may be accruing on a debt. Instead, the
language was suggested as a way to minimize debt collection litigation—a suggestion whose
validity is supported by the present litigation.”); Adlam v. FMS, Inc., 2010 U.S. Dist. LEXIS
33433, at *8 (E.D.N.Y. Apr. 5, 2010) (“The FDCPA does not require that a debt collection letter
warn a consumer that the debt may increase.”).
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In Chuway, the Seventh Circuit clarified that, in its view, when the full amount of debt
that is due on the date of the collection letter is listed on the letter, and represents the entire debt
which the debt collector is trying to collect, § 1692g(a)(1) is satisfied. 362 F.3d at 949. However,
the Chuway court further explained that when “the debt collector is trying to collect the listed
balance plus the interest running on it or other charges, he should use the safe-harbor language of
Miller.” Id. (emphasis added). There was no dispute in Chuway that the “entire debt,” which the
debt collector was hired to collect was the amount listed in the letter. Id. at 946. The collection
letter listed the balance due as of the date of the letter and stated, in pertinent part:
[Capital One Services, Inc.] has assigned your delinquent account to our agency
for collection. Please remit the balance listed above in the return envelope
provided. To obtain your most current balance information, please call 1-800-9169006. Our friendly and experienced representatives will be glad to assist you and
answer any questions you may have.
Id. at 947.
The Chuway court noted that if the collection letter had stopped after the sentence “Please
remit the balance listed above in the return envelope provided,” it would have been compliant
with § 1692g(a)(1), notwithstanding the fact that the letter did not contain the “safe harbor”
language from Miller, or any reference to interest whatsoever. Id.; see also Exhibits A and B to
Complaint, Chuway v. Nat’l Action Fin. Servs., No. 02-cv-1247 (N.D. Ill. Feb. 21, 2002) (ECF
No. 1 at 6–7) (collection letter at issue in Chuway). The court in Chuway distinguished Miller on
the grounds that the letter in Miller violated the FDCPA by listing only the “unpaid principal
balance,” in contrast to the letter in Chuway, which appropriately listed the “entire debt that the
[debt collector] was hired to collect.” Id. at 947. The court explained:
The credit card company, which is to say the creditor, not the debt collector, may
charge the plaintiff interest on the $367.42 between when that debt accrued and
when the plaintiff finally pays and may add the interest accruing in the interim to
the plaintiff’s current balance. But that would not be a part of “the amount of the
debt” for which the defendant was dunning her, and hence it would not precipitate
a violation by the defendant. It would be as if between when the $367.42 debt was
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turned over to the defendant for collection and when the plaintiff received the
dunning letter, the plaintiff had defaulted on a separate debt that she owed the
credit card company. The fact that the defendant didn’t add that to the debt for
which it had been retained to dun the plaintiff would not result in a violation of
the statute. Quite the contrary, for a debt collector has no authority to collect debts
that it has not been authorized by a creditor to collect; nor was the defendant
trying to do that.
Id.
Thus, under the Seventh Circuit case law upon which Plaintiff relied, a debt collector
does not violate § 1692g(a)(1) of the FDCPA by listing the total amount due as of the date of the
letter and failing to identify some of it as interest that has accrued on the original principal. Nor
does the Seventh Circuit require Miller’s safe harbor language when the amount due stated in the
letter represents the entire debt the collector has been hired to collect, notwithstanding the fact
that the original creditor might be collecting still-accruing interest on that amount.
In granting Defendants’ initial motion to dismiss, this Court found, even assuming
arguendo that § 1692g(a)(1) requires language akin to Miller’s “safe harbor” language when the
debt collector seeks both the amount listed on the letter and the interest accruing on that amount
from the date the letter is sent, Plaintiff’s initial Complaint failed to state a claim. Although
Plaintiff alleged that she “discovered after review of her final bill from Ameren that the amount
Defendants attempted to collect was higher than the amount of the final bill,” [Doc. No. 1-1 at ¶
14], and that “Defendants[’] June 19 letter was thus false and misleading because it did not
disclose that interest was accruing and would continue to accrue on Plaintiff’s balance,” [id. at ¶
15], Plaintiff did not allege that Defendants (the debt collectors), as opposed to Ameren (the
creditor), were seeking to collect this additional amount of interest and/or charges that Plaintiff
might have to pay. [Doc. No. 20] [citing Chuway, 362 F.3d at 947].
Accordingly, this Court found that Plaintiff failed to state a claim for relief, granted
Defendants’ Motion to Dismiss, and afforded Plaintiff leave to amend her Complaint.
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2.
Plaintiff’s Amended Complaint
Plaintiff’s Amended Complaint specified that Defendants, CACi and Weiss (the debt
collectors), as opposed to Ameren (the creditor), were seeking to collect the interest that accrued
following the publication of the June 19, 2013 collection letter. [Doc. No. 21 at ¶ 14]
[“Defendants, and not the original creditor or any other entity, were actively assessing and
attempting to collect interest on the deb beyond what was factored into the amount due that
Defendants listed on their letter.”].
Thus, because Plaintiff has adequately cured the deficiency identified by this Court in
granting Defendants’ initial Motion to Dismiss, the Court must now address the issue of whether
Defendants’ failure to include language akin to Miller’s “safe harbor” language in the June 19,
2013 debt collection letter, or some indication that the amount due listed in the letter is subject to
still-accruing interest, could be found to violate Sections 1692g(a)(1) and 1692e(2)(A) of the
FDCPA.
Since this Court issued its decision granting Defendant’s motion to dismiss Plaintiff’s
initial Complaint with leave to amend, two colleagues in this District have held that plaintiffs in
cases before them sufficiently stated claims for violations Section1692g(a)(1) and 1692e(2)(A).
Ray, 2015 U.S. Dist. LEXIS 69391, at *15–17; Wideman v. Kramer & Frank, P.C., 2015 U.S.
Dist. LEXIS 47168, at *3–6 (E.D. Mo. Apr. 10, 2015). In Wideman, Judge Limbaugh, in denying
the defendants’ motion to dismiss, noted:
Here, the issue is not simply whether the letter violated the FDCPA because it
failed to state interest was accruing. Instead, plaintiff has alleged that the letter
failed to state the correct amount of the debt because the balance stated in the
letter had changed by the time plaintiff received the letter and defendants had
failed to provide any information that the amount would, in fact, increase due to
interest. In other words, plaintiff alleges that defendants have not complied with
the FDCPA mandate that debt collectors accurately represent the amount and
character of a debt they are attempting to collect. Specifically, under §
1692e(2)(A), a debt collector may not falsely represent “the character, amount, or
legal status of any debt,” or, under § 1692g(a)(1), fail to provide the consumer
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notice of the amount of the debt. . . . This Court finds that plaintiff's allegations
are sufficient to state a claim that is plausible on its face for a violation of §
1692e(2)(A) and § 1692g(a)(1) of the FDCPA.
Wideman, 2015 U.S. Dist. LEXIS 47168, at *4–6. In Ray, Judge Hamilton adopted and followed
this reasoning, also denying a motion to dismiss. Ray, 2015 U.S. Dist. LEXIS 69391, at *16–17.
The Court finds Wideman and Ray to be soundly decided, highly persuasive, and directly on
point to the present case—both factually and procedurally.
In Gill v. Credit Bureau of Carbon County, a recent case from the District of Colorado,
the court identified “the precise question” before it as: “whether Defendant was required to
disclose the effective date of the ‘total Due’ and that the amount of the Debt would increase due
to interest.” 2015 U.S. Dist. LEXIS 58759, at *13 (D. Colo. May 5, 2015). The Gill court noted
that this question “has produced conflicting judicial opinions,” 3 and that it was “reluctant to lay
down a bright-line rule that section 1692g(a)(2) requires a debt collector seeking to collect an
interest-accruing debt to affirmatively disclose that the debt may increase due to interest or other
charges.” Id. at *13–14. The court then made an astute observation: “[in] nearly all of the cases
finding that the FDCPA does not impose a duty to inform the consumer that the debt is accruing
3
Gill, 2015 U.S. Dist. LEXIS 58759 (D. Colo. May 5, 2015) (comparing Marucci v. Cawley &
Bergmann, LLP, 66 F. Supp. 3d 559, 565–67 (D.N.J. 2014); Ivy v. Nations Recovery Ctr., Inc.,
2012 U.S. Dist. LEXIS 78450, 2012 WL 2049387, at *1–2 (E.D. Tenn. June 6, 2012);
Stonecypher v. Finkelstein Kern Steinberg & Cunningham, 2011 U.S. Dist. LEXIS 88319, 2011
WL 3489685, at *5 (E.D. Tenn. Aug. 9, 2011); Jones v. Midland Funding, LLC, 755 F. Supp. 2d
393, 397–98 (D. Conn. 2010); Smith v. Lyons, Dought, & Veldhuius, P.C., 2008 U.S. Dist.
LEXIS 56725, 2008 WL 28885887, at *6 (D.N.J. July 23, 2008); Dragon v. I.C. Sys., Inc., 483
F. Supp. 2d 198, 203 (D. Conn. 2007); Jackson v. Aman Collection Serv. Inc., 2001 U.S. Dist.
LEXIS 22238, 2001 WL 1708829, at *3 (S.D. Ind. Dec. 14, 2001), with Avila v. Riexinger &
Assocs., LLC, 2015 U.S. Dist. LEXIS 48926, 2015 WL 1731542, at *7 (E.D.N.Y Apr. 15, 2015);
Schaefer v. ARM Receivable Mgmt., Inc., 2011 U.S. Dist. LEXIS 77828, 2011 WL 2847768, at
*5 (D. Mass. July 19, 2011); Bodine v. First Nat. Collection Bureau, Inc., 2010 U.S. Dist.
LEXIS 131352, 2010 WL 5149847, at *2 (D.N.J. Dec. 13, 2010); Pifko v. CCB Credit Servs.,
Inc., 2010 U.S. Dist. LEXIS 69872, 2010 WL 2771832, at *3–4 (E.D.N.Y. July 7, 2010); Adlam
v. FMS, Inc., 2010 U.S. Dist. LEXIS 33433, 2010 WL 1328958, at *3 (S.D.N.Y. Apr. 5, 2010);
Weiss v. Zwicker & Assocs., P.C., 664 F. Supp. 2d 214, 217 (E.D.N.Y. 2009)).
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interest . . . . the debt at issue was credit card debt,” and “those courts distinguished the line of
cases finding an affirmative duty to disclose the accrual of interest because ‘even the most
unsophisticated consumer would understand that credit card debt accrues interest.’” Id. at *14–15
(citing Weiss, 664 F. Supp. 2d at 217; Avila, 2015 U.S. Dist. LEXIS 48926, 2015 WL 1731542,
at *6; Schaefer, 2011 U.S. Dist. LEXIS 77828, 2011 WL 2847768, at *5; Pifko, 2010 U.S. Dist.
LEXIS 69872, 2010 WL 2771832, at *3; Adlam, 2010 U.S. Dist. LEXIS 33433, 2010 WL
1328958, at *3.
By contrast, the defendant in Gill “[did] not dispute that the original creditor on the
accounts comprising the Debt never collected or attempted to collect interest from Plaintiff,”
and, therefore, “[the] Plaintiff had no prior notice that the amount of the Debt was likely to
change due to accruing interest.” Id. at *14. Plaintiff has alleged as much here, 4 and her
allegations must be accepted as true at this stage of the proceedings. Iqbal, 556 U.S. at 679.
Thus, as in Gill, it appears from Plaintiff’s allegations that the facts of the present case are
distinguishable from most cases finding no violation of Sections 1692g(a)(1) and 1692e(2)(A) of
the FDCPA where the debt collector did not inform the debtor that the amount of debt listed in
the collection letter was accruing debt because Ameren, the original creditor, never collected or
attempted to collect interest from Plaintiff. Accordingly, Plaintiff appears to have had no prior
notice that interest was likely to be charged on her debt, as distinguishable from credit card debt.
The Court in Gill ultimately granted summary judgment as to liability in the plaintiff’s
favor. 2015 U.S. Dist. LEXIS 58759, at *16. In doing so, the court noted that the collection
letters in question “framed the amount of the Debt as ‘Total[s] Due,’ rather than ‘outstanding
balance’ or ‘current balance,’” and that “the ‘Total[s] Due’ did not have an ‘as of’ date, which
might have signaled to Plaintiff that the Debt would increase if not paid in full within a certain
4
See Doc. No. 21 at ¶¶ 12, 18–21.
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amount of time.” Id. at *15. The Gill court noted that this wording might lead “the least
sophisticated consumer, who is both gullible and naïve,” to “believe[] that he could pay the debt
in full by remitting the ‘Total Due[s]’ in the Letters at any time after he received that letter.” Id.
Again, as noted at the outset, neither party to this action has submitted the collection
letter in question. It is of no moment, of course, because at this stage of the proceedings the
Court considers only the pleadings. Brooks, 655 F.3d at 799.
Given that purpose of the FDCPA 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,’” McIvor, 773 F.3d at 913, every case
brought under the FDCPA necessarily requires a fact specific inquiry and analysis. For this
reason, bright line rules are difficult to establish in the context of the FDCPA. See Gill, 2015
U.S. Dist. LEXIS 58759, at *14.
Upon consideration of the pleadings in this case, and the facts alleged, the Court finds
that Plaintiff has sufficiently stated a claim for violations of Sections 1692g(a)(1) and
1692e(2)(A) of the FDCPA in her First Amended Complaint. While this Court holds that such a
claim requires an allegation that the debt collector defendant, and not the original creditor, is
actively assessing interest and/or additional charges, see Chuway, 362 F.3d at 947, it would be
highly improvident for this Court to establish a bright line rule that a debt collector assessing
interest without specifying so in its collection letters is, as a matter of law, liable for violating
Sections 1692g(a)(1) and 1692e(2)(A) of the FDCPA. That inquiry, both in these proceedings,
and in future cases, will necessarily turn on the particular facts of the case.
C.
15 U.S.C. § 1692f(1)
Title 15 U.S.C. § 1692f(1) prohibits collection of an amount not expressly authorized by
the agreement creating the debt and not permitted by law. Plaintiff alleges that “neither the
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Defendants nor their client was in possession of the original contract or agreement that permitted
the assessment of interest on Plaintiff’s Ameren Missouri account, much less at the rate
Defendants were assessing and attempting to collect,” and that Defendants “were attempting to
collect an amount not expressly authorized by the agreement that created Plaintiff’s alleged
debt.” [Doc. No. 21 at ¶¶ 15–16]. ”
Defendants counter that Plaintiff alleges only that the collection of interest was not
“expressly authorized” in the alleged contract at issue, rather alleging that the contract expressly
excluded the collection of interest. Defendants note that in Missouri, in the absence of a
contractual exclusion:
Creditors shall be allowed to receive interest at the rate of nine percent per
annum, when no other rate is agreed upon, for all moneys after they become due
and payable, on written contracts, and on accounts after they become due and
demand of payment is made; for money recovered for the use of another, and
retained without the owner's knowledge of the receipt, and for all other money
due or to become due for the forbearance of payment whereof an express promise
to pay interest has been made.
RSMo. 408.020.
Based on the applicable Missouri law, the Court finds that Plaintiff has failed to state a
claim for a violation of Section 1692f(1) because Defendants did not require a contract to
expressly authorize the assessment of interest on Plaintiff’s past due debt.
D.
15 U.S.C. § 1692d
Plaintiff’s bare allegation that Defendants “[e]ngag[ed] in deceptive, harassing, and
unfair conduct in the collection of a debt, including concealing the fact that interest was accruing
on Plaintiffs’ debts, while also continually driving up the amounts Plaintiffs owed which
Defendants attempted to collect,” is wholly insufficient to state a claim under the operative
pleading standard. These are merely legal conclusions, unsupported by factual assertions.
Twombly, 550 U.S. at 555, 557.
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Conclusion
Based on the foregoing, the Court grants in part and denies in part Defendants’ Motion to
Dismiss.
Accordingly,
IT IS HEREBY ORDERED that Defendants’ Motion to Dismiss [Doc. No. 24] is
GRANTED IN PART AND DENIED IN PART.
IT IS FURTHER ORDERED that Defendants’ Motion is GRANTED with respect to
Plaintiff’s claims under 15 U.S.C. §§ 1692f(1) and 1692d.
IT IS FURTHER ORDERED that Plaintiff’s claims under 15 U.S.C. §§ 1692f(1) and
1692d are DISMISSED.
IT IS FURTHER ORDERED that Defendants’ Motion is DENIED with respect
Plaintiff’s claims under 15 U.S.C. §§ 1692g(a)(1) and 1692e(2)(A).
Dated this24th day of July, 2015.
HENRY EDWARD AUTREY
UNITED STATES DISTRICT JUDGE
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