Bland v. LVNV Funding, LLC

Filing 27

MEMORANDUM AND ORDER re 16 MOTION to Dismiss Case for Failure to State a Claim filed by Defendant LVNV Funding, LLC. The motion is GRANTED in part and DENIED in part. IT IS FURTHER ORDERED that Plaintiff shall file an amended complaint in accordance with the terms of this Order no later than September 23, 2015 (Amended Pleadings due by 9/23/2015). Signed by District Judge Rodney W. Sippel on 9/8/15. (CAR)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF MISSOURI
EASTERN DIVISION
MARGARETTA BLAND,
Plaintiff,
vs.
LVNV FUNDING, LLC,
Defendant.

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No. 4:15 CV 425 RWS

MEMORANDUM AND ORDER
This matter is before me on Defendant LVNV Funding, LLC’s Motion to
Dismiss in this Fair Debt Collection Practices Act, 15 U.S.C. §§ 1692, et seq. (“FDCPA”),
action. The issues are fully briefed and I have heard oral argument on the motion. For the
reasons that follow, I will grant in part and deny in part defendant’s motion to dismiss.
Background
This action arises out of a debt collection lawsuit. In 2002, Sears Roebuck Co. sued
plaintiff to collect on an unpaid credit card bill. Plaintiff did not respond to the lawsuit and Sears
took a default judgment in the amount of $3,387.96. Sears assigned the 2002 judgment to
defendant,1 a debt collector. Defendant hired the law firm Miller & Steeno, P.C. (“Miller”) to
revive the judgment. Miller filed a motion to revive the judgment, and then somewhat
sporadically sought to serve plaintiff with process between November 2011 and June 2014.
Plaintiff was served with the revival suit on June 25, 2014. The state court held a hearing on
defendant’s motion to revive judgment. Again, plaintiff did not respond to the motion or appear
at the hearing. On August 7, 2014, the Circuit Court of St. Louis City, Missouri revived the

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Plaintiff contends that the assignment was “botched” and is invalid.

judgment against plaintiff, giving full force and effect to the 2002 judgment in the amount of
$3,387.96. Plaintiff never appealed the default judgment or the revival of the judgment.
In late August or early September 2014, defendant, through Miller, contacted plaintiff
about the debt by phone. Plaintiff alleges that the phone call was the “initial communication” as
defined by the FDCPA, triggering defendant’s requirement to provide plaintiff with notice of her
dispute and validation rights. Plaintiff alleges that defendant never sent her notification of her
dispute and validation rights, nor did defendant provide plaintiff with written notice of the
amount of the debt or a copy of either of the state court judgments. Plaintiff alleges that during
the phone call, defendant told plaintiff it would take legal action such as garnishment if she did
not make payment that day. Shortly after receiving the phone call, plaintiff started making
payments to defendant.
In January 2015, Miller sent plaintiff a collection letter. Plaintiff alleges that the letter
did not state the amount of the debt and concealed the fact that defendant was assessing interest
on the debt. The letter instructed plaintiff to make $50 monthly payments through April 2015
and stated that after April 2015, Miller would seek to collect the full amount due.
On February 6, 2015, plaintiff filed this action in the Circuit Court of St. Louis County,
Missouri, alleging violations of the FDCPA, abuse of process, and violation of the Missouri
Merchandising Practices Act, RSMo. § 407.025(1) (“MMPA”). Defendant removed this action
to this Court on March 9, 2015. On April 7, 2015, plaintiff filed her First Amended Complaint.
In addition to plaintiff’s state law claims, plaintiff alleges that defendant violated
§§ 1692d, 1692e, 1692f, and 1692g of the FDCPA because defendant (1) fooled plaintiff into
believing that Sears, rather than defendant, was pursuing her, (2) failed to notify plaintiff of her
dispute and validation rights, (3) overshadowed plaintiff’s dispute and validation rights,

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(4) attempted to collect a debt from plaintiff when it had no legal standing to do so, (5) failed to
accurately state the amount of the debt, and (6) used unfair and unconscionable practices to
attempt to collect the debt.
On April 20, 2015, defendant filed this motion to dismiss, arguing that plaintiff has failed
to state a claim under Fed. R. Civ. P. 12(b)(6).
Legal Standard
In ruling on a motion to dismiss brought under Fed. R. Civ. P. 12(b)(6), I must accept as
true all factual allegations in the complaint and view them in the light most favorable to the
plaintiff. Kohl v. Casson, 5 F.3d 1141, 1148 (8th Cir. 1993). “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) (citing 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.” Iqbal, 556 U.S. at 678. While a court must accept factual
allegations as true, it is “not bound to accept as true a legal conclusion couched as a factual
allegation.” Carton v. Gen. Motor Acceptance Corp., 611 F.3d 451, 454 (8th Cir. 2010) (internal
citations omitted). “Threadbare recitals of the elements of a cause of action, supported by mere
conclusory statements, do not suffice.” Iqbal, 556 U.S. at 678 (internal citations omitted).
Discussion
A. FDCPA
“The purpose of the FDCPA is to eliminate abusive debt collection practices by debt
collectors . . .” Dunham v. Portfolio Recovery Assocs., LLC, 663 F.3d 997, 1000 (8th Cir.
2011). When a court is evaluating a debt collection communication it must view it “through the

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eyes of an unsophisticated consumer.” Freyermuth v. Credit Bureau Services, Inc., 248 F.3d
767, 771 (8th Cir. 2001). This standard 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 Services, Inc., 380 F.3d 316, 317–18
(8th Cir. 2004) (internal quotations and citations omitted). It “protects the uninformed or naive
consumer, yet also contains an objective element of reasonableness to protect debt collectors
from liability for peculiar interpretations of collection letters.” Id.
Section 1692d of the FDCPA provides that “a debt collector may not engage in any
conduct the natural consequence of which is to harass, oppress, or abuse any person in
connection with the collection of any debt.” Section 1692e provides that a “debt collector may
not use any false, deceptive, or misleading representation or means in connection with the
collection of any debt.” Section 1692f provides that a “debt collector may not use unfair or
unconscionable means to collect or attempt to collect any debt.” Section 1692g sets out
information a debt collector must provide to a consumer within five days after the initial
communication of a debt collection.
1. Section 1692g Dispute and Validation Rights
Plaintiff alleges that defendant violated 15 U.S.C. § 1692g by failing to send plaintiff the
requisite written notice informing plaintiff of her rights under the FDCPA. Section 1692g
requires a debt collector to provide to a consumer certain information within five days after the
initial communication of a debt collection. The required information includes “the amount of the
debt” and “the name of the creditor to whom the debt is owed.” 15 U.S.C. § 1692g(a)(1),(2).
The notice must also contain:

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(3) 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;
(4) 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 obtain verification of the debt or a copy of a judgment against
the consumer and a copy of such verification or judgment will be mailed to the
consumer by the debt collector; and
(5) a statement that, upon the consumer's written request within the thirtyday period, the debt collector will provide the consumer with the name and
address of the original creditor, if different from the current creditor.
15 U.S.C. § 1692g(a).
If a consumer properly disputes the debt within the 30-day period, the debt collector
“shall cease collection of the debt” until the debt collector verifies the disputed information and
provides the consumer with copies of the verifying information, such as the judgment. 15 U.S.C.
§ 1692g(b). Furthermore, “[a]ny collection activities and communication during the 30–day
period may not overshadow or be inconsistent with the disclosure of the consumer's right to
dispute the debt or request the name and address of the original creditor.” 15 U.S.C. § 1692g(b).
That said, the 30-day period “is not a grace period: a debt collector is perfectly free to demand
payment and pursue collection efforts, including an appropriate lawsuit against the debtor, within
the validation period. Thus, during the validation period, the debtor’s right to dispute coexists
with the debt collector’s right to collect.” Durkin v. Equifax Check Servs., Inc., 406 F.3d 410,
416 (7th Cir. 2005) (internal quotations and citations omitted).
Plaintiff alleges that the initial communication was a phone call in the fall of 2014.
Defendant argues that it is implausible that the fall 2014 phone call would constitute the initial
communication based on the lengthy history of the case. Defendant argues that I should assume
that defendant sent plaintiff notice of her dispute and validation rights in 2011 or 2012 when it

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allegedly began its collection attempts.2 Plaintiff counters that the only collection activity that
occurred before the fall 2014 phone call was the filing of formal pleadings to enforce Sears’
judgment. Because “[a] communication in the form of a formal pleading in a civil action shall
not be treated as an initial communication for purposes of subsection (a) of this section,” plaintiff
has properly pleaded that the phone call was the initial communication for FDCPA purposes.
15 U.S.C. § 1692g(d). As a result, defendant was required to provide plaintiff with written
notice of her dispute and validation rights within five days of the phone call. Other than
defendant’s argument that I should assume it provided plaintiff with the requisite notice,
defendant does not dispute that it failed to provide the requisite written notice. Failure to provide
such notice (even where, as here, it appears that there is no dispute about the validity of the
underlying debt) is a clear violation of § 1692g.3 As a result, plaintiff has stated a claim under
§ 1692g.
Plaintiff also alleges that defendant overshadowed her dispute and validation rights
because defendant demanded that she pay the debt immediately during the phone call. I must
evaluate the conversation from the perspective of an “unsophisticated consumer,” as described

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Defendant also argues that, assuming the requisite notifications were sent in 2011 and 2012, any claims based on
those actions are time-barred by the FDCPA’s one-year statute of limitations. See 15 U.S.C. § 1692k(d). Because
assuming that defendant contacted plaintiff and provided her the requisite notice in 2011 and 2012, despite the
pleadings alleging otherwise, would be completely inconsistent with the standards of review for a motion to dismiss,
I need not and therefore will not address defendant’s timeliness argument.
3
Although the FDCPA clearly states that the dispute and validation notice must be sent within in five days of the
initial communication, I question the application of that rule to cases like this where it appears that there is no
legitimate dispute about the validity of plaintiff’s liability for the debt. The record shows that the state court twice
entered judgment that plaintiff was liable for the debt – first, when it entered default judgment, and second, when it
revived the judgment. Because there is a final judgment on the issue of liability, it is unclear what, if anything,
plaintiff would dispute if she had been given the requisite notice. However, even if dispute would be futile, because
the FDCPA requires that notice be given, that the debtor be informed of his or her rights to dispute and obtain
validation of the debt, and a proper notice of dispute triggers the debt collector’s obligation to obtain and provide the
debtor with validation, including a copy of a judgment, I cannot say that plaintiff has failed to state a claim. See 15
U.S.C. § 1692g.

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above.4 Strand, 380 F.3d at 317-18. If a debt collector asserts that payment must be made within
the dispute period without explaining that the consumer retains her dispute and verification
rights, the collector has likely overshadowed a plaintiff’s dispute rights. Johnson v. Evans &
Dixon, LLC, No. 4:13-cv-671-NAB, at *7–16 (E.D. Mo. April 8, 2014). In contrast, there is
generally no overshadowing where debt collectors request payment but do not indicate that the
payment must be made before the expiration of the 30-day dispute window. Founie v. Midland
Credit Mgmt., Inc., 2014 WL 6607197, at *3 (E.D. Mo. Nov. 19, 2014). Here, plaintiff alleges
that during the phone call, defendant “threatened Plaintiff with legal action such as garnishment
if Plaintiff would refuse to make a payment on the debt to Defendant that day.” As plaintiff
alleges that defendant demanded immediate payment within the 30-day dispute window, I find
that plaintiff has sufficiently alleged a violation of § 1692g.
2. Interest and the Amount of the Debt
Plaintiff alleges that defendant has never “told Plaintiff the accurate amount of her debt
because both Miller and Defendant have refused to tell Plaintiff the actual judgment amount
and/or have refused to tell Plaintiff that the judgment amount was accruing interest at any
particular rate.” Section 1692g(a)(1) requires a debt collector to accurately state the “amount of
the debt” in an initial collection letter. Section 1692e(2)(A) provides that a debt collector cannot
make a false representation as to “the character, amount, or legal status of any debt.”

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Circuits are split on whether applying the unsophisticated consumer standard to collection notices and letters under
the FDCPA is a matter of law for judges to decide or a question of fact better left to juries. Compare Johnson v.
Revenue Mgmt. Corp., 169 F.3d 1057, 1060 (7th Cir. 1999); Kistner v. Law Offices of Michael P. Margelefsky,
LLC, 518 F.3d 433, 440–41 (6th Cir. 2008) (holding it is a question of fact) with Russell v. Equifax A.R.S., 74 F.3d
30, 33, 35 (2d Cir. 1996); Wilson v. Quadramed Corp., 225 F.3d 350, 353 (3d Cir. 2000); Terran v. Kaplan, 109
F.3d 1428, 1432-33 (9th Cir. 1997); Whiting v. AARP, 637 F.3d 355, 364 (D.C. Cir. 2011) (holding that it may be
decided as a matter of law). The United States Court of Appeal for the Eighth Circuit has not squarely addressed
this question. However, this district has concluded that the Eighth Circuit likely would treat it as a question of law,
and I agree. See also Johnson v. Evans & Dixon, LLC, No. 4:13-cv-671-NAB, at *9-11 (E.D. Mo. April 8, 2014).

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Plaintiff alleges that in January 2015, defendant, through Miller, sent plaintiff a collection
letter telling her to make $50 monthly payments through April 2015. The letter also stated that
Miller would refuse to stay execution on the judgment after April 2015. In addition to not stating
the debt amount at all, plaintiff claims that the letter misstates the amount of the debt because it
concealed that defendant was assessing interest. Plaintiff further alleges that the letter was
misleading because an unsophisticated consumer would believe that if she made the payments,
the amount of the debt would go down, but instead, the debt has likely increased due to interest.
Defendant argues that it was not required to list the amount of the debt in the January
2015 letter because under § 1692g(1) only an initial notice of the debt must contain the amount
of the debt. Defendant contends that because it communicated with plaintiff by phone in fall
2014, the January 2015 letter was not the initial communication. Defendant also argues that the
FDCPA does not require a debt collector to warn the consumer that the debt may increase.
Under the appropriate standards, I find that plaintiff has stated a claim based on her
allegations that defendant failed to accurately state the amount of the debt. First, for the reasons
stated above, I must take as true plaintiff’s allegation that the fall 2014 phone call was the first
communication between the parties about the debt, and therefore it was the “initial
communication.” Second, § 1692g(a)(1) requires that written notice containing the amount of
the debt be sent within five days of the initial communication. As a result, defendant’s argument
that the fall 2014 phone call would have served to meet that requirement fails. Plaintiff has
alleged and defendant has not disputed that defendant never sent a written notice containing the
amount of the debt. Plaintiff has stated a claim.
I also find that plaintiff has stated a claim that the January 2015 letter was misleading
under § 1692e because it failed to warn that interest was accruing and indicated that making

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payments would cause the debt to go down. Although the FDCPA does not necessarily require
that a collection letter warn that the debt may increase,5 the failure to disclose the fact that
interest is accruing such that making payments in installments would not cause the balance to go
down could plausibly mislead an unsophisticated consumer.
3. Disguised Identity
Plaintiff alleges that defendant violated §§ 1692d-f of the FDCPA by making plaintiff
believe that Miller sought to revive the judgment on behalf of Sears rather than on defendant’s
behalf. Plaintiff pleads that Miller signed the judgment revival pleadings as the attorney for
Sears and used the case caption “Sears v. Margaretta Bland” in its January 2015 letter to
plaintiff. Plaintiff argues that defendant disguised its identity to conceal the fact that the debt
was being collected by a debt collector against whom a plaintiff has statutory dispute rights.
Section 1692d prohibits abusive or harassing conduct in connection with the collection of
a debt, such as the use or threat of use of violence, the use of obscene or profane language, or
calling a debtor repeatedly or continuously. Section 1692f prohibits the use of unfair or
unconscionable means to collect a debt. Such unfair or unconscionable means include, for
example, collecting money not authorized by the debt agreement, soliciting postdated payment
for the purposes of threatening or instituting criminal prosecution, and communicating with a
consumer by post card or otherwise marking an envelope with language that indicates the
communication is from a debt collector. 15 U.S.C. § 1692f. Although these examples are not
meant to limit the application of §§ 1692d and 1692f, it is clear that plaintiff’s allegation that
defendant concealed its identity is not the type of conduct prohibited under these sections of the

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See, e.g., Adlam v. FMS, Inc., 2010 WL 1328958 at *3 (S.D.N.Y. Apr. 5, 2010) (“even the most unsophisticated
consumer would understand that credit card debt accrues interest”).

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FDCPA. As a result, plaintiff’s claim that defendant concealed its identity does not state a
plausible claim under §§ 1692d and 1692f.
Plaintiff has, however, stated a claim under § 1692e, which prohibits the use of false,
deceptive, or misleading representations or means in connection with the collection of a debt.
Section 1692e(14) in particular provides that a violation occurs when a debt collector uses “any
business, company, or organization name other than the true name of the debt collector's
business, company, or organization.” 15 U.S.C. § 1692e. Defendant argues that even the least
sophisticated consumer would not be deceived by the use of the “Sears v. Margaretta Bland”
case caption or Miller’s signing the judgment revival pleadings as the attorney for Sears. While
defendant’s argument might succeed at trial, when viewed in the context of plaintiff’s other
allegations, including the claim that defendant obscured its identity to prevent plaintiff from
knowing that a debt collector – against whom plaintiff has dispute and validation rights – was
collecting the debt, I cannot say that plaintiff has failed to state a claim.
Defendant also argues that plaintiff never pleads that it “used” any name other than its
own. Rather, defendant characterizes plaintiff’s claim as one that defendant failed to use its own
name. Section 1692e, however, is not as narrow as defendant contends. It does not merely
prohibit affirmative misrepresentations, but provides that any “false, deceptive, or misleading”
representation is prohibited. Under the clear language of § 1692e and federal notice pleading
standards, plaintiff’s allegations that defendant misled plaintiff into thinking Sears, rather than
defendant, was attempting to revive the judgment, states a claim.
4. “Botched Assignment” and Standing
Plaintiff alleges that defendant “botched the assignment” of plaintiff’s debt from Sears,
that defendant violated RSMo. § 511.690 by failing to attach a proper record of assignment when

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it filed the motion to revive the judgment, and that defendant does not have standing to collect
plaintiff’s debt.
Defendant argues that the state court documents contradict and preclude plaintiff’s claim.
Defendant attaches to its motion the state court record,6 which includes an Affidavit of
Assignment of Judgment that defendant filed on June 27, 2014.7 Defendant argues that the
affidavit demonstrates that it is a proper assignee, and further, that any claims that the
assignment was invalid or that defendant lacked standing to revive the judgment in state court
are precluded by the doctrine of issue preclusion (also known as collateral estoppel).
“When an issue of fact or law is actually litigated and determined by a valid and final
judgment, and the determination is essential to the judgment, the determination is conclusive in a
subsequent action between the parties, whether on the same or a different claim.” Powers v.
Credit Mgmt. Servs., Inc., 776 F.3d 567, 572 (8th Cir. 2015) (emphasis omitted) (internal
citations omitted). Defendant argues that the state court necessarily determined that defendant
had standing to collect the debt, which included the finding that the assignment was valid, and
that this determination was essential to the state court’s entry of the revival judgment. I agree.
Under Missouri Supreme Court Rule 74.09, which the state court cited when it entered its Order
and Judgment of Revival of Judgment on August 7, 2014, a judgment may only be revived
“pursuant to a motion for revival filed by a judgment creditor.” (emphasis added). As a result,
when the state court revived the judgment, it necessarily found that defendant was a proper
judgment creditor, and that finding was essential to the state court’s judgment. Additionally, as

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A court may consider documents that are necessarily embraced by the pleadings, such as the affidavit, in a motion
to dismiss without converting it into a motion for summary judgment. Noble Sys. Corp. v. Alorica Cent., LLC, 543
F.3d 978, 982 (8th Cir. 2008) (internal citations omitted).
7
Defendant also states that the state court documents indicate that the assignment was also filed on December 2,
2011. However, Defendant has not provided a copy of a December 2011 affidavit, nor does the state court docket
sheet indicate that anything was filed on December 2, 2011.

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standing is a constitutional requirement, the state court would have had to have found that
defendant had standing to bring the motion to revive judgment. Under the doctrine of issue
preclusion, plaintiff may not relitigate this issue in this case.8 Additionally, plaintiff’s allegation
that the “botched assignment” violated RSMo. § 511.690 fails because that statute merely
instructs on one possible way an assignment “may” be properly executed.9 See Boyd v. Sloan,
71 S.W.2d 1065, 1066 (Mo. Ct. App. 1934).
5. 1692f Claims
Finally, defendant challenges any claim plaintiff brings under § 1692f, which prohibits
unfair and unconscionable debt collection practices. Defendant argues that plaintiff has not
alleged any misconduct beyond that which plaintiff alleges as violations of other sections of the
FDCPA. Section 1692f is not so limited. Plaintiff alleged that defendant used false and
misleading statements to collect the debt from plaintiff by misrepresenting that it was Sears,
rather than a debt collector assignee; by failing to provide plaintiff with the requisite notice of
her dispute and validation rights; by overshadowing plaintiff’s dispute and validation rights; and
by never accurately stating the amount of the debt. These allegations, taken together, are
sufficient to state a claim under § 1692f of the FDCPA.
B. Abuse of Process
Plaintiff alleges that defendant abused process in violation of Missouri common law by
using certain legal processes in the state court action “solely to harass and intimidate” plaintiff.
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Furthermore, the state court record indicates that plaintiff failed to appear and show cause why the judgment
should not be revived. If plaintiff believed the state court was incorrect, she could have participated in the
proceeding or appealed the judgment, but she did not.
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Moreover, to the extent that plaintiff is claiming that defendant’s alleged violation of state law is a FDCPA
violation, plaintiff’s claim fails because the violation of a state law does not amount to a FDCPA violation. While §
1692f prohibits “unfair or unconscionable means to collect or attempt to collect any debt,” it is not “an enforcement
mechanism for other rules of state and federal law.” Beler v. Blatt, Hasenmiller, Leibsker & Moore, LLC, 480 F.3d
470, 474 (7th Cir. 2007); see also Carlson v. First Revenue Assur., 359 F.3d 1015, 1018 (8th Cir. 2004) (“The
FDCPA was designed to provide basic, overarching rules for debt collection activities; it was not meant to convert
every violation of a state debt collection law into a federal violation.”).

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“A pleading alleging abuse of process must set forth ultimate facts establishing
the following elements: (1) the present defendant made an illegal, improper,
perverted use of process, a use neither warranted nor authorized by the process;
(2) the defendant had an improper purpose in exercising such illegal, perverted or
improper use of process; and (3) damage resulted.”
Ritterbusch v. Holt, 789 S.W.2d 491, 493 (Mo. banc 1990) (internal quotations omitted).
Missouri courts have held that an action for an abuse of process does not lie “where the action is
confined to its regular function even if the plaintiff had an ulterior motive in bringing the action,
or if the plaintiff knowingly brought the suit upon an unfounded claim.” Hinten v. Midland
Funding, LLC, 2013 WL 5739035, at *10 (E.D. Mo. Oct. 22, 2013) (quoting Howard v.
Youngman, 81 S.W.3d 101, 118 (Mo. Ct. App. 2002)). To succeed, plaintiff must show that
process was used to accomplish an unlawful end or to compel her to do something which she
could not be compelled to do legally. See Howard, 81 S.W.3d at 118.
Plaintiff’s complaint fails to state a claim for abuse of process. Even taking plaintiff’s
factual allegations as true, at most plaintiff alleges that defendant had an ulterior motive in
seeking revival of the judgment. Plaintiff conceded this much at oral argument. Plaintiff has not
alleged that defendant’s motion to revive judgment was brought outside of its regular function.
To the extent that plaintiff alleges that defendant abused process by bringing suit without
standing, for the reasons explained above, that argument is precluded by the doctrine of issue
preclusion. As a result, I will dismiss plaintiff’s claim for abuse of process.
C. Missouri Merchandising Practices Act
Plaintiff alleges that defendant violated the Missouri Merchandising Practices Act,
RSMo. § 407.025 (“MMPA”), by using deception, false pretenses, misrepresentation, factual
omissions and unfair business practices in connection with its attempts to collect on plaintiff’s
debt. Defendant argues that plaintiff has failed to state a claim under the MMPA because its

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alleged collection practices were not “in connection with the sale or advertisement of any
merchandise” as defined by the MMPA. RSMo. § 407.020 (emphasis added).
“[S]ection 407.020.1 [of the MMPA] makes the ‘act, use or employment by any person’
of any unfair or deceptive practice done ‘in connection with the sale or advertisement of any
merchandise’ unlawful.” Conway v. CitiMortgage, Inc., 438 S.W.3d 410, 414 (Mo. 2014)
(emphasis included). “The use of an unlawful practice is a violation of the MMPA ‘whether
committed before, during or after the sale,’ so long as it was made ‘in connection with’ the sale.”
Id. (citing § 407.020.1.10
The Missouri Supreme Court has held that a loan servicer may be subject to the MMPA
when it is alleged to have committed fraud and deception even when the loan was originally sold
by another party. Id. at 412. In reaching that holding, court reasoned that the extension of credit,
which in that case was a mortgage, “create[ed] a long-term relationship in which the borrower
and the lender continue to perform various duties, such as making and collecting payments over
an extended period of time.” Id. at 415. However, the court clarified that a loan servicer does
not act “in connection with” the initial sale of a loan when it attempts to modify the loan terms
because it is no longer enforcing the terms of the original loan. Watson v. Wells Fargo Home
Mortg., Inc., 438 S.W.3d 404, 406 (2014). Likewise, the Eighth Circuit found Conway
distinguishable in a case where a loan trustee assumed a debt but “did not assume a continuing
duty to service [the borrower’s] loan.” Wivell v. Wells Fargo Bank, N.A., 773 F.3d 887, 895
(8th Cir. 2014). Instead, the trustee had a “narrow, contingent role” in the event of default – to

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Plaintiff also must have alleged that: (1) she made a purchase; (2) for personal, family, or household purposes; and
(3) suffered an ascertainable loss of money or property as a result of an act declared unlawful by § 407.020. Conway
v. CitiMortgage, Inc., 438 S.W.3d 410, 417 n. 3 (Mo. 2014) (internal citations omitted). Plaintiff made these
allegations in the complaint, and they are not at issue.

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collect (rather than service) the loan, and therefore did not act “in connection with” the sale of
the original loan. Id.
Defendant argues that this case is more like Wivell than Conway and defendant’s alleged
actions were not done “in connection with” the sale of the Sears credit. I agree. First, the
relationship established by the use of a consumer credit card is different from the relationship
created by parties to a mortgage loan, which is more complex, long-term, and imposes greater
duties on the parties to the loan. Second, even if the two were sufficiently analogous for MMPA
purposes, once the state court entered default judgment against plaintiff in the debt collection
lawsuit, the Sears line of credit ceased to be an ongoing “loan” and became a judgment. When
Sears assigned the judgment to defendant, defendant “did not assume a continuing duty to
service” a loan. See Wivell v. Wells Fargo Bank, N.A., 773 F.3d 887, 895 (8th Cir. 2014).
Rather, defendant had a “narrow, contingent role,” namely, to collect on the judgment. See id.
As a result, defendant’s duties were not performed “in connection with” Sears’ initial extension
of credit to plaintiff and I find that plaintiff has failed to state a claim for relief under the MMPA.
Accordingly,
IT IS HEREBY ORDERED that Defendant LVNV’s Motion to Dismiss #[16] is
GRANTED in part and DENIED in part.
IT IS FURTHER ORDERED that Plaintiff shall file an amended complaint in
accordance with the terms of this Order no later than September 23, 2015.

_______________________________
RODNEY W. SIPPEL
UNITED STATES DISTRICT JUDGE
Dated this 8th day of September, 2015.
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