King v. AllianceOne Receivables Management, Inc. et al

Filing 11

MEMORANDUM AND OPINION as set forth in following order.Signed by District Judge R Leon Jordan on 10/5/12. (ABF)

IN THE UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF TENNESSEE
AT GREENEVILLE

JENNIFER KING,
Plaintiff,
v.
ALLIANCEONE RECEIVABLES
MANAGEMENT, INC., and CAPITAL ONE
BANK (USA), NATIONAL ASSOCIATION

Defendants.

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No. 2:12-CV-314

MEMORANDUM OPINION
Defendant AllianceOne Receivables Management, Inc. (“AllianceOne”) has
filed a motion to dismiss pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure
[doc. 4]. Plaintiff has not responded to the motion within the time allowed. See Fed. R. Civ.
P. 6(a), (d); E.D. TN. LR. 7.1(a). Defendant Capital One Bank (USA), National Association
(“Capital One”) has neither joined in the motion nor opposed it. For the reasons that follow,
AllianceOne’s motion will be granted, and AllianceOne will be dismissed from this
litigation.
I.
Background
AllianceOne sent plaintiff a collection letter dated July 25, 2011, on behalf of
Capital One. That letter is the subject of this Fair Debt Collection Practices Act (“FDCPA”)

and Truth in Lending Act (“TILA”) lawsuit, proving in material part,
As of the date of this letter, you owe $888.45. Your account balance may be
periodically increased due to the addition of accrued interest or other charges
if so provided in your agreement with your original creditor.
[Doc. 1, ex. 1].
The complaint now before the court accuses AllianceOne of violating several
provisions of the FDCPA because
it [is] impossible to determine from the letter the exact amount owed on that
date, given that it referenced additional interest or other charges, without
stating any specific amounts, and did not expressly state as of what date the
balance owed is due or what impact payment of the stated amount would have
on the consumer’s obligation to pay later-accruing interest or other charges.
[Doc. 1, ¶ 17]. The complaint also alleges that both defendants violated numerous
subsections of TILA by failing to mail monthly statements to plaintiff from August 2011
through July 2012.
II.
Applicable Legal Standards
As noted, plaintiff has not contested the motion to dismiss. Although “[f]ailure
to respond to a motion may be deemed a waiver of any opposition to the relief sought,” E.D.
TN. LR. 7.2, the court must nonetheless examine the motion to ensure that the sought-after
relief is warranted. See Carver v. Bunch, 946 F.2d 451, 455 (6th Cir. 1991).
The Federal Rules authorize dismissal for “failure to state a claim upon which
relief can be granted.” Fed. R. Civ. P. 12(b)(6). To survive a Rule 12(b)(6) motion, “a

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pleading must contain a ‘short and plain statement of the claim showing that the pleader is
entitled to relief.’” Ashcroft v. Iqbal, 556 U.S. 662, 677-78 (2009) (quoting Fed. R. Civ. P.
8(a)). “[A] complaint must contain sufficient factual matter, accepted as true, to ‘state a
claim to relief that is plausible on its face.’ . . . 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 (citing and quoting
Bell Atl. Corp. v. Twombly, 550 U.S. 544, 556, 570 (2007)). While factual allegations are
to be credited, “courts are not bound to accept as true a legal conclusion couched as a factual
allegation.” Twombly, 550 U.S. at 555 (citing and quoting Papasan v. Allain, 478 U.S. 265,
286 (1986) (internal quotation omitted)).
III.
Analysis
A. FDCPA
The July 25 letter from AllianceOne was an “initial communication with a
consumer in connection with the collection of any debt.” 15 U.S.C. § 1692g(a). As such,
that communication, or a follow-up written notice sent within five days thereafter, was
required to contain “the amount of the debt.” 15 U.S.C. § 1692g(a)(1).
Plaintiff is incorrect in alleging that AllianceOne’s letter did not accurately
contain “the amount of the debt.” As this court has previously noted,

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The requirement that a validation notice correctly state the amount of the debt
has produced conflicting judicial opinions. Some courts have held that a
validation notice fails to satisfy the statute unless it states the total amount due
as of the date the letter is sent and also discloses whether the amount of the
debt will increase due to interest. . . . [O]ther courts have held that a validation
notice satisfies the statute if it states the total amount of the debt (including
interest and any other charges) as of the date the letter is sent.
Ivy v. Nations Recovery Ctr., No. 2:12-CV-037, 2012 WL 2049387, at *1-2 (E.D. Tenn. June
6, 2012) (quoting Jones v. Midland Funding, 755 F. Supp. 2d 393, 397 (D. Conn. 2010)
(citations and footnote omitted)).
Under either of these approaches, AllianceOne sufficiently disclosed the
amount of the debt. The letter states the sum owed as of the date the letter was sent and
explains further that the debt “may be periodically increased due to the addition of accrued
interest or other charges if so provided in your agreement with your original creditor.”
AllianceOne complied with § 1692g(a)(1). See Williams v. OSI Educ. Servs., 505 F.3d 675,
679-80 (7th Cir. 2007).
Plaintiff’s claim under § 1692e(2)(A) similarly fails. That FDCPA subsection
prohibits the use of “any false, deceptive, or misleading representation or means in
connection with the collection of any debt,” including falsely representing the amount of the
debt. 15 U.S.C. § 1692e(2)(A). AllianceOne’s statement of the debt was not false,
deceptive, or misleading. The July 25 letter “set forth the amount of the debt with sufficient
clarity and accuracy to comply with the requirements of the statute.” Williams, 505 F.3d at
680.
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Plaintiff’s claim under § 1692e(10) also fails. That subsection prohibits the
“use of any false representation or deceptive means to collect or attempt to collect any debt.”
15 U.S.C. § 1692e(10). Again, AllianceOne’s statement of the debt was not false or
deceptive.
Lastly, plaintiff’s claim under § 1692f fails. That section prohibits use of
“unfair or unconscionable means” to collect a debt. 15 U.S.C. § 1692f. The wording of the
July 25 debt amount disclosure was neither unfair nor unconscionable.
B. TILA
The complaint also alleges that AllianceOne and Capital One each violated 15
U.S.C. § 1637(b) by failing to transmit monthly account statements to plaintiff. Section
1637(b) imposes its obligation on “creditors.” The complaint alleges that Capital One issued
the subject credit card and is thus a “card issuer” and a “creditor” under TILA. See 15 U.S.C.
§ 1602(g), (o).
According to the complaint, AllianceOne is also subject to the requirements
of § 1637(b) because it is Capital One’s agent for the purpose of collection. That is a legal
conclusion which the court is not bound to accept.
For § 1637(b) to apply to AllianceOne under an agency theory, there must have
been an agreement under which plaintiff could use a line of credit with AllianceOne to pay
obligations incurred by use of the credit card. See Neff v. Capital Acquisitions & Mgmt., 352

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F.3d 1118, 1120 (7th Cir. 2003) (citing 12 C.F.R. pt. 226, Supp. I, ¶ 2(a)(7). The complaint
does not allege that AllianceOne granted plaintiff any credit priveleges. Providing support
services, as opposed to credit-issuing services, does not make an entity the agent of a “card
issuer” under TILA. See 12 C.F.R. pt. 226, Supp. I, ¶ 2(a)(7). Plaintiff’s TILA claim against
AllianceOne must therefore be dismissed.
IV.
Conclusion
For the reasons stated herein, plaintiff’s complaint fails to state any claim upon
which relief can be granted against AllianceOne. An order consistent with this opinion will
be entered, dismissing AllianceOne from this case. A separate scheduling order will also be
entered, setting for trial plaintiff’s claim against Capital One.

ENTER:

s/ Leon Jordan
United States District Judge

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