Ayers v. Portfolio Recovery Associates

Filing 26

MEMORANDUM DECISION AND ORDER granting 15 Motion to Dismiss for Failure to State a Claim. Signed by Judge David Nuffer on 11/8/18 (alt)

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF UTAH, CENTRAL DIVISION
SARAH E. AYRES,

MEMORANDUM DECISION AND
ORDER GRANTING DEFENDANT’S
MOTION TO DISMISS

Plaintiff,
v.

Case No. 2:17-cv-01088-DN

PORTFOLIO RECOVERY ASSOCIATES,
LLC,

District Judge David Nuffer

Defendant.
Defendant Portfolio Recovery Associates LLC (“PRA”) filed a motion (the “Motion”) 1 to
dismiss Plaintiff Sarah E. Ayres’s complaint. 2 The Motion is made under rule 12(b)(6) of the
Federal Rules of Civil Procedure. Because Ayres has failed to state a claim on which relief can
be granted, the Motion1 is GRANTED.
BACKGROUND
“To survive a motion to dismiss, a complaint must allege facts that, if true, state a claim
to relief that is plausible on its face. A claim is facially plausible when the allegations give rise to
a reasonable inference that the defendant is liable.” 3 Accepting Ayres’s well-pleaded factual
allegations as true, “view[ing] them in the light most favorable to” Ayres, and considering the
letter referenced in her complaint, 4 the relevant facts for purposes of this Motion are as follows.

1

Defendant’s Motion to Dismiss and Memorandum in Support, docket no. 15, filed October 25, 2017; see Plaintiff’s
Opposition to Motion to Dismiss, docket no. 18, filed November 22, 2017; Defendant’s Reply in Support of Motion
to Dismiss, docket no. 20, filed December 6, 2017; Notice of Supplemental Authority, docket no. 24, filed August
28, 2018; Plaintiff’s Notice of Supplemental Authority, docket no. 25, filed October 19, 2018.
2

Complaint ¶¶ 10, 12, docket no. 2-2, filed September 28, 2017.

3

Mayfield v. Bethards, 826 F.3d 1252, 1255 (10th Cir. 2016) (citation and internal quotation marks omitted).

4

Letter, docket no. 15-1, filed October 25, 2017; see Brass v. Am. Film Techs., Inc., 987 F.2d 142, 150 (2nd Cir.
1993) (“documents either in plaintiffs’ possession or of which plaintiffs had knowledge and relied on in bringing

Over a decade ago, Ayres opened a credit account with Capital One, on which she made
purchases primarily for personal, family, or household purposes. 5 The last time Ayres made a
purchase on or payment toward the account was before 2012. 6 Ayres ultimately defaulted on the
account, leaving it with an outstanding balance. 7
Following Ayres’s default, Capital One transferred the account to PRA, which is in the
business of purchasing and collecting debts. 8 According to Ayres, when PRA acquired the
account, any action to collect on her debt was already time-barred under applicable statutes. 9
Thereafter, on April 25, 2017, PRA sent a letter to Ayres in an attempt to collect the time-barred
debt. 10 The letter read:
Every day [PRA] works with people to create flexible payment
arrangements to resolve their debt. We would love the opportunity to do the same
for YOU.
Please contact us. We are standing by and ready to help.
....
CURRENT BALANCE DUE: $7,642.82
Account Offers[:]
[1] Single Payment Savings Plan[:] Pay $4,203.55 and SAVE $3,439.27[;]
[2] 12 Month Savings Plan[:] Pay $382.14 for 12 consecutive months and
SAVE $3,057.14[;]
[3] 33 Month Installment Option[:] Pay $231.60 for 33 consecutive
months[.]
Savings Plan: The savings will be applied to the balance and your
account will be considered “Settled in Full” after your final payment is
successfully posted.

suit” may properly be considered “[w]hen determining the sufficiency of plaintiffs’ claim for Rule 12(b)(6)
purposes.” (citations omitted)).
5

Complaint, supra note 2, ¶¶ 10, 12.

6

Id. ¶ 13.

7

Id. ¶¶ 11, 14.

8

Id. ¶¶ 6, 14-15.

9

Id. ¶¶ 6, 14, 20, 23, 24. It is assumed, for purposes of this Motion only, that all relevant statutes of limitations
expired before PRA’s acquisition of the account and attempt to collect on the debt.
10

Id. ¶¶ 10, 16-17; see supra note 9.

2

Installment Option: Your account will be considered “Paid in Full” after
your final payment is successfully posted.
Your first payment must be received NO LATER than: 05/26/2017[.]
....
The law limits how long you can be sued on a debt and how long a debt
can appear on your credit report. Due to the age of this debt, we will not sue you
for it or report payment or non-payment of it to a credit bureau.
....
This communication is from a debt collector and is an attempt to collect a
debt. Any information obtained will be used for that purpose. 11
Ayres did not choose any of the payment options offered in PRA’s letter. Instead, she
sued PRA for sending the letter.
DISCUSSION
Ayres asserts two causes of action against PRA. First, violation of the Fair Debt
Collection Practices Act (“FDCPA”). 12 And, second, violation of the Utah Consumer Sales
Practices Act (“UCSPA”). 13 As explained below, she is not entitled to relief under either statute.
Ayres is not entitled to relief under the FDCPA.
The FDCPA’s purpose is “to eliminate abusive debt collection practices by debt
collectors.” 14 It prohibits the use of “any false, deceptive, or misleading representation or means
in connection with the collection of any debt,” 15 as well as the use of “unfair or unconscionable
means to collect or attempt to collect any debt.” 16 Thus, it is a violation of the FDCPA to falsely
represent “the character, amount, or legal status of any debt”; 17 to threaten “to take any action

11

Letter, supra note 4.

12

15 U.S.C. § 1692 et seq.; see Complaint, supra note 2, ¶¶ 33-37.

13

UTAH CODE § 13-11-1 et seq.; see Complaint, supra note 2, ¶¶ 38-47.

14

15 U.S.C. § 1692(e).

15

Id. § 1692e.

16

Id. § 1692f.

17

Id. § 1692e(2)(A).

3

that cannot legally be taken”; 18 or to use “any false representation or deceptive means to collect
or attempt to collect any debt.” 19 A debt collector’s liability under the FDCPA is a legal issue. 20
Ayres alleges that PRA violated the FDCPA in three ways: (1) by accepting assignment of
a time-barred debt in contravention of the Utah Collection Agencies Act (“UCAA”); 21 (2) by
attempting to collect on the time-barred debt; 22 and (3) by not disclosing “that any payment on
the debt would result in the revival or tolling of the debt’s statute of limitations.” 23 For the
following reasons, the law does not afford Ayres relief on any of these grounds.
First, even if PRA violated the UCAA when it accepted assignment of a time-barred debt,
the UCAA does not give rise to a private cause of action, and “the court cannot transform a
(purported) violation of the UCAA into a private right of action under the FDCPA.” 24
Second, a debt is not invalid simply because its statute of limitations expired. 25 Nor is the
mere attempt to collect a time-barred debt unlawful under the FDCPA—especially where, as
here, 26 the debt collector’s communication indicates that the limitations period has run. 27

18

Id. § 1692e(5).

19

Id. § 1692e(10).

20

See Evon v. Law Offices of Sidney Mickell, 688 F.3d 1015, 1027 (9th Cir. 2012); Kalebaugh v. Berman & Rabin,
P.A., 43 F. Supp. 3d 1215, 1223 (D. Kan. 2014).

21

UTAH CODE § 12-1-8; see Complaint, supra note 2, ¶¶ 23-25, 35, 48, 51.

22

Complaint, supra note 2, ¶¶ 20, 48.

23

Id. ¶¶ 28, 30-31, 51.

24

Gunther v. Midland Credit Mgmt., Inc., No. 2:17-cv-704-CW, 2018 WL 4621764, *5 (D. Utah Sept. 26, 2018).

25

See Buchanan v. Northland Group, Inc., 776 F.3d 393, 396 (6th Cir. 2015).

26

Letter, supra note 4 (see penultimate paragraph quoted above accompanying note 11).

27

See Midland Funding, LLC v. Johnson, 137 S. Ct. at 1411 (2017) (“filing of a proof of claim that on its face
indicates that the limitations period has run does not fall within the scope of any of the five relevant words of the
Fair Debt Collection Practices Act”); Freyermuth v. Credit Bureau Servs., Inc., 248 F.3d 767, 771 (8th Cir. 2001)
(“[I]n the absence of a threat of litigation or actual litigation, no violation of the FDCPA has occurred when a debt
collector attempts to collect on a potentially time-barred debt that is otherwise valid”); Stimpson v. Midland Credit

4

And, third, while in some circumstances it may be a violation of the FDCPA to fail to
disclose that partial payment of a time-barred debt will revive the debt’s statute of limitations,
that cannot, as a matter of law, be the case here because “in Utah partial payment on a debt that is
past the limitations period does not revive the debt’s statute of limitations.” 28 Because there was
no risk of revival, PRA could not have violated the FDCPA by failing to disclose that a partial
payment would reset the limitations period. 29
Ayres is not entitled to relief on her first cause of action, and it will be dismissed.
Ayres is not entitled to relief under the UCSPA.
The UCSPA’s purpose is, among other things, “to protect consumers from suppliers who
commit deceptive and unconscionable sales practices,” and “to encourage the development of
fair consumer sales practices.” 30 “A deceptive act or practice by a supplier in connection with a
consumer transaction violates” the UCSPA, 31 as does also “[a]n unconscionable act or practice
by a supplier in connection with a consumer transaction.” 32

Mgm’t, Inc., No. 1:17-cv-00431, 2018 WL 4643110, *5 (D. Idaho Sept. 27, 2018) (creditor may seek payment after
statute runs and offer “to accept less than the full amount [debtor] owes—resulting in savings for” debtor).
28

Gunther, 2018 WL 4621764, *10; see State Bank of S. Utah v. Troy Hygro Sys., Inc., 894 P.2d 1270, 1276 (Utah
Ct. App. 1995) (“part payment . . . does not extend the limitations period if the . . . payment . . . occurs after the
applicable statute of limitations has run”).
29

See Stimpson, 2018 WL 4643110, *4.

30

UTAH CODE § 13-11-2(2), (3).

31

Id. § 13-11-4(1).

32

Id. § 13-11-5(1).

5

Ayres alleges that PRA violated the UCSPA in two ways: (1) by accepting assignment of
a time-barred debt in contravention of the UCAA; 33 and (2) by not disclosing “that any payment
on the debt would result in the revival or tolling of the debt’s statute of limitations.” 34
For the same reasons that these allegations do not entitle Ayres to relief on her FDCPA
claim, they also do not entitle her to relief on her UCSPA claim. Specifically, “the court cannot
transform a (purported) violation of the UCAA into a private right of action under the
USCPA”; 35 and partial payment of a time-barred debt does not revive the statute of limitations in
Utah. 36
Because the UCSPA does not afford Ayres relief, her second cause of action will be
dismissed.
ORDER
THEREFORE, IT IS HEREBY ORDERED that the Motion 37 is GRANTED.
IT IS FURTHER HEREBY ORDERED that Ayres’s first and second causes of
action 38 against PRA for violation of the FDCPA and UCSPA are DISMISSED with prejudice.
Signed November 8, 2018.
BY THE COURT:

David Nuffer
United States District Judge

33

Id. § 12-1-8; see Complaint, supra note 2, ¶¶ 23-25, 40, 51.

34

Complaint, supra note 2, ¶¶ 28, 30-31, 40, 51.

35

Gunther, 2018 WL 4621764, *9 (“a violation of the UCAA does not provide a basis for a USCPA claim”).

36

Id.

37

Docket no. 15, filed October 25, 2017.

38

See Complaint, supra note 2, ¶¶ 33-47.

6