Brunett v. Vital Recovery Services LLC

Filing 24

ORDER signed by Judge J.P. Stadtmueller on 6/22/2018: GRANTING 18 Defendant's Motion to Dismiss and DISMISSING CASE with prejudice. (cc: all counsel) (jm)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF WISCONSIN
DARLENE M. BRUNETT,
Plaintiff,
v.
VITAL RECOVERY SERVICES LLC,

Case No. 18-CV-399-JPS

ORDER

Defendant.
1.

INTRODUCTION
Plaintiff filed this class action on March 13, 2018. (Docket #1). She

sues Defendant for sending her, and members of the putative class,
allegedly misleading debt collection letters. Plaintiff brings claims under
various provisions of the Fair Debt Collection Practices Act (“FDCPA”), 15
U.S.C. § 1692 et seq. Defendant moved to dismiss Plaintiff’s Complaint on
May 7, 2018. (Docket #18). That motion is now fully briefed. (Response,
Docket #22; Reply, Docket #23). For the reasons stated below, the motion
must be granted.
2.

STANDARD OF REVIEW
Defendant has moved to dismiss Plaintiff’s Complaint pursuant to

Federal Rule of Civil Procedure (“FRCP”) 12(b)(6). That Rule provides for
dismissal of complaints which fail to state a viable claim for relief. Fed. R.
Civ. P. 12(b)(6). In reviewing Plaintiff’s Complaint, the Court is required to
“accept as true all of the well-pleaded facts in the complaint and draw all
reasonable inferences in [her] favor[.]” Kubiak v. City of Chicago, 810 F.3d
476, 480–81 (7th Cir. 2016) (citation omitted). To state a viable claim, a
complaint must provide “a short and plain statement of the claim showing

that the pleader is entitled to relief.” Fed. R. Civ. P. 8(a)(2). In other words,
the complaint must give “fair notice of what the . . . claim is and the grounds
upon which it rests.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007)
(citation omitted). The allegations must “plausibly suggest that the plaintiff
has a right to relief, raising that possibility above a speculative level[.]”
Kubiak, 810 F.3d at 480 (quotation omitted).
In addition to the FRCP 12(b)(6) standard of review, the Seventh
Circuit has provided further direction in evaluating the viability of FDCPA
claims.

Such claims are

assessed from the

perspective

of the

“unsophisticated consumer.” An unsophisticated consumer “may be
uninformed, naïve, [and] trusting, but is not a dimwit, has rudimentary
knowledge about the financial world, and is capable of making basic logical
deductions and inferences[.]” Lox v. CDA, Ltd., 689 F.3d 818, 822 (7th Cir.
2012) (citations and quotations omitted). Although unsophisticated
consumers “may tend to read collection letters literally, [they] do[] not
interpret them in a bizarre or idiosyncratic fashion.” Gruber v. Creditors’
Protection Serv., Inc., 742 F.3d 271, 274 (7th Cir. 2014) (citations and
quotations omitted). In the case of letter-based FDCPA violations, the court
considers whether the subject letter is “confusing to a significant fraction of
the population.” Id. (quotation omitted).
To prove a claim that language in a collection letter is misleading or
deceptive, the Court of Appeals has established three categories of cases:
The first category includes cases in which the
challenged language is “plainly and clearly not misleading.”
No extrinsic evidence is needed to show that the debt collector
ought to prevail in such cases. Lox[, 689 F.3d at 822]. The
second Lox category “includes debt collection language that is
not misleading or confusing on its face, but has the potential
to be misleading to the unsophisticated consumer.” Id. In such
Page 2 of 11

cases, “plaintiffs may prevail only by producing extrinsic
evidence, such as consumer surveys, to prove that
unsophisticated consumers do in fact find the challenged
statements misleading or deceptive.” Id., quoting Ruth [v.
Triumph P’ships, 577 F.3d 790, 800 (7th Cir. 2009)]. The third
category is cases in which the challenged language is “plainly
deceptive or misleading,” such that no extrinsic evidence is
required for the plaintiff to prevail. Id.
Janetos v. Fulton Friedman & Gullace, LLP, 825 F.3d 317, 322–23 (7th Cir. 2016).
Defendant seeks dismissal of each of Plaintiff’s claims, asserting that they
fall into the first category. The Seventh Circuit “ha[s] cautioned that a
district court must tread carefully before holding that a letter is not
confusing as a matter of law when ruling on a Rule 12(b)(6) motion because
district judges are not good proxies for the ‘unsophisticated consumer’
whose interest the statute protects.” McMillan v. Collection Prof’ls, Inc., 455
F.3d 754, 759 (7th Cir. 2006) (quotation omitted).
3.

RELEVANT FACTS
Accepting the truth of Plaintiff’s well-pleaded allegations and

drawing all reasonable inferences in her favor, the relevant facts are as
follows. Plaintiff allegedly owed a debt to Comenity Bank (“Comenity”).
(Docket #1-1 at 2). The debt was later purchased by Crown Asset
Management (“Crown”) and apparently assigned to Defendant for
collection. (Docket #1 at 1). Defendant sent Plaintiff a letter attempting to
collect that debt on April 17, 2017 (the “Letter”). (Docket #1-1 at 2).1 The
Letter appears as follows:

Plaintiff has attached a copy of the Letter as an exhibit to her Complaint.
The Court can therefore consider it as part of its decision on the motion to dismiss
without converting the motion into one for summary judgment. Tierney v. Vahle,
304 F.3d 734, 738 (7th Cir. 2002).
1

Page 3 of 11

Id.
4.

ANALYSIS
Plaintiff brings her FDCPA claims in two counts. 2 Count One is

asserted pursuant to 15 U.S.C. § 1692e, which prohibits the use of false or
misleading representations in the collection of a debt. 15 U.S.C. § 1692e.

The class claims are stated in Counts Three and Four. (Docket #1 at 7–13).
The Court need not address them in this Order. They are simply offshoots of the
individual claims presented in Counts One and Two. Id. Thus, if the first two
counts are dismissed, the latter two cannot survive. In any event, Defendant makes
no independent argument for dismissal of the class claims. See generally (Docket
#19).
2

Page 4 of 11

Plaintiff contends that four aspects of the Letter are deceptively worded.
First, “we” is repeatedly used but left undefined. (Docket #1 at 3–4).
According to Plaintiff, it is not clear whether “we” refers to Comenity,
Crown, or Defendant itself. Id. Second, the Letter states that if she pays the
settlement amount, the debt will be considered “resolved in full.” Id. at 4–
5. Plaintiff says that the Letter fails to explain whether Defendant is
authorized by Crown to accept the settlement as a resolution “in full.” Id.
Third, and relatedly, Plaintiff maintains that even if Defendant could accept
the settlement as satisfaction of the debt, a credit reporting agency would
not recognize the payment as such. Id. at 5. She claims that Defendant
makes a promise it cannot keep—that payment of the settlement will
indeed resolve the debt. Id. Finally, the Letter does not explain whether
payment of the settlement amount will stop collection efforts from the
current or any future creditors. Id. at 5–6. In Plaintiff’s view, this is
important because of the danger that “an unscrupulous collector or creditor
obtains the debt after partial payment has been made” and seeks additional
payments notwithstanding the settlement. Id.
Count Two is brought pursuant to 15 U.S.C. § 1692f, which forbids
unfair or unconscionable collective activity. 15 U.S.C. § 1692f. Plaintiff does
not tie any specific aspect of the Letter to Section 1692f, which is generally
viewed as the FDCPA’s catch-all provision. (Docket #1 at 4); Todd v. Collecto,
Inc., 731 F.3d 734, 739 (7th Cir. 2013) (“Section 1692f’s catch-all prohibition
on unfairness is as vague as they come.”) (quotation omitted). She simply
states that the Letter violated Section 1692f “because the above described
language, as detailed in Count [One], constitutes unfair means to attempt
to collect the debt at issue.” (Docket #1 at 7).

Page 5 of 11

Defendant argues that each aspect of Count One is plainly not
misleading, and so the entire claim should be dismissed. The Court will
address each issue in turn, beginning with Defendant’s use of the pronoun
“we.” Defendant chides Plaintiff for alleging that “we” is confusing when
she herself clearly knows that it refers to Defendant. Further, the text of the
Letter makes it plain that “we” refers to Defendant as the sender of the
Letter. For example, the Letter states that “we are offering you the
opportunity to resolve the [Crown] account,” “[w]e will inform the creditor
that your account has been resolved,” and “[c]all us to discuss our offer[;]
[w]e want to consider other payment plans together with you.” (Docket #11 at 2). “We” is thus solidly connected to Defendant and differentiated from
Plaintiff’s current and former creditors.
Plaintiff’s counterargument, confusingly located in the introduction
to her brief, is that the Letter would be clearer if Defendant said “we”
referred to “Vital Recovery Solutions,” despite the fact that Defendant’s
name is Vital Recovery Services.3 (Docket #22 at 2). Certainly this would
have alleviated Plaintiff’s purported misunderstanding, but satisfying a
particular consumer’s desired level of clarity is not what the FDCPA
mandates. Rather, Defendant complies with the statute so long as the Letter
is not misleading to an unsophisticated, but not stupid, consumer. No such
consumer, reading the entire Letter, would be confused or misled as to who
“we” is.

These are not Plaintiff’s only drafting issues. Plaintiff defends her claims
in just four pages of argument, citing exclusively to Janetos. (Docket #22 at 3-7). Her
brief is also littered with distracting typographical errors. Additional proofreading
and more thorough legal analysis would have helped the Court better understand
and appreciate Plaintiff’s positions.
3

Page 6 of 11

Plaintiff’s next concern is with the “resolved in full” statement. She
maintains that Defendant’s offer to tell the creditor that the account has
been resolved in full is a lie. In her view, paying the settlement amount
offered will not count as paying the debt in full. In her complaint, Plaintiff
offers two reasons why this is problematic. First, the Letter does not state
that Defendant is authorized to make such an offer on Crown’s behalf.
What requires Defendant to do so? On the face of the letter, it is apparent
that Defendant is collecting a debt for Crown. It is implied that Defendant
acts with Crown’s authorization. Indeed, under Plaintiff’s theory,
Defendant could not stop with a mere statement of authorization in the
Letter; that might be a contrivance. Rather, to comport with Plaintiff’s view
of Section 1692e, Defendant would be required to provide the contract
between it and Crown outlining Defendant’s authority to collect the subject
debt. Such an absurd result is untethered from any deceptive statement in
the Letter. As with the “we” issue, it is formed entirely by Plaintiff’s
idiosyncratic desire for additional clarity.
Plaintiff attempts to ground her position in Janetos, but to no avail.
There, the Seventh Circuit ruled that a collector violated 15 U.S.C. §
1692g(a)(2), which mandates that collection letters state the name of the
current creditor. Janetos, 825 F.3d at 321. The letters in question identified
an assignee and indicated that the debts had been transferred, but failed to
state in plain English who the current creditor was. Id. at 321–23. Janetos
observed that failing to disclose the current creditor opened the door to
fraud. Id. at 324. An unscrupulous collector could review publicly available
records and find out that a debt was owed. Id. It would then send the debtor
a letter demanding payment, without noting to whom the debt was owed.
Id. The debtor would therefore be unable to check with the creditor to
Page 7 of 11

confirm that the collector was authorized to accept payment. Id. at 325. If
the debtor paid the collector, the fraud would be complete, and the actual
debt would remain unsatisfied. Id.
Janetos has no bearing on Plaintiff’s claims. The court noted that a
materiality requirement has been inferred into the broad, unspecific
language of Section 1692e. Id. at 324. No such requirement is necessary for
Section 1692g, as its mandates are precise as to what information must be
included in a collection letter. Id. Plaintiff’s alleged violation is immaterial,
inasmuch as it asks for exacting specificity beyond what Section 1692e
commands. More importantly, Plaintiff reads too much into Janetos’ concern
about fraud, which arises when the current creditor is not identified. Janetos
does not apply to any and all plain statements in a collection letter which,
by some stretch of the imagination, could be misleading or untruthful. She
fails to allege that the Letter fraudulently represents Defendant’s settlement
authority. Plaintiff’s allegations thus fall short of stating a Section 1692e
violation.
Plaintiff’s other, related concern with the “resolved in full” language
is that credit reporting agencies will not recognize a settlement payment as
payment in full. Defendant asserts that the Letter is silent on credit
reporting and that Plaintiff does not allege that her debt is being reported.
Plaintiff does not cogently respond to this argument. (Docket #22 at 5–6). In
any event, the Court agrees with Defendant for the same reasons stated
previously. The Letter contains no overtly misleading statement. It says in
clear terms that Defendant will tell the creditor that her debt was “resolved
in full” and send her a notice to that effect.
Plaintiff does not allege that Defendant will not do these things, only
that her debt will not be “resolved in full” in the eyes of third parties.
Page 8 of 11

Plaintiff’s implication of deception goes beyond what Section 1692e
proscribes. Without a hint of credit reporting arising from the language of
the Letter itself, or from a factual allegation by Plaintiff, the “resolved in
full” language is plainly not misleading. As before, Plaintiff also suggests
an issue with Janetos-type fraud, but as noted above, that concern cannot be
used as a freestanding ground to support any conceivable FDCPA claim.
The final claim, that it is unclear whether payment will stop future
collection activity, fails for all of the reasons discussed above. This claim
more than any other rests on Janetos’ fraud analysis while ignoring the
Letter’s actual language. The Letter informs Plaintiff that her account will
be resolved if she pays the settlement figure, and she will receive written
confirmation of that fact. None of these statements are alleged to be false.
Defendant cannot be held liable because someone else may, at some
unspecified time, unearth a record of Plaintiff’s debt and fraudulently seek
to collect it. If Janetos were extended as Plaintiff desires, debt collectors
would face Section 1692e liability for every letter they sent. There is no
statement or promise that could be made in a collection letter that would
alleviate Plaintiff’s fear about being swindled in the distant future. In light
of the foregoing, each of Plaintiff’s Section 1692e theories must be
dismissed.4
Count Two also fails. Courts in this Circuit and elsewhere hold that
Section 1692f cannot be used to address alleged collection misconduct
which forms the basis of a plaintiff’s other claims. See Riel v. Immediate Credit

Plaintiff contends that Defendant injected factual arguments into its brief
with assertions in a number of footnotes. See (Docket #19 at 6 n.3, 7 n.4, 9 n.5);
(Docket #22 at 3–4). Even assuming Plaintiff is correct, the Court did not rely on
those assertions to find that her Section 1692e claims lack merit.
4

Page 9 of 11

Recovery Inc., No. 17-CV-440-JPS, 2018 WL 502659, at *2 n.3 (E.D. Wis. Jan.
22, 2018); Rivera, 2017 WL 3075085, at *4. In its opening brief, Defendant
asserted that Count Two was impermissibly duplicative of Count One.
(Docket #19 at 9–10). Plaintiff did not offer a meaningful response. See
generally (Docket #22 at 3–7). Nor could she, as Count Two is expressly
pleaded in reliance on the allegations of Count One. (Docket #1 at 6–7).
Accordingly, the Court must agree with Defendant that Plaintiff’s Section
1692f claim lacks a factual basis independent from her Section 1692e claim.
Count Two will therefore be dismissed.
5.

CONCLUSION
The Letter is plainly not deceptive or misleading, and so Defendant’s

motion to dismiss must be granted. Janetos, 825 F.3d at 322–23. Generally,
after granting a motion to dismiss, courts should allow a plaintiff leave to
amend her complaint to correct its deficiencies prior to dismissing an entire
action. Runnion ex rel. Runnion v. Girl Scouts of Greater Chicago & N.W. Ind.,
786 F.3d 510, 519–20 (7th Cir. 2015). Leave need not be given, however, if
the defects are clearly uncorrectable, and thus amendment would be futile.
Id. at 520. Amendment would indeed be futile here; Plaintiff cannot change
the language of the Letter. Further, she did not ask for leave to replead and
the Court will not allow amendment without such a request. See (Docket
#22); James Cape & Sons Co. v. PCC Const. Co., 453 F.3d 396, 400–01 (7th Cir.
2006). This action will, therefore, be dismissed with prejudice.
Accordingly,
IT IS ORDERED that Defendant’s motion to dismiss (Docket #18)
be and the same is hereby GRANTED; and
IT IS FURTHER ORDERED that this action be and the same is
hereby DISMISSED with prejudice.
Page 10 of 11

The Clerk of the Court is directed to enter judgment accordingly.
Dated at Milwaukee, Wisconsin, this 22nd day of June, 2018.
BY THE COURT:

____________________________________
J. P. Stadtmueller
U.S. District Judge

Page 11 of 11