VanHuss, Patricia et al v. Kohn Law Firm S.C. et al

Filing 46

ORDER granting in part and denying in part 27 Motion for Judgment on the Pleadings ; denying as moot 30 Motion to Stay ; denying as moot 35 Motion for Leave to File ; denying 17 Motion to Strike ; denying 25 Motion to Quash Signed by District Judge William M. Conley on 09/01/2015. (mfh)

IN THE UNITED STATES DISTRICT COURT
FOR THE WESTERN DISTRICT OF WISCONSIN

PATRICIA VANHUSS, LORETTA
LOMASTRO and JOINT EFFECTS,
Plaintiffs,

OPINION & ORDER

v.
14-cv-839-wmc
KOHN LAW FIRM S.C. and DISCOVER
BANK,
Defendants.

Invoking the Fair Debt Collection Practices Act (“FDCPA”), 15 U.S.C. § 1692 et seq.,
and the Wisconsin Consumer Act (“WCA”), Wis. Stat. § 421 et seq., plaintiffs allege that
defendants Kohn Law Firm and Discovery Bank engaged in unlawful and unfair practices by
garnishing funds to which they had no legal right. Specifically, according to the complaint,
defendant Discovery Bank, through its counsel Kohn Law Firm S.C. (“Kohn”), filed a
lawsuit against plaintiff Patricia VanHuss and obtained a judgment against her. It then
filed a Non-Earnings Garnishment against Patricia VanHuss “DBA Joint Effects,” changing
the case’s caption so that it appeared the judgment was not only against VanHuss but also
against Joint Effects, a partnership she ran with plaintiff Loretta LoMastro.
Several motions are currently pending before the court, including plaintiffs’ motions
to strike defendants’ bona fide error defense (dkt. #17) and to quash defendants’ subpoena
duces tecum of third-party Citibank, N.A. (dkt. #25), as well as defendants’ motion for
judgment on the pleadings (dkt. #27). For the reasons stated below, the court will deny

plaintiffs’ motions, while granting in part and denying in part defendants’ motion for
judgment on the pleadings.1

OPINION
I. Motion to Strike
In answering the complaint, defendants pled a number of affirmative defenses,
including that “[a]ny alleged violations were not intentional and resulted from a bona fide
error notwithstanding the maintenance of procedures reasonably adapted to avoid any such
error.”

(Answer (dkt. #15) 5, ¶ 9.)

This partial defense is recognized in 15 U.S.C.

§ 1692k(c), which provides:
A debt collector may not be held liable in any action brought
under this subchapter if the debt collector shows by a
preponderance of evidence that the violation was not intentional
and resulted from a bona fide error notwithstanding the
maintenance of procedures reasonably adapted to avoid any
such error.
The WCA contains a similar provision that insulates a defendant from specific statutory
penalties if the defendant’s violation was unintentional and resulted from a bona fide error
notwithstanding the maintenance of preventative procedures. Wis. Stat. § 425.301(3).
Plaintiffs motion to strike the bona fide error defense takes the position that
defendants had not pled “with particularity the circumstances constituting fraud or
mistake.” Fed. R. Civ. P. 9(b). In response, defendants filed an amended answer, which
added the following allegations:

1

Having now resolved the motion for judgment on the pleadings, defendants’ motion to stay
discovery pending its resolution will also be denied as moot (dkt. #30), as will defendants’ motion to
file a reply in support of the motion to stay (dkt. #35).

2

Any alleged violations were not intentional and resulted from a
bona fide error notwithstanding the maintenance of procedures
reasonably adapted to avoid any such error. At the time of the
garnishment, the defendants reasonably believed that Joint
Effects was a sole proprietorship rather than a partnership based
upon statements and representations made by VanHuss.
Specifically, during a pre-trial conference in the underlying Sauk
County state court proceeding held on July 2, 2013, VanHuss
stated that she was a sole proprietor. The defendants have
processes and procedures in place to avoid the filing of bank
garnishments that would knowingly result in the attachment of
funds to which the defendants are not entitled, and those
processes and procedures were in place at the time of the events
allegedly giving rise to this lawsuit.
(Am. Answer (dkt. #21) 5, ¶ 9.) Plaintiffs have to date refused to withdraw their motion to
strike, however, arguing that defendants have still not pled sufficient facts to know what
specific procedures were in place to ensure that they did not file unlawful garnishments.
Motions to strike affirmative defenses are generally disfavored because they
frequently serve only to delay. Heller Fin., Inc. v. Midwhey Powder Co., 883 F.2d 1286, 1294
(7th Cir. 1989). Accordingly, a motion to strike is generally appropriate only where the
challenged defense “is frivolous or clearly presents no bona fide issue of fact or law.”
Prudential Ins. Co. of Am. v. Marine Nat’l Exchange Bank, 55 F.R.D. 436, 438 (E.D. Wis.
1972). Similarly, before granting a motion to strike, courts generally “must ‘be convinced
that there are no questions of fact, that any questions of law are clear and not in dispute,
and that under no set of circumstances could the defense succeed.’” In re Midway Airlines,
Inc., 175 B.R. 239, 242 (Bankr. N.D. Ill. 1994) (applying Fed. R. Civ. P. 12(f) (quoting
Lirtzman v. Spiegel, Inc., 493 F. Supp. 1029, 1031 (N.D. Ill. 1980)).
On the other hand, the Seventh Circuit has recognized that affirmative defenses are
“subject to all pleading requirements of the Federal Rules of Civil Procedure.” Heller, 883
3

F.2d at 1294. Ordinarily, this requires that the pleading party set forth a “short and plain
statement” of the defense. Id. (citing Fed. R. Civ. P. 8(a); Bobbitt v. Victorian House, Inc., 532
F. Supp. 734, 737 (N.D. Ill. 1982)).
Here, the defense at issue is one of bona fide error -- that is, “a genuine mistake.”
Kort v. Diversified Collection Servs., Inc., 394 F.3d 530, 538 (7th Cir. 2005). Alleging mistake
requires a party to state the circumstances constituting the mistake “with particularity.”
Fed. R. Civ. P. 9(b). At least one court has held, albeit without extensive analysis, that the
bona fide error defense is subject to the heightened pleading requirements of Rule 9(b). See
Lowe v. Diversified Consultants, Inc., No. 12 C 2009, 2012 WL 3776715, at *1 (N.D. Ill. Aug.
30, 2012). Although there is a real question as to whether requiring a party to plead its own
mistake with particularity makes sense in light of the purposes behind the heightened
pleading standard,2 the plain language would appear to require it, and so the court will
assume Rule 9(b) applies.
Rule 9(b) requires defendants to plead the “who, what, when, where, and how” of the
alleged mistake.

DiLeo v. Ernst & Young, 901 F.2d 624, 627 (7th Cir. 1990).

Here,

defendants have done exactly that. According to defendants, VanHuss made an erroneous
statement at a pre-trial conference on July 2, 2013, that she was a “sole proprietor.” This
alone suffices to establish the “when, where and how” of the alleged mistake, as well as who
precipitated it.

Defendants have also alleged what their mistake actually was: based on

2

Rule 9(b) “serves three purposes: (1) informing defendants of the nature of the alleged wrong, so
they may mount an adequate defense; (2) eliminating conclusory complaints filed as a pretext for
using discovery to uncover heretofore unknown wrongs; and (3) protecting defendants from spurious
fraud charges that might be particularly damaging to reputation.” Levine v. Prudential Bache Props.,
Inc., 855 F. Supp. 924, 929-30 (N.D. Ill. 1994); see also Fid. Nat’l Title Ins. Co. of N.Y. v. Intercounty
Nat’l Title Ins. Co., 412 F.3d 745, 748-49 (7th Cir. 2005). While these rationales make sense in
cases in which one party pleads that its opponent has committed fraud or mistake, none clearly apply
in cases where a party pleads its own mistake as a defense.

4

VanHuss’s statement that she was a sole proprietor, defendants believed incorrectly that
Joint Effects was a sole proprietorship and that they could legally garnish its accounts. This
is sufficient to comply even with the heightened standard of Rule 9(b) and to assure the
court that, contrary to plaintiffs’ argument, the bona fide error defense is not “unnecessary
clutter.” Heller, 883 F.2d at 1294.
Finally, plaintiffs cite Reichert v. National Credit Systems, Inc., 531 F.3d 1002 (9th Cir.
2008), for the proposition that “a showing of ‘procedures reasonably adapted to avoid any
such error’ must require more than a mere assertion to that effect” and that the “procedures
themselves must be explained, along with the manner in which they were adapted to avoid
the error.” Id. at 1007. But Reichert was not a case dealing with the sufficiency of pleadings;
it addressed what a debt collector must demonstrate in order to establish the bona fide error
defense at summary judgment. See id. Plaintiffs cite no case requiring that same level of detail
at the pleadings stage. Accordingly, the motion to strike will be denied.
II. Motion to Quash Defendants’ Subpeona
Pursuant to Federal Rule of Procedure 45, plaintiffs also move to quash defendants’
subpoena commanding Citibank to produce copies of billing statements for an AT&T
Universal Rewards credit card account it issued to VanHuss.

Though the state court

proceedings giving rise to this action concerned an unpaid balance on a credit card account
issued by Discover Bank, one of the charges comprising that debt was supposedly a $10,000
balance transfer from the Citibank AT&T card. Defendants seek these billing statements in
order to determine whether VanHuss made the charges on the AT&T card for business
purposes or for her own personal use, as the FDCPA applies to debt arising out of

5

transactions for which the subject is “primarily for personal, family, or household purposes.”
15 U.S.C. § 1692a(5).
Plaintiffs argue that the court should quash defendants’ subpoena because it seeks
protected information that VanHuss expected would remain confidential.

But as

defendants point out, plaintiffs have cited no authority demonstrating that VanHuss’s
privacy interests with respect to the AT&T card billing statements outweigh defendants’
interest in obtaining discoverable information, nor shown that they will not be able to
protect VanHuss’s privacy by moving to seal her billing records.3 Plaintiffs add that any
further discovery on this issue would be unduly burdensome, because VanHuss testified at
her deposition that she used the card only for personal expenses. Defendants counter that
VanHuss represented that she used the AT&T card for business purposes during the
underlying state court proceeding. Regardless, the motion to quash will be denied because:
(1) the question of whether the debt at issue in this case is consumer debt is relevant to
defendants’ arguments under the FDCPA and WPA; (2) defendants are entitled to test
VanHuss’s testimony to the contrary; and (3) plaintiffs have not demonstrated that
defendants’ subpoena is overly broad or unduly burdensome.

III. Judgment on the Pleadings
Finally, defendants moved for judgment on the pleadings pursuant to Fed. R. Civ. P.
12(c), seeking dismissal of all of plaintiffs’ claims. “Like Rule 12(b) motions, courts grant a
Rule 12(c) motion only if ‘it appears beyond doubt that the plaintiff cannot prove any facts

3

On this score, to the extent the parties have not done so already, they are directed to promptly
enter into a good faith, straightforward protective order for legitimately confidential information,
whether produced by a party or third-party.

6

that would support his claim for relief.’” N. Ind. Gun & Outdoor Shows, Inc. v. City of South
Bend, 163 F.3d 449, 452 (7th Cir. 1998) (quoting Craigs, Inc. v. Gen. Elec. Capital Corp., 12
F.3d 686, 688 (7th Cir. 1993)). “Thus to succeed, the moving party must demonstrate that
there are no material issues of fact to be resolved.” Id. Just as with a summary judgment
motion, the court also views the facts in the complaint in the light most favorable to the
non-moving party, GATX Leasing Corp. v. Nat’l Union Fire Ins. Co., 64 F.3d 1112, 1114 (7th
Cir. 1995), although it need not ignore facts set forth in the complaint that undermine the
plaintiff’s claim or assign weight to unsupported conclusions of law, N. Ind. Gun & Outdoor
Shows, 163 F.3d at 452 (quoting R.J.R. Servs., Inc. v. Aetna Cas. & Sur. Co., 895 F.2d 279,
281 (7th Cir. 1989)).
A. Allegations in the Pleadings
Plaintiff Patricia VanHuss resides in Reedsburg and plaintiff Loretta LoMastro
resides in Baraboo, both of which are in Sauk County, Wisconsin. The final plaintiff, Joint
Effects, is a partnership in which VanHuss and LoMastro are both equal partners.
Defendant Kohn Law Firm S.C. (“Kohn”) is located in Milwaukee, Wisconsin; its primary
business purpose is debt collection; and it regularly collects or attempts to collect debts on
behalf of its clients, including defendant Discover Bank.
On or about April 26, 2013, Kohn filed a lawsuit against VanHuss in Sauk County
Circuit Court on behalf of its client, Discover Bank. The Sauk County lawsuit sought to
recover a debt arising from various charges on a Discover credit card issued under a
consumer credit agreement between VanHuss and Discover Bank.

7

The charges were

primarily for personal and family use and included a balance transfer from another personal
credit card. Neither LoMastro nor Joint Effects was a party to the Sauk County lawsuit.
VanHuss did not dispute the charges and agreed to the entry of judgment against
herself in the amount of $10,068.56. (Am. Compl. Ex. B (dkt. #11-2).)4 The Sauk County
Circuit Court accordingly entered judgment on July 3, 2013, against “Patti Vanhuss AKA
Patricia A. Vanhuss.” (Id. at Ex. C (dkt. #11-3).)
On January 15, 2014, Kohn filed a Non-Earnings Garnishment on Discover Bank’s
behalf.

In its pleading, Kohn identified the debtor as “Patti VanHuss aka Patricia A

VanHuss DBA Joint Effects.” (Id. at Ex. D (dkt. #11-4).) On February 11, Kohn further
filed a proposed “Order to Garnishee” with the clerk of court and served it on VanHuss and
Baraboo National Bank; the proposed order requested that Baraboo National Bank pay to
Discover Bank and Kohn amounts that it was holding on behalf of “Patti VanHuss aka
Patricia A VanHuss DBA Joint Effects.” (Id. at Ex. E (dkt. #11-5).) Once Kohn served the
order, Baraboo National Bank apparently froze an account belonging to Joint Effects. As a
result, LoMastro, VanHuss and Joint Effects could not access the funds in question for
personal or business use.
Two days later, the Sauk County Circuit Court ordered the dismissal of the nonearnings garnishment upon VanHuss’s objection. That order read in its entirety as follows:
This action was commenced by plaintiff against defendant Patti
VanHuss. Judgment was granted to plaintiff by way of a
consent to judgment. Throughout the proceedings defendant
was identified as Patti VanHuss including the summons and
complaint and judgment form.
4

Because these exhibits are attached to the complaint, they are a part of the pleading for all
purposes, Fed. R. Civ. P. 10(c), and the court considers them in resolving the motion for judgment
on the pleadings.

8

When it began a non-earnings garnishment plaintiff changed the
caption as it related to defendant so it read Patti VanHuss d/b/a
Joint Effects. Nowhere else in the file is any reference to “Joint
Effects.”
Ms. VanHuss has objected to the garnishment contending that
the funds seized were from an entity not responsible for the debt
to plaintiff.
She also alleges that plaintiff falsified court
documents in bringing the garnishment.
A hearing was held before the court commissioner on February
12, 2014 and based upon that hearing and the entire file:
IT IS ORDERED that the garnishment is dismissed and the
garnishee, Baraboo National Bank, shall release all funds being
held back into the account from which it was taken. The basis
of this order is that plaintiff has unilaterally and without court
order changed the caption to make it appear that the judgment
is against an entity against whom the action was never brought.
(Id. at Ex. F (dkt. #11-6).) VanHuss then moved to reopen the small claims judgment,
seeking to raise various defenses, but the Sauk County Circuit Court denied the motion,
stating that the claimed violations had occurred after the entry of judgment, to which
VanHuss had consented. (Id. at Ex. G (dkt. #11-7).)5
Plaintiffs then brought the present federal suit, alleging violations of the FDCPA,
sections 1692e(5) and 1692f, as well as violations of the WCA, sections 427.104(1)(j) and
425.107, and Wisconsin common law conversion.
B. Analysis
i.

Whether the Conduct as Pled Can Support Any Cause of Action

Defendants first argue that it was not illegal for them to alter the caption in the
garnishment action because there is no legal requirement that the caption match that in the
5

The Rooker-Feldman doctrine “applies when the state court’s judgment is the source of the injury of
which plaintiffs complain in federal court.” Harold v. Steel, 773 F.3d 884, 885 (7th Cir. 2014).
Here, the state court in this case ultimately ruled in favor of plaintiffs. Accordingly, plaintiffs appear
to seek additional damages consistent with the state court’s ruling.

9

underlying action. Defendants’ argument is premised on the principle that in Wisconsin, a
garnishment action is a “separate action” from the underlying action forming the basis for
garnishment. Wis. Stat. § 812.01(2a); see also Paul Davis Restoration of S.E. Wis., Inc. v. Paul
Davis Restoration of Ne. Wis., 2013 WI 49, ¶ 10, 347 Wis. 2d 614, 831 N.W.2d 413 (noting
that “it is well established that a garnishment action is an action independent of the
judgment for which it seeks to recover payment and is instituted separately according to
statute”). Thus, there is no absolute “right” to have the caption of a garnishment action
match the underlying action establishing liability.

Defendants also point out that the

designation “DBA” does not create a distinct entity but rather describes a person or
corporation that does business under a different name -- presumably meant to suggest that
their addition of “DBA Joint Effects” to the caption had no legal effect.
This argument appears to miss the mark, particularly at the pleading stage. Plaintiffs
do not contend that the law requires the captions between an action creating liability and a
garnishment action to “match,” nor do they suggest that defendants attempted to create a
non-existence entity by adding “DBA Joint Effects” to the garnishment caption. Rather,
their claim is that defendants froze and attempted to garnish funds to which they had no
legal right by crafting a caption that incorrectly suggested Joint Effects was simply another
name for Patricia VanHuss. This may or may not run afoul of Wisconsin law. Compare
Wis. Stat. § 812.01(1) (“Any creditor may proceed against any person who is indebted to or
has any property in his or her possession or under his or her control belonging to such creditor’s
debtor[.]”) (emphasis added), with Wis. Stat. § 178.21(3)(c) (“A partner's right in specific
partnership property is not subject to attachment or execution, except on a claim against the
partnership.”), AG Servs. of Am., Inc. v. Krejchik, 2002 WI App 6, ¶ 15, 250 Wis. 2d 340,
10

640 N.W.2d 125 (noting that generally, “partnership assets are not subject to garnishment
to satisfy the debts of individual partners”). Thus, the court rejects defendants’ assertion
that the alteration of the caption in the garnishment action cannot give rise to liability as a
matter of law.
ii.

Whether the FDCPA Applies

Defendants next contend that 15 U.S.C. § 1692e(5) does not apply to this action as
pled. Section 1692e(5) provides that a debt collector violates the FDCPA if it makes a
“threat to take any action that cannot legally be taken or that is not intended to be taken.”
Defendants argue that this provision applies only to threats of action that cannot legally be
taken -- not to purportedly illegal actions actually taken. This view finds significant support
in district courts within the Seventh Circuit, although it appears the Seventh Circuit itself
has not yet addressed the issue. As then District Judge Hamilton held in Clark v. Pollard,
No. IP 99-1414-C H/G, 2000 WL 1902183 (S.D. Ind. Dec. 28, 2000), “[b]y its plain
language, subsection (5) applies to threats of action, not to actions actually taken.” Id. at
*3; see also Bravo v. Midland Credit Mgmt., Inc., No. 14 C 4510, 2014 WL 6980438, at *3
(N.D. Ill. Dec. 9, 2014) (“By its plain terms, § 1692e(5) prohibits only the threat of
unlawful action, not the unlawful action itself; the complaint, by contrast, alleges that
Midland took unlawful action.”) (emphasis in original); Fick v. Am. Acceptance Co., No. 3:11
CV 229, 2012 WL 1074288, at *4 (N.D. Ind. Mar. 28, 2012) (dismissing § 1692e claim
where “plaintiff has only alleged actual action taken, instead of threats of action”);
Wehrheim v. Secrest, No. IP 00-1328-C-T/K, 2002 WL 31242783, at *5 (S.D. Ind. Aug. 16,
2002) (“Plaintiff's claims in the instant case are based upon actions actually taken by

11

Defendant. The court rejects Plaintiff's attempt to equate threats of action with actions
actually taken.”); but see Taylor v. Midland Funding, LLC, No. 14 C 9277, 2015 WL
1456442, at *5 (N.D. Ill. Mar. 20, 2015) (“[T]he Court cannot conclude at this point in
the litigation that the actual filing versus the threat of filing a time-barred proof of claim in
a bankruptcy case is not viable under . . . § 1692e(5).”).
In response, plaintiffs point out that various courts in other circuits have taken the
opposite approach, apparently reasoning that the FDCPA should not provide “more
protection to debt collectors who violate the law than to those who merely threaten or
pretend to do so.” Sprinkle v. SB&C Ltd., 472 F. Supp. 2d 1235, 1247 (W.D. Wash. 2006)
(emphasis added); see also Bradshaw v. Hilco Receivables, LLC, 765 F. Supp. 2d 719, 730 (D.
Md. 2011) (interpreting § 1692e(5) to “include the taking of ‘action that cannot legally be
taken’”); Marchant v. U.S. Collections W., Inc., 12 F. Supp. 2d 1001, 1006 (D. Ariz. 1998)
(“To argue that a collection agency can avoid the strictures of the FDCPA simply by acting
where it has no legal authority, as opposed to threatening to act where it has no legal
authority, would defy the very purposes of the section.”) (emphasis in original). Others
appear to presume that § 1692e(5) applies in cases where a debt collector actually took
action it could not legally take without analyzing the significance of the word “threat” in the
statute. See, e.g., Poirier v. Alco Collections, Inc., 107 F.3d 347, 350-51 (5th Cir. 1997); Foster
v. D.B.S. Collection Agency, 463 F. Supp. 2d 783, 803-05 (S.D. Ohio 2006).
This court agrees with the majority of district courts in this circuit that extending
§ 1692e(5) to apply to actions actually taken conflicts with the statutory text. As the Bravo
court noted:

12

Elsewhere in the FDCPA, Congress was explicit when it
intended to prohibit both threats to act and actually acting. See
15 U.S.C. § 1692d(1) (prohibiting “[t]he use or threat of use of
violence or other criminal means” in connection with debt
collection) (emphasis added). That Congress did not do the
same thing in § 1692e(5) confirms that Congress intended that
provision to prohibit only threats, not actions.
Bravo, 2014 WL 6980438, at *3.
This is not to say that actually taking an illegal action in connection with the
collection of a debt cannot subject a debt collector to liability under the FDCPA.

For

example, if the illegal means are otherwise misleading or unconscionable, a plaintiff may
well have a claim under other sections of the FDCPA. See, e.g., Phillips v. Asset Acceptance,
LLC, 736 F.3d 1076, 1079 (7th Cir. 2013) (debtor stated claim under the FDCPA,
§§ 1692e and 1692f generally, where she alleged that the debt collector sued her after the
statute of limitations on the creditor’s claim had run). Accordingly, the court declines to
ignore the plain language of § 1692e(5) in order to expand its protections. See Okyere v.
Palisades Collection, LLC, 961 F. Supp. 2d 508, 520 (S.D.N.Y. 2013) (“[W]e do not think
there is a warrant in case law simply to rewrite a statute based on a court's view as to its
efficaciousness. . . . Accordingly, we join those courts that have construed the statute in
accordance with its unambiguous language.”). In light of the above, defendants are entitled
to judgment on plaintiffs’ § 1692e(5) claims.6

6

“Plaintiffs need only plead facts, not legal theories, in their complaints,” Reeves ex rel. Reeves v. Jewel
Food Stores, Inc., 759 F.3d 698, 701 (7th Cir. 2014), and a plaintiff “need not allege a violation of a
specific subsection in order to succeed in a § 1692e case.” Lox v. CDA, Ltd., 689 F.3d 818, 822 (7th
Cir. 2012). Of course, here, plaintiffs did identify § 1692e(5), specifically, in their complaint. (Am.
Compl. (dkt. #11) ¶ 33.) Even if plaintiffs had pled a claim under § 1692e more generally, however,
the conduct they challenge does not fit the rubric of that statutory provision. The Seventh Circuit
has held that the prohibitions of § 1692e, though broadly written, are “clearly limited to
communications directed to the consumer” when “read in light of the Act’s purpose and numerous
provisions.” O’Rourke v. Palisades Acquisition XVI, LLC, 635 F.3d 938, 941 (7th Cir. 2011) (emphasis

13

Plaintiffs also allege that defendants’ conduct violated § 1692f, which states generally
that “[a] debt collector may not use unfair or unconscionable means to collect or attempt to
collect any debt.” 15 U.S.C. § 1692f. As the Seventh Circuit has recognized, the “statute
does not say” what is unfair or unconscionable, Beler v. Blatt, Hasenmiller, Leibsker & Moore,
LLC, 480 F.3d 470, 473 (7th Cir. 2007), although it contains a non-exhaustive list of
conduct that violates § 1692f.

Defendants base their first argument on § 1692f(6)(C),

which prohibits taking “nonjudicial action to effect dispossession or disablement of property
if . . . the property is exempt by law from such dispossession or disablement.” According to
defendants, § 1692f cannot possibly apply to the taking of judicial action to effect
dispossession of exempt property, like the state court garnishment action they filed, when
§ 1692f(6) explicitly refers to non-judicial action to effect dispossession of exempt property.
Given the non-exhaustive nature of the list in § 1692f, however, the court has trouble
adopting defendants’ argument that Congress “expressly limit[ed] the scope of the statute to
nonjudicial actions.” (Defs.’ Br. Support (dkt. #27) 8.) Absent any case law on point (and
defendants cite none), the court declines to foreclose this theory of relief as a matter of law.7
Defendants also contend that § 1692f, as a catch-all provision, applies only to
conduct that is “unfair but is not specifically identified in any other section of the FDCPA.”
added). More specifically, § 1692e is intended to “keep consumers from being intimidated or tricked
by debt collectors.” Id. (emphasis added). It is, therefore, “limited to protecting consumers and
those who have a special relationship with the consumer -- such that the Act is still protecting the
consumer -- from statements that would mislead these consumers.” Id. at 943. Defendants’ actions,
as pled, may have misled the Sauk County Circuit Court or Baraboo National Bank, but they were
not misleading to VanHuss, the consumer in this case. Cf. id. (no claim under § 1692e where
allegedly deceptive conduct was the filing of a summons and complaint with an exhibit that
resembled an authentic credit card statement but was not).
7
To the extent defendants intend to argue that plaintiffs have not pled a claim under § 1692f(6),
specifically, the court notes that while the amended complaint does not invoke that specific
subsection, it expressly relies on the broader protections of § 1692f generally. (Am. Compl. (dkt.
#11) ¶ 34.)

14

(Id.) They argue that because plaintiffs have only pled conduct that they contend violates
other provisions of the FDCPA, that conduct cannot implicate § 1692f. See, e.g., Rush v.
Portfolio Recovery Assocs. LLC, 977 F. Supp. 2d 414, 432 (D.N.J. 2013) (“Courts have
therefore determined that § 1692f cannot be the basis of a separate claim for complained of
conduct that is already explicitly addressed by other sections of the FDCPA[.]”); Chalik v.
Westport Recovery Corp., 677 F. Supp. 2d 1322, 1329 (S.D. Fla. 2009) (“However, a claim of
a violation of Section 1692f is deficient if it ‘does not identify any misconduct beyond that
which Plaintiffs assert violate other provisions of the FDCPA.’”) (quoting Foti v. NCO Fin.
Sys., 424 F. Supp. 2d 643, 667 (S.D.N.Y. 2006)); see also Christy v. EOS CCA, 905 F. Supp.
2d 648, 656 (E.D. Pa. 2012).

While expressing no opinion on its merits generally,

judgment on the pleadings on this ground would seem inappropriate under the
circumstances.
More specifically, the court has already found that the conduct of which plaintiffs
complain does not fit § 1692e(5), the only other FDCPA provision that they specifically cite.
Neither party argues that the conduct fits one of the FDCPA’s other specific prohibitions,
nor does a review of the statute reveal any provisions that are an obvious match.
generally 15 U.S.C. § 1692 et seq.

See

Certainly, dismissal of the § 1692f claim would be

appropriate if plaintiffs had successfully pled a viable § 1692e(5) claim based on identical
facts, since it would then be reasonable to conclude that plaintiffs were “attempting to
bootstrap a § 1692f claim onto” a different FDCPA violation.

See Eslava v. AllianceOne

Receivables Mgmt., Inc., No. 12-0425-WS-N, 2012 WL 4336012, at *4 (S.D. Ala. Sept. 20,
2012). But here, plaintiffs’ allegations do not clearly fit a different, more specific FDCPA
provision. Cf., e.g., Baker v. Allstate Fin. Servs., Inc., 554 F. Supp. 2d 945, 953 (D. Minn.
15

2008) (“Baker's claims are all premised on two basic types of alleged conduct: improper
disclosures and false threats of legal action. Multiple specific FDCPA provisions address
both these types of conduct. Section 1692f is, therefore, inapplicable[.]”).

But without

knowing if any specific provision is availing, it would seem premature at best to address
whether alleged misconduct might be captured by the catch-all provision. Thus, the court
declines to dismiss the § 1692f claim on bootstrapping grounds.
iii.

Whether the Conduct as Pled Violates the FDCPA or WCA

Finally, defendants contend that even if plaintiffs’ claims do not fail as a matter of
law, plaintiffs have failed to plead conduct that actually violates the FDCPA or WCA. The
court has already addressed § 1692f of the FDPCA above.

Plaintiffs also invoke

Section 427.104(1)(j) of the WCA, which states that a debt collector may not “[c]laim, or
attempt or threaten to enforce a right with knowledge or reason to know that the right does
not exist,”8 and Section 425.107 of the WCA, which states that if a court finds as a matter
of law that some aspect of, conduct related to, or result of a consumer credit transaction is
unconscionable, it shall refuse to enforce or limit the transaction to avoid any
unconscionable results. Plaintiffs rely on the same conduct -- defendants’ alleged attempt to
garnish the bank account of Joint Effects by adding its name to the garnishment caption -to support all three of their remaining claims.
Defendants primarily contend that their actions cannot give rise to liability because
they acted in accordance with state law when they sought to garnish the Joint Effects
8

Presumably, defendants did not seek to dismiss this claim on the same grounds as the § 1692e(5)
claim because, unlike § 1692e(5), the WCA’s Section 427.104(1)(j) imposes liability for threatening
to enforce rights that do not exist and for attempting to enforce rights that do not exist. Thus, the
statutory text of the WCA supports imposing liability for actions actually taken, rather than solely
for threats of action.

16

account. In support, defendants principally rely on Beler v. Blatt, Hasenmiller, Leibsker &
Moore, LLC, 480 F.3d 470, 473 (7th Cir. 2007), for the proposition that debt collectors who
follow state law garnishment procedures cannot be held liable under the FDCPA. See also
Moore v. Fein, Such, Kahn & Shepard, P.C., No. 12-1157 (JLL), 2012 WL 3945539, at *6
(D.N.J. June 13, 2012) (“Therefore, the Court does not find that Defendant's conduct was
unfair or unconscionable when it requested an execution of the judgment duly issued by the
court, even if said judgment was later vacated[.]”); Wetherelt v. Larsen Law Firm, PLLC, 577
F. Supp. 2d 1128, 1133 (D. Mont. 2008) (“A debt collector who . . . avails itself of lawful
procedures . . . does not act unfairly or unconscionably.”). In Beler, a state court entered
judgment on a debt against the plaintiff, who thereafter failed to pay, appeal or declare
bankruptcy.

The debt collector then sent a Citation to Discover Assets to her bank,

pursuant to 735 Ill. Comp. Stat. 5/2-1402; the citation informed the bank that it should not
turn over assets exempt from execution under federal or state law. Id. at 472. Instead, the
bank froze Beler’s assets pending determination of which funds, if any, might be exempt.
Beler then hired a lawyer, who argued that all the funds were exempt under 42 U.S.C.
§ 407(a); the debt collector chose not to contest the assertion and dismissed the citation.
Id. As here, Beler responded with her own suit under the FDCPA, alleging that the debt
collector had violated § 1692f by violating the Social Security Act and Illinois law.
The Seventh Circuit rejected her theory, holding that § 1692f is not an “enforcement
mechanism for other rules of state and federal law” and pointing out that the debt collector
had in fact followed Illinois state law by sending the Citation to Discover Assets. Id. at 474.
Holding that it nevertheless violated § 1692f would have required the creation of federal
common law declaring that a hearing on exemption was required before freezing assets; or in
17

other words, holding that Illinois state law itself permitted an “unfair or unconscionable”
procedure. Id. The Seventh Circuit declined to take such action, concluding that “such a
rule should be adopted (if at all) through the administrative process or a statutory
amendment rather than judicial definition of the phrase ‘unfair or unconscionable.’” Id.
Regardless of the wisdom of such a rule, the court, therefore, held that section 1692f
was not a basis to create one:
State judges may decide how their judgments are to be collected.
This does not necessarily mean that the FTC must steer clear of
the subject, but it certainly implies that federal judges ought not
use this ambulatory language to displace decisions consciously
made by state legislatures and courts about how judgment
creditors collect judgments entered under state law.
Id. at 475.
However, taking all of the alleged facts in this case as true and viewing them in a light
most favorable to plaintiffs, as the court must on a Rule 12(c) motion, reveals a somewhat
different picture. Holding defendants liable for attempting to garnish Joint Effects’ account
does not require the court to pass judgment on Wisconsin’s statutory garnishment
procedures, because as alleged, defendants did not adhere to those procedures, at least not
in substance. The fact that defendants filed the complaint in the proper form and effected
service properly does not change the allegation that they added as a “debtor” another entity
that was unnamed as a debtor at all and whose funds they had no legal right to garnish. See
Wis. Stat. § 812.01(1) (“Any creditor may proceed against any person who is indebted to or
has any property in his or her possession or under his or her control belonging to such creditor's
debtor or which is subject to satisfaction of an obligation described under s. 766.55(2), as
prescribed in this subchapter.”) (emphasis added). There is a difference between using the
18

state’s procedures as intended and attempting to use those procedures in a way the law does
not support. Compare Beler, 480 F.3d at 474, with Fox v. Citicorp Credit Servs., Inc., 15 F.3d
1507, 1517 (9th Cir. 1994) (jury could rationally find attempt to garnish funds when
debtors were actually current in their payments constituted unfair or unconscionable means
of collecting a debt under § 1692f).9
Said yet another way, if defendants had named only VanHuss in their proposed
Order to Garnishee and frozen funds expressly belonging to her that turned out to be
exempt, they would have used the Wisconsin garnishment procedures properly and could
not be subject to FDCPA liability for those actions. Cf. Eichman v. Mann Bracken, LLC, 689
F. Supp. 2d 1094, 1100 (W.D. Wis. 2010) (“Even though a debtor may not believe that
she owes a debt or ultimately is able to prove that the debt is invalid, a creditor's use of the
state court system to preserve its rights is not improper.”). But no Wisconsin statute or
procedure of which the court is aware permits debt collectors to attempt to garnish the
funds of a separate entity against which they have no judgment. Thus, this court could find
the conduct alleged to be unfair without “displac[ing] decisions consciously made by state
legislatures and courts about how judgment creditors collect judgments entered under state
law.” Beler, 480 F.3d at 475; cf. Wetherelt, 577 F. Supp. 2d at 1133 (no FDCPA liability
where defendant “followed the procedures provided for under Montana law for obtaining a
writ of execution”).
It remains true that the FDCPA is not a vehicle to enforce violations of other laws.
Beler, 480 F.3d at 474; Evory v. RJM Acquisitions Funding L.L.C., 505 F.3d 769, 778 (7th Cir.

9

As recently as 2013, in Todd v. Collecto, Inc., 731 F.3d 734 (7th Cir. 2013), the Seventh Circuit has
cited Fox as an example of conduct that can support a § 1692f claim. Id. at 739.

19

2007). But the facts alleged here describe conduct that, depending on the actual facts,
could constitute an abusive or unfair debt collection practice in and of itself. “The FDCPA .
. . was designed to protect against the abusive debt collection practices likely to disrupt a
debtor’s life.” Mace v. Van Ru Credit Corp., 109 F.3d 338, 343 (7th Cir. 1997). Instituting
a garnishment action that seeks to attach the funds not only of a debtor but of the debtor’s
business partner (or employer, or family member) could certainly prove disruptive to the
debtor’s life. In any event, the potential for abuse is there, and it is sufficiently troubling
that the court is not prepared to rule that a debt collector is free from FDCPA liability as a
matter of law when it uses state garnishment procedures in such a manner. See Fox, 15 F.3d
at 1517 (applying for garnishment when debtor is current in payments could be
unconscionable practice under § 1692f).
This is not to say that plaintiffs will ultimately be able to prevail on this claim.
Defendants may well be able to prove that their addition of Joint Effects to the NonEarnings Garnishment was a bona fide error and occurred notwithstanding their adoption of
procedures to protect against such errors. Jenkins v. Heintz, 124 F.3d 824, 828 (7th Cir.
1997) (citing 15 U.S.C. § 1692k(c)). That is not the question currently before this court,
however, and as an affirmative defense, it is best reserved for summary judgment in any
event. Accordingly, the court need not address it further here.
Last, defendants briefly argue that Baraboo National Bank is at fault for any harm
that plaintiffs may have suffered. They cite Billiar v. Atl. Credit & Fin., Inc., No. 09-CV0133 (PJS/SER), 2011 WL 3418196, at *5 (D. Minn. Aug. 4, 2011), for the proposition
that a debt collector is not liable for a bank’s error “when a debt collector instructs a
financial institution to garnish the funds of a particular debtor, and the financial institution
20

makes a mistake and attaches the funds of someone else[.]” Defendants acknowledge that
they named Joint Effects, but point out that in full, they asked Baraboo National Bank to
freeze funds belonging to “Patti VanHuss aka Patricia A. VanHuss DBA Joint Effects.”
Instead, defendants argue, the bank froze the funds of Joint Effects alone, a legallyindependent partnership.

Thus, they conclude “[i]t would hardly be fair to blame

Defendants for the fact that the Bank froze funds from an account that was not named in
the garnishment.” (Defs.’ Br. Support (dkt. #27) 14.)
This is not a case like Billiar, however, in which the bank was clearly the party in
error. In Billar, the debt collector in fact had actually instructed the bank not to attach
certain funds, but the bank disregarded that request and attached them anyway. Billiar,
2011 WL 3418196, at *4-5 (“Gurstel specifically instructed Hiway to garnish only funds
that had been contributed by Fiers and not to garnish funds that had been contributed by
anyone else. . . . Instead, Hiway froze all of the money in all of the accounts—precisely what
Gurstel had instructed Hiway not to do, and precisely what Gurstel had warned Hiway was
unlawful.”) (emphasis in original).

In contrast, here, defendants incorrectly drafted the

garnishment order, arguably suggesting, if not intentionally misleading, the Bank into
believing that “Joint Effects” was simply another name for VanHuss herself.
At best, the trier of fact might find that defendants carelessness needlessly
contributed to the bank’s ultimate error in attaching funds belonging to Joint Effects,
presumably in reliance on defendants’ mischaracterization, all in violation of the FDCPA.
Regardless, the court is not prepared to place the blame solely at the bank’s feet for this
error and absolve defendants from liability for an unlawful attachment they apparently
precipitated, at least not on the current, limited record. Of course, defendants are free to
21

renew this argument at summary judgment if they have additional evidence or authority to
support their position.10

ORDER
IT IS ORDERED that:
(1) Plaintiffs’ motion to strike (dkt. #17) is DENIED.
(2) Plaintiffs’ motion to quash (dkt. #25) is DENIED.
(3) Defendants’ motion for judgment on the pleadings (dkt. #27) is GRANTED IN
PART and DENIED IN PART, consistent with the opinion above.
(4) Defendants’ motion to stay discovery (dkt. #30) is DENIED as moot.
(5) Defendants’ motion for leave to file a reply (dkt. #35) is DENIED as moot.
Entered this 1st day of September, 2015.
BY THE COURT:
/s/
________________________________________
WILLIAM M. CONLEY
District Judge

10

Because the court has not dismissed all claims over which it has original jurisdiction, it also
declines defendants’ invitation to relinquish supplemental jurisdiction over plaintiffs’ state law
conversion claim.

22