United States District Court, Northern District of Illinois, E.D
August 18, 1982
JAMES CHALLEN, ET AL., PLAINTIFFS,
TOWN AND COUNTRY CHARGE, ET AL., DEFENDANTS.
The opinion of the court was delivered by: Shadur, District Judge.
MEMORANDUM OPINION AND ORDER
James and Cecelia Challen ("Challens") sue Continental Illinois
National Bank and Trust Company of Chicago ("Continental") and
its Town and Country Charge division ("Town and Country")*fn1 based
on an allegedly tortious letter sent by defendant to Cecelia
Challen's employer concerning an outstanding debt. Continental
has moved under Fed.R.Civ.P. ("Rule") 12 for an order dismissing
Counts I, II, III and V of the Complaint.*fn2 For the reasons stated
in this memorandum opinion and order Continental's motion is
granted in part and denied in part.
Counts I and V
Count I and part of Count V attempt to state a cause of action
under the Fair Debt Collection Practices Act (the "Act,"
15 U.S.C. § 1692-1692o). By its terms the Act applies only to "debt
collectors," defined in 15 U.S.C. § 1692a(6):
The term "debt collector" means any person who uses
any instrumentality of interstate commerce or the
mails in any business the principal purpose of which
is the collection of any debts, or who regularly
collects or attempts to collect, directly or
indirectly, debts owed or due or asserted to be owed
or due another.
Thus the critical issue is whether Continental*fn3
is collecting its
own or another creditor's debts.*fn4
Challen's ill-drawn Complaint is really unclear on that score
(as on numerous others). Paragraph XII alleges:
Town and Country . . . has an independent function
separate and apart from [Continental] namely the
issuance of credit based on Visa and Mastercharge
trade-names which credit is kept separate and apart
from other lending and collecting functions conducted
by [Continental]. . . .
That allegation alone could be fatal to Challens' claim for
reasons similar to those discussed at n. 3. But Complaint ¶ VIII
states a basically contradictory allegation, under which "Visa"
may be a legal entity rather than a trade name, or alternatively
might make Continental a "debt collector" under the other branch
of Section 1692a(6):
Defendants are persons using the mails toward
collecting debts on a regular basis owed or due to be
asserted to be owed or due to Visa, and Visa is an
organization known or identified as Visa,
U.S.A. . . .
Under Conley v. Gibson, 355 U.S. 41
, 45-46, 78 S.Ct. 99,
101-02, 2 L.Ed.2d 80 (1957)
this Court can dismiss the Complaint only if Challens can prove
no set of facts that would support a cause of action. Because
Challens could conceivably prove the allegations of Paragraph
VIII and not of Paragraph XII, Counts I and V can stand.*fn5
Cecelia Challen owes a debt to Continental. Complaint ¶¶ V-VI
allege Continental wrongfully sent a letter to Cecelia's employer
saying she (1) owed a debt that was overdue and (2) was
unresponsive and unwilling to discuss the delinquency. Finally,
Complaint ¶ VI alleges the letter was sent after an agreement had
been reached that placed Cecelia "in substantial compliance
toward the payment of the debt."
Challens allege sending the letter constituted an unlawful
violation of Cecelia's right to privacy.*fn6 But a creditor does not
violate a debtor's right to privacy when it sends a letter to an
employer informing the employer of the outstanding debt. Midwest
Glass Co. v. Stanford Developments Co., 34 Ill.App.3d 130, 134,
339 N.E.2d 274, 277 (1st Dist. 1975); Housh v. Peth, 165 Ohio St. 35,
133 N.E.2d 340 (1956); Patton v. Jacobs, 118 Ind. App. 358,
78 N.E.2d 789 (1948). To escape that rule Challens contend their
privacy rights were invaded because the letter was sent after an
agreement was reached as to the outstanding debt.
That additional factor is not sufficient to state a cause of
action for invasion of privacy, whose elements are, Midwest
Glass, 34 Ill.App.3d at 133, 339 N.E.2d at 277:
(1) an intentional giving of unreasonable publicity
(2) to private debts
(3) without the debtor's consent,
(4) made for the purpose of coercing or harassing
the debtor into payment of the debt or of exposing
the debtor to public contempt or ridicule.
Generally courts have found those standards satisfied when a
creditor engages in a long pattern of harassing a debtor into
payment of a debt. For example, the following facts were found
sufficient in Housh v. Peth, 165 Ohio St. 35, 133 N.E.2d 340
However, the factual situation developed in the
instant case is entirely different. The record shows
that the defendant deliberately initiated a
systematic campaign of harassment of the plaintiff,
not only in numerous telephone calls to the plaintiff
herself every day for a period of three weeks, some
of which were late at night, but also calls to her
superiors over the telephone, informing them of the
debt. . . . The calls to the employer, and the
rooming house, were all part of a pattern to harass
and humiliate the plaintiff and cause her mental pain
and anguish and cause her emotional disturbance for
the purpose of coercing her to pay the debt.
In other words, an action for invasion of privacy will lie only
when a creditor corresponds with an employer not legitimately to
seek the employer's assistance in collecting a debt but rather as
an unreasonable attempt to coerce or harass the debtor into
paying the debt.
Here Complaint ¶ VI confirms that even after the alleged
agreement was reached some debt remained outstanding. Thus the
letter's alleged improprieties were (1) its
failure to reflect the recent agreement and (2) its statement
Cecelia was uncooperative. Though such allegedly false statements
might constitute a libel, they do not support an invasion of
privacy claim. One letter is still one letter. While the false
statements may permit an inference of coercive intent (the fourth
element of the Midwest Glass test), they do not constitute
"unreasonable publicity" (the first element). As Midwest Glass,
34 Ill.App.2d at 134, 339 N.E.2d at 277 put it:
With reference to these elements, it appears that the
extent of publicity or degree of harassment, rather
than the character of the oral or written
communication, is dispositive of whether a debtor's
right to privacy was invaded.
Thus Challens have failed to plead an actionable invasion of
privacy and Count II must be dismissed.
Count III alleges Continental's actions constitute a tortious
interference with Cecelia's contract of employment. Under both
Illinois and Ohio law such a cause of action requires an
allegation defendant triggered an actual breach of contract.
Herman v. Prudence Mutual Casualty Co., 41 Ill.2d 468, 473-78,
244 N.E.2d 809, 812-14 (1969); Standard Oil Co. v. Landmark Farm
Bureau Cooperative, 52 Ohio App.2d 225, 369 N.E.2d 785, 788 (Ohio
Ct.App. 1976). No such allegation of actual breach is made here.
Count III is also dismissed.
Count V also alleges Continental violated Sections 2917.21 and
4931.31 of the Ohio Revised Code. Those however are criminal
statutes, and neither the statutes themselves nor any Ohio cases
indicate they provide a civil private right of action.
Accordingly that part of Count V must be dismissed.
As already indicated, the Complaint reflects little prior
analysis or current craftsmanship. At this point a patchwork
quilt of allegations survives, making an answer difficult.
Challens are ordered to file an amended complaint, responsive to
this Court's July 6 ruling and this opinion, on or before
September 1, 1982. Continental shall answer or otherwise plead to
that amended complaint on or before September 15. This action is
set for a status hearing October 15 at 9:15 a.m.