United States District Court, N.D. Illinois, Eastern Division
LELIA VINCENT and PATRICK VINCENT, individually and on behalf of all others similarly situated, Plaintiffs,
CHUHAK & TECSON, P.C., an Illinois professional corporation, Defendant. MICHELLE LOCKETT, in her own right and as next friend of SEBASTIAN A. LORENZO, on behalf of plaintiffs and a class, Plaintiffs,
CHUHAK & TECSON, P.C., an Illinois professional corporation, Defendant.
JOHN F. GRADY, District Judge.
These related cases are before us on defendant's motions to dismiss the complaints pursuant to Federal Rule of Civil Procedure 12(b)(6). For the reasons explained below, the motions are denied.
These are class actions against a law firm that acts as a debt collector, Chuhak & Tecson, P.C. ("Chuhak"), for violation of the Fair Debt Collection Practices Act (the "FDCPA"), 15 U.S.C. § 1692 et seq. Lelia and Patrick Vincent's case, 13 C 5625, was originally assigned to this court. Michelle Lockett and Sebastian A. Lorenzo's case, 13 C 7458, was originally assigned to Judge Leinenweber and then transferred to this court as related to Vincent.
The cases arise out of the same occurrence: a collection letter that Chuhak sent to plaintiffs that sought payment of past-due condominium assessments. We will quote from pertinent parts of the letter in our discussion below. Each complaint alleges that Chuhak violated § 1692g of the FDCPA (the section that requires debt collectors to provide certain debt-validation information to debtors) by "overshadowing" the required notice of the consumer's right to dispute the debt.
Chuhak moves to dismiss the complaints for failure to state a claim.
The purpose of a 12(b)(6) motion to dismiss is to test the sufficiency of the complaint, not to resolve the case on the merits. 5B Charles Alan Wright & Arthur R. Miller, Federal Practice and Procedure § 1356, at 354 (3d ed. 2004). To survive such a motion, "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." Ashcroft v. Iqbal , 556 U.S. 662, 678 (2009) (citing Bell Atl. Corp. v. Twombly , 550 U.S. 544, 570, 556 (2007)). Although we must accept as true all factual allegations in the complaint, we need not accept as true its legal conclusions. Iqbal , 556 U.S. at 678. "Threadbare recitals of the elements of a cause of action, supported by mere conclusory statements, do not suffice." Id . (citing Twombly , 550 U.S. at 555).
Section 1692g of the FDCPA requires a debt collector to send, within five days after an initial communication with a consumer in connection with the collection of any debt, a written notice to the consumer that contains certain information about the debt and the consumer's rights. 15 U.S.C. § 1692g(a). The notice, which is often referred to as a "validation notice, " must contain, among other things, a statement that "unless the consumer, within thirty days after receipt of the notice, disputes the validity of the debt, or any portion thereof, the debt will be assumed to be valid by the debt collector" as well as a statement that "if the consumer notifies the debt collector in writing within the thirty-day period that the debt, or any portion thereof, is disputed, the debt collector will obtain verification of the debt or a copy of a judgment against the consumer and a copy of such verification or judgment will be mailed to the consumer by the debt collector." 15 U.S.C. § 1692g(a)(3), (4). The statute also provides that collection activities and communication during the thirty-day period "may not overshadow or be inconsistent with the disclosure of the consumer's right to dispute the debt or request the name and address of the original creditor." 15 U.S.C. § 1692g(b); see also Chauncey v. JDR Recovery Corp. , 118 F.3d 516, 518 (7th Cir. 1997).
When evaluating a debt-collection letter for compliance with the FDCPA, we apply the "unsophisticated consumer" standard, under which the letter must be "clear and comprehensible to an individual who is uninformed, naive, and trusting, but not without a rudimentary knowledge about the financial world or incapable of making basic deductions and inferences." Zemeckis v. Global Credit & Collection Corp. , 679 F.3d 632, 635 (7th Cir. 2012) (citations and internal quotation marks omitted). Courts generally view the confusing nature of a dunning letter as a question of fact that, if well pleaded, avoids dismissal on a Rule 12(b)(6) motion. Id. at 636. A plaintiff fails to state a claim, however, when it is "apparent from a reading of the letter that not even a significant fraction of the population would be misled by it." Id . (citing Taylor v. Cavalry Inv., L.L.C. , 365 F.3d 572, 574 (7th Cir. 2004)).
Plaintiffs allege that Chuhak violated § 1692g by stating that "unless payment of the full amount is made on or before the expiration of thirty (30) days after receipt of this Notice, your right to possession of the premises will be terminated, " therefore "overshadowing" the FDCPA's required notice that a consumer has thirty days to request verification of the debt. Chuhak's letter to plaintiffs, titled "Notice, " stated in pertinent part:
This is your notice that there is due to [the plaintiffs' respective condominium association]... [the specific sum allegedly owed] for your proportionate share of the expenses of administration, maintenance and repair on the common elements and/or any outstanding fines and the costs, expenses and attorneys' fees claimed under the Declaration for collection....
This is your notice that if you notify this office within 30 days of receipt of this document that you dispute the validity of the debt or any portion thereof, we will obtain a verification of the debt and a copy of the verification will be mailed to you. After 30 days, if we do not receive a request from you, we will assume this debt is valid and proceed to collect the amount the association claims you owe....
This is your Notice that payment in full of the amount stated above is demanded of you, and that unless payment of the full amount is made on or before the expiration of thirty (30) days after receipt of this Notice, your ...