United States District Court, N.D. Illinois, Eastern Division
DER-YEGHIAYAN, District Judge
matter is before the court on Defendant Miller and Steeno,
P.C.'s (Miller) motion to dismiss and on Defendant LVNV
Funding LLC's (LVNV) motion to dismiss. For the reasons
stated below, the motions to dismiss are denied.
Roberta Dilallo (Dilallo) allegedly incurred a personal debt
(Debt) in 2007. In 2008, Arrow Financial Services, LLC
(Arrow) allegedly owned the Debt. Arrow allegedly brought an
action in state court (State Court Proceedings) and obtained
a default judgment against Dilallo. On or before April 4,
2015, LVNV allegedly purchased the Debt from Arrow. Miller
then allegedly filed a substitution of counsel for Arrow in
the State Court Proceedings, but did not disclose that Arrow
no longer owned the Debt. Dilallo includes in her third
amended complaint claims alleging violations of 15 U.S.C.
§ 1692e (Section 1692e) of the Fair Debt Collection
Practices Act (FDCPA), 15 U.S.C. § 1692 et seq.
(Count I), and claims alleging violations of 15 U.S.C. §
1692i (Section 1692i) of the FDCPA (Count II). Miller filed a
motion to dismiss and LVNV has adopted Miller's motion to
ruling on a motion to dismiss brought pursuant Federal Rule
of Civil Procedure 12(b)(6) (Rule 12(b)(6)), the court must
draw all reasonable inferences that favor the plaintiff,
construe the allegations of the complaint in the light most
favorable to the plaintiff, and accept as true all
well-pleaded facts and allegations in the complaint.
Appert v. Morgan Stanley Dean Witter, Inc., 673 F.3d
609, 622 (7th Cir. 2012); Thompson v. Ill. Dep't of
Prof'l Regulation, 300 F.3d 750, 753 (7th Cir.
2002). A plaintiff is required to include allegations in the
complaint that “plausibly suggest that the plaintiff
has a right to relief, raising that possibility above a
‘speculative level'” and “if they do
not, the plaintiff pleads itself out of court.”
E.E.O.C. v. Concentra Health Services, Inc., 496
F.3d 773, 776 (7th Cir. 2007)(quoting in part Bell
Atlantic Corp. v. Twombly, 127 S.Ct. 1955, 1965 (2007));
see also Morgan Stanley Dean Witter, Inc., 673 F.3d
at 622 (stating that “[t]o survive a motion to dismiss,
the complaint must contain sufficient factual matter,
accepted as true, to state a claim to relief that is
plausible on its face, ” and that “[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”)(quoting Ashcroft v. Iqbal, 556 U.S.
662 (2009))(internal quotations omitted).
Section 1692e Claims (Count I)
contend that Dilallo fails to state a Section 1692e claim,
arguing that the FDCPA cannot be used to resolve state court
pleading issues, and arguing that there is no allegation of a
deceptive act. Dilallo alleges that Defendants violated
Section 1692e(14), which provides that “[a] debt
collector may not use any false, deceptive, or misleading
representation or means in connection with the collection of
any debt” such as “[t]he use of any business,
company, or organization name other than the true name of the
debt collector's business, company, or
organization.” 15 U.S.C. § 1692e(14).
State Court Pleading Issues
argue that the FDCPA cannot be utilized to resolve state
court pleading issues. Defendants contend that any concerns
regarding the propriety of state court pleadings should be
addressed by the state courts rather than in a federal FDCPA
action. Defendants are correct that the fact that they
included Arrow in certain state court pleadings would not in
itself be a valid basis for pursuing a FDCPA claim. Although
Dilallo argues that such pleading issues fall under the
FDCPA, Dilallo herself devotes significant arguments to
addressing whether Defendants complied with Illinois state
court pleading rules. (Resp. 11-12). Such pleading issues are
state issues and any concerns that Dilallo has regarding them
may be raised in the state court. Dilallo cites no
controlling precedent that holds that the FDCPA preempts
state court pleading rules or dictates to the state courts
how they will conduct the pleadings phase of civil
is also seeking to hold Defendants accountable for more than
the filing of state court pleadings. Dilallo contends that
Defendants made misrepresentations concerning the ownership
of the Debt orally to Dilallo and made misrepresentations in
an email sent to Dilallo's counsel. For example, Dilallo
contends that when she realized that her bank account had
been frozen, she called Miller, and a representative of
Miller made misrepresentations to her concerning the
ownership of the Debt. Thus, Dilallo's claims reach
beyond state court pleading issues and Dilallo has alleged
sufficient facts to pursue FDCPA claims.
Allegation of Deceptive Act
argue that Dilallo has failed to allege a deceptive act on
the part of Defendants. In determining whether a statement is
deceptive under the FDCPA, a court must consider whether
“it would confuse the unsophisticated consumer.”
Lox v. CDA, Ltd., 689 F.3d 818, 822 (7th Cir. 2012).
Such a determination generally involves a question of fact.
Id. Defendants improperly seek to have this court
utilize the least sophisticated consumer standard which has
been rejected by the Seventh Circuit. Id.; (Mem.
Dis. 8). Defendants argue that there was no deception because
Dilallo does not now contest that she owes the Debt and she
does not contend that Defendants misrepresented the amount
owed. (Mem. Dis. 11). However, the mere fact that Dilallo may
ultimately owe the Debt does not give Defendants carte
blanche to engage in collection activities that violate the
FDCPA and exonerate them from any wrongdoing. In the instant
action, Dilallo has alleged conduct on the part of Defendants
that plausibly suggests that a consumer could be misled as to
the true owner of Debt. Defendants argue that ...