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Caprel v. Specialized Loan Servicing, Inc.

United States District Court, N.D. Illinois, Eastern Division

September 7, 2016

ROBERT CAPREL, Plaintiff,
v.
SPECIALIZED LOAN SERVICING, INC., Defendant.

          MEMORANDUM OPINION AND ORDER

          Edmond E. Chang, Judge

         Robert Caprel brought this suit against Specialized Loan Servicing, Inc. (which calls itself SLS), alleging that SLS violated the Fair Debt Collection Practices Act (FDCPA), 15 U.S.C. § 1692 et seq.[1] Caprel says that, back in Fall 2015, SLS sent his lawyer two letters in an attempt to collect on Caprel's mortgage debt. R. 13, Second Am. Compl.[2] Those letters, according to Caprel, contained false and misleading representations under § 1692e. Id. Caprel also contends that the letters constituted unlawful harassment or abuse under § 1692d. Id. SLS now moves to dismiss Caprel's claims under Federal Rule of Civil Procedure 12(b)(6) for failure to state a claim. R. 14, Mot. to Dismiss. For the reasons stated below, the motion to dismiss is granted, but Caprel will be given one more chance to amend the complaint.

         I. Background

         For purposes of this motion, the Court accepts as true the allegations in the Second Amended Complaint (for convenience's sake, the "Amended Complaint"). Erickson v. Pardus, 551 U.S. 89, 94 (2007). Caprel is an Illinois resident who defaulted on his mortgage debt. Second Am. Compl. ¶¶ 4, 11. After he defaulted, Caprel filed for bankruptcy on October 31, 2014; by February 2015, his mortgage debt was completely discharged. Id. ¶¶ 13, 14. SLS is a debt collector that acquired and serviced Caprel's defaulted mortgage loan. Id. ¶¶ 10-11.

         On October 8, 2015 and November 8, 2015, months after the bankruptcy proceeding had ended, SLS sent a letter to Caprel's lawyer about his outstanding mortgage debt.[3] Second Am. Compl. ¶¶ 16, 19. The letters contained information about the Home Affordable Modification Program (HAMP), a government program that helps homeowners refinance or modify their mortgages, and encouraged Caprel (via his lawyer) to participate in the program. R. 13-1, Exh. A, 10/08/2015 HAMP Solicitation Letter; R. 13-2, Exh. B, 11/08/2015 HAMP Solicitation Letter.

         Each letter displayed a bolded disclaimer at the top of the first page, which stated: "THIS [COMMUNICATION] IS FOR INFORMATIONAL PURPOSES ONLY." 10/08/2015 HAMP Solicitation Letter at 1; 11/08/2015 HAMP Solicitation Letter at 1. Both letters also contained a "Frequently Asked Questions" section that addressed general inquiries about mortgage loan defaults, HAMP loan modifications, and home foreclosures. 10/08/2015 HAMP Solicitation Letter at 15; 11/08/2015 HAMP Solicitation Letter at 3. This was one of the "FAQs":

Q: Will My credit Score Be Affected by My Late Payments or Being in Default?
A: The delinquency status of your loan will be reported to credit reporting agencies as well as your entry into a Repayment Plan, Forbearance Plan, or Trial Period Plan in accordance with the requirements of the Fair Credit Reporting Act and the Consumer Data Industry Association requirements.

Second Am. Compl. ¶¶ 18, 20; 10/08/2015 HAMP Solicitation Letter at 15; 11/08/2015 HAMP Solicitation Letter at 3.

         The October letter also contained another bolded disclaimer, which emphasized that the letter was only for informational purposes if the recipient was in bankruptcy or had their mortgage debt discharged in a bankruptcy proceeding:

THE PURPOSE OF THIS COMMUNICATION IS TO OFFER YOU LOSS MITIGATION ASSISTANCE THAT MAY HELP YOU BRING OR KEEP YOUR LOAN CURRENT THROUGH AFFORDABLE PAYMENTS. IF YOU ARE CURRENTLY IN A BANKRUPTCY PROCEEDING, OR HAVE PREVIOUSLY OBTAINED A DISCHARGE OF THIS DEBT UNDER APPLICABLE BANKRUPTCY LAW, THIS NOTICE IS FOR INFORMATION ONLY AND IS NOT AN ATTEMPT TO COLLECT THE DEBT.

10/08/2015 HAMP Solicitation Letter at 11.

         Just weeks after his lawyer received the second letter from SLS, Caprel filed this action. R. 1, Compl. Caprel brings two claims under the Fair Debt Collection Practices Act (FDCPA), 15 U.S.C. § 1692 et seq. Second Am. Compl. ¶¶ 23, 24. First, Caprel alleges that the two letters SLS sent to his lawyer amounted to "conduct the natural consequence of which [wa]s to harass, oppress, or abuse" in violation of 15 U.S.C. § 1692d. Id. ¶ 23. Second, Caprel alleges that the two letters, and more specifically, the "Frequently Asked Questions" sections of those letters, were "false, deceptive, or misleading" in violation of 15 U.S.C. § 1692e. Id. ¶¶ 18-20, 24. SLS now moves to dismiss the Amended Complaint for failure to state a claim. See Mot. to Dismiss.

         II. Standard of Review

         Under Federal Rule of Civil Procedure 8(a)(2), a complaint generally need only include "a short and plain statement of the claim showing that the pleader is entitled to relief." Fed.R.Civ.P. 8(a)(2). This short and plain statement must "give the defendant fair notice of what the ... claim is and the grounds upon which it rests." Bell Ml. Corp. v. Twombly, 550 U.S. 544, 555 (2007) (alteration in original) (internal quotation marks and citation omitted). The Seventh Circuit has explained that this rule "reflects a liberal notice pleading regime, which is intended to 'focus litigation on the merits of a claim' rather than on technicalities that might keep plaintiffs out of court." Brooks v. Ross, 578 F.3d 574, 580 (7th Cir. 2009) (quoting Swierkiewicz v. Sorema N.A., 534 U.S. 506, 514 (2002)).

         "A motion under Rule 12(b)(6) challenges the sufficiency of the complaint to state a claim upon which relief may be granted." Hallinan v. Fraternal Order of Police of Chi. Lodge No. 7, 570 F.3d 811, 820 (7th Cir. 2009). "[A] complaint must contain sufficient factual matter, accepted as true, to 'state a claim to relief that is plausible on its face.'" Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Twombly, 550 U.S. at 570). These allegations "must be enough to raise a right to relief above the speculative level." Twombly, 550 U.S. at 555. The allegations that are entitled to the assumption of truth are those that are factual, rather than mere legal conclusions. Iqbal, 556 U.S. at 678-79.

         III. Analysis

         Caprel brings two FDCPA claims under 15 U.S.C. §§ 1692d, 1692e against SLS based on the two letters that it sent to his attorney in October and November 2015. Second Am. Compl. ¶¶ 23, 24. In its motion to dismiss, SLS contends that the Amended Complaint should be dismissed for two reasons: first, SLS asserts that the letters are not even subject to the FDCPA because they were not sent "in connection with the collection of a debt"-a prerequisite for triggering the FDCPA. Mot. to Dismiss at 7-13; see also R. 27, Def's Reply Br. at 6-10. Second, SLS asserts that even if the letters are subject to FDCPA scrutiny, the fact that they were sent to Caprel's lawyer, as opposed to Caprel himself, forecloses any possibility that the letters were false and ...


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