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Woerthwein v. Midland Credit Management, Inc.

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

October 24, 2016

THEODORE WOERTHWEIN, Plaintiff,
v.
MIDLAND CREDIT MANAGEMENT, INC., Defendant.

          MEMORANDUM OPINION AND ORDER

          JOHN W. DARRAH United States District Court Judge

         On April 6, 2016, Plaintiff filed a Complaint, alleging violations of the Fair Debt Collection Practices Act, 15 U.S.C. § 1692 et seq. (“FDCPA”). Defendant filed a Motion to Dismiss [14] Plaintiff's Complaint pursuant to Federal Rule of Civil Procedure 12(b)(6) for failure to state a claim for which relief can be granted. For the reasons discussed below, Defendant's Motion to Dismiss [14] is denied.

         BACKGROUND

         Plaintiff incurred a debt from a “Citibank/Sears [credit] account” and had not made a payment on that account since July 10, 2009. (Compl. ¶ 13). Plaintiff's debt went into default and was later purchased by Midland Funding LLC. (Id. ¶ 9). Defendant, Midland Credit Management, Inc. (“MCM”) acts as a collection agency for Midland Funding LLC. (Id. ¶ 6). On September 2, 2015, Defendant sent a collection letter to Plaintiff that included, among other things, a current balance owed; the identity of the original creditor; opportunity to enroll in a “pre-approved . . . discount program”; an offer to Plaintiff of “three options to remit payment - a one-time payment at ¶ 70% discount, a 50% discount if the account was paid off over 12 months, and monthly payments “as low as $50 per month.” (Id. at ¶¶ 10-17). The September letter also stated, “We are not obligated to renew this offer.” (Id. at ¶12). The September letter did not disclose that Plaintiff's debt is time-barred.

         On January 20, 2016, Defendant sent another collection letter to Plaintiff. (Id. at ¶16). This letter was similar to the September letter. However, the January letter stated, “Because of the age of your debt, we will not sue you for it. If you do not pay the debt, we may continue to report it to the credit reporting agencies as unpaid.” (Id. at ¶ 20).

         Plaintiff alleges that the letters misrepresent Plaintiff's debt in violation of sections 1692e(2) and 1692e(10) of the FDCPA. (Id.) More specifically, Plaintiff alleges that the September letter did not disclose that the debt is time-barred and that the January letter did not inform Plaintiff that he could not be sued for the time-barred debt or the effect of making a payment on the account. (Id. ¶¶ 15, 21, 27, 29, 30, 35, 36). Plaintiff alleges that the letters are misleading because repayment towards the alleged debt would expose him to potential liability if he starts making payments. (Id. at ¶ 25).

         LEGAL STANDARD

         Rule 12(b)(6) permits a defendant to move to dismiss a complaint for “failure to state a claim upon which relief can be granted.” Fed.R.Civ.P. 12(b)(6). To survive a motion to dismiss, a complaint must allege “enough facts to state a claim to relief that is plausible on its face.” Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 570 (2007). “Threadbare recitals of the elements of a cause of action, supported by mere conclusory statements, do not suffice.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (citing Twombly, 550 U.S. at 555). However, plaintiffs are not required to “plead the elements of a cause of action along with facts supporting each element.” Runnion ex rel. Runnion v. Girl Scouts of Greater Chicago & Nw. Indiana, 786 F.3d 510, 517 (7th Cir. 2015). Rather, the complaint must provide a defendant “with ‘fair notice' of the claim and its basis.” Tamayo v. Blagojevich, 526 F.3d 1074, 1081 (7th Cir. 2008) (quoting Fed.R.Civ.P. 8(a)(2) and Twombly, 550 U.S. at 555). When evaluating a Rule 12(b)(6) motion, the court accepts the complaint's well-pleaded factual allegations as true and draws all reasonable inferences in the plaintiff's favor. Twombly, 550 U.S. at 555-56.

         ANALYSIS

         Defendant argues that the Complaint should be dismissed because Plaintiff was not deceived by Defendant's September or January letters. The basis of Defendant's argument is that Plaintiff was not deceived or misled by the letters because Plaintiff is an attorney who practices FDCPA law.

         In the Complaint, Plaintiff asserts that Defendant engaged in deceptive and misleading acts and practices in violation of sections 1692e(2) and (10) of the FDCPA by failing to disclose that Plaintiff's debt is time-barred and the effect of making a payment on a time-barred debt. Section 1692e of the FDCPA provides:

A debt collector may not use any false, deceptive, or misleading representation or means in connection with the collection of any debt. Without limiting the general application of the foregoing, the following conduct is a violation of this section:
* * *
(2) The false representation ...

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