United States District Court, N.D. Illinois, Eastern Division
MEMORANDUM OPINION AND ORDER
Honorable Thomas M. Durkin United States District Judge.
Harrer alleges that Bayview Loan Servicing LLC violated the
Fair Debt Collection Practices Act by sending him certain
communications. Bayview has moved to dismiss for failure to
state a claim pursuant to Federal Rule of Civil Procedure
12(b)(6). R. 98. For the following reasons, that motion is
12(b)(6) motion challenges the sufficiency of the
complaint. See, e.g., Hallinan v. Fraternal Order of
Police of Chi. Lodge No. 7, 570 F.3d 811, 820 (7th Cir.
2009). A complaint must provide “a short and plain
statement of the claim showing that the pleader is entitled
to relief, ” Fed.R.Civ.P. 8(a)(2), sufficient to
provide defendant with “fair notice” of the claim
and the basis for it. Bell Atl. Corp. v. Twombly,
550 U.S. 544, 555 (2007). This standard “demands more
than an unadorned, the-defendant-unlawfully-harmed-me
accusation.” Ashcroft v. Iqbal, 556 U.S. 662,
678 (2009). While “detailed factual allegations”
are not required, “labels and conclusions, and a
formulaic recitation of the elements of a cause of action
will not do.” Twombly, 550 U.S. at 555. The
complaint must “contain sufficient factual matter,
accepted as true, to ‘state a claim to relief that is
plausible on its face.'” Iqbal, 556 U.S.
at 678 (quoting Twombly, 550 U.S. at 570).
“‘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.'” Mann v.
Vogel, 707 F.3d 872, 877 (7th Cir. 2013) (quoting
Iqbal, 556 U.S. at 678). In applying this standard,
the Court accepts all well-pleaded facts as true and draws
all reasonable inferences in favor of the non-moving party.
Mann, 707 F.3d at 877.
went into default on his mortgage and declared bankruptcy.
His debt related to his mortgage was discharged in
bankruptcy. Bayview contends that even after Harrer's
bankruptcy discharge, Bayview has a “surviving security
interest in [Harrer's] property.” R. 99 at 1. The
parties do not explain the nature of this security interest,
but it does not appear to be relevant to deciding this
Harrer's bankruptcy discharge, Bayview contacted him six
times in 2014 about his mortgage and a potential foreclosure:
a voicemail on May 7; letters on May 7 and 8, see R.
79-1 at 8 and 25; and two letters each on May 22 and December
11, see R. 79-1 at 29, 31, 33-40. Harrer alleges
that the content of these communications violated the FDCPA.
Communications In Connection with the Collection of
argues that its communications with Harrer were not sent
“in connection with the collection of debt, ” as
is required to constitute a violation of the FDCPA, but were
sent to “enforce . . . the surviving security
interest in [Harrer's] property.” R. 99 at 3-5.
Bayview contends that a “creditor's communications
related to enforcing a security interest, or providing loss
mitigation alternatives, following a debtor's bankruptcy
discharge are not subject to the FDCPA.” R. 99 at 4. In
support of this contention Bayview cites the First
Circuit's holding that “it is plain that the sine
qua non of a debt is the existence of an obligation (actual
or alleged), ” and the FDCPA's definition of debt
“requires at least the existence or alleged existence
of an obligation to pay money.” Arruda v. Sears,
Roebuck & Co., 310 F.3d 13, 23 (1st Cir. 2002);
see also 15 U.S.C. § 1692a(5) (defining
“debt” as “any obligation or alleged
obligation of a consumer to pay money”). Several
district courts have applied this language to dismiss FDCPA
claims by plaintiffs who, like Harrer, had their obligations
on promissory notes secured by a mortgage discharged in
bankruptcy. See Kenney v. CitiMortgage, Inc., 2015
WL 1957880, at *5 (D. Kan. Apr. 29, 2015) (“Here,
pursuant to Plaintiffs' Chapter 7 bankruptcy discharge,
they are not liable for any deficiency between the price
secured at foreclosure and the amount owed on the
CitiMortgage Mortgage or Citibank Mortgage. [The defendant]
argues that its actions could not have been for the
collection of a debt, but rather, only for enforcement of a
security interest. The Court agrees.”); Shaw v.
Bank of Am., NA, 2015 WL 224666, at *6 (D. Mass. Jan.
15, 2015); Redjai v. Nationstar Mortg. LLC, 2014 WL
7238355, at *3 n. 1 (C.D. Cal. Dec. 15, 2014); Payne v.
Reiter & Schiller, P.A., 2012 WL 1054873, at *3 (D.
Minn. Mar. 8, 2012).
the First Circuit qualified its holding regarding the
necessity of the “existence” of a debt, by
“recogniz[ing] that a plaintiff may bring a claim under
the FDCPA by pleading that a debt collector falsely alleged
an obligation to pay money.” Arruda, 310 F.3d
at 23. This qualification comports with the Seventh
Circuit's holding that “the FDCPA is designed to
protect consumers from the unscrupulous antics of debt
collectors, irrespective of whether a valid debt actually
exists.” Keele v. Wexler, 149 F.3d 589, 594
(7th Cir. 1998). “That is because bringing or even
threatening to bring a lawsuit ‘which the debt
collector knows or should know is unavailable or unwinnable
by reason of a legal bar such as the statute of limitations
is the kind of abusive practice the FDCPA was intended to
eliminate.'” Harris v. Total Card, Inc.,
2013 WL 5221631, at *4 (N.D. Ill. Sept. 16, 2013) (quoting
Ramirez v. Palisades Collection LLC, 2008 WL
2512679, at *5 (N.D. Ill. June 23, 2008)) (and citing cases
from this district holding that “the FDCPA may be
violated where the collection letters imply there is a
legally enforceable obligation to pay the debt”)). This
reasoning applies here because Harrer claims that his
bankruptcy created a legal bar to collection on his mortgage,
which he alleges Bayview ignored in communicating with him.
Thus, the fact that Harrer is no longer obligated by the
promissory note associated with his mortgage is not a basis
to dismiss his claim that Bayview sought to collect on that
also contends that “the plain language of each letter
directly contradicts [Harrer's] conclusory statement that
the letters were related to the collection of debt, ”
R. 99 at 5, because the letters contain one of the two
If you are in Bankruptcy or received a bankruptcy discharge
of this debt, this communication is not an attempt to collect
the debt against you personally, but is notice of a possible