United States District Court, N.D. Illinois, Eastern Division
MEMORANDUM OPINION AND ORDER
Castillo United States District Court.
Lynn Mehling ("Julie") and Sheri Jane Mehling
("Sheri") (collectively "Plaintiffs")
bring this action against Fullett Rosenlund Anderson PC
("Defendant"), alleging that Defendant violated the
Fair Debt Collection Practices Act ("FDCPA"), 15
U.S.C. § 1692 el seq., by falsely representing
the character, amount, or legal status of a debt. (R. 17, Am.
Compl.) Defendant moves to dismiss Plaintiffs' claim
pursuant to Federal Rule of Civil Procedure 12(b)(6). (R. 18,
Defs Mot. to Dismiss.) For the reasons stated below, the
motion is granted in part and denied in part.
fall of 2015, Plaintiffs separately filed bankruptcy under
Chapter 13 of the United States Bankruptcy Code. (R. 17, Am.
Compl. ¶ 6; see also In re Julie Lynn Mehling,
15-33524 (Bankr. N.D. Ill.); In re Sheri Jane
Mehling, 15-29902 (Bankr. N.D. Ill.).) Defendant is a
law firm located in Illinois and represents Mayfair Station
Condominium Association ("Mayfair"). (R. 17, Am.
Compl. ¶¶ 5, 7.) On behalf of Mayfair, Defendant
filed a motion to modify the automatic stay in each
bankruptcy proceeding on March 24, 2016. (Id.
¶¶ 7-8; R. 17-2. Mots, to Modify.) The motions are
virtually identical. In the motions. Defendant stated that
Mayfair was the holder of a secured interest in the
debtors' real property. (R. 17-2, Mots, to Modify at 2,
4.) Defendant claimed that Mayfair was entitled to relief
from the bankruptcy automatic stay because Plaintiffs
"made no post-petition assessment payments since the
filing of the petition[s] for relief under Chapter 13"
on August 31, 2015, and September 30, 2015, respectively.
(Id. at 3, 5.) Both motions stated that the debtor
was in "default of [her] post-petition assessment
payments in the amount of $1, 396.53, " comprised of
$783.03 post-petition default and $658.50 for post-petition
attorneys' fees and costs. (Id.) The motions
attached a "Required Statement to Accompany Motions for
Relief From Stay" form. (R. 17-3, Req. Statements at 2,
3.) The forms reflect that each debtor was 12 months in
post-petition default to Mayfair and that the amount due was
$1, 396.53. (Id.)
claim that the motions to modify contained misrepresentations
regarding the status and amount of their debt. First,
Plaintiffs allege that on March 24, 2016-the date on which
the motions to modify were filed-it was "categorically
impossible for Plaintiffs to be twelve (12) months in
post-petition default" because Plaintiffs had filed
their bankruptcy petitions fewer than six months
earlier. (R. 17, Am. Compl. ¶ 18.) Second,
Plaintiffs allege that Defendant incorrectly stated that
Plaintiffs were in post-petition default in the amount of
$738.03, when they actually owed $547.43. (R. 17, Am. Compl.
¶ 19; R. 17-5, Ex. E; see also R. 24, Resp. at
7 ("Plaintiffs were in post-petition default in the
amount of $547.43.").)
6, 2016, Julie filed this FDCPA action. (R. 1, Compl.)
Subsequently, Sheri filed a separate FDCPA lawsuit premised
on the same underlying facts. Sheri Jane Mehling v.
Fullett Rosenlund Anderson PC, Case No.
16-05922 (N.D. Ill. filed June 6. 2016). Defendant sought to
consolidate the two cases, (R. 12, Mot. to Consolidate), and,
on August 3, 2016, this Court granted Defendant's motion,
(R. 16, Min. Order). Plaintiffs filed their amended complaint
on August 10, 2016. (R. 17, Am. Compl.) The amended complaint
alleges that Defendant violated 15 U.S.C. § 1692e by
making false representations "of the character, amount
or legal status of the debt" in the motions to modify.
(R. 17, Am. Compl. ¶¶ 16-19.) Defendant now moves
to dismiss the complaint under Rule 12(b)(6). (R. 18, Mot. to
Dismiss.) On October 11, 2016, Plaintiffs responded, and
Defendant replied on November 1, 2016. (R. 24, Resp.; R. 25.
survive a motion to dismiss, a complaint must provide
"enough facts to state a claim to relief that is
plausible on its face." Bell Atl. Corp. v.
Twombly, 550 U.S. 544, 570 (2007). A Rule 12(b)(6)
motion "challenges the viability of a complaint by
arguing that it fails to state a claim upon which relief may
be granted." Firestone Fin. Corp. v. Meyer, 796
F.3d 822, 825 (7th Cir. 2015) (citation omitted). In deciding
a Rule 12(b)(6) motion, the Court must "construe it in
the light most favorable to the nonmoving party, accept
well-pleaded facts as true, and draw all inferences in [the
party's] favor." Bell v. City of Chi. 835
F.3d 736. 738 (7th Cir. 2016) (citation omitted). "To
survive a motion to dismiss under Rule 12(b)(6).
plaintiff's complaint must allege facts which, when taken
as true, plausibly suggest that the plaintiff has a right to
relief, raising that possibility above a speculative
level." Cochran v. III. Slate Toll Highway
Auth., 828 F.3d 597. 599 (7th Cir. 2016) (internal
quotation marks and citation omitted). "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. Iqhah 556 U.S. 662. 678 (2009) (citing
Twombly, 550 U.S. at 556). The Court can consider
"allegations set forth in the complaint itself,
documents that are attached to the complaint, documents that
are central to the complaint and are referred to in it, and
information that is properly subject to judicial
notice." Williamson v. Curran, 714 F.3d 432,
436 (7th Cir. 2013).
allege that the motions to modify falsely stated the duration
of their post-petition default and the amount owed. (R. 17,
Am. Compl. ¶¶ 18-19.) Defendant argues that
"although Fullett mistakenly asserted Plaintiffs were
twelve months in post-petition [default] instead of six
months in default, the Motions to Lift the Automatic Stay
were not deceptive or misleading to create a material
violation of the FDCPA." (R. 19, Mem. at 2.) Plaintiffs
respond that the motions to modify incorrectly represented
the amount due and that this false representation was
material because "[t]o the bankrupt debtor, there can be
no question that a dollar due is material." (R. 24,
Resp. at 5, 7-8.)
FDCPA prohibits "debt collectors" from engaging in
abusive, deceptive, or unfair debt-collection practices. 15
U.S.C. § 1692. Plaintiffs allege that both
misrepresentations violated Section 1692e of the FDCPA. (R.
17, Am. Compl. ¶¶ 16-19.) Section 1692e prohibits a
debt collector from "us[ing] any false, deceptive, or
misleading representation or means in connection with the
collection of any debt" including "[t]he false
representation of... the character, amount, or legal status
of any debt."
"don't need protection against false statements that
are immaterial in the sense that they would not influence a
consumer's decision." Muha v. Encore Receivable
Mgml., Inc., 558 F.3d 623, 628 (7th Cir. 2009).
"'If a statement would not mislead the
unsophisticated consumer, it does not violate the FDCPA-even
if it is false in some technical sense. For purposes of
§ 1692e, then, a statement isn't 'false'
unless it would confuse the unsophisticated consumer."
Wahl v. Midland Credit Mgmt, Inc., 556 F.3d 643,
645-46 (7th Cir. 2009). In addition, ''a false or
misleading statement is only actionable under the FDCPA if it
is material, . . . meaning that it has the ability to
influence a consumer's decision." Lox
v. CD A. Ltd., 689 F.3d 818, 826 (7th Cir. 2012)
(citation and internal quotation marks omitted); see also
Hahn v. Triumph P'ships, LLC, 557 F.3d 755, 758 (7th
Cir. 2009) ("A statement cannot mislead unless it is
material, so a false but non-material statement is not
actionable."); Ruth v. Triumph P'ships, 577
F.3d 790. 800 (7th Cir. 2009) ("[Plaintiff] could not
prevail in the district court simply by proving that
statements in the notice were false. Whether they were false
or not, she had to prove that an unsophisticated consumer
would be deceived or misled by them.").
initial matter, the parties dispute which standard the Court
should apply when determining whether Plaintiffs have
adequately alleged that the motions to modify violated
Section 1692e. The applicable standard when determining
whether a collection communication violates Section 1692e
depends on whether the communication was directed to the
consumer or to a lawyer, and whether the
communication was allegedly false, misleading, or deceptive.
Where the debt collector communicates directly to the debtor,
and the communication is allegedly misleading or deceptive
under Section 1692e, the "unsophisticated consumer'*
standard governs. Evory v. RJM Acquisitions Funding,
L.L.C., 505 F.3d 769, 774 (7th Cir. 2007). Under this
standard, a communication violates Section 1692e if "a
person of modest education and limited commercial savvy would
be likely to be deceived." Id. The
unsophisticated consumer is not a '"dimwit, "
but may be ''uninformed, naive, and trusting."
Wahl, 556 F.3d at 645 (citation and internal
contrast, when a debtor collector makes an allegedly
misleading or deceptive representation to the debtor's
lawyer, the "competent attorney" standard applies.
Evory, 505 F.3d at 774-75; Washington v.
Portfolio Recovery Assocs., LLC, ___ F.Supp.3d ___, 2016
WL 5477519, at *4 (N.D. Ill. Sept. 29, 2016) ("An
allegedly deceptive or misleading
communication made to a lawyer is not actionable if it is
unlikely to deceive a competent lawyer[.]" (citation and
internal quotation marks omitted)). This standard asks
"whether a competent attorney would be deceived, ...