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Ramirez v. AP Account Services, LLC

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

January 3, 2017

JEREMY RAMIREZ, on behalf of himself and all others similarly situated Plaintiff,
v.
AP ACCOUNT SERVICES, LLC, Defendant.

          MEMORANDUM OPINION AND ORDER

          Robert M. Dow, Jr. United States District Judge

         Plaintiff Jeremy Ramirez filed a putative class action lawsuit against Defendant AP Account Services, LLC on March 2, 2016, alleging violation of the Fair Debt Collection Practices Act. Before the Court are Defendant's motion to dismiss the Second Amended Complaint [35] and Plaintiff's motion for class certification [4]. For the reasons set forth below, the Court denies Defendant's motion to dismiss [35]. Defendant's motion to dismiss the superseded original complaint [20] is stricken as moot. This case is set for further status hearing on January 24, 2017 at 9:00 a.m.

         I. Background

         On June 30, 2016, Plaintiff filed his Second Amended Complaint (“SAC”) [34], which is the operative complaint before the Court. Plaintiff alleges that Defendant violated the Fair Debt Collection Practices Act, 15 U.S.C. § 1692 et seq. (“FDCPA”) by attempting to collect a debt that was barred by a five-year statute of limitations pursuant to 735 ILCS 5/13-205. According to Plaintiff, the debt is a balance owed on a checking account. Plaintiff contends that Defendant sent him a letter on January 7, 2016 attempting to collect the debt, despite the fact that more than five years had elapsed since the last payment or activity on the account. [34, at ¶ 8, 9, 11, Exhibit A.] The January 7, 2016 letter had the heading “In Re: Settlement Offer, Technology Credit Union, ” and states Plaintiff's account number. [Id. at Exhibit A.] The letter states:

[Defendant] would like to offer [Plaintiff] the opportunity to settle this account on a voluntary basis, at this time there has been no attempt to resolve this debt. Please call us * * * to discuss your settlement options further. Payment arrangements are available to you as well. Once the payment is complete, [Defendant] will report this as settled for less than the balance owed to the original creditor.

         Plaintiff alleges that the January 7, 2016 letter implies that the debt is legally enforceable by offering settlement and that nothing in the letter disclosed that the debt was barred by the statute of limitations and not legally enforceable. [Id. at ¶¶ 18-19.] According to Plaintiff, he was “damaged in that he was confused and disturbed by the possibility that he could be sued in relation to the debt.” [Id. at ¶ 13.] Attached to the SAC is Technology Credit Union's Member Handbook (“the Member Handbook”). [34, Exhibit B.] The Member Handbook explains that it is “a disclosure and master agreement of the terms of all [Technology Credit Union] Accounts.” [Id., at 1.]

         Plaintiff also filed a motion for class certification, arguing that it is Defendant's policy and practice to send letters seeking to collect time-barred debts that do not disclose that the debt is time-barred and that this creates a common factual link and gives rise to the common legal question of whether Defendant's letters violate the FDCPA. [4, at 6.] On July 14, 2016, Defendant filed a motion to dismiss the SAC pursuant to Federal Rule of Civil Procedure 12(b)(6). [35.]

         II. Motion to Dismiss

         A. Legal Standard

         To survive a Rule 12(b)(6) motion to dismiss for failure to state a claim upon which relief can be granted, the complaint first must comply with Rule 8(a) by providing “a short and plain statement of the claim showing that the pleader is entitled to relief, ” Fed.R.Civ.P. 8(a)(2), such that the defendant is given “fair notice of what the * * * claim is and the grounds upon which it rests.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007) (quoting Conley v. Gibson, 355 U.S. 41, 47 (1957)) (alteration in original). Second, the factual allegations in the complaint must be sufficient to raise the possibility of relief above the “speculative level.” E.E.O.C. v. Concentra Health Servs., Inc., 496 F.3d 773, 776 (7th Cir. 2007) (quoting Twombly, 550 U.S. at 555). “A pleading that offers ‘labels and conclusions' or a ‘formulaic recitation of the elements of a cause of action will not do.'” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Twombly, 550 U.S. at 555). However, “[s]pecific facts are not necessary; the statement need only give the defendant fair notice of what the * * * claim is and the grounds upon which it rests.” Erickson v. Pardus, 551 U.S. 89, 93 (2007) (citing Twombly, 550 U.S. at 555) (alteration in original). Dismissal for failure to state a claim under Rule 12(b)(6) is proper “when the allegations in a complaint, however true, could not raise a claim of entitlement to relief.” Twombly, 550 U.S. at 558. In reviewing a motion to dismiss pursuant to Rule 12(b)(6), the Court accepts as true all of Plaintiff's well-pleaded factual allegations and draws all reasonable inferences in Plaintiff's favor. Killingsworth v. HSBC Bank Nevada, N.A., 507 F.3d 614, 618 (7th Cir. 2007).

         B. Analysis

         Defendant argues that Plaintiff's SAC should be dismissed pursuant to Federal Rule of Civil Procedure 12(b)(6). According to Defendant, Plaintiff applied the incorrect statute of limitations and under the correct statute of limitations the debt in question was not time-barred. Plaintiff submits that the five-year statute of limitations set forth in 735 ILCS 5/13-205 applies. This statute provides that

actions on unwritten contracts, expressed or implied, or on awards of arbitration, or to recover damages for an injury done to property, real or personal, or to recover the possession of personal property or damages for the detention or conversion thereof, and all civil actions not otherwise provided for, shall be commenced within 5 years next after the cause of action accrued.

735 ILCS 5/13-205. In contrast, Defendant contends that 735 ILCS 5/13-206, which applies to written obligations and provides for a ten-year statute of limitations, should apply to the debt at ...


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