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Collopy v. Dynamic Recovery Solutions, LLC

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

April 4, 2017

DIANE COLLOPY, Plaintiff,
v.
DYNAMIC RECOVERY SOLUTIONS, LLC, PINNACLE CREDIT SERVICES, LLC, and BANK OF AMERICA, N.A., Defendants.

          OPINION AND ORDER

          SARA L. ELLIS United States District Judge

         After receiving a letter (the “Letter”) from Defendants Dynamic Recovery Solutions, LLC (“Dynamic”) and Pinnacle Credit Services, LLC (“Pinnacle”) (collectively “Defendants”)[1]that falsely lead Plaintiff Diane Collopy to believe that she owed a debt, which was no longer collectable pursuant to the Illinois statute of limitations, Collopy filed this lawsuit alleging that Defendants violated the Fair Debt Collection Practices Act (“FDCPA”), 15 U.S.C. § 1692, et seq., and the Illinois Consumer Fraud and Deceptive Business Practices Act (“ICFA”), 815 Ill. Comp. Stat. 505/2, et seq. Defendants move to dismiss [27] the complaint, arguing that the Letter is not misleading on its face as a matter of law. Because whether the Letter is misleading is a question of fact that the Court cannot determine on the pleadings, the Court denies Defendants' motion to dismiss the FDCPA claims, but because Collopy abandons her state law claim in her response to the motion to dismiss, the Court grants Defendants' motion to dismiss the ICFA claim.

         BACKGROUND[2]

         Collopy is an individual consumer who obtained a credit card from BOA and, more than ten years ago, defaulted on the debt she had incurred on that card. Subsequently, Pinnacle, a debt collector, purchased from BOA the debt's collection rights. In February 2016, Dynamic, also a debt collector, sent a letter to Collopy on behalf of Pinnacle seeking to collect on the debt. The Letter included the following statement:

The law limits how long you can be sued on a debt. Because of the age of your debt, Pinnacle Credit Services, LLC will not sue you for it and Pinnacle Credit Services, LLC will not report it to any credit reporting agency.

Doc. 1-1 at 2. It also included three payment options, each including the disclaimer, “We are not obligated to renew this offer.” Id. Reading the Letter, Collopy believed that if she did not pay the debt, then Defendants would sue her, due to her ignorance that the applicable Illinois statute of limitations would, in fact, bar any suit filed on the debt. Additionally, the Letter concealed that a partial payment on the debt would revive the statute of limitations, thus subjecting her to suit on the debt.

         LEGAL STANDARD

         A motion to dismiss under Rule 12(b)(6) challenges the sufficiency of the complaint, not its merits. Fed.R.Civ.P. 12(b)(6); Gibson v. City of Chicago, 910 F.2d 1510, 1520 (7th Cir. 1990). In considering a Rule 12(b)(6) motion to dismiss, the Court accepts as true all well-pleaded facts in the plaintiff's complaint and draws all reasonable inferences from those facts in the plaintiff's favor. AnchorBank, FSB v. Hofer, 649 F.3d 610, 614 (7th Cir. 2011). To survive a Rule 12(b)(6) motion, the complaint must not only provide the defendant with fair notice of a claim's basis but must also be facially plausible. Ashcroft v. Iqbal, 556 U.S. 662, 678, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009); see also Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007). “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.” Iqbal, 556 U.S. at 678.

         ANALYSIS

         Under 15 U.S.C. § 1692e, any debt collector violates the FDCPA by using “any false, deceptive, or misleading representation or means in connection with the collection of any debt.” 15 U.S.C. § 1692e. Section 1692e(10) specifically prohibits, “[t]he use of any false representation or deceptive means to collect or attempt to collect any debt or to obtain information concerning a consumer.” Id. § 1692e(10). Section 1692f similarly prohibits a debt collector from using “unfair or unconscionable means to collect or attempt to collect any debt.” 15 U.S.C. 1692f. Collopy argues that Defendants violated §§ 1692e and 1692f when they sent her a letter seeking to collect on a debt because that letter did not state that she “cannot be sued on the subject debt, ” Doc. 1 ¶ 57, and because it failed to disclose that if Collopy made a partial payment on the debt it would revive the statute of limitations.

         To determine whether a communication violates the FDCPA, the Court must apply the “unsophisticated consumer” test. Wahl v. Midland Credit Mgmt., Inc., 556 F.3d 643, 645 (7th Cir. 2009). “If a statement would not mislead an unsophisticated consumer, it does not violate the FDCPA.” Id. at 645-46. The unsophisticated consumer has “rudimentary knowledge about the financial world and is capable of making basic logical deductions and inferences.” Id. at 645 (quotation marks omitted) (citations omitted). An unsophisticated consumer “may tend to read collection letters literally, he does not interpret them in a bizarre or idiosyncratic fashion.” Gruber v. Creditors' Prot. Serv., Inc., 742 F.3d 271, 274 (7th Cir. 2014) (quotation marks omitted) (citation omitted). Typically determining whether a communication is misleading is a question of fact that a court cannot determine at the motion to dismiss stage. Walker v. Nat'l Recovery, Inc., 200 F.3d 500, 501 (7th Cir. 1999). If the Court can determine from the face of the letter in question that “not even a significant fraction of the population would be misled by it . . . the court should reject it without requiring evidence beyond the letter itself.” Taylor v. Cavalry Inv., L.L.C., 365 F.3d 572, 574-75 (7th Cir. 2004) (quotation marks omitted). If the statements in question “plainly, on their face, are not misleading or deceptive, ” the Court may dismiss the case based on its own determination without looking to extrinsic evidence. Ruth v. Triumph P'ships, 577 F.3d 790, 800 (7th Cir. 2009).

         Collopy contends that the following statement in the Letter is deceptive and misleading:

The law limits how long you can be sued on a debt. Because of the age of your debt, Pinnacle Credit Services, LLC will not sue you for it and Pinnacle Credit Services, LLC will not report it to any credit reporting agency.

Doc. 1-1 at 2. Collopy alleges the statement failed to advise her that she cannot be sued on the subject debt. By using the words “will not sue you, ” Collopy pleads, Defendants create the misleading impression that Defendants are merely deciding not to sue rather than that Defendants are completely barred from suing. Furthermore, Collopy states that additional statements included in the letter add to the confusion by “blurring the line between an optional payment request and a commanding payment demand, ” Doc. 39 at 4, such as, “When you provide a check as payment, ” Doc. 1-1 at 2. She also argues that the inclusion of payment options “provides a strong inference that [Dynamic] intentionally attempted to mislead Plaintiff into making a payment on a debt she could no longer be sued for.” Doc. 39 at 4. Finally, she asserts that the disclaimer, “We are ...


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