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Macias v. Credit Control, LLC

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

June 16, 2017



          AMY J. ST. EVE United States District Court Judge.

         On February 14, 2017, Plaintiff Richard Macias brought the present Complaint against Credit Control LLC (“Credit Control”), Resurgent Capital Services LP (“Resurgent”), and LVNV Funding, LLC (“LVNV”), collectively “Defendants, ” alleging violations of the Fair Debt Collection Practices Act, 15 U.S.C. § 1692, et. seq. (“FDCPA”), specifically, 15 U.S.C. §§ 1692e, 1692e(10) and 1692f. Before the Court is Defendants'[1] motion to dismiss brought pursuant to Federal Rule of Civil Procedure 12(b)(6). For the following reasons, the Court grants Defendants' motion.


         Credit Control is a Missouri limited liability company that conducts business in Illinois, and its registered agent and office is CT Corporation System, of Chicago, Illinois. (R. 1, Compl. ¶ 7.) LVNV is a Delaware limited liability company that conducts business in Illinois, and its registered agent is Illinois Corporation Service, of Springfield, Illinois. (Id. ¶ 7.) Resurgent is a Delaware limited liability partnership that regularly does business in Illinois. (Id. ¶ 15.) Plaintiff alleges that Defendants are debt collectors under the FDCPA, are licensed as collection agencies in the State of Illinois, and regularly use the mails and telephone to collect consumer debts originally owed to others. (Id. ¶¶ 8-19). Plaintiff is a resident of Illinois, and this case arises from Defendants' attempts to collect delinquent consumer debt from Plaintiff. (Id. ¶ 6.)

         Plaintiff alleges that he incurred a debt in relation to a consumer credit account with Capital One that he used for personal and familial purposes. (Id. ¶ 20.) Plaintiff was unable to pay the alleged debt and subsequently went into default. (Id. ¶ 21.) Capital One reported Plaintiff's alleged debt to Equifax on January 8, 2017. (Id. ¶ 30; see also Ex. H.) LVNV purchased the debt from Capital One and assigned it to Resurgent for collection. (Compl. ¶ 22.) Resurgent in turn hired Credit Control for assistance in collecting the alleged debt. (Id. ¶ 23.) On February 3, 2017, Credit Control mailed a collection letter to Plaintiff regarding the alleged debt. (Id. ¶ 24.) The letter contained information identifying the “Current Creditor” (LVNV), the Original Creditor (Capital One), the account number, and the balance due. (Id. ¶ 25; see also Ex. G.) The letter stated, “This letter is to notify you that the above account has been purchased by LVNV Funding LLC and assigned to this office for collection.” (Id.) It further provided, “Please note that a negative credit bureau report reflecting on your credit record may be submitted to a credit reporting agency by the current account owner if you fail to fulfill the terms of your credit obligations.” (Compl. ¶ 28; see also Ex. G.)

         Plaintiff alleges that he believed, as an unsophisticated customer, that Defendants were implying that they would submit a negative credit report to a credit bureau if Plaintiff did not settle the alleged debt. (Compl. ¶ 29.) Plaintiff claims that Capital One had already reported the alleged debt to a credit bureau-Equifax. (Id. 30.) According to Plaintiff, Defendants were aware of the existing negative credit report, and were thus offering a false incentive for Plaintiff to pay his alleged debt in an attempt to “coerce” Plaintiff into settling the alleged debt. (Id. ¶¶ 31-33.) Plaintiff claims that Defendants' February 3 letter violated 15 U.S.C. §§ 1692e and 1692f because it made a misleading or unfair representation by stating that Defendants may submit a negative credit report, when in fact a credit report had already been submitted regarding the alleged debt. (Id. ¶ 41.)


         “A motion to dismiss pursuant to Federal Rule of Civil Procedure 12(b)(6) challenges the viability of a complaint by arguing that it fails to state a claim upon which relief may be granted.” Camasta v. Jos. A. Bank Clothiers, Inc., 761 F.3d 732, 736 (7th Cir. 2014). Under Rule 8(a)(2), a complaint must include “a short and plain statement of the claim showing that the pleader is entitled to relief.” Fed.R.Civ.P. 8(a)(2). The short and plain statement under Rule 8(a)(2) must “give the defendant fair notice of what the claim is and the grounds upon which it rests.” Bell Atlantic v. Twombly, 550 U.S. 544, 555 (2007) (citation omitted). Under the federal notice pleading standards, a plaintiff's “factual allegations must be enough to raise a right to relief above the speculative level.” Twombly, 550 U.S. at 555. Put differently, a “complaint must contain sufficient factual matter, accepted as true, to ‘state a claim to relief that is plausible on its face.'” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Twombly, 550 U.S. at 570).

         In determining the sufficiency of a complaint under the plausibility standard, courts must “accept all well-pleaded facts as true and draw reasonable inferences in the plaintiffs' favor.” Roberts v. City of Chicago, 817 F.3d 561, 564 (7th Cir. 2016). When ruling on motions to dismiss, courts may also consider documents attached to the pleadings without converting the motion to dismiss into a motion summary judgment, as long as the documents are referred to in the complaint and central to the plaintiff's claims. See Adams v. City of Indianapolis, 742 F.3d 720, 729 (7th Cir. 2014); Fed.R.Civ.P. 10(c). Because Plaintiff attaches photocopies of the collection letter and prior credit report to his Complaint and these documents are central to his claim, the Court may consider these attachments in ruling on the present motion.


         Plaintiff alleges that Defendant's letter violated 15 U.S.C. §§ 1692e, 1692e(10), and 1692f. Section 1692e provides that it is a violation for a debt collector to use any “false, deceptive, or misleading representation or means in connection with the collection of any debt.” 15 U.S.C. § 1692e. Under § 1692e(10), it is a violation for a debt collector to “use . . . any false representation or deceptive means to collect or attempt to collect any debt or to obtain information concerning a consumer.” 15 U.S.C. § 1692e(10). Under § 1692f, it is a violation for a debt collector to use “unfair or unconscionable means to collect or attempt to collect any debt.” 15 U.S.C. § 1692f.[2]

         According to well-settled Seventh Circuit precedent, “[c]laims brought under the Fair Debt Collection Practices Act are evaluated under the objective ‘unsophisticated consumer' standard.” Gruber v. Creditors' Prot. Serv., Inc., 742 F.3d 271, 273 (7th Cir. 2014); see also Heng v. Heavner, Beyers & Mihlar, LLC, 849 F.3d 348, 352 (7th Cir. 2017) (“We apply the ‘unsophisticated consumer' standard when evaluating whether a debt collector's representations comply with the FDCPA”); McMahon v. LVNV Funding, LLC, 744 F.3d 1010, 1019 (7th Cir. 2014) (unsophisticated consumer “standard applies to claims under both § 1692e and § 1692f”). As the Seventh Circuit has explained, “[o]n the one hand, the unsophisticated consumer may be ‘uninformed, naive, or trusting, ' but on the other hand the unsophisticated consumer does possess[ ] rudimentary knowledge about the financial world, is wise enough to read collection notices with added care, possesses reasonable intelligence and is capable of making basic logical deductions and inferences.” Gruber, 742 F.3d at 273-74 (citation and internal quotation marks omitted); see also Pantoja v. Portfolio Recovery Assocs., LLC, 852 F.3d 679, 686 (7th Cir. 2017) (same). The Seventh Circuit, however, has been explicit that “as a matter of law, we shall not entertain a plaintiff's bizarre, peculiar, or idiosyncratic interpretation” under the unsophisticated consumer standard. McMillan v. Collection Prof'l Inc., 455 F.3d 754, 758 (7th Cir. 2006). In other words, if it is not “apparent from a reading of the letter that not even a significant fraction of the population would be misled by it.” McMahon, 744 F.3d at 1020 (quoting Taylor v. Cavalry Investment, L.L.C., 363 F.3d at 574-75 (7th Cir. 2004).

         Here, Defendants argue that the Court should dismiss Plaintiff's claims because the statements in the February 3 letter were not false or misleading. Defendants contend that a current account owner (in this case, LVNV) is allowed to make a negative credit bureau report regardless of whether the original creditor (in this case, Capital One) has already made a credit bureau report. Plaintiff responds that Defendants' statement was false, misleading, and unfair for two reasons. First, Plaintiff argues that Defendants' letter was deceptive because it obscured the fact that Capital One had already made a credit bureau report in relation to this debt and created a false incentive to pay off the remainder of the debt. Second, Plaintiff contends that while the letter identified LVNV as the current creditor, it asserted only that the current account owner could make a credit bureau report without making it clear that LVNV was both the current creditor and the current account owner. The Court addresses each of Plaintiff's arguments in turn.

         I. Defendants' Statement That It “May” ...

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