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Lauber v. Lawrence

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

September 20, 2017

ANITA LAUBER, Plaintiff,


          SARA L.ELLIS, United States District Judge

         Plaintiff Anita Lauber filed this suit against Defendants Lawrence & Morris and Nathaniel David Lawrence after they brought her to state court seeking to collect on a delinquent consumer debt. Lauber claims that the citation to discover assets she received violated § 1692e and § 1692f of the Fair Debt Collection Practices Act (“FDCPA”), 15 U.S.C. § 1692 et seq. Defendants move to dismiss Lauber's first amended complaint and seek sanctions for its filing pursuant to 28 U.S.C. § 1927. Defendants argue that the allegedly misleading statement in the citation's caption is substantially similar to the captions recommended for use in other Illinois counties and sanctioned by Illinois statute such that no deception can be found. The Court agrees that Lauber has failed to sufficiently allege that the language Defendants used was material or would have a practical impact on a consumer's decision making process, which bars Lauber's § 1692e claim. The Court also dismisses Lauber's § 1692f claim because that section does not apply to legislatively and judicially sanctioned actions, like the citation at issue here. Although the Court thus grants Defendants' motion to dismiss, it is not appropriate to impose sanctions on Lauber because her actions have not multiplied the proceedings unreasonably and vexatiously.


         Lawrence & Morris, a law firm, and its principal, Lawrence, engage in the business of collecting consumer debts. On behalf of Bradford & Gordon, LLC, they sought to collect a delinquent consumer debt Lauber allegedly owed Bradford & Gordon, LLC for legal services. Defendants filed a complaint to collect the debt on September 2, 2015 in the Circuit Court of Cook County. On September 7, 2016, the state court entered a judgment against Lauber in the amount of $4, 913.36. On September 30, 2016, Defendants filed the citation at issue, seeking to determine Lauber's assets at a citation hearing, and mailed it to Lauber. The citation commanded Lauber's presence at the courthouse at a specific date and time. Defendants included the following statement in the case caption: “YOUR FAILURE TO APPEAR AT THIS HEARING MAY RESULT IN YOUR ARREST.” Doc. 1-1 at 26. On March 17, 2017, the judge presiding over the citation proceeding entered an order continuing the citation hearing, noting that the hearing had been “properly filed and [was] conforming with 2-1402.” Doc. 18-4 at 2.


         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.

         Sanctions under 28 U.S.C. § 1927 apply to “attorney[s] or other person[s] admitted to conduct cases in any court . . . who so multipl[y] the proceedings in any case unreasonably and vexatiously[.]” The Seventh Circuit has interpreted the term vexatious to mean subjective or objective bad faith. Kotsilieris v. Chalmers, 966 F.2d 1181, 1184 (7th Cir. 1992) (citing Ordower v. Feldman, 826 F.2d 1569, 1574 (7th Cir. 1987) (noting that “intentional ill will or reckless conduct constitutes vexatious conduct”)). Sanctions are justified where an attorney presses a claim “without a plausible legal or factual basis and lacking in justification, ” Pac. Dunlop Holdings, Inc. v. Barosh, 22 F.3d 113, 119 (7th Cir. 1994) (quoting Walter v. Fiorenzo, 840 F.2d 427, 433 (7th Cir. 1988)), or “pursue[s] a path that a reasonably careful attorney would have known, after appropriate inquiry, to be unsound.” Kapco Mfg. Co. v. C & O Enters., Inc., 886 F.2d 1485, 1491 (7th Cir. 1989) (quoting In re TCI, 769 F.2d 441, 445 (7th Cir. 1985)).


         I. Motion to Dismiss

         Defendants seek to dismiss Lauber's first amended complaint against them, claiming that they did not commit any alleged FDCPA violations when using language similar to that sanctioned by Illinois statute, 735 Ill. Comp. Stat. 5/2-1402, and indeed used by two other Illinois county courts, when sending the citation to Lauber. Defendants chose to use a form case caption approved by the McHenry and St. Clair County courts for citations to discover assets in preparing the citation served on Lauber. Compare Doc. 1-1 at 26 (citation served on Lauber), with 22nd Judicial Cir. Ct. R. 15.01 (McHenry County rule for citations to discover assets); Doc. 18-3 (St. Clair County form citation to discover assets). Lauber alleges that the citation she received violated the FDCPA because the statement in the caption indicating that her failure to appear may result in arrest did not adequately define the four steps that must occur before she could be arrested for not appearing at the required citation hearing. Specifically, Lauber alleges the caption on the citation was a false or misleading representation in violation of § 1692e, which states “[a] debt collector may not use any false, deceptive, or misleading representation or means in connection with the collection of any debt.” 15 U.S.C. § 1692e. Lauber also claims that the caption to the citation violates 15 U.S.C. § 1692f, in which “[a] debt collector may not use unfair or unconscionable means to collect or attempt to collect any debt.” Defendants may use Lauber's pleadings to demonstrate that she is not entitled to relief. McCready v. eBay, Inc., 453 F.3d 882, 888 (7th Cir. 2006).

         A. Section § 1692e

         The Seventh Circuit has defined three categories of cases alleging deceptive or misleading statements:

(1) cases involving statements that plainly, on their face, are not misleading or deceptive; (2) cases involving statements that are not plainly misleading or deceptive but might possibly mislead or deceive the unsophisticated consumer, for which plaintiffs must produce extrinsic evidence to prove that unsophisticated consumers find the statements to be so; and (3) communications which are plainly deceptive and misleading to an unsophisticated consumer as a matter of law.

Marquez v. Weinstein, Pinson & Riley, P.S., 836 F.3d 808, 814-15 (7th Cir. 2016) (quoting Ruth v. Triumph P'ships, 577 F.3d 790, 800 (7th Cir. 2009)). Typically, determining whether a communication is misleading is a question of fact that the Court cannot determine at the motion to dismiss stage. Walker v. Nat'l Recovery, Inc., 200 F.3d 500, 501 (7th Cir. 1999). But if the Court can determine from the face of the document 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) (citation omitted) (internal quotation marks omitted). Thus, if the statement in question is ...

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