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Duarte v. General Revenue Corp.

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

November 15, 2017

Brenda Duarte, Plaintiff,
General Revenue Corporation, Defendant.


          Hon. Thomas M. Durkin, United States District Judge

         Brenda Duarte alleges that General Revenue Corporation violated the Fair Debt Collection Practices Act (“FDCPA”) by sending her certain communications regarding a debt. General Revenue has moved to dismiss for failure to state a claim pursuant to Federal Rule of Civil Procedure 12(b)(6). R. 35. For the following reasons, that motion is granted.

         Legal Standard

         A Rule 12(b)(6) motion challenges the sufficiency of the complaint. See, e.g., Hallinan v. Fraternal Order of Police of Chi. Lodge No. 7, 570 F.3d 811, 820 (7th Cir. 2009). A complaint must provide “a short and plain statement of the claim showing that the pleader is entitled to relief, ” Fed.R.Civ.P. 8(a)(2), sufficient to provide defendant with “fair notice” of the claim and the basis for it. Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007). This standard “demands more than an unadorned, the-defendant-unlawfully-harmed-me accusation.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). While “detailed factual allegations” are not required, “labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do.” Twombly, 550 U.S. at 555. The complaint must “contain sufficient factual matter, accepted as true, to ‘state a claim to relief that is plausible on its face.'” Iqbal, 556 U.S. at 678 (quoting Twombly, 550 U.S. at 570). “‘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.'” Mann v. Vogel, 707 F.3d 872, 877 (7th Cir. 2013) (quoting Iqbal, 556 U.S. at 678). In applying this standard, the Court accepts all well-pleaded facts as true and draws all reasonable inferences in favor of the non-moving party. Mann, 707 F.3d at 877.


         Now on her second amended complaint, Duarte alleges that General Revenue sent her a debt collection letter on behalf of DePaul University that included the following sentence: “Please be aware the balance may change due to payments you made or other adjustments made by your creditor.” R. 32-1 at 7.[1] Duarte argues that this statement violated the FDCPA because it was false in violation of § 1692e(2)(A), and because it constituted a “threat to take any action . . . that is not intended to be taken, ” in violation of § 1692e(5).

         The letter also included a balance statement showing “current principal” of “3228.00”; “current interest” of “0.00”; “current collection cost balance” of “0.00”; and “current interest rate” of “0.00%”. Duarte argues that this statement is also false in violation of § 1692e(2) and a threat of action “not intended to be taken” in violation of § 1692e(5).

         Under 15 U.S.C. § 1692e, a “debt collector may not use any false, deceptive, or misleading representation or means in connection with the collection of any debt.” “[A] determination of whether a statement is false, deceptive or misleading . . . under the FDCPA . . . is a fact-bound determination of how an unsophisticated consumer would perceive the statement.” Marquez v. Weinstein, Pinson & Riley, P.S., 836 F.3d 808, 812 (7th Cir. 2016). The Seventh Circuit has “cautioned . . . that in determining whether a statement is . . . misleading, a district court must ‘tread carefully' because district judges are not good proxies for the ‘unsophisticated consumer' whose interest the statute protects.” Id. “Accordingly, Rule 12(b)(6) dismissal on that issue is appropriate only if there is no set of facts consistent with the pleadings under which the plaintiffs could obtain relief.” Id.

         I. Whether the Statement Regarding “Adjustment” is Plausibly False in Violation of § 1692e(2)

         Duarte has failed to plausibly allege that the statement regarding “adjustments” is false. Duarte makes the following relevant allegations: “The balance of the alleged [debt] would not change because of adjustments made by the creditor, ” R. 32 ¶ 19; “In fact, the balance on the alleged debt has never changed, despite Defendant's suggestion to the contrary, ” id. ¶ 22; “In fact, no interested or collection costs were ever going to be assessed on the alleged debt, ” id. ¶ 26. Duarte, however, does not allege that her creditor is prohibited from making “adjustments” to her balance. Absent such an allegation, Duarte has failed to allege the falsity of the statement that her loan balance may be adjusted by her creditor.

         Duarte argues that the statement is false based on General Revenue's statement in an earlier filing in this case that Duarte's “account was not accruing interest or other charges.” R. 18 at 10. But again, this statement does not assert that it was impossible for Duarte's account to accrue interest or charges, and it says nothing about “adjustments” generally. This statement from General Revenue's earlier brief, to the extent it can be considered an admission, does not undermine the veracity of the statement in the letter it sent Duarte.

         For these reasons, General Revenue's motion to dismiss Duarte's claim under § 1692e(2)(A) with respect to the “adjustments” statement is granted, and that claim is dismissed.

         II. Whether the Statement Regarding “Adjustments” is Plausibly a Threat to Take Action General Revenue Never Intended to Take in Violation of § 1692e(5)

         Duarte also argues that the statement violates § 1692e(5) because it constitutes a threat to make “adjustments” to her loan balance, which General Revenue never intended to do. A “threat, in the broadest sense, involves a declaration of an intention to take some action.” St. John v. Cach, LLC, 822 F.3d 388, 390-91 (7th Cir. 2016). Under § 1692e(5), “a threat need not be express: it can be implied.” Gonzales v. Arrow Fin. Servs., 660 F.3d 1055, 1064 (7th Cir. 2011). Thus, “a threat can be stated in noncommittal terms and still run afoul of the FDCPA.” Haddad v. Midland Funding, LLC, 255 F.Supp.3d 735, 745 (N.D. Ill. 2017) (citing Ruth v. Triumph P'ships, 577 F.3d 790, 799-802 (7th Cir. 2009) (holding that the statement that “we may collect and/or share all the information we obtain in servicing your account” was a threat under § 1692e(5), where the defendant could not legally share the plaintiff's personal information) (emphasis added); Gonzales, 660 F.3d at 1062, 1064 (holding that ...

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