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Johnson v. Alltran Financial, LP

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

May 7, 2018

CHERYL JOHNSON, Plaintiff,
v.
ALLTRAN EDUCATION, LP, Defendant.

          MEMORANDUM OPINION AND ORDER

          AMY J. ST. EVE UNITED STATES DISTRICT COURT JUDGE

         Plaintiff Cheryl Johnson (“Plaintiff” or “Johnson”) brings this action against debt collector Defendant Alltran Education, LP (“Defendant” or “Alltran”), alleging two counts, a violation of the Fair Debt Collection Practices Act (the “FDCPA”), 15 U.S.C. § 1692, et seq., and a violation of the Illinois Collection Agency Act (the “ICAA”), 225 Ill. Comp. Stat. 425, et. seq. (R. 18, “FAC.”) Before the Court is Defendant's motion to dismiss Plaintiff's First Amended Complaint (“FAC”). (R. 22, “Def.'s Mot. to Dismiss.”) For the following reasons, the Court grants Defendant's motion to dismiss.

         BACKGROUND

         According to the FAC, Plaintiff Johnson is a resident of the state of Illinois. (FAC at ¶ 6.) Johnson allegedly incurred a consumer debt in the form of a consumer credit account with Chase Bank, USA, N.A. (Id. at ¶ 11; R. 18-1 at 6, “Debt Letter.”) She became delinquent on her debt, her debt went into default, and Chase Bank subsequently retained Alltran for collection of the debt. (FAC at ¶ 6, 12-13.)

         Alltran sent a letter to Johnson regarding her debt (the “Debt Letter”), dated April 5, 2017, which constituted Alltran's initial communication with Plaintiff. (Id. at ¶ 14, 16-17; Debt Letter.) Plaintiff concedes that the Debt “Letter conveyed information regarding the alleged debt, including the identity of the creditor, an account number, and an amount due, ” and further that “Defendant provided the required disclosures under § 1692g(a) of the FDCPA.” (FAC at ¶ 15, 18.) In a box in the top right corner of the Debt Letter are the details of Johnson's debt:

Creditor: Chase Bank USA, N.A. Account: XXXXXXXXXXXX2355 Alltran ID: [REDACTED] Past Due Amount: $11, 255.14 Partial Account Number for Your Security

(Debt Letter.) A paragraph in the body of the letter reads:

Unless you notify this office within 30 days after receiving this notice that you dispute the validity of the debt or any portion thereof, this office will assume this debt is valid. If you notify this office in writing within the thirty day period that the debt, or any portion thereof, is disputed, this office will: obtain verification of the debt or obtain a copy of a judgment and mail you a copy of such judgment or verification. If you request this office in writing within 30 days from receiving this notice, this office will provide you the name and address of the original creditor, if different from the current creditor.

(“validation notice” or “verification statement”). (Id.) A box in the bottom right corner of the Debt Letter provides in part: “If you write to us and ask us to stop communicating with you about this debt, we will, but if you owe this debt, you will still owe it and the debt may still be collected from you, ” (“communication statement”). (Id.) The text in this box goes on to provide contact information for Alltran's Contact Center and Complaint Hotline in case the consumer has “a complaint about the way we [Alltran] are collecting this debt.” (Id.) The Debt Letter also provides Alltran's general contact information, including the address and telephone number, as well as the extension for the specific agent assigned to Plaintiff's account. (Id.)

         Plaintiff's FAC alleges two counts: a violation of various sections of the FDCPA and a violation of the ICAA. Before the Court is Alltran's motion to dismiss Johnson's FAC.

         LEGAL STANDARD

         “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) (citing Fed.R.Civ.P. 12(b)(6)); see also Hill v. Serv. Emp. Int'l Union, 850 F.3d 861, 863 (7th Cir. 2017). 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 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). A plaintiff's “factual allegations must be enough to raise a right to relief above the speculative level.” Id. 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); see Adams v. City of Indianapolis, 742 F.3d 720, 728 (7th Cir. 2014).

         When 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.” Forgue v. City of Chicago, 873 F.3d 962, 966 (7th Cir. 2017); Roberts v. City of Chi., 817 F.3d 561, 564 (7th Cir. 2016); Mann v. Vogel, 707 F.3d 872, 877 (7th Cir. 2013). In addition to the allegations set forth in the complaint itself, a court weighing a motion to dismiss “may consider documents that are attached to a complaint or that are central to the complaint, even if not physically attached to it.” Cmty. Bank of Trenton v. Schnuck Markets, Inc., 887 F.3d 803, 809 (7th Cir. 2018) (citations omitted); see Mueller v. Apple Leisure Corp., 880 F.3d 890, 895 (7th Cir. 2018); Williamson v. Curran, 714 F.3d 432, 436 (7th Cir. 2013); Brownmark Films, LLC v. Comedy Partners, 682 F.3d 687, 690 (7th Cir. 2012).

         ANALYSIS

         Alltran moves to dismiss both counts of the FAC. In Count I, Johnson claims that the Debt Letter violates the FDCPA because: (1) the communication statement overshadows the verification statement, in violation of 15 U.S.C. § 1692g(b), which prohibits overshadowing of or inconsistency with the validation right; (2) the communication statement misleads Plaintiff into believing that Alltran can continue collecting the debt even if she disputes its validity or seeks to verify it, in violation of 15 U.S.C. §§ 1692e and 1692e(10), which prohibit false, deceptive, or misleading representations or means; (3) the communication statement threatens that Alltran can continue collecting the debt even if Plaintiff disputes the debt, in violation of 15 U.S.C. § 1692e(5), which prohibits debt collectors from threatening to take actions they cannot legally take; and (4) the Debt Letter fails to disclose that the “past due amount” is current as of the date of the letter and may increase due to interest, late fees, or other fees, in violation of 15 U.S.C. § 1692e, which generally prohibits false, deceptive, or misleading representations or means. (FAC at ¶ 54-58.) Plaintiff seeks actual damages pursuant to 15 U.S.C. § 1692k(a)(1), statutory damages pursuant to § 1692k(a)(2), and costs and reasonable attorney's fees pursuant to § 1692k(a)(3). (Id. at 10.)

         In Count II, Johnson claims that Alltran violated the ICAA because “Alltran overshadowed its disclosure of Plaintiff's rights to dispute the validity of the debt and/or request verification within the thirty-day dispute period, in violation of 255 ILCS 425/9.3(b) of the ICAA, when it informed Plaintiff that the alleged debt could still be collected from Plaintiff even if Plaintiff disputed the debt.” (Id. at ¶ 60.) Plaintiff seeks compensatory and punitive damages, and costs related to this claim. (Id. at 10.) The Court reviews each count in turn.

         I. Fair Debt Collection Practices Act (Count I)

         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). 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.” Id. at 273-74 (citation and internal quotation marks omitted); see also Boucher v. Fin. Sys. of Green Bay, Inc., 880 F.3d 362, 366 (7th Cir. 2018). The Seventh Circuit, however, has explicitly stated that “as a matter of law, [a court] 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); see Durkin v. Equifax Check Servs., Inc., 406 F.3d 410, 414-15 (7th Cir. 2005) (“[W]e disregard unrealistic, peculiar, bizarre, and idiosyncratic interpretations of collection letters.”) (citing Pettit v. Retrieval Masters Creditors Bureau, Inc., 211 F.3d 1057, 1060 (7th Cir. 2000), Gammon v. GC Servs., L.P., 27 F.3d 1254, 1257 (7th Cir. 1994)).

         The Seventh Circuit views “the confusing nature of a dunning letter as a question of fact, ” Evory v. RJM Acquisitions Funding L.L.C., 505 F.3d 769, 776 (7th Cir. 2007), that, if well-pleaded, avoids dismissal on a Rule 12(b)(6) motion, see McMillan, 455 F.3d at 759 (“We have cautioned that a district court must tread carefully before holding that a letter is not confusing as a matter of law when ruling on a Rule 12(b)(6) motion because district judges are not good proxies for the unsophisticated consumer whose interest the statute protects.” (internal quotation marks omitted)). See also Boucher, 880 F.3d at 366 (“Because this inquiry involves a fact-bound determination of how an unsophisticated consumer would perceive the statement, dismissal is only appropriate in cases involving statements that plainly, on their face, are not misleading or deceptive.” (quotations and citations omitted)). “Nevertheless, a plaintiff fails to state a claim and dismissal is appropriate as a matter of law when it is ‘apparent from a reading of the letter that not even a significant fraction of the population would be misled by it.' “ Zemeckis v. Glob. Credit & Collection Corp., 679 F.3d 632, 636 (7th Cir. 2012) (quoting Taylor v. Cavalry Invs., LLC, 365 F.3d 572, 574 (7th Cir. 2004) (internal quotation marks omitted)).

         A. Alleged Violation of 15 U.S.C. § 1692g(b)

         Plaintiff first alleges that the communication statement overshadows the validation notice, in violation of 15 U.S.C. § 1692g(b). (FAC at ¶ 54.) Section 1692g(b) provides:

If the consumer notifies the debt collector in writing within the thirty-day period…that the debt, or any portion thereof, is disputed, or that the consumer requests the name and address of the original creditor, the debt collector shall cease collection of the debt, or any disputed portion thereof, until the debt collector obtains verification of the debt or a copy of a judgment, or the name and address of the original creditor, and a copy of such verification or judgment, or name and address of the original creditor, is mailed to the consumer by the debt collector. Collection activities and communications that do not otherwise violate this subchapter may continue during the 30-day period…unless the consumer has notified the debt collector in writing that the debt, or any portion of the debt, is disputed or that the consumer requests the name and address of the original creditor. Any ...

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