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Wood v. Allied Interstate, LLC

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

June 13, 2018



          Gary Feinerman, Judge.

         Clarence Wood alleges that a letter he received from Allied Interstate, LLC violated the Fair Debt Collection Practices Act (“FDCPA”), 15 U.S.C. §§ 1692 et seq., and the Illinois Collection Agency Act (“ICAA”), 225 ILCS 425/9. Doc. 1. Allied moves under Federal Rule of Civil Procedure 12(b)(6) to dismiss the suit. Doc. 18. The motion is denied.


         On a Rule 12(b)(6) motion, the court must accept the operative complaint's well-pleaded factual allegations, with all reasonable inferences drawn in Wood's favor, but not its legal conclusions. See Smoke Shop, LLC v. United States, 761 F.3d 779, 785 (7th Cir. 2014). The court must also consider “documents attached to the complaint, documents that are critical to the complaint and referred to in it, and information that is subject to proper judicial notice, ” along with additional facts set forth in Wood's brief opposing dismissal, “so long as those facts are consistent with the pleadings.” Phillips v. Prudential Ins. Co. of Am., 714 F.3d 1017, 1020 (7th Cir. 2013) (internal quotation marks omitted). The facts are set forth as favorably to Wood as those materials allow. See Pierce v. Zoetis, Inc., 818 F.3d 274, 277 (7th Cir. 2016). In setting forth those facts at the pleading stage, the court does not vouch for their accuracy. See Jay E. Hayden Found. v. First Neighbor Bank, N.A., 610 F.3d 382, 384 (7th Cir. 2010).

         Wood defaulted on a debt he incurred for goods and services used for family or household purposes. Doc. 1 at ¶¶ 11-12. Allied, a debt collector, sent Wood a letter stating that the “Amount Owed” was $2, 827.24. Id. at ¶ 13; Doc. 1-1 at 6. The letter included an “Account Listing, ” which provided this breakdown of the amount owed:

         (Image Omitted)

         Id. at 8.

         Wood believed that the letter's statement that he owed “$0.00” in fees, collection costs, and interest indicated that such amounts would begin to accrue if he did not pay the debt. Id. at ¶ 19. In fact, however, Allied was not allowed to assess fees, collection costs, or interest on Wood's account, so no such amounts could possibly accrue. Id. at ¶¶ 20-21, 29. Wood alleges that Allied's letter suggested that fees, collection costs, and interest would begin to accrue in an attempt to coerce him to pay the debt in full, and quickly, because if he did not do so his balance would increase. Id. at ¶¶ 27, 30. Wood experienced “negative emotions about Allied's threat that if he did not pay now, the balance may be adjusted, including generalized insult, annoyance, aggravation, and other garden variety emotional distress.” Id. at ¶ 36.


         I. FDCPA Claim

         Wood alleges that Allied's letter violated the FDCPA because it falsely implied that “additional charges could be added to [his] account [or alleged debt] by including column headers that included fees, interest, and collection costs with zero balances in its collection letter, ” when in fact Allied was not permitted to assess collection costs, fees, or interest. Doc. 24 at 3. The complaint identifies § 1692e as the pertinent FDCPA provision, but Wood's opposition brief contends that the letter violated both §§ 1692e and 1692f. Ibid. Allied maintains that Wood may not pursue a § 1692f claim because the complaint does not cite that provision. Doc. 25 at 4 n.1. But a complaint need not plead legal theories, see Rabe v. United Air Lines, Inc., 636 F.3d 866, 872 (7th Cir. 2011) (“A complaint need no identify legal theories, and specifying an incorrect theory is not a fatal error.”); Bartholet v. Reishauer A.G. (Zurich), 953 F.2d 1073, 1078 (7th Cir. 1992) (same), and Wood's factual allegations provide fair notice of the necessary elements of his § 1692f claim.

         Section 1692e prohibits a debt collector from using “any false, deceptive, or misleading representation or means in connection with the collection of any debt.” 15 U.S.C. § 1692e; see Ruth v. Triumph P'ships, 577 F.3d 790, 799-800 (7th Cir. 2009). This provision, essentially a “rule against trickery, ” Beler v. Blatt, Hasenmiller, Leibsker & Moore, LLC, 480 F.3d 470, 473 (7th Cir. 2007), sets forth “a nonexclusive list of prohibited practices” in sixteen subsections, McMahon v. LVNV Funding, LLC, 744 F.3d 1010, 1019 (7th Cir. 2014). Wood does not, and need not, “allege a violation of a specific subsection” of § 1692e. Lox v. CDA, Ltd., 689 F.3d 818, 822 (7th Cir. 2012). Section 1692f, meanwhile, proscribes the use of “unfair or unconscionable means to collect or attempt to collect any debt.” 15 U.S.C. § 1692f. Because Wood's § 1692f claim rests on the same premise-that Allied's letter was deceptive-as his § 1692e claim, the two claims rise or fall together.

         The Seventh Circuit “has consistently held that with regard to ‘false, deceptive, or misleading representations' in violation of § 1692e of the FDCPA, the standard is … whether the debt collector's communication would deceive or mislead an unsophisticated, but reasonable, consumer if the consumer is not represented by counsel.” Bravo v. Midland Credit Mgmt., Inc., 812 F.3d 599, 603 (7th Cir. 2016); see also Gruber v. Creditors' Prot. Serv., Inc., 742 F.3d 271, 273 (7th Cir. 2014) (noting that FDCPA claims “are evaluated under the objective ‘unsophisticated consumer' standard”). That standard protects a consumer who “may be uninformed, naïve, or trusting, ” but who nonetheless “possess[es] rudimentary knowledge about the financial world.” Gruber, 742 F.3d at 273 (internal quotation marks omitted). The reasonable consumer, although unsophisticated, is “not a dimwit” and “is capable of making basic logical deductions and inferences.” Lox, 689 F.3d at 822 (internal quotation marks omitted).

         As a general rule, the potentially confusing or misleading “nature of a dunning letter [is treated] as a question of fact that, if well-pleaded, avoids dismissal on a Rule 12(b)(6) motion.” Zemeckis v. Global Credit & Collection Corp., 679 F.3d 632, 636 (7th Cir. 2012) (internal citation omitted). ‚ÄúNevertheless, 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 ...

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