Bass v. Stolper, Koritzinsky, Brewster & Neider, S.C.

• Citation: 111 F.3d 1322
• Decision Date: 18 April 1997
• Docket Number: No. 96-2113,96-2113
• Parties: Terri L. BASS, Plaintiff-Appellee, v. STOLPER, KORITZINSKY, BREWSTER & NEIDER, S.C. and Kathy Leschensky, Defendants-Appellants.
• Court: United States Courts of Appeals. United States Court of Appeals (7th Circuit)

Page 1322

111 F.3d 1322

65 USLW 2682

Terri L. BASS, Plaintiff-Appellee, v. STOLPER, KORITZINSKY, BREWSTER & NEIDER, S.C. and Kathy

Leschensky, Defendants-Appellants.

No. 96-2113.

United States Court of Appeals,

Seventh Circuit.

Argued Oct. 22, 1996.

Decided April 18, 1997.

Carla Andres, Vele & Andres, Evansville, WI, Richard J. Rubin, Santa Fe, NM (argued), for Plaintiff-Appellee.

Joseph R. Long, II (argued), Relles, Meeker & Borns, Madison, WI, for Defendants-Appellees.

Ernest J. Isenstadt, Stephen Calkins, Federal Trade Commission, Washington, DC, Joanne Faulkner, New Haven, CT, for Amici Curiae.

Before BAUER, ESCHBACH, and COFFEY, Circuit Judges.

ESCHBACH, Circuit Judge.

This case presents the novel question of whether the Fair Debt Collection Practices Act ("FDCPA" or "the Act"), 15 U.S.C. sec. 1692 et seq., applies to third-party efforts to collect payment from consumers who use a dishonored check for the purchase of goods or services. The answer turns on whether the payment obligation that arises from a dishonored check constitutes a "debt" as defined in the Act. On cross-motions for partial summary judgment, the district court answered in the affirmative, holding that (1) the Act applies to third-party collectors of dishonored checks, and (2) the defendants' collection practices violated the Act. On appeal, the defendants challenge only the former holding, arguing that the Act applies only to those debts arising from an offer or extension of credit. We now affirm.

I.

To pay for groceries, Joe Arsenault wrote a check in the amount of $156.94 to "Copps," a local supermarket. The check, which was subsequently dishonored by his bank due to insufficient funds, was drawn on an account that Arsenault held jointly with plaintiff-appellee, Terri Bass. To collect on the check, Copps employed defendant law firm, Stolper, Koritzinsky, Brewster & Neider, S.C. ("SKBN"), who instituted collection activities against Arsenault under Wisconsin's civil recovery statute. ¹

SKBN's first three collection attempts were in the form of collection letters addressed solely to Arsenault. Arsenault did not respond. Its fourth collection letter, however, was addressed jointly to Arsenault and Bass. This letter, written and signed by defendant Kathy Leschensky, a non-attorney employee of SKBN, advised that she "draft[ed] and file[d] lawsuits" in collections matters, and that she would "hold off taking any action for 7 days" if Bass or Arsenault would make arrangements to pay. In response, Bass brought an action for statutory damages for defendants' failure to comply with the FDCPA in its collection letter. Among other complaints, Bass alleged that in the letter Leschensky misrepresented herself as an attorney and violated 15 U.S.C. secs. 1692e(3), 1692e(5), and that the letter did not include language specifically required by the Act stating that the purpose of the letter is to collect a debt and that any information received would be used solely in collection efforts. See 15 U.S.C. sec. 1692e(11). SKBN conceded before the district court that the letter lacked this required language.

Both parties moved for partial summary judgment, and on March 4, 1996, the district court granted Bass's motion, finding that 1) the Act applies to collectors of dishonored checks, and 2) the letter sent to Bass violated sec. 1692e(11) of the Act. Before our court, defendants challenge only the district court's finding that the Act applies to their collection activities. ² In finding that the Act applied, the district court reasoned that a consumer who issues a subsequently dishonored check has an obligation to pay that meets the Act's definition of the term "debt."

We review a district court's entry of partial summary judgment de novo, drawing all reasonable inferences in the light most favorable to the nonmovant. Daill v. Sheet Metal Workers' Local 73 Pension Fund, 100 F.3d 62, 65 (7th Cir.1996); Tolentino v. Friedman, 46 F.3d 645, 649 (7th Cir.1995). Summary judgment is proper when there is no genuine issue of material fact left for the fact finder and the movant is entitled to judgment as a matter of law. FED.R.CIV.P. 56(c). In this case, the parties have no dispute over the material facts. The sole disagreement concerns whether the district court correctly interpreted a dispositive provision of the FDCPA. Our task on appeal is simply to review the district court's finding that the payment obligation arising from a dishonored check creates a "debt" under the FDCPA. We conduct this review pursuant to our jurisdiction under 28 U.S.C. sec. 1291.

II.

On September 20, 1977, premised on Congressional concern that state protections against questionable debt collection practices were insufficient, President Carter signed into law the Fair Debt Collection Practices Act as an amendment to the Consumer Credit Protection Act ("CCPA"). 15 U.S.C. sec. 1601 et seq. The primary goal of the FDCPA is to protect consumers from abusive, deceptive, and unfair debt collection practices, including threats of violence, use of obscene language, certain contacts with acquaintances of the consumer, late night phone calls, and simulated legal process. See generally Jenkins v. Heintz, 25 F.3d 536, 538 (7th Cir.1994), aff'd, 514 U.S. 291, 115 S.Ct. 1489, 131 L.Ed.2d 395 (1995) (reviewing the history and purpose of the FDCPA). A basic tenet of the Act is that all consumers, even those who have mismanaged their financial affairs resulting in default on their debt, deserve "the right to be treated in a reasonable and civil manner." Baker v. G.C. Services Corp., 677 F.2d 775, 777 (9th Cir.1982) (citing 123 Cong.Rec. 10241 (1977)).

In the most general terms, the FDCPA prohibits a debt collector from using certain enumerated collection methods in its effort to collect a "debt" from a consumer. Because not all obligations to pay are considered "debts" under the Act, the definition of "debt" thus serves to limit the scope of the FDCPA. ³ SKBN has conceded that the collection letter sent to Arsenault and Bass used one of the collection methods prohibited by the Act. Therefore, we face only the task of resolving the parties' dispute over the scope of the FDCPA, specifically whether the payment obligation that arises from a dishonored check constitutes a "debt" as defined in the FDCPA. Appellants' argument, that the FDCPA does not control the collection activities arising from worthless checks, rises and falls on its assertion that the only type of "debt" triggering application of the FDCPA is debt arising from an offer or extension of credit to the consumer. Appellee counters that neither the Act's language, nor the Act's legislative history, limits "debt" in this fashion. As support, each party relies on the appropriate side of a small, yet conflicting body of case law on this issue which has grown up in the district courts. ⁴

As with all issues of statutory interpretation, the appropriate place to begin our analysis is with the text itself, see Hughey v. United States, 495 U.S. 411, 415, 110 S.Ct. 1979, 1982, 109 L.Ed.2d 408 (1990), which is the most reliable indicator of congressional intent. Time Warner Cable v. Doyle, 66 F.3d 867, 876 (7th Cir.1995). Appellants, however, skip the textual analysis in their opening brief and instead rely on the Act's legislative history to bolster their interpretation of the term "debt" as including only credit transactions. Given the complete lack of textual support in the Act for appellants' argument, this course of action is understandable. Resorting to legislative history is unnecessary here, however, because the language in the statute's definition of "debt" is plain.

A "debt," the collection of which is governed by the FDCPA, ⁵ is defined in the Act as

any obligation or alleged obligation of a consumer to pay money arising out of a transaction in which the money, property, insurance, or services which are the subject of the transaction are primarily for personal, family, or household purposes, whether or not such obligation has been reduced to judgment.

15 U.S.C. sec. 1692a(5). Appellants would have us read into this definition the additional requirement that the debt flow from a specific type of consumer transaction--one involving the offer or extension of credit. However, we see no language in the Act's definition of "debt" (or any other section of the Act) that mentions, let alone requires, that the debt arise from an extension of credit. Nor do we find patent ambiguity in the definition of "debt." The definition is not "beset with internal inconsistencies [or] ... burdened with vocabulary that escapes common understanding." EEOC v. The Chicago Club, 86 F.3d 1423, 1434 (7th Cir.1996). In the absence of ambiguity, our inquiry is at an end, and we must enforce the congressional intent embodied in the plain wording of the statute. In re Witkowski, 16 F.3d 739, 742 (7th Cir.1994); Bethlehem Steel Corp. v. Bush, 918 F.2d 1323, 1326 (7th Cir.1990).

On the contrary, the plain language of the Act defines "debt" quite broadly as "any obligation to pay arising out of a [consumer] transaction." In examining this definition, we first focus on the clear and absolute language in the phrase, "any obligation to pay." Such absolute language may not be alternatively read to reference only a limited set of obligations as appellants suggest. See, e.g., United States v. On Leong Chinese Merchants Assoc. Building, 918 F.2d 1289, 1296-97 (7th Cir.1990) (holding that federal forfeiture statute at 18 U.S.C. sec. 1955(d) could not be read to exclude real property because the phrase "any property" unambiguously includes both personal and real property). As long as the transaction creates an obligation to pay, a debt is created. We harbor no doubt that a check evidences the drawer's obligation to pay for the purchases made with the check, and should the check be dishonored, the payment obligation remains. See Williams v. United States, 458 U.S....