Rsidue, L.L.C. v. Michaud, 2005AP1299.
| Decision Date | 13 July 2006 |
| Docket Number | No. 2005AP1299.,2005AP1299. |
| Citation | 2006 WI App 164,721 N.W.2d 718 |
| Parties | RSIDUE, L.L.C., Plaintiff-Respondent, v. Michael R. MICHAUD, Defendant-Appellant.<SMALL><SUP>†</SUP></SMALL> |
| Court | Wisconsin Court of Appeals |
On behalf of the defendant-appellant, the cause was submitted on the briefs of Thad M. Gegner of Freund Law Office, Eau Claire.
On behalf of the plaintiff-respondent, the cause was submitted on the brief of Edward J. Heiser, Jr., Kenneth R. Nowakowski and Lisa Arent of Whyte Hirschboeck Dudek, S.C., Milwaukee.
Before VERGERONT, DEININGER and HIGGINBOTHAM, JJ.
Rsidue, L.L.C., purchased Michael Michaud's overdue credit card account and brought this action to collect the amount due on it. The circuit court ordered the entry of judgment against Michaud. He appeals, claiming the circuit court erred in denying his motion to dismiss Rsidue's complaint for failure to comply with the pleading requirements set forth in WIS. STAT. § 425.109(1) (2003-04).1 We conclude that Rsidue is not a "creditor" within the meaning of the Wisconsin Consumer Act and is thus not subject to the pleading requirements of § 425.109(1). Accordingly, we affirm.
¶ 2 Household Bank of North America issued Michaud a credit card in 1991. He used the card and made regular payments on the account for several years. In 2001 however, Michaud defaulted by failing to timely make required payments on the account balance. He tried unsuccessfully to work out a payment plan with Household. Household sold Michaud's account in January 2003 to Collins Financial Services, Inc., which, in turn, sold the account to Rsidue. Rsidue's attorney sent Michaud a letter in March of 2003 telling him that Rsidue had acquired the credit card account from Household Bank, that the account balance stood at $10,912.02, and that he could cure his default on the account by remitting $2,353.01.
¶ 3 Rsidue filed this collection action in October 2003. It identified itself in an amended complaint as "the current holder" of the credit card account and sought to recover the following amounts plus additional interest, court costs and attorney fees:
Principal Balance Purchases and/or cash
advances, plus late fees
less payments received
through March 25, 2003 $8,344.00
Plus: Accrued Interest on Principal
Interest Balance from September
30, 2002 through
March 17, 2004 at
23.90% $2,930.27
Less: Payments Payments received from
March 25, 2003 through
September 15, 2003 ($0.00)
Total Due Balance due as of
March 17, 2004 $11,274.27
¶ 4 Michaud moved to dismiss Rsidue's amended complaint because it allegedly failed to comply with WIS. STAT. § 425.109(1)(d), which requires certain complaints to include "the figures necessary for computation of the amount" due the plaintiff. Rsidue argued in opposition to Michaud's motion that it was not subject to the pleading requirements of § 425.109 because it was not a "creditor" within the meaning of the Wisconsin Consumer Act (WCA), WIS. STAT. chs. 421-427. Alternatively, Rsidue claimed that its amended complaint complied with § 425.109(1). The circuit court accepted Rsidue's second argument and denied Michaud's motion to dismiss, concluding that Rsidue had "fully complied" with the requirements under WIS. STAT. § 425.109(1) as discussed in Household Finance Corp. v. Kohl, 173 Wis.2d 798, 496 N.W.2d 708 (Ct.App.1993). After a trial on damages, the court entered an order directing that judgment be entered in favor of Rsidue for $8,344.00. Michaud appeals.
¶ 5 The principal question in this appeal is whether Rsidue's complaint must comply with the requirements of WIS. STAT. § 425.109(1). Because the pleading requirements under § 425.109(1) apply to a "complaint by a creditor," see id., our answer to the question turns in large measure on whether Rsidue is a "creditor" within the meaning of the § 425.109. Thus, the question before us is one of statutory interpretation, a question we decide de novo. See Gold v. City of Adams, 2002 WI App 45, ¶ 7, 251 Wis.2d 312, 641 N.W.2d 446.
¶ 6 When interpreting a statute, we must assume that the legislature expressed its intent in the statutory language it chose to enact. State ex rel. Kalal v. Circuit Court for Dane County, 2004 WI 58, ¶ 44, 271 Wis.2d 633, 681 N.W.2d 110. A court must give statutory language its common, ordinary, and accepted meaning, except that technical or specially-defined words or phrases are given their technical or special definitional meaning. Id., ¶ 45. If our analysis of the statutory language yields "`a plain, clear statutory meaning, then there is no ambiguity, and the statute is applied according to this ascertainment of its meaning.'" Id., ¶ 46 (citation omitted).
¶ 7 WISCONSIN STAT. § 425.109(1) provides, among other things, that a "complaint by a creditor to enforce any cause of action arising from a consumer credit transaction shall include . . . [t]he actual or estimated amount . . . that the creditor alleges he or she is entitled to recover and the figures necessary for computation of the amount . . . ." Section 425.109(1)(d) (emphasis added). For purposes of the WCA, which includes WIS. STAT. ch. 425, a "creditor" is "a merchant who regularly engages in consumer credit transactions or in arranging for the extension of consumer credit by or procuring consumer credit from 3rd persons." WIS. STAT. § 421.301(16). Thus, under the controlling "special" definition of the term, an entity is a "creditor" if it is a "merchant"2 and "regularly engages" in at least one of three activities: (a) "consumer credit transactions"; (b) "arranging for the extension of consumer credit by" third persons; or (c) "procuring consumer credit from" third persons.
¶ 8 Rsidue does not dispute that the obligation upon which it pursued Michaud arose out of a "consumer credit transaction." It also does not dispute that the original owner or creator of the credit card account, Household Bank, "regularly engages in consumer credit transactions" and is thus a "creditor" within the meaning of WIS. STAT. § 425.109(1). Finally, neither Michaud nor Rsidue challenges the circuit court's description of Rsidue as being "in the business of purchasing consumer debt and acquiring the right to pursue the debtors for the past due balances."
¶ 9 Rsidue contends that WIS. STAT. § 425.109(1) does not apply to its complaint. Notwithstanding the fact that it seeks in this action to enforce an obligation arising from a consumer credit transaction, Rsidue maintains it does not have to comply with § 425.109(1) because its business activities do not come within those that would render it a "creditor" under the WCA. Therefore, according to Rsidue, the pleading requirements at issue, which apply only to a "complaint by a creditor," do not apply to Rsidue's complaint. We thus consider whether the record establishes that Rsidue regularly engages in any of the three activities that would render it a creditor within the meaning of WIS. STAT. §§ 421.301(16) and 425.109(1).
¶ 10 We first address whether Rsidue can be said to "regularly engage[] in consumer credit transactions." See § 421.301(16). A "consumer credit transaction" is a transaction whereby ] Section 421.301(10). A consumer credit transaction can include a "consumer credit sale," whereby goods or services are sold on credit payable in installments or subject to a finance charge. See § 421.301(9). It can also include a "consumer loan," which is a loan made by a lender that is either subject to a finance charge or is repayable in installments. See § 421.301(12).3
¶ 11 Rsidue contends that, because it neither sells goods or services to consumers on credit nor otherwise lends money to consumers, it does not "engage," regularly or otherwise, "in consumer credit transactions." We agree. We conclude that Rsidue does not meet the first definitional criterion for being a "creditor," and we note that Michaud does not argue to the contrary. Similarly, there appears to be no dispute that Rsidue also does not regularly engage "in arranging for the extension of consumer credit by" third persons. See WIS. STAT. § 421.301(16). Thus, only the final activity specified in § 421.301(16) remains a possibility — regular engagement in procuring consumer credit from third persons.
¶ 12 Michaud contends that Rsidue meets the third definitional criterion of WIS. STAT. § 421.301(16) because, in acquiring defaulted consumer credit obligations from creditors, Rsidue "regularly engages in . . . procuring consumer credit from" third persons as set forth in WIS. STAT. § 421.301(16). From the outset, we note that we find Michaud's interpretation somewhat strained. We question whether buying and attempting to collect bad debts would commonly or ordinarily be referred to as "procuring consumer credit." The term, "procuring consumer credit," seems to be more applicable to the activities of a loan broker or other intermediary, who does not lend money him or herself but who brings together prospective borrowers and willing lenders.
¶ 13 The applicable statutory definition of "credit" confirms our view that Michaud's proffered interpretation is unreasonable. "`Credit' means the right granted by a creditor to a customer to defer payment of debt, to incur debt and defer its payment or to purchase goods, services or interests in land on a time price basis." WIS. STAT. §...
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