Smith v. Convergent Outsourcing, Inc.
| Decision Date | 27 April 2021 |
| Docket Number | 20 C 4553 |
| Citation | 539 F.Supp.3d 929 |
| Parties | Calvin SMITH, Plaintiff, v. CONVERGENT OUTSOURCING, INC., Defendant. |
| Court | U.S. District Court — Northern District of Illinois |
Mario Kris Kasalo, The Law Office of M. Kris Kasalo, Ltd., Skokie, IL, Celetha Chatman, Michael Jacob Wood, Community Lawyers Group, Ltd., Chicago, IL, for Plaintiff.
Andrew E. Cunningham, Morgan Ian Marcus, Sessions Israel & Shartle LLC, Patrick Allen Watts, Chicago, IL, for Defendant.
Calvin Smith alleges in this putative class action that a collection letter he received from Convergent Outsourcing, Inc. violated the Fair Debt Collection Practices Act ("FDCPA"), 15 U.S.C. § 1692 et seq. Doc. 1. Convergent moves under Civil Rule 12(b)(6) to dismiss the complaint. Doc. 12. The motion is granted in part and denied in part.
In resolving a Rule 12(b)(6) motion, the court assumes the truth of the operative complaint's well-pleaded factual allegations, though not its legal conclusions. See Zahn v. N. Am. Power & Gas, LLC , 815 F.3d 1082, 1087 (7th Cir. 2016). 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 Smith's brief opposing dismissal, so long as those additional 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 Smith as those materials allow. See Pierce v. Zoetis, Inc. , 818 F.3d 274, 277 (7th Cir. 2016). In setting forth the facts at the pleading stage, the court does not vouch for their accuracy. See Goldberg v. United States , 881 F.3d 529, 531 (7th Cir. 2018).
Smith fell behind on his cable bill, and the account went into default. Doc. 1 at ¶¶ 10-11. The cable company hired Convergent to collect the debt. Id. at ¶ 12. Convergent mailed Smith a letter dated August 2, 2019 attempting to collect the $355.58 balance on his account. Id. at ¶¶ 13, 17-18; Doc. 1-1 at 2-3.
This lawsuit targets two aspects of the letter. First, the letter stated that Smith could "dispute the validity of th[e] debt" "in writing at PO Box 9004, Renton, WA 98057 within 30 days from receiving this notice." Doc. 1-1 at 3. But the letter did not mention that Convergent also allowed debtors to submit disputes by mail to its physical address, by fax, by email, or by completing a form on its website. Doc. 1 at ¶¶ 21-23. Second, the letter stated that, if Smith disputed the debt, Convergent would "obtain verification of the debt or obtain a copy of a judgment and mail you a copy of such judgment or verification." Doc. 1-1 at 3. The letter's references to a "judgment" made Smith think that there might have been a judgment entered against him, but in fact, as Convergent knew, there was no such judgment. Doc. 1 at ¶¶ 32-36.
Smith first claims that Convergent's listing only its P.O. Box as a method for submitting disputes, when in fact it allowed debtors to submit disputes by several other methods, overshadowed its disclosure of his right to dispute the debt, in violation of 15 U.S.C. § 1692g. Doc. 1 at ¶¶ 19-30; Doc. 21 at 3-9. Section 1692g(a) requires a debt collector's written notice to set forth five enumerated disclosures. The third disclosure gives the consumer 30 days in which to dispute the validity of the debt, or else "the debt will be assumed to be valid by the debt collector." 15 U.S.C. § 1692g(a)(3). Smith's claim centers on the fourth disclosure, which requires the notice to include:
a statement that if the consumer notifies the debt collector in writing within the thirty-day period that the debt, or any portion thereof, is disputed, the debt collector will obtain verification of the debt or a copy of a judgment against the consumer and a copy of such verification or judgment will be mailed to the consumer by the debt collector.
Id. § 1692g(a)(4).
The FDCPA requires debt collectors to make each disclosure "clearly enough that the recipient is likely to understand it." Janetos v. Fulton Friedman & Gullace, LLP , 825 F.3d 317, 321 (7th Cir. 2016) (quoting Chuway v. Nat'l Action Fin. Servs., Inc. , 362 F.3d 944, 948 (7th Cir. 2004) ). Clarity is measured under the " ‘unsophisticated consumer’ standard." Zemeckis v. Glob. Credit & Collection Corp. , 679 F.3d 632, 635 (7th Cir. 2012) ; see also Steffek v. Client Servs., Inc. , 948 F.3d 761, 764 (7th Cir. 2020) (). Under that standard, the court "evaluate[s] a communication ‘through the objective lens of an unsophisticated consumer who, while uninformed, naïve, or trusting, possesses at least reasonable intelligence, and is capable of making basic logical deductions and inferences.’ " Steffek , 948 F.3d at 764 (quoting Smith v. Simm Assocs., Inc. , 926 F.3d 377, 380 (7th Cir. 2019) ).
Smith claims that Convergent's letter, by identifying only its P.O. Box as a method for submitting disputes and failing to mention the other available methods, "overshadowed" the letter's disclosure of his ability to dispute the debt. Doc. 21 at 6. Overshadowing is a specific type of § 1692g claim, in which the required disclosure is made but "additional language in the letter contradicts and ‘overshadows’ the [disclosure]." Marshall-Mosby v. Corp. Receivables, Inc. , 205 F.3d 323, 326 (7th Cir. 2000). In 2006, Congress amended § 1692g to add an explicit overshadowing provision, which states: "Any collection activities and communication during the 30-day period may not overshadow or be inconsistent with the disclosure of the consumer's right to dispute the debt." Financial Services Regulatory Relief Act of 2006, Pub. L. No. 109-351, § 802(c), 120 Stat. 1966, 2006-07 (codified at 15 U.S.C. § 1692g(b) ). As the Seventh Circuit explained, the amendment "merely codified a rule that the courts had already instituted." Zemeckis , 679 F.3d at 635 n.1 (citing Bartlett v. Heibl , 128 F.3d 497, 500 (7th Cir. 1997) ); see Bartlett , 128 F.3d at 500 (). So overshadowing claims are just a subspecies of § 1692g claims more generally.
Dismissal of a § 1692g claim on the pleadings is appropriate only "[i]f it is apparent from a reading of the letter that not even a significant fraction of the population would be misled by it." Taylor v. Cavalry Inv., L.L.C. , 365 F.3d 572, 574 (7th Cir. 2004) (quotation marks omitted); see also Chuway , 362 F.3d at 948 (). Convergent contends that to be the case here, reasoning that because § 1692g(a)(4) does not require debt collectors to provide multiple means to submit a debt dispute, its "gratuitously" making available additional methods besides the P.O. Box cannot expose it to liability merely because its letter failed to list those additional methods. Doc. 13 at 6.
Convergent is correct that § 1692g does not specify the methods a debt collector must make available for a consumer to dispute a debt. But neither does it permit a debt collector to impose hurdles not found in the statute to submitting a dispute. The Seventh Circuit has held, for instance, that a debt collector may not ask a consumer to give a reason for opening a dispute under § 1692g(a)(4). See DeKoven v. Plaza Assocs. , 599 F.3d 578, 582 (7th Cir. 2010) (). District courts have applied this principle to allow FDCPA challenges to various extra-statutory requirements imposed by debt collectors. See Mikolajczyk v. Universal Fid., LP , 2017 WL 706301, at *3-4 (E.D. Wis. Feb. 22, 2017) (); Whitten v. ARS Nat'l Servs., Inc. , 2002 WL 1050320, at *4 (N.D. Ill. May 23, 2002) (); Frey v. Satter, Beyer & Spires , 1999 WL 301650, at *5 (N.D. Ill. May 03, 1999) ().
It thus would have been unlawful for Convergent to tell Smith that he could submit his dispute only by mail to the P.O. Box, because the statute imposes no such limit and Convergent in fact made available other delivery methods. Granted, the letter does not use the word "only"; rather, it reads: "If you notify this office in writing at [the P.O. Box] ... this office will obtain verification of the debt ...." Doc. 1-1 at 3. Technically, the letter does not state that the P.O. Box is the sole method available to submit a dispute. A logician's or grammarian's reading is not the standard, however—the question is whether "a significant fraction of the population" could potentially read the letter to (incorrectly) limit the method of submitting a dispute. Taylor , 365 F.3d at 574.
The court cannot reject that possibility as a matter of law on the pleadings. In everyday speech, people often use a statement in the form "if X, then Y" to mean "Y only if X." "If the weather is warm, we'll go to the park." "If you study hard, you'll pass the test." Those statements might...
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