Walker v. National Recovery, Inc.
| Decision Date | 02 March 1999 |
| Docket Number | No. 98 C 4530.,98 C 4530. |
| Citation | 42 F.Supp.2d 773 |
| Parties | Margaret WALKER, Plaintiff, v. NATIONAL RECOVERY, INC., Defendant. |
| Court | U.S. District Court — Northern District of Illinois |
Daniel A. Edelman, Ignacio D. Maramba, Charles H. Lee, Edelman & Combs, Chicago, IL, for Plaintiff.
David M. Schultz, John M. Foley, Hinshaw & Culbertson, Chicago, IL, for Defendant.
Margaret Walker ("Plaintiff") instituted this class action lawsuit against National Recovery, Inc., ("Defendant") alleging violations of the Fair Debt Collection Practices Act ("FDCPA"), 15 U.S.C. § 1692 et seq. (1998). Defendant now brings a motion to dismiss for failure to state a claim. Fed.R.Civ.P. 12(b)(6).1 For the following reasons the Court holds that the facts as alleged demonstrate that Defendant did not violate the FDCPA and grants Defendant's motion to dismiss.
Plaintiff is an individual who resides in Bellwood, Illinois. Defendant is a professional debt collection agency and qualifies as a "debt collector" under the FDCPA. 15 U.S.C. § 1692a(6). In February 1998 Defendant mailed to Plaintiff one of its standard form collection letters (the "dunning letter"). The letter demanded payment of an overdue personal loan made to Plaintiff by Commercial Credit. The letter addressed to Plaintiff states:
Your past-due account with Commercial Credit has been placed with our company for immediate collection. Failure to respond may result in further collection activity and possible legal action.
Unless you notify this office in writing within thirty (30) days after receiving this notice that you dispute the validity of this debt or any portion thereof, this office will assume that this debt is valid. If you notify this office in writing within THIRTY (30) days from receiving this notice, 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 in writing within THIRTY (30) days after receiving this notice, this office will provide you with the name and address of the original creditor, if different from the current creditor.
Please remit PAYMENT IN FULL with this letter to the address above or you may pay in person at our office. Make payment payable to NATIONAL RECOVERY, INC.
If you have any questions concerning your account please contact me at my office.
Si Ud. necesita ayunda en la traduccion de esta carta, por favor llamenos para enviarle una traduccion.
Plaintiff alleges that the letter violates the FDCPA because it in effect is a demand for immediate payment which contradicts and overshadows the validation notice required under the FDCPA.
In analyzing Plaintiff's complaint under Rule 12(b)(6), the court must accept as true the allegations in the complaint and the inferences that may be reasonably drawn from them. Fed.R.Civ.P. 12(b)(6); Bowman v. City of Franklin, 980 F.2d 1104, 1107 (7th Cir.1992). A motion to dismiss may be granted only if the court concludes that "no relief could be granted under any set of facts that could be proved consistent with the allegations." Hishon v. King & Spalding, 467 U.S. 69, 73, 104 S.Ct. 2229, 2232, 81 L.Ed.2d 59 (1984). A plaintiff's claim can be dismissed if the plaintiff pleads facts which demonstrate that the plaintiff does not have a viable claim. Thomas v. Farley, 31 F.3d 557, 558-59 (7th Cir.1994).2
The Fair Debt Collection Practices Act requires a "validation notice" to be present in letters seeking to collect debts:
(a) Notice of debt; contents
Within five days after the initial communication with a consumer in connection with the collection of any debt, a debt collector shall, unless the following information is contained in the initial communication or the consumer has paid the debt, send the consumer a written notice containing —
(1) the amount of the debt;
(2) the name of the creditor to whom the debt is owed;
(3) a statement that unless the consumer, within thirty days after receipt of the notice, disputes the validity of the debt, or any portion there of, the debt will be assumed to be valid by the debt collector.
(4) 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; and
(5) a statement that, upon the consumer's written request within the thirty-day period, the debt collector will provide the consumer with the name and address of the original creditor, if different from the current creditor.
(b) If the consumer notifies the debt collector in writing within the thirty-day period ... the debt collector shall cease collection of the debt ... until the debt collector obtains [such information requested].
15 U.S.C. § 1692g.
At issue is whether the dunning letter violates the FDCPA. Specifically, Plaintiff claims that the use of the words "immediate collection" and information as to the consequences of a failure to respond in the first paragraph of the letter, the FDCPA's required validation notice in the second paragraph of the letter, and a request for "PAYMENT IN FULL" in the third paragraph of the letter violates § 1692 of the FDCPA. Plaintiff contends that the additional language overshadows or contradicts the included validation notice and therefore confuses the reader. The Court concludes that as a matter of law the letter does not violate the FDCPA and, consequently, "no relief could be granted under any set of facts that could be proved consistent with the allegations." Hishon v. King & Spalding, 467 U.S. 69, 73, 104 S.Ct. 2229, 2232, 81 L.Ed.2d 59 (1984). Defendant is entitled to have its motion to dismiss granted.
The FDCPA has been interpreted to not only require the above described notification, but the validation notice also must not be contradicted nor overshadowed by other parts of the letter. Bartlett v. Heibl, 128 F.3d 497, 500 (7th Cir.1997). "Merely including the requisite validation notice in a collection letter is not sufficient to satisfy the FDCPA; the notice must be communicated effectively." Keen v. Omnibus International, Inc., No. 98 C 3947, 1998 WL 485682, at *2 (N.D.Ill. Aug.12, 1998) (citing Swanson v. Southern Oregon Credit Serv., 869 F.2d 1222, 1225 (9th Cir. 1988)). "All Courts of Appeals which have addressed the issue in this case, including this Circuit, have held that, even though the § 1692g(a) information properly is included in a communication from a debt collector to a debtor, the debt collector may not overshadow or contradict that information with other messages sent with the validation notice or within the validation period." Chauncey v. JDR Recovery Corp., 118 F.3d 516, 518 (7th Cir.1997). Additional communications in the letter may not overshadow the validation notice by obscuring it either visually or via emphatic techniques. Keen, 1998 WL 485682, at *2 (citing Bartlett, 128 F.3d at 500). Furthermore, those additional statements may not be included if they would confuse the debtor regarding the rights disclosed in the validation notice. Keen, 1998 WL 485682, at *2 (citing Swanson, 869 F.2d at 1225). For instance, other communications which contradict the validation notice in the sense that they are logically inconsistent with it, would be confusing and therefore are not permitted. Keen, 1998 WL 485682, at *2 (citing Bartlett, 128 F.3d at 500). However, words or phrases may not be taken out of the context of the letter to be measured against the requirements of the FDCPA but instead the letter must be viewed in its entirety. Keen, 1998 WL 485682, at *3 (citing Bartlett, 128 F.3d at 501).
The standard by which the Court views the letter is one of the unsophisticated consumer. Bartlett, 128 F.3d at 500. "[T]he debt collector may not defeat the statute's purpose by making the required disclosures in a form or within a context in which they are unlikely to be understood by the unsophisticated debtors who are the particular objects of the statute's solicitude." Id. Adopting the unsophisticated consumer standard the Seventh Circuit explained its contours. Gammon v. GC Services Ltd. Partnership, 27 F.3d 1254, 1257 (7th Cir.1994). Thus the standard weighs in reasonableness and fairness to debt collectors. While the standard does not require collection letters to be drafted in only the most basic and rudimentary language such that elementary school children could understand them, it also does not allow contradictory and complicated statements that would confuse an unsophisticated consumer. "The unsophisticated consumer is to be protected against confusion whatever form it takes." Bartlett, 128 F.3d at 500.
There is a wealth of caselaw addressing § 1692g of the FDCPA and both Plaintiff and Defendant cite numerous cases to support their respective positions. The Court concludes that several Seventh Circuit and Northern District of Illinois cases addressing FDCPA violations are sufficiently analogous to persuade the Court that Defendant's dunning letter is in compliance with the FDCPA. Furthermore, the Court concludes that the numerous cases cited by Plaintiff which find violations of the FDCPA are distinguishable from the present case.
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