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Whalen v. Specialized Loan Servicing, LLC

United States District Court, W.D. Wisconsin

January 11, 2016

CHERYL WHALEN, on behalf of herself and all others similarly situated, Plaintiff,
v.
SPECIALIZED LOAN SERVICING, LLC, Defendant.

OPINION AND ORDER

BARBARA B. CRABB DISTRICT JUDGE.

Defendant Specialized Loan Servicing, LLC, serviced a second mortgage on plaintiff Cheryl Whalen’s home before a foreclosure in 2015. In this proposed class action, plaintiff contends that defendant violated the Fair Debt Collection Practices Act by sending her three documents related to the mortgage debt, which she had discharged in bankruptcy. In particular, plaintiff says that the documents were “false, deceptive or misleading” in violation of 15 U.S.C. § 1692e and “unfair or unconscionable” in violation of § 1692f. Defendant has filed a motion to dismiss with respect to two of those documents, arguing that it did not violate § 1692e or § 1692f because the documents were not made in connection with the collection of a debt and they were neither “false, deceptive or misleading” nor “unfair or unconscionable.” Dkt. #21.

Plaintiff does not respond meaningfully to defendant’s argument that the documents were not unfair or unconscionable within the meaning § 1692f. Todd v. Collecto, Inc., 731 F.3d 734, 739-40 (7th Cir. 2013) (“Asking a consumer to pay a debt discharged in bankruptcy . . . is not unfair or unconscionable within the meaning of § 1692f.”). Accordingly, I am granting defendant’s motion as to plaintiff’s claim under § 1692f. In addition, I agree with defendant that its February 19, 2015 letter was not sent in connection with the collection of a debt, so the protections of the Fair Debt Collection Practices Act do not apply. However, I am denying defendant’s motion to dismiss with respect to plaintiff’s claim that the March 13, 2015 letter violated § 1692e because she has alleged adequately both that the letter was sent in the connection with the collection of a debt and that the letter was false, deceptive or misleading.

THE LETTERS AT ISSUE

Plaintiff attached the letters at issue to her complaint, so I may review the content of the letters in deciding defendant’s motion to dismiss. Fed.R.Civ.P. 10(c); Bogie v. Rosenberg, 705 F.3d 603, 608-09 (7th Cir. 2013). In the letter to plaintiff dated February 19, 2015, defendant wrote the following:

The amount of the debt as of 1/29/15 is $27, 752.06. For informational purposes, this amount is comprised of the following: unpaid principal of $0.00, deferred interest of $0.00, uncollected interest of $0.00, escrow balance/advances of $0.00, and outstanding fees of $0.00. Please note that the amount of the debt does not include any fees or interest that may accrue after the date of this letter.
The Current Creditor . . . is the party to whom the debt is owed.
Unless you, within thirty days after receipt of this notice, dispute the validity of the debt, or any portion thereof, the debt will be assumed to be valid . . . .
SPECIALIZED LOAN SERVICING LLC (“SLS”) IS REQUIRED BY LAW TO INFORM YOU THAT THIS COMMUNICATION IS FROM A DEBT COLLECTOR ATTEMPTING TO COLLECT A DEBT, AND ANY INFORMATION OBTAINED WILL BE USED FOR THAT PURPOSE. HOWEVER, IF YOU ARE CURRENTLY IN A BANKRUPTCY PROCEEDING OR HAVE RECEIVED A BANKRUPTCY DISCHARGE OF THE HOME LOAN DEBT REFERENCED ABOVE, THIS NOTICE IS FOR INFORMATIONAL PURPOSES ONLY. IT SHOULD NOT BECONSTRUED AS AN ATTEMPT TO COLLECT AGAINST YOU PERSONALLY. IF YOU ARE REPRESENTED BY AN ATTORNEY, PLEASE PROVIDE THIS NOTICE TO YOUR ATTORNEY.
BANKRUPTCY NOTICE - IF YOU ARE A CUSTOMER IN BANKRUPTCY OR A CUSTOMER WHO HAS RECEIVED A BANKRUPTCY DISCHARGE OF THIS DEBT, PLEASE BE ADVISED THAT THIS NOTICE IS SENT TO COMPLY WITH THE REQUIREMENTS OF THE FAIR DEBT COLLECTION PRACTICES ACT (“FDCPA”). THIS NOTICECONSTITUTES NEITHER A DEMAND FOR PAYMENT NOR A NOTICE OF PERSONAL LIABILITY TO ANY RECIPIENT HEREOF, WHO MIGHT HAVE RECEIVED A DISCHARGE OF SUCH DEBT IN ACCORDANCE WITH APPLICABLE BANKRUPTCY LAWS OR WHO MIGHT BE SUBJECT TO THE AUTOMATIC STAY OF SECTION 362 OF THE UNITED STATES BANKRUPTCY CODE. HOWEVER, IT IS BEING SENT TO YOU AS A THE LIEN AGAINST THE COLLATERAL PROPERTY HAS NOT BEEN DISCHARGED IN YOUR BANKRUPTCY. IF YOU HAVE QUESTIONS, PLEASE CONTACT US.

In the letter to plaintiff dated March 13, 2015, defendant included the following information:

According to our records, your mortgage is in serious default and the foreclosure process may be imminent. If you have the desire to keep your home, our goal is to assist you in trying to make that happen. Specialized Loan Servicing LLC (“SLS”) is prepared to discuss alternative repayment plans that may be available regarding your delinquent loan . . . .
Enclosed you will find a request for financial information. This completed form will help SLS determine if you are eligible for one of our alternative payment plans. Your accurate and prompt response to this request is an essential first step on your way towards avoiding possible further action.
Specialized Loan Servicing LLC is required by law to inform you that this communication is from a debt collector. However, the purpose of this communication is to offer you loss mitigation assistance that may help you bring or keep your loan current through affordable payments. If you are currently in bankruptcy proceeding, or have previously obtained a discharge of this debt under applicable bankruptcy law, this notice is for information only and is not an attempt to collect the debt, a demand for payment, or an attempt to impose personal liability for that debt. You are not obligated to discuss your home loan with us or enter into a loan modification or other loan-assistance program. You should consult with your bankruptcy attorney or other advisor about your legal rights and options.
BANKRUPTCY NOTICE - IF YOU ARE A CUSTOMER IN BANKRUPTCY OR A CUSTOMER WHO HAS RECEIVED A BANKRUPTCY DISCHARGE OF THIS DEBT: PLEASE BE ADVISED THAT THIS NOTICE IS TO ADVISE YOU OF THE STATUS OF YOUR MORTGAGE LOAN. THIS NOTICE CONSTITUTES NEITHER A DEMAND FOR PAYMENT NOR A NOTICE OF PERSONAL LIABILITY TO ANY RECIPIENT HEREOF, WHO MIGHT HAVE RECEIVED A DISCHARGE OF SUCH DEBT IN ACCORDANCE WITH APPLICABLE BANKRUPTCY LAWS OR WHO MIGHT BE SUBJECT TO THE AUTOMATIC STAY OF SECTION 362 OF THE UNITED STATES BANKRUPTCY CODE. HOWEVER, IT MAY BE A NOTICE OF POSSIBLE ENFORCEMENT OF THE ...

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