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Strohbehn v. Access Group, Inc.

United States District Court, E.D. Wisconsin

May 23, 2017



          J. P. Stadtmueller U.S. District Judge.

         1. INTRODUCTION

         Plaintiff Erin Strohbehn (“Strohbehn”) filed her complaint in this matter on July 26, 2016, against Defendant Access Group, Inc. (“Access”). (Docket #1). Strohbehn claimed that Access violated the Fair Credit Reporting Act (“FCRA”), 15 U.S.C. § 1681 et seq., and the Wisconsin Consumer Act (“WCA”), Wis.Stat. §§ 421, 427 et seq., in its attempts to collect her decade-old student loan debts. Id. The action was assigned to District Judge Charles N. Clevert, Jr. On August 29, 2016, Access filed a motion to dismiss the complaint. (Docket #9). On September 19, 2016, Strohbehn filed an amended complaint. (Docket #15). The amended complaint expounded on Strohbehn's allegations against Access and added new claims against a collection agency, Weltman Weinberg & Reis Co., LPA (“WWR”). Access responded with another motion to dismiss on October 3, 2016. (Docket #17). WWR took no part in Access's motion and answered the amended complaint on November 1, 2016. (Docket #27). Access's motion was fully briefed and ripe for decision as of November 23, 2016. See (Brief in Opposition, Docket #30; Reply Brief, Docket #33).[1] On March 21, 2017, this matter was reassigned to this branch of the Court upon Judge Clevert's retirement. For the reasons explained below, Access's motion must be denied.


         Access has moved to dismiss Strohbehn's complaint pursuant to Federal Rule of Civil Procedure (“FRCP”) 12(b)(6). This rule provides for dismissal of complaints which fail to state a viable claim for relief. Fed.R.Civ.P. 12(b)(6). To state a viable claim, a complaint must provide “a short and plain statement of the claim showing that the pleader is entitled to relief.” Fed.R.Civ.P. 8(a)(2). In other words, the complaint must give “fair notice of what the . . . claim is and the grounds upon which it rests.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007) (citation omitted). The allegations must “plausibly suggest that the plaintiff has a right to relief, raising that possibility above a speculative level[.]” Kubiak v. City of Chicago, 810 F.3d 476, 480 (7th Cir. 2016) (citation omitted).

         In reviewing Strohbehn's complaint, the Court is required to “accept as true all of the well-pleaded facts in the complaint and draw all reasonable inferences in [her] favor[.]” Id. at 480-81. However, a complaint that offers “labels and conclusions” or “a formulaic recitation of the elements of a cause of action will not do.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Twombly, 550 U.S. at 555). The Court must identify allegations “that, because they are no more than conclusions, are not entitled to the assumption of truth.” Id. at 679. Ultimately, dismissal is only appropriate “if it appears beyond doubt that the plaintiff could prove no set of facts in support of [her] claim that would entitle [her] to the relief requested.” Enger v. Chicago Carriage Cab Corp., 812 F.3d 565, 568 (7th Cir. 2016).

         3. RELEVANT FACTS

         Accepting the truth of Strohbehn's well-pleaded allegations and drawing all reasonable inferences in her favor, the relevant facts are as follows. Prior to 2007, Strohbehn obtained student loans through Access. She alleges that sometime in 2007, she paid off the loans completely, via a single lump sum payment. At the time, Access's servicer was Kentucky Higher Education Student Loan Corporation. In 2012, this role was transferred to ACS Education Services. Strohbehn states that from 2007 until 2016, she received no contact from Access or either of its servicers regarding the loans.

         At some point in 2016, she received a letter from Access. The letter indicated that Access believed she still owed at least a portion of the loans. Strohbehn checked her credit report and discovered that Access was reporting unpaid amounts on each loan. She claims that the incorrect credit reporting caused her frustration, distraction from work, embarrassment, and other forms of stress.

         Strohbehn contacted the three major credit bureaus in March 2016 to dispute the improperly reported debts. As of that time, she maintains that the debts were either fully paid in 2007 or, alternatively, that the last payments thereon occurred more than six years ago, bringing the debts outside Wisconsin's statute of limitations on contracts. See Wis. Stat. § 893.43(1). The credit bureaus forwarded the disputes to Access. Access (or its agents) responded to the bureaus that the debts were valid. The negative reporting items mar Strohbehn's credit report to this day.

         Strohbehn alleges two counts relevant to Access. Count One states that Access violated Section 1681s-2(b) of the FCRA by failing to conduct a reasonable investigation into Strohbehn's disputes and by refusing to update its erroneous credit reporting items. Strohbehn further pleads that Access willfully violated the FCRA because it “disregarded notices pertaining to the status of the account[.]” (Docket #15 at 7). Count Two is brought pursuant to the WCA. Strohbehn alleges that Access harassed her by continuing collection activity on fully paid debts and that Access published false credit information.

         4. ANALYSIS

         The primary thrust of Access's motion is that Strohbehn's allegations are incorrect, namely that she did not completely satisfy her loans in 2007. In support of this argument, Access has provided three of its internal documents related to Strohbehn's account: 1) a “Recovery Overview, ” which gives an overview of Strohbehn's account and lists five loans under her name; 2) a “Borrower History, ” providing a timeline of events on Strohbehn's account from 2003 to 2012, including Access's credit reporting activity; and 3) a “Payment History, ” revealing that Strohbehn did indeed make a substantial payment on the loans in April 2007, but a relatively small balance nevertheless remained (together, the “Account Documents”). (Docket #19-1, #19-2, and #19-3).

         Taken as true, the Account Documents appear to destroy the foundational allegation of Strohbehn's amended complaint-that Access has been attempting to collect non-existent debts. However, the Account Documents are not properly included in Access's motion. The focus of a motion to dismiss pursuant to FRCP 12(b)(6) is the ...

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