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Hennings v. Alltran Financial LP

United States District Court, E.D. Wisconsin

May 26, 2017

PAMELA HENNINGS, on behalf of herself and all others similarly situated, Plaintiff,
v.
ALLTRAN FINANCIAL, LP f/k/a J.C. CHRISTENSEN AND ASSOCIATES, Defendant.

          DECISION AND ORDER ON DEFENDANT'S MOTION TO DISMISS

          NANCY JOSEPH United States Magistrate Judge.

         Pamela Hennings filed an amended class action complaint against Alltran Financial, LP, formerly known as J.C. Christensen and Associates, alleging violations of the Fair Debt Collection Practices Act (“FDCPA”) based on actions taken by Alltran in the course of collecting a debt owed to American General Finance f/k/a Springleaf Financial. (Docket # 10.) Alltran has filed a motion to dismiss Hennings' amended complaint pursuant to Fed.R.Civ.P. 12(b)(6) on the grounds that she has failed to state a claim upon which relief can be granted as to her 15 U.S.C. §§ 1692g and 1692e claims, and that she does not have Article III standing to bring this lawsuit. (Docket # 13.) For the reasons that follow, the defendant's motion to dismiss is granted in part and denied in part.[1]

         BACKGROUND

         Hennings alleges in her complaint that she incurred a consumer debt to American General Finance f/k/a Springleaf Financial (“AGF”). (Am. Compl. ¶ 7, Docket # 10.) She alleges that she filed for bankruptcy in 2011 and received a discharge on the debt owed to AGF on March 12, 2012. (Id. ¶ 8.) Hennings alleges that sometime after discharge, AGF sold her account to LVNV Funding, LLC. (Id. ¶ 9.) LVNV sued Hennings' ex-husband regarding the AGF debt in 2014 and was granted a judgment against Hennings' ex-husband. (Id. ¶¶ 10, 12.) Hennings was not named as a defendant in the action. (Id. ¶ 11.)

         Hennings alleges that LVNV sold or assigned Hennings' discharged account to the defendant, J.C. Christensen and Associates. (Id. ¶ 13.) Hennings alleges that the defendant is attempting to collect on the judgment from Hennings despite the fact that it knew or should have known that Hennings was not a judgment debtor and that she previously discharged the debt in her bankruptcy. (Id. ¶ 14.)

         Hennings alleges that in attempting to collect the judgment from her, the defendant sent a collection letter on or about July 19, 2016. (Id. ¶ 15.) Hennings alleges that the defendant violated the FDCPA because the collection letter is confusing to the unsophisticated consumer as it demands a payment within the statutory 30 day validation period or shortly thereafter, and fails to explain how the validation notice and the settlement “deadline” fit together. (Id. ¶¶ 25, 46.) She further alleges the defendant violated the FDCPA by attempting to collect on a judgment that was not against Hennings. (Id. ¶ 52.)

         APPLICABLE RULE

         Alltran moves to dismiss for failure to state a claim upon which relief may be granted pursuant to Fed.R.Civ.P. 12(b)(6). A complaint must contain “a short and plain statement of the claim showing that the pleader is entitled to relief.” Fed.R.Civ.P. 8(a)(2). The Supreme Court has interpreted this language to require that the plaintiff plead “enough facts to state a claim to relief that is plausible on its face.” Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 570 (2007). In Ashcroft v. Iqbal, the Supreme Court elaborated further on the pleadings standard, explaining that a “claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged, ” though this “standard is not akin to a ‘probability requirement.'” 556 U.S. 662, 678 (2009). The allegations in the complaint “must be enough to raise a right to relief above the speculative level.” Twombly, 550 U.S. at 555 (internal citation omitted). Rule 12(b)(6) does not permit the court to consider matters outside the complaint without converting the motion into a motion for summary judgment, Fed.R.Civ.P. 12(d).

         ANALYSIS

         1. Standing

         As an initial matter, Alltran argues that Hennings has not satisfied her burden of establishing Article III standing because she did not plead that she qualifies as a consumer under the FDCPA or that she has suffered an actual injury. (Def.'s Br. at 9, Docket # 13.) Although framed as a standing issue, Alltran's first argument-that Hennings has not properly pleaded that she qualifies as a consumer-is really an argument that she has not properly pleaded a cause of action under the FDCPA, which applies to consumer debt; that is, it must be for personal, family, or household purposes. 15 U.S.C. § 1692(a)(5). Hennings alleges that she incurred a “consumer debt as that term is defined at 15 U.S.C. § 1692a(5) to American General Finance f/k/a Springleaf Financial.” (Am. Compl. ¶ 7.) Hennings alleges no facts, however, to support the allegation that her debt was consumer in nature. She makes no more than a “[t]hreadbare recital[ ]” of the “consumer debt” element of her FDCPA claims. Hennings alleges no facts that allow me to draw the reasonable inference that Alltran is liable for the misconduct alleged. Thus, Hennings' entire amended complaint should be dismissed on this basis. However, given this failure is easy to remedy, I find it more prudent to allow Hennings another opportunity to amend her complaint and properly allege that she is a consumer who incurred a consumer debt.

         Hennings does not address Alltran's argument regarding standing as to her § 1692e claim (beyond stating in a footnote that the reasoning as to her § 1692g arguments applies to any right under the FDCPA). (Pl.'s Resp. Br. at 12, Docket #14.) As will be discussed further below, Hennings' § 1692g claim will be dismissed. Thus, I will not address the standing issue as to her § 1692e claim at this time.

         2. Section 1692g ― Overshadowing Claim

         Hennings alleges that the collection letter is confusing, deceptive, and/or misleading to the unsophisticated consumer. The letter states, in relevant part, that J.C. Christensen and Associates had been “contracted to lead and represent” in the collection of the judgment awarded on Hennings' Springleaf Financial Services account. (Am. Compl. ¶ 15, Exh. B, Docket # 6-2.) The letter goes on to say that the judgment may be forwarded to an attorney for execution. (Id.) However, the letter provides that J.C. Christensen and Associates had been given authorization to negotiate settlement terms for satisfaction of the judgment and provides three “settlement opportunities to make voluntary resolution of your judgment a reality.” (Id.) The letter articulates three settlement options. Under the settlement options appears a paragraph that states “[f]or accounting purposes, your first payment toward the settlement must be received within 40 calendar days after the date of ...


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