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Livermore v. Unifund CCR LLC

United States District Court, E.D. Wisconsin

December 15, 2017



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

         1. INTRODUCTION

         Plaintiff filed this class action on July 31, 2017. (Docket #1). He sued Defendants Unifund CCR LLC (“Unifund”), Pilot Receivables Management LLC (“Pilot”), and Distressed Asset Portfolio III LLC (“DAP”) for their part in sending him, and members of the putative class, allegedly confusing debt collection letters. Id. Plaintiff brings claims under the Fair Debt Collection Practices Act (“FDCPA”) and the Wisconsin Consumer Act (“WCA”). Id. All Defendants save Northland Group Inc. (“Northland”) moved to dismiss Plaintiff's Complaint on September 14, 2017 (the three moving defendants hereinafter referred to as “Defendants”). (Docket #13). That motion was mooted by the filing of Plaintiff's Amended Complaint on September 20, 2017. (Docket #17). The new pleading did not assuage Defendants' concerns, however, as they promptly filed another motion to dismiss on October 4, 2017. (Docket #19). That motion is now fully briefed. (Response, Docket #23; Reply, Docket #28). For the reasons stated below, the motion must be granted.


         Defendants have moved to dismiss Plaintiff's complaint pursuant to Federal Rules of Civil Procedure (“FRCP”) 12(b)(1) and (6). FRCP 12(b)(1) allows for dismissal of actions over which the Court lacks subject-matter jurisdiction. Fed.R.Civ.P. 12(b)(1). FRCP 12(b)(6) provides for dismissal of complaints which fail to state a viable claim for relief. Id. 12(b)(6). In reviewing Plaintiff'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 [his] favor[.]” Kubiak v. City of Chicago, 810 F.3d 476, 480-81 (7th Cir. 2016) (citation omitted); Evers v. Astrue, 536 F.3d 651, 656 (7th Cir. 2008).

         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, 810 F.3d at 480 (quotation omitted). 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.

         3. RELEVANT FACTS

         Accepting the truth of Plaintiff's well-pleaded allegations and drawing all reasonable inferences in his favor, the relevant facts are as follows. Plaintiff defaulted on a Citibank credit card account. On March 17, 2016, United Collection Bureau, Inc. (“UCB”) sent Plaintiff a collection letter regarding the debt. (Docket #17-1).[1] UCB's letter states that “CITIBANK, N.A.” was Plaintiff's creditor. Id. It further states that Plaintiff's balance was $19, 552.10 and that interest may accrue on that balance. Id.

         On June 15, 2016, Northland sent Plaintiff a similar letter. (Docket #17-2). The letter identified Citibank as Plaintiff's creditor and provided a current balance of $19, 844.39. Id. Northland sent another letter to Plaintiff on July 19, 2016 with the same information. Id. More letters came for August through November 2016. (Docket #17-3). Each of those letters provided a new balance of $19, 840.37. Id.

         On May 30, 2017, Citibank wrote to Plaintiff, informing him that his delinquent credit card account had been sold to Pilot. (Docket #17-4). The May 30 letter listed the balance as $19, 548.08. Id. On June 15, 2017, Plaintiff received a letter from Unifund. (Docket #17-5). Unifund claimed that DAP, not Pilot, was the current owner of the debt. Id. Apparently, between May 30 and June 15, Pilot sold the debt to DAP. The balance on Unifund's letter was the same as that provided by Citibank-$19, 548.08. Id. Unifund further identified Citibank as the original creditor and provided an address for Citibank in Sioux Falls, South Dakota. Id.

         Plaintiff finds a number of faults in this barrage of collection notices. First, the differing balances were confusing, in that they went up and down without Plaintiff having made a payment since September 2015. Second, Unifund's letter identified the debt amount as the “Balance Placed.” Id. Plaintiff alleges that this leaves open the possibility that some other portion of the debt was not “placed” with Unifund. Third, the May 30 and June 15, 2017 letters, taken together, do not clearly identify whether Pilot or DAP owned Plaintiff's debt. Plaintiff believes that although Unifund, DAP, and Pilot are all affiliates, DAP never owned the account. Finally, Plaintiff says that including Citibank's address in the June 15 letter was a deliberate attempt to mislead consumers into sending disputes about their debts to Citibank itself. This would be fruitless, of course, because Citibank no longer owned the debt. Also, inclusion of Citibank's address may lead consumers to erroneously direct payment to Citibank.

         4. ANALYSIS

         Plaintiff states his claims against Defendants in five counts. The first three are FDCPA claims. Count One alleges that, in light of the moving balances stated in the various letters throughout 2016 and 2017, all Defendants are liable for either over- or under-stating the amount of Plaintiff's debt. Count Two claims that Unifund attempted to deceive Plaintiff by including Citibank's address on its letter. The address also “overshadowed” the FDCPA-mandated validation notice included in Unifund's letter. Count Three also targets Unifund, stating that its letter misidentified DAP as the owner of the debt.

         The final two counts are based on the WCA and are offered as factual alternatives. Count Four alleges that if Pilot was the true owner of Plaintiff's debt, it is liable for Unifund's letter which was sent to collect a debt on Pilot's behalf. In this instance, Pilot would be responsible for Unifund's assertion that DAP owned the debt, when this was false. Count Five states that if DAP was the true owner, it too bears liability for Unifund's conduct.[2]Here, Unifund did not clarify that the debt had been sold to DAP so soon after Citibank had sold it to Pilot. According to Plaintiff, failing to explain this development constitutes harassment.

         Plaintiff also asserts two class claims. These appear to be based on Counts One and Two. (Docket #17 at 17) (The first class is the “Amount of Debt” class, and the second is the “Address of Original Creditor” class). The allegations nonetheless suggest that the class claims have a basis in both the FDCPA and WCA. Id.

         Defendants' first argument for dismissal is that Plaintiff lacks constitutional standing to proceed on any of the FDCPA claims. If this were true, the Court would lack subject-matter jurisdiction over the claims. Plaintiff, of course, opposes this position. The Court can assume, without deciding, that Plaintiff has adequately alleged standing.[3] Defendants' second argument is that the Amended Complaint fails to state any viable claims for relief against them. The Court agrees, at least in part, and this requires dismissal of those claims. The Court will address each claim in turn.

         4.1 ...

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