United States District Court, E.D. Wisconsin
Stadtmueller, U.S. District Judge.
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.
STANDARD OF REVIEW
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).
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.
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). 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.
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,
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.
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
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.
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.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.
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.
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. 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.