United States District Court, E.D. Wisconsin
STADTMUELLER, UNITED STATE DISTRICT JUDGE.
December 15, 2017, the Court granted Defendants' motion
to dismiss Plaintiff's First Amended Complaint. (Docket
#32). In that same order, the Court permitted Plaintiff to
move for leave to file a Second Amended Complaint (the
“SAC”). Id. at 13-14. He did so on
December 22, 2017. (Docket #34). The motion is now fully
briefed. (Response, Docket #36; Reply, Docket #38). In the
interest of brevity, the Court assumes familiarity with its
December 15, 2017 order.
Rule of Civil Procedure 15 governs amendment of pleadings. It
provides that leave to amend should be given “freely .
. . when justice so requires.” Fed.R.Civ.P. 15(a)(2).
Courts nevertheless “have broad discretion to deny
leave to amend where there is undue delay, bad faith,
dilatory motive, repeated failure to cure deficiencies, undue
prejudice to the defendants, or where the amendment would be
futile[.]” Arreola v. Godinez, 546 F.3d 788,
796 (7th Cir. 2008). As to that final ground, an amendment is
futile when “the proposed amendment fails to cure the
deficiencies in the original pleading, or could not survive a
second motion to dismiss.” Crestview Vill.
Apartments v. U.S. Dep't of Hous. & Urban Dev.,
383 F.3d 552, 558 (7th Cir. 2004). The Court of Appeals has
stressed that Rule 15(a)(2) announces a “liberal
amendment policy.” Runnion ex rel. Runnion v. Girl
Scouts of Greater Chicago & Nw. Ind., 786 F.3d 510,
521 (7th Cir. 2015).
pares down Plaintiff's case to two related counts and
eliminates Defendants Northland Group, Inc.
(“Northland”) and Pilot Receivables Management
LLC (“Pilot”). (Docket #34-1). Count One alleges
that Defendant Unifund CCR LLC's (“Unifund”)
June 15, 2017 letter violated the Fair Debt Collection
Practices Act, namely its prohibition on misleading
representations, 15 U.S.C. § 1692e, and its requirement
that debt collectors state the correct amount of the debt,
id. § 1692g. (Docket #34-1 at 19-20).
theory on Count One is as follows. Citibank sold
Plaintiff's debt to Defendant Distressed Asset Portfolio
III LLC (“DAP”). Id. at 8. Information
provided in discovery shows that on the sale date, the
“sale amount” of Plaintiff's debt was $19,
548.08, the “charge off balance” was $19, 844.39,
and the “current balance” was $19, 840.37.
Id. at 8-10; see also (Docket #34-6).
Unifund's letter informed him that the “balance
placed” with Unifund was the first figure, $19, 548.08.
(Docket #34-1 at 7); see also (Docket #34-5).
Plaintiff says that this statement omits the final month of
interest which accrued before the debt was sold, which
explains the differing balances. (Docket #34-1 at 10). He
further asserts that the “current balance” is
true debt amount which Unifund could theoretically collect
from him. Id. at 10-11. Thus, Plaintiff maintains,
the Unifund either misstated the amount of debt, or at very
least attempted to mislead him about the actual amount.
Id. at 11-12, 19-20. Count Two, asserted against
Unifund and DAP, maintains that this same misstatement or
attempt to mislead also violates the Wisconsin Consumer Act.
Id. at 20-21.
assert that Plaintiff's motion suffers from all of the
defects identified in Arreola. As to the majority of
them, dealing with prejudice and delay, the Court has already
concluded that Plaintiff should be allowed to file the
instant motion. (Docket #32 at 13-14). Subsumed in that
ruling was an appreciation of those concerns. However, as
noted in that same passage, those concerns would preclude any
further amendment of the complaint. Id. In other
words, the SAC is Plaintiff's last chance to offer a
only issue not addressed (and which could not have been
without the SAC) was futility. In light of the liberal
standard applied to Plaintiff's motion, the Court
concludes that the SAC is not futile, inasmuch as it appears
to cure the deficiencies identified in the Court's order
on the motion to dismiss. The SAC greatly narrows
Plaintiff's claims, changes them slightly, and rests
those claims not on prior letters from third parties, but
rather Defendants' own documents.
Court appreciates the parties' efforts to address the
alternative basis for futility: whether the SAC would survive
a new motion to dismiss. However, the Court believes it is
more prudent to address any particular concerns Defendants
may have with the SAC in further dispositive motion practice.
Indeed, certain issues Defendants raised previously, such as
standing, could not be addressed in the context of the
instant motion. The parties' briefing on the motion for
leave to amend is also relatively short, suggesting that it
may not fully explore the relevant issues. It will be more
efficient, and hopefully allow the Court to reach a sounder
conclusion, if Defendants' arguments are evaluated upon
summary judgment or, if necessary, another motion to
IT IS ORDERED that Plaintiff's motion
for leave to amend his complaint (Docket #34) be and the same
is hereby GRANTED;
IS FURTHER ORDERED that Plaintiff's Second
Amended Complaint (Docket #34-1) shall be his operative
IS FURTHER ORDERED that Defendants Pilot Receivables
Management LLC and Northland Group, Inc. be and the same are
hereby DISMISSED from this action; and
IS FURTHER ORDERED that Plaintiff's motion to
stay class certification briefing (Docket #2) be and the same
is hereby GRANTED.