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Bahena v. Jefferson Capital Systems, LLC

United States District Court, W.D. Wisconsin

June 1, 2018

TRACI BAHENA, Plaintiff,

          OPINION & ORDER


         This case arises out of a debt-collection action that defendant Messerli & Kramer, PA, filed on behalf of its client, defendant Jefferson Capital Systems, LLC, against plaintiff Traci Bahena. Bahena brings claims against defendants under the Fair Debt Collection Practices Act (FDCPA) and the Wisconsin Consumer Act (WCA). Dkt. 25. Defendants have moved to dismiss the complaint for lack of jurisdiction and for failure to state a claim. Dkt. 31 and Dkt. 36. The court will deny defendants' motions.


         The court draws the following facts from Bahena's amended complaint, Dkt. 25, documents referred to in it, and public court records, see Jefferson Capital Systems, LLC v. Bahena, No. 17-sc-11 (Lafayette Cty. Cir. Ct. filed January 18, 2017), and accepts them as true for the purposes of deciding defendants' motion. Lee v. City of Chicago, 330 F.3d 456, 459, 468 (7th Cir. 2003).

         In January 2016, Bahena received a letter from Asset Recovery Solutions attempting to collect a debt owed to “Fingerhut Direct Marketing.” Dkt. 25, ¶ 11. It listed Jefferson Capital as the “current creditor.” Id. In July 2016, Bahena received a second debt-collection letter listing Jefferson Capital as the current creditor. The second letter was from Five Lakes Agency and listed “Metabank/Fingerhut direct Mrkting” as the “original creditor.” Id. ¶ 13. Bahena did not recognize Asset Recovery Solutions, Jefferson Capital, or Five Lakes Agency as creditors of hers. Nor did she receive notice that she was in default on any account or that she had the right to cure default.

         In January 2017, Bahena was served with a summons and small claims complaint notifying her that she was being sued in Lafayette County Circuit Court by “Jefferson Capital Systems, LLC as successor in interest to Metabank c/o Messerli & Kramer PA” for $1, 870.72 in credit card debt. Dkt. 34-1, at 1. The small claims complaint was signed by Jillian Walker, a Messerli attorney representing Jefferson Capital. From 2007 to the fall of 2017, Walker was listed as attorney of record in at least 11, 054 cases in six Wisconsin counties. She also practices in Minnesota.

         On February 6, Bahena appeared at the Lafayette County courthouse to contest the small claims complaint. At a March 6 status conference, another Messerli attorney, Peter Lawrence, told the Lafayette County judge that he planned to file a motion for summary judgment. Bahena sent discovery requests to Messerli, but never received a response. Bahena also retained a lawyer, Briane Pagel-the same attorney representing her in this matter. Pagel “notified Messerli of his appearance.” Id. at 23. He also filed an answer and counterclaims for violation of Wisconsin Statute section 427.104(1)(j) and “unconscionable actions.” Dkt. 34-3, at 12. (The document is titled “first amended answer, ” id. at 4, but there's no record of an initial answer being filed earlier.)

         Messerli never filed the promised motion for summary judgment, but around the same time Pagel appeared and filed counterclaims, Messerli moved to dismiss the small claims case. The court dismissed the case with prejudice on May 3, the same day it received Pagel's filings. See Dkt. 34-4.

         On June 14, Bahena filed this lawsuit against Jefferson Capital and Messerli asserting three causes of action. First, she claims that defendants violated § 1692e of the FDCPA by falsely representing that the debt at issue was “fully and legally accelerated” and that Jefferson had the right to file suit against her when in fact, the debt was not fully and legally accelerated and Jefferson did not have the right to file suit because it had not given her notice of her right to cure default, as required by section 425.104 of the WCA. Dkt. 25, ¶ 48. Second, she claims that the same false representations violated section 427.104(1)(j) of the WCA. Third, she claims that defendants violated § 1692e of the FDCPA by falsely representing “that an attorney was meaningfully involved in the debt collection process when . . . . [i]n fact, there was no meaningful attorney involvement.” Dkt. 25, ¶ 58. She alleges that these three statutory violations caused her “emotional distress and other actual damages.” Id. ¶ 61. Specifically, she alleges that she “was made extremely nervous and distressed at the prospect of going to court on her own” and that she “incurred travel costs and time loss from having to attend court and deal with discovery issues.” Id.


         Defendants move to dismiss Bahena's complaint for lack of subject-matter jurisdiction, insufficient service of process, and failure to state a claim. On all aspects of defendants' motion, the court accepts Bahena's well-pleaded factual allegations as true and draws all reasonable inference from those facts in her favor. Lee, 330 F.3d at 459, 468. When deciding the jurisdictional issues, the court may consider supporting evidence adduced by the parties; Bahena, as plaintiff, bears the burden of establishing jurisdiction by a preponderance of the evidence. Id. at 468. When it comes to the arguments under Federal Rule of Civil Procedure 12(b)(6), the court does not consider supporting evidence. Id. at 459. The question under Rule 12(b)(6) is “simply whether the complaint includes factual allegations that state a plausible claim for relief.” BBL, Inc. v. City of Angola, 809 F.3d 317, 325 (7th Cir. 2015).

         The parties, attorneys, claims, defenses, and arguments in this case are substantially similar to those in Satran v. LVNV Funding, No. 17-cv-896 (W.D. Wis. filed Nov. 27, 2017). In fact, it appears that both cases are part of a larger feud between Bahena's attorney and Messerli. See, e.g., Whitehead v. Discover Bank, No. 15-cv-261 (E.D. Wis. filed Mar. 9, 2015); LoMastro v. Baxter Credit Union, No. 17-cv-962 (W.D. Wis. filed Dec. 29, 2017). Much of the court's analysis in Satran applies to this case, so the court will refer to Satran when appropriate.

         A. Subject-matter jurisdiction

         Defendants contend that the court lacks subject-matter jurisdiction because (1) Bahena lacks standing to assert her claims and (2) the Rooker-Feldman doctrine deprives this court of subject-matter jurisdiction over Bahena's claims. The parties' arguments concerning standing mirror those presented in Satran. For the same ...

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