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Hoffman v. Keith D. Weiner & Assoc. Co. L.P.A.

United States District Court, E.D. Wisconsin

April 18, 2019

ROBERT HOFFMAN, Plaintiff,
v.
KEITH D. WEINER & ASSOC. CO., L.P.A., Defendant.

          DECISION AND ORDER

          LYNN ADELMAN DISTRICT JUDGE.

         Robert Hoffman alleges that the defendant, a debt collector, sent him letters that violate the Fair Debt Collection Practices Act (“FDCPA”) and the Wisconsin Consumer Act. Before me now is the defendant's motion to dismiss the complaint for failure to state a claim upon which relief can be granted. See Fed. R. Civ. P. 12(b)(6).

         I. BACKGROUND

         According to the allegations of the complaint, which I accept as true for purposes of deciding the motion to dismiss, the defendant, Keith D. Weiner & Associates Co., L.P.A., is a law firm that routinely collects consumer debts and thus is a “debt collector” as defined by both the FDCPA and the Wisconsin Consumer Act. The plaintiff is a “consumer” or “customer” as defined by those laws.

         The plaintiff alleges that the defendant mailed him debt-collection letters dated October 11, 2018 and November 16, 2018. These letters are attached to the complaint. They state that the defendant is attempting to collect a debt owed to “MJT Bolivar LLC” in the amount of $477.50. The plaintiff alleges that this debt arose from a residential lease agreement. Both letters contain the following language: “As of the date of this letter, you owe the balance stated above. Because of interest and other charges that may vary from day to day, the amount due on the day you pay may be greater.”

         The plaintiff alleges that including this language in the letters violated the FDCPA and the Wisconsin Consumer Act because the language is false and misleading. The plaintiff alleges that the defendant does not-and cannot-add “interest and other charges that may vary from day to day.” Compl. ¶¶ 30-33. Thus, alleges the plaintiff, the letter is likely to trick the consumer into thinking that if he or she does not pay immediately, the balance owed will grow, when in fact the defendant would not and could not add interest and other charges to the balance.

         The defendant contends that its letters were not misleading as a matter of law because the language at issue was prescribed by the Seventh Circuit as a form of “safe harbor” for creditors to use in their collection letters. See Miller v. McCalla, Raymer, Padrick, Cobb, Nichols, & Clark, L.L.C., 214 F.3d 872, 876 (7th Cir. 2000). The defendant also argues that the letters were not misleading as a matter of law because, at some point in the future, the debt might be reduced to judgment, at which point the defendant would be entitled to collect post-judgment interest under Wisconsin law, which would “vary from day to day.”

         II. DISCUSSION

         To survive a Rule 12(b)(6) motion, a plaintiff must “state a claim to relief that is plausible on its face.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007). “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.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). The complaint must, at a minimum, “give the defendant fair notice of what the claim is and the grounds upon which it rests.” Twombly, 550 U.S. at 555. In construing a plaintiff's complaint, I assume that all factual allegations are true but disregard statements that are conclusory. Iqbal, 556 U.S. 678.

         In the present case, the plaintiff seeks relief under both the FDCPA and the Wisconsin Consumer Act. However, in their briefs, the parties focus on the FDCPA and agree that the fate of the claim under the Wisconsin Consumer Act is tied to the fate of the claim under the FDCPA. Thus, I will discuss only the FDCPA.

         Because the language at issue in this case is based on the Miller safe-harbor formula, I begin by discussing that case. It involved a claim that the debt collector violated the statutory duty to state the amount of the debt. 214 F.3d at 875 (citing 15 U.S.C. § 1692g(a)(1)). The letter stated that the “unpaid principal balance” of the loan was $178, 844.65 but added that “this amount does not include accrued but unpaid interest, unpaid late charges, escrow advances or other charges for preservation and protection of the lender's interest in the property, as authorized by your loan agreement. The amount to reinstate or pay off your loan changes daily. You may call our office for complete reinstatement and payoff figures.” Id. The court held that the letter did not comply with the requirement to state the amount of the debt. Id. It noted that the unpaid principal balance was only part of the debt and that the FDCPA required the debt collector to state the total amount due-including interest and other charges-on the date the letter was sent. Id. at 875-76.

         The court, however, recognized that the debt collector faced some difficulty in accurately stating the total amount of the debt when the amount changed daily. Id. For this reason, the court created the safe-harbor language at issue in this case and held that use of such language would satisfy the debt collector's duty to state the amount of the debt in cases where the amount varies from day to day. Id. at 876. This is the language:

As of the date of this letter, you owe $ ___[the exact amount due]. Because of interest, late charges, and other charges that may vary from day to day, the amount due on the day you pay may be greater. Hence, if you pay the amount shown above, an adjustment may be necessary after we receive your check, in which event we will inform you before depositing the check ...

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