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Knaak v. Optio Solutions LLC

United States District Court, E.D. Wisconsin

December 18, 2019



          J.P. Stadtmueller U.S. District Judge

         1. INTRODUCTION

         Plaintiff filed this class action on July 18, 2019. (Docket #1). He sues Defendant for sending him, and members of the putative class, allegedly misleading debt collection letters. Plaintiff brings claims under various provisions of the Fair Debt Collection Practices Act (“FDCPA”), 15 U.S.C. § 1692 et seq., and the Wisconsin Consumer Act (“WCA”), Wis.Stat. §§ 427.101 et seq. Defendant filed a partial motion to dismiss certain of Plaintiff's claims on October 16, 2019. (Docket #11). That motion is now fully briefed. (Response, Docket #13; Reply, Docket #15). For the reasons stated below, the motion must be denied.


         Defendant has moved to dismiss Plaintiff's claims pursuant to Federal Rule of Civil Procedure (“FRCP”) 12(b)(6). That Rule provides for dismissal of complaints which fail to state a viable claim for relief. Fed.R.Civ.P. 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 Chi., 810 F.3d 476, 480- 81 (7th Cir. 2016) (citation omitted). 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).

         In addition to the FRCP 12(b)(6) standard of review, the Seventh Circuit has provided further direction in evaluating the viability of FDCPA claims. Such claims are assessed from the perspective of the “unsophisticated consumer.” An unsophisticated consumer “may be uninformed, naïve, [and] trusting, but is not a dimwit, has rudimentary knowledge about the financial world, and is capable of making basic logical deductions and inferences[.]” Lox v. CDA, Ltd., 689 F.3d 818, 822 (7th Cir. 2012) (citations and quotations omitted). Although unsophisticated consumers “may tend to read collection letters literally, [they] do[] not interpret them in a bizarre or idiosyncratic fashion.” Gruber v. Creditors' Protection Serv., Inc., 742 F.3d 271, 274 (7th Cir. 2014) (citations and quotations omitted). In the case of letter-based FDCPA violations, the court considers whether the subject letter is “confusing to a significant fraction of the population.” Id. (quotation omitted).

         To prove a claim that language in a collection letter is misleading or deceptive, the Court of Appeals has established three categories of cases:

The first category includes cases in which the challenged language is “plainly and clearly not misleading.” No extrinsic evidence is needed to show that the debt collector ought to prevail in such cases. Lox[, 689 F.3d at 822]. The second Lox category “includes debt collection language that is not misleading or confusing on its face, but has the potential to be misleading to the unsophisticated consumer.” Id. In such cases, “plaintiffs may prevail only by producing extrinsic evidence, such as consumer surveys, to prove that unsophisticated consumers do in fact find the challenged statements misleading or deceptive.” Id., quoting Ruth [v. Triumph P'ships, 577 F.3d 790, 800 (7th Cir. 2009)]. The third category is cases in which the challenged language is “plainly deceptive or misleading, ” such that no extrinsic evidence is required for the plaintiff to prevail. Id.

Janetos v. Fulton Friedman & Gullace, LLP, 825 F.3d 317, 322-23 (7th Cir. 2016). Defendant's motion to dismiss necessarily implies that it believes Plaintiff's FDCPA claims fall into the first category. The Seventh Circuit “ha[s] cautioned that a district court must tread carefully before holding that a letter is not confusing as a matter of law when ruling on a Rule 12(b)(6) motion because district judges are not good proxies for the ‘unsophisticated consumer' whose interest the statute protects.” McMillan v. Collection Prof'ls, Inc., 455 F.3d 754, 759 (7th Cir. 2006) (quotation omitted).

         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 allegedly owed a debt through a Kohl's store-branded credit card. Defendant was hired to collect the balance due on the account. Defendant sent Plaintiff a letter seeking payment on September 7, 2018 (the “Letter”). The Letter states, in pertinent part:

         (Image Omitted.)

(Docket #1-1 at 2). Plaintiff's claims in this case relate to the “Fees” and “Interest” portions of the account summary. To that end, Plaintiff also attached to his complaint a billing statement he received from Kohl's in late 2016, which states that he had accrued $210 in fees and $381.15 in interest in the year 2016. (Docket #1-2 at 2).

         4. ...

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