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Degroot v. Client Services, Inc.

United States District Court, E.D. Wisconsin

January 15, 2020

JOSEPH DEGROOT, individually and on behalf of all others similarly situated, Plaintiff,
v.
CLIENT SERVICES, INC., Defendant.

          DECISION AND ORDER GRANTING MOTION TO DISMISS

          William C. Griesbach, District Judge United States District Court

         Plaintiff Joseph Degroot, individually and on behalf of all others similarly situated, filed this action on July 1, 2019, alleging that Defendant Client Services, Inc. (CSI) violated the Fair Debt Collection Practices Act (FDCPA), 15 U.S.C. §§ 1692, et seq., when CSI sent a letter to Degroot seeking to collect a debt he owed to Capital One Bank (USA), N.A. Presently before the court is CSI's motion to dismiss the amended complaint for lack of standing and for failure to state a claim. For the reasons that follow, CSI's motion will be granted.

         LEGAL STANDARD

         CSI moves to dismiss under Federal Rules of Civil Procedure 12(b)(1) and 12(b)(6). A Rule 12(b)(1) motion challenges the jurisdiction of this court of the subject matter related in the complaint. Fed.R.Civ.P. 12(b)(1). To survive a Rule 12(b)(1) motion, the plaintiff must establish that the jurisdictional requirements have been met. Schaefer v. Transp. Media, Inc., 859 F.2d 1251, 1253 (7th Cir. 1988). The proponent of federal jurisdiction must “prove those jurisdictional facts by a preponderance of the evidence.” Meridian Sec. Ins. Co. v. Sadowski, 441 F.3d 536, 543 (7th Cir. 2006). When the moving party “launches a factual attack against jurisdiction, the district court may properly look beyond the jurisdictional allegations of the complaint and view whatever evidence has been submitted on the issue to determine whether in fact subject matter jurisdiction exists.” Apex Digital, Inc. v. Sears, Roebuck & Co., 572 F.3d 440, 444 (7th Cir. 2009) (internal quotation marks and citations omitted).

         A Rule 12(b)(6) motion tests the sufficiency of the complaint to state a claim upon which relief can be granted. Gibson v. City of Chicago, 910 F.2d 1510, 1520 (7th Cir. 1990); see Fed. R. Civ. P. 12(b)(6). When reviewing a motion to dismiss under Rule 12(b)(6), the court must accept all well-pleaded factual allegations as true and draw all reasonable inferences in the light most favorable to the nonmoving party. Gutierrez v. Peters, 111 F.3d 1364, 1368-69 (7th Cir. 1997); Mosley v. Klincar, 947 F.2d 1338, 1339 (7th Cir. 1991). Rule 8 mandates that a complaint need only include “a short and plain statement of the claim showing that the pleader is entitled to relief.” Fed.R.Civ.P. 8(a)(2). The plaintiff's short and plain statement must “give the defendant 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). While a plaintiff is not required to plead detailed factual allegations, he must plead “more than labels and conclusions.” Id. A simple, “formulaic recitation of the elements of a cause of action will not do.” Id. A claim is plausible on its face 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, 663 (2009).

         ALLEGATIONS OF THE AMENDED COMPLAINT

         Degroot, a Wisconsin resident, originally incurred and defaulted on a financial obligation owed to Capital One Bank (USA), N.A. CSI, a corporation formed under the laws of Missouri, regularly engages in the collection of defaulted consumer debts owed to others.

         On August 6, 2018, AllianceOne Receivables Management, Inc., a debt collector, mailed a letter to Plaintiff. The letter advises that Capital One referred Degroot's account to AllianceOne for collections. The letter states: “The amount of your debt is $425.86. Please keep in mind, interest and fees are no longer being added to your account. This means every dollar you pay goes towards paying off your balance.” Dkt. No. 8-1 at 2. Degroot alleges that he understood the AllianceOne letter to inform him that Capital One had recently charged-off his account, meaning that it would no longer add accruing interest, late charges, or other fees to the debt for any reason.

         Capital One later assigned, placed, or transferred the account to CSI for collection. CSI mailed Degroot a letter dated March 11, 2019. This letter was CSI's first written communication with Degroot to collect the debt. The top left-hand corner of the letter contained CSI's logo and address, as well as the following information related to Degroot's debt:

CURRENT CREDITOR: CAPITAL ONE BANK (USA), N.A.
ACCOUNT NUMBER: XXXXXXXXXXXX9018
BALANCE DUE: $425.86

Dkt. No. 8-2 at 2. The letter notes “Our client, CAPITAL ONE BANK (USA), N.A., has placed the above account with our organization for collections” and summarizes Degroot's current balance:

Balance Due At Charge-Off: ...

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