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Wertz v. Asset Acceptance, LLC

Court of Appeals of Indiana

March 21, 2014

NATHAN WERTZ, Appellant,

Page 1176

APPEAL FROM THE ST. JOSEPH SUPERIOR COURT. The Honorable Jenny Pitts Manier, Judge. Cause No. 71D05-1208-CC-607.

ATTORNEYS FOR APPELLANT: DANIEL A. EDELMAN, HEATHER KOLBUS, Edelman, Combs, Latturner & Goodwin, L.L.C., Chicago, Illinois; MICHAEL P. MCILREE, Hobart, Indiana.

ATTORNEYS FOR APPELLEE: JENNIFER KALAS, SCOTT B. COCKRUM, Hinshaw & Culbertson LLP, Schererville, Indiana.

NAJAM, Judge. BAKER, J., and CRONE, J., concur.


Page 1177

NAJAM, Judge


Nathan Wertz appeals the trial court's judgment dismissing his counterclaim against Asset Acceptance, LLC (" Asset" ) pursuant to Asset's Trial Rule 12(B)(6) motion.[2] Wertz raises six issues for our review, but we need only address the following dispositive issue: whether, under Indiana's Uniform Consumer Credit Code (" IUCCC" ), Ind. Code § § 24-4.5-1-101 to -7-414, Asset, an out-of-state business, was required to obtain an Indiana license to collect on a debt owed by Wertz tat Asset had purchased from the original lending institution. We affirm.


On August 9, 2012, Asset, a Delaware limited liability company with its principal place of business in Michigan, filed its complaint against Wertz. According to Asset's complaint, it had purchased a credit card account from " Chase Bank/First USA/Chase" (" Chase Bank" ) on which Wertz had defaulted.[3] Appellant's App. at 13. Asset sought to recover a principal balance of $6,594.26, together with interest, on that account.

On October 22, Wertz filed a counterclaim and putative class action against Asset. According to Wertz's counterclaim, Asset " has pursued litigation against over 400 persons in Marion County, Indiana[,] alone," and " 'legal collections'" accounted for " 44.9% of all [of Asset's] collections." Id. at 20-21. However, Wertz continued, Asset is not licensed under the IUCCC to take assignments of Indiana debts or to collect on those debts, and Asset does not otherwise meet the IUCCC's description of those entities authorized to " undertake direct collection of payments from debtors arising out of consumer loans." Id. at 19. As such, according to Wertz, Asset's collection efforts violated both the Indiana Deceptive Consumer Sales Act (" IDCSA" ), I.C. § § 24-5-0.5-0.1 to -12, and the federal Fair Debt Collection Practices Act (" FDCPA" ), 15 U.S.C. § § 1692-1692p. With his counterclaim, Wertz filed a motion to dismiss Asset's complaint on the ground that Asset lacked standing to obtain the relief it had requested.

On December 20, Asset filed a motion to dismiss the counterclaim pursuant to Indiana Trial Rule 12(B)(6). In particular, Asset argued that dismissal of the counterclaim was appropriate in that the IUCCC does not apply to it because it is not an Indiana business and it has no physical location within Indiana. Asset further asserted that Wertz's counterclaim failed to plead a claim under the IDCSA and the FDCPA. On March 18, 2013, the trial court granted Asset's motion to dismiss and denied Wertz's motion to dismiss. In relevant part, the court stated that " Wertz's counterclaims under the FDCPA and [IDCSA] are premised on the assumption

Page 1178

that Asset needed to have been licensed either under the IUCCC or the [Indiana Collection Agency Act (" ICAA" ).] It did not . . . ." Id. at 12. Thereafter, the trial court entered judgment on Asset's motion to dismiss pursuant to Indiana Trial Rule 54(B).[4] This appeal ensued.


Wertz asserts that the trial court erred when it granted Asset's Trial Rule 12(B)(6) motion to dismiss Wertz's counterclaim. In particular, Wertz contends that the IUCCC required Asset, an out-of-state business with no physical situs in Indiana, to obtain an Indiana license before it could take the assignment from Chase Bank or collect on Wertz's underlying debt. This is a question of first impression for Indiana's courts.

Our review of a trial court's grant of a motion to dismiss under Trial Rule 12(B)(6) is de novo and requires no deference to the trial court's decision. Sims v. Beamer, 757 N.E.2d 1021, 1024 (Ind.Ct.App. 2001). " A motion to dismiss under Rule 12(B)(6) tests the legal sufficiency of a complaint: that is, whether the allegations in the complaint establish any set of circumstances under which a plaintiff would be entitled to relief." Trail v. Boys & Girls Clubs of N.W. Ind., 845 N.E.2d 130, 134 (Ind. 2006). " Thus, while we do not test the sufficiency of the facts alleged with regards to their adequacy to provide recovery, we do test their sufficiency with regards to whether or not they have stated some factual scenario in which a legally actionable injury has occurred." Id. When reviewing a Trial Rule 12(B)(6) motion to dismiss, we accept the facts alleged in the complaint as true and view the pleadings in a light most favorable to the nonmoving party and with every reasonable inference in the nonmoving party's favor. Id. We view motions to dismiss under Trial Rule 12(B)(6) " with disfavor because such motions undermine the policy of deciding causes of action on their merits." McQueen v. Fayette Cnty. Sch. Corp., 711 N.E.2d 62, 65 (Ind.Ct.App. 1999), trans. denied.

This appeal also requires this court to interpret various statutes and consider an administrative agency's interpretation of those statutes. As we have explained:

Statutory interpretation is a question of law reserved for the court and is reviewed de novo. De novo review allows us to decide an issue without affording any deference to the trial court's decision. When a statute has not previously been construed, our interpretation is controlled by the express language of the statute and the rules of statutory construction. Our goal in statutory construction is to determine, give effect to, and implement the intent of the legislature. When a statute is subject to different interpretations, the interpretation of the statute by the administrative agency charged with the duty of enforcing the statute is entitled to great weight, unless that interpretation is inconsistent with the statute itself. When a court is faced with two reasonable interpretations of a statute, one of which is supplied by an administrative agency charged with enforcing the statute, the court should defer to the agency. When a court determines that an administrative agency's interpretation is reasonable, it should terminate its analysis and not address the reasonableness of the

Page 1179

other party's interpretation. Terminating the analysis recognizes the general policies of acknowledging the expertise of agencies empowered to interpret and enforce statutes and increasing public reliance on agency interpretations.

Ind. Dep't of Envtl. Mgmt. v. Boone Cnty. Res. Recovery Sys., Inc., 803 N.E.2d 267, 273 (Ind.Ct.App. 2004) (emphasis added; quotations, citation, omissions, alterations, and original emphases removed), trans. denied.

The licensing requirement of the IUCCC is stated in Indiana Code Section 24-4.5-3-502 (" Section 3-502" ), which states:

(1) A person that is a:
(a) depository institution;
(b) subsidiary that is owned and controlled by a depository institution; or
(c) credit union service organization;
may engage in the making of consumer loans that are not mortgage transactions without obtaining a license under this article.
(2) A collection agency licensed under IC 25-11-1[, the ICAA,[5] ...

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