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Holt v. LVNV Funding, LLC

United States District Court, S.D. Indiana, Indianapolis Division

November 30, 2015

LISA HOLT, individually and on behalf of all others similarly situated, Plaintiff,
v.
LVNV FUNDING, LLC, a Delaware limited liability company, and FINANCIAL RECOVERY SERVICES, INC., a Minnesota corporation, Defendants

          For LISA HOLT, Individually and on behalf of all others similarly situated, Plaintiff: Angie K. Robertson, Mary E. Philipps, David J. Philipps, PHILIPPS AND PHILIPPS, LTD., Palos Hills, IL; John Thomas Steinkamp, JOHN T. STEINKAMP AND ASSOCIATES, Indianapolis, IN.

         For LVNV FUNDING, LLC, a Delaware limited liability company, FINANCIAL RECOVERY SERVICES, INC., a Minnesota corporation, Defendants: Matthew P. Kostolnik, Michael S. Poncin, MOSS & BARNETT, Minneapolis, MN.

         ENTRY ON DEFENDANTS' MOTION FOR JUDGMENT ON THE PLEADINGS

         RICHARD L. YOUNG, CHIEF UNITED STATES DISTRICT JUDGE.

         Plaintiff, Lisa Holt, filed this action against Defendants, LVNV Funding, LLC and Financial Recovery Services, Inc., pursuant to the Fair Debt Collection Practices Act (" FDCPA" ), 15 U.S.C. § 1692 et seq. This matter now comes before the court on Defendants' Motion for Judgment on the Pleadings pursuant to Federal Rule of Civil Procedure 12(c). For the reasons set forth below, the court DENIES Defendants' motion.

         I. Background

         Plaintiff owed a debt on a Capital One credit card that became delinquent in 2004. (Filing No. 1, Complaint at ¶ ¶ 3, 9). Sometime thereafter, Defendant LVNV Funding, LLC (" LVNV" ) purchased the debt and retained Defendant Financial Recovery Services, Inc. (" FRS" ) to collect it. ( Id. at ¶ 9). FRS' collection efforts included mailing Plaintiff a dunning letter[1] on October 6, 2014 (the " Letter" ). ( Id. ; see Filing No.1-3, Exhibit C).

         The Letter claims Plaintiff owes LVNV a balance of $1,189.99, which is comprised of $576.73 in principal and $613.26 in interest. (Exhibit C). Below this, the Letter states, " THE LAW LIMITS HOW LONG YOU CAN BE SUED ON A DEBT. BECAUSE OF THE AGE OF YOUR DEBT, LVNV FUNDING LLC WILL NOT SUE YOU FOR IT." ( Id. ). The Letter goes on to outline four " ACCOUNT REDUCTION OPPORTUNITIES," including paying the account in full with a one-time payment of the full balance and settling the account in full by making a one-time payment of 35% of the balance. The Letter then provides,

PLEASE MARK YOUR CHOICE WITH AN " X" IN THE SPACE PROVIDED AND FORWARD WITH YOUR PAYMENT TO THE ADDRESS LISTED BELOW OR PAY ONLINE. WE ARE NOT OBLIGATED TO RENEW OFFERS 2 THROUGH 4 ABOVE. FOR OFFERS 2 AND 3 ABOVE, WHEN YOU HAVE SATISFIED THIS AGREEMENT, THE ACCOUNT(S) WILL BE CONSIDERED SETTLED IN FULL FOR LESS THAN THE FULL BALANCE AND YOU WILL BE RELEASED OF ALL LIABILITY RELATIVE TO THE ABOVE LISTED ACCOUNT(S). LVNV FUNDING LLC IS REQUIRED BY THE IRS TO PROVIDE INFORMATION ABOUT CERTAIN AMOUNTS THAT ARE DISCHARGED AS A RESULT OF A CANCELLATION OF A DEBT ON A FORM 1099C. IF LVNV FUNDING LLC IS REQUIRED TO NOTIFY THE IRS, YOU WILL RECEIVE A COPY OF THE FORM 1099C THAT IS FILED WITH THE IRS. WE RECOMMEND THAT YOU CONSULT INDEPENDENT TAX COUNSEL OF YOUR OWN CHOOSING IF YOU DESIRE ADVICE ABOUT ANY TAX CONSEQUENCES WHICH MAY RESULT FROM THIS SETTLEMENT.

( Id. ).

         II. Legal Standard

         A party may move for judgment on the pleadings " [a]fter the pleadings are closed--but early enough not to delay trial." Fed.R.Civ.P. 12(c). " A Rule 12(c) motion is governed by the same standards as a motion to dismiss for failure to state a claim under Rule 12(b)(6)." Lodholtz v. York Risk Servs. Grp., 778 F.3d 635, 639 (7th Cir. 2015). In order to survive a Rule 12(b)(6) motion, a complaint must " state a claim to relief that is plausible on its face." Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 570, 127 S.Ct. 1955, 167 L.Ed.2d 929 (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, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009). For purposes of ruling on Defendants' motion, the court accepts Plaintiff's well-pleaded factual allegations as true and construes all reasonable inferences in her favor. Tierney v. Advocate Health & Hosps. Corp., 797 F.3d 449, 451 (7th Cir. 2015).

         III. Discussion

         Plaintiff filed her Complaint pursuant to the FDCPA, which Congress passed in order to " eliminate the many evils associated with debt collection." Bentrud v. Bowman, 794 F.3d 871, 874 (7th Cir. 2015). Specifically, Plaintiff alleges that Defendants violated 15 U.S.C. § § 1692e and 1692f. Section 1692e broadly prohibits debt collectors from using " any false, deceptive, or misleading representation or means in connection with the collection of any debt." Similarly, Section 1692f makes it unlawful for debt collectors to " use unfair or unconscionable means to collect or attempt to collect any debt." In reviewing Plaintiff's claims, the court must view the Letter through the perspective of an " unsophisticated consumer." Gruber v. Creditors' Prot. Serv., 742 F.3d 271, 273 (7th Cir. 2014). The Gruber court explained,

Although the hypothetical unsophisticated consumer is not as learned in commercial matters as are federal judges, he is not completely ignorant either. Pettit v. Retrieval Masters Creditors Bureau, Inc., 211 F.3d 1057, 1060 (7th Cir. 2000). On the one hand, the unsophisticated consumer may be " uninformed, naive, or trusting," but on the other hand the unsophisticated consumer does " possess[] rudimentary knowledge about the financial world, is wise enough to read collection notices with added care, possesses 'reasonable intelligence,' and is capable of making basic logical deductions and inferences." Id. (citations omitted). Additionally, while the unsophisticated consumer " may tend to read collection letters literally, ...

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