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Driver v. LJ Ross Associates, Inc.

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

August 28, 2019

DAVID F. DRIVER, Plaintiff,



          On November 9, 2018, Plaintiff, Mr. Driver, received a collection letter from Defendant, LJ Ross Associates, Inc. (“LJ Ross”), which detailed-in relevant part:

         (Image Omitted)

(Docket No. 23-1).[1]

         Driver alleges that the letter falsely implied the current amount of a utility debt, which LJ Ross was attempting to collect, could change. (Docket No. 1). Specifically, Driver claims that the inclusion of “interest” and other “charges” falsely implied that LJ Ross might add interest and charges to the debt that were properly collectible. (Id.). Yet, the agreement creating the subject debt did not authorize such additional charges. (Id. at ECF p. 5). Driver claims he was confused and misled by the nature of the Defendant's collection letter and has suffered anxiety and mental anguish as a result. (Id.).

         Plaintiff brings this lawsuit asserting, in a single claim, that the letter violated the Fair Debt Collection Practices Act (“FDCPA”), specifically violating 15 U.S.C. §1692e and 15 U.S.C. §1692f through its references to “interest” and “charges.” (Docket No. 1 at ECF pp. 4-5). LJ Ross now moves to dismiss the complaint for failure to state a claim. For the reasons below, the court DENIES LJ Ross's motion.

         I. Legal Standard

         On a Rule 12(b)(6) motion, the court must accept the operative complaint's well-pleaded factual allegations, with all reasonable inferences drawn in Driver's favor, but not its legal conclusions. See Smoke Shop, LLC v. United States, 761 F.3d 779, 785 (7th Cir. 2014). The court must also consider “documents attached to the complaint, documents that are critical to the complaint and referred to in it, and information that is subject to proper judicial notice, ” along with the additional facts set forth in Driver's brief opposing dismissal, “so long as those facts are consistent with the pleadings.” Phillips v. Prudential Ins. Co. of Am., 714 F.3d 1017, 1020 (7th Cir. 2013) (internal quotation marks omitted). The facts are set forth as favorably to Driver as those materials allow. See Pierce v. Zoetis, Inc., 818 F.3d 274, 277 (7th Cir. 2016). In setting forth those facts at the pleading stage, the court does not vouch for their accuracy. See Jay E. Hayden Found. v. First Neighbor Bank, N.A., 610 F.3d 382, 384 (7th Cir. 2010).

         II. Analysis

         Driver alleges that LJ Ross violated the FDCPA by falsely implying that additional fees could be added to Plaintiff's account (“subject debt”) by including column headers that included “Total Interest Added” and “Total Non-Int Charges/Adjstmnts” in conjunction with itemizations that such additional interest and charges totaled $0.00, respectively. (Docket No. 1; Docket No. 22 at ECF p. 5). Driver argues that LJ Ross should not have included these columns and should not have associated them with the itemized dollar amounts because it gave the impression that interest and other charges could accrue on the subject debt, when Defendant had no intention of applying said fees in the first place. (Docket No. 22 at ECF p. 5).

         Section 1692e prohibits a debt collector from using “any false, deceptive, or misleading representation or means in connection with the collection of any debt.” 15 U.S.C. § 1692e; see Ruth v. Triumph P'ships, 577 F.3d 790, 799-800 (7th Cir. 2009). This provision, essentially a “rule against trickery, ” Beler v. Blatt, Hasenmiller, Leibsker & Moore, LLC, 480 F.3d 470, 473 (7th Cir. 2007), sets forth “a nonexclusive list of prohibited practices” in sixteen subsections, McMahon v. LVNV Funding, LLC, 744 F.3d 1010, 1019 (7th Cir. 2014). Although “a plaintiff need not allege a violation of a specific subsection in order to succeed in a § 1692e case, ” Lox v. CDA, Ltd., 689 F.3d 818, 822 (7th Cir. 2012), Driver invokes subsections (2) and (10), which proscribe, respectively, “[t]he false representation of the character, amount, or legal status of any debt, ” 15 U.S.C. § 1692(e)(2)(A) and “[t]he use of any false representation or deceptive means to collect or attempt to collect any debt or to obtain information concerning a consumer.” id. § 1692(e)(10). Section 1692f, meanwhile, forbids the use of “unfair or unconscionable means to collect or attempt to collect any debt.” 15 U.S.C. § 1692f. Because Driver's § 1692f claim rests on the same premise-that LJ Ross's letter was deceptive-as his § 1692e claim, the two succeed or fail together. See Wood v. Allied Interstate, LLC, 2018 WL 6830333, at *2 (N.D. Ill.Dec. 28, 2018) (“Wood II”).

         The Court evaluates a FDCPA claim by using the objective “unsophisticated consumer” standard. Gruber v. Creditors' Prot. Serv., Inc., 742 F.3d 271, 273 (7th Cir. 2014). This standard protects the consumer who is “uninformed, naïve, or trusting, yet admits an objective element of reasonableness.” Gammon v. GC Serv's Ltd. P'ship, 27 F.3d 1254, 1257 (7th Cir. 1994). “The reasonableness element in turn shields complying debt collectors from liability for unrealistic or peculiar interpretations of collection letters.” Id. While the unsophisticated consumer may be “uninformed, naïve, or trusting, ” he also “possesses rudimentary knowledge about the financial world” and does not interpret collection letters in a “bizarre or idiosyncratic fashion.” Pettit v. Retrieval Masters Creditors Bureau, Inc., 211 F.3d 1057, 1060 (7th Cir. 2000).

         Unlike some other circuits, see, e.g., Gonzales v. Arrow Fin. Servs., LLC, 660 F.3d 1055, 1061 n. 3 (9th Cir. 2011), we treat the question of whether an unsophisticated consumer would find certain debt collection language misleading as a question of fact. See Walker v. Nat'l Recovery, Inc., 200 F.3d 500, 503 (7th Cir. 1999).[2] See also Zemeckis v. Global Credit & Collection Corp., 679 F.3d 632, 636 (7th Cir. 2012) (holding as a general rule, the potentially confusing or misleading “nature of a dunning letter [is treated] as a question of fact that, if well-pleaded, avoids dismissal on a Rule 12(b)(6) motion.”) (internal citation omitted). “Nevertheless, a plaintiff fails to state a claim and dismissal is appropriate as a matter of law when it is apparent from a reading of the letter that not even a significant fraction of the population would be misled by it.” Id. (internal quotation marks omitted).

         LJ Ross contends that Driver could not have been confused about whether interest or charges might be added to his debt because the letter expressly stated that the amount of interest and charges was zero, and nothing else in the letter possibly implied further interest or charges would later be added. (Docket No. 12 at ECF p. 9). Yet, the Seventh Circuit has made clear that a “dunning letter is false and misleading if it impl[ies] that certain outcomes might befall a delinquent debtor when, legally, those outcomes cannot come to pass.” Boucher v. Fin. Sys. of Green Bay, Inc., 880 F.3d 362, 367 (7th Cir. 2018) ...

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