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Heredia v. Capital Management Services, L.P.

United States Court of Appeals, Seventh Circuit

November 8, 2019

Mabel L. Heredia, Plaintiff-Appellant,
v.
Capital Management Services, L.P., Defendant-Appellee.

          Argued September 20, 2019

          Appeal from the United States District Court for the Eastern District of Wisconsin. No. l:17-cv-00284-WCG - William C. Griesbach, Judge.

          Before WOOD, Chief Judge, and Manion and ROVNER, Circuit Judges.

          ROVNER, CIRCUIT JUDGE.

         Capital Management Services, L.P. (CMS) is a debt collector, and therefore regularly sends out dunning letters to debtors hoping to collect past-due debts. The Fair Debt Collection Practices Act (FDCPA) highly regulates the content of those letters to prevent debt collectors from using abusive practices that prey on vulnerable debtors. See 15 U.S.C. § 1692(e). Mabel L. Heredia received four collection letters from CMS-and claims that the language in this correspondence violated the FDCPA. CMS disagreed and filed a motion to dismiss under Fed.R.Civ.P. 12(b)(6), which the district court granted. Upon our de novo review (see Marquez v. Weinstein, Pinson & Riley, P.S., 836 F.3d 808, 810 (7th Cir. 2016)), we find that Heredia has plausibly alleged that the dunning letter violated the FDCPA. We therefore reverse the order dismissing the matter and remand to the district court for further proceedings.

         I.

         Because this case comes before us on a motion to dismiss, we must accept as true all well-pleaded factual allegations and draw all reasonable inferences in favor of the plaintiff. Marquez, 836 F.3d at 810. Generally, the question of whether a disputed statement is false, deceptive, or misleading is a fact-laden one and therefore a district court may not dismiss a complaint unless the disputed statement is plainly, on its face, not misleading or deceptive. Dunbar v. Kohn Law Firm, S.C., 896 F.3d 762, 765 (7th Cir. 2018). In Marquez, we noted that:

[I]n determining whether a statement is confusing or misleading, a district court must tread carefully because district judges are not good proxies for the 'unsophisticated consumer' whose interest the statute protects. Accordingly, Rule 12(b)(6) dismissal on that issue is appropriate only if there is no set of facts consistent with the pleadings under which the plaintiffs could obtain relief.

Marquez, 836 F.3d at 812 (internal citations omitted). With this standard in mind, we turn to the specifics of this case.

         II.

         Like most debt collectors, CMS sends out form letters to debtors hoping to convince them to pay what they owe on their debt. But, of course, most debt collectors, in reality, would be happy to receive any amount of money from a debtor. This is so because, by the time a debt collector gets involved in the collection process, many of the debts will be unrecoverable. Although CMS sends form letters, it personalizes those letters, offering an individualized payment option, and often multiple options, to debtors to clear their debt. For example, CMS sent a letter to Heredia, dated November 11, 2016, which stated:

In an effort to liquidate as many files as possible, we are making the following settlement offers:
A. 29% reduction of your present balance to the amount of $1343.63, if paid in full on or before 11/30/2016. (A savings of: $548.80)
B. 24% reduction of your present balance to the amount of $1438.25. The first payment of $719.13 or more is due on or before 11/30/2016. The second and final payment of $719.12 or more is ...

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