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Nature of Suit Code: 890
Nature of Suit: Other Statutory Actions
Cause of Action: 

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United States Court of Appeals 

For the Seventh Circuit

Chicago, Illinois 60604

Submitted March 28, 2016*

Decided March 28, 2016

Before

DIANE P. WOOD, Chief Judge

MICHAEL S. KANNE, Circuit Judge

DIANE S. SYKES, Circuit Judge

No. 15‐3545

SHELLIE L. JOHNSON, et al.,

Plaintiffs‐Appellants,

v.

CARRINGTON MORTGAGE

SERVICES,

Defendant‐Appellee.

Appeal from the United States District

Court for the Eastern District of Wisconsin.

No. 15‐CV‐173

William E. Duffin,

Magistrate Judge.

O R D E R

Shellie Johnson and her sons allege that Carrington Mortgage Services violated

federal laws by harassing her, threatening her with foreclosure, and falsely reporting to

the credit bureaus that she was delinquent on her mortgage payments. After the

plaintiffs amended their complaint three times, the district court dismissed the fourth

complaint for failure to state a claim. Because that conclusion is correct, we affirm.   

                                                 

* After examining the briefs and record, we have concluded that oral argument is

unnecessary. Thus the appeal is submitted on the briefs and record. See FED. R. APP.

P. 34(a)(2)(C).

NONPRECEDENTIAL DISPOSITION

To be cited only in accordance with Fed. R. App. P. 32.1

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No. 15‐3545    Page 2

We review de novo the district court’s dismissal and take the facts alleged in the

complaint as true. See Gustafson v. Adkins, 803 F.3d 883, 888 (7th Cir. 2015). Johnson’s

troubles with Carrington began after she refinanced mortgages on two properties in

Milwaukee, Wisconsin, in 2006. Carrington became the servicer of these loans the next

year, in July 2007. About six years later, Johnson says, Carrington began harassing her

by calling and sending letters claiming that her payments were late. Johnson disputed

the asserted delinquency. She also authorized her sons, Sherman and Archie, to speak

with Carrington on her behalf about the payment and refinancing issues.   

Johnson and her two sons later sued Carrington, contending that Carrington

violated the Fair Debt Collections Practices Act, see 15 U.S.C. §§ 1692c(a)(1), 1692d,

1692e, and the Fair Credit Reporting Act, see 15 U.S.C. § 1681s‐2(b). Carrington moved

to dismiss. In evaluating the fourth complaint, the district court first dismissed the sons’

claims. They had neglected, the court observed, to sign the fourth complaint and,

because the plaintiffs were pro se, Johnson could not sign the complaint on their behalf.

In any case, the district court thought, the sons lacked standing to pursue a claim under

the FDCPA. Second, the court dismissed Johnson’s FDCPA claims because she failed to

allege that the debts were primarily for personal purposes. Finally, the court dismissed

Johnson’s FCRA claim because she failed to allege that she had disputed any credit

inaccuracies with a credit reporting agency.    

Carrington raised another argument that the district court did not

reach—whether Carrington was a “debt collector” under the FDCPA. In moving to

dismiss, Carrington submitted a record of Johnson’s payment history up to the date that

it began servicing the loan. The record showed that Johnson’s loan payments were

current when it started servicing the loan. Carrington argued that, because Johnson was

not in default when it began servicing her loans, it was not a debt collector under the

FDCPA. But the district court did not analyze that argument because it had already

decided that the claim was deficient. As a result, the court also did not discuss the

exhibits that Johnson herself had attached to her complaint. These included the same

payment record that Carrington supplied. The payment record shows that she was not

in default when Carrington acquired the loan.     

On appeal Johnson and her sons challenge the dismissal, but they cannot prevail.

First we address the FDCPA claims. Those claims fail if Carrington was not a “debt

collector,” and it was not a debt collector if Johnson “was not in default at the time [the

debt] was obtained by” Carrington. 15 U.S.C. § 1692a(6)(F)(iii); see Schlosser v. Fairbanks

Capital Corp., 323 F.3d 534, 536–37 (7th Cir. 2003); Bailey v. Sec. Nat’l Servicing Corp.,

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154 F.3d 384, 387–88 (7th Cir. 1998); Glazer v. Chase Home Fin. LLC, 704 F.3d 453, 457

(6th Cir. 2013) (mortgage loan servicer not a debt collector because it obtained loan

before default). The reason that Congress excluded as potential defendants under the

FDCPA persons who acquire debts before a debtor defaults is that those persons have an

incentive to promote a positive relationship with the debtor and are less likely to harass,

even if the debtor later defaults. See Ruth v. Triumph P’ship, 577 F.3d 790, 796–97

(7th Cir. 2009); Schlosser, 323 F.3d at 536. Because the issue of Johnson’s default status (at

the time that Carrington acquired the loan) was raised in the district court and

Carrington has raised it again in this court, we may consider affirming on the basis of it.

See Dibble v. Quinn, 793 F.3d 803, 807 (7th Cir. 2015); Brooks v. Ross, 578 F.3d 574, 578

(7th Cir. 2009).

On this record we conclude that Johnson was not in default for all of 2007, and

therefore Carrington is not a debt collector and not liable under the FDCPA. The district

court properly hesitated to decide the motion to dismiss based on a payment record that

Carrington furnished from outside the pleadings. See FED. R. CIV. P. 12(d); United States

v. Rogers Cartage Co., 794 F.3d 854, 861 (7th Cir. 2015); Brownmark Films LLC v. Comedy

Partners, 682 F.3d 687, 690 (7th Cir. 2012). But Johnson herself attached to her complaint

the very record showing that she was current on all her mortgage payments in 2007,

when Carrington acquired the loan, and she does not dispute its accuracy. See Bogie v.

Rosenberg, 705 F.3d 603, 608–09 (7th Cir. 2013). By attaching that record, she

incorporated it into her complaint. See FED. R. CIV. P. 10(c); Olson v. Bemis Co., 800 F.3d

296, 305–06 (7th Cir. 2015). True, she alleges in her complaint that she was in default in

2007. But that is a legal conclusion, which we need not accept. See Ashcroft v. Iqbal,

556 U.S. 662, 678 (2009). Moreover, an attached exhibit of unquestioned veracity that

contradicts an allegation in a complaint overrides that allegation if, as here, the

complaint refers to the subject of the exhibit and that subject is central to the claim.

See Burke v. 401 N. Wabash Venture, LLC, 714 F.3d 501, 505 (7th Cir. 2013); Rosenblum v.

Travelbyus.com Ltd., 299 F.3d 657, 661–62 (7th Cir. 2002). Johnson’s attachment

corresponds to her allegation about her default history—an allegation essential to her

claim that Carrington is a debt collector. And on appeal she does not deny that it refutes

the conclusion in her complaint that she was in default when Carrington first serviced

the loan. Under these circumstances, the FDCPA claim was rightly dismissed.

That brings us to the FCRA claim. The district court is correct that this claim fails

because Johnson did not allege that she disputed the purported inaccuracy of her debt

status by contacting a credit reporting agency. In her complaint, Johnson merely alleges

that she told Carrington “you are ruining my credit by reporting inaccurate information

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that my account is delinquent while it is current, and that I demand you need to correct

the information.” But in order to state a claim, Johnson needed also to plead that she

disputed this inaccuracy by notifying a credit reporting agency of it, the agency then

contacted Carrington to alert it about the dispute, but Carrington then failed to

adequately investigate. See Westra v. Credit Control of Pinellas, 409 F.3d 825, 827

(7th Cir. 2005); Chiang v. Verizon New England Inc., 595 F.3d 26, 35 (1st Cir. 2010);

Longman v. Wachovia Bank, N.A., 702 F.3d 148, 150–52 (2d Cir. 2012); SimmsParris v.

Countrywide Fin. Corp., 652 F.3d 355, 358 (3d Cir. 2011); Sanders v. Mountain Am. Fed.

Credit Union, 689 F.3d 1138, 1146–47 (10th Cir. 2012). Her allegation of a protest only to

Carrington is not enough, and after three attempts at amending her complaint, the

district court properly dismissed the claim.   

Accordingly the judgment is AFFIRMED.   

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