IN THE UNITED STATES DISTRICT COURT

FOR THE NORTHERN DISTRICT OF ILLINOIS

EASTERN DIVISION

GREGORY LEEB, on behalf of himself

and the class,

Plaintiff,

v.

PENDRICK CAPITAL PARTNERS, LLC and

NATIONWIDE CREDIT CORP.,

Defendants.

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) No. 12 C 913

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MEMORANDUM OPINION AND ORDER

Plaintiff Gregory Leeb, individually and on behalf of others

similarly situated, filed a three-count first amended complaint

alleging that defendants Pendrick Capital Partners, LLC and

Nationwide Credit Corp. violated the Illinois Collection Agency

Act (“ICAA”) (Count I) and the Fair Debt Collection Practices Act

(“FDCPA”) (Count II) when Nationwide tried to collect debts on

behalf of Pendrick, which is not licensed as a debt collector in

Illinois. Plaintiff also alleges that defendant Nationwide

violated the FDCPA (Count III) when it sent him a dunning letter

after he had disputed the alleged debt in writing. Defendants

have moved to dismiss the complaint pursuant to Federal Rule of

Civil Procedure 12(b)(6). For the following reasons, defendant

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Pendrick’s motion is granted, and defendant Nationwide’s motion

is granted in part and denied in part.1

I.

According to the complaint, Pendrick is a Delaware

corporation that purchased plaintiff’s consumer debt (and the

debts of other Illinois residents) and then hired Nationwide (and

other debt collectors) to collect the debt. While Pendrick is

not licensed as a collection agency in Illinois, Nationwide is. 

On December 26, 2011, Nationwide mailed a dunning letter to

plaintiff, demanding payment of a debt that Pendrick had

purchased from Infinity Healthcare Physicians Services. Two days

later, plaintiff mailed, via certified mail and fax, a letter to

Nationwide, disputing the validity of the alleged debt. 

Plaintiff also sent a letter via fax instructing Nationwide to

cease all further communication with him regarding the debt. On

or around January 5, 2012, Nationwide mailed a second letter to

plaintiff, stating that Nationwide was unable to continue its

investigation into the validity of the debt and requiring

1

 Plaintiff has, at the last minute, moved to file

additional authority. That motion is denied. Plaintiff claims

that Grant-Hall v. Calvary Portfolio Services, LLC, 11 C 1832,

2012 U.S. Dist. LEXIS 23526 (Feb. 24, 2012 N.D. Ill.), stands for

the proposition that the ICAA does not violate the Commerce

Clause. First, I do not reach the constitutional issue raised by

some of the parties in their briefing. Second, Grant-Hall only

held that Section 8b of the ICAA did not violate the dormant

Commerce Clause, but Section 8b is not at issue in this case.

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plaintiff to submit further information. The letter also

contained a payment slip and the balance allegedly due.

II.

“A motion under Rule 12(b)(6) challenges the sufficiency of

the complaint to state a claim upon which relief may be granted.” 

Hallinan v. Fraternal Order of Police of Chicago Lodge No. 7, 570

F.3d 811, 820 (7th Cir. 2009). In ruling on a motion to dismiss,

I assume that all the well-pleaded facts alleged in the complaint

are true. Erickson v. Pardus, 551 U.S. 89, 94, 127 S.Ct. 2197,

167 L.Ed.2d 1081 (2007). A complaint must include “a short and

plain statement of the claim showing that the pleader is entitled

to relief.” Fed. R. Civ. P. 8(a)(2). Under the federal notice

pleading standards, to survive a motion to dismiss a plaintiff’s

“[f]actual allegations must be enough to raise a right to relief

above the speculative level.” Bell Atlantic Corp. v. Twombly,

550 U.S. 544, 555, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007)

(citation omitted). 

Generally, on a Rule 12(b)(6) motion I may only consider the

plaintiff’s complaint and any attachments to it. Rosenblum v.

Travelbyus.com Ltd., 299 F.3d 657, 661 (7th Cir.2002). There are

some exceptions recognized in this circuit, id., but because I do

not find it necessary to consider any document beyond the

pleadings and the letter attached thereto, I do not address

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whether the various exhibits submitted by the parties are

appropriate on a motion to dismiss.

III.

A. Counts I and II

Plaintiff’s first two causes of action, against both

defendants, must be dismissed. Plaintiff purports to bring count

I under the Illinois Collection Agency Act, 225 ILCS 425/1a et

seq. (“ICAA”), alleging that defendant Pendrick has engaged in

collection efforts without being licenced in Illinois in

violation of § 4 of the ICAA. The complaint also alleges that

defendant Nationwide violated various sections of the statute by

“demanding payment” for Pendrick’s debts, which, as an

“unlicensed debt buyer,” Pendrick did not have the right to

collect. (Pl.’s First Am. Compl., at ¶¶ 62-68.)

Defendant Pendrick argues that it does not operate as a

collection agency simply by purchasing debts and placing those

debts with a third party for collection. Indeed, the plain

language of the ICAA forecloses plaintiff’s claim that Pendrick

illegally purchased debts in Illinois and indirectly acted to

collect those debts. Sections 2 and 3 of the ICAA define

“collection agency.” Section 2 defines a debt collector or

collection agency as “any person who, in the ordinary course of

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business, regularly, on behalf of himself or herself or others,

engages in debt collection.” Section 3 further states: 

A person, association, partnership, corporation, or

other legal entity acts as a collection agency when he

or it . . . Engages in the business of collection for

others of any account, bill or other indebtedness . . .

[or] [b]uys accounts, bills or other indebtedness and

engages in collecting the same.

225 ILCS 425/3 (West 2008). In turn, § 4 provides:

No collection agency shall operate in this State,

directly or indirectly engage in the business of

collecting, solicit claims for others, . . . exercise

the right to collect, or receive payment for another of

any account, bill or other indebtedness, without

registering under this Act.

Id. at § 4. Under the ICAA, a debt buyer is not a collection

agency unless it “engages in collecting” the debts it has

purchased. If a debt purchaser does not engage in collection

activities, it is not considered a collection agency under the

ICAA and does not need to be licensed by the state. The facts as

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alleged reveal that Pendrick is not a collection agency and did

not have to be licensed before purchasing plaintiff’s debt.

The cases plaintiff cites do not support a contrary

conclusion. Plaintiff relies heavily on LVNV Funding, LLC v.

Trice, 952 N.E.2d 1232 (Ill. App. Ct. 2011), but that case is

distinguishable. In LVNV, the plaintiff, a debt purchaser not

licensed as a collection agency in Illinois, had acquired a

credit card company’s interest in the defendant debtor’s unpaid

credit card account. After acquiring the debt, the plaintiff

sued the debtor to recover the amount due on the account, and

after a trial, judgment was entered in favor of the debt

purchaser. The defendant then moved to vacate the judgment,

arguing that the judgment was void on account of the fact that

the debt purchaser had violated § 4 of the ICAA. The LVNV court

concluded that if the debtor could prove that the plaintiff had

not registered as a collection agency before filing its lawsuit,

it would have committed a crime under the ICAA “when it purchased

the debt and sued to collect it.” LVNV, 952 N.E.2d at 1236

(emphasis added). By contrast, Pendrick did not sue plaintiff to

collect on the debt. Pendrick did not even send the dunning

letters to plaintiff. In fact, plaintiff does not allege that

Pendrick ever attempted to contact him in connection with the

debt. Pendrick placed the debt with a licensed collection agency

for collection. LVNV does not address the issue of placing a

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debt with a licensed third party, and as such does not support

plaintiff’s position.

The other cases plaintiff cites to are similarly inapposite. 

In Kim v. Riscuity, Inc., No. 06 C 1585, 2006 WL 2192121 (N.D.

Ill. July 31, 2006), the debt buyer retained a law firm to

collect the plaintiff’s debt. The court in Kim found that the

plaintiff had alleged that the defendant had itself made attempts

to collect the debt. Id., at *2. The court concluded that the

defendant was a collection agency under the ICAA based solely on

allegations that the defendant “made attempts to collect [the]

debt.” Id.

Wisniewski v. Asset Acceptance Capital Corp., No. 08 CV

2793, 2009 WL 212155 (N.D. Ill. Jan. 29, 2009), in which a debt

purchaser assigned a debt to its subsidiary, who in turn filed

suit against the debtor in state court, also does not support

plaintiff’s claim. With the exception of the parent-subsidiary

relationship, Wisniewski is similar to LVNV. Further, the

plaintiff in Wisniewski had alleged that the debt purchaser and

its subsidiary both made repeated and harassing telephone calls

in connection with an effort to collect the debt. Id. at *1.2

2 Plaintiff’s citation to Schutz v. Arrow Fin. Services,

LLC, 465 F.Supp.2d 872, 875-76 (N.D. Ill. 2006), Pollice v. Nat’l

Tax Funding, L.P., 225 F.3d 379, 405 (3d Cir. 2000), and Fox v.

Citicorp Credit Services, Inc., 15 F.3d 1507, 1516 (9th Cir.

1994), for the suggestion that Pendrick is a collection agency

because it is arguably responsible for the actions of Nationwide

under a theory of vicarious liability is similarly unavailing. 

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Plaintiff does not cite to any case in which a debt

purchaser that has not engaged in any collection activities but

has hired an independent and legally distinct third-party

collection agency to collect the debt was held to be a collection

agency under the ICAA. Pendrick made no demand for payment, did

not file a lawsuit against plaintiff, and did not hire a legal

representative to take any of those actions on its behalf. In

the absence of such debt collection efforts, Pendrick does not

fit the definition of a collection agency under the ICAA. As

such, count I of plaintiff’s complaint fails. Further, because

plaintiff’s FDCPA claim against Pendrick and Nationwide, count

II, is dependant on the ICAA claim,3 that claim must be dismissed

as well.

B. Count III

As defendant Nationwide admits, under § 1692g, “when a debt

collector receives a request for verification, it has two

None of these cases deals with the issue of when the purchaser of

a debt may be considered a collection agency. Notably, the Third

Circuit in Pollice points out that the theory of vicarious

liability only applies if the owner of the debt may also be

considered a “debt collector” under 15 U.S.C. § 1692a(6).

3 Plaintiff argues that defendants violated the FDCPA when

they made “misrepresentations and illegal threats.” (Pl.’s Resp.

to Def. Pendrick’s Mot. to Dismiss, at 9.) But plaintiff admits

that “those misrepresentations and illegal threats occurred

solely because Pendrick engaged in criminal activity as set out

by the ICAA.” (Id. at 10.)

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options: (1) it can send verification and continue to collect the

debt; or (2) stop collection efforts.” (Def. Nationwide’s Memo.

in Support of Mot. to Dismiss, at p. 6 n. 2.) See 15 U.S.C.

§ 1692g(b); Jang v. A.M. Miller and Associates, 122 F.3d 480, 483

(7th Cir. 1997). Plaintiff alleges that Nationwide continued its

collection efforts in spite of plaintiff’s written notice

disputing the debt. These allegations are enough to defeat

Nationwide’s motion to dismiss the third count of the operative

complaint. 

In arguing that the letter it sent to plaintiff purporting

to request additional information was “especially benign,”

Nationwide’s reliance on Marro v. Crosscheck, Inc., No. 1:04-CV00147-LMB, 2004 WL 3688137 (E.D. Va. Aug. 6, 2004) is misplaced. 

In response to an initial letter seeking payment, the debtor in

Marro mailed a “handwritten note vaguely disputing the debt.” 

Id. at *3. The debt collector wrote back requesting further

documentation of the dispute. The court found that this second

letter, despite the inclusion of certain statutorily required

debt validation information, was not a continuing attempt to

collect the debt. Id. The second letter did not demand payment. 

Marro is distinguishable in at least two important respects. 

First, defendant here does not argue that plaintiff’s dispute

letter was similarly vague or otherwise unclear, though the

holding of Marro relies on that factual distinction. Therefore,

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plaintiff has sufficiently alleged that he disputed the debt so

as to trigger Nationwide’s duty to verify the debt.

Second, plaintiff alleges that the letter defendant

Nationwide sent to plaintiff, attached to the complaint,

constituted a continuing attempt to collect the debt. Nationwide

argues that because there was no due date on the letter, it was

not an attempt to collect the debt, nor was it a communication

made “in connection with the collection of a debt.” (Def.

Nationwide’s Memo. in Support of Mot. to Dismiss, at 9.) See 15

U.S.C. § 1692e; see also Gburek v. Litton Loan Servicing, LP, 614

F.3d 380, 382 (7th Cir. 2010) (“Generally speaking, a

communication from a debt collector to a debtor is not covered by

the FDCPA unless it is made ‘in connection with the collection of

any debt.’”). But the Seventh Circuit has held that “a

communication need not make an explicit demand for payment in

order to fall within the FDCPA’s scope.” Gburek, 614 F.3d at 385

(citing Horkey v. J.V.D.B. & Associates, 333 F.3d 769 (7th Cir.

2003)). Here, though there was no due date on the letter, its

form and contents suggest that the letter was an attempt to

collect the debt. The letter contains a tear-off section at the

top of the page to be used in remitting a payment to the debt

collector, the “total” balance due, and a space for writing in

the amount enclosed as payment. The main portion of the letter

states in small lettering at the top “Detach Upper Portion And

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Return With Payment.” None of the cases cited by Nationwide

describe a similar communication. As such, plaintiff has stated

a claim under 15 U.S.C. § 1692g against Nationwide.

IV.

For the foregoing reasons, defendant Pendrick’s motion to

dismiss is granted and defendant Nationwide’s motion to dismiss

is granted in part. Counts I and II of plaintiff’s complaint are

dismissed. Defendant Nationwide’s motion is also denied in part. 

Plaintiff has stated a claim against it in count III of his

complaint. 

 ENTER ORDER:

 ____________________________

 Elaine E. Bucklo

 United States District Judge

Dated: August 1, 2012

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