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IN THE UNITED STATES DISTRICT COURT 

FOR THE NORTHERN DISTRICT OF ILLINOIS 

EASTERN DIVISION 

LINDA RICE on behalf of plaintiff and the class 

defined below, 

Plaintiff, 

v. 

MIDLAND CREDIT MANAGEMENT, INC.; 

MIDLAND FUNDING LLC; and ENCORE 

CAPITAL GROUP, INC., formerly MCM 

CAPITAL GROUP, INC., 

Defendants. 

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Case No.: 1:12-cv-01395 

Judge: Robert M. Dow, Jr. 

Magistrate Judge Maria Valdez 

MEMORANDUM IN SUPPORT OF MOTION TO DISMISS

 Defendants Midland Credit Management, Inc., (“MCM”), Midland Funding LLC and 

Encore Capital Group, Inc., (“Encore”), by and through their attorneys and for their 

Memorandum in Support of their Motion to Dismiss Plaintiff’s Complaint pursuant to Federal 

Rule of Civil Procedure Rule 12(b)(6) state as follows: 

INTRODUCTION

Plaintiff complains of four letters MCM sent her for collection of a CIT Bank credit card 

debt. (Compl., ¶35, Exs. A-D to Compl.). The first letter attached to her Complaint is dated 

April 21, 2011. Plaintiff claims that her date of last payment on the account was January 19, 

2006 and that the statute of limitations on a credit card bill in Illinois is five years. (Compl., 

¶¶38,39). She alleges that the letters failed to disclose that her debt was barred by the statute of 

limitations and failed to disclose the date of the transactions giving rise to the debt. (Compl., 

¶¶41,42). On this basis she claims that MCM’s letters violated Sections 1692e, 1692e(2), 

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1692e(10) and 1692f of the Fair Debt Collection Practices Act, 15 U.S.C. §1692 et. al. 

(“FDCPA”). (Compl., ¶46).1

 

Plaintiff’s theory fails. MCM was entitled to seek collection of Plaintiff’s debt whether 

or not the statute of limitations had expired because under Illinois law, the statute of limitations 

is procedural and does not alter substantive rights. Belleville Toyota, Inc. v. Toyota Motor Sales, 

U.S.A., Inc., 199 Ill.2d 325, 351, 770 N.E.2d 177, 195 (Ill. 2002). Merely attempting to collect a 

time-barred debt does not violate the FDCPA. Murray v. CCB Credit Services, Inc., No. 04 C 

7456, 2004 WL 2943656, *2 (N.D.Ill. 2004); Walker v. Cash Flow Consultants, Inc., 200 F.R.D. 

613, 616 (N.D.Ill. 2001). Moreover the FDCPA does not require a debt collector to disclose the 

statute of limitations applicable to a particular debt, nor does it require a debt collector to 

disclose the date of the transactions giving rise to such a debt. Plaintiff cannot read requirements 

into the Act that are not there. Finally, Plaintiff appears to rely upon a consent decree between 

the FTC and Asset Acceptance in support of her theory. (Compl., ¶45). However, a consent 

decree between the FTC and an unrelated party is evidence of nothing. A court may not enter a 

consent decree that imposes obligations on a party that did not consent to the decree. Local No. 

93, Intern. Ass'n of Firefighters, AFL-CIO C.L.C. v. City of Cleveland, 478 U.S. 501, 529, 106 

S.Ct. 3063, 3079 (1986). As further set forth below, this court should dismiss Plaintiff’s 

Complaint in its entirety. 

 

1

 Plaintiff alleges that MCM and Midland Funding LLC are under common ownership and are both subsidiaries of 

Encore. (Compl., ¶19). Plaintiff claims that each Defendant is a debt collector and is liable for the FDCPA 

violations. (Compl., ¶13,18, 32). While Defendants Midland Funding LLC and Encore do not concede that they are 

debt collectors under the FDCPA, taking Plaintiff’s allegations as true for purposes of this motion, MCM’s 

arguments apply with equal force to all Defendants. 

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ARGUMENT

A. None of MCM’s letters threaten litigation.

Plaintiff’s theory is nothing new. This court has already considered whether or not 

merely sending a letter seeking collection of a time-barred debt violates the FDCPA and has 

concluded that it does not. Murray v. CCB Credit Services, Inc., 2004 WL 2943656, *2 (N.D.Ill. 

2004); Walker v. Cash Flow Consultants, Inc., 200 F.R.D. 613, 616 (N.D.Ill. 2001). Moreover, 

Plaintiff’s counsel in Walker represents the Plaintiff in this case. 

In Murray, Plaintiff alleged that Defendant engaged in deceptive practices in violation of 

the FDCPA by sending him a letter seeking collection of a time-barred debt. The letter advised 

that Plaintiff owed a $351.03 debt to Sterling Bank & Trust/FNBO, provided that it had been 

placed with Defendant for collection and requested that Plaintiff submit payment for the balance. 

In determining that the letter did not violate the FDCPA and in granting Defendant’s motion to 

dismiss, the court stated: 

Plaintiff does not claim that defendant had threatened actual or future litigation to 

recover the debt. Neither does he argue that the dunning letter was confusing or 

otherwise worded in a manner that violates the FDCPA. Instead, plaintiff claims 

that the violation occurred when defendant attempted to collect on a time-barred 

debt. The running of the statute of limitations would bar defendant from 

collecting through the courts, but it does not extinguish plaintiff’s debt. See 

Walker v. Cash Flow Consultants, Inc., 200 F.R.D. 613, 616 (N.D.Ill. 2001). 

That defendant cannot sue to recover the debt does not prevent it from seeking to 

recover the debt via an alternate route. Merely attempting to collect a time-barred 

debt does not violate the FDCPA. We agree with the court in Walker that a 

violation of the FDCPA occurs if the attempt to collect the time-barred debt is 

accompanied by a threat to sue, or if litigation had actually begun. In such a 

situation the debt collector misrepresents the legal status of the debt. See Walker, 

200 F.R.D. at 616 (discussing Freyermuth v. Credit Bureau Servs. Inc., 248 F.3d 

767 (8th Cir. 2001)); Griffith v. Capital One Bank, 2001 U.S. Dist. LEXIS 21953, 

*5 (N.D.Ill. 2001). Defendant does not violate the FDCPA because the dunning 

letter is silent as to actual or potential litigation. Id. at *2. 

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In Walker v. Cash Flow Consultants, Inc., 200 F.R.D. 613 (2001), Defendant attempted 

to collect a debt for a dishonored check. Defendant sent Plaintiff a collection letter after 

expiration of the three year statute of limitations for dishonored checks. Plaintiff alleged that 

Defendant violated Sections 1692e, 1692e(2)(A) and 1692e(10) of the FDCPA by knowingly 

attempting to collect on a time-barred debt. In rejecting Plaintiff’s claim the court stated: 

Notably, Illinois law is consistent with Freyermuth: the statute of limitations bars 

a specific remedy; it does not extinguish the indebtedness. See La Pine Scientific 

Co. v. Lenckos, 95 Ill.App.3d 955, 958, 51 Ill.Dec. 241, 420 N.E.2d 655, 658 (1st

Dist. 1981). The court finds Freyermuth persuasive, but holds only that, in order 

to survive a motion to dismiss, a defendant’s attempt to collect on a time-barred 

debt must be accompanied by actual litigation or a threat, either explicit or 

implicit, of future litigation. Here, Plaintiff did not allege that CFC explicitly or 

implicitly threatened him with further collection action and, as noted, the 

language of CFC’s debt collection letter would belie any such allegation. Id. at 

616. 

As in the Murray and Walker cases, MCM’s letters in this case do not implicitly or explicitly 

threaten litigation. Plaintiff does not allege that MCM’s letters contained such a threat, nor can 

the letters reasonably be read to include such an implication. The Seventh Circuit applies the 

“unsophisticated consumer” standard. Gammon v. GC Srvcs, 27 F.3d 1254, 1257 (7th Cir. 

1994); Durkin v. Equifax Check Services, Inc., 406 F.3d 410, 415 (7th Cir. 2005). The 

unsophisticated consumer standard protects debt collectors from idiosyncratic interpretations of 

communications (i.e. applying the view of a person with a modest education and who has some 

commercial savvy). Offering Plaintiff payment options of the debt does not imply that litigation 

can or will be initiated, nor would the unsophisticated consumer interpret the letters in such a 

manner. 

 Plaintiff alleges that Defendant’s “nondisclosure” is “exacerbated by the offer of a 

settlement” and that “[a]n offer to settle implies a colorable obligation to pay. (Compl., ¶47). 

Plaintiff insinuates that the expiration of the statute of limitations extinguished her debt. Illinois 

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law is clear- the statute of limitations does not extinguish the underlying indebtedness. Belleville 

Toyota, Inc. v. Toyota Motor Sales, U.S.A., Inc., 199 Ill.2d 325, 351, 770 N.E.2d 177, 195 (Ill. 

2002); La Pine Scientific Co. v. Lenckos, 95 Ill.App.3d 955, 958, 420 N.E.2d 655, 658 (1st Dist. 

1981). Thus a time-barred debt is “colorable” and implying it is “colorable” is permissible.2

 MCM’s letters each identify the MCM Account No., Original Creditor, Original Account 

No and Current Balance. The body of the April 21, 2011 letter stated3

: 

 

2

 “Colorable” is defined as “seemingly valid or genuine.” http://www.merriam-webster.com/dictionary/colorable. 

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Nothing in MCM’s April 21, 2011 letter in any way references or implies that litigation 

can or will be initiated by MCM.4

 MCM’s May 20, 2011 letter states: 

 

3

 The font size is not identical to the actual letter which was attached as Exhibit A to the Complaint, nor is reverse of 

the letter set forth herein. However, the letter is excerpted here to demonstrate that the settlement language does not 

imply or threaten litigation. 

4

 Exhibits C and D which were attached to the Complaint are additional letters containing identical language. 

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The letters seek payment of Plaintiff’s debt. Seeking payment of a time-barred debt is 

permissible under the FDCPA. See Huertas v. Galaxy Asset Management, 641 F.3d 28, 33 (3rd

Cir. 2011); Freyermuth v. Credit Bureau Services, Inc., 248 F.3d 767, 771 (8th Cir. 2001); 

Wallace v. Capital One Bank, 168 F.Supp.2d 526, 529 (D.Md.,2001); Johnson v. Capital One 

Bank, No. Civ.A. SA00CA315EP, 2000 WL 1279661, *2 (W.D.Tex.,2000); Aronson v. 

Commercial Financial Services, Inc., No. Civ.A. 96-2113, 1997 WL 1038818, *3

(W.D.Pa.,1997). 

B. The FDCPA does not require a debt collector disclose that a debt is time-barred.

Plaintiff claims that Defendant violated the FDCPA by failing to disclose that Plaintiff’s 

debt is time-barred. (Compl., ¶41). The FDCPA, however, does not contain any such 

requirement. Plaintiff asks this court to read language into the Act that is not there. When the 

language of a statute is plain, courts must enforce that statute according to its terms. Aubert v. 

American General Finance, Inc.137 F.3d 976, 979(7th Cir. 1998). The courts are prohibited 

from reading into clear statutory language a restriction that Congress itself did not include. Bass 

v. Stolper, Koritzinsky, Brewster & Neider, S.C., 111 F.3d 1322, 1326 (7th Cir. 1997). 

In Schaefer v. ARM Receivable Management, Inc., 09-11666-DJC, 2011 WL 2847768 

(D.Mass. 2011), the Plaintiff made similar allegations. Plaintiff alleged Defendants violated 

Section 1692e(2) by attempting to collect a time-barred debt from him without disclosing that the 

debt was time-barred. He also claimed by seeking payment on the debt and offering to settle, 

Defendants sought to revive the debt which violated Section 1692f and 1692e(2) of the FDCPA. 

The court noted that a debt collector could seek voluntary repayment of a time-barred debt and 

also stated, “[i]addition, Schaefer cites no authority that stands for his proposition that a debt 

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collector is required under the FDCPA to disclose that submitting a payment would revive or toll 

the statute of limitations.” Id. at *4. 

Similarly, in this case, there is no authority for Plaintiff’s claim that the FDCPA requires 

that a debt collector disclose when the statute of limitations has expired on a debt it is attempting 

to collect. MCM’s letters permissibly seek voluntary payment of Plaintiff’s debt. See Huertas v. 

Galaxy Asset Management, 641 F.3d 28, 33 (3rd Cir. 2011). 

C. The FTC Consent Decree with Asset Acceptance has no relevance to Plaintiff’s claims.

Plaintiff cites to an FTC consent decree with Asset Acceptance which allegedly provides 

that Asset is required to disclose to consumers when it is attempting to collect debts that are 

barred by the statute of limitations. (Compl., ¶45). Plaintiff’s citation to this consent decree has 

nothing to do with Defendants and certainly does not establish that MCM’s letters violate the 

FDCPA. Consent decrees are contracts. Their force comes from the agreement of the parties, not 

from the statute on which the complaint was based. Dunn v. Carey, 808 F.2d 555, 559 (7th Cir. 

1986). Whether or not the FTC and Asset Acceptance agreed to certain terms has no bearing on 

MCM, nor does it establish that debt collectors must disclose the statute of limitations in 

collection letters. A court may not enter a consent decree that imposes obligations on a party that 

did not consent to the decree. Firefighters Local 93 v. City of Cleveland, 478 U.S. 501, 529, 106 

S.Ct. 3063, 3079 (1986). Consequently, “parties who choose to resolve litigation through 

settlement may not dispose of the claims of a third party, and a fortiori may not impose duties or 

obligations on a third party, without that party’s agreement.” U.S. v. City of Chicago, 978 F.2d 

325, 330 (1992)(citation omitted). 

The FTC Complaint raised numerous allegations against Asset including violations under 

the FTC Act (Counts I and II), violations of the Fair Credit Reporting Act, 15 U.S.C. §1681, et. 

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al., (Counts III-V), violations of Sections 1692b, 1692c, 1692e and 1692g(b) of the FDCPA 

(Counts VI-IX) and sought injunctive and equitable relief. The consent decree is clear that the 

parties agreed to settlement, “without adjudication of any issue of fact or law, to settle and 

resolve all matters in dispute arising from the Complaint to the date of entry of the Decree and 

without Defendant admitting any of the matters alleged in the Complaint other than jurisdictional 

facts...” United States of America (for the Federal Trade Commission) v. Asset Acceptance, 

LLC, Case No. 8:12-cv-182-T-27EAJ (M.D.Fla.). The consent decree was a compromise of 

numerous disputed claims and does not support Plaintiff’s claim that a debt collector violates the 

FDCPA by attempting to collect time-barred debt. 

CONCLUSION

MCM’s letters permissibly seek payment of Plaintiff’s delinquent CIT Bank debt. The 

fact that MCM cannot sue Plaintiff for collection of the debt is of no consequence. MCM’s offer 

to settle the debt does not implicitly or explicitly threaten suit. Seeking voluntary payment of a 

time-barred debt is not false, misleading or deceptive under Sections 1692e and f of the FDCPA. 

WHEREFORE, Defendants Midland Credit Management, Inc., Midland Funding LLC 

and Encore Capital Group, Inc. respectfully request that this Court enter judgment in their favor 

and against Plaintiff on Plaintiff’s Complaint. 

 Respectfully submitted, 

 By: s/Jennifer W. Weller

One of the attorneys for 

MIDLAND CREDIT MANAGEMENT, 

INC.; MIDLAND FUNDING LLC; and

ENCORE CAPITAL GROUP, INC 

David M. Schultz 

Jennifer W. Weller 

Hinshaw & Culbertson LLP 

222 N. LaSalle, Suite 300 

Chicago, IL 60601 

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CERTIFICATE OF SERVICE

I, Jennifer W. Weller, an attorney, certify that I shall cause to be served a copy of the 

MEMORANDUM IN SUPPORT OF MOTION TO DISMISS upon the below listed 

individual(s), by deposit in the U.S. mail box at 222 North LaSalle Street, Chicago, Illinois 

60601, postage prepaid, before the hour of 4:00 p.m., messenger delivery, Federal Express, 

facsimile transmitted from (312) 704-3001, or electronically via the Case 

Management/Electronic Case Filing System (“ECF”) as indicated, on April 17, 2012. 

 CM/ECF 

 Facsimile 

 Federal Express 

 Regular U.S. Mail 

 Messenger 

 E-Mail 

To: All Parties of Record 

 HINSHAW & CULBERTSON LLP 

David M. Schultz s/ Jennifer W. Weller

Jennifer W. Weller 

HINSHAW & CULBERTSON LLP 

222 North LaSalle Street, Suite 300 

Chicago, Illinois 60601 

312/704-3000 

312/704-3001 – facsimile 

dschultz@hinshawlaw.com 

jweller@hinshawlaw.com 

Jennifer W. Weller 

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