IN THE UNITED STATES DISTRICT COURT 

FOR THE NORTHERN DISTRICT OF ILLINOIS 

EASTERN DIVISION 

SHELDON G. FREY, on behalf of 

himself and the class defined herein, 

Plaintiff, 

v. 

) 

) 

) 

) 

) 

) 

) 

L VNV FUNDING LLC, ) 

RESURGENT CAPITAL SERVICES LP, ) 

and ALEGIS GROUP LLC, ) 

Defendants. 

) 

) 

Case No. 12-ov-3066 

MEMORANDUM OF LAW 

IN SUPPORT OF DEFENDANTS' MOTION TO DISMISS 

I. INTRODUCTION 

Plaintiff Theresa Stumpf filed a two count class action complaint (the "Complaint") 

against Defendants PYOD, LLC ("PYOD") and Weltman, Weinberg & Reis Co., LPA 

("WWR") (collectively "Defendants") alleging that Defendants sent dunning letters and sued on 

time-barred debts (I) in violation of the Fair Debt Collection Practices Act, 15 U.S.c. §1692 el 

seq. ("FDCPA") and (2) in violation of the Illinois Consumer Fraud and Deceptive Business 

Practices Act, 815 ILCS 50512, el seq. ("ICFA"). Plaintiff's Complaint contains almost no facts 

regarding her underlying debt. Plaintiff fails to include such basic facts as the specific nature of 

her debt, when she went into default, whether she made payments after going into default, when 

Defendants sent her dunning letters, and what was contained in any such dunning letters. 

Plaintiff's FDCPA claim fails as pled because the FDCPA does not prohibit sending 

dUlU1ing letters on time-barred debts. Plaintiff's ICFA claim fails because Plaintiff does not 

allege she was deceived by Defendants' conduct. Moreover, Plaintiff fails to state particularized 

facts to support either her FDCPA or ICF A claim and neither rises above the speCUlative level. 

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Therefore, the Court should dismiss Plaintiffs Complaint pursuant to Fed. R. Civ. P. 12(b)(6) for 

failure to state a claim upon which relief can be granted. 

II. PLAINTIFF'S ALLEGATIONS 

Plaintitrs class action complaint contains scant allegations regarding the facts underlying 

her individual claims against Defendants. Plaintiff alleges that on or about March 6, 2012, 

WWR filed suit in the Circuit Court of Cook County to collect a debt Plaintiff owed PYOD 

related to an auto retail installment contract or lease debt ("Collection Action"). (Compl. ~ 17.) 

According to the Complaint, after Plaintiff filed a motion to dismiss, the state court entered an 

agreed order dismissing the Collection Action. (Compl. 11 18-21.) Plaintiff alleges, without 

providing any additional facts regarding her underlying debt, that she went into default more 

than 4 years prior to Defendants filing the Collection Action. (Compi. 1 22.) Plaintiff does not 

state specifically when or why she why she ceased making payments on her debt. Further, 

Plaintiff does not state whether she ever came out of default and does not state if and when she 

made any subsequent payments on her debt. Instead, Plaintiff makes the concJusory allegation 

that Defendants regularly demand payment on, threaten litigation, and file debt collection suits 

barred by the statute oflimitations. (Compi. 1 30.) 

Plaintiff brings two claims on the basis of these limited factual allegations: (I) she alleges 

Defendants violated the FDCPA "by dunning and suing consumers on time-barred debts without 

disclosure of that fact" (Compi. 1 34), and; (2) she alleges PYOD violated the ICFA "by dunning 

and threatening and filing suits on time-barred debts." (Compl. 47.) 

III. ARGUMENT 

A. Legal Standard. 

In deciding a motion to dismiss under Rule 12(b)(6), the Court assumes all well-pleaded 

allegations in the complaint to be true and draws all inferences in the light most favorable to the 

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plaintiff. Killingsworth v. HSBC Bank, 507 F.3d 614,618 (7th Cir. 2007) (citing Bell Atl. Corp. 

v. Twombly, 550 U.S. 544 (2007». To survive a motion to dismiss, the complaint must 

overcome two hurdles: (I) "the complaint must describe the claim in sufficient detail to give the 

defendant fair notice of what the claim is and the grounds on which it rests;" and (2) "its 

allegations must plausibly suggest that the plaintiff has a right to relief, by providing allegations 

that raise a right to relief above the 'speculative level.'" Tamayo v. Blagojevich, 526 F.3d 1074, 

1084 (7th Cir. 2008). Dismissal is warranted under Rule 12(b)(6) where the complaint lacks a 

cognizable legal theory. or where it presents a cognizable legal theory yet fails to plead essential 

facts to support that theory. Neitzke v. Williams, 490 U.S. 319, 326 (1989). "[T]he fact that the 

allegations undergirding a plaintiffs claim could be true is no longer enough to save it." Atkins 

v. CilyojChi., 631 F.3d 823, 831 (7th Cir. 2011). 

In relation to claims under the FDCPA, the Seventh Circuit evaluates communications 

from debt collectors "through the eyes of the unsophisticated consumer." .lang v. A.M Miller & 

Assocs. , 122 F.3d 480, 483-84 (7th Cir. 1997); see also Avila v. Rubin, 84 F.3d 222, 226 (7th 

Cir. 1996). The "unsophisticated consumer" is a hypothetical consumer whose reasonable 

perceptions are used to assess debt collection activities. See Gammon v. GC Servs. Ltd. P'ship. 

27 F.3d 1254, 1257 (7th Cir. 1994). This standard "protects the consumer who is uninformed, 

naive, or trusting." Jang, 122 F.3d at 483- 84 (citing Gammon, 27 F.3d at 1257). At the same 

time, the standard "admits an objective element of reasonableness," which "protects debt 

collectors from liability for unrealistic or peculiar interpretations." Id. 

B. Plaintiff Fails To State A Claim Under The FDCPA Because The Statute Of 

Limitations For Filing A Debt Collection Action Does Not Prohibit A Debt 

Collector From Sending Collection Letters 

Plaintiff's FDCPA claim fails because the statute oflimitations to collect a debt does not 

prevent a debt collector from sending letters. When attempting to collect a debt, "the statute of 

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limitations bars a specific remedy; it does not extinguish the indebtedness." Walker v. Cash 

Flow Consultants, Inc., 200 F.R.D. 613, 616 (N.D. Ill. 2001). A debt collector can send 

communications regarding a debt that is time-barred so long as those communications are not 

false, deceptive, or misleading. Jd. An FDCPA claim is subject to dismissal as a matter of law if 

there is nothing deceptive-seeming about the communication in question. Evory v. RJM 

Acquisitions Funding L.L.c. , 505 F.3d 769, 776 -777 (7th Cir. 2007). 

Here, Plaintiff's FDCPA claim alleges Defendants committed FDCPA violations "by 

dunning and suing consumers on time-barred debts without disclosure of that fact." (Compl.1 

34.) Plaintiff's claim cannot survive as alleged because sending dunning letters associated with 

time-barred debts does not constitute a per se FDCPA violation. Plaintiff's Complaint does not 

include the contents of the dunning letter or letters that she alleges violate the FDCPA. Plaintiff 

cites non-binding language from the Federal Trade Commission ("FTC") to support her 

allegation that communications related to time-barred debts violate the FDCPA. (Compl. 32.) 

(citing the FTC website, which states that "[w]hen a collector tells a consumer that she owes 

money and demands payment, it may create the misleading impression that the collector can sue 

the consumer in court to collect that debt.") However, the FTC's website makes clear that as a 

general matter "collectors are allowed to contact you about time-barred debts." Time-barred 

Debts, FTC Consumer Alert, at http://www.ftc.govlbcp/eduJpubs/consumer/alertsialtI44.shtm. 

Without additional facts regarding the content of the alleged dunning letters Plaintiffreceived, 

her FDCPA claim on that basis fails to rise above the speculative level. Atkins, 631 F.3d at 831. 

Thus, the Court should dismiss Plaintiffs FDCPA claim. 

C. Plaintiff Fails To Allege Defendants Filed A Debt Collection Action More 

Than Four Years After The Cause of Action Accrued 

Plaintiff has not stated facts sufficient to support an FDCPA claim because she has not 

alleged Defendants filed the Collection Action more than four years after the cause of action 

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accrued. Under 810 ILCS 5/2-725, "[aJn action for breach of any contract for sale must be 

commenced within 4 years after the cause of action has accrued." Similarly, under 810 ILCS 

512A-50 I, "[a 1n action for default under a lease contract, including breach of warranty or 

indemnity, must be commenced within 4 years after the cause of action accrued." A cause of 

action for default "accrues when the act or omission on which the default or breach of warranty 

is based is or should have been discovered by the aggrieved party, or when the default occurs, 

whichever is later." 810 ILCS 5/2A-506(2). 

Here, Plaintiff has not alleged sufficient facts to establish when an action to collect her 

debt accrued. Plaintiff does not allege when she first ceased making payments. Plaintiff does 

not state any facts regarding terms of her underlying retail installment sale or lease contract; in 

particular, Plaintiff fails to allege what triggers default under the contract. Accordingly, 

Plaintiff's Complaint provides no way to assess when the cause of action for her default accrued. 

Absent more specific facts, Plaintiffs allegation that the Collection Action was time-barred is 

conclusory and fails to rise above the speculative level. 

D. Plaintiff Fails To State Claim Under Tbe ICFA Because Sbe Does Not Allege 

She Was Deceived Bv PYOD 

Plaintiffs ICFA claim fails because she does not allege she was actually misled or 

deceived by PYOD. To state a cause of action under the ICFA, a plaintiff must allege: "(1) a 

deceptive act or unfair practice occurred; (2) the defendant intended for plaintiff to rely on the 

deception; (3) the deception occurred in the course of conduct involving trade or commerce; (4) 

the plaintiff sustained actual damages; and (5) such damages were proximately caused by the 

defendant's deception." Avery v. State Farm Mut. Auto. Ins. Co., 835 N.E.2d 801 (III. 2005); 

Wooley v. Jackson Hewitt, Inc. , 540 F. Supp. 2d 964, 970 (N. D. III. 2008); Dubey v. Pub. 

Storage, Inc., 918 N.E.2d 265, 277 (III. App. Ct. 2009). In order to plead proximate causation, 

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"a plaintiff must allege that he was, in some manner, deceived." Kitzes v. Home Depot, U.S.A., 

1nc., 374 Ill. App. 3d 1053, 1062,872 N.E.2d 53, 61 , (1st Dist. 2007). 

Here, Plaintiff does not allege she was in any way deceived by the filing of the Collection 

Action. In fact, Plaintiff alleges that through counsel she moved to have the Collection Action 

dismissed as untimely shortly after it was filed. (Com pI.,. 19.) Plaintiff further acknowledges 

that Defendants' agreed to dismissal of the Collection Action. (Compl. ~ 21.) These actions 

belie any potential claim that plaintiff was deceived. 

Plaintiffs ICFA claim also fails to meet the heightened pleading requirements for fraud. 

To state a claim under the ICF A, a plaintiff '''must state with particularity and specificity the 

deceptive [unfair] manner of defendant's acts or practices, and the failure to make such 

averments requires the dismissal of the complaint.'" Pantoja-Cahue v. Ford Motor Credit Co., 

375 Ill. App. 3d 49, 60, 872 N.E.2d 1039, 1048-1049 (Ill. App. 1st Dist. 2007). Plaintiff does 

not provide any allegations whatsoever regarding the content of the dunning letters she allegedly 

received and underlie her ICFA claim. Plaintiffs fraud claim cannot survive based solely on 

these threadbare and conclusory allegations of deceptive or unfair practices. Therefore, the 

Court should dismiss Plaintiffs ICFA claim. 

IV. CONCLUSION 

For the foregoing reasons, Plaintiff has failed to state a claim against Defendants under 

either the FDCPA or the ICF A. Therefore, Defendants respectfully request the Court dismiss the 

Complaint and grant such other relief the Court deems just and proper. 

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Date: August 8, 2012 

Gary S. Caplan (Atty. # 6 198263) 

David A. Maas (Atty. # 6306482) 

REED SMITH LLP 

lO South Wacker Drive 

Chicago, Illinois 60606 

Telephone: (312) 207-1000 

Fax: (312)207-6400 

Respectfully submitted, 

PYOD, LLC, and WELTMAN, WEINBERG & 

REIS CO., LPA 

By: sI Gary S. Caplan 

One of Their Attorneys 

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CERTIFICATE OF SERVICE 

I, Gary S. Caplan, hereby certify that on August 8, 2012 I caused to be filed electronically the 

attached MEMORANDUM OF LAW IN SUPPORT OF DEFENDANTS' MOTION TO 

DISMIS using the Court's CMlECF system, which automatically will send notice to those parties 

who have appeared and are so registered. 

Gary S. Caplan (Atty. # 6198263) 

Max A. Stein (Atty. # 6275993) 

David A. Maas (Atty. # 6306482) 

REED SMITH LLP 

10 South Wacker Drive 

Chicago, Illinois 60606 

Telephone: (312) 207-1000 

Fax: (312) 207-6400 

By: sf Gary S. Caplan 

One of Its Attorneys 

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