Opinion ID: 72013
Heading Depth: 2
Heading Rank: 2

Heading: Dismissal of the complaint for failure to state a cause of action.

Text: 9 We review the dismissal of a complaint for failure to state a claim de novo, accepting all allegations in the complaint as true and construing facts in a light most favorable to the plaintiff. Harper v. Thomas, 988 F.2d 101, 103 (11th Cir.1993). A complaint may not be so dismissed unless it appears beyond doubt that the plaintiff can prove no set of facts in support of his claim which would entitle him to relief. Pataula Elec. Membership Corp. v. Whitworth, 951 F.2d 1238, 1240 (11th Cir.) (quoting Conley v. Gibson, 355 U.S. 41, 45-46, 78 S.Ct. 99, 102, 2 L.Ed.2d 80 (1957)), cert. denied, 506 U.S. 907, 113 S.Ct. 302, 121 L.Ed.2d 225 (1992). 10 The district court found that because the alleged obligations did not arise from an extension or offer of credit, Brown failed to plead the essential element of a debt. Thus, this appeal presents the issue of whether Brown met the threshold requirement that the prohibited practices alleged were used in an attempt to collect a debt as defined by the Fair Debt Collection Practices Act (FDCPA). 11 The purpose of the FDCPA is to to eliminate abusive debt collection practices by debt collectors, to insure that those debt collectors who refrain from using abusive debt collection practices are not competitively disadvantaged, and to promote consistent State action to protect consumers against debt collection abuses. 15 U.S.C. § 1692(e) (1997). 12 The statute defines debt as any obligation or alleged obligation of a consumer to pay money arising out of a transaction in which the money, property, insurance, or services which are the subject of the transaction are primarily for personal, family, or household purposes, whether or not such obligation has been reduced to judgment. 15 U.S.C. § 1692a(5). A creditor is any person who offers or extends credit creating a debt or to whom a debt is owed. 15 U.S.C. § 1692a(4). 13 Appellant Brown asserts that Appellees engaged in a prohibited practice under the FDCPA by attempting to enforce an illegitimate debt. Appellees argue that the nature of the debt in this case does not fall within the definition contemplated by the Act. According to Appellees, this case does not present the type of deferred payment contemplated by the Act. In so arguing, Appellees contend that the Act's definition of creditor requires an extension of credit. 14 Does a debt require the extension of credit? We start with the plain language of the statute. See Holly Farms Corp. v. NLRB, --- U.S. ----, ----, 116 S.Ct. 1396, 1401, 134 L.Ed.2d 593 (1996). The only relevant reference to an extension of credit in the Act is in the definition of creditor. The Act defines creditor in the disjunctive. As a general rule, the use of a disjunctive in a statute indicates alternatives and requires that those alternatives be treated separately. Hence, language in a clause following a disjunctive is considered inapplicable to the subject matter of the preceding clause. Quindlen v. Prudential Ins. Co. of America, 482 F.2d 876, 878 (5th Cir.1973). 15 The Seventh Circuit recently provided a thorough analysis of the definition of debt as used in the FDCPA. In Bass v. Stolper, Koritzinsky, Brewster & Neider, S.C., 111 F.3d 1322 (7th Cir.1997), the parties disputed whether a dishonored check created debt that would invoke the protections of the FDCPA. The Bass court found that the payment obligation which arose from a dishonored check constitutes a debt as defined in the Act. Id. at 1325. The court commented on the broad definition of debt in the Act and reasoned that [a]s long as the transaction creates an obligation to pay, a debt is created. Id. We agree with that reading of the statute. Extension of credit is not a prerequisite to the existence of a debt covered by the FDCPA. Budget's assertion that Brown is obligated as a result of a consumer transaction suffices to bring the obligation within the ambit of the FDCPA. 1 See 15 U.S.C. § 1692a(5). 16 Although the unambiguous language of the statute renders consideration of extrinsic sources unnecessary, see Holly Farms, --- U.S. at ----, 116 S.Ct. at 1401, we note that the legislative history confirms our reading of the statute. Congress considered and rejected Appellees' understanding of the statute. Early drafts of the FDCPA restricted the term debt to any obligation arising out of a transaction in which credit is offered or extended to an individual, and the money, property, or services which are the subject of the transaction are primarily for personal, family, or household purposes. H.R. 13720, 94th Cong., 2d Sess. (1976). Congress deleted the credit extension requirement, however, and never reinserted the restriction. See Bass, 111 F.3d at 1327. We conclude that Congress did not intend to include a credit extension requirement. See Heintz v. Jenkins, 514 U.S. 291, 294-96, 115 S.Ct. 1489, 1491, 131 L.Ed.2d 395 (1995). 17 Because the Act requires no extension of credit, it does not appear beyond doubt that Brown can prove no facts in support of his claim that would entitle him to relief. See Pataula Elec. Membership Corp. v. Whitworth, 951 F.2d 1238, 1240 (11th Cir.) (quoting Conley v. Gibson, 355 U.S. 41, 45-46, 78 S.Ct. 99, 102, 2 L.Ed.2d 80 (1957)), cert. denied, 506 U.S. 907, 113 S.Ct. 302, 121 L.Ed.2d 225 (1992). The district court did not have the benefit of the Bass court's analysis. We remand the case for further proceedings. 18 REVERSED and REMANDED for proceedings consistent with this opinion.