Court Opinion

ID: 4441658
Source: CourtListenerOpinion
Date Created: 2019-09-26 07:00:21.874176+00
Date Added: 2024-06-11T14:59:22.179733
License: Public Domain

In the

    United States Court of Appeals
                 For the Seventh Circuit
                     ____________________
No. 19-1088
PATRICIA ANN KOEHN,
                                                Plaintiff-Appellant,
                                 v.

DELTA OUTSOURCE GROUP, INC., et al.,
                                             Defendants-Appellees.
                     ____________________

          Appeal from the United States District Court for the
                     Eastern District of Wisconsin.
     No. 1:18-cv-01084-WCG — William C. Griesbach, Chief Judge.
                     ____________________

     ARGUED JULY 9, 2019 — DECIDED SEPTEMBER 25, 2019
                  ____________________

   Before KANNE, HAMILTON, and SCUDDER, Circuit Judges.
    HAMILTON, Circuit Judge. Plaintiff Patricia Ann Koehn
brought this suit against a collection agency, alleging that its
collection letter was misleading and violated the Fair Debt
Collection Practices Act, 15 U.S.C. § 1692 et seq. The district
court granted the collection agency’s motion to dismiss for
failure to state a claim, concluding that no significant fraction
of the population would be misled by the letter. We agree and
affirm.
2                                                     No. 19-1088

    The letter to Koehn was from defendant Delta Outsource
Group, Inc. The letter said that the “current balance” of
Koehn’s debt was $2,034.03. Koehn contends the letter was
misleading because (a) the phrase “current balance” implied
that her balance could grow, even though (b) her account was
actually “static,” meaning that additional interest and fees
could no longer be added to the balance. She contends the
phrase “current balance” thus violated 15 U.S.C.
§ 1692g(a)(1), which requires a debt collector to state “the
amount of the debt,” and § 1692e, which prohibits more gen-
erally “any false, deceptive, or misleading representation or
means in connection with the collection of any debt.” By
falsely implying that the “current balance” might increase,
she contends, the debt collector’s choice of wording will mis-
lead debtors to give such static debts greater priority than
they otherwise would.
     Delta moved to dismiss Koehn’s complaint under Federal
Rule of Civil Procedure 12(b)(6) for failure to state a claim.
Delta argued that it is apparent from the face of the letter that
no significant fraction of the population would be misled by
it. See Zemeckis v. Global Credit & Collection Corp., 679 F.3d 632,
636 (7th Cir. 2012), quoting Taylor v. Cavalry Investment, L.L.C.,
365 F.3d 572, 574 (7th Cir. 2004) (applying “significant frac-
tion” standard). In response, Koehn relied on Chuway v. Na-
tional Action Financial Services, Inc. 362 F.3d 944 (7th Cir. 2004),
to argue that “current balance” (as opposed to “balance”) can
mislead debtors. Chief Judge Griesbach correctly read Chu-
way more narrowly than Koehn does, and he granted the mo-
tion to dismiss.
   To state a legally viable claim, Koehn needed to allege
plausibly that Delta’s use of the “current balance” phrase
No. 19-1088                                                       3

“would materially mislead or confuse an unsophisticated
consumer.” Boucher v. Finance System of Green Bay, Inc., 880
F.3d 362, 366 (7th Cir. 2018). An unsophisticated consumer is
“uninformed, naïve, or trusting,” Veach v. Sheeks, 316 F.3d 690,
693 (7th Cir. 2003), but nonetheless possesses “reasonable in-
telligence,” basic knowledge about the financial world, and
“is wise enough to read collection notices with added care.”
Gruber v. Creditors' Protection Service, Inc., 742 F.3d 271, 273
(7th Cir. 2014) (quotations omitted).
    Whether a dunning letter will mislead or confuse is often
a question of fact that cannot be resolved on a motion to dis-
miss. Zemeckis, 679 F.3d at 636. In addition, the federal judges
who must decide such motions are not necessarily good prox-
ies for the “unsophisticated consumers” protected by the
FDCPA. See, e.g., McMahon v. LVNV Funding, LLC, 744 F.3d
1010, 1020 (7th Cir. 2014); Johnson v. Revenue Management
Corp., 169 F.3d 1057, 1060 (7th Cir. 1999). Still, if it is apparent
that “not even a significant fraction of the population would
be misled” by a collection letter, then the complaint can and
should be dismissed. Zemeckis, 679 F.3d at 636. We do not see
anything inherently misleading in the phrase “current bal-
ance.”
    The district court read Chuway correctly as not extending
to this case. The dunning letter in Chuway said that the
debtor’s “balance” was a specified amount. It went on to re-
quest payment but added: “To obtain your most current bal-
ance information, please call” a toll-free telephone number.
362 F.3d at 947. We said that if the letter had stopped after the
request for payment, “the defendant would be in the clear.”
Id. That hypothetical assurance applies to this case. But the
further instruction in Chuway to call to “obtain your most
4                                                  No. 19-1088

current balance information” caused the problem. That in-
struction implied to the debtor that the amount he owed
might actually be different from the “current balance” set
forth in the dunning letter. The letter implied that the only
way the debtor could obtain the current balance was to call
the debt collector (although in fact the printed balance was
not subject to change). That was a reasonable interpretation of
the letter, which was sufficient to meet plaintiff’s burden of
proof of a violation of the statute. Id. at 947–48 (noting also
that “the entire bench was confused about the meaning of the
letter until the defendant’s lawyer explained it to us at oral
argument”).
   Chuway thus did not reach as far as the common and in-
nocuous language plaintiff challenges here. And in Barnes v.
Advanced Call Center Technologies, LLC, 493 F.3d 838 (7th Cir.
2007), we affirmed summary judgment for a debt collector
who used the phrase “Current Amount Due” on the “tearoff”
section of the collection letter. “Absent some particularly am-
biguous language in the rest of the letter, we cannot see how
an unsophisticated consumer would interpret the tearoff to
indicate that anything other than the ‘Current Amount Due’
was ‘the amount of the debt.’” Id. at 841.
    Delta’s letter challenged here contains no directive to call
for a “current balance,” nor does it include any language im-
plying that “current balance” means anything other than the
balance owed. We have cautioned before: “The Act is not vi-
olated by a dunning letter that is susceptible of an ingenious
misreading, for then every dunning letter would violate it.”
White v. Goodman, 200 F.3d 1016, 1020 (7th Cir. 2000), quoted
in Chuway, 362 F.3d at 948. It takes an ingenious misreading
of this letter to find it misleading. And that same ingenuity
No. 19-1088                                                    5

would call into question the even simpler phrase that “the bal-
ance is $____.” After all, the simple present-tense verb “is”
also implies “current,” doesn’t it?
    Dunning letters can comply with the Fair Debt Collection
Practices Act without answering all possible questions about
the future. A lawyer’s ability to identify a question that a dun-
ning letter does not expressly answer (“Is it possible the bal-
ance might increase?”) does not show the letter is misleading,
even if a speculative guess to answer the question might be
wrong.
   The judgment of the district court is
                                                   AFFIRMED.