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Trichell v. Midland Credit Management, Inc.

United States District Court, N.D. Alabama, Middle Division

August 31, 2018

JOHN TRICHELL, Plaintiff,
v.
MIDLAND CREDIT MANAGEMENT, INC., et al., Defendants.

          MEMORANDUM OPINION

          ANNEMARIE CARNEY AXON, UNITED STATES DISTRICT JUDGE.

         This matter comes before the court on Defendants' motion to dismiss the complaint. (Doc. 13).

         Plaintiff John Trichell filed this putative class action suit on behalf of himself and others similarly situated, naming as defendants two debt collectors: Midland Credit Management, Inc. and its sister company Midland Funding, LLC. (Doc. 1). Mr. Trichell alleges that Defendants violated the Fair Debt Collection Practices Act (FDCPA) by deceptive or misleading debt collection letters seeking repayment of legally unenforceable debts.

         Defendants move to dismiss the complaint for failure to state a claim. The court WILL GRANT the motion because a “least sophisticated consumer” would not find the letters deceptive or misleading.

         I. BACKGROUND

         At this stage, the court must accept as true the factual allegations in the complaint and construe them in the light most favorable to the plaintiff. Butler v. Sheriff of Palm Beach Cty., 685 F.3d 1261, 1265 (11th Cir. 2012). The court may also consider exhibits attached to the complaint. Hoefling v. City of Miami, 811 F.3d 1271, 1277 (11th Cir. 2016). Mr. Trichell attaches three collection letters that Midland Credit Management sent to him; as a result, the court's description of the facts incorporates the content of those letters.

         Midland Funding is a company that buys defaulted consumer debts, which it collects through other collection agencies, such as Midland Credit Management. (Doc. 1 at 2). Mr. Trichell alleges that “[m]ore than 7 years” before he filed this complaint, he “allegedly” defaulted on an unspecified amount of credit card debt. (Id. at 3; Doc. 1-2). Consistent with its business model, Midland Funding acquired Mr. Trichell's defaulted debt and in 2017, it had Midland Credit Management send him three collection letters stating that he had a balance due of $42, 859.55. (Doc. 1 at 3). But, under Alabama law, by the time Midland Credit Management sent those letters, the debt was legally unenforceable because the statute of limitations barred any lawsuit to recover the defaulted debt. (Id. at 3-4); Ala. Code § 6-2-34(5).

         Although Midland Credit Management sent the letters and requests payment to itself, the letters list Midland Funding as the owner of the debt. (Doc. 1-2). Each letter contains statements like the following: “Congratulations! You have been pre-approved for a discount program designed to save you money. Act now to maximize your savings and put this debt behind you . . . .” (Doc. 1-2 (emphasis in original)). The letters also list, as a “Benefit of Paying, ” savings of over $30, 000. (Id.). The letters offer three payment plains: (1) a single lump-sum payment plan for “70% OFF”; (2) a twelve-month payment plan for “50% OFF”; or (3) a monthly payment plan for “As Low As . . . $50 per month.” (Id.). The first two options each list a “Payment Due Date” of about a month after the date of each letter. (Id.).

         The final paragraph of each collection letter states: “The law limits how long you can be sued on a debt and how long a debt can appear on your credit report. Due to the age of this debt, we will not sue you for it or report payment or nonpayment of it to a credit bureau.” (Id.). The court will refer to this paragraph as the “disclaimer language.”

         The court pauses here to take judicial notice of some facts relating to the disclaimer language. See Fed. R. Evid. 201; U.S. ex rel. Osheroff v. Humana Inc., 776 F.3d 805, 811 (11th Cir. 2015). In 2015, Defendants and several other debt collectors entered a consent decree with the Consumer Financial Protection Bureau. See In re Encore Capital Grp., Inc., no. 2015-CFPB-22, available at https://www.consumerfinance.gov/policy-compliance/enforcement/actions/encore (last visited Aug. 29, 2018). The consent decree provides:

[F]or those Consumer accounts where the Debt is Time-Barred . . . [the debt collector] will include the following statement: “The law limits how long you can be sued on a debt and how long a debt can appear on your credit report. Due to the age of this debt, we will not sue you for it or report payment or non-payment of it to a credit bureau.”

Id., available at http://files.consumerfinance.gov/f/201509cfpbconsent-order-encore-capital-group.pdf, at 38-39 (last visited Aug. 29, 2018). The Federal Trade Commission has also entered a consent decree with a different debt collector, requiring similar language. See United States v. Asset Acceptance, LLC, no. 8:12-cv-182, Doc. 5, at 13 (M.D. Fla. Jan. 31, 2012).

         Mr. Trichell, on behalf of himself individually and “all persons similarly situated in the State of Alabama, ” asserts that Defendants' actions (1) violated 15 U.S.C. § 1692e by attempting to collect time-barred debts using deceptive and misleading collection letters (Count One); and (2) violated 15 U.S.C. § 1692f by using unfair or unconscionable means to collect or attempt to collect a debt (Count Two). (Doc. 1 at 5-6).

         II. ...


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