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Cooper v. Atlantic Credit & Finance Inc.

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

May 10, 2019

ERICA COOPER, Plaintiff,
ATLANTIC CREDIT & FINANCE INC., et al., Defendants.



         Plaintiff Erica Cooper (“Cooper”) brings this action pursuant to the Fair Debt Collection Practices Act (“FDCPA”), 15 U.S.C. § 1692, et seq., asserting that Defendants Atlantic Credit & Finance, Inc. (“Atlantic”) and Midland Funding, LLC (“Midland”) (collectively, “Defendants”) violated 15 U.S.C. §§ 1692g(b) and 1692f, when Defendants sent a “Second Letter” that improperly “overshadowed” and/or “contradicted” the statutorily-required validation notice contained in the “First Letter” and constituted the use of unfair and unconscionable means to collect a debt. (Doc. 1). Defendants move to dismiss both claims pursuant to Federal Rule of Civil Procedure 12(b)(6) for failure to state a claim.[2] (Doc. 11 at 1). Plaintiff explains her opposition to dismissal in a response brief (doc. 17), and Defendants have filed a reply brief in support of their motion to dismiss (doc. 18). The motion to dismiss is therefore ripe for review. For the reasons explained below, the motion to dismiss (doc. 11) is GRANTED.

         I. Background

         In October 2017, Defendants sent Cooper two letters as part of their efforts to collect a debt (or “Account”) Cooper owed on a credit card issued by Synchrony Bank, which she used to pay for dental services. (Doc. 1 at ¶¶ 8-9). The “First Letter, ” dated October 3, 2017, contained a “validation notice” that is required to be included with a debt collector's “initial communication” with a consumer. (Id. at ¶ 8; doc. 1-2). The validation notice advised Cooper of her statutory rights under 15 U.S.C. § 1692g(a), including her right to dispute the debt in writing within thirty days, which - if exercised - would require Defendants to suspend their collection efforts pending a response to her request for verification of the debt. (See doc. 1-2). The First Letter contained other basic elements, including informing Cooper that Midland had purchased or been assigned her Account and that her Account had been placed with Atlantic for collection. (Doc. 1-2). The First Letter further informed Cooper that she was obligated to pay the defaulted Account balance of $ 1, 140.99, and directed her how to contact someone to discuss the debt. (Id.).

         Before the expiration of the thirty-day validation period, Defendants sent Cooper a “Second Letter, ” dated October 13, 2017. (Doc. 1 at ¶ 9; doc. 1-3). The Second Letter states that its purpose was to inform Cooper that Midland was considering “forwarding [her] account to an attorney in [her] state for possible litigation.” (Doc. 1-3). The Second Letter urged Cooper to call to discuss her options and presented two payment options “to resolve the . . . account[, ]” specifically: (1) a one-time reduced repayment due 10/31/2017; and (2) biweekly payments as low as $ 25.00 until the balance was paid in full. (Id.). The Second Letter then stated: “These payment opportunities do not alter or amend your validation rights as described in the previous letter to you.” (Id.). These letters are attached to the complaint as Exhibit B (doc. 1-2) and Exhibit C (doc. 1-3).

         II. Standard of Review

         Under Federal Rule of Civil Procedure 8(a)(2), a pleading must contain “a short and plain statement of the claim showing the pleader is entitled to relief. “[T]he pleading standard Rule 8 announces does not require 'detailed factual allegations,' but it demands more than an unadorned, the-defendant-unlawfully-harmed-me accusation.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (citing Bell Atlantic v. Twombly, 550 U.S. 544, 555 (2007)). Mere Alabels and conclusions' or A a formulaic recitation of the elements of a cause of action” are insufficient. Iqbal, 556 U.S. at 678. (citations and internal quotation marks omitted). “Nor does a complaint suffice if it tenders 'naked assertion[s]' devoid of 'further factual enhancement.” Id. (citing Bell Atl. Corp., 550 U.S. at 557).

         Rule 12(b)(6), Fed. R. Civ. P., permits dismissal when a complaint fails to state a claim upon which relief can be granted. “To survive a motion to dismiss, a complaint must contain sufficient factual matter, accepted as true, to state a claim to relief that is plausible on its face.” Iqbal, 556 U.S. at 678 (citations and internal quotation marks omitted). A complaint states a facially plausible claim for relief “when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.” Id. (citation omitted). The complaint must establish “more than a sheer possibility that a defendant has acted unlawfully.” Id.; see also Bell Atl. Corp., 550 U.S. at 555 (“Factual allegations must be enough to raise a right to relief above the speculative level.”). Ultimately, this inquiry is a “context-specific task that requires the reviewing court to draw on its judicial experience and common sense.” Iqbal, 556 U.S. at 679.

         Because Cooper attached the First Letter and the Second Letter as exhibits to her complaint (docs. 1-2 & 1-3), the Court may consider both letters in determining whether she has stated a plausible claim for relief. See Moore v. Nottee & Kreyling, P.C., No. 1:17-cv-1148, 2017 WL 8217642, at *1 (N.D.Ga. Oct. 12, 2017) (citing Brooks v. Blue Cross & Blue Shield of Fla., Inc., 116 F.3d 1364, 1368 (11th Cir. 1997)). Furthermore, “[w]hen exhibits contradict allegations, the exhibits control.” Boler v. Bank of Am., N.A., No. 2:17-cv-0303-JEO, 2017 WL 6555343, at *5 (N.D. Ala. Dec. 22, 2017).

         III. Analysis

         A. Section 1692g(b) - May Not Overshadow or Be Inconsistent with Validation Notice

         Defendants argue that Cooper fails to state a claim under § 1692g(b) because nothing in the Second Letter “overshadows” or “contradicts” the notice of validation rights contained in the First Letter. (Doc. 11 at 4-11; doc. 18 at 2-9). Section 1692g(a) of the FDCPA requires a debt collector to send the consumer an effective validation notice either in its initial communication with the consumer or within five days after that initial communication. This “validation notice, ” which Defendants included in their First Letter, must inform the consumer that she has thirty days after receipt to challenge the validity or amount of the debt and seek verification of the debt. 15 U.S.C. § 1692g(a). After the thirty-day validation period expires, the debt collector may assume the debt is valid. 15 U.S.C. §1692g(a)(3). If the consumer exercises her right to dispute the debt within the thirty-day period, the debt collector must suspend its collection efforts pending a response to her request. 15 U.S.C. § 1692g(b). If the consumer does not challenge the validity of the debt during this time (or before she challenges it), collection activities and communications that do not otherwise violate the FDCPA may continue. Id.

         In cases such as here, where the consumer had not exercised her validation rights, the validation period does not operate as a grace period. See Durkin v. Equifax Check Servs., Inc., 406 F.3d 410, 416 (7th Cir. 2005). Because the debtor's right to dispute the debt coexists with the debt collector's right to collect, the FDCPA attempts to strike a balance by enumerating certain limitations on a debt collector's activities and communications during the validation period. See Durkin, 406 F.3d at 416. One of these limitations is that such activities and communications “may not overshadow or be inconsistent with the disclosure of the consumer's rights to dispute the debt or request the name and address of the original creditor.” 15 U.S.C. § 1692g(b). The court evaluates whether overshadowing or contradiction occurred under the “least sophisticated consumer” standard and looks at whether the debt collector's language and tactics are being employed to mislead the least sophisticated recipients of its debt collection letters. See Leblanc v. Unifund CCR Partners, 601 F.3d 1185, 1193-94 (11th Cir. 2010).

         Cooper alleges that Defendants' Second Letter violated this section of the FDCPA by demanding payment/action before the end of the thirty-day validation period and by threatening litigation. (Doc. 1 at ¶¶ 13-16). Defendants contend these allegations are belied by the language of the Second Letter. (Doc. 11 at 2-3). To determine whether anything in the Second Letter “overshadowed” or “contradicted” the ...

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