Katiuska Bravo v. Midland Credit Management, Inc

In the United States Court of Appeals For the Seventh Circuit ____________________ No. 15-1231 KATIUSKA BRAVO, Plaintiff-Appellant, v. MIDLAND CREDIT MANAGEMENT, INC. AND MIDLAND FUNDING, LLC, Defendants-Appellees. ____________________ Appeal from the United States District Court for the Northern District of Illinois, Eastern Division. No. 14 C 4510 — Gary Feinerman, Judge. ____________________ ARGUED DECEMBER 2, 2015 — DECIDED DATE FEBRUARY 8, 2016 ____________________ Before KANNE, SYKES, Circuit Judges, and GILBERT, District Judge *. GILBERT, District Judge. Katiuska Bravo first sued Midland Credit Management, Inc. and Midland Funding, LLC (to- gether, “Midland”) in 2014 over its efforts to collect several * Of the Southern District of Illinois, sitting by designation. 2 No. 15-1231 debts from her. The case settled. After settlement, Midland sent Bravo’s attorney two letters requesting payment of the debts that were resolved in the settlement. Bravo then filed this action alleging that the letters violate the Fair Debt Col- lection Practices Act (“FDCPA”), 15 U.S.C. § 1692 et seq. The district court dismissed the complaint for failure to state a claim, and we affirm. I. BACKGROUND. Bravo sued Midland for violations of the FDCPA in Janu- ary 2014 and that matter settled in March 2014. Midland agreed to forgive two of Bravo’s debts (GE/Lowe’s and Citi- bank/Sears) as part of the settlement agreement. David J. Philipps, an attorney who specializes in consumer litigation, represented Bravo in the initial suit and in the case at bar. In May 2014, Midland sent two letters addressed as fol- lows: Kaliuska Bravo C/O David J. Philipps 9760 S. Roberts Rd Ste 1 Palos Hills, IL 60465-1686 The letters were received at Philipps’ business office and were basically identical. One letter requested the payment of the GE/Lowe’s account and the other letter requested the pay- ment of the Citibank/Sears account. Philipps did not forward the correspondence to his client, but opened and reviewed the content of the letters. Bravo claims that the letters violate § 1692c of the FDCPA which 1) prohibits contact with a consumer regarding debts once the consumer notifies the debt collector that she is rep- resented by counsel, and 2) prohibits a debt collector from No. 15-1231 3 continuing to communicate a demand for payment to a con- sumer once the consumer has refused to pay. Bravo further alleges that the letters violate § 1692e by making false and misleading statements. Neither party disputes that Midland is a debt collector and that Bravo is a consumer as defined by the FDCPA. II. DISCUSSION We review a dismissal pursuant to Federal Rule of Civil Procedure Rule 12(b)(6) de novo, and the Court accepts as true all allegations in the complaint. Erickson v. Pardus, 551 U.S. 89, 94 (2007) (citing Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007)). The complaint must contain a “short and plain state- ment of the claim showing that the pleader is entitled to re- lief.” Fed. R. Civ. P. 8(a)(2). This requirement is satisfied if the complaint (1) describes the claim in sufficient detail to give the defendant fair notice of what the claim is and the grounds upon which it rests and (2) plausibly suggests that the plain- tiff has a right to relief above a speculative level. Bell Atl., 550 U.S. at 555; see Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009); EEOC v. Concentra Health Servs., 496 F.3d 773, 776 (7th Cir. 2007). A. Continued Communication with a Represented Consumer. The FDCPA § 1692c(a)(2) states that a debt collector may not communicate with a consumer, in connection with the col- lection of any debt, if the debt collector knows that the con- sumer is represented by counsel. It further requires a debt collector to cease further communication with the consumer, with limited exceptions not applicable here, once a consumer has notified the debt collector that the consumer refuses to pay a debt. § 1692c(c). 4 No. 15-1231 Bravo argues that since the letters were directed to Bravo– regardless of the delivery address–Midland was communi- cating with Bravo after Midland was notified that Bravo was represented by counsel. This Court held in Tinsley v. Integrity Financial Partners, Inc., 634 F.3d 416 (2011), “that § 1692c as a whole permits debt collectors to communicate freely with consumers’ lawyers.” Id. at 419. The Plaintiff in Tinsley had retained counsel who sent a letter to the debt collector advising it that the Plaintiff refused to pay. The correspondence also directed the debt collector to “cease all further collection activities and direct all future communication to our office.” The debt collector re- frained from communicating with the Plaintiff; however, he called the lawyer with a request for payment. Thereafter, the Plaintiff filed suit under the FDCPA alleging that the Act “prohibits debt collectors from contacting a debtor’s legal counsel as well as the debtor himself, once the debtor refuses to pay.” Id. at 416. In Tinsley, we asked, “Why would Congress have pro- vided that hiring a lawyer makes it impossible for the debtor and debt collector to communicate through counsel?” We found “[t]hat would be an implausible understanding of § 1692c(a)(2).” One of the purposes of § 1692c(a)(2) is to pro- vide a legal buffer for the consumer and “[a] debtor who does not want to be pestered by demands for payment, settlement proposals, and so on, need only tell his lawyer not to relay them.” Id. at 419. There is no case law cited that supports Bravo’s position that a letter addressed to a debtor, but sent to the debtor at an attorney’s address, is a per se violation of § 1692c(a)(2) of the No. 15-1231 5 FDCPA. We find that holding so would undermine the find- ings in Tinsley that a debt collector should be able to com- municate freely and directly with counsel upon notification that a debtor is properly represented. Then, as occurred in this case, the attorney can review the correspondence and take any steps necessary. A consumer’s name on an envelope does not equate to communication with that consumer when it is sent in “care of” and to the address of an attorney. B. Continued Communication with Regard to the Collection of a Debt. Bravo also argues that the two letters were a continued at- tempt to collect a debt in violation of § 1692c(c). Bravo states that nothing in Tinsley would allow a debt collector, in the face of multiple cease collection demands, to continue its collec- tion efforts. She goes on to argue that a debt collector may contact the attorney, but not to demand payment of the debt from the consumer. Bravo argues that this matter is distin- guishable from Tinsley as the debt in Tinsley was still owed and in this matter, the debts had been discharged. Whether a debt is pending or discharged is irrelevant. A debt collector may not even be aware–until he contacts debtor’s counsel–that a debt has been resolved. “Courts do not impute to debt collectors other information that may be in creditors’ files–for example, that debt has been paid or was bogus to start with.” Randolph v. IMBS, Inc., 368 F.3d 726, 729 (7th Cir. 2004). If the Court cannot impute creditors’ knowledge to a debt collector, it stands to reason that it cannot limit a debt collector’s ability to communicate with a debtor’s counsel to only those incidents where a debt is owed. 6 No. 15-1231 C. False, Deceptive, or Misleading Statements. Next Bravo argues that Midland’s letters violate the gen- eral provision of § 1692e of the FDCPA, which states that a debt collector may not use any “false, deceptive, or mislead- ing representation or means in connection with the collection of any debt.” Bravo contends that the letters falsely stated that Bravo stilled owed debts that had been discharged by the prior settlement. This Court has consistently held that with regard to “false, deceptive, or misleading representations” in violation of § 1692e of the FDCPA, the standard is: (1) whether the debt collector’s communication would deceive or mislead an un- sophisticated, but reasonable, consumer if the consumer is not represented by counsel or (2) whether a competent attorney would be deceived, even if he is not a specialist in consumer debt law. See Zemmeckis v. Global Credit & Collection Corp., 679 F.3d 632, 635 (7th Cir. 2012); Wahl v. Midland Credit Mgmt., Inc., 556 F.3d 643, 645 (7th Cir. 2009); Ruth v. Triumph, 577 F.3d 790, 799-800 (7th Cir. 2009); Evory v. RJM Acquisitions Funding, L.L.C., 505 F.3d 769, 774-775 (7th Cir. 2007); Sims v. GC Servs. L.P., 445 F.3d 959, 963 (7th Cir. 2006); Turner v. J.V.D.B. & As- socs., 330 F.3d 991, 995 (7th Cir. 2003). Plaintiff relies on Evory, et al. v. RJM Acquisitions Funding L.L.C., 505 F.3d 769 (7th Cir. 2007), to argue that every false statement to an attorney is a per se violation of § 1692e. That overstates Evory. The Evory court held the “competent attor- ney” standard applies regardless of whether a statement is false, misleading or deceptive. Id. at 775. No. 15-1231 7 This case involves alleged false representations to a debtor’s attorney. Therefore, the standard is whether a com- petent attorney, even if he is not a specialist in consumer debt law, would be deceived by two letters requesting payment for debts resolved in a settlement. On the facts before us, we be- lieve a competent attorney would be able to determine whether his client continued to owe a debt after it was settled in full and would therefore not be deceived by the two letters. D. Violations of § 1692e(5) of the FDCPA. Lastly, Bravo argued that the letters violate §1692e(5) of the FDCPA. She alleges that the letters contained threats of actions that Midland was not legally able to take. The first threat was demanding payment of debts eliminated by settle- ment. The second threat was the statement, “[T]his account may still be reported on your credit report as unpaid.” These arguments were not brought at the district level, and argu- ments not raised to the district court are waived on appeal. See Puffer v. Allstate Ins. Co., 675 F.3d 709, 718 (7th Cir. 2012); Brown v. Auto. Components Holding, LLC, 622 F.3d 685, 691 (7th Cir. 2010); Robyns v. Reliance Standard Life Ins. Co., 130 F.3d 1231, 1238 (7th Cir. 1997). III. CONCLUSION Although the Complaint describes the claim in sufficient detail to give Midland fair notice of what the claim is and the grounds upon which it rests, it fails to plausibly suggest that the Bravo has a right to relief above a speculative level. The Court finds that the two letters were not continued communi- cation to a consumer and that the letters would not have de- ceived a competent attorney who was aware that the debts had been resolved. 8 No. 15-1231 For the foregoing reasons, we AFFIRM the judgment of the district court.