Opinion
No. 99 C 4044
July 14, 2000
MEMORANDUM OPINION AND ORDER
This case is before the Court on the motion of defendants Bass Associates, P.C. and Patti Bass (hereinafter collectively referred to as "Bass") to dismiss plaintiff's complaint pursuant to Fed.R.Civ.P. 12(b)(6). For the reasons stated below, we grant the motion to dismiss.
BACKGROUND
Patti Bass is an attorney and the principal of Bass Associates, a law firm that specializes in representing creditors in consumer bankruptcy proceedings. In her complaint, plaintiff seeks recovery from Bass for alleged violations of the Fair Debt Collection Practices Act ("FDCPA") arising from a December 28, 1998 correspondence that Bass sent to plaintiff requesting information about her bankruptcy status. The text of the December 28, 1998 letter is as follows:
Wendy Buckley 8639 S 87th Ave Apt. 113 Justice, IL 60458
Client: BENEFICIAL NATIONAL BANK USA Dealer: KMART CORP. Acct#: 7101593000064995
Dear Wendy Buckley
This office has been notified that a possble bankruptcy has been filed. We have not yet received the bankruptcy information. Please provide this information in the spaces below and return it as soon as possible.
Thank you for your assistance.
Attorney's Name: __________________________ Attorney's Address: _______________________ Attorney's Phone: _________________________ Case Number: ______________________________ Chapter: __________________________________ Intention: ________________________________ Date Filed: _______________________________
Sincerely, Ronald Key Bankruptcy Paralegal
Plaintiff claims that this correspondence violates 15 U.S.C. § 1692(e), (e)(11) and § 1692g. Plaintiff attempts to bring this action under the FDCPA on behalf of a class of individuals residing in Illinois who were mailed letters similar to the subject correspondence.
Bass claims that, on its face, the subject letter is not a communication governed by the FDCPA. The letter does not attempt to collect a debt-it merely requests information regarding plaintiff's bankruptcy status. Bass claims that the letter is outside the scope of the FDCPA. Moreover, Bass claims that, if it would have included the technical language required under § 1692 and § 1692e(11) of the FDCPA in correspondence sent to bankruptcy debtors, Bass could have violated the automatic stay mandated under the Bankruptcy Code.
DISCUSSION
A motion to dismiss does not test whether the plaintiff will prevail on the merits, but instead whether the plaintiff has properly stated a claim. Scheuer v. Rhodes, 416 U.S. 232, 236 (1974). In deciding a motion to dismiss, the court must assume all facts alleged in the complaint to be true, construe the allegations liberally, and view the allegations in the light most favorable to the plaintiff. Wilson v. Formigoni, 42 F.3d 1060, 1062 (7th Cir. 1994). Dismissal is only properly granted if "it is clear that no relief could be granted under any set of facts that could be proved consistent with the allegations." Cushing v. City of Chicago, 3 F.3d 1156, 1159 (7th Cir. 1993).
The purpose of the FDCPA is set forth in 15 U.S.C. § 1692(e) which provides:
It is the purpose of this subchapter 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.
The FDCPA was designed to "protect against the abusive debt collection practices likely to disrupt a debtor's life." Mace v. Van Ru Credit Corp., 109 F.3d 338, 343 (7th Cir. 1997). Plaintiff claims that Bass' letter violates the FDCPA because it is an attempt to collect a debt and it fails to contain the language required under § 1692g and § 1692e(11).
Section 1692g establishes the procedure for the lawful collection of debts under the FDCPA's collection process and specifically requires the debt collector to send the consumer a written notice containing:
1) the amount of the debt;
2) the name of the creditor to whom the debt is owed;
3) a statement that unless the consumer, within thirty days after receipt of the notice, disputes the validity of the debt, or any portion thereof, the debt will be assumed valid by the debt collector;
4) a statement that if the consumer notifies the debt collector in writing within the thirty day period that the debt, or any portion thereof, is disputed, the debt collector will obtain verification of the debt or a copy of a judgment against the consumer and a copy of such verification or judgment will be mailed to the consumer by the debt collector; and
5) a statement that, upon the consumer's written request within the thirty-day period, the debt collector will provide the consumer with the name and address of the original creditor, if different from the current creditor.15 U.S.C. § 1692(g)(a).
Section 1692e deals with "false or misleading representations" and subpart (11) lists certain information that must be disclosed in communications that are sent to collect a debt. Section 1692e provides in relevant part:
A debt collector may not use any false, deceptive, or misleading representation or means in connection with the collection of any debt. Without limiting the general application of the foregoing, the following conduct is a violation of this section:
(11) The failure to disclose in the initial written communication with the consumer and, in addition, if the initial communication with the consumer is oral, in that initial oral communication, that the debt collector is attempting to collect a debt and that any information obtained will be used for that purpose, and the failure to disclose in subsequent communications that the communication is from a debt collector.
I. The Letter Is Not A Communication In Connection With The Collection of A Debt And Does Not Fall Within The Scope Of The FDCPA
On its face, the Bass letter is a request for information about plaintiff's bankruptcy status, sent by Bass to the plaintiff after learning that plaintiff may have filed for bankruptcy. There is nothing that indicates that this letter is an attempt to collect a debt. Certainly a letter that simply requests bankruptcy information is not the type of letter that can be reasonably placed in the category describing a "communication in connection with the collection of a debt" under the ambit of the FDCPA. Both common sense and the plain meaning of the FDCPA require distinguishing this letter from a communication which attempts to collect a debt from an individual who has not filed for bankruptcy. See Bailey v. Security National Servicing Corp., 154 F.3d 384, 388 (7th Cir 1998).
The information that Bass requested in her letter is limited to the name, address and phone number of plaintiffs attorney, and the case number, intention, chapter, and date the bankruptcy proceedings were filed. There is no demand for any payment and no statement that any amount is outstanding or owed by plaintiff. There is nothing in this letter which can be construed as "abusive" or "false, deceptive or misleading." 15 U.S.C. § 1962e(11).
In Bailey, the Seventh Circuit held that a letter sent by a mortgage company to a debtor that did not demand any payment, but only informed the debtor about its current account status and the due dates of the next four payments was not a "communication in connection with the collection of any debt" as defined under the FDCPA. Id. at 388. In that case, the letter informed the Baileys that they owed $551.00 by a certain date, advised the Baileys of the due dates of their upcoming payments, and contained a warning that failure to pay the monthly installments would cause the forbearance agreement to become null and void and result in acceleration. Id. at 387-89.
The Seventh Circuit held that this was not the type of letter or communication that is governed by the FDCPA. The Court explained that:
Under the law only communications "in connection with the collection of any debt" (see 15 U.S.C. § 1692e, 1692g) fall under the ambit of the Act, and the defendants' letters cannot reasonably be placed in that category. The important letter dated January 4 does not "demand" any payment whatsoever, but merely informs the Baileys about "the current status" of their account. The due dates listed in the letter are all prospective. Surely this is not the type of communication related to "the collection" of a debt. . . . The letter in our case demands nothing, and doesn't even imply that anything owed under the Bailey's forbearance agreement is overdue.Id. at 389.
The Bailey Court held that defendant's communication was not subject to the FDCPA because it merely provided information regarding plaintiffs' account status and payment schedule. In this case, it is even more obvious that the subject correspondence is not a communication governed by the FDCPA. Like the letter in Bailey, our letter does not make any demand for payment. Although the name of the alleged creditor and the account number associated with the alleged debt are mentioned in the letter, taking the letter as a whole, we find that it is clear that the purpose of the letter was to ascertain information about the bankruptcy proceeding. The letter in our case merely requests information regarding the status of plaintiffs bankruptcy proceedings. Therefore, this correspondence, like that in Bailey, cannot be deemed a communication in connection with "the collection of a debt" as defined under §§ 1692g and 1692e of the FDCPA.
Assuming all well-pleaded facts in plaintiff's complaint are true, plaintiff cannot state a claim under the FDCPA based upon the limited inquiry for bankruptcy information made in the letter sent by Bass. Because this letter is not a communication governed under the FDCPA, plaintiffs action must be dismissed.
II. Bankruptcy Code Precludes Application Of The FDCPA In This Case
Plaintiffs cause of action is based upon the claim that Bass failed to follow the correct procedure to collect a debt under the FDCPA. As alleged in plaintiffs complaint, Bass specializes in representing creditors in bankruptcy proceedings. We believe that Bass sent this letter because they believed that plaintiff had filed for bankruptcy, not because they were attempting to "collect a debt" under the FDCPA.
There is absolutely nothing in the Bankruptcy Code which inhibits a creditor from obtaining the type of information requested by this letter. On the other hand, the automatic stay which is raised by the filing of a bankruptcy petition prevents any action "to collect, assess, or recover a claim against the debtor . . ." 11 U.S.C. § 362(a)(6). Thus, the inclusion of the language plaintiff claims is required under the FDCPA is forbidden by the Bankruptcy Code.
By her complaint, plaintiff seeks to turn the letter, which clearly seeks only limited information about plaintiffs bankruptcy proceedings, into an "attempt to collect a debt" under the FDCPA by making the argument that the language required to collect a debt under the FDCPA is missing from the letter. Allowing plaintiff to assert a private right of action under the FDCPA for doing no more than requesting bankruptcy information places Bass in a catch-22 by forcing them to choose between violating the Bankruptcy Code and violating the FDCPA. See Baldwin v. McCalla Raymer, Padrick, Cobb, Nichols Clark L.L.C., 1999 WL 284788 (N.D. Ill. 1999), citing, Maloy v. Phillips, 197 B.R. 721 (M.D. Ga. 1996); Divane v. A and C Elec. Co., Inc., 193 B.R. 856, 859 (N.D. Ill. 1996); Hubbard v. National Bond and Collection Assoc., Inc., 126 B.R. 422, 428-29 (D. Del. 1991).
Allowing the FDCPA to apply in a bankruptcy context would undermine the central purpose of the Bankruptcy Code. This reasoning is consistent with the few cases which have addressed the interplay between the FDCPA and the Bankruptcy Code. See, Baldwin, 1999 WL 284788 at *5, citing Maloy v.Phillips, 197 B.R. 721 (M.D. Ga. 1996); Divane v. A and C Elec. Co., Inc., 193 B.R. 856, 859 (N.D. Ill. 1996); Hubbard, 126 B.R. 422, 428-29 (D. Del. 1991). "These cases have found that there is no FDCPA violation where a debt collector chose not to fulfill the FDCPA's notice requirement on the grounds that sending the FDCPA notice would conflict with the automatic stay found in the Bankruptcy Code." Baldwin, 1999 WL 284788 at *6
Likewise in Maloy, the defendant mailed a debt collection letter to plaintiff prior to learning that he had filed for bankruptcy. Plaintiff alleged that the defendant failed to comply with § 1692g of the FDCPA. The defendant argued that § 362 of the Bankruptcy Code prohibited him from complying with the FDCPA. the Maloy Court noted that one of the primary goals of the bankruptcy law is to protect the debtor from any collection efforts until discharge and that "any act taken by a creditor for the purpose of collecting a prepetition debt violates the stay if it amounts to pressure on the debtor to pay." The Court explained:
This broad prohibition certainly encompassed the communication required by 15 U.S.C. § 1692g. . . . The Fair Debt Collection Practices Act., establishes a procedure for the lawful collection of debts. Sending the validation notice required by § 1692g would have been yet another step forward in the statutorily created collection process, and would have in the court's considered judgment "amounted to pressure on the debtor to pay. . . . The notice required by § 1692 suggests to a debtor that collection efforts are ongoing, and have not been halted by the bankruptcy petition. . . . In sum, this notice creates the prospect of future contacts from the collector as well as future action by the collector with regard to the debt. . . . Defendant's situation was a catch-22. One statute told him to go left, and the other right. Erring on the side of caution, defendant chose to terminate all communications with debtor. In the court's best judgment, defendant made the right choice by honoring the automatic stay.Maloy, 197 B.R. at 723. Thus, the automatic stay of the Bankruptcy Code prohibits a collector from sending the notice required by § 1692g of the FDCPA. Id.
Certainly the inclusion of the language that plaintiff claims is missing constitutes an attempt to collect a debt under the statutorily created process set forth under the FDCPA and pressures the debtor to pay. It also transforms a lawful and legitimate inquiry for bankruptcy information into an unlawful attempt to collect a debt under the FDCPA. Clearly this was not Bass' intention when they sent the letter to plaintiff. It is readily apparent that Bass knew or believed that plaintiff had filed for bankruptcy and was attempting only to obtain information related to that proceeding so as to comply with the Bankruptcy Code. The fact that Bass' letter is dated December 28, 1998 and plaintiff may not have filed her bankruptcy until February 1, 1999 is irrelevant. The point is that Bass was notified that a possible bankruptcy had been filed.
Plaintiff cannot transform this simple request for information into an attempt to collect a debt under the FDCPA. Bass' bare bones request for information related to plaintiffs bankruptcy status does not constitute a FDCPA violation. Any holding to the contrary places Bass in a Hobson's choice by forcing them to choose between complying with the Bankruptcy Code at the expense of violating the FDCPA, or complying with the FDCPA at the expense of violating the bankruptcy stay. Bass' letter complied with the letter and spirit of the Bankruptcy Code. The case law which has adressed the interplay between the FDCPA and the Bankruptcy Code prohibits plaintiff from aserting a private right of action under the FDCPA under the circumstances present in this case.
For all of these reasons, plaintiff has failed to state a claim under the FDCPA, and the complaint is dismissed.
CONCLUSION
For the foregoing reasons, we grant the motion of defendant Bass Associates P.C. and Patti Bass to dismiss the complaint of plaintiff Wendy Buckley. This case is hereby terminated. This is a final and appealable order.