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Cooper v. Midland Credit Management Inc.

United States District Court, M.D. Georgia, Columbus Division

December 11, 2018

KEITH COOPER, Plaintiff,
v.
MIDLAND CREDIT MANAGEMENT, INC., Defendant.

          ORDER

          CLAY D. LAND CHIEF U.S. DISTRICT COURT JUDGE

         Keith Cooper brought this putative class action alleging that Midland Credit Management, Inc. sent him a collection letter that violates the Fair Debt Collection Practices Act (“FDCPA”), 15 U.S.C. § 1692, et seq. Presently pending before the Court is Midland Credit Management, Inc.'s motion to dismiss (ECF No. 5). As discussed below, the motion is granted.

         MOTION TO DISMISS STANDARD

         “To survive a motion to dismiss” under Federal Rule of Civil Procedure 12(b)(6), “a complaint must contain sufficient factual matter, accepted as true, to ‘state a claim to relief that is plausible on its face.'” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)). The complaint must include sufficient factual allegations “to raise a right to relief above the speculative level.” Twombly, 550 U.S. at 555. In other words, the factual allegations must “raise a reasonable expectation that discovery will reveal evidence of” the plaintiff's claims. Id. at 556. But “Rule 12(b)(6) does not permit dismissal of a well-pleaded complaint simply because ‘it strikes a savvy judge that actual proof of those facts is improbable.'” Watts v. Fla. Int'l Univ., 495 F.3d 1289, 1295 (11th Cir. 2007) (quoting Twombly, 550 U.S. at 556).

         FACTUAL ALLEGATIONS

         Keith Cooper owes a debt to Midland Funding, LLC based on Cooper's use of a revolving line of credit he obtained from Credit One Bank. The debt servicer, Midland Credit Management, Inc. (“Midland”) sent the following collection letter to Cooper:

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         Compl. Ex. A, Collection Letter (May 24, 2017), ECF No. 1-1. At the time of the letter, the debt was more than six years old, so a lawsuit to recover the debt was time-barred under Georgia law.[1]Cooper does not allege that he selected any of the payment options. Cooper does allege that if he did make a partial payment, that “would potentially re-start the statute of limitations on the debt under Georgia law.” Compl. ¶ 31, ECF No. 1. Cooper further alleges that Midland's letter “is misleading and deceptive since it fails to advise [Cooper] that if he takes advantage of any of the payment options, such payment(s) would be a new promise to pay that would restart the statute of limitations clock in Georgia thus exposing him to a potential lawsuit.” Id. ¶ 32. Cooper does not allege facts to suggest that Midland would sue him following a partial payment, and in fact, Cooper alleged that Midland unequivocally stated that it will not sue him. See Id. ¶ 28.

         DISCUSSION

         To prevail on his FDCPA claim, Cooper must establish that: (1) he was the object of collection activity arising from consumer debt; (2) Midland is a debt collector under the FDCPA; and (3) Midland engaged in a practice prohibited by the FDCPA. See LeBlanc v. Unifund CCR Partners, 601 F.3d 1185, 1193 (11th Cir. 2010) (per curiam) (explaining that a “debt collector” engaging in “collection activity” to recover an outstanding “consumer debt” “is subject to the FDCPA”). Here, Midland does not dispute that Cooper was the object of collection activity arising from consumer debt or that it is a debt collector under the FDCPA. The dispositive question is whether Cooper adequately alleged an FDCPA violation.

         The purpose of the FDCPA is “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.” 15 U.S.C. § 1692(e). The FDCPA prohibits debt collectors from using “any false, deceptive, or misleading representation or means in connection with the collection of any debt, ” including false representations about “the character, amount, or legal status of any debt” and “any false representation or deceptive means to collect or attempt to collect any debt.” 15 U.S.C. §§ 1692e(2)(A) & 1692e(10).[2] The FDCPA also prohibits a debt collector from using “unfair or unconscionable means to collect or attempt to collect any debt.” 15 U.S.C. § 1692f. Thus, a debt collector may communicate with a consumer and seek voluntary payment of a stale debt as long as it does not threaten litigation, mislead the consumer about the debt, or use an unfair means of attempting to collect a debt.

         To determine whether a collection letter violates the FDCPA, the courts use a “least sophisticated consumer” standard. LeBlanc, 601 F.3d at 1193. Under this standard, the Court “looks to the tendency of language to mislead the least sophisticated recipients of a debt collector's letters.” Id. at 1194 (quoting Jeter v. Credit Bureau Inc., 760 F.2d 1168, 1175 (11th Cir. 1985)). The standard presumes that the least sophisticated consumer has “a rudimentary amount of information about the world and a willingness to read a collection notice with some care.” Id. at 1194 (quoting Clomon v. Jackson, 988 F.2d 1314, 1319 (2d Cir. 1993)). It is intended to protect “naive consumers” while preventing “liability for bizarre or idiosyncratic interpretations of collection notices.” Id. (quoting United States v. Nat'l Fin. Servs., Inc., 98 F.3d 131, 136 (4th Cir. 1996)).

         Here, Cooper argues that Midland's collection letter is misleading because the least sophisticated consumer could be misled into making a partial payment, which could revive the statute of limitations under Georgia law. Cooper is correct that in Georgia, a debtor's underlying debt is not extinguished by the statute of limitations even if an action to recover it is time-barred. Martin v. Mayer, 11 S.E.2d 218, 227 (Ga.Ct.App. 1940). And, the statute of limitations could be revived if there is a “new promise to pay, ” which could be in the form of “[a] payment entered upon a written evidence of debt by the debtor or upon any other written acknowledgment of the existing liability.” O.C.G.A. § 9-3-112. “A new promise, in order to renew a right of action already barred . . . shall be in writing, either in the party's own handwriting or subscribed by him or someone authorized by him.” O.C.G.A. § 9-3-110. Thus, to restart the statute of limitations under Georgia law, “the acknowledgment of the debt must be communicated to the creditor and it ‘must sufficiently identify the debt or afford the means by which [the debt] might be identified with reasonable certainty.'” SKC, Inc. v. EMAG Sols., LLC, 755 S.E.2d 298, 301- 02 (Ga.Ct.App. 2014) (alterations in original) (quoting Middlebrooks v. Cabaniss, 20 S.E.2d 1012 (Ga. 1942)).

         The Georgia courts have held “that when payment to a creditor is accompanied by some notation sufficient to identify the debt being paid, that payment and notation constitute a new promise to pay which renews the running of the limitations period.” Id. So, if a debtor makes a partial payment by check or wire transfer to a creditor with a notation indicating that the payment should be applied to the debt on his account, then those payments with the notations constitute a new promise to pay. Given that a partial payment could revive the statute of limitations under Georgia law if it is accompanied by a writing evidencing a new promise to pay ...


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