Janetos v. Fulton Friedman & Gullace, LLP
2016 U.S. App. LEXIS 6361
| 7th Cir. | 2016Background
- Asset Acceptance, a debt collector, purportedly owned consumer debts; Fulton Friedman & Gullace (Fulton), a law firm/debt collector, sent § 1692g(a) validation letters to debtors on Asset Acceptance’s account template.
- Letters identified “Asset Acceptance, LLC” as an “assignee of [original creditor]” and stated the account had been “transferred from Asset Acceptance, LLC to Fulton,” but never explicitly named the current creditor/owner.
- Plaintiffs sued alleging violations of FDCPA §§ 1692g(a)(2), 1692e, and 1692e(10); the district court granted summary judgment to defendants, finding ambiguity and requiring extrinsic evidence of confusion and a materiality showing.
- The Seventh Circuit held the letters failed § 1692g(a)(2) because they did not clearly identify the current creditor; ambiguity alone does not require extrinsic proof when a statutorily required disclosure is omitted or unclear.
- The court rejected an implied materiality requirement for § 1692g(a)(2) — Congress’s express mandate to disclose the creditor’s name suffices — and remanded with liability for Fulton and vicarious liability for Asset Acceptance (itself a debt collector).
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Fulton’s letters complied with § 1692g(a)(2) (must state name of creditor) | Letters failed to identify the current creditor; wording left recipients to guess and thus violated § 1692g(a)(2) | The letters implicitly disclosed creditor relationship (context shows Asset Acceptance remained owner) or were at worst ambiguous | Held for plaintiffs: letters did not clearly identify current creditor and thus violated § 1692g(a)(2) |
| Whether ambiguity requires extrinsic evidence of consumer confusion to survive summary judgment | No—statutory disclosure must be clear; omission/unclear disclosure violates § 1692g(a)(2) without consumer-survey evidence | Ambiguity places the letter in the category requiring extrinsic evidence of confusion to prove liability | Held for plaintiffs: extrinsic proof of confusion not required when the statutorily required disclosure is not made clearly (citing Chuway) |
| Whether § 1692g(a)(2) violations require a materiality showing | Plaintiffs: no materiality requirement; Congress already decided the disclosure’s importance | Defendants/district court: omission was immaterial here (payments to Fulton would extinguish debt) | Held for plaintiffs: no additional materiality requirement for § 1692g(a)(2); omission is actionable per statute |
| Whether Asset Acceptance may be vicariously liable for Fulton’s violations | Plaintiffs: Asset Acceptance is a debt collector and may be liable for agent’s misconduct | Asset Acceptance: should not be vicariously liable absent proof of control over the specific conduct | Held for plaintiffs: Asset Acceptance may be vicariously liable because it is itself a debt collector and must monitor agents (following Pollice and Fox) |
Key Cases Cited
- Chuway v. National Action Fin. Servs., Inc., 362 F.3d 944 (7th Cir. 2004) (§ 1692g(a) disclosure must be clear enough that recipient likely understands it; extrinsic evidence not required when letter is clearly misleading)
- Hahn v. Triumph Partnerships LLC, 557 F.3d 755 (7th Cir. 2009) (explains materiality analysis for § 1692e claims)
- Lox v. CDA, Ltd., 689 F.3d 818 (7th Cir. 2012) (three-category framework for misleading debt-collection language and when extrinsic evidence is required)
- Pettit v. Retrieval Masters Creditor Bureau, Inc., 211 F.3d 1057 (7th Cir. 2000) (context on unsophisticated consumer’s ability to make basic inferences)
- Pollice v. Nat’l Tax Funding, L.P., 225 F.3d 379 (3d Cir. 2000) (a debt collector may be vicariously liable for acts of those it enlists to collect debts)
- Fox v. Citicorp Credit Servs., Inc., 15 F.3d 1507 (9th Cir. 1994) (debt collector liable for attorney-agent’s FDCPA violations)
- Russell v. Equifax A.R.S., 74 F.3d 30 (2d Cir. 1996) (form-over-substance warning against technical compliance with FDCPA)
- Suesz v. Med-1 Solutions, LLC, 757 F.3d 636 (7th Cir. 2014) (discusses prevalence of default judgments and related consumer notice issues)
- Warren v. Sessoms & Rogers, P.A., 676 F.3d 365 (4th Cir. 2012) (declines to add materiality requirement for certain FDCPA disclosure omissions)