Jeffrey Lox v. CDA Limited
2012 U.S. App. LEXIS 15961
| 7th Cir. | 2012Background
- Lox, a Glasford, Illinois resident, received medical treatment from Dr. Baylor in 2005 and accrued a debt.
- Dr. Baylor referred the debt to CDA, a debt-collection agency.
- CDA sent dunning letters, some stating that a court could award attorney fees if Baylor sued and won.
- Lox alleged the language misled under the FDCPA, 15 U.S.C. § 1692e, and filed suit in the Central District of Illinois.
- The district court granted CDA summary judgment; Lox appeals the ruling on the attorney-fees language.
- The Seventh Circuit reverses, holding the attorney-fees language was materially false and misleading.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the attorney-fees language violated the FDCPA §1692e | Lox argues the language falsely implied fees could be awarded. | CDA contends language is conditional and not clearly actionable. | Yes, language was false and misleading. |
| Whether the statement was facially misleading or required extrinsic evidence | Lox contends no extrinsic evidence needed to show deception. | CDA argues extrinsic evidence may be required for some categories. | The statement is plainly misleading on its face; extrinsic evidence not needed. |
| Whether the statement was material under FDCPA | False statement could influence debtor’s decision to pay or contest debt. | Argues immaterial as in some cases. | Yes, the statement was material. |
| Whether Lox waived the FDCPA challenge to the attorney-fees language | Lox preserved the claim in amended complaint and responses. | Argument not raised earlier, waived. | Not waived; timely raised with sufficient notice. |
Key Cases Cited
- Ruth v. Triumph P’ships, 577 F.3d 790 (7th Cir. 2009) (broad §1692e reach; extrinsic evidence required in some scenarios; false-but-not-misleading vs. misleading distinctions)
- Wahl v. Midland Credit Mgmt., 556 F.3d 643 (7th Cir. 2009) (unsophisticated-consumer standard; category framework for §1692e claims)
- Gonzales v. Arrow Fin. Servs., LLC, 660 F.3d 1055 (9th Cir. 2011) (conditional language can be misleading; no obligation to clarify ambiguity)
- Hahn v. Triumph P’ships, 557 F.3d 755 (7th Cir. 2009) (materiality required for false/misleading statements under §1692e)
- Donahue v. Quick Collect Inc., 592 F.3d 1027 (9th Cir. 2010) (mislabeling of debt principal/interest considered immaterial where total debt remains; context matters)
- Taylor v. Cavalry Inv., L.L.C., 365 F.3d 572 (7th Cir. 2004) (language about interest may be misleading; correct standard applied to confusion of debtor)