43 F. Supp. 3d 1215
D. Kan.2014Background
- Ray owed a Citibank debt; Citibank hired defendant to collect it and sent a letter dated June 6, 2012 stating Balance: $6,871.02, attorney fees (where applicable), the exact amount to be determined by agreement between you and us or by a court.
- Kalebaugh owed a Citibank debt; defendant sent a letter dated October 4, 2012 nearly identical to Ray’s, stating Balance: $7,872.73, attorney fees (where applicable), the exact amount to be determined by agreement between you and us or by a court.
- Defendant’s policy was to add attorney’s fees language only where the consumer agreed to pay them if the account is placed with an attorney and allowed defendant to file a lawsuit to collect the balance and fees.
- Ray and Citibank later stipulated to judgment against Ray in a separate Kansas case, including attorney’s fees; judgment entered February 14, 2013.
- A Wyandotte County, Kansas lawsuit was filed on Kalebaugh’s behalf seeking judgment for the balance and reasonable attorney’s fees, pending at the time of briefing.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Does the letter state the amount of the debt as required by FDCPA §1692g(a)(1)? | Ray/Kalebaugh argue letters misstate amount by including uncertain attorney’s fees. | Letters state the balance plus possible attorney’s fees; fees are contingent and not final. | Yes; letters did not state the exact amount due on the dates sent. |
| Do the letters violate FDCPA §1692e(2)(A) by misrepresenting the debt’s amount or nature by including attorney’s fees as part of the debt? | Inclusion of ‘attorney’s fees (where applicable)’ misstates amount. | Potential attorney’s fees were a true possibility and may be recovered. | Yes; inclusion of contingent attorney’s fees rendered the amount misrepresented. |
| Do the letters violate FDCPA §1692e(5) by threatening to take action that cannot be taken or that was not intended to be taken? | Threat to collect attorney’s fees not yet incurred constitutes improper threat. | Filing of lawsuits to collect debts and fees demonstrates intent to take legal action. | No; defendant did not violate §1692e(5). |
Key Cases Cited
- Miller v. McCalla, Raymer, Padrick, Cobb, Nichols, and Clark, LLC, 214 F.3d 872 (7th Cir.2000) (debt must be stated in total amount due, including today's date, not just principal)
- Veach v. Sheeks, 316 F.3d 690 (7th Cir.2003) (attorney’s fees cannot be included as part of remaining principal balance when not yet awarded)
- Evory v. RJM Acquisitions Funding L.L.C., 505 F.3d 769 (7th Cir.2007) (whether a communication violates §1692e is treated as a question of law or fact in various circuits)
- Jeter v. Credit Bureau, Inc., 760 F.2d 1168 (11th Cir.1985) (per se violation standard for threatening actions not to be taken)
- Kuehn v. Cadle Co., Inc., 335 Fed.Appx. 827 (11th Cir.2009) (whether §1692e violations are a question of law or fact varies by circuit)