LaGrone v. LVNV Funding LLC (In re LaGrone), 525 B.R. 419

Background

Debtor Booker La-Grone filed an adversary complaint alleging LVNV Funding (through Resurgent) violated the Fair Debt Collection Practices Act (FDCPA) by filing a proof of claim in his Chapter 13 case for a Sears credit‑card debt that was time‑barred under Illinois law.
The proof of claim was filed on September 19, 2013; last account activity and charge‑off occurred in 2007, making the claim allegedly time‑barred.
Debtor asserted violations of 15 U.S.C. § 1692 (including §§ 1692e(2)(A), 1692e(5), 1692e(10), and § 1692f) based solely on filing an untimely proof of claim.
Defendants moved to dismiss under Rule 12(b)(6) (Bankruptcy Rule 7012), arguing the complaint fails to state an FDCPA claim and that bankruptcy rules/statutory scheme preclude FDCPA relief.
The bankruptcy court analyzed (1) whether it may enter final judgment (core vs. noncore/related proceeding) and (2) whether filing a proof of claim subject to a statute‑of‑limitations defense states an FDCPA claim.

Issues

Issue	Plaintiff's Argument	Defendant's Argument	Held
Jurisdiction: may bankruptcy judge enter final judgment on this FDCPA adversary?	FDCPA claim arises in context of the bankruptcy case and is related to it, so bankruptcy court can decide.	FDCPA claim arises under Title 15, not Title 11, so it is non‑core and bankruptcy judge cannot enter final judgment.	Non‑core but "related to" the bankruptcy: judge may hear and recommend but cannot enter final judgment; may decide motion to dismiss and recommend final judgment if dismissal stands.
Statutory preclusion: does the Bankruptcy Code preclude FDCPA claims based on in‑case activity?	FDCPA governs debt collection and should apply despite bankruptcy procedures.	Bankruptcy Code and claims process preclude FDCPA remedies for proofs of claim; procedural conflict.	No preclusion: Randolph framework requires irreconcilable conflict or clear congressional intent to displace FDCPA; overlapping remedies are reconcilable.
Nature of act: Is filing a proof of claim an "attempt to collect" under FDCPA?	Filing a proof of claim is a collection act and thus can fall within FDCPA coverage.	Filing a claim is a bankruptcy claims procedure, not a collection act against the debtor.	Filing a proof of claim is an act in connection with collection and can be actionable under the FDCPA.
Merits: Does filing a proof of claim that is time‑barred, alone, violate FDCPA (false, deceptive, unfair)?	Filing an untimely proof is deceptive/unfair like filing time‑barred lawsuits; FDCPA should prohibit it.	Time‑barred proof of claim lacks the deceptive/abusive dynamics of untimely civil suits; bankruptcy protections (trustee, disclosures, counsel, procedures) remove the consumer‑vulnerability rationale.	Dismissed: alleging only that a proof of claim is time‑barred does not plausibly state an FDCPA violation; court grants leave to amend.

Key Cases Cited

Barnett v. Stern, 909 F.2d 973 (7th Cir.) (defines core proceedings under §157)
Wood v. Wood, 825 F.2d 90 (5th Cir.) (core vs. noncore test cited for §157 analysis)
Phillips v. Asset Acceptance, LLC, 736 F.3d 1076 (7th Cir.) (FDCPA prohibits filing time‑barred lawsuits against consumers)
Randolph v. IMBS, Inc., 368 F.3d 726 (7th Cir.) (statutory preclusion analysis; narrow approach)
Crawford v. LVNV Funding, LLC, 758 F.3d 1254 (11th Cir.) (held filing time‑barred proof of claim can violate FDCPA)
Elscint, Inc. v. First Wisconsin Fin. Corp. (In re Xonics, Inc.), 813 F.2d 127 (7th Cir.) (defines "related to" bankruptcy jurisdiction)
Simmons v. Roundup Funding, LLC, 622 F.3d 93 (2d Cir.) (FDCPA and bankruptcy context; holding FDCPA may not apply in certain in‑case activities)
Gammon v. GC Servs. L.P., 27 F.3d 1254 (7th Cir.) (unsophisticated consumer standard under FDCPA)
Todd v. Collecto, Inc., 731 F.3d 734 (7th Cir.) (standing under FDCPA for persons other than debtor)
Evory v. RJM Acquisitions Funding L.L.C., 505 F.3d 769 (7th Cir.) (statements unlikely to deceive competent counsel are not actionable under FDCPA)