Smith v. ARS National Services Inc.
102 F. Supp. 3d 1276
M.D. Fla.2015Background
- Plaintiff Peggy Smith incurred consumer debt with FIA Card Services, which assigned the account to ARS for collection.
- ARS sent an initial collection letter on September 8, 2014; Smith sent a handwritten letter on September 12, 2014 stating she refused to pay because the amount appeared incorrect (the "Notification Letter").
- Despite that written refusal, ARS sent a second letter on October 22, 2014 again seeking payment and advertising that it was willing to consider payment arrangements or settlements (the "Second Letter").
- Smith sued under the Fair Debt Collection Practices Act (FDCPA), alleging ARS violated 15 U.S.C. § 1692c(c) by continuing communications after written notice to cease.
- ARS moved to dismiss under Rules 12(b)(1) and 12(b)(6), arguing (1) Smith’s letter did not validly invoke § 1692c(c) (it was a verification request under § 1692g(b)), and (2) the Second Letter fell within § 1692c(c)(2)’s exception for notices that a remedy may be invoked.
- The court denied the motion to dismiss, finding Smith sufficiently alleged she refused to pay and that factual resolution of the § 1692c(c)(2) exception was inappropriate at the pleading stage.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Smith’s Notification Letter validly invoked § 1692c(c) (demand to cease) | Smith’s handwritten letter expressly refused to pay, which triggers § 1692c(c) and required ARS to cease communications | ARS contends the letter was a request for verification under § 1692g(b), not a demand to cease communications | Court: Letter sufficiently alleges refusal to pay and thus gave effective notice under § 1692c(c) |
| Whether ARS’s Second Letter falls within § 1692c(c)(2) exception (notice that specified remedies may be invoked) | Smith alleges the Second Letter was a collection communication sent after notice and not merely a notification of remedies | ARS contends the Second Letter is a settlement/collection notice akin to a remedy ordinarily invoked (citing Lewis) and thus permitted by § 1692c(c)(2) | Court: Whether the Second Letter fits the exception is a factual/legal determination inappropriate on a motion to dismiss; complaint survives |
Key Cases Cited
- Bell Atl. Corp. v. Twombly, 550 U.S. 544 (plausibility standard for Rule 12(b)(6))
- Ashcroft v. Iqbal, 556 U.S. 662 (pleading standards; courts accept well-pleaded facts, not legal conclusions)
- Leivis v. ACB Bus. Servs., Inc., 135 F.3d 389 (6th Cir. 1998) (collection letter presenting payment options construed as settlement offer falling within § 1692c(c)(2) exception)
- Cruz v. Int’l Collection Corp., 673 F.3d 991 (9th Cir. 2012) (analyzing Lewis and limits of § 1692c(c)(2) exception)
- Linder v. Portocarrero, 963 F.2d 332 (11th Cir. 1992) (pleading facts accepted as true on motion to dismiss)