Pope v. Vogel

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David A. Szwak
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Pope v. Vogel

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JAMES POPE, on behalf of himself and all others similarly situated, Plaintiff, v. RONALD B. VOGEL II; AMERICAN ASSETS

CONSOLIDATED, INC.; and PORTFOLIO AMERICA FUND 2, LTD., Defendants

97 C 1835

UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF
ILLINOIS, EASTERN DIVISION
1998 U.S. Dist. LEXIS 2868
March 4, 1998, Decided
March 5, 1998, Date Docketed

DISPOSITION: [*1] Defendants' motion to dismiss denied as to Count I, Count II and Count IV of the complaint and the defendants' motion to dismiss granted as to Count III, Count V, and Count VI of the complaint. Count III, Count V and Count VI dismissed with prejudice.

COUNSEL: For JAMES POPE, plaintiff: Cathleen M. Combs, Daniel A. Edelman, James O. Latturner, Beth Ilyse Solomon, Charley Hoon Lee, Edelman & Combs, Chicago, IL.

For RONALD B VOGEL, II, AMERICAN ASSETS CONSOLIDATED INC, PORTFOLIO AMERICA FUND 2, LTD, defendants: Nick James Digiovanni, Albert Edwin Fowerbaugh, Jr, Matthew Sears Klepper, Lord, Bissell & Brook, Chicago, IL.

JUDGES: Charles P. Kocoras, United States District Judge.

OPINIONBY: Charles P. Kocoras

OPINION: MEMORANDUM OPINION

CHARLES P. KOCORAS, District Judge:

This case comes before the court on the defendants' motion to dismiss the plaintiff's complaint pursuant to Rules 9(b), 12(b)(2) and 12(b)(6) of the Federal Rules of Civil Procedure. For the reasons set forth below, this motion is granted in part and denied in part.

BACKGROUND

Plaintiff, James Pope, filed a six count complaint against defendants, Ronald B. Vogel II, American Assets Consolidated, Inc., ("AACI"), [*2] and Portfolio America Fund 2, Ltd. ("PAF"), for alleged violations of the Fair Debt Collection Practices Act ("FDCPA"), 15 U.S.C. @ 1692 et seq. . . .

The following facts, which we are obligated to accept as true only for purposes of our review, are taken from the plaintiff's complaint. AACI and PAF are California companies that acquire and collect delinquent debts originally owed to third parties. Vogel is the President, Vice-President, Treasurer and Secretary of AACI and PAF and oversees the affairs of both. In the 1970s, plaintiff had a Mastercard credit card issued by Chemical Bank. After becoming unemployed, plaintiff could not pay off the balance on the account. Chemical Bank sold the account to PAF and PAF sought payment [*3] from the plaintiff.
Plaintiff received correspondence on three occasions from PAF and AACI regarding his credit card debt. On January 3, 1996, PAF sent plaintiff a letter inviting him to refinance the credit card balance. The letter stated that "it is our goal to help you reestablish your good credit, and that's why Portfolio America offers to clean your tradeline upon completion of our arrangements." On February 22, 1996, AACI, acting on PAF's behalf, sent plaintiff another letter advising the plaintiff that they would pursue collection of the $ 6,263.54 owed on the credit card "through every means available." Further correspondence was sent by AACI to plaintiff on March 27, 1996, enclosing a promissory note to the order of AACI in satisfaction of the debt. The letter provided that if plaintiff agreed to the promissory note and made the required payments, it could "only improve [his] financial status." Further, upon completion of all payments under the note, AACI would "change your tradeline, with us, to "Paid", thereby helping [plaintiff] to reestablish [his] credit." Plaintiff began making payments in March, 1996. In January, 1997, plaintiff received another letter from AACI [*4] advising that plaintiff still owed a balance of $ 5,549.19 and offering to settle the debt for $ 1,795.60. On January 27, 1997, plaintiff sent AACI a cashier's check for $ 1,795.60.

Plaintiff filed suit individually and on behalf of a class of individuals who had similar dealings with the defendants because he claims that the defendants made representations that were deceptive and false. Specifically, plaintiff alleges in Counts I, II and IV of the complaint that the defendants' representations that refinancing would "improve your financial status" and "help you to reestablish your credit" were false and deceptive in violation of the FDCPA and the CFA. . . .

The court finds that Counts I, II, and IV sufficiently set forth claims under the FDCPA and the CFA against the defendants. Section 1692e of the FDCPA provides that a "debt collector" may not use any "false, deceptive, or misleading representation or means in connection with the collection of any debt." In addition, section 1692e(2) provides that the false representation of "the character, amount, or legal status [*17] of any debt" violates the statute. The test for determining whether a communication violates section 1692e is an objective standard based on the "least sophisticated consumer." Bentley v. Great Lakes Collection Bureau, 6 F.3d 60 (2nd Cir. 1993). Under the CFA, it is unlawful for a person to use unfair or deceptive practices with intent to induce others to rely upon the deception. 815 ILCS 505/2. To state a claim under the CFA, a plaintiff must state the "identity of the person making the misrepresentation, the time, place and content of the misrepresentation, and the method by which the misrepresentation was communicated." Gallagher Corp. v. Massachusetts Mutual Life Ins. Co., 940 F. Supp. 176, 180 (N.D. Ill. 1996) (quoting Schifells v. Kemper Financial Services, Inc., 978 F.2d 344, 352 (7th Cir. 1992)).

In the complaint, plaintiff identifies the particular language in the defendants' letters that he claims is deceptive and false. For example, plaintiff alleges that the defendants made deceptive statements to Illinois debtors concerning the defendants' abilities to "reestablish [the debtors'] credit." Plaintiff has also attached exhibits to the complaint containing the [*18] defendants' letters, thus identifying the method by which the misrepresentations were communicated. These letters identify the person making the misrepresentation and the date of such misrepresentations. Under the liberal pleading standard that we apply to Rule 12(b)(6) motions, we find that plaintiff has alleged sufficient factual matter to outline the elements of his cause of action under the FDCPA and under the CFA. . . .

Charles P. Kocoras

United States District Judge

Dated: March 4, 1998
David Szwak
Chairman, Consumer Protection Section, Louisiana State Bar Association
Bodenheimer, Jones & Szwak
509 Market Street, 7th Floor
Mid South Tower
Shreveport, Louisiana 71101
318-221-6444
Fax 318-221-6555
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