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Case Number 07-12950

v. Honorable David M. Lawson






This matter is before the Court on the defendant’s motion to dismiss this action brought under the Fair Debt Collection Practices Act (FDCPA) and state law for failure to state a claim under Federal Rule of Civil Procedure 12(b)(6). The defendant argues that the plaintiff’s complaint alleges only that the defendant, Asset Acceptance, LLC, sued the plaintiff for an alleged debt without providing the underlying loan agreement or, in the alternative, a timely affidavit of account, which does not make out a violation of the FDCPA according to controlling Sixth Circuit precedent. The plaintiff responded by attempting to distinguish the cited precedent, and then at oral argument held on April 8, 2008 he added a few more reasons that the lawsuit should proceed. The Court allowed additional time for filing supplemental briefs and to permit the plaintiff to move to amend his complaint, if he so chose. The Court reviewed the supplemental filings and now concludes that the plaintiff’s complaint cannot be read as expansively as he contends, the complaint as drafted fails to state a cognizable claim, and the plaintiff’s proposed amendment is futile and untimely and should not be allowed. Therefore, the Court will grant the motion to dismiss and dismiss the case.


According to the complaint, on April 16, 2007, the defendant in this case, Asset Acceptance, LLC, sued plaintiff Matthew Lipa in a Michigan state court to collect a debt in the amount of $816.24, apparently resulting from an unpaid credit card obligation. Asset Acceptance did not file the underlying credit agreement with its state-court complaint. Instead, it submitted an “affidavit

of account,” which read as follows:


I hereby certify and affirm that I, Patricia Conaton, am the Legal Manager of ASSET ACCEPTANCE LLC....

I further state that the said company has purchased and is the owner of a claim against Matthew Lipa, Account Number XXXXXXXX0251, originally with PROVIDIAN FINANCIAL, and the amount of $816.24 is now due and owing with pre-judgment interest continuing to accrue at the rate of 5.000%.


I further state that the business records of this account received at the time of purchase have been reviewed and the information contained herein was obtained from said business records.

Compl., Ex A., Aff. of Account.

The plaintiff contends that this affidavit was defective under state law because it was not executed within ten days before the complaint was filed; rather, “it was signed about a month before the Summons [was issued].” Compl. at 19. According to plaintiff Lipa, bringing suit in this fashion – without producing the debt-creating instrument or, alternatively, furnishing a proper account affidavit – constituted a violation of the FDCPA.

On July 16, 2007, the plaintiff filed a complaint in this Court asserting a count under that Act. After setting forth the facts noted above, the plaintiff alleged that the defendant violated several specific sections of the FDCPA consisting of (1) 15 U.S.C. § 1692d, which prohibits “any conduct

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collection of the debt”; (2) 15 U.S.C. § 1692e(5), which prohibits a debt collector from “threat[ening] to take any action that cannot legally be taken”; (3) 15 U.S.C. § 1692e(10), which prohibits the “use of any false representation or deceptive means to collect or attempt to collect any debt or to obtain information concerning a consumer”; and (4) 15 U.S.C. § 1692f, which prohibits an attempt to collect “any amount... unless such amount is expressly authorized by the agreement creating the debt or permitted by law.” Compl. at 22-26. It is apparent from the factual allegations and subsequent filings, however, that the plaintiff only takes issue with the way in which the defendant brought its collection suit.

The defendant contends that the facts as alleged in the complaint do not establish a violation of any of these statutory provisions, and therefore the complaint fails to state a claim. The defendant points to Harvey v. Great Seneca Financial Corp., 453 F.3d 324 (6th Cir. 2006), in support of its contention that the FDCPA is not violated by a debt collector filing a collection lawsuit without attaching to its suit papers a copy of written proof of the debt. In his response to the motion, the plaintiff attempts to distinguish Harvey on the basis that Harvey never disputed that he owed the amount claimed, whereas Lipa contests the amount of the debt. At oral argument on the motion, however, the plaintiff raised new arguments. He insisted that the complaint includes the theory that the defendant failed to validate the debt before it filed suit, and the defendant actually did not own the debt at the time. He argued that if the complaint cannot be read that broadly, he should be given a chance to amend. However, in his response to the defendant’s motion to dismiss the plaintiff also “agree[d] to dismiss it’s [sic] State claims and go to the Jury with just the FDCPA violations.” Pl.’s Resp. at 8.

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move to amend his complaint if he chose. The plaintiff then filed a supplemental brief raising yet another argument: that the motion to dismiss is untimely. He also developed further his arguments that the defendant did not respond to his request to validate the debt in writing, and the defendant was not the true owner of the debt, and he moved to amend his complaint. The validation letter offered by the plaintiff is dated November 28, 2006, and there appears to be no dispute that the defendant received it shortly thereafter. In terms of when the plaintiff first learned of the debt, he writes in the validation letter, “This letter is being sent to you in response to a notice sent to my father’s house dated October 18, 2006.” Pl’s Supp. Br., Ex. 5, Validation Letter at 1. The plaintiff has also submitted an affidavit, not referenced in the complaint (either the original or the proposed amended complaint), wherein he states that the defendant failed to respond to this letter, and he always disputed the amount allegedly owed.

Turning to the claim for lack of ownership of the debt, the plaintiff theorizes that defendant Asset did not own the debt at the time it filed the collection lawsuit because Washington Mutual (which apparently owns Providian Financial, from whom Asset acquired the debt) continued to send the plaintiff bills. The evidence here is rather limited and consists of six bills sent by Washington Mutual from April 27, 2007 to September 27, 2007. The bills were sent to the plaintiff (although he claims he did not receive them because the address was wrong), and they requested payment in the amount of $832.51. The one exception to this is the final bill sent on September 27, 2007, which was an invoice of $0.

If the Court rejects the plaintiff’s position that the current complaint is sufficient to proceed with his FDCPA case, the plaintiff requests leave to amend. His proposed amended complaint only

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debt, and it does not add allegations regarding the non-ownership of the debt. The new factual

allegations read as follows:

21. Prior to the lawsuit, Plaintiff sent Defendant a validation notice regarding the alleged debt. (Exhibit 3 - Letter)

22. Defendant received this letter. (Exhibit 4 - Return Receipt)

23. Defendant failed to validate the debt and instead sued Plaintiff to collect the alleged debt.

Pl.’s Supp. Br., Ex. 1, Prop. Amend. Compl. at 21-23. The plaintiff then adds the following legal conclusion: “Defendants have violated the FDCPA, 15 U.S.C. § 1692g(b), by continuing to attempt to collect a debt without validating the debt after being asked to do so.” Prop. Amend. Compl. at 30.

In his supplemental brief, the plaintiff asks the Court to either (1) deny the defendant’s motion to dismiss, (2) convert the motion to one for summary judgment and deny it as such, or (3) allow the plaintiff to amend his complaint. The defendant continues to assert that Harvey requires the conclusion that the complaint fails to state a claim, and the complaint states neither a validation nor lack-of-ownership claim. The defendant also opposes the plaintiff’s effort to amend the complaint on the grounds that the proposed amendment would be futile, the plaintiff has committed undue delay, and amendment would be prejudicial.

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The defendant’s motion to dismiss is directed to the original complaint. Motions to dismiss are governed by Rule 12(b) of the Federal Rules of Civil Procedure and allow for dismissal for “failure to state a claim upon which relief can be granted.” Fed.R.Civ.P. 12(b)(6). “The purpose of Rule 12(b)(6) is to allow a defendant to test whether, as a matter of law, the plaintiff is entitled to legal relief even if everything alleged in the complaint is true.” Mayer v. Mylod, 988 F.2d 635, 638 (6th Cir. 1993). When deciding a motion under that Rule, the court must construe the complaint in the light most favorable to the plaintiff, accept all factual allegations as true, and determine whether the complaint contains “enough facts to state a claim to relief that is plausible on its face.” Bell Atlantic Corp. v. Twombly, 550 U.S.__, __, 127 S.Ct. 1955, 1974 (2007). “[A] judge may not grant a Rule 12(b)(6) motion based on a disbelief of a complaint’s factual allegations.” Columbia Natural Res., Inc. v. Tatum, 58 F.3d 1101, 1109 (6th Cir. 1995). “However, while liberal, this standard of review does require more than the bare assertion of legal conclusions.” Ibid. Federal Rule of Civil Procedure 8(a) requires that the complaint give the defendant fair notice of the nature of the claim and the factual grounds upon which it rests. Twombly, 127 S.Ct. at 1964. Therefore, “[w]hile a complaint attacked by a Rule 12(b)(6) motion to dismiss does not need detailed factual allegations, a plaintiff’s obligation to provide the ‘grounds’ of his ‘entitle[ment] to relief’ requires more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do.” Id. at 1964-65 (citations omitted) (alteration in original). “In practice, ‘a... complaint must contain either direct or inferential allegations respecting all the material elements to sustain a recovery under some viable legal theory.’” In re DeLorean Motor Co., 991 F.2d 1236, 1240 (6th Cir. 1993) (quoting Car Carriers, Inc. v. Ford Motor Co., 745 F.2d 1101, 1106 (1984)); see also

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The main thrust of the plaintiff’s complaint in this case is that the defendant filed a defective collection lawsuit in state court because its affidavit of account stated was stale and there was no other written proof of the debt attached to the state court pleadings. The plaintiff reasons, therefore, that the defendant violated the FDCPA by filing this lawsuit without any written proof of the debt, thereby contravening 15 U.S.C. § 1692f (prohibiting attempts to collect “any amount... unless such amount is expressly authorized by the agreement creating the debt or permitted by law”), 15 U.S.C.

§ 1692e(10) (outlawing the “use of any false representation or deceptive means to collect or attempt to collect any debt”), and 15 U.S.C. § 1692d (forbidding “any conduct the natural consequence of which is to harass, oppress, or abuse any person in connection with the collection of the debt”).

There are several reasons why the plaintiff’s case lacks merit. Before discussing them, however, the Court will briefly address the plaintiff’s contention that the defendant’s motion is untimely, which is equally meritless. The plaintiff has seized upon an excerpt from Rule 12(b) that says “[a] motion asserting any of these defenses must be made before a responsive pleading if a responsive pleading is allowed,” and argues that since the defendant already filed an answer it waived the defense of failure to state a claim. This argument ignores the clear language stated elsewhere in the Rule that preserves such defenses that are asserted in the first responsive pleading, as the defendant did here. See Fed. R. Civ. P. 12(b) (“No defense or objection is waived by joining it with one or more other defenses in a responsive pleading or in a motion.”). In addition, Rule 12(h)(2) provides that a party may raise the failure-to-state-a-claim defense up to and including trial,

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pleading, “[t]he defense of failure to state a claim upon which relief can be granted is protected from waiver through trial.” Romstadt v. Allstate Ins. Co., 59 F.3d 608, 610-11, 611 n.1 (6th Cir. 1995).

Turning to the defects in the plaintiff’s theory of liability, it is apparent that controlling Sixth Circuit precedent renders lawful under the FDCPA the conduct the plaintiff describes in his complaint. The Fair Debt Collection Practice Act, 15 U.S.C. § 1692 et seq., was enacted in 1978 to promote fair debt collection by eliminating abusive practices in the collection of consumer debts and by defining the rights of consumers vis-à-vis debt collectors. “The statute is very broad, and was intended to remedy ‘what is considered to be a widespread problem.’” Harvey v. Great Seneca Financial Corp., 453 F.3d 324, 329 (6th Cir. 2006) (quoting Frey v. Gangwish, 970 F.2d 1516, 1521 (6th Cir. 1992)). Therefore, “[i]n determining whether any particular conduct violates the FDCPA, the courts have used an objective test based on the least sophisticated consumer.” Ibid. (citing Smith v. Transworld Sys., Inc., 953 F.2d 1025, 1029 (6th Cir. 1992)).

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