Taylor, Donna T. v. Cavalry Investment

In the
United States Court of Appeals
For the Seventh Circuit
____________
No. 02-2509
DONNA T. TAYLOR, individually and on behalf
of all others similarly situated,
Plaintiff-Appellant,
v.
CAVALRY INVESTMENT, L.L.C.,
Defendant-Appellee.
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Nos. 03-2578, 03-2588 & 03-2590
DOUG A. SCHLETZ, et al., on behalf of themselves
and all others similarly situated,
Plaintiffs-Appellants,
v.
ACADEMY COLLECTION SERVICE, INC.,
Defendant-Appellee.
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Appeals from the United States District Court
for the Northern District of Illinois, Eastern Division.
No. 02 C 786 and Nos. 02 C 6484, 02 C 6953, 02 C 9391—
James B. Moran, Milton I. Shadur, Judges.
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ARGUED MARCH 31, 2004—DECIDED APRIL 22, 2004
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2 Nos. 02-2509, 03-2578, 03-2588, 03-2590
Before BAUER, POSNER, and WILLIAMS, Circuit Judges.
POSNER, Circuit Judge. We have consolidated for decision
the appeals from the dismissal of two closely related cases
under the Fair Debt Collection Practices Act, 15 U.S.C.
§§ 1692 et seq., a statute designed to curb aggressive debt-
collection practices. The Act requires, among other things,
that any dunning letter by a debt collector state “the amount
of the debt” that he’s trying to collect. § 1692g(a)(1); Chuway
v. National Action Financial Services Inc., No. 03-2158, 2004
WL 614760, at *1 (7th Cir. Mar. 30, 2004); Miller v. McCalla,
Raymer, Padrick, Cobb, Nichols & Clark, L.L.C., 214 F.3d 872,
875 (7th Cir. 2000).
In the Schletz case, with which we begin, the defend-
ant was hired to collect credit-card debt owed by the three
plaintiffs. The defendant sent each of them a letter which
sets forth the amounts of the “PRINCIPAL BAL,”
“INTEREST OWING,” and “TOTAL BAL DUE.” So far, so
good. But the letter goes on to say that “if applicable, your
account may have or will accrue interest at a rate specified
in your contractual agreement with the original creditor,”
that is, the issuer of the credit card. The basis for the
statement was that every day that the debt remained
unpaid, the debtor would be accruing interest for which he
might later be billed, as in fact happened with one of the
plaintiffs. In the case of the other two plaintiffs, the creditors
closed their accounts and upon doing so stopped adding
interest, though presumably they could have continued
doing so until the debts were paid. The plaintiffs argue that
the statement confused them about the amount of the debt
that the defendant was trying to collect, and they submitted
affidavits to this effect to the district court, which neverthe-
less granted summary judgment for the defendant.
As we noted just the other day in Chuway, a dunning letter
must state the amount of the debt sufficiently clearly that
Nos. 02-2509, 03-2578, 03-2588, 03-2590 3
the recipient is unlikely to misunderstand it. See also Bartlett
v. Heibl, 128 F.3d 497, 500-01 (7th Cir. 1997); Avila v. Rubin,
84 F.3d 222, 226 (7th Cir. 1996); Terran v. Kaplan, 109 F.3d
1428, 1431-32 (9th Cir. 1997); Miller v. Payco-General American
Credits, Inc., 943 F.2d 482, 483-84 (4th Cir. 1991). And the
benchmark is the understanding of unsophisticated debtors,
who are frequent targets of debt collectors. But a debtor
cannot create a triable issue just by submitting an affidavit
in which he says that he misunderstood the dunning letter.
If it is apparent from a reading of the letter that not even “a
significant fraction of the population” would be misled by
it—if as in White v. Goodman, 200 F.3d 1016, 1020 (7th Cir.
2000), the interpretation attested to by the plaintiff is a
“fantastic conjecture”—the court should reject it without
requiring evidence beyond the letter itself. Veach v. Sheeks,
316 F.3d 690, 692-93 (7th Cir. 2003); Pettit v. Retrieval Masters
Creditors Bureau, Inc., 211 F.3d 1057, 1060-62 (7th Cir. 2000);
McStay v. I.C. System, Inc., 308 F.3d 188, 191 (2d Cir. 2002);
Smith v. Computer Credit, Inc., 167 F.3d 1052, 1054-55 (6th
Cir. 1999); Smith v. Transworld Systems, Inc., 953 F.2d 1025,
1028-29 (6th Cir. 1992). The fact that a lawyer has found
three people who are willing to sign affidavits drafted by
him stating that they were confused will not create an issue
for trial unless the judge reading the letter reasonably
concludes that it could well confuse a substantial number of
recipients. Unlike the letter at issue in the Chuway case, there
is nothing in the statement complained of in the letter to
Schletz and his coplaintiffs to confuse anyone.
A judge might be mistaken in supposing that a letter that
was clear to him was clear to unsophisticated debtors,
however, and so it is open to a plaintiff, in any but the
clearest case, to present objective evidence of confusion,
for example the results of a consumer survey. Pettit v.
Retrieval Masters Creditors Bureau, Inc., supra, 211 F.3d at
1061-62; Walker v. National Recovery, Inc., 200 F.3d 500, 502,
4 Nos. 02-2509, 03-2578, 03-2588, 03-2590
504 (7th Cir. 1999); Johnson v. Revenue Management Corp., 169
F.3d 1057, 1060-61 (7th Cir. 1999). That at least is the view of
our court; other circuits disagree and think that whether a
dunning letter is confusing is always a matter of law. E.g.,
Wilson v. Quadramed Corp., 225 F.3d 350, 353 n. 2 (3d Cir.
2000). No matter. No survey was conducted here, leaving
the plaintiffs’ affidavits as the sole, and insufficient, eviden-
tiary basis for supposing that a statement entirely clear on
its face is actually unclear.
The plaintiffs have an alternative claim that is downright
frivolous—that the statement we quoted from the dunning
letter is false, and so violated 15 U.S.C. § 1692e, because two
of the creditors did not add interest. The letter didn’t say
they would, only that they might.
In our other case, Taylor, the letter again clearly stated the
principal balance, the interest due, and the total balance
due, and the main claim is that the further statement that
“your account balance may be periodically increased due to
the addition of accrued interest or other charges as provided
in your agreement with your creditor” is confusing. It is no
more confusing than the statement in the Schletz letter. It is
the clear statement of a truism.
In addition, however, the letter contains, after a sentence
that gives a phone number that the debtor can call “to
resolve your account,” the statement: “Act now to satisfy
this debt.” Taylor contends that this injects confusion by
obscuring (“overshadowing,” as many of the cases say) the
debtor’s statutory entitlement to a 30-day period in which
to dispute the debt and by doing so to compel the debt
collector to verify it. Bartlett v. Heibl, supra, 128 F.3d at 500-
01; Chauncey v. JDR Recovery Corp., 118 F.3d 516, 518-19 (7th
Cir. 1997); Avila v. Rubin, supra, 84 F.3d at 226; Miller v.
Payco-General American Credits, Inc., supra, 943 F.2d at 484-85.
Not so. The entitlement is clearly stated in the next para-
graph of the letter.
Nos. 02-2509, 03-2578, 03-2588, 03-2590 5
“Act now to satisfy your debt” is in the nature of puffing,
in the sense of rhetoric designed to create a mood rather
than to convey concrete information or misinformation
(“Buy Now!” “Best Deal Ever!” “We Will Not Be
Undersold!”), as it is perfectly obvious to even the dimmest
debtor that the debt collector would very much like him to
pay the amount demanded straight off, sparing the debt col-
lector any further expense. Renick v. Dun & Bradstreet
Receivable Management Services, 290 F.3d 1055, 1057 (9th Cir.
2002) (per curiam) (“Use the tear-off portion of this letter . . .
to send your payment today”); Wilson v. Quadramed Corp.,
supra, 225 F.3d at 360-61 n. 6 (“avoid further action”); Terran
v. Kaplan, supra, 109 F.3d at 1434.
The only complication in Taylor’s case is that the district
judge dismissed the case on the pleadings, the only evi-
dence before him being the dunning letter itself, which was
attached to the complaint. However, both in his brief and at
oral argument Taylor’s counsel (the same counsel as in
Schletz) made clear that the only evidence he would have
wanted to present was an affidavit in which Taylor would
say that he had been confused by the letter, a form of proof
as unavailing in this case as in the other.
The judgments in both cases are therefore
AFFIRMED.
A true Copy:
Teste:
_____________________________
Clerk of the United States Court of
Appeals for the Seventh Circuit
USCA-02-C-0072—4-22-04