United States District Court, D. Minnesota
CHAD D. ENGELBY, Plaintiff,
I.C. SYSTEM, INC., a Minnesota corporation, Defendant.
Michael J. Sheridan, ATLAS LAW FIRM, LLC, for plaintiff.
P. Flynn, GORDON & REES LLP, for defendant.
Patrick J. Schiltz, United States District Judge
Chad D. Engelby filed a petition for relief under Chapter 7
of the United States Bankruptcy Code. Among the debts that he
sought to have discharged was a debt to Molldrem Family
Dentistry (“Molldrem”). After Engelby filed his
petition, Molldrem hired defendant I.C. System, Inc.
(“ICS”) to collect Engelby's debt. ICS sent
three letters to Engelby-two while his bankruptcy proceedings
were pending and one after his debt to Molldrem had been
discharged by the bankruptcy court.
brings this action against ICS, alleging that each of
ICS's letters violated the Fair Debt Collection Practices
Act (“FDCPA”), 15 U.S.C. § 1692 et
seq. This matter is before the Court on ICS's motion
to dismiss Engelby's amended complaint. ECF No. 24. ICS
argues that it cannot be held liable under the FDCPA because
it did not know that Engelby had filed for
bankruptcy or that his debt had been discharged. ICS further
argues that Engelby is judicially estopped from pursuing his
FDCPA claims because he did not disclose those claims during
the bankruptcy proceedings. For the reasons that follow, the
Court finds that both of ICS's arguments are meritless,
and therefore denies ICS's motion to dismiss.
became indebted to Molldrem in the amount of $825.60. ECF No.
16, Am. Compl. (“Compl.”) ¶ 6. On April 21,
2016, Engelby filed a Chapter 7 petition in the United States
Bankruptcy Court for the District of Minnesota. Id.
¶ 8. Engelby identified Molldrem as one of his
creditors. Id. ¶ 9; see also ECF No.
26, Flynn Decl. Ex. 1, Bankr. Pet., Sched. F (listing a debt
of $826.00 to Molldrem on account 4500). Three days later,
the clerk of the bankruptcy court mailed a Notice of Chapter
7 Bankruptcy Case to Molldrem (and Engelby's other
creditors). Compl. Ex. A. That notice informed Molldrem that
“[t]he filing of the case imposed an automatic stay
against most collection activities.” Id. The
notice specifically warned Molldrem that it could not
“try to collect from [Engelby]” or “demand
repayment from [him] by mail, phone, or otherwise.”
2016, Molldrem hired ICS to collect the debt from Engelby.
Id. ¶ 7; see also ECF No. 25 at 2.
Molldrem apparently did not inform ICS that Engelby had filed
for bankruptcy or that the automatic stay barred collection
activities against him. ICS sent letters to Engelby on July
9, 2016, and July 29, 2016, both demanding that he repay his
debt to Molldrem. Compl. ¶ 12; see also Id. Ex.
B. Engelby did not respond.
bankruptcy court issued an Order for Discharge on August 11,
2016. Id. ¶ 14; see also Flynn Decl.
Ex. 3. On August 12, 2016, ICS sent Engelby yet another
letter demanding that he repay his debt to Molldrem. Compl.
¶ 15; see also Id. Ex. C. Of course, that debt
no longer existed, as it had been discharged the previous day
by the bankruptcy court. But ICS was apparently unaware of
brings this action against ICS, alleging that ICS violated
multiple provisions of the FDCPA when it sent demand letters
to him on July 9, July 29, and August 12, 2016. ICS now moves
to dismiss Engelby's amended complaint for failure to
state a claim.
Standard of Review
survive a motion to dismiss under Federal Rule of Civil
Procedure 12(b)(6), a complaint must “state a claim to
relief that is plausible on its face.” Bell Atl.
Corp. v. Twombly, 550 U.S. 544, 570 (2007). Although the
factual allegations in the complaint need not be detailed,
they must be sufficient to “raise a right to relief
above the speculative level.” Id. at 555. In
assessing the sufficiency of the complaint, the Court may
disregard legal conclusions that are couched as factual
allegations. See Ashcroft v. Iqbal, 556 U.S. 662,
678-79 (2009). The Court must, however, accept as true all of
the factual allegations in the complaint and draw all
reasonable inferences in the plaintiff's favor. See
Id. at 678.
if the parties present, and the Court considers, matters
outside of the pleadings, the motion must be treated as a
motion for summary judgment. Fed.R.Civ.P. 12(d). But the
Court may consider materials that are necessarily embraced by
the complaint, as well as any exhibits attached to the
complaint, without converting the motion into one for summary
judgment. Mattes v. ABC Plastics, Inc., 323 F.3d
695, 697 n.4 (8th Cir. 2003); see also Kushner v. Beverly
Enters., Inc., 317 F.3d 820, 831 (8th Cir. 2003)
(“‘When deciding a motion to dismiss, a court may
consider the complaint and documents whose contents are
alleged in a complaint and whose authenticity no party
questions, but which are not physically attached to the
pleading.'”) (citation omitted).
alleges that ICS violated the FDCPA when it sent collection
letters to him on July 9, July 29, and August 12, 2016.
Engelby relies on multiple provisions of the FDCPA, but only
one of those provisions needs to be discussed, because the
Court must deny ICS's motion if Engelby has pleaded a
plausible claim under any provision of the FDCPA.
the FDCPA, a “debt collector” may not “use
any false, deceptive, or misleading representation or means
in connection with the collection of any debt.” 15
U.S.C. § 1692e. The FDCPA sets forth a non-exclusive list
of acts that violate this provision, including the making of
a “false representation of the character, amount, or
legal status of any debt.” 15 U.S.C. §
the three letters sent to Engelby by ICS asserted that
Engelby's debt to Molldrem was due, and each of the
letters demanded that Engelby repay that debt. But at the
time of the July 9 and July 29 letters, Engelby's debt to
Molldrem was not due because of the automatic stay. And at
the time of the August 12 letter, Engelby's debt to
Molldrem was not due because that debt had been discharged by
the bankruptcy court. It seems clear, then, that the three
letters misrepresented the legal status of Engelby's debt
to Molldrem in violation of § 1692e(2)(A). See
Randolph v. IMBS, Inc., 368 F.3d 726, 728 (7th Cir.
2004) (“[A] demand for immediate payment while a debtor
is in bankruptcy (or after the debt's discharge) is
‘false' in the sense that it asserts that money is
due, although, because of the . . . discharge injunction, it
is not.” (internal citations omitted)); Eide v.
Colltech, Inc., 987 F.Supp.2d 951, 962-63 (D. Minn.
2013) (“Sending a collection ...