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Toepper v. Snyder

United States District Court, D. Minnesota

June 20, 2018

Kathleen Toepper, on behalf of herself and all others similarly situated, Plaintiff,
v.
Law Office of Richard Snyder, Bruce Jackman, Richard W. Snyder, and Ben Bridge Jeweler, Inc., Defendants.

          ORDER

          JOAN N. ERICKSEN UNITED STATES DISTRICT JUDGE

         Plaintiff Kathleen Toepper (“Toepper”) filed this putative class action alleging that Defendant Law Office of Richard Snyder (“LORS”), Defendant Bruce Jackman (“Jackman”), and Defendant Richard W. Snyder (“Snyder”), (collectively, “LORS Defendants”), violated the Fair Debt Collection Practices Act (“FDCPA”) and the automatic stay of a bankruptcy proceeding. Am. Compl., ECF No. 19. Toepper also asserts claims for automatic stay violations against Defendant Ben Bridge Jeweler, Inc. (“Ben Bridge”). Id. at 24-25.

         LORS Defendants move to dismiss all claims against them under Federal Rule of Civil Procedure 12(b)(6) for “failure to state a claim upon which relief can be granted.” ECF Nos. 24, 26. Toepper opposes the motion. ECF No. 34. As set forth below, the Court grants the motion and dismisses this action as against LORS Defendants.

         BACKGROUND

         Around September 14, 2016, Toepper incurred a debt with Ben Bridge when she purchased a gold chain and gold earrings. ECF No. 19 at 3. On December 6, 2016, Toepper filed for Chapter 7 bankruptcy in the District of Minnesota. Id. Ben Bridge retained LORS, who then sent three letters concerning the debt to Toepper's bankruptcy attorney.[1] Id. at 3-6. These three letters are the basis for all the claims against LORS Defendants.

         First, on January 9, 2017, Jackman, a paralegal for LORS, sent a letter to Toepper's bankruptcy attorney (“the January 9 Letter”). The letter reads, in relevant part:

This office represents Ben Bridges Jewelers and has been retained to recover funds procured by your client through fraud. Our initial review of the file indicates that our client has sufficient grounds to seek a determination that its debt on the above-referenced account in the amount of $5814.28 be adjudged nondischargeable under 11 U.S.C. Section 523(a)(2).
If your client wishes to discuss a settlement of this matter prior to our filing an adversary complaint, please contact this office within 7 days of the date of this letter. If we do not receive a response, our office will proceed with preparing the adversary complaint to determine this debt to be nondischargeable.
Thank you for your cooperation in this matter.

         ECF No. 27-1 at 1; ECF No. 19 at 3-4. The bottom of the letter states: “In the event that the FDCPA is deemed to apply to bankruptcy proceedings, this letter is an attempt to collect a debt and any information obtained as a result will be used for that purpose.” Id.

         On January 23, 2017, Jackman sent a second letter to Toepper's bankruptcy attorney (“the January 23 Letter”). This letter reads, in relevant part:

Our client's records indicate that on or before 09/14/2016, your client purchased 18K GOLD TOSCANO CHAIN, 18K GOLD EARRINGS (“Secured Property”) from BEN BRIDGE JEWELERS with a fair market value of $6, 788.36, and either admitted transferring the Secured Property pre-petition or failed to conclusively disclose its location and/or disposition as required in the bankruptcy schedules. As of the date your client's bankruptcy case was filed, the total amount owed on this account was $5, 814.28, and our office has determined that sufficient cause may exist to file a complaint to Determine Nondischargeability of Debt under 11 U.S.C. § 523(a)(6).
Before we proceed with preparing this complaint, we are offering your client an opportunity to settle this matter by signing a reaffirmation agreement. As an added incentive for your client to settle without litigation, we are offering a discount of $1, 164.28 off of the principal amount owed on this debt, as reflected in the attached reaffirmation documents.
Please discuss this reaffirmation offer with your client. You must respond to this office within 7 days to avoid further action. Thank you for your prompt attention to this matter.

         ECF No. 27-1 at 2 (emphasis in original); ECF No. 19 at 4-5 (emphasis in original). The bottom of the letter states: “In the event that the FDCPA is deemed to apply to bankruptcy proceedings, this letter is an attempt to collect a debt and any information obtained as a result will be used for that purpose.” Id. As stated, Jackman attached a proposed reaffirmation agreement.

         Third, on February 15, 2017, Snyder, a lawyer for LORS, sent a letter to Toepper's bankruptcy attorney (“the February 15 Letter”). The letter reads, in relevant part:

Based on a recent review of our legal file, the issues pertaining to the purchases from Ben Bridge Jewelers on the account with Ben Bridge Jewelers included in the above-referenced bankruptcy proceeding remain unresolved. You have left our office with no alternative but to escalate this matter with our client for further instructions.
We have prepared the attached complaint which we may be forced to file through local counsel if we do not hear from you. Please contact our office within seven (7) days to prevent further action.
Our client had hoped this matter could be resolved without litigation, but the attached pleading should convince you that they are prepared and willing to take the next step.

         ECF No. 27-1 at 13 (emphasis in original); ECF No. 19 at 5-6 (emphasis in original). As stated in the letter, Snyder provided a complaint to Toepper's bankruptcy attorney.

         On March 7, 2017, Toepper's debts were discharged in bankruptcy. ECF No. 19 at 6. On September 8, 2017, Toepper filed this putative class action against LORS Defendants and Ben Bridge. ECF No. 1. In her Amended Complaint, she alleges that the above letters violated the FDCPA and the automatic stay provision of the United States Bankruptcy Code. ECF No. 19. Toepper has not yet moved for class certification. LORS Defendants now move under Rule 12(b)(6) to dismiss the claims against them.

         LEGAL STANDARD

         To survive a Rule 12(b)(6) motion, “a complaint must contain sufficient factual matter, accepted as true, to ‘state a claim to relief that is plausible on its face.'” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)). A complaint “does not need detailed factual allegations, ” but it must contain “more than labels and conclusions.” Twombly, 550 U.S. at 555 (citation omitted). “Threadbare recitals of the elements of a cause of action, supported by mere conclusory statements, do not suffice.” Iqb ...


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