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Smith v. Convergent Outsourcing, Inc.

United States District Court, E.D. Michigan, Southern Division

November 1, 2016

ELIZABETH SMITH Plaintiff,
v.
CONVERGENT OUTSOURCING, INC., Defendant.

          OPINION AND ORDER GRANTING IN PART AND DENYING IN PART DEFENDANT'S MOTION FOR SUMMARY JUDGMENT (DKT. 10)

          TERRENCE G. BERG UNITED STATES DISTRICT JUDGE

         I. INTRODUCTION

         This is a debt collection case. Defendant Convergent Outsourcing moves for summary judgment pursuant to Federal Rule of Civil Procedure 56 on the ground that its inclusion in a debt collection letter of the sentence “We cannot sue to collect this debt and providing a partial payment may revive the creditor's ability to sue to collect the balance” means its letter did not violate the Fair Debt Collection Practices Act. Because even the least sophisticated consumer would not be misled by the use of the words “settle” and “may” in the context of this letter, Defendant's motion as to Count I is GRANTED. But because Defendant did not argue that it was entitled to summary judgment on Count II (violation of the Michigan Occupational Code) and Count III (violation of the Michigan Collection Practices Act), Defendant's motion as to Counts II and III is DENIED, and these claims are REMANDED to state court.

         II. FACTUAL AND PROCEDURAL HISTORY

         Plaintiff Elizabeth Smith is a former customer of Sprint who allegedly failed to pay Sprint $798.89. Defendant Convergent Outsourcing is a debt collector who has been seeking to collect this debt since 2012. On April 2, 2015, Defendant sent Plaintiff the letter that prompted this lawsuit. The letter was a single page, double sided. On the front, Defendant made a settlement offer of $279.61:

Dear Elizabeth Smith:
This notice is being sent to you by a collection agency. The records of Sprint show that your account has a past due balance of S 798.89.
Our client has advised us that they are willing to offer you a reduced settlement amount of your total balance due to settle your past due balance The full settlement amount or first payment of your selected payment program must be received in our office within 45 days of this letter. If you are interested in taking advantage of this settlement opportunity, please complete the below information and remit with your payment.
Your settlement amount would be $ 279.61 to dear this account in full. This amount represents a 65% savings of your total balance. We are not obligated to make this offer to you tn the future. Even if you are unable to take advantage of this offer, please contact us to see what terms can be worked out on your account.
Payment of a settlement amount does not make you eligible for reinstatement of Sprint services. To be eligible to reapply for service, your entire balance must be paid. Upon payment of the entire balance, you may apply for new service with Sprint. You may be subject to a security deposit on each new unit you establish.
Sincerely.
Convergent Outsourcing, Inc
THIS IS AN ATTEMPT TO COLLECT A DEBT AND AN Y INFORMATION OBTAINED WILL BE USED FOR THAT PURPOSE. THIS COMMUNICATION ...

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