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Burns v. Ross Stuart & Dawson Inc.

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

December 1, 2016

PARKER BURNS, Plaintiff,



         This lawsuit, alleging violations of the federal Fair Debt Collection Practices Act (“FDCPA”) and Michigan's Regulation of Collection Practices Act (“RCPA”), arises from a letter Plaintiff Parker Burns received to collect an alleged debt. Plaintiff brings this lawsuit as a putative class action on behalf of other consumers who received the same letter. Presently before the Court is Defendant Edward Rose & Sons, LLC's motion to dismiss Plaintiff's Amended Complaint, filed pursuant to Federal Rule of Civil Procedure 12(b)(6) on May 12, 2016. (ECF No. 18.) The motion has been fully briefed. Finding the facts and legal arguments sufficiently presented in the parties' briefs, the Court finds oral argument unnecessary and is dispensing with oral argument pursuant to Eastern District of Michigan Local Rule 7.1(f).

         I. Rule 12(b)(6) Standard

         A motion to dismiss pursuant to Rule 12(b)(6) tests the legal sufficiency of the complaint. RMI Titanium Co. v. Westinghouse Elec. Corp., 78 F.3d 1125, 1134 (6th Cir. 1996). Under Federal Rule of Civil Procedure 8(a)(2), a pleading must contain a “short and plain statement of the claim showing that the pleader is entitled to relief.” To survive a motion to dismiss, a complaint need not contain “detailed factual allegations, ” but it must contain more than “labels and conclusions” or “a formulaic recitation of the elements of a cause of action . . ..” Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555 (2007). A complaint does not “suffice if it tenders ‘naked assertions' devoid of ‘further factual enhancement.' ” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Twombly, 550 U.S. at 557).

         As the Supreme Court provided in Iqbal and Twombly, “[t]o survive a motion to dismiss, a complaint must contain sufficient factual matter, accepted as true, to ‘state a claim to relief that is plausible on its face.' ” Id. (quoting Twombly, 550 U.S. at 570). “A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.” Id. (citing Twombly, 550 U.S. at 556). The plausibility standard “does not impose a probability requirement at the pleading stage; it simply calls for enough facts to raise a reasonable expectation that discovery will reveal evidence of illegal [conduct].” Twombly, 550 U.S. at 556.

         In deciding whether the plaintiff has set forth a “plausible” claim, the court must accept the factual allegations in the complaint as true. Erickson v. Pardus, 551 U.S. 89, 94 (2007). This presumption, however, is not applicable to legal conclusions. Iqbal, 556 U.S. at 668. Therefore, “[t]hreadbare recitals of the elements of a cause of action, supported by mere conclusory statements, do not suffice.” Id. (citing Twombly, 550 U.S. at 555).

         II. Factual and Procedural Background

         According to Plaintiff's Amended Complaint, Defendant Ross, Stuart & Dawson, Inc. (“RSD”) is a debt collector, which offers its name and letterhead to creditors for “pre-collect” collection of debts. (Am. Compl. ¶ 9, ECF No. 13.) Defendant Edward Rose & Sons, LLC (“Rose”) is a real estate development and management company, which collects payments from tenants on behalf of its various properties in Michigan. (Id. ¶ 10.) One of these properties is “The Village.” (Id.)

         On or about March 2, 2016, Plaintiff received a letter for a debt owed to “The Village.” (Id. ¶ 31, Ex. 1, ECF Nos. 13, 13-1.) RSD's name is printed in large letters in the top, right-hand corner of the letter, under which appears: “Excellence in Global Collections”. (Id.) In the top, left-hand corner of the letter, in a smaller font, is “The Village”, followed by an address in Bloomfield Hills, Michigan, which Plaintiff alleges belongs to Rose. (Am. Compl. ¶ 33(g), Exs. 1, 3, ECF Nos. 13, 13-1, 13-3.)

         The letter begins by informing Plaintiff: “The Village has instructed us to proceed with the collection of your account.” (Am. Compl., Ex. 1, ECF No. 13-1.) The letter then warns Plaintiff: “To avoid further collection action, we urge you to take care of this matter.” (Id.) Under the heading “IMPORTANT CONSUMER NOTICE” is information advising Plaintiff to “notify this office within 30 days” to dispute the validity of the debt or request validation of the debt or the name and address of the original creditor. (Id., emphasis added). Below the notice is RSD's name in bold. (Id.) The letter contains neither an address nor phone number for RSD, however. (Id.)

         Plaintiff is directed in the letter to contact “the creditor” to ask any questions or pay the debt by credit card, followed by a phone number which Plaintiff alleges is Rose's number. (Id.; see also Am. Compl. ¶ 33(b), Ex. 2, ECF No. 13-2.) The bottom of the letter bears the name of “The Village”, followed by Rose's address. (Am. Compl., Ex. 1.)

         On its website, RSD advertises “pre-collect” services for its clients. (Am. Compl. ¶ 35, Ex. 4, ECF Nos. 13, 13-4.) According to the website, the goal of RSD's pre-collect program “is to create an opportunity to communicate with the debtor and re-direct them back to your company so that the situation can be resolved internally.” (Id., emphasis removed.) The website states that payments are made directly to the client. (Id.) RSD's website also advertises “Letter Writing Services.” (Id.)

         In 2007, RSD and Rose entered an agreement titled, “Edward Rose & Sons Demand Letter ‘Duns' Agreement” (“Defendants' Agreement”). (Am. Compl. ¶ 36, Ex. 5, ECF No. 13, 13-5.) Plaintiff states in his Amended Complaint that a “Duns Letter” or “Dunning Letter” is a notice to a customer that payment of an account receivable is overdue. (Id. ¶ 37.) According to Defendants' Agreement, RSD agreed to provide Rose demand letter services. (Id. ¶ 38, Ex. 5.) The letter states the “terms and conditions” of those services, which include:

(1) “RSD will mail a series of three letters per debtor account”;
(2) each letter will contain a remittance slip and return address bearing the address provided by Rose and stated in the agreement;
(3) a telephone number specified by Rose, and stated in the agreement, will be inserted into each letter;
(4) “RSD will send all three letters to the debtor(s) until the client cancels any remaining letters”; and,
(5) RSD will include National Change of Address and Address Change Service on the first and second letters and forward ...

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