Skeberdis v. Patrick Kinnally & Kinnally, Flaherty, Krentz, Loran, Hodge & Masur, P.C.

DAVID SKEBERDIS, Plaintiff, v. PATRICK KINNALLY and KINNALLY,FLAHERTY, KRENTZ, LORAN,HODGE & MASUR, P.C., Defendants.

Case No. 17-cv-6261

UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF ILLINOIS EASTERN DIVISION

June 21, 2018

Judge Robert M. Dow, Jr.

MEMORANDUM OPINION AND ORDER

This matter is before the Court on Defendants' motion [7] to dismiss Plaintiff's complaint pursuant to Federal Rule of Civil Procedure 12(b)(6). For the reasons stated below, Defendants' motion [7] is granted and Plaintiff's complaint is dismissed in its entirety with prejudice. The Court will issue a final judgment and close this case.

I. Background

Plaintiff David Skeberdis ("Plaintiff") brings this action against Patrick Kinnally and Kinnally, Flaherty, Krentz, Loran, Hodge & Masur, P.C. ("Defendants") for violations of the Fair Debt Collection Practices Act, 15 U.S.C. § 1692 et seq. ("FDCPA"). According to Plaintiff's complaint,¹ Defendants, acting as debt collectors, initiated a lawsuit in September 2016 against Plaintiff in Illinois state court in order to collect a civil debt of approximately $23,000. [See 1, ¶ 7.] This lawsuit was filed on behalf of the City of Aurora, Illinois, and the initial complaint alleged that Plaintiff incurred this approximately $23,000 debt as a result of an "adjudicatory decision" by Aurora. [Id.] This state court lawsuit was filed in Kane County,Illinois, pursuant to Illinois's venue statute. [Id.] Plaintiff, however, resides in DuPage County, Illinois. [Id., ¶ 6.]

According to Plaintiff, this reference to an "adjudicatory decision" in the state court lawsuit as the source for his alleged debt was false. Moreover, Plaintiff alleges that Defendants willfully misrepresented the nature of this $23,000 obligation as being the result of an "adjudicatory decision" for the purpose of fixing the state court lawsuit's venue in Kane County rather than in DuPage County, where Plaintiff resides. [Id., ¶ 11.] Plaintiff further alleges that Defendants later amended the complaint to remove the "adjudicatory decision" reference and instead plead only that the $23,000 debt resulted from an implied contract between the City of Aurora and Plaintiff. [Id., ¶ 8.]

Defendants have attached to their motion to dismiss the state court complaint that was filed in September 2016.² [See 7, Ex. B (State Court Compl.).] According to this complaint, the City of Aurora removed more than 300 birds from Plaintiff's property in October 2012. [Id.,¶ 3.] The complaint states that this removal was undertaken pursuant to a court order. [Id., at Ex. 1.] Aurora engaged and paid a company called Restoration Techs for cleaning and bio-recovery services of Plaintiff's property after the birds were removed. [Id.] The state court complaint seeks reimbursement from Plaintiff for Aurora's payment to Restoration Techs, along with other expenses Aurora incurred after the removal of birds from Plaintiff's property, stating that "[b]ased on a reasonable interpretation of the course of dealing" between Aurora and Plaintiff, Aurora expected to be compensated for these services by Plaintiff. [Id., ¶¶ 4-12.] The state court complaint also claims that the state court has jurisdiction "to enforce the City's adjudicatory decision" against Plaintiff. [See id., ¶ 13.] Although this "adjudicatory decision" is not identified in the state court complaint itself, Defendants have also attached to their motion to dismiss (1) an administrative search warrant, signed by a judge in Kane County, authorizing an inspection of Plaintiff's property and removal of any animals from the property that are in violation of Aurora's municipal ordinances; and (2) the return of this administrative search warrant detailing the birds that were removed from Plaintiff's property pursuant to the warrant. [See 7, Exs. A, C.]³

Plaintiff alleges that Defendants' reference to an "adjudicatory decision" in this state court complaint violates two provisions of the FDCPA. First, Plaintiff claims that this reference violates the FDCPA's prohibition against using "any false, deceptive, or misleading representation or means in connection with the collection of any debt," 15 U.S.C. § 1692e, because it is false. Second, Plaintiff claims that this reference to an "adjudicatory decision" inthe state court lawsuit was made in order to fix venue in a county other than the county in which Plaintiff resides in violation of the FDCPA's provision that a debt collector bringing any legal action on a debt against any consumer shall "bring such action only in the judicial district or similar legal entity (A) in which such consumer signed the contract sued upon; or (B) in which such consumer resides at the commencement of the action," 15 U.S.C. § 1692i(a)(2). [Id., ¶¶ 9-11.]

After Plaintiff initiated the instant lawsuit, Defendants filed a motion [7] to dismiss Plaintiff's complaint in its entirety, which is currently before the Court.

II. Legal Standard

To survive a Federal Rule of Civil Procedure ("Rule") 12(b)(6) motion to dismiss for failure to state a claim upon which relief can be granted, the complaint first must comply with Rule 8(a) by providing "a short and plain statement of the claim showing that the pleader is entitled to relief," Fed. R. Civ. P. 8(a)(2), such that the defendant is given "fair notice of what the * * * claim is and the grounds upon which it rests." Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007) (quoting Conley v. Gibson, 355 U.S. 41, 47 (1957)) (alteration in original). Second, the factual allegations in the complaint must be sufficient to raise the possibility of relief above the "speculative level." E.E.O.C. v. Concentra Health Servs., Inc., 496 F.3d 773, 776 (7th Cir. 2007) (quoting Twombly, 550 U.S. at 555). "A pleading that offers 'labels and conclusions' or a 'formulaic recitation of the elements of a cause of action will not do.'" Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Twombly, 550 U.S. at 555). Dismissal for failure to state a claim under Rule 12(b)(6) is proper "when the allegations in a complaint, however true, could not raise a claim of entitlement to relief." Twombly, 550 U.S. at 558. In reviewing a motion to dismiss pursuant to Rule 12(b)(6), the Court accepts as true all of Plaintiff's well-pleaded factualallegations and draws all reasonable inferences in Plaintiff's favor. Killingsworth v. HSBC Bank Nev., N.A., 507 F.3d 614, 618 (7th Cir. 2007).

III. Analysis

Plaintiff brings one claim in his complaint for the violation of the FDCPA, based solely on the state court complaint filed by Defendants in Kane County in September 2016. Defendants make four arguments in support of their Rule 12(b)(6) motion to dismiss Plaintiff's complaint. First, Defendants argue that the amount sought to be collected in the state court action does not meet the statutory definition of a "debt" under the FDCPA and, therefore, Plaintiff fails to state a claim. [7, at 5-7.] Second, Defendants argue that the reference to an "adjudicatory decision" in the state court complaint is accurate and thus does not violate the FDCPA. [Id., at 4-5.] Third, Defendants argue that the "adjudicatory decision" reference, even if false, is immaterial. [Id., at 7-9.] Finally, Defendants argue that Plaintiff lacks standing to pursue his FDCPA claim because he has not articulated how he has suffered a concrete injury. [Id., at 9-10.]

The FDCPA was enacted in order to "protect consumers from abusive, deceptive, and unfair debt collection practices by prohibiting the use of certain collection methods in a debt collector's attempt to collect a 'debt' from a consumer." Berman v. GC Servs. Ltd. P'ship, 146 F.3d 482, 484 (7th Cir. 1998). A "debt" is defined in the statute as "any obligation or alleged obligation of a consumer to pay money arising out of a transaction in which the money, property, insurance, or services which are the subject of the transaction are primarily for personal, family, or household purposes, whether or not such obligation has been reduced to judgment." 15 U.S.C. § 1692a(5). Not all obligations to pay money constitute "debts" under this definition, which serves to limit the scope of the FDCPA. Berman, 146 F.3d at 484.

The Seventh Circuit has articulated a two-part inquiry to use in determining whether a particular obligation falls into this statutory definition: this inquiry considers both parts of the definition separately. See Berman, 146 F.3d at 484. First, a court must ask whether the obligation sought to be collected is "of a consumer to pay money arising out of a transaction." Id. (citing Newman v. Boehm, Pearlstein & Bright, Ltd., 119 F.3d 477, 481-82 (7th Cir. 1997)). If this question is answered in the affirmative, a court must then assess whether the "money, property, insurance, or services which are the subject of the transaction are primarily for personal, family, or household purposes." Id. (citing Newman, 119 F.3d at 481-82); see also Vasilakos v. Blitt & Gaines, P.C., 2013 WL 4047634, at *2 (N.D. Ill. Aug. 8, 2013); Thone Phan v. Gartner Law Offices, Inc., 2012 WL 3993031, at *2 (N.D. Ill. Sept. 10, 2012).

Regarding the first part of this inquiry, the Seventh Circuit has stated that the term "transaction," while not defined in the FDCPA itself, is "a broad reference to many different types of business dealings between parties." Franklin v. Parking Revenue Recovery Servs., Inc., 832 F.3d 741, 744 (7th Cir. 2016) (quoting Bass v. Stolper, Koritzinsky, Brewster & Neider, S.C., 111 F.3d 1322, 1325 (7th Cir. 1997)). But courts have generally limited the term "transaction" in the FDCPA context to refer to a consensual transaction that has been contracted for by parties. See Berman, 146 F.3d at 484 (interpreting the statutory definition of "debt" to refer to "an obligation to pay arising from a consensual transaction, where parties negotiate or contract for consumer-related goods or services"); Reid v. Am. Traffic Sols., Inc., 2010 WL 5289108, at *4 (S.D....