Jeffrey Lox v. CDA, Limited

Summary

The Seventh Circuit held that debt-collection letters falsely and materially suggested that attorney fees could be awarded against the debtor, even though no contractual or statutory basis for such fees existed. The court concluded that the language was misleading on its face under the Fair Debt Collection Practices Act and did not require extrinsic evidence. It reversed the grant of summary judgment to CDA and remanded for further proceedings.

Holdings

1. The statement that, after CDA obtained a judgment, a court could allow attorney fees was false because attorney fees could not have been awarded against Lox under the applicable contractual and legal circumstances.
2. The attorney-fees statement was misleading on its face to the unsophisticated consumer, and Lox therefore did not need extrinsic evidence to establish its deceptive nature.
3. The false and misleading attorney-fees statement was material because it had the ability to influence a consumer's decision whether to pay or contest the debt.
4. Lox did not waive his claim concerning the attorney-fees language because his amended complaint attached the challenged letter and generally alleged violations of § 1692e(10), his interrogatory responses identified the relevant language, and CDA questioned him about it at deposition.

Questions Presented

1. Whether CDA's statement that a court could allow attorney fees if it obtained a judgment against Lox was false under 15 U.S.C. § 1692e.
2. Whether the statement was misleading to the unsophisticated consumer on its face, such that extrinsic evidence was unnecessary.
3. Whether the false and misleading statement was material under the FDCPA.
4. Whether Lox waived the attorney-fees theory by not specifically quoting the challenged language in his amended complaint.

Disposition

reversed_and_remanded