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Wagner v. Client Services

March 26, 2009

PAULA WAGNER, PLAINTIFF,
v.
CLIENT SERVICES, INC., DEFENDANT.



The opinion of the court was delivered by: Baylson, J.

MEMORANDUM

Presently before this Court is Defendant Client Services, Inc.'s Motion to Dismiss in a consumer action for damages brought pursuant to the Fair Debt Collection Practices Act ("FDCPA"), 15 U.S.C. § 1692. Plaintiff Paula Wagner alleges that Defendant sent her a collection letter containing false, deceptive, and / or misleading representations, in violation of the Act. For the following reasons, the motion will be denied.

I. Background

A. Facts

Defendant, Client Services, Inc., a Missouri corporation in the business of collecting debts on behalf of creditors, sent a letter to Plaintiff, a Pennsylvania resident, regarding debt allegedly due to Citibank (South Dakota) NA ("Citibank").*fn1 (Compl. ¶¶ 5-9). The letter, dated April 4, 2008, indicated a balance due of $6,687.23.*fn2 (Def.'s Mot. Dismiss, Ex. B). The letter reads:

In an effort to resolve this matter amicably, our client has authorized us to accept a settlement of 80% of the above balance.

If you chose to accept this offer, we must receive the settlement amount in full no later than fourteen days from the date of this letter. If you wish to accept this offer, but need a few more days to make arrangements, please call us at our toll free number 1-800-521-3236.

If the amount written-off is equal or greater than $600.00, our client is required by the Internal Revenue code, section 6050P, to report this amount and issue a form 1099-C. If you have any questions regarding your personal taxes, it is recommended that you consult with a certified public accountant or other tax professional. (Compl. Ex. A). Plaintiff claims that language of the letter is false, deceptive, and misleading, thereby violating § 1692e of the Fair Debt Collection Practices Act ("FDCPA"), 15 U.S.C. § 1692. (Compl. ¶ 18).

B. Procedural History

Plaintiff filed her Complaint on November 25, 2008 (Doc. No. 1). Defendant filed this Motion to Dismiss on January 2, 2009 (Doc. No. 4), and Plaintiff replied on January 19, 2009 (Doc. No. 6).

II. Jurisdiction

Jurisdiction is proper on the basis of 28 U.S.C.A. § 1331. Plaintiff's claim arises under the Fair Debt Collection Practices Act, 15 U.S.C. § 1692.

III. Parties' Contentions

In its Motion to Dismiss, Defendant argues that the letter is not deceptive or misleading in any way because the facts of this case necessitate the filing of Form 1099-C pursuant to Internal Revenue Code ("I.R.C.") § 6050P. (Def.'s Memo. Law Support Mot. Dismiss at 3). Defendant argues that under § 6050P, as clarified by 26 C.F.R. 1.6050P-1(b)(2), an agreement to accept less than full consideration of the debt is an "identifiable event," thereby triggering the § 6050P reporting requirement. (Def.'s Memo. at 2). Defendant argues that because the "identifiable event" of a discharge of indebtedness would occur if Plaintiff accepted Defendant's settlement offer and because the amount of the discharge in this case is ...


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