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In Rem Demand for Neighborhood Association Debt Violates FDCPA

Link: Ellison v. Fullett Rosenlund Anderson PC, Case No. 17 CV 2236 (N.D. Ill., Sept. 28, 2018).

Defendant law firm sent a notice on behalf of Brookside Village Neighborhood Association to collect past due monthly assessments. Plaintiff had discharged the debt in bankruptcy. Regardless, Defendant sent a dunning letter titled “IN REM NOTICE AND DEMAND FOR POSSESSION” that stated:

THIS IS THE PROPERTY’S NOTICE … that the property is in default of its ongoing obligation due to Brookside Village Neighborhood Association in the sum of $4,100.00 for its proportionate share of the expenses … lawfully agreed upon due and owing at least in part since 02/01/2011, as well as the sum of $265.02 in legal fees and costs in attempting to collect this account, for a total sum of $4,365.02.

This is its NOTICE that payment in full of the amount stated above is demanded of the property and that, unless its payment of the FULL AMOUNT is made on or before the expiration of thirty-four (34) days after the date of mailing of this Notice, THE ASSOCIATION MAY SEEK TO TERMINATE ANY RIGHT TO POSSESSION OF THE PREMISES.

The court, judge Harry D. Leinenweber, found that Plaintiff is a “consumer” despite having discharged the debt, that the notice was in connection with the collection of a debt (despite Defendant’s arguments it was only “in rem”), and that the notice taken as a whole would be misleading and confusing on its face to the average unsophisticated consumer.

Defendant’s hail mary argument that the FDCPA conflicts with Illinois’ Forcible Entry and Detainer Act was summarily rejected:

FRA fails to identify any conflict, let alone one that rises to the magnitude of conflict present in Ho, between FEDA and the FDCPA. Nor can the Court find any such conflicts. While fulfilling FEDA requirements, a notice or letter can still be drafted in a way that violates the FDCPA. This happens to be the case for the Notice here. Regardless of whether the Notice complies with FEDA requirements, the Court finds that the Notice was misleading and could have been crafted in a way to avoid ambiguity and confusion, particularly by informing Plaintiff either that she was not liable for the debt or by specifying the amount, if any, she was still liable for post-bankruptcy discharge.

Plaintiff was represented by Edelman, Combs, Latturner & Goodwin LLC.

Posted in FDCPA

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