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Stimpson v. Midland Credit Management, Inc.

United States Court of Appeals, Ninth Circuit

December 18, 2019

Barry Stimpson, Plaintiff-Appellant,
v.
Midland Credit Management, Inc., a Kansas corporation; Midland Funding, LLC, a Delaware limited liability company, Defendants-Appellees.

          Argued and Submitted October 24, 2019 Seattle, Washington

          Appeal from the United States District Court for the District of Idaho, No. 4:17-cv-00431-BLW B. Lynn Winmill, District Judge, Presiding

          Scott C. Borison (argued), Esq., Legg Law Firm, LLP, San Mateo, California; Ryan A. Ballard, Esq., Ballard Law, PLLC, Rexburg, Idaho; Peter A. Holland, Esq., Holland Law Firm PC, Annapolis, Maryland; for Plaintiff-Appellant.

          Joshua C. Dickinson (argued), Spencer Fane LLP, Omaha, Nebraska; Lyle J. Fuller, Fuller & Fuller, PLLC, Preston, Idaho; for Defendants-Appellees.

          Before: Richard R. Clifton and Sandra S. Ikuta, Circuit Judges, and Jed S. Rakoff, [*] District Judge.

         SUMMARY [**]

         Fair Debt Collection Practices Act

         Affirming the district court's summary judgment in favor of the defendant in an action under the Fair Debt Collection Practices Act, the panel rejected plaintiff's claim that a debt collector's letter was deceptive or misleading under 15 U.S.C. § 1692e because it attempted to persuade him to pay a time-barred debt.

         The panel held that a debt collector is entitled to collect a lawful, outstanding debt even if the statute of limitations has run, so long as the debt collector does not use means that are deceptive or misleading and otherwise complies with legal requirements. The panel concluded that the letter's statute-of-limitations disclosure would not mislead the least sophisticated debtor into thinking that the debt collector could use legal means to collect the debt, and the letter was not deceptive or misleading for not warning about the potential for revival of the statute of limitations. Further, there is nothing inherently deceptive or misleading in attempting to collect a valid, outstanding debt, even if it is unenforceable in court.

          OPINION

          IKUTA, CIRCUIT JUDGE:

         Barry Stimpson contends that a debt collector's letter was deceptive or misleading because it attempted to persuade him to pay a time-barred debt. We reject this claim because a debt collector is entitled to collect a lawful, outstanding debt even if the statute of limitations has run, so long as the debt collector does not use means that are deceptive or misleading and otherwise complies with legal requirements.

         I

         In February 2006, Barry Stimpson obtained a credit card from HSBC Bank Nevada, N.A. (HSBC). HSBC's credit agreement with Stimpson provided that Nevada law applied to the account.[1] Stimpson charged purchases to his card, but did not pay off the entire balance. He made his last payment on December 12, 2008. In September 2009, HSBC sold Stimpson's account to a debt collector, Midland Funding, LLC.[2] Under Nevada law, the limitations period for bringing a legal action against Stimpson for recovery of the amount owed on the credit card expired on December 12, 2014, six years after Stimpson's last payment. See NRS §§ 11.010, 11.190, 11.200.

         Over two years later, in March 2017, Midland Credit sent a letter to Stimpson indicating that his account balance was $1, 145.60.[3] The upper right-hand corner of the letter states: "Offer Expiration Date: 04-27-2017." In the middle of the page, the letter states: "Available Payment Options. Option 1: 40% OFF. Option 2: 20% OFF Over 6 Months. Option 3: Monthly Payments As Low As: $50 per month. Call today to discuss your options and get more details." Immediately below the payment options, the letter states:

Benefits of Paying Your Debt
--Save $458.24 if you pay by 04-27-2017
--Put this debt behind you.
--No more communication on this account.
--Peace of mind.

         The letter is signed by Tim Bolin, Division Manager. Under his signature, the letter states:

The law limits how long you can be sued on a debt and how long a debt can appear on your credit report. Due to the age of this debt, we will not sue you for it or report payment or non-payment of it to a credit bureau.

         Near the bottom of the page, the letter provides: "We are not obliged to renew any offers provided. . . . PLEASE SEE REVERSE SIDE ...


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