Please E-mail suggested additions, comments and/or corrections to Kent@MoreLaw.Com.
District of Minnesota Federal Courthouse - Minneapolis, Minnesota
Morelaw Internet Marketing
Case Number: 17-2141
Court: United States District Court for the District of Minnesota (Hennepin County)
Plaintiff's Attorney: Peter Nickitas
Defendant's Attorney: Amy M Goltz, Manuel H Newburger
Description: Troy Scheffler sued Gurstel Chargo, P.A. (“Gurstel”), claiming Gurstel
violated the Fair Debt Collection Practices Act (“FDCPA”). The district court1
granted Gurstel’s motion for summary judgment. We affirm.
Scheffler is a former debt collector who has litigated a number of FDCPA
claims against other debt collectors. Gurstel is a law firm engaged in debt collection.
Scheffler’s case against Gurstel involves a credit card debt for which Gurstel obtained
judgment against Scheffler in 2009, and later communications between Scheffler and
In both 2014 and 2015, Gurstel mailed Financial One Credit Union a
garnishment notice in an attempt to collect on the judgment. Each time, Gurstel also
mailed a copy of the garnishment summons to Scheffler, along with a similar cover
letter. The 2015 cover letter stated, “These documents were served upon Financial
One Credit Union, on or about August 6, 2015. If you have any questions, please
contact one of our collection representatives at 800-514-0791.” (emphasis in
original). The letter also included what is sometimes referred to in the industry as a
“mini-Miranda” warning, which stated: “This communication is from a debt collector
and is an attempt to collect a debt. Any information obtained will be used for that
In September 2015, Scheffler called the telephone number included in the 2015
cover letter and reached Gurstel collection representative John Salter. The
conversation quickly drifted toward the underlying debt, prompting Scheffler to ask,
“OK, so what am I gonna do about that?” In response, Salter broached the possibility
of settling the debt. Scheffler soon told Salter that Scheffler had sent Gurstel a
“cease” letter and suggested Salter violated its directive. The conversation ended
Scheffler thereafter sued Gurstel in state court and Gurstel removed the case
to federal court. Scheffler’s operative complaint alleged that Gurstel violated his
rights under provisions of the FDCPA, 15 U.S.C. §§ 1692c(c) and 1692e(10).
Section 1692c(c), entitled “Ceasing communication,” states in part:
If a consumer notifies a debt collector in writing that the consumer
refuses to pay a debt or that the consumer wishes the debt collector to
cease further communication with the consumer, the debt collector shall
not communicate further with the consumer with respect to such
debt . . . .
The FDCPA expressly exempts certain communications, including those made
“to notify the consumer that the debt collector or creditor may invoke specified
remedies which are ordinarily invoked by such debt collector or creditor.” Id. at
Section 1692e, entitled “False or misleading misrepresentations,” prohibits a
debt collector from using “any false, deceptive, or misleading representation or means
in connection with the collection of any debt.” It is deemed a violation if a debt
collector makes “use of any false representation or deceptive means to collect or
attempt to collect any debt or to obtain information concerning a consumer.” Id. at
Scheffler alleged his rights under § 1692c(c) were violated when, after
receiving his cease letter, Gurstel: (1) sent Scheffler the garnishment summons cover
letter; and (2) tried to collect the underlying debt during the September phone call.
As to the alleged violation of § 1692e(10), Scheffler alleged the cover letter to the
garnishment summons was part of a false and deceptive practice under which Gurtsel
“deceives debtor consumers to telephone their business to discuss a garnishment
summons when in fact the telephone number provided reaches those unable to discuss
legal documents.” Sheffler alleged this was a bait-and-switch scheme under which
consumers seeking answers to a legal process are instead subjected to efforts to
collect a debt.
After discovery, Gurstel moved for summary judgment on all claims. The
district court granted Gurstel’s motion in its entirety and dismissed Scheffler’s case
with prejudice. See Scheffler v. Gurstel Chargo, P.A., Civil No. 15-4436(DSD/SER),
2017 WL 1401278 (D. Minn. April 19, 2017) (hereinafter cited to as the “Order”).
The district court concluded that Scheffler’s claims under § 1692c(c) failed.
The district court first reasoned that prior precedent, Scheffler v. Messerli & Kramer
P.A., 791 F.3d 847, 848 (8th Cir. 2015), dictated that sending the garnishment notice
itself was not a violation. Further, the district court held that Gurstel’s inclusion of
an invitation to call with questions was not a violation. As for the phone call between
Scheffler and Salter, the district court found “[w]hen reviewed as a whole, the call
was an unsubtle and ultimately unsuccessful attempt to provoke Salter into
committing an FDCPA violation,” and that Salter handled the call appropriately.
Finally, the district court reasoned that even if the call could be construed as an effort
to collect on the debt, “Scheffler’s conduct and words constituted a waiver of his
cease letter” and his waiver was “knowing and voluntary.”
As to Scheffler’s § 1692e(10) claim, the district court rejected Scheffler’s
argument that Gurstel’s cover letter falsely indicated that Scheffler could call the
number on the letter to discuss the garnishment notice with a lawyer. The district
court explained the letter did not state the call would be answered by an attorney
prepared for questions solely about garnishment, but instead accurately stated that
Scheffler could contact a collection representative. Further, the district court also
rejected Scheffler’s argument that by including “a so-called mini-Miranda warning”
on the cover letter, Gurstel transformed the letter into an improper debt-collection
effort. Finally, the district court reasoned that “the call itself was not a debtcollection
effort in violation of the FDCPA.”
We review the “grant of summary judgment de novo and may affirm on any
basis supported by the record.” Nash v. Optomec, Inc., 849 F.3d 780, 783 (8th Cir.
2017) (quoting Tenge v. Phillips Modern Ag Co., 446 F.3d 903, 906 (8th Cir. 2006)).
We will affirm a dismissal only if, after viewing the evidence in the light most
favorable to Scheffler, we conclude “there is no genuine dispute as to any material
fact.” Id. (quoting Fed. R. Civ. P. 56(a)).
A. The Unsophisticated Consumer Standard
Scheffler’s first argument on appeal is that the district court failed to apply
what is known as the unsophisticated consumer standard. As a general matter, we
have applied the unsophisticated consumer standard to FDCPA claims. See Strand
v. Diversified Collection Serv., Inc., 380 F.3d 316, 317 (8th Cir. 2004). It “is
‘designed to protect consumers of below average sophistication or intelligence
without having the standard tied to “the very last rung of the sophistication ladder.”’”
Id. (quoting Duffy v. Landberg, 215 F.3d 871, 874 (8th Cir. 2000)). “This standard
protects the uninformed or naive consumer, yet also contains an objective element of
reasonableness to protect debt collectors from liability for peculiar interpretations of
collection letters.” Id. at 317-18.
Scheffler contends that rather than using this standard, “the district court
faulted Mr. Scheffler for his prior debt collecting work” and for his past appeal before
this Court in Scheffler, 791 F.3d 847. We disagree.
Scheffler’s argument is contradicted by the express language of the district
court’s order. Not only did the district court correctly articulate the unsophisticated
consumer standard, it explicitly applied that standard when analyzing both of
Scheffler’s statutory claims. Regarding Scheffler’s § 1692c(c) claim, the district
court stated that Scheffler’s waiver of his cease letter was “knowing and voluntary,
just as it would be were he an unsophisticated debtor.” Order at 8 (emphasis added).
And in the district court’s analysis regarding Scheffler’s § 1692e claim, the district
court rejected Scheffler’s argument that the cover letter was deceptive by stating that
the letter “certainly was not deceiving to Scheffler, whose experience in debt
collection and FDCPA litigation belies his grievance, but neither would it be
deceiving to an unsophisticated consumer.” Id. at 9 (emphasis added). Considering
these statements, we have no reason to believe the district court failed to apply the
unsophisticated consumer standard.2
B. Section 1692c(c) — Violation of Cease Letter
We next address Scheffler’s argument that the district court erred by
concluding Gurstel was entitled to summary judgment on his claim that Gurstel
violated § 1692c(c) in its communications with him. As to mailing the garnishment
2This Court has not yet applied the unsophisticated consumer standard in the
specific context of a § 1692c(c) claim. The Ninth Circuit has, however, applied a
similar version of the standard (the “least sophisticated debtor” standard) when
analyzing a waiver of rights under § 1692c(c), reasoning that it “will enforce a waiver
of the cease communication directive only where the least sophisticated debtor would
understand that he or she was waiving” such rights. Clark v. Capital Credit &
Collection Servs., Inc., 460 F.3d 1162, 1171 (9th Cir. 2006). Judge O’Scannlain
criticized the majority’s use of the least sophisticated standard to evaluate a
§ 1692c(c) waiver, explaining it was unnecessary because “in any conceivable case,
a debtor who phones a debt collector to request information must be said to have
sufficient awareness of the relevant circumstances and likely consequences of her
action.” Id. at 1180 (O’Scannlain, J., concurring in part and dissenting in part).
Judge O’Scannlain saw “no reason to use any standard other than common sense.”
Id. at 1181 (internal quotation marks omitted). We need not decide whether the
unsophisticated consumer standard applies to a § 1692c(c) waiver because Scheffler’s
acts would constitute a waiver under the unsophisticated consumer standard or one
of common sense. See infra Part II.B.
notice, we agree with the district court that our prior precedent dictates that providing
a copy of the garnishment summons after receiving the cease letter did not violate the
statute. See Scheffler, 791 F.3d at 848. “A creditor may communicate with a debtor
after receiving a cease letter ‘to notify the consumer that the debt collector or creditor
may invoke specified remedies which are ordinarily invoked by such debt collector
or creditor.’” Id. (quoting § 1692c(c)(2)).
Scheffler maintains, however, that the cover letter’s inclusion of a so-called
“directive” to contact one of Gurstel’s collection representatives, with the explicit
statement that the letter “is an attempt to collect a debt,” transformed the
correspondence into a communication regarding the debt in violation of § 1692c(c).
We disagree. The cover letter was a communication regarding the debt in a general
sense, but it still fits within the remedy exception under § 1692c(c)(2), making the
communication permissible. We see nothing improper with providing a phone
number for Scheffler to contact if he had questions. To the contrary, it would be odd
if the letter did not provide contact information. Therefore, we hold that Gurstel did
not violate § 1692c(c) by including its contact information on the cover letter.
We also reject Scheffler’s argument that Gurstel violated his rights under
§ 1692c(c) by discussing possible resolution of the debt during the September phone
call. Scheffler contends that he called only about the topic of the garnishment
summons and did not wish to talk about the debt. After reviewing the conversation
that took place, however, we agree with the district court’s assessment that “the call
was an unsubtle and ultimately unsuccessful attempt to provoke Salter into
committing an FDCPA violation.” Order at 8.
It is true that Gurstel representative Salter discussed a possible debt resolution
with Scheffler. However, it is important to note that Scheffler called Gurstel and the
brief conversation regarding settling the underlying debt occurred only in response
to Scheffler’s direct question of what he was “gonna do about” the debt. Salter fairly
answered Scheffler’s question by stating that Gurstel was willing to settle the debt
and asking if Scheffler was interested in doing so. At no point did Salter pressure or
badger Scheffler in any way.
We agree with the Ninth Circuit that § 1692c(c) does not prevent a debt
collector from responding to a debtor’s post-cease letter inquiry regarding a debt. See
Clark, 460 F.3d at 1170. “Indeed, to hold that a debt collector may not respond to a
debtor’s telephone call regarding his or her debt would, in many cases, ‘force honest
debt collectors seeking a peaceful resolution of the debt to file suit in order to resolve
the debt—something that is clearly at odds with the language and purpose of the
FDCPA.’” Id. (quoting Lewis v. ACB Business Servs., 135 F.3d 389, 399 (6th Cir.
Even if Salter’s communication can be construed as an effort to collect on the
debt in violation of the cease letter, it occurred after Scheffler called and asked a
question about the underlying debt. An unsophisticated consumer would know that
by behaving like Scheffler, he was waiving his rights under § 1692c(c) so as to allow
the debt collector to answer his question. See id. We hold Scheffler voluntarily and
knowingly waived his cease letter for purposes of allowing Salter to answer his
question, and therefore Gurstel did not violate Scheffler’s rights under § 1692c(c) by
briefly discussing a possible resolution of the debt during the phone call.
C. Section 1692e(10) — Deceptive Debt Collection
We finally consider Scheffler’s contention that the district court was wrong to
grant Gurstel summary judgment on his claim that Gurstel violated § 1692e(10) by
falsely or deceptively communicating through the cover letter that a collection
representative could answer garnishment summons questions.
Scheffler’s argument fails under the unsophisticated consumer standard. As
an initial matter, we agree with the district court’s assessment that the cover letter
accompanying the garnishment summons was accurate. Contrary to Scheffler’s
contention, “[t]he letter does not state that the number provided will be answered by
an attorney prepared to answer questions solely about garnishment.” Order at 9. The
letter suggested a collection representative could be reached at the listed number and
that proved to be true. As for Scheffler’s belief that the letter accompanying the
garnishment summons was part of some novel deceptive scheme to work around the
cease directive, this is the exact sort of peculiar interpretation against which debt
collectors are protected by the objective element of the unsophisticated consumer
standard. See Strand, 380 F.3d at 318 (explaining that the objective element of the
unsophisticated consumer standard “protect[s] debt collectors from liability for
peculiar interpretations of collection letters”). We therefore hold Gurstel was also
entitled to summary judgment on Scheffler’s § 1692e(10) claim.
Outcome: We affirm the district court’s summary judgment order in its entirety.