Opinion
No. 98 C 4280.
April 19, 1999
MEMORANDUM OPINION AND ORDER
Before this court are Defendant McCalla, Raymer, Padrick, Cobb, Nichols Clark's ("Defendant") motion to dismiss Plaintiff David Baldwin's ("Plaintiff") complaint, which alleges violation of the Fair Debt Collection Practices Act, 15 U.S.C. § 1692 et seq. ("FDCPA"), and Plaintiff's motion for class certification. For the following reasons, Defendant's motion to dismiss is GRANTED and Plaintiff's motion for class certification is DENIED. This case is CLOSED.
I. Facts
Plaintiff was a debtor in a Chapter 13 proceeding in the Northern District of Illinois. (Cpt. ¶ 3. See also In re: David Baldwin, Case No. 97-B-11289 (N.D. Ill.).) Defendant is a law firm whose practice consists primarily of collecting or attempting to collect debts. (Cpt. ¶ 4.) Defendant represents a number of major mortgage companies, including Countrywide Home Loans, Inc. ("Countrywide"). Plaintiff alleges that Defendant regularly uses the United States Mails and other instrumentalities of interstate commerce to attempt to collect debts incurred for non-business purposes and originally owed to others and that Defendant is a "debt collector" as defined by 15 U.S.C. § 1692(a)(6). (Cpt. ¶¶ 5-6.) Plaintiff also alleges that Defendant regularly files or causes to be filed proofs of claim on behalf of mortgage companies in Chapter 13 proceedings in the Northern District of Illinois and elsewhere. (Cpt. ¶ 7.)
One of the debts that was scheduled in Plaintiff's Chapter 13 proceeding was a residential mortgage serviced by Countrywide; the funds were obtained for nonbusiness purposes, and the loan is secured by Plaintiff's residence. (Cpt. ¶ 8.) The mortgage was executed by Plaintiff on February 3, 1995. (Cpt. ¶ 9.) On July 9, 1997, Defendant filed a proof of claim in the Chapter 13 based on the mortgage serviced by Countrywide. (Cpt. ¶ 10.) Plaintiff states that the claim included interest on the arrearages on the mortgage in violation of the § 1322(e) of the Bankruptcy Code. 11 U.S.C. § 1132(e). (Cpt. ¶¶ 11-12.) Plaintiff admits that, pursuant to 11 U.S.C. § 502(a), "a claim or interest, proof of which is filed under section 501 of this title, is deemed allowed, unless a party in interest . . . objects." (Cpt. ¶ 13.) Plaintiff alleges that Defendant's filing of proofs of claim that include unauthorized interest on arrearages injures debtors by forcing them either to go to the expense of challenging the claim or to pay the unauthorized interest in the claim. (Cpt. ¶ 14.) Plaintiff alleges that Defendant's actions, with respect to himself and all other similarly situated debtors, violates the FDCPA.
Plaintiff's Chapter 13 Plan was confirmed on June 2, 1997. (See In re: David Baldwin, Document 7, Case No. 97-B-11289.) Plaintiff did not object to Defendant's proof of claim after it was filed. Instead, in Plaintiff's "Amended Schedule B," filed on October 22, 1997, he stated that he "has claim or offset against Countrywide Home Loans, Inc. and the Law Offices of McCalla, Raymer, Padrick, Cobb, Nichols Clark, L.L.C., for charges imposed by Countrywide on its proof of claim form for property inspection. The value of the claim if brought individually, is $38.00 in action damages. The $38 damages might be trebled under some theories. Punitive damages are a possibility. There is a possible Fair Debt Collection Practices Act claim against the law firm with statutory damages of $1,000." (In re: David Baldwin, Document 16A, Case No. 97-B-11289.) On a motion filed by Plaintiff pursuant to 11 U.S.C. § 554(b), the court ordered the bankruptcy trustee to abandon the alleged cause of action against Defendant as being too burdensome to the estate. (In re: David Baldwin, Document 17, Case No. 97-B-11289.) On June 22, 1998, Plaintiff's bankruptcy plan was involuntarily dismissed pursuant to 11 U.S.C. § 1307(c)(6) due to material default by the Plaintiff. (In re: David Baldwin, Document 22, Case No. 97-B-11289.) On August 10, 1998, the bankruptcy court approved the trustee's final report and account, which stated that Countrywide's claim amount was $10,461.72, the amount on the proof of claim at issue in this case. (In re: David Baldwin, Documents 24 (report and account) and 25 (approval of report and account), Case No. 97-B-11289.)
II. Standard for Motion to Dismiss
A motion to dismiss pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure does not test whether the plaintiff will prevail on the merits, but instead whether the plaintiff has properly stated a claim for which relief may be granted. Pickrel v. City of Springfield, Ill., 45 F.3d 1115 (7th Cir. 1995). The court must accept as true all of plaintiff's well-pleaded factual allegations, as well as all reasonable inferences. Id. Thus, the court will dismiss a complaint under Rule 12(b)(6) only if "it is clear that no relief could be granted under any set of facts that could be proved consistent with the allegations."Ledford v. Sullivan, 105 F.3d 354, 357 (7th Cir. 1997) (quotingHishon v. King Spalding, 467 U.S. 69, 73, 104 S. Ct. 2229, 2232 (1984)). However, the court need "not strain to find inferences favorable to the plaintiffs which are not apparent on the face of the complaint." Coates v. Illinois State Bd. of Ed., 559 F.2d 445, 447 (7th Cir. 1977). In ruling on a motion to dismiss, the court may consider public documents, such as the materials from Plaintiff's prior litigation. Menominee Indian Tribe of Wisconsin v. Thompson, 161 F.3d 449, 456 (7th Cir. 1998).
III. Analysis
Plaintiff's case seeks "to secure redress for defendant's practice of filing claims in Chapter 13 proceedings that demand payment of interest that is not authorized by law." (Cpt. ¶ 1.) Because Plaintiff cannot maintain a FDCPA claim regarding filing of proofs of claim, the court GRANTS Defendant's motion to dismiss and DENIES Plaintiff's motion for class certification.
A. Motion to Dismiss
Defendant raises five arguments in support of its motion to dismiss. The most substantive arguments are that the Bankruptcy Code precludes application of the FDCPA and the claim that Plaintiff's claim is collaterally estopped. Accordingly, the court will consider those arguments first. The court will then briefly address the other three arguments (waiver, mootness, and failure to state a claim).
Defendant couches this argument in terms of "preemption." However, "[p]reemption is not the applicable doctrine under these circumstances, since the question whether one federal law takes precedence over another does not implicate the Supremacy Clause."Coker v. Trans World Airlines, Inc., 165 F.3d 579, 583 (7th Cir. 1999). While the cases cited by Defendant are relevant, the court will instead apply an analysis taking into account the fact that this case involves the intersection of two federal statutes, rather than a conflict between federal and state law.
1. Application of the FDCPA to proofs of claim in a bankruptcy proceeding.
Plaintiff's complaint raises the question of whether a debtor can file an FDCPA claim premised on the filing of a proof of claim in a Chapter 13 proceeding. Where, as here, the court is considering the intersection of two federal statutes, "principles of statutory construction and interpretation, as well as the underlying statutory policies and congressional intentions . . . are important consideration when there is a potential conflict among federal statutes because fundamentally each federal statute has equal effect under the law." United States v. Palumbo Bros., Inc., 145 F.3d 850, 862 (7th Cir. 1998). This case indeed raises a potential conflict between federal statutes, because Plaintiff's complaint seeks to produce an external challenge to alleged wrongdoing that occurred during bankruptcy proceedings, which were governed by "the complex, detailed, and comprehensive provisions of the lengthy Bankruptcy Code," which "create a whole system under federal control which is designed to bring together and adjust all of the rights and duties of creditors and embarrassed debtors alike." MSR Exploration, Ltd. v. Meridian Oil, Inc., 74 F.3d 910, 913 (9th Cir. 1996).
The Seventh Circuit has recently made clear that "[t]he choice between two federal statutes requires an analysis of both, to see if they are indeed incompatible or if they can be harmonized, and if they are incompatible to decide which one Congress meant to take precedence." Coker v. Trans World Airlines, Inc., 165 F.3d 579, 583-84 (7th Cir. 1999). Thus, "[c]ongressional intent behind one federal statute should not be thwarted by the application of another federal statute if it is possible to give effect to both laws." Palumbo Bros., 145 F.3d at 862. In interpreting the Bankruptcy Code and the FDCPA, "[a]s in all cases of statutory interpretation, our task is to interpret the words of these statutes in light of the purposes Congress sought to serve."Chapman v. Houston Welfare Rights Org., 441 U.S. 600, 608, 99 S. Ct. 1905, 1911 (1979). The court will first consider the interpretation of each of the acts and then conduct the harmonization analysis.
a. The Bankruptcy Code
In interpreting the Bankruptcy Code, the court keeps in mind the Supreme Court's clear statement rule that courts should "not read the Bankruptcy Code to erode past bankruptcy practice absent a clear indication that Congress intended such a departure."Cohen v. De La Cruz, ___ U.S. ___, ___, 118 S. Ct. 1212, 1218 (1998). Additionally, "[t]he Bankruptcy Act should always be construed in a way to carry out its purposes and to care for the situations created by it." In re Consupak, Inc., 87 B.R. 529, 541 (N.D. Ill. 1988).
While the FDCPA is not actually part of the Bankruptcy Code, the court finds that this clear statement rule is still relevant in interpreting the Bankruptcy Code. Additionally, the FDCPA is part of the Consumer Credit Protection Act, Mace v. Van Ru Credit Corp., 109 F.3d 338, 343 (7th Cir. 1997), which was passed pursuant to both the bankruptcy and commerce powers.Kokoszka v. Belford, 417 U.S. 642, 650, 94 S. Ct. 2431, 2436 (1974).
The Supreme Court has long noted that the central purpose of the Bankruptcy Code "is to place the property of the bankrupt, whereever [sic] found, under the control of the court, for equal distribution among the creditors." Straton v. New, 283 U.S. 318, 320-21, 51 S. Ct. 465, 466 (1931). See also Agribank v. Green, 188 B.R. 982, 990 (C.D. Ill. 1995) ("A chief purpose of the bankruptcy laws is to secure a prompt and effectual administration and settlement of the debtor's estate within a limited period."). Thus, "[t]he principal function of bankruptcy law is to determine and implement in a single collective proceeding the entitlements of all concerned." In re American Reserve Corp., 840 F.2d 487, 489 (7th Cir. 1988) (emphasis added). See also In re Wildman, 30 B.R. 133, 155 (N.D. Ill. 1983) (stating that the current structuring of the Bankruptcy Code was specifically designed "to place within a single court the authority to determine all aspects of a bankruptcy case and its proceedings."). In meeting that purpose, the Bankruptcy Code performs the essential function of "reconciling competing claims of creditors to property of the debtor's bankruptcy estate." In re Green, 210 B.R. 556, 558 (N.D. Ill. 1997).
b. The FDCPA
The FDCPA "appear[s] under the capacious umbrella of the Consumer Credit Protection Act." Mace v. Van Ru Credit Corp., 109 F.3d 338, 343 (7th Cir. 1997). The FDCPA "was designed to protect against the abusive debt collection practices likely to disrupt a debtor's life." Id. In the FDCPA, Congress expressly found that "[t]here is abundant evidence of the use of abusive, deceptive, and unfair debt collection practices by many debt collectors. Abusive debt collection practices contribute to the number of personal bankruptcies, to marital instability, to the loss of jobs, and to invasions of individual privacy." 15 U.S.C. § 1692(a). Congress then stated that the purpose of the FDCPA is "to eliminate abusive debt collection practices by debt collectors, to insure that those debt collectors who refrain from using abusive debt collection practices are not competitively disadvantaged, and to promote consistent State action to protect consumers against debt collection abuses." 15 U.S.C. § 1692(e).
c. Analysis
No court has addressed the question of whether an FDCPA claim can be premised upon the filing of proofs of claim in a bankruptcy proceeding. This court finds that the FDCPA does not apply to proofs of claim in bankruptcy proceedings and, accordingly, dismisses Plaintiff's complaint.
This question becomes considerably clearer when one looks at the Supreme Court's decision in Kokoszka v. Belford, which addresses the application of one of the provisions of the Consumer Credit Protection Act. 417 U.S. 642, 94 S. Ct. 2431 (1974). Addressing Whether the Consumer Credit Protection Act's wage garnishment provisions should apply in the context of bankruptcy, the Supreme Court stated:
Indeed, this court's task would have been made considerably easier had either party cited this highly relevant case law.
The Congress did not enact the Consumer Credit Protection Act in a vacuum. The drafters of the statute were well aware that the provisions and the purposes of the Bankruptcy Act and the new legislation would have to coexist. Indeed, the Consumer Credit Protection Act explicitly rests on both the bankruptcy and commerce powers of the Congress. . . . An examination of the legislative history of the Consumer Protection Act makes it clear that, which it was enacted against the background of the Bankruptcy Act, it was not intended to alter the clear purpose of the latter Act to assemble, once a bankruptcy petition is filed, all of the debtor's assets for the benefit of his creditors. Indeed, Congress' concern was not the administration of a bankrupt's estate but the prevention of bankruptcy in the first place. . . .Id. at 650, 94 S. Ct. at 2436. The Supreme Court concluded: "In short, the Consumer Credit Protection Act sought to prevent consumers from entering bankruptcy in the first place. However, if despite its protection, bankruptcy did occur, the debtor's protection and remedy remained under the Bankruptcy Act." Id. at 651, 94 S. Ct. at 2436. Like with the wage garnishment provisions of the Consumer Credit Protection Act, a key function of the FDCPA provisions of the Consumer Credit Protection Act was to eliminate practices that "contribute to the number of personal bankruptcies." 15 U.S.C. § 1692(a). Neither set of provisions demonstrates even the slightest intent on the part of Congress to interfere with the intricate workings of the bankruptcy system. The holding and reasoning of Kokoszka impel a finding that an FDCPA claim may not be premised on proofs of claim filed as part of a bankruptcy proceeding.
Even absent Kokoszka, this court would be reluctant to find that the FDCPA should apply to actions that occur within a bankruptcy proceeding. In fact, there are several reasons why application of the FDCPA to bankruptcy proceedings would be inappropriate absent explicit statutory language permitting such application. First, as noted before, a clear statement rule applies to statutory provisions which would "erode past bankruptcy practice." It is beyond cavil that past bankruptcy practice, as well as explicit Bankruptcy Code provisions, have left the remedy for fraudulent and otherwise defective proofs of claim to the Bankruptcy Code. See Holloway v. Household Automotive Finance Corp., 227 B.R. 501, 505-07 (N.D. Ill. 1998) (discussing Bankruptcy Code §§ 105 (contempt and other orders), and 1330(a) (revocation of confirmation order premised on fraudulent proofs of claim); finding that § 105 does not provide an implied private right of action; noting that "to imply a private right of action under § 105(a) would undermine and be inconsistent with the underlying legislative scheme imposed by the Bankruptcy Code," which leaves the remedy for fraudulent proofs of claim to § 1330(a)). Indeed, the Ninth Circuit, after listing several of the provisions "designed to preclude the misuse of the bankruptcy process," noted that the number of remedies explicitly provided in the Bankruptcy Code "suggests that Congress has considered the need to deter misuse of the process and has not merely overlooked the creation of additional deterrents." MSR Exploration, 74 F.3d at 915 (holding that preemption of state law remedies by Bankruptcy Code was appropriate). The court finds that application of the FDCPA to bankruptcy proofs of claim would be inconsistent with prior bankruptcy practice and inappropriate pursuant to the clear statement rule.
Second, application of the FDCPA to bankruptcy proofs of claim would undermine the central purpose of the Bankruptcy Code, namely, to adjudicate and conciliate all competing claims to a debtor's property in one forum and one proceeding. While cases addressing the Bankruptcy Code's preemption of state law remedies are not entirely apposite, due to the inapplicability of the Supremacy Clause to this case, the reasoning in cases that addresses the risks to the bankruptcy system from external remedies is persuasive. As the Ninth Circuit noted, "[t]he threat of later state litigation may well interfere with the filings of claims by creditors and with other necessary actions that they, and others, must or might take within the confines of the bankruptcy process. Whether creditors should be deterred, and when, is a matter unique to the flow of the bankruptcy process itself. . . ." Id. at 916. See also In re Lenior, 1999 WL 135067, *14 (Bankr. N.D. Ill. 1999) (rejecting state law unjust enrichment counts premised on allegedly inflated proofs of claim; noting that the Bankruptcy Code has "its own comprehensive scheme to guard against fraud and remedy it"); Cox v. Zale Delaware, Inc., 1998 WL 397841, *5 (N.D. Ill. 1998) (finding that state law counts were preempted by the Bankruptcy Code; "The expansive reach of the Code preempts virtually all claims relating to alleged misconduct in the bankruptcy courts."); Pereira v. First North American National Bank, 223 B.R. 28, 31-32 (finding that Bankruptcy Code preempted state law claims; "Here, the Bankruptcy provides the remedial scheme for addressing violations of Sections 362 and 524, including the filing of civil contempt proceedings under the bankruptcy court's inherent contempt power and Section 105. A proper complaint filed in the appropriate forum may allow the Plaintiff to take advantage of these remedies."). This reasoning is just as applicable to the risks of permitting debtors to premise FDCPA actions on proofs of claim (or other documents) filed in bankruptcy proceedings. Permitting debtors to premise FDCPA actions on proofs of claim filed in bankruptcy proceedings would give rise to two definite risks. The first is that creditors may be deterred from filing claims, thus defeating the point of bringing all claims together in one proceedings. As the Ninth Circuit argued in MSR Exploration, any deterrence of the filing of claims should come from within the Bankruptcy Code itself. The second risk is that the possibility of an FDCPA claim, with its provisions permitting statutory and actual damages and attorney's fees, could prompt debtors to ignore the procedural safeguards within the Bankruptcy Code, such as the right to object to proofs of claim and to seek sanctions against creditors who violate provisions within the Bankruptcy Code, in favor of the FDCPA. Indeed, it appears that that is precisely what occurred in this case, for the record in the Bankruptcy Court shows that the debtor and his attorney were well aware of the alleged flaws in Defendant's proof of claim but chose not to object to the claim in favor of filing the present case. The practice of debtors deliberately bypassing the Bankruptcy Code's objection process in favor of alternative litigation would undermine the entire bankruptcy system.
Third, this result is consonant with the few cases that have addressed the intersection of the FDCPA and the Bankruptcy Code. These cases have found that there is no FDCPA violation where a debt collector chose not to fulfill the FDCPA's notice requirement on the grounds that sending the FDCPA notice would conflict with the automatic stay found in the Bankruptcy Code.Maloy v. Philips, 197 B.R. 721, 723 (M.D. Ga. 1996) ("Defendant's situation was a catch-22. One statute told him to go left, and the other right. Erring on the side of caution, defendant chose to terminate all communications with debtor. In the court's best judgment, defendant made the right choice by honoring the automatic stay."; granting summary judgment to creditor on FDCPA claim); Hubbard v. National Bond and Collection Assoc., Inc., 126 B.R. 422, 428-29 (D. Del.) ("The FDCPA was not enacted to enforce the Bankruptcy Code's automatic stay provisions; it was enacted `to eliminate abusive debt collection practices. Automatic stays are adequately enforced by the contempt power of bankruptcy courts and specific provisions of the Bankruptcy Code."), aff'd without opinion, 947 F.2d 935 (3d Cir. 1991).
Other cases have found § 1983 claims are not available to remedy violations of the Bankruptcy Code on the ground that the Bankruptcy Code has "a `balance, completeness and structural integrity' that suggests remedial exclusivity." Pereira v. Chapman, 92 B.R. 903, 908 (C.D. Cal. 1988). See also Kearns v. Orr, 1994 WL 173895, *8 (D. Kan. 1994) (rejecting § 1983 claim). Still other cases have refused to imply remedies into the Bankruptcy Code because Congress has already created express remedies in the Code. See, e.g., Holloway v. Household Automotive Finance Corp., 227 B.R. 501, 506 (N.D. Ill. 1998).
The court finds that an FDCPA claim can not be premised on proofs of claim filed in a bankruptcy proceeding and, accordingly, GRANTS Defendant's motion to dismiss.
2. Collateral estoppel
Defendant argues that Plaintiff's failure to object to Defendant's proof of claim, which is part of a confirmed bankruptcy plan, is barred by the principles of collateral estoppel or res judicata. When determining whether a challenges to a confirmed plan may be maintained, the court applies res judicata principles. In re Church, 1998 WL 97691, *3 (Bankr. N.D. Ill. 1998). Res judicata occurs where a court has issued a final judgment on the merits in prior litigation on the same issue, transaction, or occurrence," Car Carriers, Inc. v. Ford Motor Co., 789 F.2d 589, 593 (7th Cir. 1986). The elements of res judicata are: "(1) an identity of parties or their privies; (2) an identity of the causes of action; and (3) a final judgment on the merits." In re Church, 1998 WL 97691 at *3 (citingAndersen v. Chrysler Corp., 99 F.3d 846, 852 (7th Cir. 1996). Res judicata applies not only to matters decided in a prior case but also to other matters which could have been decided in the prior case but were not raised. Id. It is undisputed that the first element is met, for Plaintiff was a party to each proceeding. Confirmation of the bankruptcy plan can constitute the third element. "Confirmation of the plan of reorganization is a . . . milestone, equivalent to final judgment in ordinary civil litigation. Once that milestone has been reached, further changes should be allowed only for compelling reasons." Holstein v. Brill, 987 F.2d 1268, 1270 (7th Cir. 1993). This is because "[t]he provisions of a confirmed [Chapter 13] plan bind the debtor and each creditor, whether or not the claim or such creditor is provided for by the plan, and whether or not such creditor has objected to, has accepted, or has rejected the plan." 11 U.S.C. ¶ 1327(a). Thus, "[a]s a general rule, the failure to raise an `objection at the confirmation hearing or to appeal from the order of confirmation should preclude . . . attack on the plan or any provision therein as illegal in a subsequent proceeding.'" In re Chappell, 984 F.2d 775, 782 (7th Cir. 1993). If the confirmed plan does act as a "final judgment" for res judicata purposes, its bar would apply to any claim challenging a claim, including an FDCPA claim.Adair v. Sherman, 1999 WL 117754, *3 (N.D. Ill. 1999) (rejecting FDCPA claim as barred by res judicata where party failed to object to a proof of claim filed in a bankruptcy proceeding prior to the dismissal of the bankruptcy proceeding; "[T]he present case does not involve a `post-confirmation objection' or the re-opening of a previously filed bankruptcy proceeding. Adair's bankruptcy case has been dismissed, and the question presented to this Court is whether he should be permitted to file another case concerning matters that were properly raised in the original bankruptcy proceedings. This Court concludes that the answer is `no.'").
The court in Adair did not address the question of whether an FDCPA claim may be maintained at any time regarding a proof of claim filed in a Chapter 13 bankruptcy proceeding, but does not mention whether such a question was raised.
Like the court in Adair, the court finds that it would be inappropriate under the rules of res judicata to permit Plaintiff to file a new claim in a new court challenging Defendant's proof of claim where Plaintiff failed to object to the proof of claim filed prior to the involuntary dismissal of Plaintiff's claims. Plaintiff's claims, like those of the plaintiff inAdair, raise the serious concern that bankruptcy debtors will deliberately fail to challenge proofs of claim, despite having knowledge of possible challenges to the proofs of claim and despite being represented in their bankruptcy, in the hope of maintaining collateral challenges pursuant to statutes, like the FDCPA, which may provide additional damages, as well as attorneys' fees. See id. at *3 ("Even taking a step back from the intricacies of the Bankruptcy Code, the Court can see no reason why Adair's claim could not have been raised in the bankruptcy court prior to confirmation of his Chapter 13 plan. Adair was admittedly aware of the proof of claim form filed by FMB and the fact that this form allegedly overvalued his car. . . ."); see also id. at 3 n. 4 (noting that Adair could have objected to FMB's claim in the bankruptcy court at any time prior to the dismissal of the bankruptcy case). If debtors were permitted to make such strategic decisions and, thus, to delay their challenges to the legality or correctness of proofs of claim until after dismissal of the bankruptcy case, the concept of finality in bankruptcy will be completely undermined. See In re Clark, 172 B.R. 701, 705 (S.D. Ga. 1994).
The court emphasizes the "involuntary" nature of the dismissal of Plaintiff's Chapter 13 plan because one court in the Northern District of Illinois has held that where a debtor voluntarily dismisses a confirmed plan, the plan has no res judicata effect. Elliot v. ITT Corp., 150 B.R. 36, 40 (N.D. Ill. 1992).
One possible distinction between Adair and the present case is that the proof of claim in this case was filed after the plan's confirmation. The court in In re Church found no res judicata where "[t]he precise final total amount of the Creditor's claim was not set forth in the plan, or in its proof of claim, which did not detail the amount of the subject fees or interest." 1998 WL 97691 at *4. The proof of claim at issue in this case does detail the amount of owed on the Countrywide claim. That said, does the confirmed plan have res judicata effect where the proof of claim is filed after confirmation? Cases such as In re Church and In re Strong, 203 B.R. 105, 113-14 (N.D. Ill. 1996) have held that the principles of res judicata do not bar post-confirmation objections to claims filed in the bankruptcy court where the proofs of claim themselves are filed post-confirmation. Neither of these cases addresses the singularly different situation where (1) confirmation occurs, (2) a proof of claim is filed, (3) no objection to the proof of claim is ever made in the bankruptcy case, and (4) the bankruptcy case is involuntarily dismissed. Rather, as In re Church explicitly notes, "[t]he doctrine of res judicata does not bar this matter which is really part of the claims objection process after confirmation of the plan." 1998 WL 97691 at *4. The court finds that where, as here, a debtor had the opportunity to raise post-confirmation claims objections to a proof of claim and failed to do so, the principles of res judicata bar his subsequent post-dismissal collateral challenge to the proof of claim.
This potential distinction is different from the problem that occurs when a challenge cannot be raised in the context of confirmation. In re Beard, 112 B.R. 951, 956 (N.D. Ind. 1990) (finding no res judicata effect where an issue required an adversary proceeding; "The determination of the amount due on account of a creditor's claim and the value of a lien securing a claim are contested matters and, thus, may properly be dealt with during the confirmation process. A challenge which questions the validity or existence of a lien, however, requires an adversary proceeding. Disputes of this nature are not resolved by the confirmation process."). The issue in this case addresses the amount due on Countrywide's claim and, thus, could have been addressed through the confirmation process.
This situation is not uncommon. "Historically in this District and Division, like others, Chapter 13 confirmation hearings are held prior to expiration of the claims bar date prescribed under Bankruptcy Rule 3002 in order to expedite case administration and get dividend distributions . . . to the creditors as soon as possible, rather than wait for the completion of the sometimes lengthy claims objection process."In re Strong, 203 B.R. at 113.
The plan was confirmed on June 2, 1997, the proof of claim was filed on July 7, 1997, and the Amended Schedule B (acknowledging a possible FDCPA claim) was filed on October 22, 1997.
3. Waiver
Defendant also states that Plaintiff has waived the FDCPA claim — but cites no case law and does not explain how this argument differs in any way from Defendant's collateral estoppel argument. The court will not dismiss Plaintiff's claim on the basis of this skeletal argument.
4. Mootness
While it is true that a case will be moot "where a plaintiff has received all of the requested relief to which she is legally entitled," Ortiz v. John O. Butler Co., 94 F.3d 1121, 1125 (7th Cir. 1996), it is undisputed that the FDCPA permits statutory damages. 15 U.S.C. § 1692k(a)(2)(A). To the extent that Defendant is arguing that any damage claim for Plaintiff is moot because Plaintiff did not object to the proof of claim in the bankruptcy court, that argument is dependent upon the collateral estoppel argument. Accordingly, the court will not dismiss Plaintiff's claim for mootness.
5. Failure to state a claim
This argument addresses the interpretation of both the Bankruptcy Code and the FDCPA. Because this court has already addressed the interpretation of those statutes and determined that the FDCPA does not apply to proofs of claims made in a bankruptcy proceeding, the court need not address the additional arguments made regarding the merits of Plaintiff's claim.
B. Plaintiff's Motion for Class Certification
Neither Plaintiff nor the putative class members may maintain an FDCPA claim, as their claims would be premised on the use of the FDCPA to address proofs of claims made in a Chapter 13 bankruptcy proceeding. Accordingly, the court DENIES Plaintiff's motion for class certification.
IV. Conclusion
For the foregoing reasons, Defendant's motion to dismiss is GRANTED and Plaintiff's motion for class certification is DENIED. This case is CLOSED.
JUDGMENT IN A CIVIL CASE
[ ] Jury Verdict. This action came before the Court for a trial by jury. The issues have been tried and the jury rendered its verdict.
Decision by Court. This action came to trial or hearing before the Court. The issues have been tried or heard and a decision has been rendered.
IT IS HEREBY ORDERED AND ADJUDGED that Defendants' Motion to Dismiss is Granted. Plaintiff's Motion for class certification is Denied. There being no other matters pending, this case is Closed.