Bandas v. United Recovery Serv., LLC
| Decision Date | 07 September 2018 |
| Docket Number | 17 C 01323 |
| Parties | FRANK BANDAS, Plaintiff, v. UNITED RECOVERY SERVICE, LLC, Defendants. |
| Court | U.S. District Court — Northern District of Illinois |
MEMORANDUM OPINION AND ORDER
Plaintiff Frank Bandas filed suit against United Recovery Service, LLC ("URS") alleging violations of the Fair Debt Collection Practices Act ("FDCPA"), 15 U.S.C. § 1692 et seq., and the Illinois Collection Agency Act ("ICAA"), 225 ILCS 425/1 et seq. (Dkt. 1). On November 8, 2017, this Court dismissed Plaintiff's ICAA claim. (Dkt. 33). The parties filed Cross-Motions for Summary Judgment on Plaintiff's remaining FDCPA claim. (Dkts. 47, 50). For the following reasons, the Court denies Plaintiff's Motion for Summary Judgment (Dkt. 47) and grants Defendant's Motion for Summary Judgment (Dkt. 50).
The Court takes the relevant facts from the parties' Local Rule ("LR") 56.1 statements of undisputed material facts and supporting exhibits: Local Rule 56.1 Statement of Uncontested Material Facts in Support of Plaintiff's Motion for Summary Judgment (Dkt. 49), Defendant's Response to Plaintiff's Rule 56.1 Statement (Dkt. 55), Defendant's Rule 56.1 Statement of Uncontested Facts in Support of Motion for Summary Judgment (Dkt. 52), Plaintiff's Response to Defendant's Local Rule 56.1 Statement of Facts in Support of Defendant's Motion for Summary Judgment (Dkt. 57), Plaintiff's L.R. 56.1(b)(3)(c) Statements of Additional Facts in Opposition to Defendant's Motion for Summary Judgment (id.), and Defendant's Response to Plaintiff's Rule 56.1 Statement of Additional Facts in Opposition to Summary Judgment. (Dkt. 60). The following facts are supported by the record and, except where otherwise noted, are undisputed.
Plaintiff incurred a $94 debt to Advocate Medical Center for medical services. (Dkt. 49 at ¶ 6; Dkt. 57 at ¶ 7). After Plaintiff defaulted on the debt, URS, a fully licensed debt collector in the state of Illinois, attempted to collect the $94 debt on behalf of Advocate Medical Center. (Dkt. 49 at ¶¶ 4, 8; Dkt. 57 at ¶¶ 2, 7). As part of its collection efforts, URS sent Plaintiff a collection later dated April 20, 2016, stating in relevant part:
(Dkt. 49 at ¶ 11; Dkt. 57 at ¶11) (emphasis in original). Plaintiff claims that after reading the April 20 letter, he believed URS intended to sue him for the alleged debt. (Dkt. 49 at ¶ 13).
At the time the April 20 letter was sent, neither URS nor Advocate Medical Group intended to sue Plaintiff for the $94 debt. (Dkt. 49 at ¶¶ 14-15). The only procedures URS uses to collect debts are phone calls and collection letters. (Dkt. 49 at ¶ 12). URS did not make any phone calls or send any collection letters to Plaintiff after April 20, 2016. (Dkt. 60 at ¶¶ 1-2).
Summary judgment is proper where "there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." Fed. R. Civ. P. 56(a). Courts properly grant summary judgment where "no reasonable jury could rule in favor of the nonmoving party." See Bagwe v. Sedgwick Claims Mgmt. Servs., Inc., 811 F.3d 866, 879 (7th Cir. 2016) (internal citation omitted). Courts do not weigh the evidence or make credibility determinations when deciding motions for summary judgment. See Omnicare, Inc. v. UnitedHealth Grp., Inc., 629 F.3d 697, 704 (7th Cir. 2011). Rather, the Court must "construe all factual disputes and draw all reasonable inferences in favor of [] the non-moving party." Cole v. Bd. of Trustees of N. Ill. Univ., 838 F.3d 888, 895 (7th Cir. 2016), cert. denied, 137 S.Ct. 1614 (2017). When there are cross-motions, the Court "construe[s] the evidence and all reasonable inferences in favor of the party against whom the motion under consideration is made." Premcor USA, Inc. v. Am. Home Assurance Co., 400 F.3d 523, 526-27 (7th Cir. 2005). "A factual dispute is genuine only if a reasonable jury could find for either party." Nichols v. Mich. City Plant Planning Dep't, 755 F.3d 594, 599 (7th Cir. 2014) (internal quotation omitted).
The initial burden is on the moving party to inform the district court why a trial is not necessary. Modrowski v. Pigatto, 712 F.3d 1166, 1168 (7th Cir. 2013). This burden "may be discharged by 'showing'—that is, point[ing] out to the district court—that there is an absence of evidence to support the nonmoving party's case." Id. (quoting Celotex Corp. v. Catrett, 477 U.S. 317, 325 (1986)). "Upon such a showing, the nonmoving party must 'make a showing sufficient to establish the existence of an element essential to that party's case.'" Id. (quoting Celotex, 477 U.S. at 322.) In other words, summary judgment "is the 'put up or shut up' moment in a lawsuit, when a party must show what evidence it has that would convince a trier of fact to accept itsversion of events." Johnson v. Cambridge Indus., Inc., 325 F.3d 892, 901 (7th Cir. 2003) (internal quotations omitted).
Bandas alleges that URS's April 20th collection letter deceptively threatened him with litigation when it had no intention of actually suing him for the $94 debt, in violation of § 1692e of the FDCPA. (Dkt. 1 at ¶¶ 20-28, 36; Dkt. 48 at 2). Section 1692e of the FDCPA prohibits debt collectors from "us[ing] any false, deceptive, or misleading representation or means in connection with the collection of any debt" and provides a non-exhaustive list of conduct constituting a violation of this general prohibition. 15 U.S.C. § 1692e. Bandas alleges that URS's letter violates §§ 1692e(5) and 1692e(10) of that list, which prohibit:
Id. The parties do not dispute that URS is a "debt collector" as defined by the FDCPA, 15 U.S.C. § 1692e(6), that the $94 constituted a "debt" as defined by the FDCPA, id. at § 1692e(5), or that the letter was sent in connection with the collection of that debt. (See Dkt. 55 at ¶¶ 3, 6; Dkt. 57 at ¶¶ 5, 12). The parties dispute only whether the letter made "false, deceptive or misleading representations."
URS admits that it had no intention to sue Bandas over the debt. Thus, if the letter does constitute a threat of litigation, that threat would be false. But to succeed on his claim, Plaintiff must do more than prove that the letter contains a false representation. A representation that is technically false does not in itself constitute a violation of § 1962e; the plaintiff must show not only that statement is false but also that it would mislead an "unsophisticated consumer." See Lox v. CDA, Ltd., 689 F.3d 818, 822 (7th Cir. 2012) (citing Wahl v. Midland Credit Mgmt., 556 F.3d643, 645-46 (7th Cir.2009)). The question, therefore, is whether an unsophisticated consumer reading the letter would believe that URS intended to sue him.
The unsophisticated consumer is "uninformed, naive, [and] trusting, but is not a dimwit, has rudimentary knowledge about the financial world, and is capable of making basic logical deductions and inferences." Id. (internal quotations omitted). Additionally, the unsophisticated consumer "may tend to read collection letters literally" but "does not interpret them in a bizarre or idiosyncratic fashion." Gruber v. Creditors' Prot. Serv., Inc., 742 F.3d 271, 274 (7th Cir. 2014) (quoting Pettit v. Retrieval Masters Creditor Bureau, Inc., 211 F.3d 1057, 1060 (7th Cir. 2000)). This standard is more demanding than the "least significant consumer" standard used in other circuits and rejected by the Seventh Circuit in that, under the "unsophisticated consumer" standard, a plaintiff must show that the representation would be confusing to a "significant fraction of the population." Id. (quoting Taylor v. Cavalry Inv., L.L.C., 365 F.3d 572, 574 (7th Cir.2004)); see also Gruber, 742 F.3d at 274; Zemeckis v. Glob. Credit Collection Corp., 679 F.3d 632, 635 (7th Cir. 2012).
Whether the representation is confusing to a significant fraction of the population is a question of fact. See id.; see also McMillan v. Collection Professionals Inc., 455 F.3d 754, 760 (7th Cir. 2006). Section 1692e cases fall into three categories: (1) "cases involving statements that plainly, on their face, are not misleading or deceptive," in which courts grant summary judgment in favor of defendants, (2) "cases involve[ing] statements that are not plainly misleading or deceptive but might possibly mislead or deceive the unsophisticated consumer," in which "plaintiffs may prevail only by producing extrinsic evidence, such as consumer surveys, to prove that unsophisticated consumers do in fact find the challenged statements misleading or deceptive," and (3) "[c]ases involving plainly deceptive communications" that are "clearly misleading on theirface," in which plaintiff need not present any extrinsic evidence to prevail. Ruth v. Triumph Partnerships, 577 F.3d 790, 800 (7th Cir. 2009). Extrinsic evidence is required in all but...
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