Boyd & Harrison v. Wexler

• Decision Date: 28 December 2001
• Docket Number: No. 01-1809,01-1809
• Citation: 275 F.3d 642
• Parties: (7th Cir. 2001) Birgetta A. Davis Boyd and Charlene Harrison, Plaintiffs-Appellants, v. Norman P. Wexler, doing business as Wexler and Wexler, Defendant-Appellee
• Court: U.S. Court of Appeals — Seventh Circuit

Page 642

275 F.3d 642 (7th Cir. 2001)

Birgetta A. Davis Boyd and Charlene Harrison, Plaintiffs-Appellants, v. Norman P. Wexler, doing business as Wexler and Wexler, Defendant-Appellee.

No. 01-1809

In the United States Court of Appeals For the Seventh Circuit

Argued November 2, 2001

Decided December 28, 2001

Appeal from the United States District Court for the Northern District of Illinois, Eastern Division. No. 00 C 2555--Ruben Castillo, Judge.

Daniel A. Edelman (argued), Edelman, Combs & Lattuner, Chicago, IL, for Appellants.

Michael S. Loeffler (argued), Meckler, Bulger & Tilson, Chicago, IL, for Appellee.

Before Posner, Ripple, and Evans, Circuit Judges.

Posner, Circuit Judge.

This appeal from the grant of summary judgment to the defendant, a lawyer named Norman Wexler, presents questions regarding both the meaning of the Fair Debt Collection Practices Act, 15 U.S.C. sec.sec. 1692 et seq., and the minimum showing required to defeat a motion for summary judgment.

The Act forbids a debt collector, which Wexler is conceded to be, to "use any false, deceptive, or misleading representation or means in connection with the collection of any debt," 15 U.S.C. sec. 1692e, including "the false representation or implication that any individual is an attorney or that any communication is from an attorney." 15 U.S.C. sec. 1692e(3). A lawyer who merely rents his letterhead to a collection agency violates the Act, 15 U.S.C. sec. 1692j(a); Taylor v. Perrin, Landry, deLaunay & Durand, 103 F.3d 1232, 1235-38 (5th Cir. 1997); cf. White v. Goodman, 200 F.3d 1016, 1018 (7th Cir. 2000), for in such a case the lawyer is allowing the collection agency to impersonate him. The significance of such impersonation is that a debtor who receives a dunning letter signed by a lawyer will think that a lawyer reviewed the claim and determined that it had at least colorable merit; so if no lawyer did review the claim, the debtor will have been deceived and the purpose of the Act therefore thwarted. Similarly, a lawyer who, like Wexler, is a debt collector violates section 1692e(3) (and also section 1692e(10), which forbids "the use of any false representation or deceptive means to collect or attempt to collect any debt") if he sends a dunning letter that he has not reviewed, since his lawyer's letterhead then falsely implies that he has reviewed the creditor's claim. Avila v. Rubin, 84 F.3d 222, 228-29 (7th Cir. 1996); United States v. National Financial Services, Inc., 98 F.3d 131, 135-37 (4th Cir. 1996); Clomon v. Jackson, 988 F.2d 1314, 1320-21 (2d Cir. 1993). "A debt collection letter on an attorney's letterhead conveys authority and credibility." Crossley v. Lieberman, 868 F.2d 566, 570 (3d Cir. 1989).

The plaintiffs received dunning letters signed "Wexler & Wexler," the name under which the defendant practices law. The suit charges that no lawyer in fact reviewed the claims made in the letters before they were mailed. The defendant moved for summary judgment and supported the motion with his affidavit. The affidavit states that a lawyer reviews every individual file before the initial collection letter (the letters to the plaintiffs were initial, not follow-up, letters) is sent, that he himself reviewed the plaintiffs' files before approving the sending of collection letters to them, and that in every collection case handled by his office a lawyer "reviews each and every document in the client's file to insure the correctness of the data and the claim, paying strict attention to the various statutes of limitation which may apply . . . [and] to make sure that we comply with state requirements, such as the need for actual presence in the state, a collection agency license or a license to practice law in the state." If the lawyer approves the claim, a form letter is prepared "for review and approval [by him] before [it is] allowed to go into the mail." If "after reviewing the case file . . . the attorney is unable to verify that the client is making a valid claim, the case is pulled out and discussed with our client."

So far, so good. But pretrial discovery revealed that in a recent eight-and-a- half-month period Wexler's firm sent out 439,606 pieces of mail, which according to the deposition testimony of one of the firm's lawyers consisted overwhelmingly of collection letters. That is an average of 51,718 a month. So Wexler's firm must be large--but no, it turns out to have only three lawyers, although it has 45 other employees. Of the three lawyers, two, including the defendant, appear to be engaged in managing the firm and all three engage in normal litigation activities (Wexler's affidavit states that his firm "routinely engages in litigation with regards [sic] to collection matters"), leaving little time for them to be reviewing the routine collection activity that generates the vast bulk of the mailings. In addition, Wexler is constantly changing the form letter. We are amused (though we doubt the recipients were) by one of the variants, which Wexler dropped after being sued on account of it: "YOU ARE ABOUT TO BE TREATED IN A MANNER THAT WILL CAUSE YOU TO THINK TWICE BEFORE YOU WRITE ANOTHER WORTHLESS CHECK. OUR CLIENT HAS INSTRUCTED THAT WE NOTIFY YOU THAT YOU ARE GOING TO BE SUED UNLESS REPAYMENT IS FORTHCOMING AT ONCE." Keele v. Wexler, 149 F.3d 589, 591 (7th Cir. 1998).

Suppose that each of the three lawyers in Wexler's firm devotes four hours a day to reviewing collection files and authorizing the mailing of dunning letters and that the process of review and authorization takes an average of 15 minutes per file. That comes to 16 collection letters a day per lawyer, which is fewer than 50 collection letters a day for all three lawyers or, assuming a five-day work week, fewer than 1,000 letters a month for the entire firm--if it is really true that each lawyer follows the review and authorization procedure set forth in Wexler's affidavit. To say the least, it is difficult to see how the firm could send out fifty times that number of letters yet still have a lawyer review the file and the letter in every one.

And it gets worse. The volume of mail sent by the firm varies from week to week, and in one particularly busy week in June 2000 the firm sent out 23,342 pieces of mail-- 93 times the maximum number consistent with 15-minute review. What is more, Wexler stated at his deposition that he personally is responsible for reviewing most of thecollection letters; if he reviewed all of them himself, the estimate of 93 times the maximum consistent with 15-minute review would soar to 279 times. Our 15- minute estimate may be too high, but it could be cut in three, or for that matter in 15, without explaining the volume of collection letters.

The district judge, in explaining why despite this evidence he granted summary judgment for Wexler, characterized Wexler's affidavit as "uncontradicted and unrefuted." This characterization was possible only because the judge gave no weight at all to the volume of mail, stating that "mathematical inferences about the volume of letters sent are not probative of [Wexler's] state of mind." State of mind is not the issue. The issue is credibility, the truthfulness of the affidavit; Wexler might think he reviewed the two plaintiffs' files carefully yet be mistaken. Circumstantial evidence can create an issue of credibility. United States v. Arias, 238 F.3d 1, 3-5 (1st Cir. 2001); United States v. Drones, 218 F.3d 496, 504 (5th Cir. 2000); United States v. Premises Known as 717 South Woodward Street, 2 F.3d 529, 534 (3d Cir. 1993); United States v. Bouquett, 820 F.2d 165, 167 (6th Cir. 1987). Suppose a witness testifies that he saw a person draw a gun, but there is evidence that a truck was blocking the witness's line of sight. This would be circumstantial evidence that created an issue of the witness's credibility (though not necessarily of his state of mind--he might have thought he saw a gun, but have been mistaken). And so it is here. Wexler's testimony was made incredible, or at least highly implausible, by the evidence of the volume of mail, especially when that evidence is viewed against the background of his testimony that he personally reviewed the plaintiffs' files. The letters to the two plaintiffs were mailed in February and March 2000, respectively. They are very short form letters seeking unexceptional amounts of money; there is nothing memorable about them. Wexler gave his deposition in September, almost six months later--by which time, if his affidavit can be believed, close to 100,000 additional collection matters had passed through his...