Cortright v. Thompson, 91 C 20216.

• Decision Date: 01 April 1992
• Docket Number: No. 91 C 20216.,91 C 20216.
• Citation: 812 F. Supp. 772
• Parties: Robert F. CORTRIGHT and Janie Cortright, Plaintiffs, v. James C. THOMPSON, Defendant.
• Court: U.S. District Court — Northern District of Illinois

812 F. Supp. 772

Robert F. CORTRIGHT and Janie Cortright, Plaintiffs, v. James C. THOMPSON, Defendant.

No. 91 C 20216.

United States District Court, N.D. Illinois, W.D.

April 1, 1992.

Philip H. Hart, UAW-Chrysler Legal Services, Belvidere, IL, for plaintiffs.

Frederic Theodore Brandt, III, Kostantacos, Traum, Reuterfors & McWilliams, P.C., Rockford, IL, for defendant.

ORDER

REINHARD, District Judge.

Introduction

Plaintiffs, Robert F. Cortright and Janie Cortright, filed a complaint against defendant, James C. Thompson, alleging that defendant violated the Fair Debt Collection Practices Act (Act), 15 U.S.C. § 1692 et seq. The complaint alleges that a letter sent by defendant violated the Act by stating differing views of the validity of the debt; namely stating that the debt was due immediately and should be paid within 10 days but later stating that after 30 days the debt would be considered valid. This claim also alleges that the letter misrepresented the "imminence of legal action" and the "existence of `mandatory court' attendance." The complaint also alleges an alternative theory that the letter was a form letter which was used to create a false belief that a person other than the creditor, in this case defendant, was participating in the collection of the debt when the person in fact was not participating. Defendant has moved for summary judgment¹ and sanctions pursuant to Federal Rule of Civil Procedure (F.R.C.P.) 11. Plaintiffs have filed a cross-motion for partial summary judgment as to liability.

Facts

On April 2, 1991, defendant, a licensed attorney in Illinois, sent plaintiffs a letter notifying them that their account at Rockford Clinic in the amount of $1152.27 was "long past due." Defendant represents Rockford Mercantile Agency (RMA). The letter was written on defendant's firm's letterhead and stated the following:

CREDITOR — ROCKFORD CLINIC AMOUNT DUE 1,152.27 REF — 192236 300587 CORTRIGHT, JANIE/CHRISTIN CORTRIGHT ROBERT 5608 BELLVILLE DR ROCKFORD IL 61108

IT HAS COME TO MY ATTENTION THAT YOUR ACCOUNT WITH THE CREDITOR NAMED ABOVE IS LONG PAST DUE. THEREFORE, IT IS ESSENTIAL THAT THE BALANCE DUE IS PAID IMMEDIATELY, OR IN THE ALTERNATIVE, THAT SATISFACTORY PAYMENT ARRANGEMENTS BE MADE THROUGH MY CLIENT, ROCKFORD MERCANTILE AGENCY. PLEASE CONTACT MY CLIENT AT XXX-XXX-XXXX TO DISCUSS THE STATUS OF YOUR ACCOUNT AT YOUR EARLIEST POSSIBLE CONVENIENCE. IN THE EVENT THE BALANCE IS NOT PAID IN FULL OR SATISFACTORY PAYMENT ARRANGEMENTS MADE WITHIN TEN DAYS, IT MAY BE NECESSARY TO FILE AT ANY TIME THEREAFTER A LAWSUIT TO RECOVER THE AMOUNT DUE IF SO REQUESTED BY MY CLIENT. I AM CERTAIN THAT YOU REALIZE THAT SUCH ACTION COULD OBLIGATE YOU TO PAY ADDITIONAL SUMS FOR COURT COSTS AND ALSO LEAD TO YOU MISSING TIME FROM WORK TO ATTEND MANDATORY COURT APPEARANCES. YOUR PROMPT ATTENTION TO THIS MATTER IS EXPECTED.

Very truly yours KOSTANTACOS, TRAUM, REUTERFORS & McWILLIAMS, P.C. James C. Thompson /s/ James C. Thompson JCT/jb

Unless you notify my client at (815) 965-0581 within 30 days of the receipt of this letter that you dispute any portion of this debt, we will assume the debt is valid. If you do so notify us we will obtain verification of the debt and mail a copy to you; we will also provide the name and address of the original creditor; if different than that listed above.

THE PURPOSE OF THIS CORRESPONDENCE IS TO COLLECT A DEBT AND ANY INFORMATION OBTAINED WILL BE USED FOR THAT PURPOSE.

On April 8, 1991, plaintiffs, through their attorney, requested that the debt be verified. The debt has since been discharged.

Contentions

Defendant contends that the letter did not violate the Act. Plaintiffs' cross-motion for partial summary judgment contends that the letter violated the Act by not effectively conveying the validation notice.

Discussion

This court will not grant any summary judgment motion unless all of the pleadings and supporting documents, if any, indicate that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247, 106 S.Ct. 2505, 2510, 91 L.Ed.2d 202 (1986); Fitzsimmons v. Best, 528 F.2d 692, 694 (7th Cir.1976). Facts are material so as to preclude summary judgment if they might affect the outcome of the suit under the governing law. Anderson, 477 U.S. at 248, 106 S.Ct. at 2510. A dispute about a material fact is genuine if the evidence is such that a reasonable jury could return a verdict for the non-moving party. Anderson, 477 U.S. at 248, 106 S.Ct. at 2510. However, the district court is not required to evaluate every conceivable inference that can be drawn from evidentiary matters, but only reasonable ones. Spring v. Sheboygan Area School District, 865 F.2d 883, 886 (7th Cir.1989). The mere existence of a scintilla of evidence in support of a party's position is insufficient; there must be evidence on which the jury could reasonably find for the party. Anderson, 477 U.S. at 252, 106 S.Ct. at 2512. The inquiry to be made on a motion for summary judgment is whether the evidence presents a sufficient disagreement to require submission to a jury or whether it is so one-sided that one party must prevail as a matter of law. Anderson, 477 U.S. at 251-52, 106 S.Ct. at 2512.

Initially, plaintiffs' "alternate cause of action" alleged in paragraphs 9 and 10 of plaintiffs' complaint must be addressed. This cause of action alleges that defendant violated the Act "by furnishing a form letter knowing it would be used to create the false belief that an attorney, and not the collection agency itself, was attempting to collect the debt." According to plaintiffs, defendant violated the Act if he provided the letter to a third party for its independent use in the collection process. Apparently plaintiffs allege that defendant was not participating in the collection of the debt.

Section 1692j(a) of the Act states, "It is unlawful to design, compile, and furnish any form knowing that such form would be used to create the false belief in a consumer that a person other than the creditor of such consumer is participating in the collection of or in an attempt to collect a debt such consumer allegedly owes such creditor, when in fact such person is not so participating." 42 U.S.C. § 1692j(a).

Defendant's affidavit states that he is one of the attorneys within his firm which represents RMA and that he and other attorneys review all correspondence sent to consumers on behalf of RMA. Two other affidavits state that all correspondence sent on behalf of RMA are reviewed by either defendant or two other attorneys. Plaintiffs have not presented any evidence refuting defendant's participation in reviewing the correspondence.

Because plaintiffs have not presented any evidence to refute the affidavits which show that defendant participated in the collection of the debt, defendant's motion for summary judgment is granted as to the "alternate cause of action."

As to the first claim that defendant violated the Act, it must be noted at the outset that there is an absence of authority about this issue from the Seventh Circuit and no reported cases from this district. However, there are several other circuit court opinions and district court decisions on this issue. Further, defendant has included in the record two informal opinion letters addressed to different law firms which address the issue raised here.

District courts need not give the decisions of other courts of appeals automatic deference because, within reason, the parties are entitled to an independent judgment. Colby v. JC Penney Co., Inc., 811 F.2d 1119, 1123 (7th Cir.1987). Although decisions of other circuits are not necessarily controlling, district courts should give them substantial weight. Richards v. Local 134, International Brotherhood of Electrical Workers, 790 F.2d 633, 636 (7th Cir.1986). In contrast, a decision of a district judge has persuasive rather than authoritative effect, Alliance to End Repression v. City of Chicago, 820 F.2d 873, 875 (7th Cir.1987), and is not binding on the circuit or even on other district judges in the same district, United States v. Articles of Drug Consisting of 203 Paper Bags, 818 F.2d 569, 572 (7th Cir.1987).

Although § 1692k(e) of the Act, provides that no liability shall be imposed for any act done or omitted in good faith in conformity with any advisory opinion of the Federal Trade Commission (FTC), informal letters of the FTC staff outlining the current enforcement position of the staff do not limit liability. Hulshizer v. Global Credit Services, 728 F.2d 1037, 1038 (8th Cir.1984). The precedential value of informal advisory letters is limited by the restricted interpretive power given to the FTC under the Act. Pressley v. Capital Credit & Collection Service, 760 F.2d 922, 925 (9th Cir.1985). Such letters are merely suggestions that the stated interpretations are the more likely meaning of the statute. Staub v. Harris, 626 F.2d 275, 279 (3rd Cir.1980).

Therefore, all the authority relied upon by the parties will be given the weight that each is due. The opinions of the court of appeals from other circuits receive the greatest weight; other district court decisions receive some weight, and the informal letters receive the least weight.

A two-step process is used to determine if a debt collector violated the Act: first, the court must interpret the statute, and second, the court must determine if defendant violated the Act as interpreted by the court. Higgins v. Capitol Credit Services, Inc., 762 F.Supp. 1128, 1131 (D.Del.1991). As defendant concedes, the clear weight of authority for determining if a debt collector violated the Act requires that the court apply the least sophisticated consumer analysis. See, e.g., Smith v. Transworld Systems, Inc., 953 F.2d 1025, 1028 (6th Cir.1992); Graziano v. Harrison, 950 F.2d 107, 111 (3rd Cir.1991); Swanson v. Southern Oregon Credit...