Durkin v. Equifax Check Services, Inc.

Citation406 F.3d 410
Decision Date18 April 2005
Docket NumberNo. 04-2289.,04-2289.
PartiesMichael DURKIN and Loretta Reed, individually and on behalf of all others similarly situated, Plaintiffs-Appellants, v. EQUIFAX CHECK SERVICES, INC., a Delaware corporation, Defendant-Appellee.
CourtUnited States Courts of Appeals. United States Court of Appeals (7th Circuit)

David J. Philipps, Gomolinski & Philipps, Hickory Hills, IL, for Plaintiffs-Appellants.

Christopher V. Langone (argued), David L. Hartsell (argued), McGuirewoods, Chicago, IL, for Defendant-Appellee.

Before COFFEY, RIPPLE, and MANION, Circuit Judges.

MANION, Circuit Judge.

Equifax Check Services, Inc.,1 uses a series of form letters to assist it in collecting debts from dishonored checks, Equifax mailed such a series of letters to Michael Durkin and, separately, to Loretta Reed. Believing that certain letters were unacceptably confusing, Durkin, and later Reed, sued Equifax under the Fair Debt Collection Practices Act ("FDCPA"), 15 U.S.C. §§ 1692, et seq. The district court consolidated the two actions into one. After denying the plaintiffs summary judgment, the district court granted Equifax's motion to exclude the plaintiffs' only expert witness. This evidentiary ruling led Equifax to move for summary judgment, arguing that the plaintiffs failed to bring forth the necessary extrinsic evidence to support their case. The district court agreed and granted Equifax summary judgment. The plaintiffs appealed. We affirm.


Equifax, through its check authorization and warranty service, protects retailers from being stuck with bad checks. Under the service, when a customer presents a retailer with a check, the retailer contacts Equifax, and Equifax determines whether it will stand behind the check and authorize it or whether it will deny acceptance of the check. Equifax makes this determination by reviewing its database of check writing information. If Equifax authorizes a check that is later dishonored, Equifax purchases the check from the retailer at face value, making the retailer whole, and then pursues collection efforts on its own behalf. Two retailers who have subscribed to this service are Funco, Inc., (also known as Funcoland) and Sears, Roebuck and Company.

On March 15, 2000, Equifax authorized a $217.45 check in Michael Durkin's name payable to Funco. Durkin's checking account, however, was closed, and the check was dishonored. Funco submitted the dishonored check to Equifax, and Equifax purchased the check at face value. Equifax then began its collection efforts and sent Durkin a collection letter on April 12, 2000. This initial letter contained a notice of certain rights afforded to Durkin under the FDCPA. Specifically, Equifax informed Durkin—in accordance with 15 U.S.C. § 1692g(a)-(b) and the corresponding safe-harbor language drafted by this court in Bartlett v. Heibl, 128 F.3d 497, 501-02 (7th Cir.1997)—that he had thirty days from his receipt of the letter to dispute the validity of the debt and that disputes should be in writing. This thirty-day period is commonly called the "validation period," and the aforementioned notice is routinely referred to as the "validation notice." With no response from Durkin, Equifax sent a second letter on April 24, 2000, and likewise a third letter on May 8, 2000. Equifax also made a telephone call to Durkin during this period. The second and third collection letters did not discuss or reference the validation period, nor did they reiterate any of the rights and procedures spelled out in the initial letter's validation notice. Each of the three letters appears in the appendix to this opinion.2

Within a day or two of receiving the initial letter, Durkin forwarded it to his attorney, an experienced FDCPA practitioner. Durkin had retained the attorney to handle financial and legal matters arising from the theft of his checkbook in August 1999. The check presented to Funco in March 2000 was among the checks stolen. Durkin's signature on the Funco check was thus a forgery, and the checking account had been closed at the time the forged check was written. Durkin and his attorney were therefore aware of the problem with the checking account when the initial letter arrived in April. Nevertheless, the attorney did not lodge a written dispute with Equifax until May 8, 2000, after the second letter had arrived and the day that the third letter was sent. Equifax, once informed about the forgery, ceased all collection activity and expunged Durkin's check writing history of any negative references regarding the Funco check. Three months later, Durkin's attorney filed a class action, with cocounsel, under the FDCPA against Equifax in the Northern District of Illinois using Durkin as the named plaintiff. The complaint alleged FDCPA violations on behalf of individuals who had received the same form letters.

Separately, a different set of attorneys brought a virtually identical FDCPA class action in the Northern District of Illinois against Equifax with Loretta Reed as their lead plaintiff. Reed wrote a $76.30 check to Sears. Equifax authorized the check. Nonetheless, the check was dishonored (purportedly because of a bank error). Equifax bought the check from Sears at face value and then sent Reed a collection letter that was similar to the initial letter sent to Durkin, including the same safe-harbor validation notice. Later, Equifax sent a second letter to Reed, which contained the same form language used in the second letter to Durkin. Reed purportedly received the same third letter as well, but she has not produced that letter. Reed never disputed the debt with Equifax; rather, she paid Equifax $76.30 plus a $25.00 service charge.

The district court consolidated the Durkin and Reed actions. The district court also granted class certification. The class was composed of Illinois residents from whom Equifax tried to collect a debt for a dishonored check written to Funco or Sears during a certain period by using the same or similar form letters received by Durkin and Reed. The class numbered approximately 4,800 individuals.

The plaintiffs' "amended consolidated class action complaint" contained three counts, each alleging a different FDCPA violation. Count one alleged that Equifax's followup form letters, i.e., the second and third letters, contradicted and/or overshadowed the safe-harbor validation notice in the initial letter, causing confusion in violation of 15 U.S.C. § 1692g. Count two claimed that a particular sentence in the second letter describing Equifax's procedures for handling debts was misleading in violation of 15 U.S.C. § 1692e. Finally, count three alleged that Equifax's follow-up letters, which contained a toll-free number, violated 15 U.S.C. § 1692f by unfairly obscuring the requirement that certain debt disputes be made in writing.

In arguing for summary judgment, the plaintiffs contended that alleged FDCPA violations were apparent on the face of the collection letters. The district court disagreed but ruled that the case should go to trial since the plaintiffs procured a linguistics expert, English professor Allan Metcalf, to support their claims of confusion. However, Equifax later filed a motion to bar Metcalf from testifying at trial, which the district court granted. Consequently, the plaintiffs were left with no evidence of confusion beyond the collection letters themselves and their (Durkin, Reed, and one rank-and-file class member) own assertions that the letters were confusing. This development led Equifax to move for summary judgment,3 arguing that the plaintiffs' evidence was insufficient to go to trial. The district court granted the motion, ruling that the plaintiffs could not proceed to trial relying solely on the letters and their own self-serving testimony. The plaintiffs moved for reconsideration, but the district court declined to alter its summary judgment ruling. The plaintiffs appealed.


The plaintiffs first maintain that the district court erred in denying them summary judgment. They then alternatively argue for the case to go to trial, attacking the subsequent grant of summary judgment for Equifax. We review a district court's summary judgment decisions de novo, construing all facts in favor of the non-moving party. See Turner v. J.V.D.B. & Assocs., Inc., 330 F.3d 991, 994 (7th Cir.2003). Summary judgment is appropriate when the "pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." Fed.R.Civ.P. 56(c). In short, "summary judgment is appropriate if, on the record as a whole, a rational trier of fact could not find for the non-moving party." Turner, 330 F.3d at 995.

To determine if the collection letters at issue violate the FDCPA as alleged by the plaintiffs, we examine the letters from the standpoint of the so-called unsophisticated consumer or debtor. See Fields v. Wilber Law Firm, P.C., 383 F.3d 562, 564-66 (7th Cir.2004) (reviewing § 1692e, § 1692f, and § 1692g claims under unsophisticated consumer/debtor standard). While the unsophisticated debtor is considered "uninformed, naive, or trusting," he is nonetheless deemed to possess "rudimentary knowledge about the financial world and is capable of making basic logical deductions and inferences." Id. (internal quotations omitted). Further, the unsophisticated-debtor standard is an objective one and is not the same as the rejected least-sophisticated-debtor standard; accordingly, we disregard unrealistic, peculiar, bizarre, and idiosyncratic interpretations of collection letters. See Pettit v. Retrieval Masters Creditors Bureau, Inc., 211 F.3d 1057, 1060 (7th Cir.2000); Gammon v. GC Servs., L.P., 27 F.3d 1254, 1257 (7th Cir.1994). To that end, a mere claim of confusion is not enough: a plaintiff must show that the challenged "language of the letters...

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