Greene v. CCDN, LLC, Case No. 08–cv–6165.

• Decision Date: 25 March 2011
• Docket Number: Case No. 08–cv–6165.
• Citation: 853 F.Supp.2d 739
• Parties: Timothy GREENE, et al., Plaintiffs, v. CCDN, LLC, et al., Defendants.
• Court: U.S. District Court — Northern District of Illinois

853 F.Supp.2d 739

Timothy GREENE, et al., Plaintiffs,

v.CCDN, LLC, et al., Defendants.

Case No. 08–cv–6165.

United States District Court,

N.D. Illinois,

Eastern Division.

March 25, 2011.

Ashley Sara Decker, David M. Marco, Larry Paul Smith, Larry P. Smith & Associates, Ltd., Chicago, IL, David A. Searles, Donovan Searles, LLC, Gregory J. Gorski, James A. Francis, Michael J. Szymborski, Francis & Mailman, P.C., Philadelphia, PA, for Plaintiffs.

Richard J. Wasik, Barrister Legal Services, P.C., Robert Kenneth Lock, R.K. Lock & Associates, Chicago, IL, for Defendants.

MEMORANDUM OPINION AND ORDER

ROBERT M. DOW, JR., District Judge.

Plaintiffs Timothy and Christine Greene (“Plaintiffs”) filed the instant lawsuit to assert violations of the federal Credit Repair Organizations Act, 15 U.S.C. §§ 1679 et seq., (“CROA”), and the Illinois Credit Service Organizations Act, 815 ILCS §§ 605/1 et seq., (“ICSOA”). Before the Court is Plaintiffs' motion for summary judgment [97]. For the reasons stated below, Plaintiffs' motion is granted in part and denied in part.

I. Background

The procedural history of this lawsuit is perplexing. Plaintiffs' second amended complaint [71] named a bevy of Defendants—19 in total. On March 14, 2011, Plaintiffs voluntarily dismissed 15 Defendants pursuant to Federal Rule of Civil Procedure 41(a)(1)(A)(i) [102], leaving the following four Defendants in the case: CCDN, LLC (“CCDN”), R.K. Lock & Associates (“RKLA”), Robert K. Lock, Jr., Esq. (“Lock”); and Philip M. Manger (“Manger”).¹ The Court will refer to CCDN, RKLA, Lock, and Manger collectively as “Defendants.”

There is no evidence on the docket sheet that any of the Defendants was properly served with the second amended complaint.² None of the Defendants has filed an answer to the second amended complaint. However, the docket sheet reflects that Defendants—through their counsel (now Defendant Lock)—have actively litigated this matter since Plaintiffs filed their second amended complaint on February 22, 2010 (for example, Defendants responded to Plaintiffs' motion for summary judgment). For this reason, it is clear that Defendants are aware of the second amended complaint and have waived any defense they might have had based on defective service. ³ See Relational, LLC v. Hodges, 627 F.3d 668, 672 n. 4 (7th Cir.2010) (“defenses based on a lack of personal jurisdiction, such as legally defective service may be waived”). Furthermore, the fact that Defendants have not filed their answer to the operative complaint does not preclude the Court from considering the instant summary judgment motion. Federal Rule of Civil Procedure 56(b) provides that “[u]nless a different time is set by local rule or the court orders otherwise, a party may file a motion for summary judgment at any time until 30 days after the close of all discovery.” (emphasis added). While it is unusual, a motion for summary judgment may be made and ruled upon before an answer is filed.⁴ See In re KJK Const. Co., Inc., 414 B.R. 416, 426–27 (Bankr.N.D.Ill.2009).

The Court takes the facts relevant to the disposition of the instant motion from the parties' Local Rule (“L.R.”) 56.1 statements. (See [97–1; 98–1] ). L.R. 56.1 requires that statements of facts contain allegations of material fact and that factual allegations be supported by admissible record evidence. See L.R. 56.1; Malec v. Sanford, 191 F.R.D. 581, 583–85 (N.D.Ill.2000). It is the function of the Court, with or without a motion to strike, to review carefully statements of material facts and to eliminate from consideration any argument, conclusions, and assertions that are unsupported by the documented evidence of record offered in support of the statement. See, e.g., Sullivan v. Henry Smid Plumbing & Heating Co., Inc., 2006 WL 980740, at *2 n. 2 (N.D.Ill. Apr. 10, 2006); Tibbetts v. RadioShack Corp., 2004 WL 2203418, at *16 (N.D.Ill. Sept. 29, 2004); Rosado v. Taylor, 324 F.Supp.2d 917, 920 n. 1 (N.D.Ind.2004). The Court's scrutiny of material statements of facts applies equally to the party seeking summary judgment and the party opposing it.

Where a party has offered a legal conclusion or a statement of fact without offering proper evidentiary support, the Court will not consider that statement. See, e.g., Malec, 191 F.R.D. at 583. Additionally, where a party improperly denies a statement of fact by failing to provide adequate or proper record support for the denial, the Court deems that statement of fact to be admitted. See L.R. 56.1(a), 56.1(b)(3)(B); see also Malec, 191 F.R.D. at 584. The requirements for a response under Local Rule 56.1 are “not satisfied by evasive denials that do not fairly meet the substance of the material facts asserted.” Bordelon v. Chicago Sch. Reform Bd. of Trs., 233 F.3d 524, 528 (7th Cir.2000). In addition, the Court disregards any additional statements of fact contained in a party's response brief but not in its L.R. 56.1(b)(3)(B) statement of additional facts. See, e.g., Malec, 191 F.R.D. at 584 (citing Midwest Imports, Ltd. v. Coval, 71 F.3d 1311, 1317 (7th Cir.1995)). Similarly, the Court disregards a denial that, although supported by admissible record evidence, does more than negate its opponent's fact statement—that is, it is improper for a party to smuggle new facts into its response to a party's L.R. 56.1 statement of fact. See, e.g., Ciomber v. Cooperative Plus, Inc., 527 F.3d 635, 643 (7th Cir.2008). The Seventh Circuit repeatedly has confirmed that a district court has broad discretion to require strict compliance with L.R. 56.1. See, e.g., Koszola v. Bd. of Educ. of the City of Chicago, 385 F.3d 1104, 1109 (7th Cir.2004); Curran v. Kwon, 153 F.3d 481, 486 (7th Cir.1998) (citing Midwest Imports, Ltd., 71 F.3d at 1317 (collecting cases)).

Plaintiffs' statement of facts [97–1] contains 24 separate paragraphs. Defendants' response [98–1] does not respond “to each numbered paragraph in the moving party's statement,” L.R. 56.1(b)(3)(B), but instead discusses only paragraphs 2, 3, and 13 of Plaintiffs' statement. Accordingly, to the extent that the other of the paragraphs in Plaintiffs' statement are properly supported by record evidence, they are admitted. L.R. 56.1(b)(3)(C). Defendants' statement [98–1] also contains its own 17–paragraph statement of facts. Plaintiffs have not responded to Defendants' statement of facts. Accordingly, to the extent that each of the facts in Defendants' statement of facts is properly supported by record evidence and not controverted by a fact in Plaintiffs' statement, it is admitted. L.R. 56.1(a). The Court has identified a number of instances where the facts asserted in the parties' statements of facts are not properly supported by the record evidence identified.⁵ The parties' lax compliance with L.R. 56.1 made the Court's consideration of the instant motion difficult. The parties are strongly encouraged to carefully review L.R. 56.1 and Judge Castillo's opinion in Malec v. Sanford prior to filing or responding to another motion for summary judgment in this district.

Defendants Lock and Manger are the co-founders and owners of CCDN, which does business as the “Credit Collection Defense Network.” CCDN is exclusively managed by Lock and Manger.⁶ RKLA is a sole proprietorship owned entirely by Lock under which Lock practices law.

Plaintiffs and their two sons reside in Spring Valley, Illinois. Christine ⁷ is employed as a nurse and Timothy is employed as a police officer. In early 2006, Plaintiffs had more than $50,000 in credit card and school loan debt. Although Plaintiffs' debts were current, Plaintiffs felt that they “had a lot of debt” and Christine was concerned about the fact that they were “only making the minimum payments.” (Pl Ex. 12, Christine Dep. at 33–39). Plaintiffs sought out CCDN's help because “CCDN said that they could help me get out of debt and help me get rid of it.” ( Id. at 38:5–8).

Plaintiffs first learned of CCDN through an e-mail or Internet pop-up advertisement that they received in or around April or May of 2006. In response to that communication, Christine called a representative of CCDN (a John Charles) who directed her to Manger. Christine called Manger and asked him questions about the CCDN program. Manger told Christine that CCDN helped with credit negotiation, credit restoration, and that CCDN could help fix her credit scores. (Christine Dep. at 27–28). Manger said that CCDN “got the credit stuff that was being illegally put on our credit scores dropped, they negotiated that through their program, that there was a whole program that you went through.” ( Id. at 29:10–14). Manger told Christine that CCDN would “help make my credit score better by helping get rid of charges that they were stating were on my credit wrongly by helping restore anything that was wrong in my credit history.” ( Id. at 32:10–33:1–3). Following her initial conversation with Manger, Christine and Timothy spoke with Manger on a number additional occasions in order to better understand the CCDN program. (See id. at 44–47; Pl. Ex. 16, Timothy Dep at 18–19). During these conversations, Manger told Plaintiffs that CCDN would “negotiate and eliminate our credit card debt” and “repair and rebuild our credit back to original, if not better.” (Timothy Dep at 18:16–18). Manger told Plaintiffs that CCDN would eliminate their debt without them ever having to go to court, and if a court appearance ever became necessary, then “somebody would be there to represent us.” (Timothy Dep. at 24:14–21). Plaintiffs believed that by signing up for the CCDN program and by paying CCDN the approximately $6,000 that they charged, CCDN would eliminate the tens of thousands of dollars of credit card debt that they had and would restore their credit. (Timothy Dep. at 32–33).

Following these conversations, Plaintiffs obtained the required enrollment paperwork from CCDN. Plaintiffs attach the CCDN Debt Reconciliation Program Enrollment Manual (hereinafter, the “...