Holcomb v. Freedman Anselmo Lindberg, LLC
| Decision Date | 24 March 2017 |
| Docket Number | 15 C 1129 |
| Citation | 245 F.Supp.3d 998 |
| Parties | Betty HOLCOMB, Plaintiff, v. FREEDMAN ANSELMO LINDBERG, LLC, Defendant. |
| Court | U.S. District Court — Northern District of Illinois |
Bryan Paul Thompson, The Thompson Law Firm, P.C., Chicago, IL, Andrew Finko, Chicago, IL, Michael Jacob Wood, Community Lawyers Group, Ltd., Chicago, IL, for Plaintiff.
David M. Schultz, Hinshaw & Culbertson LLP, Chicago, IL, Jonathon D. Drews, Hinshaw & Culbertson LLP, Chicago, IL, Justin M. Penn, Hinshaw & Culbertson, Chicago, IL, Raven Burke Mackey, Hinshaw & Culbertson LLP, Chicago, IL, for Defendant.
Betty Holcomb has sued the law firm of Freedman Anselmo Lindberg, LLC ("Freedman"), alleging a violation of the Fair Debt Collection Practices Act ("FDCPA"), 15 U.S.C. § 1692c(a)(2). In short, Holcomb alleges that Freedman violated the FDCPA by mailing court filings to her directly when Freedman knew that she was represented by counsel in the case. Freedman counters that, while Holcomb's attorney was present at a couple of court hearings, the attorney did not file an appearance and, therefore, was not an "attorney of record." According to Freedman, in such cases, Illinois procedural rules required Freeman to mail the court papers to Holcomb directly. The parties have filed cross-motions for summary judgment. For the following reasons, the Court grants Holcomb's motion [64] and denies Freedman's motion [68].
The material facts of this case are undisputed. Holcomb opened a credit card account with Citibank, N.A. Pl.'s LR 56.1(a)(3) Stmt. ¶ 5. Holcomb eventually could not pay the balance and defaulted on the account. Id. Portfolio Recovery Associates, LLC then purchased Holcomb's debt and hired Freedman to collect it. Id. ¶¶ 6–7.
In order to collect the debt, Freedman filed a complaint on Portfolio Recovery's behalf against Holcomb in the Circuit Court of Cook County on August 4, 2014. Id. ¶ 8. In response to the lawsuit filed against her, Holcomb retained attorneys at Debtors Legal Clinic.1 Id. ¶ 9; Def.'s Ex. 1, 9/16/14 Letter from Finko to Freedman, at 1.
Holcomb's attorney, Andrew Finko, notified Freedman via letter dated September 16, 2014, that Holcomb was represented by Debtors Legal Clinic and that she disputed the debt at issue. Pl.'s LR 56.1(a)(3) Stmt. ¶ 10. In addition, Finko specifically instructed Freedman to contact Debtors Legal Clinic if Freedman wished to discuss the matter. Id.
After Freedman received the letter, Freedman added two notations to Holcomb's account: "n-c" and "FDCPAA." Id. ¶ 12. According to Barbara Nilsen, who was Freedman's managing attorney at the time, these notations meant "no calls, FDCPA attorney." Id. About three weeks later, Freedman sent Holcomb's attorneys a copy of her credit card contract and account information. Id. ¶ 13.
The parties appeared before the Circuit Court on November 12, 2014, and January 6, 2015. Holcomb's attorney appeared on behalf of Holcomb at both hearings. His appearance at these two hearings was confirmed in notes taken by Freedman's own attorney. Id. ¶¶ 14–18; see Def.'s Ex. 4, Nilsen Dep. 18:1–20:1, 38:3–38:16, 39:6–39:20, Oct. 27, 2015; Def.'s LR 56.1(b)(3)(C) Stmt. ¶ 37; Def.'s Ex. 2, Case Information Summary, at 3. More significantly, the appearance of Holcomb's attorney was recognized by the Circuit Court in orders signed by Judge Dennis McGuire and dated November 12, 2014, and January 6, 2015. [CITE—Ex. E and F in Pl.'s exhibits] For whatever reason, however, Holcomb's attorneys did not file a written appearance until January 20, 2015. Def.'s LR 56.1(b)(3)(B) Stmt. ¶ 11; Def.'s Ex. 2, Case Information Summary, at 3.
On January 8, 2015, Freedman, claiming that Holcomb was in default in the state court proceedings, filed a motion for judgment. Pl.'s LR 56.1(a)(3) Stmt. ¶ 20. The next day, Freedman mailed a copy of its motion and notice of motion to Holcomb as well as her attorney. Id. ¶ 21. These documents included the name of the current owner of the debt and Holcomb's name. Def.'s Ex. 8, Notice of Motion and Motion for Judgment. In addition, the motion for judgment stated the amount of the alleged debt, which was $10,212.11. Id.
According to Holcomb, upon receiving the documents, Holcomb began to feel scared, anxious, and stressed, because she believed that Portfolio Recovery would continue to contact her directly even though she had retained an attorney. Pl.'s LR 56.1(a)(3) Stmt. ¶ 30. Holcomb also suffered anxiety and stress because she thought she could face criminal consequences if a judgment were entered against her. Id. ¶ 32.
"The court shall grant summary judgment if the movant shows that 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) ; see also Celotex Corp. v. Catrett , 477 U.S. 317, 322, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986). At the summary judgment stage, a court must consider any disputed facts in the light most favorable to the nonmoving party, drawing all reasonable inferences in the nonmoving party's favor. Anderson v. Liberty Lobby , 477 U.S. 242, 255, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986) ; Grochocinski v. Mayer Brown Rowe & Maw, LLP , 719 F.3d 785, 794 (7th Cir. 2013). To survive summary judgment, the nonmoving party must "do more than simply show that there is some metaphysical doubt as to the material facts," Matsushita Elec. Indus. Co. v. Zenith Radio Corp. , 475 U.S. 574, 586, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986), and instead "must establish some genuine issue for trial such that a reasonable jury could return a verdict in her favor." Gordon v. FedEx Freight, Inc. , 674 F.3d 769, 772–73 (7th Cir. 2012).
The FDCPA was enacted to "eliminate abusive debt collection practices by debt collectors" and "to promote consistent State action to protect consumers against debt collection abuses." 15 U.S.C. § 1692(e). To this end, § 1692c(a)(2) of the FDCPA provides that "[w]ithout the prior consent of the consumer given directly to the debt collector or the express permission of a court of competent jurisdiction, a debt collector may not communicate with a consumer in connection with the collection of any debt...if the debt collector knows the consumer is represented by an attorney with respect to such debt and has knowledge of, or can readily ascertain, such attorney's name and address, unless the attorney fails to respond within a reasonable period of time to a communication from the debt collector or unless the attorney consents." Id. § 1692c(a)(2).
Holcomb contends that Freedman violated § 1692c(a)(2) because Freedman knew that she was represented by counsel when it mailed its notice of motion and motion for default judgment regarding the debt collection case directly to Holcomb. Freedman's defense rests on three separate, but related, arguments. First, it contends that, because Holcomb's attorney had not filed a written appearance until January 20, 2015, Freedman "did not have knowledge that Plaintiff had an attorney representing her in the state collection action." Def.'s Resp. Br. at 3. Second, Freedman argues that, because (as far as it knew) Holcomb was proceeding pro se , it was merely adhering to the service rules set forth in Illinois Supreme Court Rule 11(a) and Circuit Court of Cook County Rule 2.1(c)(i), which required it to mail the motion and notice to Holcomb directly.2 According to Freedman, its compliance with these rules precludes a finding of liability because its actions were undertaken with "the express permission of a court of competent jurisdiction." 15 U.S.C. § 1692(a). Third, to the extent it was mistaken, Freedman argues that it is entitled to the bona fide error defense provided in § 1692k(c). None of the arguments has merit.3
First, no reasonable jury could find based on the current record that Freedman did not know that Holcomb was represented by an attorney for the purpose of disputing her debt generally and for the purpose of representing her in the state collection case. Freedman knew, based upon the September 16, 2014, letter, that Holcomb had retained Finko of the Debtors' Legal Clinic to represent her with respect to her debt generally. Freedman also knew (as indicated by Freedman's notes) that a lawyer had appeared to represent Holcomb before the Illinois Circuit Court at two separate hearings. Indeed, Freedman himself drafted a proposed order at the end of both hearings indicating that "Defendant's counsel" was "[p]resent before the court." Pl.'s Ex. F, at 3. Furthermore, both of the orders then were signed by Circuit Court Judge McGuire. Id. at 3–4.
For its part, Freedman argues that, because the attorney who appeared for Holcomb at the hearings had not filed a written appearance under Illinois Supreme Court Rule 13(a) by January 9, 2015, it had no reason to know that Holcomb had retained an attorney for the state action when it mailed the court filings to her. However, this argument not only ignores the information that Freedman had at the time as described above, but it fails to appreciate the import of Judge McGuire's orders.
On November 12, 2014, and January 6, 2015, Judge McGuire entered two orders that expressly recognized Holcomb's counsel's presence on the record. Furthermore, the record indicates that, at both hearings, Judge McGuire addressed the attorneys and entered a schedule for the case. Pl.'s Ex. F, at 3–4. On neither occasion did Freedman object to Holcomb's attorney's ability to participate in the proceedings. The only reasonable conclusion that can be drawn from the language of the orders and what transpired at the hearings is that Judge McGuire recognized the appearance of Holcomb's attorney for the purposes of the case. And indeed, under Illinois law, he had the discretion to do so. See Ebert v. Dr. Scholl's Foot Comfort Shops, Inc. , 137 Ill.App.3d 550, 92 Ill.Dec. 323, 484 N.E.2d 1178, 1182 (1985) (...
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