Veillard v. Mednick, 98 C 1311.
| Decision Date | 13 October 1998 |
| Docket Number | No. 98 C 1311.,98 C 1311. |
| Citation | 24 F.Supp.2d 863 |
| Parties | Patrick VEILLARD, Plaintiff, v. Richard M. MEDNICK, and Doctors Service Bureau, Inc., Defendants. |
| Court | U.S. District Court — Northern District of Illinois |
Cathleen M. Combs, Daniel A. Edelman, James O. Latturner, Michelle R. Teggelaar, Edelman & Combs, Chicago, IL, for Plaintiff.
Timothy M. McCarthy, Joseph Michael Eichberger, Jerome G. McSherry & Associates, Chicago, IL, for Defendants.
In this putative class action, plaintiff Patrick Veillard alleges that defendants Richard Mednick ("Mednick") and Doctors Service Bureau, Inc. ("Bureau") violated numerous provisions of the Fair Debt Collection Practices Act ("FDCPA" or "Act"), 15 U.S.C. § 1692. The one-count complaint alleges seven violations of the FDCPA stemming from one letter sent to Veillard on October 6, 1997, from Richard M. Mednick and Associates on behalf of their creditor-clients.
Veillard claims that the defendants violated the Act in three ways: the defendants' collection letter purports to emanate from an attorney who is not actually involved in handling the file, in violation of §§ 1692e, 1692f, and 1692g; creates the false belief that Mednick is participating in the collection of the debt, in violation of § 1692j;1 and contradicts and overshadows the required validation statement, in violation of § 1692g. Presently pending before the Court are the parties' cross-motions for summary judgment. For the reasons that follow each motion is partially granted and partially denied.
The facts of this case are straightforward and undisputed. Defendant Bureau is an Illinois corporation with its principal place of business in Evanston, Illinois. Bureau is a licensed collection agent in Illinois and has been since 1989. Defendant Richard Mednick is an attorney licensed in Illinois with his office located Evanston, Illinois. He is listed in the telephone book, Sullivan's Law Directory, Index to Law Firms, Martindale-Hubbell Law Directory, and directory assistance as an attorney. Mednick employs non-attorneys to collect debts.
Veillard is a resident of New York who became indebted to Nations Credit Commercial Corporation ("Nations") through the use of a credit card. Nations sent Veillard's debt to Bureau who in turn retained Mednick to collect the money. Mednick's office sent Veillard an unsigned collection letter, dated October 6, 1997, seeking to obtain payment owed to Nations. The letterhead used by the defendants was from "RICHARD M. MEDNICK AND ASSOCIATES", but did not explicitly state that Mednick and Associates is a law firm or that Mednick is an attorney. The body of the letter is reproduced below:
DEAR PATRICK VEILLARD:
Your seriously past-due account has been placed with us for collection.
Unless you notify this office within 30 days after receiving this notice that you dispute the validity of the debt or any portion thereof, this office will assume this debt is valid. If you notify this office in writing within 30 days from receiving this notice, this office will obtain verification of the debt or obtain a copy of a judgment and mail you a copy of such judgment or verification. If you request this office in writing within 30 days after receiving this notice, this office will provide you with the name and address of the original creditor, if different from the current creditor.
Your best interest will be served by resolving this matter as soon as possible as our client shows this obligation to be due immediately.
Yours truly,
J. Dancer
for Richard M. Mednick
THIS IS AN ATTEMPT TO COLLECT A DEBT. ANY INFORMATION OBTAINED WILL BE USED FOR THAT PURPOSE.
The Court must determine whether Mednick's letter violates the Act and, if so, whether Bureau is liable for any of these violations.
Veillard asserts that Mednick and Bureau violated the FDCPA because the letter purports to emanate from Mednick, a lawyer who was not actually involved in handling the file, and the letter creates the false impression that Mednick was participating in the collection of the debt when in fact he was not. The letter does not expressly state that Mednick is an attorney, but Veillard contends that the letter conveys this impression because it is on letterhead generally reserved for the legal profession. According to Veillard, by using letterhead that suggests it is from a law firm, Mednick and Bureau are being deceptive, thereby violating the Act. Veillard also claims that the letter overshadows and contradicts the validation notice requirement. Specifically, the statement "Your best interest will be served by resolving this matter as soon as possible as our client shows this obligation to be due immediately" is likely to induce the debtor to pay within the validation period to avoid legal action.
Mednick and Bureau argue that, because the word "attorney" is nowhere in the letter, the unsophisticated consumer would not be misled or deceived into believing anything other than that the letter stemmed from a collection agency. They contend that only a very sophisticated and extremely suspicious consumer would track down whether Mednick has a law license. In addition, professionals such as architects, engineers, real estate, and life insurance people use the letterhead "and associates," therefore, the unsophisticated consumer would not believe this came from a law firm. They also argue that the letter does not threaten legal action and, therefore, that they did not violate § 1692e(5).
Summary judgment is proper when the record contains no genuine issue as to any material fact and the moving party is entitled to judgment as a matter of law. Fed. R.Civ.P. 56(c). The facts in this case are not in dispute and only questions of law are present; therefore, this case is ripe for summary judgment. Avila v. Rubin, 84 F.3d 222, 226 (7th Cir.1996). We now turn to the parties's cross-motions for summary judgment.
Congress enacted the FDCPA in 1977 "to eliminate abusive debt collection practices by debt collectors." 15 U.S.C. § 1692(e). To this end, the Act sets certain standards for debt collectors' communications with debtors. Among them is a requirement that debt collectors advise debtors of their rights to dispute the debt and demand verification, see 15 U.S.C. § 1692g, a ban on false and misleading statements in collection letters, see id. § 1692e, and a prohibition against collecting a debt through "unfair or unconscionable fees beyond the amount in arrears," see § 1692f(1). Additionally, 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 that 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." See § 1692j.
The Seventh Circuit evaluates communications from debt collectors "through the eyes of the unsophisticated consumer." Jang v. A.M. Miller & Assocs., 122 F.3d 480, 483-84 (7th Cir.1997); see Avila, 84 F.3d at 226. The unsophisticated consumer is a hypothetical consumer whose reasonable perceptions will be used to determine if collection messages are deceptive or misleading. See Gammon v. GC Servs. Ltd. Partnership, 27 F.3d 1254, 1257 (7th Cir.1994). This standard presumes a level of sophistication that "is low, close to the bottom of the sophistication meter," Avila, 84 F.3d at 226, and "protects the consumer who is `uninformed, naive, or trusting,'" Jang, 122 F.3d at 483-84 (citing Gammon, 27 F.3d at 1257). Still, the standard "admits an objective element of reasonableness," which "protects debt collectors from liability for unrealistic or peculiar interpretations of collection letters." Id.
Veillard claims that Mednick and Bureau violated §§ 1692e, 1692e(3), 1692e(5), 1692e(10), and 1692f of the FDCPA, and Bureau violated § 1692j, when they sent a letter out purporting to be from an attorney who was not actually involved in handling the file. Section 1692e states that a debt collector "may not use any false, deceptive, or misleading representation ... with the collection of any debt." Section 1692e(3) prohibits any "false representation or implication that any individual is an attorney or that any communication is from an attorney." Section 1692e(5) bars debt collectors from threatening "any action that cannot legally be taken or that is not intended to be taken." Collectors violate § 1692e(10) when they use "any false representation or deceptive means to collect ... any debt." Under § 1692f, a debt collector may not use unfair or unconscionable means to collect or attempt to collect any debt. Finally, § 1692j states that "[i]t 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 ... is participating in the collection of ... the debt."
An attorney sending dunning letters must be directly and personally involved in the debt collection to comply with the strictures of FDCPA. Avila, 84 F.3d at 222. According to Avila, personal involvement "include[s] reviewing the file of individual debtors to determine if and when [letters] should be sent or approving the sending of letters based on the recommendations of others." Id. at 227. Avila explains that the use of an attorney's letterhead and his signature on collection letters could give consumers the false impression that the letters are communications from an attorney, id., and that
[a]n unsophisticated consumer, getting a letter from an `attorney,' knows the price of poker has just gone up. And that clearly is the reason why the dunning campaign escalates...
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