Webster v. Receivables Performance Mgmt., LLC

• Citation: 473 F.Supp.3d 861
• Decision Date: 21 July 2020
• Docket Number: Case No. 1:18-cv-03940-TWP-DML
• Parties: September WEBSTER, Plaintiff, v. RECEIVABLES PERFORMANCE MANAGEMENT, LLC, Defendant.
• Court: U.S. District Court — Southern District of Indiana

473 F.Supp.3d 861

September WEBSTER, Plaintiff,

v.RECEIVABLES PERFORMANCE MANAGEMENT, LLC, Defendant.

Case No. 1:18-cv-03940-TWP-DML

United States District Court, S.D. Indiana, Indianapolis Division.

Signed July 21, 2020

Angie K. Robertson, David J. Philipps, Mary E. Philipps, Philipps and Philipps, Ltd., Palos Hills, IL, John Thomas Steinkamp, John Steinkamp & Associates, Indianapolis, IN, for Plaintiff.

Brittney B. Rykovich, Gordon Rees Scully Mansukhani, Indianapolis, IN, Kelly V. Milam, Gordon Rees Scully Masukhani, LLP, Chicago, IL, Sean P. Flynn, Gordon Rees Scully Mansukhani, LLP, Irvine, CA, for Defendant.

ENTRY ON CROSS-MOTIONS FOR SUMMARY JUDGMENT

TANYA WALTON PRATT, JUDGE

This matter is before the Court on Cross-Motions for Summary Judgment pursuant to Federal Rule of Civil Procedure 56. Plaintiff September Webster ("Webster") initiated this action against Defendant Receivables Performance Management, LLC ("RPM") after it failed to report to TransUnion credit reporting agency that she disputed owing a certain debt to one of its clients. On February 28, 2020 Webster filed a Motion for Summary Judgment (Filing No. 56 ). Shortly thereafter, on April 10, 2020, RPM filed a Cross Motion for Summary Judgment. (Filing No. 61 ). For the following reasons, the Court denies Webster's Motion for Summary Judgment and grants RPM's Motion.

I. BACKGROUND

RPM is a debt collection agency licensed by the State of Indiana. RPM regularly collects, or attempts to collect, directly or indirectly, debts owed or due or asserted to be owed or due another that arose out of transactions in which the money, property or services which are the subject of the transactions are primarily for personal, family or household purposes. (Filing No. 1 at 2 ).

Webster was having issues with her broadcast satellite services from DirecTV, including the signal not working when the weather was windy or rainy and pornographic channels being listed in the middle of the network channels, which led to uncomfortable questions from her young son. (Filing No. 57-1 at 8 ). This prompted her to attempt to cancel her service with DirecTV before the end of her service term. Id. at 6. Webster then defaulted on her payment owed to DirecTV, and that debt was transferred to RPM for collection (Filing No. 1 at 2 ). RPM reported to TransUnion, the credit reporting agency, that Webster owed a $357.00 debt to its client (Filing No. 57-2 at 3 ).

On September 13, 2017, RPM sent Webster a debt collection letter, which provided various ways to pay the debt or communicate with RPM, being via telephone, US mail or its complaint portal. (Filing No. 61-2 at 30 ). Webster never received this collection letter because it was sent to an address where she had not lived for several months (Filing No. 57-1 at 8–9).

On August 29, 2018, Webster obtained a copy of her TransUnion credit report on which RPM had reported the delinquent debt owed to DirecTV (Filing No. 57 at 2; Filing No. 57-2 ). Webster believed that the amount of the DirecTV debt RPM was reporting on her credit report was incorrect. On September 27, 2018, Webster's counsel, John Steinkamp ("Steinkamp") sent a notice disputing her debt to RPM via fax to the facsimile number 1-888-203-3641 ("-3641") (Filing No. 57-7 at 4 ). Before faxing the dispute notice, Steinkamp verified RPM's facsimile number with the Nationwide Multistate Licensing System & Registry ("NMLS") (Filing No. 57-5 at 7; Filing No. 57-6 at 2 ). Indiana is one of ten states nationwide that manages debt collection licensing via the NMLS (Filing No. 57-3 ). In order to obtain a license to act as a debt collector in Indiana, debt collection agencies, including RPM, have to apply to do so via NMLS's website, which requires debt collection agencies to submit certain information, including contact information (Filing No. 57-3; Filing No. 57-4 at 6 ). After faxing the dispute letter, Steinkamp received notification that the fax was successfully transmitted (Filing No. 1-2 at 1 ).

However, on December 29, 2017, almost a year before Steinkamp faxed Webster's dispute letter, RPM asked its IT department to remove the facsimile number -3641 from RPM's website and consumer-facing media. (Filing No. 57-4 at 5; Filing No. 61-2 at 32.) RPM did so "to mitigate our risk of potential claims from consumers who allege they sent us something that we cannot locate." (Filing No. 61-2 at 32.) The IT department reported that this was accomplished on or about January 10, 2018; however, the -3641 fax number was not disconnected or otherwise disabled until February 2019. (Filing No. 57-4 at 5, 8; Filing No. 61-2 at 32.) When Steinkamp sent the dispute letter to the -3641 fax number, the number already had been removed by RPM from any consumer-facing media and its website and -3641 was not being identified on RPM's website or consumer correspondences as a proper means of communication. Steinkamp researched the facsimile number after Webster filed this lawsuit, and the NMLS continued to state that the -3641 fax number was RPM's fax number. (Filing No. 57-5 at 7.) It also was listed as the fax number for RPM on the Better Business Bureau's website. (Filing No. 31-2 at 3.) Although Steinkamp's letter transmitted to the -3641 fax number was received, it was not processed or seen by an RPM employee and RPM was unaware there was a facsimile on that system until after the law suit was filed. (Filing No. 57-4 at 8.)

On November 16, 2018, Webster obtained an updated copy of her TransUnion credit report, which did not indicate that RPM's debt was disputed. (Filing No. 1 at 3; Filing No. 56 at 1; Filing No. 57-8.) The credit report noted RPM's report of the DirecTV debt and further noted that the debt was verified by RPM. (Filing No. 57 at 5-6; Filing No. 57-8.) On December 14, 2018, Webster initiated this lawsuit against RPM, asserting violation of the Fair Debt Collection Practices Act, 15 U.S.C. § 1692, et seq. ("FDCPA") (Filing No. 1 ). Thereafter, the parties filed their Cross-Motions for Summary Judgment pursuant to Federal Rule of Civil Procedure 56 (Filing No. 56; Filing No. 61 ). Additional facts are added in the discussion section of the order.

II. SUMMARY JUDGMENT STANDARD

The purpose of summary judgment is to "pierce the pleadings and to assess the proof in order to see whether there is a genuine need for trial." Matsushita Elec. Indus. Co. v. Zenith Radio Corp. , 475 U.S. 574, 587, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986). Federal Rule of Civil Procedure 56 provides that summary judgment is appropriate if "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." Hemsworth v. Quotesmith.com, Inc. , 476 F.3d 487, 489–90 (7th Cir. 2007). In ruling on a motion for summary judgment, the court reviews "the record in the light most favorable to the non-moving party and draw[s] all reasonable inferences in that party's favor." Zerante v. DeLuca , 555 F.3d 582, 584 (7th Cir. 2009) (citation omitted). "However, inferences that are supported by only speculation or conjecture will not defeat a summary judgment motion." Dorsey v. Morgan Stanley , 507 F.3d 624, 627 (7th Cir. 2007) (citation and quotation marks omitted). Additionally, "[a] party who bears the burden of proof on a particular issue may not rest on its pleadings, but must affirmatively demonstrate, by specific factual allegations, that there is a genuine issue of material fact that requires trial." Hemsworth , 476 F.3d at 490 (citation omitted). "The opposing party cannot meet this burden with conclusory statements or speculation but only with appropriate citations to relevant admissible evidence." Sink v. Knox County Hosp. , 900 F. Supp. 1065, 1072 (S.D. Ind. 1995) (citations omitted).

These same standards apply even when each side files a motion for summary judgment. The existence of cross-motions for summary judgment does not imply that there are no genuine issues of material fact.

R.J. Corman Derailment Serv., LLC v. Int'l Union of Operating Eng'rs. , 335 F.3d 643, 647 (7th Cir. 2003). The process of taking the facts in the light most favorable to the non-moving party, first for one side and then for the other, may reveal that neither side has enough to prevail without a trial. Id. at 648. "With cross-motions, [the Court's] review of the record requires that [the Court] construe all inferences in favor of the party against whom the motion under consideration is made." O'Regan v. Arbitration Forums, Inc. , 246 F.3d 975, 983 (7th Cir. 2001) (citation and quotation marks omitted).

III. DISCUSSION

The parties filed cross-motions, each asserting that they are entitled to summary judgment on the FDCPA claim. Webster argues RPM violated § 1692e(8) of the FDCPA—which also resulted in violations of §§ 1692d, 1692e and 1692f of the FDCPA—when it continued to report the DirecTV debt but failed to report that the debt was disputed. (Filing No. 56 at 2.) RPM argues it had no knowledge of Webster's dispute because Steinkamp sent the dispute letter to a fax number no longer utilized by RPM, and thus, it did not violate the FDCPA. (Filing No. 61 at 5–6.) Further, RPM argues that even if the Court finds Webster sufficiently disputed her debt, RPM is entitled to the bona fide error defense pursuant to § 1692k(c) of the FDCPA. Id. RPM additionally argues that Webster lacks standing to bring her claim because of a lack of injury, and her dispute was untimely. Id. at 9–12. The Court will first address whether Webster has standing to bring her claim and whether her dispute was untimely. Then the Court will address the alleged FDCPA violation.

A. Webster's Motion for Summary Judgment

1. Standing to Bring Claim

RPM argues Webster lacks Article III standing to bring her FDCPA claim because she was not injured. (Filing No. 61 at 11–12.) To establish standing, a...