Simpson v. Safeguard Properties, LLC

Filing 178

MEMORANDUM Opinion and Order: Simpson's motion for summary judgment (ECF No. 146 ) is granted in part and denied in part, and Safeguard's motion for summary judgment (ECF No. 151 ) is denied. The court dismisses Safeguard's bo na fide error defense under § 1692k(c) and its defense invoking the bona fide fiduciary exception of § 1692a(6)(F)(i). A status conference is set for October 13, 2017, at 9:30 a.m. Signed by the Honorable Joan B. Gottschall on 9/28/2017.Mailed notice(vcf, )

UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF ILLINOIS
EASTERN DIVISION
LUCILLE SIMPSON, on behalf of herself
and the class members defined herein,
Plaintiff,
v.
SAFEGUARD PROPERTIES, LLC,
Defendant.

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Case No. 13-CV-02453
Judge Joan B. Gottschall

MEMORANDUM OPINION AND ORDER
Before the court are cross motions for summary judgment in this case brought under the
Fair Debt Collection Practices Act (“FDCPA”), 15 U.S.C. § 1692 et seq. The parties chiefly
disagree about whether defendant Safeguard Properties, LLC (“Safeguard”), meets the FDCPA’s
definition of a debt collector by placing door hangers as part of inspections of homes conducted
at the behest of a mortgage service. Finding genuine factual disputes material to that question
exist, the court denies the cross motions on that issue.
I. BACKGROUND
The court begins by sketching the pertinent procedural history. It then sets forth the
undisputed facts at summary judgment.
A. Procedural History
Safeguard moved to dismiss plaintiff Lucille Simpson’s (“Simpson”) complaint for
failure to state a claim for which relief could be granted. See Fed . R. Civ. P. 12(b)(6). The
court denied the motion on June 12, 2013. Simpson v. Safeguard Props., LLC (“Simpson I”), No.
13 C 2453, 2013 WL 2642143 (N.D. Ill. June 12, 2013). The court decided that Simpson’s
complaint, viewed favorably to her, stated a claim that Safeguard met the FDCPA’s definition of

a debt collector. Id. at *2. Also, the complaint, ruled the court, plausibly alleged that Safeguard
sent communications in connection with the collection of a debt. Id. at *3–4; see also id. at *4
(“tak[ing] no position regarding the merits of Simpson’s allegations”); 15 U.S.C. § 1692c.
After an initial round of discovery, Simpson moved under Federal Rule of Civil
Procedure 23 for class certification. The court granted her motion on September 17, 2014.
Simpson v. Safeguard Props., LLC (“Simpson II”), No. 13 C 2453, 2014 WL 4652336 (N.D. Ill.
Sept. 17, 2014). Safeguard asked the court to reconsideration its decision. The court denied that
request on May 7, 2015. Simpson v. Safeguard Props., LLC (“Simpson III”), No. 13 CV 2453,
2015 WL 2193135 (N.D. Ill. May 7, 2015). As certified, the class consists of:
(a) all natural persons with Illinois addresses (b) that Safeguard
contacted at the secured property (c) with a standard door hanger
(d) on behalf of Midland (e) on or after April 12, 2012 (one year
prior to the filing of this action on April 12, 2013) and (f) on or
before May 2, 2013 (20 days after filing this action), (g) where the
address of the secured property and the address of the mortgagor
were the same.
Simpson II, 2014 WL 4652336, at *1 (citation omitted).
Class discovery followed. See Minute Entry, June 3, 2015, ECF No. 104. Notice of the
pendency of this action was sent to class members on or around October 21, 2016. Minute
Entry, Dec. 12, 2016, ECF No. 142. The parties subsequently filed the pending cross motions
for summary judgment.
B. Facts
Except where otherwise stated, the court draws the following undisputed facts from the
parties’ Local Rule 56.1 statements of undisputed material facts. The court discusses the factual
disputes in its analysis.
In 2011, Midland Mortgage Co. (“Midland”) serviced the mortgage on Simpson’s home
in Bolingbrook, Illinois. Def.’s Resp. to Pl.’s SOF ¶ 12, ECF No. 162; Pl.’s Resp. to Def.’s SOF
2

¶ 5, ECF No. 164; see also Def.’s Resp. to Pl.’s SOF ¶ 15 (describing notice of default dated Jan.
10, 2012). Beginning May 2011, Midland considered Simpson’s mortgage to be in default.
Def.’s Resp. to Pl.’s SOF ¶ 13. Midland subsequently retained Safeguard to provide contact and
inspection services for Simpson’s home. Id. ¶¶ 14, 19. Between October 8, 2012, and February
1, 2013, Safeguard independent contracts left five hangers on Simpson’s door. Id. ¶¶ 17, 20;
Pl.’s Resp. to Def.’s SOF ¶ 8. Except for the door hangers, Simpson has not communicated with
Safeguard. Pl.’s Resp. to Def.’s SOF ¶¶ 10–11.
The words “IMPORTANT INFORMATION ENCLOSED” appeared on the outside of
the identical door hangers. Compl. Exs. A–F. A pocket in each hanger held an identical card.
The cards had no logo or graphic. See ibid. What appears, at least when viewed in a light
favorable to Simpson, to be a small identification number beginning with “SPI” can be found in
the lower-right corner. See ibid. The cards read, in English and Spanish:
IMPORTANT
PLEASE CALL
(Customer Service or Mid)
NAME
800-552-3000
TELEPHONE NUMBER
PLEASE BE READY TO GIVE YOUR ACCOUNT NUMBER.
WE ARE EXPECTING YOUR CALL TODAY
Ibid. Dialing the phone number on the cards connected the caller with Midland’s “general line.”
Def.’s Resp. to Pl.’s SOF ¶ 22. A generic version of the card appears in the inspectors’ training
manual. Pl.’s Ex. E at 54, ECF No. 159-1. According to Simpson, it is reasonable to infer that
Safeguard designed the cards from this fact, but Safeguard disagrees. See Def.’s Resp. to Pl.’s
SOF ¶ 10.

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Safeguard markets its services to mortgage companies, though it disputes that it markets
them exclusively to companies with delinquent borrowers. Def.’s Resp. to Pl.’s SOF ¶ 5. In its
own words, Safeguard is a “privately held mortgage field services company” that “inspects and
maintains defaulted and foreclosed properties for mortgage service companies, lenders,
investors, and other financial institutions.” Id. ¶ 4 (quoting Ans. ¶ 7). Among other things,
Safeguard advertises “communicating with delinquent borrowers” as a service it provides.
Def.’s Resp. to Pl.’s SOF ¶ 4.
Safeguard calls the service at issue here a “contact attempt inspection” (“CAI”). Pl.’s
Resp. to Def.’s SOF ¶ 15. Safeguard provides other field services such as cutting the grass,
winterizing pipes and utilities, and installing a lock box if the property becomes vacant. Id. at
¶ 19.
To determine whether a property is occupied, Safeguard’s inspectors check whether the
grass has been cut, whether personal property can be seen, whether the home appears to have
utility services, and whether the glass, presumably in windows and doors, is intact. Def.’s Resp.
to Pl.’s SOF ¶ 32. Inspectors only leave a door hanger if they determine that the property is
occupied. Id. ¶ 35. Safeguard tells its inspectors to leave the door hanger even if the inspector
talks with someone in the home. Id. ¶ 9.
II. SUMMARY JUDGMENT STANDARD
Summary judgment is appropriate “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). A genuine dispute as to any material fact exists if “the evidence is such that a reasonable
jury could return a verdict for the nonmoving party.” Anderson v. Liberty Lobby, Inc., 477 U.S.
242, 248 (1986). In resolving summary judgment motions, “facts must be viewed in the light

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most favorable to,” and all reasonable inferences from that evidence must be drawn in favor of,
“the nonmoving party[–but] only if there is a ‘genuine’ dispute as to those facts.” Scott v. Harris,
550 U.S. 372, 380 (2007); Blasius v. Angel Auto., Inc., 839 F.3d 639, 644 (7th Cir. 2016) (citing
Cairel v. Alderden, 821 F.3d 823, 830 (7th Cir. 2016)).
The party seeking summary judgment has the burden of establishing that there is no
genuine dispute as to any material fact. See Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986);
Modrowski v. Pigatto, 712 F.3d 1166, 1168 (7th Cir. 2013) (explaining that Rule 56 “imposes an
initial burden of production on the party moving for summary judgment to inform the district
court why a trial is not necessary” (citation omitted)). After “a properly supported motion for
summary judgment is made, the adverse party must” go beyond the pleadings and “set forth
specific facts showing that there is a genuine issue for trial.” Anderson, 477 U.S. at 255
(quotation and footnotes omitted); see also Modrowski, 712 F.3d at 1169 (stating party opposing
summary judgment “must go beyond the pleadings (e.g., produce affidavits, depositions, answers
to interrogatories, or admissions on file), to demonstrate that there is evidence upon which a jury
could properly proceed to find a verdict in her favor”) (citations and quotations omitted).
Summary judgment is warranted when the nonmoving party cannot establish an essential
element of its case on which it will bear the burden of proof at trial. Kidwell v. Eisenhauer, 679
F.3d 957, 964 (7th Cir. 2012).
“The ordinary standards for summary judgment remain unchanged on cross-motions for
summary judgment . . . .” Blow v. Bijora, Inc., 855 F.3d 793, 797 (7th Cir. 2017) (citing Calumet
River Fleeting, Inc. v. Int’l Union of Operating Eng’rs, Local 150, 824 F.3d 645, 647–48 (7th
Cir. 2016)). The court must separately apply the procedural requirements of Rule 56 to each
cross motion for summary judgment. See id.; Hotel 71 Mezz Lender LLC v. Nat’l Ret. Fund, 778

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F.3d 593, 603 (7th Cir. 2015). Each movant and nonmovant “must individually satisfy the
requirements of Rule 56.” United Transp. Union v. Ill. Cent. R.R. Co., 998 F. Supp. 874, 880
(N.D. Ill. 1998) (citing Proviso Ass’n of Retarded Citizens v. Vill. of Westchester, 914 F. Supp.
1555, 1560 (N.D. Ill. 1996) and Chi. Truck Drivers, Helpers & Warehouse Workers Union
(Indep.) Pension Fund v. Kelly, No. 95 C 501, 1996 WL 507258, *3 (N.D. Ill. Sept. 4, 1996)).
Regarding the material factual contentions, the court adopts “a dual, ‘Janus-like’ perspective” on
cross motions aimed at the same claim or defense. Hotel 71, 778 F.3d at 603 (citing Shiner v.
Turnoy, 29 F. Supp. 3d 1156, 1160 (N.D. Ill. 2014)). On one motion, the court views the facts
and inferences in the light most favorable to the nonmovant; but if summary judgment is not
warranted, the court changes tack on the cross motion and gives the unsuccessful movant “all of
the favorable factual inferences that it has just given to the movant’s opponent.” Id. (citing R.J.
Corman Derailment Servs., LLC v. Int’l Union of Operating Engrs., Local Union 150, 335 F.3d
643, 647–48 (7th Cir. 2003)). Which party has the burden of proof at trial determines which
party must “go beyond the pleadings and affirmatively . . . establish a genuine issue of material
fact.” Santaella v. Metro. Life Ins. Co., 123 F.3d 456, 461 (7th Cir. 1997) (citing Celotex, 477
U.S. at 324).
III. ANALYSIS
Congress declared the FDCPA’s purpose: “It is the purpose of this subchapter to
eliminate abusive debt collection practices by debt collectors, to insure that those debt collectors
who refrain from using abusive debt collection practices are not competitively disadvantaged,
and to promote consistent State action to protect consumers against debt collection abuses.” 15
U.S.C. § 1692(e); see also Bass v. Stolper, Koritzinsky, Brewster & Neider, S.C., 111 F.3d 1322,
1328–29) (7th Cir. 1997) (quoting this language and describing it as the FDCPA’s “separate and

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specific purpose”). Among other practices, the FDCPA requires a debt collector, in connection
with the collection of a debt, to “disclose in the initial written communication with the consumer
and, in addition, if the initial communication with the consumer is oral, in that initial oral
communication, that the debt collector is attempting to collect a debt and that any information
obtained will be used for that purpose.” 15 U.S.C. § 1692e(11). After the initial communication,
the debt collector must “disclose that [subsequent] communication[s] [are] from a debt
collector.” Id. Additionally, § 1692g(a) requires a debt collector to send the debtor, either in the
initial communication within five days after it, a notice listing the debt’s amount, the creditor’s
identity, and certain statements and warnings regarding the consumer’s right to dispute the debt.
See id. § 1692g(a)(1)–(5).
The door hangers here do not contain the disclosures required by §§ 1692g and 1692e.
Def.’s Resp. to Pl.’s SOF ¶¶ 21, 26, ECF No. 162. Safeguard does not include those disclosures
as a matter of policy, id. ¶ 27, presumably because it takes the position that it does not meet the
FDCPA’s definition of a “debt collector.” The parties cross move for summary judgment on that
issue. Safeguard adds an additional ground in its motion. It argues that it did not send the
“initial communication,” so it did not need to give the notices required by § 1692g(a). Def.’s
Mem. Supp. Mot. Summ. J. 13–14, ECF No. 156. The court first addresses the question of
whether Safeguard is a debt collector. The court then considers the applicability of the “bona
fide fiduciary exception” and turns to the § 1692g issue. Finally, the court considers an issue
raised only in Simpson’s motion for summary judgment: Safeguard’s “bona fide error defense”
under § 1692k(c).

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A. Fact Issues Preclude Judgment as a Matter of Law on Whether Safeguard is a Debt
Collector
The FDCPA defines the term “debt collector” as “any person who uses any
instrumentality of interstate commerce or the mails in any business the principal purpose of
which is the collection of any debts, or who regularly collects or attempts to collect, directly or
indirectly, debts owed or due or asserted to be owed or due another.” 15 U.S.C. § 1692a(6). The
following six paragraphs list what the definition does “not include.” See id. Safeguard says that
it does not fall within the core definition just quoted. It alternatively contends that the “bona fide
fiduciary” exception to the definition applies. See § 1692a(6)(F)(i).
To be a debt collector under the FDCPA, one must attempt to collect a debt owed to
another. Henson v. Santander Consumer USA Inc., 137 S. Ct. 1718, 1724 (2017). Simpson did
not owe a debt to Safeguard or Midland, though, so the definitional dispute here focuses on what
it means to “collect” a debt for purposes of § 1692a(6). As it did at the Rule 12(b)(6) stage,
Safeguard casts its role as ministerial. It compares its contact attempt inspections to the
ministerial tasks performed by a mail carrier delivering an envelope. See Mem. Supp. Def.’s
Mot. Summ. J. 8–10, ECF No. 156.
The FDCPA “is not aimed . . . “at companies that perform ministerial duties for debt
collectors, such as stuffing and printing the debt collector’s letters.” White v. Goodman, 200
F.3d 1016, 1019 (7th Cir. 2000) (citing Laubach v. Arrow Serv. Bureau, Inc., 987 F. Supp. 625,
629–31 (N.D. Ill. 1997)) (other citations omitted); see also Randle v. GC Servs. L.P., 48 F. Supp.
2d 835, 839–42 (N.D. Ill. 1999). Courts have held that, in appropriate circumstances, engaging
in activities going “beyond mere information gathering or message delivery,” can make a
defendant a debt collector, as where Western Union gave consumers’ telephone numbers to
creditors. Romine v. Diversified Collection Servs., Inc., 155 F.3d 1142, 1149 (9th Cir. 1998),

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cited in Simpson I, 2013 WL 2642143, at *2. This court cited another case holding that the
defendant qualified as a debt collector based on a complaint’s allegations. The complaint
included allegations that the defendant sent representatives to deliver notices to creditors and that
“representatives are instructed to urge alleged debtors, in person, to call the creditor while they
watched. They were to gather contact information from the debtors directly, to speak with their
neighbors, and to conduct a visual assessment of their properties.” Siwulec v. J.M. Adjustment
Servs., LLC, 465 F. App’x 200, 204 (3d Cir. 2012). Here, the disputed evidence and the
reasonable inferences that could be drawn from it, depending on whether one takes Simpson or
Safeguard’s perspective, requires the denial of summary judgment.
First, there is a genuine dispute over the material issue of whether Safeguard was actively
or passively involved in the design of the door hangers. Courts have found the degree to which
the defendant participated in the design of a communication like a letter, as contrasted with being
a passive conduit, to be an important factor when deciding whether a particular defendant is a
debt collector. See Siwulec, 465 F. App’x at 204; Randle, 48 F. Supp. 2d at 838–39 (citing
Laubach, 987 F. Supp. at 630–31). Safeguard points to the “SPI” identifiers in the cards’ lower
right-hand corner, e.g., Compl. Ex. A at 1, and the fact that a generic card appears on page fiftyfour of the manual used to train inspectors, compare id., with Pl.’s Ex. E at 54. Safeguard
counters that this evidence is insufficient to support the reasonable inference that it designed the
cards. As it is reasonable to infer that Safeguard would not include a customer’s intellectual
property in its training manual, this dispute is genuine.
The second material dispute concerns the “principal purpose” of Safeguard’s CAI
business. § 1692a(6). Safeguard urges the court to look at the “principal purpose” of its
business as the entirety of its property preservation services. See generally Schweihs v. Chase

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Home Fin., LLC, 77 N.E.3d 50, 54 (Ill. 2016) (generally describing services provided by
Safeguard in tort case). Safeguard cannot avoid debt collector status merely because it conducts
some business that is not debt collection. See Romine, 155 F.3d at 1148 (holding Western Union
service fell within definition of “debt collector” in part because requiring a phone number
“appear[ed] to be unique to the [particular] service”); Hernandez v. Midland Credit Mgmt., Inc.,
No. 04 C 7844, 2006 WL 695451, at *6 (N.D. Ill. Mar. 14, 2006) (recognizing that the defendant
was “a debt collector for the purpose of applying the FDCPA to its actions”).
Safeguard’s failure to discriminate among the services it provides makes the small
mountain of Rule 12(b)(6) cases it cites inapposite here because they involved Safeguard’s
winterization services without any effort at solicitation rather than the CAI service. See, e.g.,
Alqaq v. CitiMortgage, Inc., No. 13 C 5130, 2014 WL 1689685, at *3–4 (N.D. Ill. Apr. 29,
2014) (breaking into home to winterize it not debt collection); Gordon v. Bank of N.Y. Mellon
Corp., 964 F. Supp. 2d 937, 948–49 (N.D. Ind. 2013) (holding complaint failed to state claim
that Safeguard was a debt collector because it alleged Safeguard employees broke into a home
but did not say that any defendant mentioned a debt).
Nonetheless, Safeguard has marshalled nontrivial evidence that it is not a debt collector.
Safeguard’s clients, including Midland, never tell it a loan’s status or how much the client thinks
is owed. Pl.’s Resp. to Def.’s SOF ¶ 14, ECF No. 164. And except arguably indirectly via the
door hangers, Safeguard does not give debtors information about how to make payments. See id.
¶¶ 14, 18.
The undisputed purpose of a contact attempt inspection “is to determine the occupancy
states [sic] of the property.” Def.’s Resp. to Pl.’s SOF ¶ 18, ECF No. 162. Safeguard also points
to a letter sent to mortgagees by the federal Department of Housing and Urban Development

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(“HUD”) requiring mortgage servicers to inspect properties once a mortgage loan has been
delinquent for more than forty-five days and to reinspect the property every thirty days to make
sure it is still occupied. Def.’s Mem. Supp. Mot. Summ. J. 9–10, ECF No. 156; see also HUD
Mortgagee Letter 2010-18 (“Guidelines”), ECF No. 163-1 App. B. Though the guidelines
mention the need to exhaust efforts at reaching the resident by phone or correspondence,
Guidelines 7, Safeguard points to nothing in the HUD guidelines requiring it to take the step of
leaving a door hanger to determine whether the property is occupied, see id. So although HUD’s
guidelines might give a mortgagee’s representative a reason to inspect the property, they do not
require leaving the particular form of correspondence selected: door hangers. 1
Safeguard cites Midland’s Federal Rule of Civil Procedure 30(b)(6) representative’s
deposition to suggest two other reasons for the hangers. Midland’s representative testified that
one purpose of the door hangers was letting the occupant know who had been there. Def.’s
Resp. to Pl.’s SOF ¶ 29. He also stated that door hangers were an alternative method of
verifying occupancy. See Pruden Dep. 53:1–18.
Other evidence in the record creates a genuine dispute. The door hangers themselves can
be reasonably viewed as contradicting this evidence of the CAI service’s purpose. The hangers
do not mention Midland, Safeguard, or the name of the person who left the hanger; nor do they
have a blank for that information. See Compl. Exs. A–E. They invite the recipient to call a
phone number and have an unspecified account number ready. See id. A jury could find that the
1

Safeguard also directs the court’s attention to a Chicago ordinance that became effective November 18, 2011,
requiring “mortgagees” to file a registration statement for each “vacant” building with Chicago’s Department of
Buildings thirty days after a property becomes vacant or sixty days after a default on a mortgage, whichever is later.
Fed. Hous. Fin. Agency v. City of Chicago, 962 F. Supp. 2d 1044, 1050 (N.D. Ill. 2013) (citing Municipal Code of
Chicago § 13–12–126(a)(1)). The ordinance makes the mortgagee “responsible for securing the building’s doors
and windows, maintaining all grass and weeds, [and] clearing snow from the walkway and any public sidewalk
adjoining the lot” as well as posting a prescribed sign. Id. (citing same source § 13-12-126(a)). Simpson lives in
Bolingbrook, not Chicago. Pl.’s Resp. to Def.’s SOF ¶ 5. More importantly for the class, as with the HUD
guidelines, Safeguard identifies nothing in the ordinance requiring contact with the occupant or door hangers.

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cryptic reference to an account number only makes sense to request if Midland is trying reach the
debtor because another occupant (and determining occupancy is one of the stated reasons for the
door hanger) would not have the account number. See id. And Safeguard markets its services to
mortgage servicers holding delinquent debts, Def.’s Resp. to Pl.’s SOF ¶ 5, and its marketed
services include contacting customers, id. ¶ 6.
What is more, Midland only requests a contact attempt inspection when it has not heard
from the debtor in thirty days. Def.’s Resp. to Pl.’s SOF ¶ 31. Safeguard offers other services to
its clients that do not involve customer contact. Def.’s Resp. to Pl.’s SOF ¶ 34, ECF No. 162.
Moreover, the only evidence in the record shows that Simpson received notices between October
2012 and January 2013, but Midland sent her a notice of default ten months earlier in January
2012. See Def.’s Resp. to Pl.’s SOF ¶¶ 15, 17. A jury could reasonably see that as evidence of
selective enforcement supporting the conclusion that Safeguard “is dispatched to the homes of
particularly delinquent debtors as part of [Midland]’s debt collection efforts.” Fielding v. FCC
Fin., LLC, No. 3:12-cv-00194, 2015 WL 12532741, at *4 (M.D. Tenn. Jan. 22, 2015) (denying
summary judgment in part based on evidence showing a service was sent to homes for this
reason). Furthermore, a Safeguard inspector must leave the door hanger when he or she talks
with someone at the property. Def.’s Resp. to Pl.’s SOF ¶ 9. As inspectors only leave door
hangers at homes believed to be occupied, id. ¶ 35, a reasonable jury could conclude that the
door hanger is superfluous in that situation because the inspector has had an opportunity to
identify why he or she was there.
These facts, seen favorably to Simpson, take this record out of the run of cases Safeguard
cites analogizing its role to that of a letter carrier or bicycle messenger. A delivery service will
generally take anyone’s package to an address, whether it is a birthday card, an invitation, or

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collection letter. In contrast, a reasonable jury here could find that Safeguard has marketed its
CAI services and runs those services principally for the benefit of mortgage servicers trying to
collect delinquent debts. See, e.g., Randle, 48 F. Supp. 2d at 839–40; Aquino v. Credit Control
Servs., 4 F. Supp. 2d 927, 929 (N.D. Cal. 1998) (holding bicycle messenger was not debt
collector). The court notes here that Safeguard can be reasonably viewed as providing
meaningful follow up. Cf. Randle, 48 F. Supp. 2d at 839–40 (finding significant that company
had created letters but did provide not follow-up). The fact that Simpson received five door
hangers itself supports the inference, favorable to Simpson, that they were intended as follow up.
See Def.’s Resp. to Pl.’s SOF ¶ 17.
In Heintz v. Jenkins, 514 U.S. 291, 294 (1995), the Supreme Court cited a legal
dictionary to define the word “collect,” used in § 1692a(6), as meaning, “[i]n ordinary English[,]
. . . ‘to obtain payment or liquidation of [a debt] , either by personal solicitation or legal
proceedings.’” (emphasis added) (quoting Black’s Law Dictionary 263 (6th ed. 1990)). The text
of § 1692a(6) includes someone who “regularly collects or attempts to collect, direct or
indirectly, debts owed.” Combining these two sources yields the rule that one who indirectly
attempts to obtain payment or liquidation through personal solicitation is a debt collector.
Weighed as a whole, the summary judgment evidence could support a jury decision for
either side on whether Safeguard is a “debt collector” when it performs its contact attempt
inspections. If inclined to see things Simpson’s way, the contact attempt inspections, a jury
could decide, have a principal purpose of encouraging a debtor, with all the subtext of a visible
reminder of an in-person visit and a handwritten note (five in Simpson’s case), to call Midland,
so it can attempt to obtain payment for debt. See Def.’s Resp. to Pl.’s SOF ¶ 17 (“We are
expecting your call today.”) The contrary conclusion, consistent with Midland’s Rule 30(b)(6)

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depositions and the undisputed fact that Safeguard receives limited information from Midland,
would also be reasonable with the benefit of inferences favorable to Safeguard.
In supplemental briefing, Safeguard says this court should grant its motion for summary
judgment by following the reasoning of a similar case against it, Schlaf v. Safeguard Properties,
LLC, No. 3:15-cv-50113 (N.D. Ill. Aug. 29, 2017), available in this record at ECF No. 174. 2
That case also involved door hangers left by Safeguard after CAIs on behalf of a different
mortgage servicer. Interestingly, those hangers bear the servicer’s name, unlike the hangers in
this case. See Slip. Op. at 2. Like this court, the Schlaf court determined that the HUD
guidelines do not “strictly require[ ]” the use of door hangers. Id. at 2 n.3. But unlike in this
case, the record there included insufficient evidence for a fact finder to conclude that Safeguard
directly or indirectly marketed debt-collection services. Id. at 4. In addition, the Schlaf court
twice stressed that “the door hangers bear Green Tree’s (not Safeguard’s) name” in addition to
reiterating its point about Safeguard’s marketing. Id. at 7; accord id. at 8. As already explained,
the evidence here supports a finding that Safeguard designed the door hanger and marketed its
services as an indirect debt collector. To be clear, in its opinion in Simpson I, 2013 WL
2642143, at *2–3, this court mentioned facilitating communications as a shorthand for
“indirectly” collecting a debt as that adverb is used in § 1692a(6).
B. Safeguard Waived or Forfeited the “Bona Fide Fiduciary” Exception
The definition of a debt collector excludes “any person collecting or attempting to collect
any debt owed or due or asserted to be owed or due another to the extent such activity is

2

In its supplement, Safeguard also brought the court’s attention to Hunte v. Safeguard Properties Management LLC,
No. 16-cv-11198 (N.D. Ill. June 6, 2017), available in this record at ECF No. 171. Decided at the pleadings stage,
Hunte applied a part of the definition of “debt collector” not at issue here. See Slip Op. at 5 (applying prong of
definition applying to an entity “the principal purpose of which is the enforcement of security interests.” (quoting §
1692a(6)) (emphasis omitted)).

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incidental to a bona fide fiduciary obligation or a bona fide escrow arrangement.”
§ 1692a(6)(F)(i) (numbering omitted). Relying primarily on Harris v. Liberty Community
Management, Inc., 702 F.3d 1298, 1302 (11th Cir. 2012), Safeguard argues in the alternative that
it fits this exception.
As Simpson points out, Safeguard’s motion for summary judgment never cites its Local
Rule 56.1 statement of material facts, or any other evidence, in support of this contention. See
Mem. Supp. Def.’s Mot. Summ. J. 12–13, ECF No. 156. Safeguard does generally reference the
testimony of two of its witnesses and certain documents, leaving the court, and the opposing
party, to guess at which portions, if any, of those exhibits support its position. See id. at 13. Its
response to Simpson’s motion for summary judgment appears to be identical in this respect and
is therefore similarly deficient. See Resp. Opp’n Pl.’s Mot. Summ. J. 6–7, ECF No. 161. This
defeats the purpose of the Local Rule 56.1 statements. See Mervyn v. Nelson Westerberg, Inc.,
76 F. Supp. 3d 715, 720 (N.D. Ill. 2014) (explaining that “the value of the parties’ Local Rule
56.1 statements and responses is largely lost if those materials are not cited in the briefs”); Malec
v. Sanford, 191 F.R.D. 581, 586 (N.D. Ill 2000) (stating that memoranda in support of a motion
for summary judgment should cite only the Local Rule 56.1 statements in support of factual
propositions).
The legal component of Safeguard’s argument is also underdeveloped. The crux of
Safeguard’s argument seems to be that it was performing a fiduciary duty for Midland under
HUD guidelines. Mem. Supp. Def.’s Mot. Summ. J. 13. Nowhere in its briefing does Safeguard
cite legal authority showing that a fiduciary relationship between it and Midland existed. The
question in Harris was whether a management company that collected overdue assessments for a
homeowners’ association fell into the “bona fide fiduciary” exception. Answering yes, the

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Harris court pointed to Georgia law that “a ‘confidential relationship’ exists ‘where one party is
so situated as to exercise a controlling influence over the will, conduct, and interest of another or
where, from a similar relationship of mutual confidence, the law requires the utmost good faith,
such as the relationship between partners, principal and agent, etc.’” Harris, 702 F.3d at 1302
(citing GA. CODE ANN. § 23–2–58) (other citations and emphasis omitted). Safeguard does not
explain what legal rule creates the fiduciary relationship between it and Midland. Nor does
Safeguard discuss the nature of the HUD program in a way that would aid the analysis of what
can be a complicated issue. See generally Rowe v. Educ. Credit Mgmt. Corp., 559 F.3d 1028,
1032–34 (9th Cir. 2009) (analyzing role of student loan company to determine whether exception
applied). It cites the letter but offers no legal theory on why a letter to mortgagees makes it a
fiduciary. As this argument is undeveloped, the court deems it waived. See United States v.
Beavers, 756 F.3d 1044, 1059 (7th Cir. 2014) (“Perfunctory, undeveloped arguments without
discussion or citation to pertinent legal authority are waived.” (quoting Hahaffey v. Ramos, 588
F.3d 1142, 1146 (7th Cir. 2009))).
Not only has Safeguard failed to develop this argument legally and factually, but
Simpson also cross moves for summary judgment on this defense. Because Safeguard pleaded
the § 1692a(6)(F)(i) defense as an affirmative defense and it has come forward with no evidence
creating a triable issue, the defense must be dismissed at summary judgment. See, e.g., Rowan v.
Blatt, Hasenmiller, Leibsker & Moore LLC, No. 14 CV 08923, 2015 WL 5920873, at *6–7 (N.D.
Ill. Oct. 8, 2015) (entering summary judgment on defendant’s FDCPA affirmative defenses
where nonmovant failed to carry his summary judgment burden).

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C. Successive Debt Collectors Must Make § 1692g Disclosures to Debtors
Safeguard also seeks summary judgment on Simpson’s claim under § 1692g(a) because,
it claims, Midland sent Simpson an initial notice including the statements the FDCPA requires in
August 2011 and a second notice from a different debt collector is not required. Def.’s Mem.
Supp. Mot. Summ. J. 13–15, ECF No. 156. As with its previous argument, Safeguard cites
nothing to establish its factual assertion that Midland sent a § 1692g-compliant letter in August
2011. See id. at 15. Perhaps this is common ground to the parties, but the court cannot find a
reference to it in Safeguard’s Local Rule 56.1 statement either. See ECF No. 157.
Nevertheless, the court puts this issue to rest because the parties’ briefs collect a
handsome array of cases on the subject. Courts are divided over whether § 1692g requires a
fresh notice from each successive debtor. See Janetos v. Fulton Friedman & Gullace, LLP, No.
12 C 1473, 2013 WL 791325, at *4 (N.D. Ill. Mar. 4, 2013) (collecting cases and discussing
split). Having reviewed the statute, legislative history, and case law, especially the thorough
treatment of this issue in Hernandez v. Williams, Zinman & Parham PC, 829 F. 3d 1068, 1071–
81 (9th Cir. 2016), this court joins the courts that have decided that the language of § 1692g is
ambiguous and read it broadly in light of the FDCPA’s remedial purposes to hold that § 1692g
applies to initial communications sent by each successive debt collector. See id.; Janetos, 2013
WL 791325, at*5 (collecting additional authority). Having so concluded, the court denies
Safeguard’s request for summary judgment on Simpson’s § 1692g claims.
D. Safeguard has Failed to Create a Fact Issue on its Bona Fide Error Defense
Finally, Simpson moves for summary judgment on Safeguard’s “bona fide error” defense
under § 1692k(c). See Jerman v. Carlisle, McNellie, Rini, Kramer & Ulrich LPA, 559 U.S. 573,
575 (2010). Safeguard responds, without citation, that it pleaded this defense in the alternative

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and characterizes Simpson’s request as an improper attempt to strike an affirmative defense.
Resp. Opp’n Pl.’s Mot. Summ. J., 6, ECF No. 161. A plaintiff may use a motion for summary
judgment to point out the nonmoving party’s inability to come forward with evidence sufficient
to support a verdict for it on an affirmative defense on which it will have the burden of proof at
trial. See Alexander v. Unlimited Progress Corp., No. 02 C 2063, 2004 WL 2384645, at *4
(N.D. Ill. Oct. 20, 2004) (rejecting defendant’s sole argument that “summary judgment can be
granted on an affirmative defense only if the defendant moves for it,” entering summary
judgment on defendant’s bona fide error defense, and explaining that “a summary judgment
motion ‘is the put up or shut up moment in a lawsuit, when a party must show what evidence it
has that would convince a trier of fact to accept its version of events’” (quoting Koszola v. Bd. of
Educ. of City of Chi., 385 F.3d 1104, 1111 (7th Cir. 2004))). As Safeguard has not pointed to
evidence creating a fact issue on its bona fide error defense, it must be dismissed at summary
judgment. See id. at *6; Rowan, 2015 WL 5920873, at *7.
IV. CONCLUSION
For the reasons stated, Simpson’s motion for summary judgment (ECF No. 146) is
granted in part and denied in part, and Safeguard’s motion for summary judgment (ECF No. 151)
is denied. The court dismisses Safeguard’s bona fide error defense under § 1692k(c) and its
defense invoking the bona fide fiduciary exception of § 1692a(6)(F)(i). A status conference is
set for October 13, 2017, at 9:30 a.m.

Date: September 28, 2017

/s/
Joan B. Gottschall
United States District Judge

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