Summers v. Midland Funding, LLC et al
MEMORANDUM Opinion and Order Signed by the Honorable Ronald A. Guzman on 11/7/2017: For the reasons stated below, the Court denies defendants' motions for summary judgment 43 , 47 and plaintiff's motions for summary judgment 55 , 62 . Status hearing set for 11/21/2017 at 09:30 AM. [For further details see Memorandum Opinion and Order.] Mailed notice(is, )
IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF ILLINOIS
MIDLAND FUNDING, LLC;
MIDLAND CREDIT MANAGEMENT, INC.; )
ENCORE CAPITAL GROUP, INC.; and
BLATT, HASENMILLER, LEIBSKER &
No. 14 CV 10174
Judge Ronald A. Guzmán
MEMORANDUM OPINION AND ORDER
For the reasons stated below, the Court denies defendants’ motions for summary
judgment [43, 47] and plaintiff’s motions for summary judgment [55, 62].
Craig Summers alleges that Midland Funding, LLC, Midland Credit Management, Inc.
(collectively, “Midland”), Encore Capital Group, Inc. (“Encore”), and Blatt, Hasenmiller,
Leibsker & Moore LLC (“Blatt”) violated the venue provision of the Fair Debt Collection
Practices Act (“FDCPA”), 15 U.S.C. § 1692i(a)(2), by filing a consumer debt collection suit
against him in Cook County’s First Municipal District when Summers lived in the Fifth
Municipal District. Before the Court are the parties’ cross-motions for summary judgment. The
motions have been pending for some time because, at Blatt’s request, the Court deferred ruling
pending the Seventh Circuit’s decision in Oliva v. Blatt, Hasenmiller, Leibsker & Moore LLC,
No. 15-2516, another FDCPA case.
The Court of Appeals issued an en banc ruling in Oliva on July 24, 2017, in which it held
that the FDCPA’s safe-harbor provision, which precludes liability for violations that result from
a debt collector’s bona fide error, does not apply to a debt collector’s violation of the statute’s
venue provision that resulted from a mistake of law based on its reliance on circuit precedent
that was overruled after it had brought suit. Oliva v. Blatt, Hasenmiller, Leibsker & Moore LLC,
864 F.3d 492, 494-99 (7th Cir. 2017). That meant that the safe harbor did not protect Blatt from
liability for filing a consumer debt collection suit in a Cook County municipal district other than
where the consumer resided or signed the contract sued upon, even if Blatt had relied in good
faith upon Seventh Circuit precedent, later overruled, in which the Court had held that the
relevant judicial district was the entire county and not the smaller municipal districts within the
county.1 The only arguments defendants present in their motions for summary judgment are the
bona fide error arguments that the Court of Appeals rejected in Oliva. Accordingly, defendants’
motions for summary judgment are denied.
Plaintiff also moves for summary judgment against all defendants. He cannot obtain
summary judgment in his favor unless he demonstrates that there is no genuine issue of fact as to
the elements of his claim. Plaintiff must show that 1) he is a consumer, meaning that he was
“obligated to pay [a] debt” incurred “primarily for personal, family, or household purposes”; 2)
defendants are “debt collectors”; 3) they brought legal action on a debt; and 4) they did not bring
the collection action in the judicial district in which plaintiff resided at the time of suit or signed
the contract sued upon. See Portalatin v. Blatt, Hasenmiller, Leibsker & Moore, LLC, 125 F.
Supp. 3d 810, 817 (N.D. Ill. 2015) (citing 15 U.S.C. §§ 1692a, 1692i, 1692k; Serna v. Law
Office of Joseph Onwuteaka, P.C., 614 F. App’x 146, 151 (5th Cir. 2015)).
Suesz v. Med-1 Solutions, LLC, 757 F.3d 636 (7th Cir. 2014), is the decision in which the
Seventh Circuit overruled Newsom v. Friedman, 76 F.3d 813 (7th Cir. 1996), by holding that the
relevant judicial district for purposes of 15 U.S.C. § 1692i is the smallest geographic area for
determining venue in the court system at issue. In Cook County, the smallest geographic areas are
the smaller municipal districts within the county. Oliva, 864 F.3d at 494.
In response to plaintiff’s motion, defendants contend that plaintiff has failed to establish
that the debt at issue is a consumer debt; that they are debt collectors; and that plaintiff did not
sign the contract giving rise to the debt in the First District, where the collection suit was filed.
The first and last arguments are easily disposed of. It is undisputed that plaintiff was sued for
debt on a Wal-Mart credit card issued by GE Capital Retail Bank. Credit card debt in Illinois is
based on an oral contract, and the lender and debtor enter into a new agreement each time the
card is used. Browne v. John C. Bonewicz, P.C., No. 14 CV 6312, 2015 WL 6165033, at *2
(N.D. Ill. Oct. 20, 2015) (citing Portfolio Acquisitions, L.L.C. v. Feltman, 909 N.E.2d 876, 884
(Ill. App. Ct. 2009)). Therefore, there was no written contract here for plaintiff to have “signed”
in any district.2 Furthermore, plaintiff has submitted a declaration in which he states that he used
the Wal-Mart account to make purchases for personal and household use only.
Nevertheless, plaintiff fails to establish that each defendant is a “debt collector,” which
the FDCPA defines 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).3 The “debt collector” element is not typically
difficult to prove; indeed, in many FDCPA cases, defendants concede that they are debt
Blatt cites no authority for its argument that plaintiff “signed” a contract, for FDCPA
purposes, each time he made a purchase with the credit card by signing a charge slip or providing
an electronic signature.
The Seventh Circuit has held that the purchaser of a defaulted debt is a “debt collector”
under the FDCPA, even though it owns the debt and is collecting for itself. Ruth v. Triumph
P’ships, 577 F.3d 790, 796-97 (7th Cir. 2009).
collectors. Nevertheless, Blatt, Midland, and Encore do not so concede,4 and plaintiff fails to
submit evidence that addresses whether each defendant meets one of the prongs of the statutory
definition. Plaintiffs simply states that it is “obvious” that they are debt collectors, without
pointing to specific evidence and explaining how it satisfies the definition. Plaintiff asserts that
the complaint in the collection case “identifies Defendants as a ‘debt collector,’” (Dkt. No. 79,
Pl.’s Reply at 3), but the complaint refers only to Blatt and Midland Funding, LLC, not the other
Midland entity or Encore, and it does not so specifically label either entity. Plaintiff’s motions
for summary judgment are therefore denied.
The parties are directed to reevaluate their settlement positions and exhaust all efforts to
settle this case. A status hearing is set for November 21, 2017, at 9:30 a.m.
DATE: November 7, 2017
Ronald A. Guzmán
United States District Judge
The Court will note, however, that at the November 17, 2015 hearing on Blatt’s motion—
after the parties’ motions were fully briefed—the parties agreed that the decision in Oliva would
determine defendants’ liability, and defendants’ counsel failed to mention any of these issues they
had raised in response to plaintiff’s motions.
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