Baranowski v. Blitt and Gaines, P.C. et al

Filing 25

ENTER MEMORANDUM OPINION AND ORDER Signed by the Honorable Harry D. Leinenweber on 8/2/2017: Ruling date stricken. Civil case terminated. Mailed notice(wp, )

IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF ILLINOIS
EASTERN DIVISION

YVONNE BARANOWSKI,
Plaintiff,
v.

Case No.

BLITT AND GAINES, P.C., and
MSW CAPITAL, LLC,

17 C 2407

Judge Harry D. Leinenweber

Defendants.

ORDER
Defendants’

Joint

Rule

12(b)(6)

Motion

to

Dismiss

[ECF

Nos. 11, 17] is granted.

STATEMENT
At the heart of this case is a communication that Defendant
Blitt

and

Gaines,

Baranowski

P.C.

(“Blitt”)

(“Baranowski”)

incident

sent
to

to

Plaintiff

its

Yvonne

representation

of

Defendant MSW Capital, LLC (“MSW”) in the latter’s underlying
state-court
debt.

action

to

recover

Baranowski’s

delinquent

See, MSW Capital LLC v. Yvonne Baranowski, No. 14 M1

135267 (Circ. Ct. Cook Co., Ill.).
MSW

alleged

had

purchased

after her default.

Baranowski’s

Before filing that lawsuit,

alleged

debt

from

Credit

One

(See, ECF No. 1 (“Compl.) ¶¶ 15-17.)

On

March 17, 2017, Blitt mailed to Baranowski a notice concerning
the

need

for

all

parties

conference in the case.

to

appear

at

an

(Compl. at Ex. G.)

upcoming

status

Blitt also mailed

this letter to Andrew Finko (“Finko”) at an address associated
with the law firm Wood Finko & Thompson PC. (Ibid.)
then

filed

this

lawsuit,

claiming

that

Blitt’s

Baranowski

sending

this

notice to her violated a provision of the Fair Debt Collection
Practices Act (the “FDCPA”) prohibiting a debt collector from
communicating with a consumer without her consent 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.”

15 U.S.C. § 1692c(a)(2).

Defendants do not contest that the notice constitutes a
“communication with a consumer in connection with the collection
of any debt” within the meaning of the FDCPA.
dispute

Baranowski’s

collector.”

allegation

that

Nor do Defendants

Blitt

is

a

“debt

See, e.g., Heintz v. Jenkins, 514 U.S. 296, 299

(1995) (applying the FDCPA “to attorneys who ‘regularly’ engage
in

consumer-debt-collection

consists of litigation”).

activity,

even

for

that

activity

Instead, Defendants spotlight facts

omitted from Baranowski’s Complaint:
appeared

when

Baranowski

Finko, who had previously

informally,

was

granted

permission to withdraw his firm from the case.

formal

(ECF No. 11

(“Defs.’ Mot.”) at Exs. 1-2 (Finko’s “Motion to Withdraw and
Substitute

Counsel”

filed

on

October

30,

2015).)

In

its

November 12, 2015 order granting Finko’s motion, the circuit
court

instructed

him

to

file

a

November 19, 2015. (Id. at Ex. 3.)

substitute

appearance

by

No appearance was filed, and

Finko did not appear at hearings or status conferences (although
it is unclear if there were any) until the one that was the
subject of Blitt’s March 17, 2017 notice.
2017

status

Baranowski,

conference,
and

the

Finko

judge

again

noted

At that April 20,

appeared

that

on

Blitt’s

behalf

of

notice

to

Baranowski was appropriate “due to no counsel having substituted
into the matter.” (Id. at Ex. 4.)
Relying

on

these

facts,

Defendants

argue

that

Blitt

by

sending Baranowski the notice was merely attempting to follow
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the

strictures

instruct

in

of

the

appearance”

the

case

within

21

Illinois
of

Supreme

“failure

days

of

to

Court

file

withdrawal

Rules,

[a]

which

supplementary

that

“subsequent

notices and filings shall be directed to the party at the last
known business or residence address.”

Ill. S. Ct. R. 13(c)(5).

This authorization, in Blitt’s estimation, amounted to “express
permission

of

a

court”

within

the

meaning

of

§

1692c(a)

direct notice to Baranowski. (See, Defs.’ Mot. at 4.)

to

Blitt

alternatively contends that, to the extent it lacked express
permission

of

a

court

of

competent

jurisdiction,

Baranowski

fails to allege plausible continuation of its knowledge that
Finko

represented

Baranowski

after

the

circuit

court’s

substitution deadline came and went.
To survive a Rule 12(b)(6) motion to dismiss, a complaint
“must state a claim that is plausible on its face,” with all
inferences from the factual allegations drawn in favor of the
plaintiff.

Adams v. City of Indianapolis, 742 F.3d 720, 728

(7th Cir. 2015) (quoting Bell Atl. Corp. v. Twombly, 550 U.S.
544, 570 (2007)).
plaintiff

pleads

A claim enjoys “facial plausibility when the
sufficient

factual

content

that

allows

the

court to draw the reasonable inference that the defendant is
liable for the alleged misconduct.”

Adams, 742 F.3d at 728

(quoting Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009)).
ruling

on

a

motion

to

dismiss,

district

courts

may

When

consider

documents attached to the complaint, documents central to the
complaint

and

referred

to

in

it,

properly subject to judicial notice.

and

information

that

is

Amin Ijbara Equity Corp.

v. Village of Oak Lawn, 860 F.3d 489, 493 (7th Cir. 2017).

(To

the extent any of the state court documents are not central to
the complaint’s allegations, they are proper fodder for judicial
notice

because

they

represent

official

directly on the matters at issue.
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proceedings

that

bear

See, Green v. Warden, U.S.

Penitentiary,

699

F.2d

364,

369

(7th

Cir.

1984)

(“[F]ederal

courts may also take notice of proceedings in other courts, both
within

and

outside

of

the

federal

judicial

system,

if

the

proceedings have a direct relation to matters at issue.”).)
The Court first notes that Finko’s failure to file a formal
appearance

initially

is

immaterial,

as

Finko

made

informal

appearances without objection and with court recognition prior
to moving to withdraw and substitute.

See, e.g., Holcomb v.

Freedman Anselmo Lindberg, LLC, No. 15 C 1129, 2017 WL 1105445,
at

*3-4

(N.D.

Ill.

Mar.

24,

2017);

Washington

v.

Portfolio

Recovery Assocs., LLC, 211 F.Supp.3d 1041, 1054-55 (N.D. Ill.
2016), reconsideration denied, 2017 WL 2958250 (July 11, 2017).
The balance of the Court’s analysis is not indebted to the fact
that Finko appeared informally in the case prior to his filing a
motion to withdraw and subsequently failing to substitute within
21 days as instructed by the circuit court.
On the contrary, case law in this Circuit suggests that,
because

Finko

was

Baranowski’s

counsel

of

record,

Illinois

Supreme Court Rule 13(c)(5) sufficed as “express permission of a
court of competent jurisdiction” for Blitt to send the notice to
Baranowski.

For example, in Thomas v. Law Firm of Simpson &

Cybak, 392 F.3d 914 (7th Cir. 2004), superseded by statute on
other grounds, Pub. L. 109-351, 120 Stat.2006 (Oct. 13, 2006),
the Seventh Circuit found first that service of a summons and a
complaint was a “communication” under § 1692g of the FDCPA.

To

allay concomitant concerns that “in any jurisdiction in which a
defendant must be personally served, a debtor could arguably
thwart service by simply retaining an attorney,” the court noted
that “other exceptions within § 1692c could be read to allow for
service.” Id. at 920.

The court’s chief example was the license

§ 1692c(a) grants a debt collector to communicate “with debtors
represented

by

attorneys

with

the

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express

permission

of

the

court,”

and

permitting

it

unambiguously

service

permission.”

could

Ibid.

be

(emphasis

stated

read

that

as

“[c]ourt

granting
What

added).

such

rules

more,

is

express
in

an

earlier case, Spearman v. Tom Wood Pontiac-GMC, Inc., No. IP 00
C 1340, 2002 WL 31854892 (S.D. Ind. Nov. 4, 2002), a district
court in this Circuit came to the same conclusion, noting in
dicta that “the court rules that allow service of process on an
individual

might

be

considered

express

permission

(as

distinguished from particularized or case-specific permission)
for such a communication with the consumer.” Id. at *3.
The situation here is different from that characterizing
Holcomb,

in

which

the

district

court

rejected

a

FDCPA

defendant’s attempt to hide behind the Illinois Supreme Court
Rules, because that case involved no comparable withdrawal and
substitution confusion.
(“[U]nder

Illinois

See, Holcomb, 2017 WL 1105445, at *4

law,

trial

courts

have

discretion

to

recognize an attorney’s appearance even when the attorney has
not

formally

complied

with

Illinois

S.

Ct.

Rule

13.

Here,

Holcomb was represented by an attorney in the state collection
case,

and

appearance,

Judge

McGuire

thereby

permitted

qualifying

his

unlimited,

Holcomb’s

attorney

general
as

an

‘attorney of record’ under Illinois Supreme Court Rule 11(a).”).
Holcomb is redolent of the issue sub judice only in that counsel
for the putative debtor repeatedly appeared without filing a
formal appearance.

Also inapplicable to this dispute is the

district court’s refusal in Washington to find that Illinois
court

rules

plaintiff,

conferred
because

the

permission
alleged

to

communicate

debtor

who

with

the

received

the

communication was not even a party to the state-court action.
See,

Washington,

2017

WL

2958250

(“Thus,

according

to

Defendants’ own argument, the Illinois court rules do not apply
and

cannot

constitute

‘express
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permission

of

a

court

of

competent jurisdiction’ to communicate directly with a debtor
whom

the

creditor

knows

to

be

represented

by

counsel.”)

(citation omitted).
Even if the Illinois Supreme Court Rules do not amount to
express permission, and instead the “case-specific” edict of a
court hearing the actual controversy is required to cleanse any
FDCPA taint, the circuit court did so.
opportunity

that

absence

any

of

Blitt’s

notice

attorney’s

was

It found at the first

proper

substitution

in

into

light

the

matter

the

of

for

Baranowski.

To Baranowski’s inevitable protest that Blitt did

not

the

receive

circuit

court’s

prior

permission,

the

Court

responds that no language in the statute appears to require ex
ante

procurement

of

express

court

permission.

The

FDCPA

prohibits a debt collector from communicating with a consumer
“[w]ithout the prior consent of the consumer given directly to
the

debt

collector

competent

or

the

jurisdiction.”

express
15

permission

U.S.C.

of

a

§ 1692c(a).

court

of

Whereas

Congress saw fit to require the “prior consent of the consumer,”
it

declined

requirement

in
that

the

ensuing

would

limit

text
the

to

impose

ability

permission retroactively or nunc pro tunc.

of

any

courts

analogous
to

grant

Both expressio unius

and the interpretive canon disfavoring construction of statutes
that

would

curtail

the

judiciary’s

inherent

powers

militate

against finding ex post permission ineffective under § 1692c(a).
See, e.g., N.L.R.B. v. SW General, Inc., 137 S.Ct. 929, 940
(2017)

(noting

the

expressio

unius

canon’s

application

when

“circumstances support a sensible inference that the term left
out must have been meant to be excluded”) (quotation, internal
quotation marks, and alterations omitted); Chambers v. NASCO,
Inc., 501 U.S. 32, 43-47 (1991) (“[W]e do not lightly assume
that Congress has intended to depart from established principles
such as the scope of a court’s inherent powers.”) (quotation,
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internal quotation marks, and citation omitted); California v.
Am. Stores Co., 495 U.S. 271, 295 (1990) (“Unless a statute in
so

many

words,

or

by

a

necessary

and

inescapable

inference,

restricts the court’s jurisdiction in equity, the full scope of
that jurisdiction is to be recognized and applied.”) (quotation,
internal quotation marks, and citation omitted).

As such, even

if the Illinois Supreme Court Rules are insufficiently casespecific

to

constitute

“express

permission

of

a

court

of

competent jurisdiction” to send the notice to Baranowski, the
circuit court’s finding that the notice was proper surely does.
Because either Illinois Supreme Court Rule 13(c)(5) or the
circuit

court’s

April

20,

2017

ruling

amounted

to

“express

permission of a court of competent jurisdiction” to send the
notice to Baranowski, whatever knowledge Blitt may have had of
Baranowski’s representation by Finko is immaterial.

As such,

Defendants’ Motion to Dismiss is granted.
The Court takes a final moment to note an alternative basis
for

dismissing

the

claim

against

MSW.

While

Blitt

may

constitute a “debt collector” under the FDCPA, this says nothing
of MSW’s status, which implicates the Supreme Court’s recent
holding that a company may collect debts for its own account
without

triggering

the

statutory

“debt

collector”

definition.

Henson v. Santander Consumer USA Inc., 137 S.Ct. 1718 (2017).
As the Seventh Circuit explained in Janetos v. Fulton Friedman &
Gullace,

LLP,

825

F.3d

317

(7th

Cir.

2016),

while

a

debt

collector can be held vicariously liable for missives drafted
and sent by its agents, “[o]n the other hand, a company that is
not

a

debt

collector

would

not

liability under the Act at all.”
(noting

also

that

it

“makes

ordinarily

be

subject

to

Id. at 325 (citations omitted)

less

sense

to

impose

vicarious

liability on such a company for its attorney’s violations simply
because the attorney happens to be a debt collector”) (emphasis
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added) (citations omitted).

Because individuals “who do not

otherwise meet the definition of ‘debt collector’ cannot be held
liable

under

the

act,”

Pettit

v.

Retrieval

Masters

Creditor

Bureau, Inc., 211 F.3d 1057, 1059 (7th Cir. 2000) (citations
omitted), MSW cannot be vicariously liable for the acts of Blitt
even if it was acting as MSW’s agent for purposes of sending
Baranowski

the

notice.

Henson

thus

associated FDCPA claim against MSW.

pulls

the

plug

on

any

As an alternative to the

Blitt-centered analysis above, the Court therefore finds that
sua sponte dismissal of Baranowski’s claim against MSW would be
appropriate.

See, e.g., Ledford v. Sullivan, 105 F.3d 354, 356

(7th Cir. 1997) (“Sua sponte 12(b)(6) dismissals are permitted,
provided

that

a

sufficient

basis

for

the

court’s

action

is

evident from the plaintiff’s pleading.”).
For the reasons stated herein, the Court grants Defendants’
Motion to Dismiss.

Civil case terminated.

Each party is to

bear its own costs.

Harry D. Leinenweber, Judge
United States District Court
Dated: 8/2/2017

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