Tilmon v. LVNV Funding, LLC et al

Filing 45

ORDER granting 41 Motion for Summary Judgment. Each party shall bear its own costs. Signed by Judge William D. Stiehl on 1/30/2014. (jaf )

IN THE UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF ILLINOIS

JEROME TILMON,
Plaintiff,
v.
LVNV FUNDING, LLC;
BLATT, HASENMILLER,
LIEBSKER & MOORE, LLC;
BAKER & MILLER, P.C.,
Defendants.

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No. 12-CV-734-WDS

MEMORANDUM & ORDER
STIEHL, District Judge:
This matter is before the Court on defendants’ LVNV Funding, LLC, (LVNV), Blatt,
Hasenmiller, Liebsker & Moore, LLC., (BHLM), and Baker & Miller, PC’s, (collectively
referred to as “defendants”) joint motion for summary judgment (Doc. 41), to which plaintiff
has filed a response (Doc. 42), and defendants a reply (Doc. 43). Plaintiff is proceeding in this
matter pro se. Plaintiff seeks to recover for alleged unlawful debt collection under the Fair
Debt Collection Practices Act (“FDCPA”) 15 U.S.C. § 1692 et seq.
I.

BACKGROUND
The record reveals that in 2008 plaintiff opened a credit account with HSBC Bank

(HSBC) to purchase a Bowflex Ultimate Home Gym for personal use. Defendants assert that
plaintiff failed to make payments on the account and that account was charged off by HSBC in
October of 2009. Defendant LVNV then purchased the rights to the account in November of
2009, and BHLM was retained by LVNV to help collect against plaintiff on the amounts due.
Plaintiff asserts that he had settled the account with HSBC and, therefore, did not owe any

money. In his second amended complaint, plaintiff alleges that in January of 2012, he received
a debt collection letter from defendant Blatt, Hasenmiller, Leibsker & Moore, LLC (BHLM)
on behalf of defendant LVNV Funding. Plaintiff responded to the letter by returning a
conditional acceptance and debt verification letter. Plaintiff claims that in February of 2012,
BHLM sent plaintiff an additional letter attempting to collect on a different amount due than
that which was set forth in the January, 2012 letter. Plaintiff sent BHLM a Notice of Default
and a Cease and Desist letter, to which BHLM did not respond.
In April of 2012, BHLM sent another debt collection letter, which prompted a “Notice
of Intent to Sue” letter from plaintiff. In May, 2012, plaintiff spoke with Kenneth Wilson, at
BHLM, seeking the status of his account. He was advised that the account had been recalled
by Resurgent, and that BHLM was no longer involved in the collection of the debt. Plaintiff
alleges that he sought, but had not, as of the filing of the complaint, received written
confirmation of that fact. In June of 2012, defendant Baker & Miller allegedly sent plaintiff
another debt collection letter on behalf of LVNV Funding seeking to collect on the same debt
which remained uncollected by BHLM.
Plaintiff asserts that the actions of each of the defendants were illegal and in violation
of the FDCPA and, as a result, he has suffered severe emotional distress, financial loss, and
damage to his credit score. Plaintiff prays for statutory damages of $1,000.00, actual damages
and attorney’s fees and costs.
II.

ANALYSIS
Defendants have filed a joint motion for summary judgment, asserting that plaintiff’s

claims against the defendants are unsupported. Defendants claim that they did not violate §

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1692g(b), § 1692e(2), or § 1692f(1) of the FDCPA. Defendants also assert that defendant
LVNV is not vicariously liable for the conduct of Baker & Miller and BHLM.
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.” Fed.R.Civ.P. 56(c). The moving party has the initial burden of demonstrating
that no evidence exists to support the non-moving party's contentions.

Celotex Corp. v.

Catrett, 477 U.S. 317, 323 (1986). If the moving party meets this burden, then the non-moving
party must set forth specific facts showing that there is a genuine issue of material fact
requiring a jury trial. Id. at 324. In reviewing a motion for summary judgment, the Court must
view the record and draw all inferences in the light most favorable to the non-moving party.
Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247 (1986). However, “this standard provides
that the mere existence of some alleged factual dispute between the parties will not defeat an
otherwise properly supported motion for summary judgment; the requirement is that there be
no genuine issue of material fact.” Id. at 247-48 (emphasis in original); see also Bank Leumi
Le-Israel, B.M. v. Lee, 928 F.2d 232, 236 (7th Cir.1991) (noting that court is required to draw
“only those inferences that are reasonable”).
A. Defendants’ Alleged Violation Of Section 1692g(B).
Section 1692g(b) provides a consumer with a right to request validation of his debt
within thirty days after the initial communication from a debt collector. 15 U.S.C. § 1692g(b).
Once the debt collector receives this notice, the debt collector “shall cease collection of the
debt, or any portion thereof, until the debt collector” mails the verification to the consumer. Id.

Plaintiff claims that BHLM violated this statute by “not ceasing collection efforts until
the debt was validated and continued their collection activities.” Specifically, plaintiff claims
that, although BHLM did respond to his letter demanding validation of the debt, the
information provided by BHLM was insufficient because plaintiff could not determine the
“legal status” of the debt between Plaintiff and HSBC Bank. Defendant BHLM simply asserts
that the letter dated January 16, 2012, provided all the information necessary to validate the
debt. The record reveals that the letter provided: the reference number for the account; the
account number; name of the current creditor; name of the debtor; name of the original
creditor; last date of payment; balance due; date account was opened; and, date account was
charged off.
The Fourth Circuit is instructive on this issue. In Chaudhry v. Gallerizzo, the Fourth
Circuit Court of Appeals held that:
[V]erification of a debt involves nothing more than the debt collector confirming in
writing that the amount being demanded is what the creditor is claiming is owed; the
debt collector is not required to keep detailed files of the alleged debt…Consistent with
the legislative history, verification is only intended to “eliminate the…problem of debt
collectors dunning the wrong person or attempting to collect debts which the consumer
has already paid…” There is no concomitant obligation to forward copies of bills or
other detailed evidence of the debt.
Chaudry v. Gallerizzo, 174 F.3d 394, 406 (4th Cir. 1999)(citations omitted); see also Zaborac
v. Mut. Hosp. Serv., Inc., No. 1:03-CV-01199-LJM-WTL, 2004 WL 2538643 at *2 (S.D. Ind.
October 7, 2004) (finding that a written confirmation that the debt collector was demanding
what the creditor claimed was owed would have been sufficient information in sending
verification, and stating that details of the debt are not required).
Upon review of the record, the Court FINDS it is evident that BHLM provided
sufficient verification and did not violate Section 1692g(b). Plaintiff provides no evidence that

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defendant Baker & Miller received a request for validation or that BM even knew about any
request for validation to BHLM. While knowledge may be imputed to agents, debt collectors
are independent contractors. See Randolph v. IMBS, Inc., 368 F.3d 726 (7th Cir. 2004). Baker
& Miller may not be held liable, therefore, for actions taken or not taken by BHLM.
B. Defendants’ Alleged Violation Of Section 1692e(2).
Section 1692e(2) prohibits debt collector’s use of any “false, deceptive, or misleading
representation or means in the collection of any debt,” including the “false representation of the
character, amount, or legal status of any debt.” 15 U.S.C. § 1692e(2). Plaintiff contends that
defendants violated this section by “falsely representing the character, amount, or legal status
of the alleged debt when the amount allegedly owed went up and down in every
communication.” (Doc. 26 at 5). Defendant claims that plaintiff’s contention is unwarranted
because a debt may fluctuate from day-to-day without running afoul of the FDCPA.
The letter at issue included safe-harbor language adopted by the Seventh Circuit in
Miller v. McCalla, Raymer, Padrick, Cobb, Nichols & Clark, L.L.C., 214 F.3d 872, 875 (7th
Cir. 2000). The safe-harbor language used was that approved for debt collectors to use when
the amount of the debt is subject to change from day-to-day. Id. at 876. 1
Further, “a debt collector who uses this form will not violate the ‘amount of the debt’
provision, provided, of course, that the information he furnishes is accurate and he does not
obscure it by adding confusing other information (or misinformation).” and, by using this
language, the debt collector “will as a matter of law have discharged his duty to state clearly
the amount due.” Id. Similar language is in defendant BHLM’s letter dated November 30,
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“As of the date of this letter, you owe $ [the exact amount due]. Because of interest, late charges, and
other charges that may vary from day to day, the amount due on the day you pay may be greater.
Hence, if you pay the amount shown above, an adjustment may be necessary after we receive your
check, in which event we will inform you before depositing the check for collection. For further information, write the undersigned or call [phone number].”

2011, and defendant Baker & Miller’s collection letter of June 27, 2012. The Court FINDS,
therefore, that this language, as a matter of law, was sufficient to advise the plaintiff that the
balance of the debt would change.
When deciding whether collection letters violate the FDCPA, the Seventh Circuit looks
at the letters through the eyes of the unsophisticated consumer. Wahl v. Midland Credit
Mgmt.Inc., 556 F.3d 643, 645 (7th Cir. 2009). As the court stated, “[t]he ‘unsophisticated
consumer’ isn’t a dimwit.

[He] may be ‘uniformed, naive, [and] trusting,’ but [he] has

‘rudimentary knowledge about the financial world’ and is ‘capable of making basic logical
deductions and inferences’ Id. (citations omitted). Further, “[i]f a statement would not mislead
the unsophisticated consumer, it does not violate the FDCPA—even if it is false in some
technical sense.” Id. at 645-46 (internal quotations removed). Throughout its letters, the
defendants identified the total amount sought with the phrase “balance due.” Although the
balance due changed multiple times, the reasons for its change are readily discernible. The
Court FINDS that the defendants did not violate Section 1692e(2) because defendants used the
“safe-guard” language in the Miller disclaimer, and the letters would not mislead the
unsophisticated consumer.
C. Defendant LVNV’s Alleged Violation Of Section 1692f(1).
Pursuant to Section 1692f(1), a debt collector cannot collect “any amount (including
any interest, fee, charge, or expense incidental to the principal obligation) unless such amount
is expressly authorized by the agreement creating the debt or permitted by law.” 15 U.S.C. §
1692f(1). There are only two factors to consider when looking at whether the collection of a
debt violates § 1692f(1): “(1) whether the debt agreement explicitly authorizes the charge; or
(2) whether the charge is permitted by law. The provision is silent as to the debt collector’s

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intent, yet it is clear that a collector who collected a charge unauthorized by the debt agreement
or by law, even by accident, would violate § 1692f(1).” Turner v. J.V.D.B. & Assoc., Inc., 330
F.3d 991, 996 (7th Cir. 2003).
Plaintiff claims that defendant LVNV violated 15 U.S.C. § 1692f(1) when it attempted
to collect a debt from him not authorized by any agreement creating the alleged debt or
permitted by law. As defendants note, plaintiff, however, failed to specify which charges were
allegedly not authorized by the agreement creating the alleged debt or permitted by law. On or
about November 17, 2009, LVNV purchased all right, title and interest in the plaintiff’s debt to
HSBC bank, and, therefore, LVNV was authorized by the agreement that created the debt to
collect those charges.
When a collection letter provides the precise information required by the FDCPA, the
letter is not an unfair or unconscionable means of debt collection under § 1692f, even if the
debt collector may have falsely stated the amount of debt owed. See Turner, 330 F.3d at 998
(noting that “a letter simply providing the information required by Section 1692g(a) is not an
unfair or unconscionable means of debt collection under § 1692f, even when the debt collector
may have violated some other provision of the FDCPA.”); see also Jang v. A.M. Miller and
Assoc., 122 F.3d 480, 484 (7th Cir. 1997) (finding that “a debt collector who strictly complies
with the provisions of the FDCPA cannot be said to have used unfair or unconscionable means
to collect a debt under Section 1692f”). The court therefore FINDS that defendant LVNV did
not violate 15 U.S.C. § 1692f(1).
D. Defendant LVNV’s Vicarious Liability For The Conduct Of Baker &
Miller And BHLM.
Generally, “a client is not responsible for its attorney’s misconduct because an attorney
usually pursues a client’s legal rights without specific direction from the client, using

independent professional judgment to determine the manner and form of the work.” Grant-Hall
v. Calvary Portfolio Servs., LLC, 856 F.Supp. 2d 929, 941 (N.D. Ill. 2012) (internal quotations
and citations omitted). The plaintiff must show “either that the client specifically directed,
controlled, or authorized the attorney’s precise method of performing the work or that the
client subsequently ratified acts performed in the exercise of [the] attorney’s independent
judgment.” Horowitz v. Holabird & Root, 816 N.E.2d 272, 279 (Ill. 2004). Additionally, “if
there is no evidence that the client directed, controlled authorized, or ratified the attorney’s
allegedly tortious conduct, no vicarious liability can attach.” Id. Here, there is no evidence
that defendant LVNV directed, controlled, or authorized defendant BHLM’s or defendant
BM’s method in performing work. There is no evidence in the record that defendant LVNV
subsequently ratified the acts performed by either defendant BHLM or defendant BM or even
knew about the specific actions they took. Therefore, the Court cannot find that defendant
LVNV is vicariously liable for the alleged actions of defendant BHLM or defendant BM.
III.

CONCLUSION
Accordingly, the Court GRANTS defendants’ motion for summary judgment, and

judgment is entered in favor of defendants, LVNV Funding, LLC, (LVNV),

Blatt,

Hasenmiller, Liebsker & Moore, LLC., (BHLM), and Baker & Miller, and against plaintiff,
Jerome Tilmon on all grounds raised. The Clerk of the Court is directed to enter judgment
accordingly. Each party shall bear its own costs.

IT IS SO ORDERED.
DATED: 30 January, 2014
/s/ WILLIAM D. STIEHL
DISTRICT JUDGE

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