Anguiano v. LVNV Funding LLC et al
OPINION AND ORDER: For the reasons set forth in the Opinion and Order, the Court GRANTS IN PART, and DENIES IN PART, the Plaintiff's Amended Motion for Summary Judgment 142 , GRANTS IN PART, and DENIES IN PART, the Defendants' Cross-Motion for Summary Judgment 139 , and DENIES AS MOOT the Defendant's Daubert Motion 137 . The Court SETS the case for a telephonic conference on Tuesday, 11/28/2017, at 11:00AM, for the purpose of scheduling additional motions/briefing as noted in this Opinion and Order. Signed by Chief Judge Theresa L Springmann on 9/28/2017. (jss)
UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF INDIANA
MARY MITCHELL, on behalf of herself and
all other class members,
LVNV FUNDING, LLC; RESURGENT
CAPITAL SERVICES, L.P.; and ALEGIS
CAUSE NO.: 2:12-CV-523-TLS
OPINION AND ORDER
This matter is before the Court on three matters: (1) the Amended Motion for Summary
Judgment [ECF No. 142], filed by Plaintiff Mary Mitchell on behalf of herself and all other class
members; (2) the Cross Motion for Summary Judgment [ECF No. 139], filed by Defendants
LVNV Funding, LLC (LVNV), Resurgent Capital Services, L.P. (Resurgent), and Alegis Group,
LLC (Alegis); and (3) the Defendants’ Daubert Motion to Bar the Plaintiff’s Expert [ECF No.
137]. All of these motions are briefed and ripe for ruling. The parties have also briefed
statements of undisputed material facts. [see ECF Nos. 144, 155, 163, 165, 167, 154, 160, 161.]
The following facts, taken from the Amended Complaint [ECF No. 31] and the parties’
statements of material facts, are undisputed.
LVNV is engaged in the business of purchasing allegedly defaulted debts originally owed
to others and incurred for personal, family, or household purposes. LVNV has no employees. It
holds titles to accounts while Resurgent, operating as a collection agency, directs collection
activities on behalf of LVNV. Alegis is the sole general partner of Resurgent.
On January 30, 2012, Capital Management Services, L.P. (CMS), contracted by
Resurgent to send dunning letters, sent the Plaintiff, who is a resident of Indiana, a letter to
collect on her debt. The letter included “GE-WALMART” as the “Description” and listed
“LVNV Funding LLC” as the “Current Creditor.” (Second Am. Compl. Ex. A., ECF No. 31-1.)
The account number and balance were also included. (Id.) The substance of the letter stated, in
Dear Mary L. Mitchell:
This company has been engaged by RESURGENT CAPITAL SERVICES, LP, the
servicer of the account, to resolve your delinquent debt of $1356.06. Please submit
your payment and make your check or money order payable to Capital Management
Services, LP, to the above address.
Unless you notify this office within 30 days after receiving this notice that you
dispute the validity of this debt or any portion thereof, this office will assume this
debt is valid. If you notify this office in writing within 30 days from receiving this
notice that you dispute the validity of this debt or any portion thereof, this office
will obtain verification of the debt or obtain a copy of a judgment and mail you a
copy of such verification or judgment. If you request this office in writing within
30 days after receiving this notice this office will provide you with the name and
address of the original creditor, if different than the current creditor.
Capital Management Services, LP is authorized to accept less than the full balance
due as settlement of the above account. The settlement amount of $474.62, which
represents 35% of the amount presently owed, is due in our office no later than
forty-five (45) days after receiving this notice. We are not obligated to renew this
For your convenience, this settlement may be made online at: www.cms-trans. com.
For other payment options, please contact Capital Management Services LP . . . .
This is an attempt to collect a debt; any information obtained will be used for that
purpose. This communication is from a debt collector.
(Id.) The letter also directed the recipient to “detach and return top portion with payment.” (Id.)
The parties do not contest that the alleged debt was past the operative statute of
limitations. The letter did not disclose the date of the transactions giving rise to the claimed debt
or advise that the debt was barred by Indiana’s six year statute of limitations.
The Plaintiff alleges that the settlement offer, in connection with the failure to disclose
that the claim was time-barred, implied that LVNV could decide to sue the Plaintiff to collect on
the debt. Moreover, the Plaintiff alleges that the Defendants engaged in unfair and deceptive acts
and practices “by causing its agents to send consumers collection letters that contain settlement
offers on time-barred debts without disclosure of the fact that the debt is time-barred.” (Second
Am. Compl. ¶ 47.) The Plaintiff seeks actual and statutory damages pursuant to the Fair Debt
Collection Practices Act (FDCPA).
On November 10, 2015, the Court certified the following class, pursuant to Federal Rule
of Civil Procedure 23(b)(3):
All individuals with addresses in Indiana or Illinois
to whom LVNV, Resurgent, or any debt collector employed by LVNV or Resurgent
sent a letter seeking to collect
a credit card debt on which the last payment had been made more than five years
(Illinois residents) or six years (Indiana residents) prior to the letter
(e) which letter was sent on or after
i. December 17, 2011, in the case of Indiana residents or
ii. February 28, 2011, in the case of Illinois residents and
(f) On or before January 7, 2013
(g) Where the individual after receipt of the letter,
i. Made a payment,
ii. filed a suit,
iii. or responded by requesting verification or contesting the debt.
(Nov. 5, 2015 Order, ECF No. 88; Apr. 21, 2016 Order Am. Class Definition, ECF No. 105.)
The Court also certified a subclass “for those class members who received a copy of the letter
attached as Exhibit A to the Second Amended Complaint. Illinois residents who fall within the
revised class definitions in McMahon v. LVNV Funding, LLC, 1:12-CV-1410, are specifically
excluded.” (Nov. 5, 2015 Order.)
STANDARD OF REVIEW
Summary judgment is warranted when “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). Summary judgment is the moment in litigation where the nonmoving party is
required to marshal and present the Court with evidence on which a reasonable jury could rely to
find in his favor. Goodman v. Nat’l Sec. Agency, Inc., 621 F.3d 651, 654 (7th Cir. 2010). A court
should deny a motion for summary judgment when the nonmoving party presents admissible
evidence that creates a genuine issue of material fact. Luster v. Ill. Dep’t of Corrs., 652 F.3d 726,
731 (7th Cir. 2011) (first citing United States v. 5443 Suffield Terrace, 607 F.3d 504, 510 (7th
Cir. 2010), then citing Swearnigen–El v. Cook Cnty. Sheriff’s Dep’t, 602 F.3d 852, 859 (7th Cir.
2010)). A court’s role in deciding a motion for summary judgment “is not to sift through the
evidence, pondering the nuances and inconsistencies, and decide whom to believe. [A] court has
one task and one task only: to decide, based on the evidence of record, whether there is any
material dispute of fact that requires a trial.” Waldridge v. Am. Heochst Corp., 24 F.3d 918, 920
(7th Cir. 1994). Material facts are those that are outcome determinative under the applicable law.
Smith v. Severn, 129 F.3d 419, 427 (7th Cir. 1997). Although a bare contention that an issue of
material fact exists is insufficient to create a factual dispute, a court must construe all facts in a
light most favorable to the nonmoving party, view all reasonable inferences in that party’s favor,
Bellaver v. Quanex Corp., 200 F.3d 485, 491–92 (7th Cir. 2000), and avoid “the temptation to
decide which party’s version of the facts is more likely true,” Payne v. Pauley, 337 F.3d 767, 770
(7th Cir. 2003).
Section 1692e provides:
A debt collector may not use any false, deceptive, or misleading representation or means
in connection with the collection of any debt. Without limiting the general application of
the foregoing, the following conduct is a violation of this section:
(2) The false representation of –
(A) the character, amount, or legal status of any debt;
(B) any services rendered or compensation which may be lawfully received by
any debt collector for the collection of a debt.
(5) The threat to take any action that cannot legally be taken or that is not intended to be
(10) The use of any false representation or deceptive means to collect or attempt to
collect any debt or to obtain information concerning a consumer.
15 U.S.C. § 1692e. Section 1692f prohibits debt collectors from using “unfair or unconscionable
means to collect or attempt to collect any debt.”
“[I]n deciding whether . . . a representation made in a dunning letter is misleading, the
court asks whether a person of modest education and limited commercial savvy would be likely
to be deceived.” Evory v. RJM Acquisitions Funding L.L.C., 505 F.3d 769, 774 (7th Cir. 2007).
A court must view the letter through the perspective of an “unsophisticated consumer.” Lox v.
CDA, Ltd., 689 F.3d 818, 822 (7th Cir. 2012). This standard applies to claims under both § 1692e
and § 1692f. Turner v. J.V.D.B. & Assoc., Inc., 330 F.3d 991, 997 (7th Cir. 2003).
There are three categories of § 1692e cases: (1) cases in which the allegedly offensive
language is plainly and clearly not misleading; (2) cases that include debt collection language
that is not misleading or confusing on its face, but has the potential to be misleading to the
unsophisticated consumer; and (3) cases involving letters that are plainly deceptive or
misleading. Cases in the first category do not require any extrinsic evidence to show that the
reasonably unsophisticated consumer would not be confused by the pertinent language. If a case
falls into the second category, “plaintiffs may prevail only by producing extrinsic evidence, such
as consumer surveys, to prove that unsophisticated consumers do in fact find the challenged
statements misleading or deceptive.” Ruth v. Triumph P’ships, 577 F.3d 790, 800–01 (7th Cir.
2009); Lox, 689 F.3d at 822. Cases in the third category do not require any extrinsic evidence in
order for a plaintiff to be successful. Id.
It has been well established by the Seventh Circuit that, typically, whether a dunning
letter is confusing is a question of fact. McMahon, 744 F.3d at 1020; Evory, 505 F.3d at 776;
Lox, 689 F.3d at 822. However, a plaintiff may prevail on a motion for summary judgment
without providing extrinsic evidence if the statements in question are plainly and clearly
misleading on their face and if the statements are materially false. Hahn v. Triumph P’ships, 557
F.3d 755, 757–58 (7th Cir. 2009); Lox, 689 F.3d at 822. A false or misleading statement is
material if it has “the ability to influence a consumer’s decision.” O’Rourke v. Palisades
Acquisition XVI, LLC, 635 F.3d 938, 942 (7th Cir. 2011). If the letter “does not plainly reveal
that it would be confusing to a significant fraction of the population, the plaintiff must come
forward with evidence beyond the letter and beyond his own self-serving assertions that the letter
is confusing in order to create a genuine issue of material fact for trial.” Durkin v. Equifax Check
Servs., Inc., 406 F.3d 410, 415 (7th Cir. 2005).
In regard to statute of limitation issues and settlement offers, the Seventh Circuit has held
that “a debt collector violates the FDCPA when it misleads an unsophisticated consumer to
believe a time-barred debt is legally enforceable regardless of whether litigation is threatened . . .
.” McMahon, 744 F.3d at 1020. Further, the McMahon Court observed that the defendants’
collection letters, both of which contained the term “settle” or “settlement,” were especially
problematic since “a settlement offer on a time-barred debt implies that the creditor could
successfully sue on the debt. If unsophisticated consumers believe either that the settlement offer
is their chance to avoid court proceedings where they would be defenseless, or if they believe
that the debt is legally enforceable at all, they have been misled, and the debt collector has
violated the FDCPA.” Id. at 1022. However, as this Court recognized in its Opinion and Order
regarding class certification, issued on November 10, 2015, the McMahon Court did not hold
that a dunning letter for a time-barred debt is, per se, a violation of the FDCPA. That question
was not before the McMahon Court as both of the consolidated appeals at issue were still at the
pleadings stage. Accordingly, this Court held that it:
knows of no binding precedent, and the parties have not identified any, holding that a letter
is silent regarding the statute of limitations, and the consequences of partial payment on a
time-barred debt, is so clearly misleading that extrinsic evidence is unnecessary. In any
event, whether the Plaintiff will be required to provide through extrinsic evidence that the
Defendants’ communications would mislead an unsophisticated consumer is not yet before
(Nov. 10, 2015 Order 6–7).
Since the Court’s Order, and in the middle of the parties’ briefing, the Seventh Circuit
decided Pantoja v. Portfolio Recovery Assocs., LLC, 852 F.3d 679, 686 (7th Cir. 2017). In
Pantoja, the defendant collection agency sought to collect on a debt that was past the statute of
limitations. “The point of controversy here concerns efforts to collect consumer debts on which
the statute of limitations has expired when the effort does not involve filing or threatening a
lawsuit.” Id. at 683. The court went on to explain: “[t]he opportunities for mischief and deception
. . . may well be so great that the better approach is simply to find that any such efforts violate
the FDCPA’s debts, § 1692e, and on ‘unfair or unconscionable means’ to attempt to collect
debts, §1692f.” Id. at 684.
Though the Seventh Circuit ultimately decided the case on narrower grounds, the court
First, the letter does not even hint, let alone make clear to the recipient, that if he
makes a partial payment or even just a promise to make a partial payment, he risks loss of
the otherwise ironclad protection of the statute of limitations. Second, the letter did not
make clear to the recipient that the law prohibits the collector from suing to collect this old
debt. Either is sufficient reason to affirm summary judgment for the plaintiff.
Id. (emphasis added). The Pantoja Court continued hold, “[W]e believe the FDCPA prohibits a
debt collector for luring debtors away from the shelter of the statute of limitations without
providing an unambiguous warning that an unsophisticated consumer would understand.” Id. at
The Court notes that the district courts in Magee, Green, and Rawson, in which the
respective plaintiffs received dunning letters similar to the letter at issue in this case, have held
these dunning letters in violation of the FDCPA for the same reasons as the Pantoja district
court. See Magee v. Portfolio Recovery Assoc., No. 12-CV-1624, 2016 WL 2644763, at *4 (N.D.
Ill. May 9, 2016) (“Here, as in Pantoja, Defendant failed to include language stating that
Plaintiffs’ debt was time barred, that they could no longer be sued on that debt, and that a partial
payment would reset the statute of limitations period. Defendant’s failure to include such
language in the dunning letter is clearly deceptive on its face. Thus, summary judgment may be
awarded without extrinsic evidence as the deceptive language is materially false.”); Rawson v.
Source Receivables Mgmt., 215 F.Supp.3d 684 (N.D. Ill. Jan. 6, 2016) (holding that a letter
almost identical to the letter at issue here is deceptive, without the need for extrinsic evidence);
Green v. Monarch Recovery Mgmt., No. 1:13-CV-418, 2015 WL 4599480, at *9 (S.D. Ind. Jul.
29, 2015) (“[W]e hold that Monarch’s collection letter was plainly misleading in offering to
accept a ‘settlement’ on a time-barred debt while failing to inform Ms. Green that a limitations
defense existed and/or that the effect of a partial payment would be to restart the statute of
limitations. Nothing in Monarch’s letter indicates that the debt was not legally enforceable and,
in fact, by offering to settle the debt, the letter clearly implied otherwise.”). Though the Magee,
Green, and Rawson decisions were decided prior to the Seventh Circuit’s Pantoja decision, they
relied upon the Pantoja district court decision and the Seventh Circuit “affirm[ed], essentially for
the reasons explained concisely by [the Pantoja district court judge]. Pantoja, 852 F.3d at 681–
Regardless of the effect of the other district court decisions, the Seventh Circuit has since
laid down the operative standard for this Court: a dunning letter should “make clear to the
recipient that the law prohibits the collector from suing to collect [the] old debt.” Id. at 684.
Moreover, the letter should, “at the very least, hint, that if [the recipient] makes a partial payment
or even just a promise to make a partial payment, he risks loss of the otherwise ironclad
protection of the statute of limitations.” Id. Because “either [are] sufficient reason[s] to affirm
summary judgment for the plaintiff,” and, in fact, both reasons exist in this case, the Court
grants, in part, the Plaintiff’s Motion for Summary Judgment, and denies, in part, the
Defendants’ Cross-Motion for Summary Judgment. Id.
In her Complaint, the Plaintiff contends that the Defendants engaged in unfair and
deceptive acts and practices, in violation of §§ 1692e, 1692e(2), 1692e(5), 1692e(10), and 1692f
of the FDCPA by failing to disclose to the Plaintiff that the statute of limitations had expired and
that the debt could not be collected through a court action. The Plaintiff further alleges that the
Defendants’ offer in the letter to settle the debt was misleading because it implied that a timebarred debt is legally enforceable.
The Plaintiff’s Motion for Summary Judgment
On March 17, 2017, the Plaintiff filed her Amended Motion for Summary Judgment on
the issue of liability, on behalf of herself and the certified class.1 The Plaintiff alleges three bases
to support the Court’s granting of summary judgment: (1) that the dunning letter failed to
disclose that the debt the Defendants attempted to collect was time-barred because the statute of
limitations had passed, (2) LVNV could no longer sue the Plaintiff or the class members on their
respective debts, and (3) by accepting the Defendants’ offer to settle and making a payment, the
debtor could revive the statute of limitations and subject himself/herself to a judgment for the
full amount of the debt. Accordingly, the Plaintiff argues that because of these issues, the letter
falls within the category of letters that are plainly deceptive or misleading and thus, do not
require any extrinsic evidence of proof.
In the alternative, the Plaintiff argues that if the letter falls within the second category of
letters—letters with debt collection language that is not misleading or confusing on its face, but
has the potential to be misleading to the unsophisticated consumer—she has provided the
requisite extrinsic evidence to demonstrate that unsophisticated consumers do in fact find the
Though the Plaintiff’s Motion indicates she solely seeks summary judgment on the issue of liability, she
included briefing on the issue of damages, and the Defendants responded. The Defendants also included
arguments concerning damages in their Cross-Motion. This Opinion and Order addresses the Court’s
analysis on damages separately, below.
dunning letter misleading or deceptive. The Plaintiff’s extrinsic evidence includes guidance
provided by the Federal Trade Commission and Consumer Financial Protection Bureau and an
expert report provided by Professor Timothy Goldsmith.
The Plaintiff also argues that all of the Defendants are responsible for the violation,
arguing that LVNV owned the debts, Resurgent attempted to collect the debts on behalf of
LVNV, Resurgent entered into a collection services agreement with CMS, and Alegis is liable
because it is Resurgent’s general partner. The Plaintiff argues that not only are Resurgent,
LVNV, and Alegis liable under a theory of vicarious liability for CMS’s actions, but they are
directly liable for the failure to supervise and control an agent, CMS, by knowingly placing timebarred debts for collection.
The Defendant argues that, though the Seventh Circuit in McMahon recognized that the
Plaintiff’s theory of liability is plausible, it did not dispose of a plaintiff’s burden to come forth
with evidence that a letter silent on the statute of limitations for a time-barred debt, and
containing a settlement offer, is misleading to unsophisticated consumers. Accordingly, the
Defendant argues that the Plaintiff has not provided the required extrinsic evidence, particularly
because she has not presented survey evidence of a consumer’s perception of the specific
dunning letter at issue. Moreover, the Defendant contends that the Plaintiff’s own testimony does
not support her claim that she believed the letter was misleading; non-binding agency reports do
not satisfy the burden of proof contemplated by the case law; and the Plaintiff’s expert offered
improper, irrelevant, and unreliable opinions and should be barred in accordance with the
Defendants’ Daubert Motion. Finally, the Defendant argues that LVNV cannot be held liable for
a letter sent by a debt collector retained by Resurgent. Not only is LVNV not a debt collector
with respect to CMS’s communications, but LVNV had no role in sending the dunning letter and
thus, according to the Defendants, cannot be held liable.
The Defendants’ Cross Motion for Summary Judgment
Because the Defendants’ Cross Motion for Summary Judgment concerning the Plaintiff’s
§ 1692e claim is premised on the same arguments raised by the Defendants in response to the
Plaintiff’s Summary Judgment Motion—namely that neither the law nor the FDCPA mandates
disclosure of a time-barred debt, failure to make a disclosure does not imply a threat of litigation,
and the Plaintiff has failed to provide the requisite evidence to demonstrate that the letter is
misleading to unsophisticated consumers—the Court incorporates its earlier discussion here.
Regarding the Plaintiff’s § 1962f claim, the Defendants assert that the Plaintiff failed to
assert any separate factual basis for the claim, and the McMahon appeal declined to address the
§ 1962f claim in that case.
Finally, the Defendants contend that LVNV is not a debt collector because “its principal
purpose is not debt collection, nor does it regularly collect debts owed to another or collect debts
using a name other than its own name.” (Defs’ Br. in Supp. of Cross Mot. for Summ. J. 26, ECF
No. 140). Rather, LVNV holds ownership rights of purchased debt and hires Resurgent to
manage its inventory. According to the Defendants, “[t]he fact that a business merely owns debt
does not make it a debt collector even if the debt it owns is in default at the time it is acquired.”
In response to the Defendants’ arguments, the Plaintiff cites the Seventh Circuit’s
Pantoja decision. In particular, the Plaintiff points out that the Pantoja Court held, “[W]e believe
the FDCPA prohibits a debt collector from luring debtors away from the shelter of the statute of
limitations without providing an unambiguous warning that an unsophisticated consumer would
understand.” 852 F.3d at 685. Accordingly, the Plaintiff argues that the letter is misleading, as a
matter of law. Moreover, the Plaintiff contends that omission of the time-barred nature of the
debt is deceptive.
Regarding LVNV’s liability, the Plaintiff argues that LVNV “purchases the bad debts,
refers them to an associated company for collection, and files suit[s] in its own name if other
means do not result in payment by the debtor.” (Pl. Resp. to Cross Mot. for Summ. J. 29, ECF
No. 153). Accordingly, the Plaintiff argues LVNV must be found liable.
The Offer to Settle and the Statue of Limitations
The Court begins its analysis with the dunning letter’s offer to settle and whether this
misleads the consumer to believe their time-barred debt is legally enforceable. The offer states,
in relevant part, “Capital Management Services, LP is authorized to accept less than the full
balance due as settlement of the above account. The settlement amount of $474.62, which
represents 35% of the amount presently owed, is due in our office no later than forty-five (45)
days after receiving this notice.” (Second Am. Compl. Ex. A.)
The Pantoja Court analyzed the effects of a settlement offer, holding, “We begin with the
danger that a debtor who accepts the offered terms of a settlement will, by doing so, waive his
otherwise absolute defense under the statute of limitations. Only the rarest consumer-debtor will
recognize this danger.” 852 F.3d at 684 (internal citations omitted).
Here, the Plaintiff’s debt and the debts of the class are time-barred. Accepting the
settlement offer would have “put [the Plaintiff] in a much worse legal position than [s]he would
have been in before taking the step. Before [s]he received [the D]efendants’ letter, [s]he had an
absolute defense to any possible collection suit, which would have been illegal to file.” Id. at
685. Accordingly, the Pantoja Court’s holding that “we believe the FDCPA prohibits a debt
collector for luring debtors away from the shelter of the statute of limitations without providing
an unambiguous warning that an unsophisticated consumer would understand” controls. Id. at
685. The Plaintiff’s dunning letter did not provide any warning whatsoever, let alone an
unambiguous warning, that payment of an amount would result in the loss of the protections
accorded by the statute of limitations on the otherwise time-barred debt. Accordingly, the Court
finds the dunning letter misleading and thus, in violation of the FDCPA.
It is true, as the Defendants’ point out, that the dunning letter in this case is silent
regarding the statute of limitations, whereas the dunning letter analyzed by the Pantoja Court did
include carefully crafted language on the statute of limitations. However, this did not prevent the
Pantoja Court from holding that “the FDCPA prohibits a debt collector for luring debtors away
from the shelter of the statute of limitations without providing an unambiguous warning that
an unsophisticated consumer would understand.” Id. at 685 (emphasis added). Furthermore,
the Pantoja Court affirmed the district court’s grant of summary judgment in favor of the
plaintiff on two separate grounds:
First, the letter does not even hint, let alone make clear to the recipient, that if he makes a
partial payment or even just a promise to make a partial payment, he risks loss of the
otherwise ironclad protection of the statute of limitations. Second, the letter did not
make clear to the recipient that the law prohibits the collector from suing to collect
this old debt.
Id. at 684 (emphasis added). The Seventh Circuit held that “[e]ither is sufficient reason to affirm
summary judgment for the plaintiff.” Id. (emphasis added).
Here, the operative dunning letter does not “make clear to the recipient that the law
prohibits the collector from suing to collect th[e] old debt.” Id. Nor does the letter even hint that
making or promising to make a partial payment, which would be the case upon acceptance of the
settlement offer, risks the loss of the otherwise ironclad protection of the statute of limitations.
Accordingly, the Court grants, in part, the Plaintiff’s Motion for Summary Judgment and denies,
in part, the Defendants’ Cross-Motion for Summary Judgment on the issue of whether the letter
was misleading. Because no extrinsic evidence is required to establish that the letter the Plaintiff
received violated the FDCPA, the Court need not reach the Defendants’ Daubert Motion seeking
to exclude the report and testimony of the Plaintiff’s expert and denies the Daubert Motion as
Section 1692f Claim
Though the Defendants point out that the Plaintiff did not brief novel arguments
regarding the Defendants’ liability pursuant to § 1692f, this is because the standard for the
Court’s review is the same as § 1692e: the Court must review the alleged violation “from the
standpoint of the so-called unsophisticated consumer or debtor.” Durkin, 406 F.3d at 141.
Section 1692f prohibits debt collectors from using “unfair or unconscionable means to collect or
attempt to collect any debt.” The Plaintiff argues that the dunning letter is not only misleading
and deceptive, but also is an unfair or unconscionable means to collect her debt.
In affirming the District Court’s grant of summary judgment in favor of the plaintiff, the
Pantoja Court also affirmed the District Court’s grant of summary judgment on the plaintiff’s
§ 1692f claim. Neither the district court, nor the Seventh Circuit engaged in a separate analysis
on the § 1692f claim. Thus, the circuit court affirmed that the analysis for the § 1962e violation
in cases where the statute of limitations and settlement clause are at issue renders the same result
for the § 1962f violation. See also Magee, 2016 WL 2644763, at * 1–2 (granting summary
judgment in favor of the plaintiff pursuant to both §§ 1962e and 1962f). And of course, this
makes sense—a letter that is misleading to an unsophisticated is likely an unfair means to collect
or attempt to collect a debt.
Accordingly, this Court follows the Seventh Circuit in Pantoja and similarly concludes
that the dunning letter is an unfair means to collect or attempt to collect debt by failing to state
that acceptance of the settlement agreement risks the loss of the otherwise ironclad protection of
the statute of limitations. Nor does the dunning letter make clear that the law prohibits the
collector from suing to collect the old debt.
The Plaintiff argues that all of the Defendants are responsible for the FDCPA violation
because they are debt collectors, including LVNV.2 The Defendants respond that LVNV is not a
debt collector under the FDCPA because it is solely an owner of the debt at issue and does not
perform collections, but instead hires others to do so.
The FDCPA defines a debt collector as “any person who uses any instrumentality of
interstate commerce or the mails in any business the principle 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). In support of their Cross
Motion, the Defendants point out that this issue was, at the time, pending before the Supreme
The Plaintiff argues that as Resurgent’s general partner, Alegis is also liable for the FDCPA violation
because general partners of a debt collector organized as a partnership are liable for the actions of the
partnership. Barlett v. Heibl, 128 F.3d 497, 499 (7th Cir. 1997). The Defendants do not provide any
counterarguments concerning Alegis’s liability.
Court, though the Court had not issued a ruling by the time the parties’ briefing on both Motions
However, since the parties’ briefing, the Supreme Court issued a decision in Henson v.
Santander Consumer USA, Inc., 137 S. Ct. 1718 (2017). The issue squarely before the Court was
as follows: “[H]ow to classify individuals and entities who regularly purchase debts originated
by someone else and then seek to collect those debts for their own account.” Id. at 1721.
Ultimately, the Court held that “[a]ll that matters is whether the target of the lawsuit regularly
seeks to collect debts for its own account or does so for ‘another.’” Id; see also id. at 1724
(“After all and again, under the [FDCPA’s] definition at issue before us you have to attempt to
collect debts owed another before you can ever qualify as a debt collector.”). Accordingly, “a
company collecting purchased defaulted debt for its own account” is not a debt collector. Id.
Here, the parties do not dispute that LVNV is the owner of the defaulted debts and sought
to use Resurgent in order to collect the Plaintiff’s debt (and the debts of the class members) for
its own account, not the account for another. Therefore, pursuant to the Court’s decision in
Henson, LVNV is not a debt collector under the FDCPA. The Plaintiff has provided no facts to
support her claim that LVNV is a debt collector because it collects debts for “another.” Instead,
when distinguishing the district court’s decision in Henson, the Plaintiff argues that LVNV files
collection lawsuits in its own name, whereas this was not the case in Henson. However, the fact
that LVNV files suits in its own name further affirms that the Supreme Court’s Henson decision
controls—LVNV is seeking to collect debts for itself, and not another when filing these suits.
Accordingly, the Court denies, in part, the Plaintiff’s Motion for Summary Judgment on
this point and grants, in part, the Defendants’ Cross Motion for Summary Judgment on the issue
of LVNV’s liability. Therefore, the Court does not need to reach the inquiry as to whether
LVNV was vicariously liable for CMS’s letter.
The Plaintiff argues that the Defendants should be liable not under a theory of vicarious
liability, but for the failure to supervise and control an agent—CMS. The Court notes that the
though the Plaintiff argues that all of the Defendants should be liable for the failure to supervise
and control an agent, the Plaintiff’s arguments focus on Resurgent and LVNV. In response, the
Defendants argue that LVNV is not liable and “the only entity that could potentially be
vicariously liable for CMS’s letter would be Resurgent.” (Defs’ Resp. to Mot. for Summ. J. 15,
ECF No. 156.) The issue of vicarious liability was raised again only in the Defendants’ briefing
The Court has already determined that it will not reach this issue with regard to LVNV
for the reasons stated earlier. Though, based on the limited information before the Court, the
Court is inclined to find that Resurgent is liable for the failure to control and supervise CMS
because it either failed to instruct CMS to include appropriate language concerning the offer to
settle and the statute of limitations or otherwise oversee CMS’s dunning letter, the Court finds
that this issue is insufficiently briefed and there are remaining questions of fact. For example, the
parties’ have provided limited information and briefing regarding the interactions and oversight
between Resurgent and CMS. Moreover, though Alegis may likely be held to the same legal and
factual standard as Resurgent, there is no briefing to support the claim that Alegis should
similarly be held liable under a theory of failure to oversee an agent. For these reasons, the Court
finds it is not appropriate at this time to grant summary judgment for either party on this point.
In regards to statutory damages, the FDCPA authorizes plaintiffs to collect such damages
“as the court may allow, but not exceeding $1,000.” 15 U.S.C. § 1692k(a)(2)(A). In determining
the amount of statutory damages to award, “the court shall consider, among other relevant factors
. . . the frequency and persistence of noncompliance by the debt collector, the nature of such
noncompliance, and the extent to which such noncompliance was intentional.” 15 U.S.C.
§ 1692k(b)(1). Although the statute says “the court,” the Seventh Circuit has held that
“§ 1692k(a)(2) of the FDCPA provides for trial by jury in determining statutory additional
damages.” Kobs v. Arrow Serv. Bureau, Inc., 134 F.3d 893, 898 (7th Cir. 1998). Section 1692k
“is multifaceted and open-ended, granting the factfinder considerable discretion to set statutory
damages.” Gillespie v. Blitt & Gaines, P.C., 123 F. Supp. 3d 1029, 1033–34 (N.D. Ill. 2015).
“When there is a material dispute of fact to be resolved or discretion to be exercised in selecting
a financial award, then either side is entitled to a jury.” BMG Music v. Gonzalez, 430 F.3d 888,
892 (7th Cir. 2005) (emphasis added). By contrast, only “if there is no material dispute and a rule
of law eliminates discretion in selecting the remedy, then summary judgment is permissible.” Id.
at 892–93 (emphasis added). Because “[s]ection 1692k(b) channels, but does not eliminate in
any circumstance, the jury’s discretion to award statutory damages” the Court affirms that
“summary judgment is not appropriate for statutory damages.” Gillespie, 123 F. Supp. 3d at
The Plaintiff argues that she and the class members are entitled actual damages for the
amount they paid in response to the dunning letter because, in cases involving a material
omission, it is necessary only to establish that the facts withheld are material in the sense that a
reasonable person might have considered them important in the making of his decision. See
Affiliated Ute Citizens of Utah v. United States, 406 U.S. 128 (1972). The Defendants contend
that they are entitled to summary judgment on the actual damages claim because the Plaintiff has
no evidence that these damages are a “result of” the alleged violation. 15 U.S.C. § 1692k(a)1.
The Court turns first to two sentences briefed by the Defendants in their Reply in Support
of their Motion, in which the Defendants argue that the Plaintiff cannot establish that she has
standing because she has no actual damages since she did not make any payment in response to
the letter. Accordingly, the Defendants argue that the “Plaintiff cannot establish that she has
standing because she has admitted to at most a bare procedural violation divorced from any
concrete harm,” citing Spokeo, Inc. v. Robins, 136 S.Ct. 1540, 1548 (2016) for support. (Def.’s
Reply in Supp. of Cross Mot. for Summ. J. 14, ECF No. 164.)
In Spokeo, the plaintiff filed suit against the defendant on behalf of a class of similarly
situated individuals, claiming that the defendant violated the Fair Credit Reporting Act (FCRA)
when it inaccurately reported his personal background on its website. The Supreme Court held
that in order to assert standing, the plaintiff must have suffered an injury in fact. Id. at 1547. “To
establish an injury in fact, a plaintiff must show that he or she suffered ‘an invasion of a legally
protected interest’ that is ‘concrete and particularized’ and ‘actual or imminent, not conjectural
or hypothetical.’” Id. at 1548 (citation omitted). The Court clarified; however, that “‘[c]oncrete’
is not, however, necessarily synonymous with ‘tangible’” and “we have confirmed in many of
our previous cases that intangible injuries can nevertheless be concrete.” Id. at 1548. As
examples, the Court cited restrictions on First Amendment freedoms and harm to one’s
reputation. Id. at 1549. The Court ultimately remanded the case to the Ninth Circuit to determine
whether the plaintiff suffered injury in fact.
On remand, the Ninth Circuit had “little difficulty” affirming that “an alleged violation of
a consumer’s rights under the Fair Credit Report Act constitutes a harm sufficiently concrete to
satisfy the injury-in-fact requirement of Article III of the United States Constitution.” Robins v.
Spokeo, Inc., 867 F.3d 1109, 1545–46 (9th Cir. 2017). The Ninth Circuit considered “the extent
to which violation of a statutory right can itself establish an injury sufficiently concrete for the
purposes of Article III standing.” Id. at 1112. The court recognized that the Supreme Court’s
Spokeo decision noted that some statutory violations, alone, do establish concrete harm,
especially when Congress conferred the “right to protect a plaintiff’s concrete interests.” Id. at
1113. In the case of the FCRA, the Ninth Circuit held that Congress established the statute to
protect consumers’ concrete interests. Id. Moreover, the nature of the specific alleged conduct by
the defendant ensured a “real risk of harm to the concrete interests the FCRA protects.” Id. at
The Court finds that this same analysis applies to the FDCPA, concurring with the
Southern District of Indiana’s opinion in Swike v. Med-1 Sol., LLC, No. 1:17-CV-1503, 2017
WL 4099307 (S.D. Ind. Sept. 15, 2017), in which the court similarly reviewed the Ninth
Circuit’s Spokeo decision and discussed it in the context of the FDCPA and injury in fact.
Similar to the plaintiff in Swike, the Plaintiff here received a letter that the FDCPA expressly
protects her from:
Just as a plaintiff has standing to sue where a defendant fails to provide a required
disclosure under the FDCPA . . . so too does [the plaintiff] have standing to sue [the
defendant] for sending her something from which she was supposed to be protected. This
is because the receiving of a prohibited debt communication constitutes a real injury in and
Id. at *4. Accordingly, the Court denies, in part, the Defendants’ Cross-Motion for Summary
Judgment on this point.
Regarding the actual damages suffered by the Plaintiff and the class members, the Court
finds that the parties have neither sufficiently briefed, nor argued, what the prevailing case law
indicates the actual damages should be. The Plaintiff asks simply for “judgment entered for each
class member in the amount paid,” (Pl. Resp. to Defs’ Mot. for Summ. J. 21, ECF No. 153), and
the Court is inclined to agree. However, it is unclear from the parties’ briefing whether this is in
dispute; for instance, whether there are any issues concerning what particular class members
paid, whether they paid in parts, whether they had any communication with Resurgent before
paying, etc. Accordingly, the Court finds that it is not appropriate at this time to grant summary
judgment on the issue of damages.
For the above reasons, the Court GRANTS, IN PART, and DENIES, IN PART, the Plaintiff’s
Amended Motion for Summary Judgment [ECF No. 142], GRANTS, IN PART, and DENIES,
IN PART, the Defendants’ Cross-Motion for Summary Judgment [ECF No. 139], and DENIES
AS MOOT the Defendant’s Daubert Motion [ECF No. 137]. The Court sets the case for a
telephonic conference on Tuesday, November 28, 2017, at 11:00AM, for the purpose of
scheduling additional motions/briefing as noted in this Order and Opinion.
SO ORDERED on September 28, 2017.
s/ Theresa L. Springmann
CHIEF JUDGE THERESA L. SPRINGMANN
UNITED STATES DISTRICT COURT
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