Anderson, Charles v. I.C. Systems Inc.
Filing
67
ORDER granting defendant's 19 Motion for Summary Judgment; denying plaintiff's 27 Motion for Summary Judgment. Signed by District Judge James D. Peterson on 4/13/2021. (jls)
IN THE UNITED STATES DISTRICT COURT
FOR THE WESTERN DISTRICT OF WISCONSIN
CHARLES ANDERSON,
Plaintiff,
v.
OPINION and ORDER
20-cv-263-jdp
I.C. SYSTEM, INC.,
Defendant.1
Plaintiff Charles Anderson says that defendant I.C. System, Inc. violated the Fair Debt
Collection Practices Act (FDCPA) by failing to report to credit-reporting agencies that
Anderson disputed a debt that I.C. System was trying to collect. Both parties move for
summary judgment. Dkt. 19 and Dkt. 27.
I.C. System contends that it is entitled to summary judgment for three reasons:
(1) Anderson lacks standing to bring his claim because he hasn’t alleged that he was harmed;
(2) I.C. System didn’t know, nor should it have known, that the debt was disputed; and (3) any
mistake by I.C. System was a “bona fide error” that would shield it from liability under the
FDCPA. Anderson has standing to bring this lawsuit because he has adduced evidence that his
credit rating was harmed by I.C. System’s actions. But the court agrees that I.C. System is
entitled to summary judgment under the bona fide error defense. The court will grant I.C.
System’s motion, deny Anderson’s, and close the case.
1
The court has updated the caption to reflect defendant’s name as indicated in its answer,
Dkt. 7.
UNDISPUTED FACTS
The following facts are undisputed except where noted.
Plaintiff Charles Anderson incurred a medical debt to Manatee Physician Alliance, LLC,
which is not a party to this lawsuit. The parties don’t specify when Anderson incurred this
debt, but Manatee Physician Alliance gave the debt to defendant I.C. System for collection in
October 2018. I.C. System reported the debt to credit-reporting agencies as unpaid in March
2019.
Anderson says that he disputed the debt on December 20, 2019, when Anderson’s
counsel, Matthew C. Lein, sent a letter to I.C. System. Dkt. 45-1. Lein wrote that he was
representing Charles D. Anderson and Carol Ann Hamblin (Anderson’s fiancée. Dkt. 23
(Anderson Dep. 7:16)). Lein identified Anderson and Hamblin by providing their Social
Security numbers and their shared address in Hayward, Wisconsin. Lein wrote that the letter
was to serve as “written notice that the above-referenced individual(s) is in fact and in law
represented by this office for all debts that he or she may have.” He also wrote that “the abovereferenced individual(s) disputes the debt which you are attempting to collect.” The letter
didn’t include any more information about what debt or debts were being disputed.
Based on the information provided by Lein, an I.C. System employee located two
accounts associated with Hamblin and marked them as disputed. But I.C. System had more
than 600 accounts with the name “Charles Anderson.” The information in Anderson’s account
regarding the Manatee Physician Alliance debt didn’t include his Social Security number or his
middle initial, and it included addresses in Palmetto, Florida, and Stone Lake, Wisconsin, but
not the Hayward address provided by Lein. I.C. System did not mark the Manatee Physician
2
Alliance account as disputed, and it didn’t report to credit-reporting agencies that the debt was
disputed.
Anderson filed this lawsuit in March 2020. He attached to his complaint redacted
copies of his credit reports that included enough specific information to allow I.C. System to
identify the Manatee Physician Alliance account. The day after Anderson filed this lawsuit,
I.C. System asked the credit-reporting agencies to delete I.C. System’s reporting of the Manatee
Physician Alliance account, which the agencies did a few days later.
ANALYSIS
In his complaint, Anderson alleged that I.C. System violated several FDCPA provisions,
but his arguments in his summary judgment briefs rely only on 15 U.S.C. § 1692e(8), which
prohibits a debt collector from “[c]ommunicating . . . to any person credit information which
is known or which should be known to be false, including the failure to communicate that a
disputed debt is disputed.” At summary judgment, I.C. System makes arguments against
Anderson’s other FDCPA claims, but Anderson doesn’t respond to those arguments in any of
his briefs. So he has forfeited any claims other than his claim under § 1692e(8). See Nichols v.
Mich. City Plant Planning Dep’t, 755 F.3d 594, 600 (7th Cir. 2014) (“The non-moving party
waives any arguments that were not raised in its response to the moving party’s motion for
summary judgment.”).
Summary judgment is appropriate if the moving party shows that the material facts are
not in genuine dispute and the party is entitled to judgment as a matter of law. On crossmotions for summary judgment, the court construes the facts and the reasonable inferences
3
drawn from them in the light most favorable to the nonmoving party. Blow v. Bijora, Inc., 855
F.3d 793, 797 (7th Cir. 2017).
Standing is a jurisdictional question, so the court will address that issue first. See Apex
Digital, Inc. v. Sears, Roebuck & Co., 572 F.3d 440, 443 (7th Cir. 2009).
A. Standing
A plaintiff has standing to sue under Article III of the United States Constitution if he
suffered an injury in fact that is both fairly traceable to the defendant’s challenged conduct
and likely to be redressed by a favorable judicial decision. Lujan v. Defenders of Wildlife, 504
U.S. 555, 560–61 (1992). An injury in fact is “an invasion of a legally protected interest” that
is “concrete and particularized” and “actual or imminent, not conjectural or hypothetical.” Id.
at 560 (internal quotation marks omitted). As with any other factual proposition, the plaintiff
must prove standing with specific facts at summary judgment. Id. at 561.
I.C. System contends that Anderson hasn’t adduced any evidence that he suffered an
injury in fact, even if I.C. System’s conduct violated the FDCPA. See Spokeo, Inc. v. Robins, 136
S. Ct. 1540, 1549 (2016) (“Article III standing requires a concrete injury even in the context
of a statutory violation.”). Anderson’s only proposed fact on this point is the statement that
he “suffered a concrete injury as a result of Defendant’s omission to act.” Dkt. 29, ¶ 15. This
statement is a legal conclusion, not a fact, so it would not be sufficient to establish standing.
But Anderson says in a declaration that his credit rating was lowered because I.C. System didn’t
inform the credit-reporting agencies that the debt was disputed. Dkt. 40, ¶ 10. This allegation
is supported by copies of Anderson’s Experian and TransUnion credit reports attached to his
complaint, both of which are dated February 17, 2021, and both of which list the Manatee
Physician Alliance debt as past due. Dkt. 1-4. Although Anderson hasn’t provided copies of
4
credit reports without the Manatee Physician Alliance debt for comparison, I.C. System does
not dispute the negative effect on his credit ratings.
The effect on Anderson’s credit rating is a sufficient injury. In Evans v. Portfolio Recovery
Associates, LLC, 889 F.3d 337 (7th Cir. 2018), the court of appeals held that a group of
plaintiffs had standing to sue under the FDCPA based on their allegation that the defendant
had failed to report disputed debts to a credit-reporting agency. The court held that the “real
risk of financial harm caused by an inaccurate credit rating” was a sufficient injury to confer
standing. Id. at 345 (quoting Sayles v. Advanced Recovery Sys., Inc., 865 F.3d 246, 250 (5th Cir.
2017)). The court noted that “[a]n inaccurate credit report produces a variety of negative
effects,” including serving as “‘a red flag to the debtor’s other creditors and anyone who runs a
background or credit check, including landlords and employers.’” Id. (quoting Phillips v. Asset
Acceptance, LLC, 736 F.3d 1076, 1082 (7th Cir. 2013)).
I.C. System’s arguments for why Anderson lacks standing are unpersuasive. First, it
contends that Anderson hasn’t adduced admissible evidence that he disputed the Manatee
Physician Alliance debt. The basis for this argument is unclear, as Lein’s letter is evidence that
Anderson disputed the debt. In support of its argument, I.C. System points to Anderson’s
testimony that he was unaware of what debt I.C. System was attempting to collect, he was
unsure what the purpose of Lein’s letter was, and he didn’t know whether he owed a debt to
I.C. System. See Dkt. 23 (Anderson Dep. 26:11–30:22). Perhaps I.C. System means to contend
that this testimony shows that Anderson lacked a valid reason to dispute the debt. But the
FDCPA “does not require an individual’s dispute [to] be valid or even reasonable. Instead, the
plaintiff must simply make clear that he or she disputes the debt.” Evans, 889 F.3d at 347. Or
perhaps I.C. System means to contend that Anderson lacks standing because he was unable to
5
articulate why he was harmed in his deposition. But Anderson expressly testified in his
deposition that I.C. System’s actions led to a “[l]ow credit score.” Dkt. 23 (Anderson Dep.
43:11). Anderson may not fully grasp the nature of this lawsuit or the facts behind it, but that’s
his attorney’s job, not his.
Second, I.C. System says that there’s no “appreciable risk of harm” to Anderson based
on a lower credit rating because he testified that he’s “just not a person that applies for loans,”
Dkt. 23 (Anderson Dep. 18:21–19:1). But Evans doesn’t require a plaintiff to show that he
plans to apply for a loan. As the Evans court stressed, it’s not only potential creditors that run
credit checks, but also prospective landlords and employers, among others.
Third, I.C. System says that Anderson wasn’t harmed because he testified in his
deposition that he already had poor credit caused by unauthorized charges on his credit card
made by his ex-girlfriend. But I.C. System doesn’t contend that Anderson’s credit rating was
unaffected by the Manatee Physician Alliance debt, and it cites no authority for the proposition
that a consumer with a low credit rating is unharmed if his rating is lowered further.
Fourth, I.C. System cites Anderson’s fee agreement with Lein and John Steinkamp,
Lein’s co-counsel in this case. The agreement is dated March 17, 2020, about three months
after Lein sent the letter to I.C. System and a few days before Anderson filed this lawsuit.
Dkt. 56. I.C. System raises this issue for the first time in its reply brief in support of its motion
for summary judgment, which prevents Anderson from addressing the issue. In any event, I.C.
System fails to explain why the date on which Anderson signed a fee agreement has anything
to do with his standing to bring this lawsuit. So the fee agreement doesn’t support I.C. System’s
position, either.
6
Anderson has adduced evidence that his credit rating suffered because I.C. System failed
to report that he disputed the Manatee Physician Alliance debt, so he has standing to bring
this lawsuit.
B. Bona fide error
I.C. System contends that it is entitled to summary judgment under the FDCPA’s bona
fide error defense, 15 U.S.C. § 1692k(c). Because the court agrees that any mistake by I.C.
System was a bona fide error, it doesn’t need to consider I.C. System’s argument that Anderson
has failed to show that I.C. System knew or should have known that he disputed the Manatee
Physician Alliance debt.
The bona fide error defense requires I.C. System to establish three elements: (1) the
presumed FDCPA violation was not intentional; (2) the presumed FDCPA violation resulted
from a bona fide error; and (3) the defendant maintained procedures reasonably adapted to
avoid any such error. Kort v. Diversified Collection Servs., Inc., 394 F.3d 530, 537 (7th Cir. 2005).
I.C. System has established each of these elements. First, I.C. System didn’t
intentionally violate the FDCPA when it failed to report the Manatee Physician Alliance debt
as disputed to the credit-reporting agencies. I.C. System’s chief compliance officer, Michelle
Dove, says in a declaration that I.C. System had more than 600 accounts associated with the
name Charles Anderson. Dkt. 45, ¶ 19. She explains that I.C. System didn’t report the
Manatee Physician Alliance debt as disputed because it was unable to locate Anderson’s
account based on the information that Lein provided. Id., ¶ 16. The address provided in the
letter was in Hayward, Wisconsin, but that address didn’t appear in Anderson’s Manatee
Physician Alliance account, which included addresses in Palmetto, Florida, and Stone Lake,
Wisconsin. Id., ¶ 17. And although Lein provided Anderson’s Social Security number, the
7
Manatee Physician Alliance account didn’t have a Social Security number associated with it.
Id. Anderson adduces no evidence to dispute any of these points. So I.C. System didn’t know
that the Manatee Physician Alliance debt was disputed when it failed to report it as disputed.
As for the second element, I.C. System’s failure to locate the Manatee Physician Alliance
account was a bona fide error. Dove says in her declaration that if I.C. System is unable to
locate a matching account when a consumer attempts to dispute a debt, it normally issues what
it calls a “can’t find” letter to obtain more information from the consumer to identify the
consumer’s account. Id., ¶ 23. She explains that I.C. System didn’t issue a “can’t find” letter in
response to Lein’s letter because I.C. System was able to identify two debts associated with
Hamblin, which it promptly reported as disputed to the credit-reporting agencies. Lein’s letter
was ambiguous about whether both Hamblin and Anderson were disputing debts and about
how many debts were in dispute: he wrote that “the above-referenced individual(s) disputes
the debt which you are attempting to collect.” Dkt. 45-1. Because the specific information that
Lein provided for Anderson didn’t match any of the “Charles Anderson” accounts in I.C.
System’s database, it was reasonable for I.C. System to conclude from the letter’s ambiguous
language that Anderson did not have a debt with I.C. System to dispute.
Anderson contends that I.C. System is barred from asserting that it committed a bona
fide error because Dove testified in her deposition, “I don’t think there was an error. I don’t
think that there’s anything else that I.C. System could have done to locate Mr. Anderson’s
account using the information provided in the dispute letter.” Dkt. 22 (Dove Dep. 88:17–20).
In essence, Anderson argues that a debt collector cannot rely on the bona fide error defense
unless it admits some level of carelessness or culpability. But Anderson cites no authority for
8
the proposition that a debt collector cannot rely on the bona fide error defense even if the debt
collector contends that it did the best it could under the circumstances.
Anderson contends that I.C. System did, in fact, identify Anderson’s account based on
Lein’s letter. Dkt. 50, at 8. He bases this contention on I.C. System’s records, which show that
a few days after Lein sent the letter, an I.C. System employee viewed Anderson’s account but
failed to mark it as disputed. But Anderson doesn’t explain what information in Lein’s letter
would have allowed the employee to conclude that this account—one of more than 600
“Charles Anderson” accounts in the system—belonged to plaintiff. The mere fact that an
employee viewed Anderson’s account does not undermine I.C. System’s contention that it
committed a bona fide error in failing to identify Anderson’s debt to Manatee Physician
Alliance as disputed.
As for the third element, I.C. System had reasonable procedures in place to ensure that
disputed debts are correctly matched with consumer accounts, flagged as disputed, and
reported as disputed to credit-reporting agencies. Dove testified that I.C. System employees
who review consumer correspondence are trained on how to use its computer system to locate
the consumer’s account. Dkt. 22 (Dove Dep. 60:11–14, 61:10–15). I.C. System employee
Barbara Miller testified in a deposition that she “[s]earch[es] through our [computer] system
to match any information that was provided in the letter.” Dkt. 31 (Miller Dep. 34:11–13).
She testified that to confirm that she has located the correct account, “something has to match.
The address, the Social, the last four of the Social, if there was a partial account number, et
cetera.” Id. at 36:18–21. As already noted, if an employee is unable to identify an account
based on the information provided by the consumer, I.C. System has a policy of sending a
“can’t find” letter to request further information.
9
After the consumer’s account has been identified, I.C. System has a “Dispute Handling
Policy” that describes when the consumer’s debt should be flagged as disputed based on
consumer correspondence, stressing that “[t]he consumer does not have to state the word
‘dispute’ for the issue to be considered a dispute” and providing multiple examples of what
could constitute a dispute. Dkt. 45-7, at 2. The policy expressly instructs I.C. System
employees to report any disputed debts to the credit-reporting agencies. Id.
I.C. System oversees this process by conducting separate weekly and monthly audits of
each of its representatives. Its legal affairs supervisor audits at least two accounts per
representative each week, and its credit reporting supervisor audits at least 20 accounts per
representative each month. Dkt. 45-8, at 10. If employees are found to have violated I.C.
System’s correspondence policies, they are subject to disciplinary action. Dkt. 45, ¶ 25.
Anderson says that I.C. System’s failure to send a “can’t find” letter regarding
Anderson’s account in response to Lein’s letter shows that I.C. System “failed to follow its own
internal policies and procedures.” Dkt. 50, at 13. But Lein’s letter was ambiguous about
whether Hamblin, Anderson, or both were disputing a debt, so it was reasonable for I.C. System
to conclude that a “can’t find” letter was unnecessary after it located two debts belonging to
Hamblin.
Anderson also contends that I.C. System should have implemented a procedure to
“requir[e] its clients to provide personal identifiers” such as Social Security numbers so that
I.C. System could have identified Anderson’s account based on his Social Security number.
Dkt. 50, at 14. Elsewhere in his brief, he says that I.C. System “has no policies and procedures
for how to handle a dispute letter with more than one consumer on it” and that I.C. System
doesn’t “permit [its] employees to simply call and request more information from the person
10
who sent the correspondence.” Id. at 9. But the FDCPA “does not require debt collectors to
take every conceivable precaution to avoid errors; rather, it only requires reasonable
precaution.” Kort, 394 F.3d at 539. Even if I.C. System could have prevented this particular
error by implementing the types of procedures that Anderson describes, that isn’t evidence that
I.C. System’s existing procedures are unreasonable. Anderson’s counsel could easily have
prevented the problem in several ways: by including more identifying information in his letter
disputing the debt, such as Anderson’s previous addresses; by specifically identifying the debt
that Anderson disputed; by sending separate letters for Anderson and Hamblin; or by stating
clearly in the letter that both Anderson and Hamblin had debts that they disputed. The FDCPA
does not require I.C. System to anticipate every potential omission or ambiguity in a debt
dispute letter.
Finally, Anderson contends that I.C. System doesn’t give its employees “sufficient time
to locate accounts.” Dkt. 50, at 14. He cites deposition testimony from two I.C. System
employees who said that they handle up to 120 accounts and take up to 20 telephone calls
each day. He says that “[a]t this high rate of reviewing accounts, mistakes will almost certainly
occur in locating accounts.” Id. at 15. But the FDCPA anticipates that errors will occur, and
under limited circumstances, some errors are excused. Even if I.C. System imposes an
unreasonable workload on its employees, that workload isn’t what caused the error at issue in
this case. The problem wasn’t that I.C. System’s employees didn’t have enough time to locate
Anderson’s account; it’s that Lein’s letter lacked enough information to allow them to identify
the correct account, and it was ambiguous about how many debts were being disputed and who
was disputing them.
11
I.C. System has adduced evidence to establish each of the elements of the bona fide
error defense, and Anderson identifies no reason to call that evidence into question. I.C. System
is entitled to summary judgment on Anderson’s claim.
ORDER
IT IS ORDERED that:
1. Defendant I.C. System, Inc.’s motion for summary judgment, Dkt. 19, is
GRANTED.
2. Plaintiff Charles Anderson’s motion for summary judgment, Dkt. 27, is DENIED.
3. The clerk of court is directed to enter judgment in favor of defendant and close this
case.
Entered April 13, 2021.
BY THE COURT:
/s/
________________________________________
JAMES D. PETERSON
District Judge
12
Disclaimer: Justia Dockets & Filings provides public litigation records from the federal appellate and district courts. These filings and docket sheets should not be considered findings of fact or liability, nor do they necessarily reflect the view of Justia.
Why Is My Information Online?