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DURKJN v. EQUIFAX CHECK SERVICES

March 31, 2004.

MICHAEL DURKJN and LORETTA REED, individually, and on behalf of all others similarly situated, Plaintiffs,
v.
EQUIFAX CHECK SERVICES, INC., Defendant



The opinion of the court was delivered by: WILLIAM J. HIBBLER, District Judge

MEMORANDUM OPINION AND ORDER

Plaintiffs, Loretta Reed and Michael Durkin, on behalf of themselves and a class certified by this Court on February 12, 2001 (collectively, "Plaintiffs"), brought suit against Defendant, Equifax Check Services, Inc. ("Equifax"), for alleged violations of § 1692e, § 1692f, and § 1692g of the Fair Debt Collection Practices Act ("FDCPA"), 15 U.S.C. § 1692 et seq. Equifax now moves for summary judgment.

I. BACKGROUND

  Equifax is a debt collector under the FDCPA. See Durkin v. Equifax Check Serv.s, Inc., No. 00 C 4832, 2002 WL 31426397 (N.D. Ill. Oct. 28, 2002) ("Durkin 2002"). Equifax purchases dishonored checks from merchants and contacts the check's maker through a series of collection letters demanding full payment. The FDCPA requires debt collectors to provide a written notice including the amount of the debt, the creditor's name, and a statement mat the debtor has thirty days to dispute the debt. 15 U.S.C. § 1692-1692o. In this case, Equifax sent an initial letter on April Page 2 10, 2000, a "dunning letter" or "collection letter," notifying class members of their outstanding debt and their right to challenge that debt within thirty days. This letter stated, in pertinent part;

 
Federal law gives you thirty (30) days after you receive this letter to dispute the validity of the debt or any part of it. If you don't dispute it within that period, we will assume that it is valid. If you do dispute it, and you notify us in writing to that effect, we will, as required by law, obtain and mail to you proof of the debt. And if within the same period, you request in writing the name and address of the merchant to whom your check was written, we will provide you with that information too. . . . The law does not require us to wait until the end of the 30-day period before taking action to collect this debt. If, however, you request proof of the debt or the name and address of the merchant to whom you wrote your check within the 30-day period that begins with your receipt of this letter, the law requires us to suspend our efforts to collect the debt until we mail the requested information to you . . .
  Equifax then sent two additional letters requesting payment in full on the debt. These follow-up letters did not include information about the debtors' thirty-day right to dispute the debt The first additional letter, on April 24, 2000, stated, in relevant part:
 
Despite a previous written notice, you have failed to make full restitution on your $217.45 dishonored check written to Funco, Inc. nearly 5 weeks ago. Your check was returned as a dishonored item and has been assigned to our Collection department to determine an appropriate action by Equifax Check Services, Inc. ("ECS") that will result in payment of this check.
Should you fail to pay for this dishonored check or contact this office to make arrangements, steps will be taken to determine if your check will be assigned to an investigator or to a collection agency.
You can stop this process by sending your payment in full, including the service charge referenced below, to ECS. . . .
CONTINUED REFUSAL TO HONOR THIS RETURNED CHECK WILL RESULT IN YOUR CREDIT FILE BEING IMPACTED WITH A NEGATIVE REFERENCE WHICH MAY IMPACT FUTURE CREDIT GRANTING DECISIONS.
The third, and final, letter, sent May 8, 2000, stated:

  Equifax Check Services, Inc. has previously sent you letters requesting restitution for your dishonored check that we purchased from Funco. Inc. Despite repeated requests Page 3 and notifications regarding your unpaid check, you have seemingly elected to ignore your original obligation. Rather than continue to send requests that go unanswered, we have elected to proceed further with more extensive collection efforts. Should you continue to refuse to honor your obligation, we will furnish information on your dishonored check to a national credit bureau. The credit information maybe retained on your record up to seven years . . . You may reach our offices at the number below if you wish to discuss this matter further.

  Section 1692g of the FDCPA requires the debt collector to provide written notice to the debtor that he or she has thirty-days within which to request, in writing, proof of the debt's validity. Plaintiffs claim mat while the first letter met the FDCPA standards, the follow-up letters, containing demands for payment without mentioning the thirty-day period, overshadowed this information, in violation of the FDCPA. Plaintiffs also claim that Equifax violated § 1692e of the FDCPA by engaging in false, deceptive and misleading misrepresentations by implying mat Plaintiffs' debts had not yet been referred to a debt collector when it stated that the debts had not yet been referred to a collection agency. Finally, § 1692f prohibits a debt collector from using unfair or unconscionable means to attempt to collect a debt. Plaintiffs claim that Equifax's practices of including language in the second and third letters requesting that Plaintiffs contact it by telephone, but not explaining that challenges to the debt's validity must be in writing, constituted unfair collection practices.

  Before the close of discovery, the Court considered and denied the parties' cross motions for summary judgment. Durkin v. Equifax Check Serv.s, Inc., No. 00 C 4832, 2001WL1155254 (N.D. Ill. Sept. 28, 2001) ("Durkin 2001"). In Durkin 2001, both parties offered conflicting expert testimony regarding whether the letters could confuse unsophisticated consumers such as Plaintiffs. The Court held mat this factual dispute precluded entry of summary judgment in either party's favor.

  On January 21, 2003, however, the Court granted Equifax's motion to bar Plaintiffs' sole expert witness. See Durkin v. Equifax Check Serv.s, Inc., No. 00 C 4832 (N.D. Ill. Jan. 21, 2003) Page 4 (Unpublished Order). Nine months later, Equifax moved for judgment on the pleadings pursuant to Federal Rule of Civil Procedure 12(c), relying on Walker v. Nat'l Recovery, Inc., in which the Seventh Circuit noted that if the plaintiff "decides to stand on her complaint and forego factual development, then the case may come to an end by judgment on the pleadings under Fed.R.Civ.P. 12(c)." 200 F.3d 500, 503 (7th Cir. 1999). The Court denied the motion because 12(c) is only appropriate in the rare case where the plaintiff actually states that he intends to base his entire argument on the pleadings alone. Durkin v. Equifax Check Serv.s, Inc., No. 00 C 4832, 2003 WL 22078331 (N.D. Ill, Sept. 8, 2003) ("Durkin 2003"). Plaintiffs made no such affirmative statements and retained the ability to come up with new evidence before trial. The Court held that, "once the plaintiff is able to successfully state a claim, the Court must give the plaintiff the opportunity to present evidence in support of that claim. If it turns out that the evidence is wholly one-sided, then it is possible to end the case by summary judgment under rule 56, but not under rule 12(c)." Durkin 2003 at * 7.

  Because the Court dismissed the motion on procedural grounds, the Court did not reach the question of whether Plaintiffs could prevail by relying on the collection letters alone, or, instead, whether they must provide additional extrinsic evidence to survive summary judgment*fn1 At the end of discovery, Plaintiffs have submitted no other evidence but the collection letters and the testimony Page 5 of the two named plaintiffs. Equifax filed the instant motion for summary judgment, asking the Court to dismiss Plaintiffs' claims for their failure to provide evidence sufficient to create a genuine issue of material fact under Federal Rule of Civil Procedure 56.

 II. STANDARD OF REVIEW

  Summary judgment is appropriate when the pleadings, depositions, and other materials in the record show that there is no disputed issue of material fact and that the moving party is entitled to judgment as a matter of law. Fed.R.Civ.P. 56(c); Celotex Corp. v. Catrett, 477 U.S. 317, 322-23 (1986). Summary judgment may be granted when the record as a whole shows that a rational trier of fact could not find for the non-moving party. Rogers v. City of Chi., 320 F.3d 748, 752 (7th Cir. 2003). The opposing party must "go beyond the pleadings" and "designate specific facts showing that there is a genuine [material] issue for trial." Andersen v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). The Court considers the ...


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