The opinion of the court was delivered by: Virginia M. Kendall, United States District Judge Northern District of Illinois
Judge Virginia M. Kendall
MEMORANDUM OPINION AND ORDER
Plaintiffs Jimmy L. Gully, Raquel M. Ontiveros and Mai Thurman ("Plaintiffs") bring this action against Arrow Financial Services, LLC. ("Defendant" or "Arrow") for alleged violations of the Fair Debt Collection Practices Act, 15 U.S.C. § 1692 et seq. Defendant attempted to collect debts owed by Plaintiffs to Capital One. Plaintiffs complain that Defendant sent them settlement offers that falsely represented the settlement authority that Capital One gave Defendant. The parties have cross-moved for summary judgment. Because Defendant's letters did not state that its client, Capital One, would not be willing to accept a lower settlement amount -- either during the time period stated or in the future -- the representations in Defendant's letters are not false.
Defendant is a debt collector. (Plaintiffs' Rule 56.1 Statement of Material Facts ("Plfs. SMF"), ¶ 6.) Capital One engaged Defendant to perform certain collection services. (Plfs. SMF, App. L, § 1.01.) Schedule B to the Agency Collection Contract signed by Capital One and Defendant was titled "Settlement Authority" and provided:
The Agency may not settle for less than the amounts shown in the grid below without written authorization from Capital One. The settlement amount is not to include any monies received prior to the date the settlement was negotiated.
Days Since Charge-Off 0-90 91-180 181-730 >730 Total $0 -- $1,500 70% 70% 50% 50% Account $1,501 - $3,000 70% 50% 50% 40% Balance >$3,000 70% 50% 40% 40% (Plfs. SMF, App. L, Sch. B.) Defendant attempted to collect debts owed by Plaintiffs to Capital One. (Plfs. SMF, ¶¶ 17-19.) Plaintiffs each received the same form letter from Defendant stating:
"At this time our client is willing to settle your past due account for [___]% of the full balance and accept this amount as settlement of the referenced account. The settlement amount must be made in one payment and received by our office on or before [date]."
The letters also included the current balance on the account, the settlement amount and information regarding how to make the settlement payment.
Summary judgment is proper when "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 judgment as a matter of law." Fed. R. Civ. P. 56(c). The Court considers cross-motions for summary judgment from a "Janus-like" perspective, examining each party's motion in turn and viewing all evidence and drawing all inferences in favor of the party opposing the motion. See Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 255 (1986).
The purpose of the FDCPA is "to eliminate abusive debt collection practices by debt collectors." 15 U.S.C. § 1692(e). To this end, the FDCPA prohibits a debt collector from using "any false, deceptive, or misleading representation or means in connection with the collection of any debt." 15 U.S.C. § 1692e. This prohibition includes "the use of any false representation or deceptive means to collect or attempt to collect any debt." 15 U.S.C. § 1692e(10). Plaintiffs do not allege that Defendant's statements regarding its settlement authority were misleading or deceptive. Instead, Plaintiffs argue that the statements were false. Thus, the only question is whether Defendant falsely represented that it did not have authority to settle: (1) for a percentage lower than the settlement amount listed in the letters or (2) after the date listed in the letters.*fn1 See Gearing v. Check Brokerage Corp., 233 F.3d 469, 472 (7th Cir. 2004) ("Section 1692e applies even when a false representation was unintentional").
Although there is no controlling authority from the Seventh Circuit on the propriety of these type of settlement offers, there has been no lack of discussion of the issue from other judges in this district and elsewhere. In particular, this Court finds the reasoning in Gully v. Van Ru Credit Corp., 381 F. Supp. 2d 766 (N.D. Ill. 2005) (Moran, J.) and Hernandez v. AFNI, Inc., 428 F. Supp. 2d 776 (N.D. Ill. 2006) ...