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Gros v. Midland Credit Management

October 20, 2008

WILLIAM GROS, PLAINTIFF,
v.
MIDLAND CREDIT MANAGEMENT, INC., AND FORD MOTOR CREDIT COMPANY, DEFENDANTS.



The opinion of the court was delivered by: James F. Holderman, Chief Judge

MEMORANDUM OPINION AND ORDER

In this lawsuit, plaintiff William Gros ("Gros") seeks damages related to defendant Midland Credit Management, Inc.'s ("MCM") efforts to collect on a non-existent $3,690.61 debt ("the Debt") originally owed by Gros to defendant Ford Motor Credit Company ("Ford Credit"). Gros also seeks damages related to the sale of the Debt by Ford Credit to Midland Funding, LLC, which precipitated MCM's collection efforts. Gros's only remaining claims are against MCM for violations of the Fair Debt Collection Practices Act, 15 U.S.C. § 1692 (Count I) and against MCM and Ford Credit for violations of the Illinois Consumer Fraud and Deceptive Business Practices Act, 815 ILCS 505/2, et seq. (Count II), all other claims having been dismissed with prejudice. (See 9/10/2007 Order, Dkt. No. 56; 7/22/2008 Order, Dkt. No. 107.) Now before the court is MCM's Motion for Summary Judgment. (Dkt. No. 104.) For the reasons set forth below, MCM's motion is granted and judgment is entered in favor of MCM on Counts I and II.

BACKGROUND

When ruling on a motion for summary judgment, the court views the evidence in the light most favorable to the nonmoving party and draws all reasonable inferences in the non-movant's favor. Omega Healthcare Investors, Inc. v. Res-Care, Inc., 475 F.3d 853, 857 (7th Cir. 2007). The following undisputed facts are construed in the light most favorable to Gros.

In January 1999, Gros opened an account with Ford Credit to lease a Lincoln Town Car. (Def.'s L.R. 56.1(a)(3) Stmt. ¶ 5.) The lease was for 26 months, with monthly payments of $598.53. (Id.) Gros entered into a six-month extension of his lease in January 2002. (Id. ¶ 6.) Sometime in 2003, Gros filed a lawsuit in the Circuit Court of DuPage County, Illinois, against Ford Credit, alleging that Ford Credit had refused to sell Gros the vehicle at the contract price. (Id. ¶ 7; Pl's Resp. to Def.'s L.R. 56.1(a)(3) Stmt. ¶ 7; Pl.'s L.R. 56.1(b)(3)(C) Stmt. ¶ 3.) Ford Credit also filed a counterclaim against Gros in the same state lawsuit. (Pl.'s L.R. 56.1(b)(3)(C) Stmt. ¶ 3.) On September 20, 2005, Ford Credit's counterclaim was dismissed with prejudice, and the circuit court held that Ford Credit had no right to additional funds from Gros. (Def.'s L.R. 56.1(a)(3) Stmt. ¶ 7; Pl.'s L.R. 56.1(b)(3)(C) Stmt. ¶ 3-4.)

In April 2006, Midland Funding, LLC ("Midland Funding") purchased the non-existent Debt from Ford Credit. (Def.'s L.R. 56.1(a)(3) Stmt. ¶ 8.) MCM is the collection arm of Midland Funding. (Id. ¶ 3.) On May 19, 2006, MCM sent a letter to Gros, stating that the current owner of Gros's Ford Credit US account was Midland Funding, and that MCM ("a debt collection agency") was attempting to collect on a $3,690.61 balance owed to Midland Funding. (Id. ¶ 8.) The May 19, 2006, letter states:

Dear WILLIAM F. GROS,

The purpose of this letter is to introduce Midland Funding LLC as the new owner of the above referenced account and Midland Credit Management, Inc. ("MCM"), a debt collection company, is [sic] the servicer of this obligation. Accordingly, all communication regarding the account should be addressed to MCM as servicer for Midland Funding LLC and not the previous owner.

The records transferred with your FORD CREDIT US account reflect that you are obligated on this account, which is in default with a Current Balance of $3,690.61. As the owner of the account, but subject to the rights described in the following three paragraphs, Midland Funding LLC is entitled to be paid the entire current balance due which should be remitted to MCM.

Unless you notify MCM within thirty (30) days of receiving this notice that you dispute the validity of the debt, or any portion thereof, MCM will assume this debt to be valid.

If you notify MCM in writing, within thirty (30) days after receiving this notice that the debt, or any portion thereof, is disputed, MCM will obtain verification of the debt or a copy of a judgment (if there is a judgment) and MCM will mail you a copy of such verification or judgment.

If you request, in writing, within thirty (30) days after receiving this notice, MCM will provide you with the name and address of the original creditor.

To discuss this debt, please contact us toll free at (800) 935-4566.

Midland Credit Management, Inc. (800) 935-4566 Please see reverse side for important information. (Id. ¶ 9; 6/20/2008 Gros Dep., Ex. 21.) Gros read the May 19, 2006, letter, but did not notify MCM in writing within thirty days that he disputed any portion of the Debt. (Def.'s L.R. 56.1(a)(3) Stmt. ¶ 10.)

On May 26, 2006, MCM sent a second letter to Gros. (Id. ¶ 11.) The May 26, 2006 letter again stated that the current owner of Gros's Ford Credit US account was Midland Funding and that the "Current Balance" due on the account was $3,690.61. (Id.) The May 26, 2006, letter further stated:

Dear WILLIAM F. GROS,

Midland Credit Management, Inc. is the SERVICER of the above-mentioned FORD CREDIT US account. This is a demand for payment. Please include a check or money order for the Current Balance due. Once the balance has been received the credit reporting agencies will be notified that the account is paid.* Please do not hesitate to contact me at (800) 265-8825, Ext. 3590 if you have any questions.

Please understand that this is a communication from a debt collector. This is an attempt to collect a debt. Any information obtained will be used for that purpose. Sincerely, Nichole Hiemenz X3590, C3-41 (800) 265-8825 3590 Midland Credit Management, Inc. *Your credit report will not be updated if the federal reporting period has expired. (Id.; 2d Am. Compl., Ex. A.) The May 26, 2006, letter included a perforated payment stub at the bottom of the letter.

Also on May 26, 2006, Gros received a phone call from MCM. (Def.'s L.R. 56.1(a)(3) Stmt. ¶ 12.) In the May 26, 2006, phone call, a representative from MCM told Gros that MCM was collecting a sum of money, which Gros recognized "as coming from Ford Motor Credit." (Id. ¶ 12; Pl.'s L.R. 56.1(b)(3)(C) Stmt. ¶ 6.) Gros told the MCM representative that he owed no money to Ford Credit.*fn1 (Pl.'s Pl.'s L.R. 56.1(b)(3)(C) Stmt. ¶ 7.) Gros received a second phone call from MCM sometime between May 26, 2006, and July 24, 2006. (Def.'s L.R. 56.1(a)(3) Stmt. ¶ 13.) Gros again told the MCM representative that he did not owe the money. (Pl.'s L.R. 56.1(b)(3)(C) Stmt. ¶ 9)*fn2

On July 21, 2006, MCM sent a third letter to Gros. (Def.'s L.R. 56.1(a)(3) Stmt. ¶ 14.)

The July 21, 2006, letter also stated that the current owner of Gros's Ford Credit US account was Midland Funding and that the "Current Balance" due on the account was $3,690.61. ...


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