United States District Court, N.D. Illinois, Eastern Division
[Copyrighted Material Omitted]
For Jonathan Simkus, Plaintiff: Daniel A. Edelman, LEAD ATTORNEY, Cathleen M. Combs, Francis Richard Greene, James O. Latturner, Edelman, Combs, Latturner & Goodwin, LLC, Chicago, IL.
For Cavalry Portfolio Services, LLC, Cavalry SPV 1, LLC, Defendants: Anna-Katrina S Christakis, LEAD ATTORNEY, Raechelle D. Norman, Pilgrim Christakis LLP, Chicago, IL.
MEMORANDUM OPINION AND ORDER
Marvin E. Aspen, United States District Judge.
Plaintiff Jonathan Simkus brings a two-count complaint against Defendants Cavalry SPV I, LLC (SPV), and Cavalry Portfolio Services, LLC (CPS) for violations of § 1692e and § 1692f of the Fair Debt Collections Practices Act. 15 U.S.C. § 1692 et seq. (" FDCPA" ). Mr. Simkus contends Defendants SPV and CPS (collectively, " Defendants" ) unlawfully charged him interest retroactively on a debt SPV purchased from Bank of America (" BOA" ) for the purposes of collection. Defendants contend that BOA never waived its right to collect interest, and therefore, Defendants were permitted to charge that interest as BOA's assignee. Before us are cross-motions for summary judgment as to liability on both counts. For the reasons set forth below, we deny Mr. Simkus's motion. We deny Defendants' motion in part, and grant it in part. We also request additional briefing for the parties to address whether Defendants' dunning letter was misleading.
Plaintiff Jonathan Simkus accrued $7,077.66 in BOA credit card debt. (Pl.'s 56.1 SOF ¶ ¶ 11-13.) Mr. Simkus opened the account on July 18, 2003. ( Id. ¶ 6.) According to the cardholder agreement, the applicable law is Arizona and federal Law. ( Id., Ex. D, Cardholder Agreement at 956.) Mr. Simkus testified that from 2003 to 2010, he lived in various locations in Arizona. ( Id., Ex. A, Simkus Dep. at 10.) After Mr. Simkus stopped making payments, the account went into default and BOA charged-off the account on April 30, 2009. ( Id. ¶ ¶ 11-12.) Mr. Simkus understood that under his agreement with BOA, the bank would charge interest on any unpaid balances. ( Id. ¶ 10.) Also, he testified that he believed he knew how BOA would calculate this interest. (Defs.' 56.1 SOF, Ex D, Simkus Dep. at 34.) On December 9, 2010, Capital Management Services, L.P, attempted on BOA's behalf to collect the charged-off debt of $7,077.66. (Defs.' 56.1 SOF ¶ 15.)
On May 11, 2011, BOA's subsidiary, FIA Card Services, sold Mr. Simkus's credit card account to SPV, LLC, a debt collection agency. (Pl.'s 56.1 SOF ¶ 18.) That same month, BOA reported to TransUnion that the " High Balance" on the account was $7,077.66. (Defs.' 56.1 SOF ¶ 18.) In the agreement between BOA and SPV, the contract indicated that the balance " may include interest (accrued or unaccrued)." (Pl.'s 56.1 SOF, Ex. K, Loan Sale Agreement § 1.7.) BOA did not charge interest for the twenty-five months after the charge-off prior to its selling the account to Defendant SPV. (Pl.'s 56.1 SOF, Ex. C, Aff. of Sale and Certification of Debt.) In the cardholder agreement between BOA and Mr. Simkus, the agreement states that " failure to exercise any rights . . . will not waive any of our rights in the future."
(Pl.'s 56.1 SOF, Ex. D, Cardholder Agreement § 7.17.)
After purchasing the accounts from BOA, SPV then retroactively added interest to the account from the period BOA owned the account after the charge-off date until SPV purchased the account. (Pl.'s 56.1 SOF ¶ 22.) One month after SPV purchased the account, CPS  sent Mr. Simkus a collection letter demanding $10,828.28. ( Id., Ex. H.) Mr. Simkus testified that he found the new amount confusing based on the previous statement from Capital Management services that requested the charge-off amount of $7,077.66. (Simkus Dep. at 75-78.) Upon seeing the letter with the new balance, Mr. Simkus testified that his parents were also confused, but they speculated that the extra amount on the balance " was probably interest." (Simkus Dep. at 90:17-18.) On June 29, 2011 Mr. Simkus wrote to CPS, seeking information verifying his name in connection to the account. (Defs.' 56.1 SOF ¶ 29.) On September 2, 2011, CPS provided Mr. Simkus with the verification information on the account and informed him that the balance had increased to $11,220.79. (Pl.'s 56.1 SOF, Ex. J.)
Mr. Simkus argues that Defendants' retroactive charging of interest violates § 1692e and § 1692f of FDCPA. (Pl.'s MSJ at ¶ 5.) Each party seeks summary judgment on liability.
STANDARD OF REVIEW
Summary judgment is proper only when " 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). A genuine issue for trial exists when " the evidence is such that a reasonable jury could return a verdict for the nonmoving party." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S.Ct. 2505, 2510, 91 L.Ed.2d 202 (1986). This standard places the initial burden on the moving party to identify those portions of the record that " it believes demonstrate the absence of a genuine issue of material fact." Celotex Corp. v. Catrett, 477 U.S. 317, 323, 106 S.Ct. 2548, 2553, 91 L.Ed.2d 265 (1986) (internal quotations omitted). Once the moving party meets this burden of production, the nonmoving party " must go beyond the pleadings" and identify portions of the record demonstrating that a material fact is genuinely disputed. Id. ; Fed.R.Civ.P. 56(c). ...