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Canham v. Fair Collections & Outsourcing, Inc.

United States District Court, N.D. Illinois, Eastern Division

August 13, 2014

THOMAS J. CANHAM, Plaintiff,
v.
FAIR COLLECTIONS & OUTSOURCING, INC., Defendant.

MEMORANDUM OPINION AND ORDER

MILTON I. SHADUR, Senior District Judge.

Thomas Canham ("Canham") brings this action against Fair Collections & Outsourcing, Inc. ("Fair Collections"), asserting (1) that in violation of the Fair Debt Collection Practices Act, 15 U.S.C. § 1692 ("Section 1692"), and the Illinois Collection Agency Act, 225 ILCS 425/9 ("Section 425/9"), Fair Collections tried to collect an amount from him greater than was actually due and also (2) that Fair Collections violated the Fair Credit Reporting Act, 15 U.S.C. § 1681s-2(b) ("Section 1681s-2(b)"), by reporting an inaccurate debt to credit bureaus. To understand the basic nature of those claims, a brief recap of their background follows.[1]

After Berkshires at Hoffman Estates ("Berkshires") evicted Canham for nonpayment of rent and secured a judgment against him for the balance due, it hired Fair Collections to recover not only the judgment amount but also additional fees and rent for the months that Canham remained in his apartment following the judgment of eviction. Canham contends that his underlying debt to Berkshires could not have exceeded the amount of the judgment against him, so that Fair Collections violated the cited statutes by attempting to collect a debt that was greater than the amount actually due and then reporting that greater amount to credit bureaus.[2]

Fair Collections has now filed a Fed.R.Civ.P. ("Rule") 56 motion for summary judgment on all counts. Its motion is granted for the reasons set out more fully below.

Summary Judgment Standard

Every Rule 56 movant bears the burden of establishing the absence of any genuine issue of material fact ( Celotex Corp. v. Catrett , 477 U.S. 317, 322-23 (1986)). For that purpose courts consider the evidentiary record in the light most favorable to nonmovants and draw all reasonable inferences in their favor ( Lesch v. Crown Cork & Seal Co. , 282 F.3d 467, 471 (7th Cir. 2002)). Courts "may not make credibility determinations, weigh the evidence, or decide which inferences to draw from the facts" in resolving motions for summary judgment ( Payne v. Pauley , 337 F.3d 767, 770 (7th Cir. 2003)). But a nonmovant must produce more than "a mere scintilla of evidence" to support the position that a genuine issue of material fact exists, and "must come forward with specific facts demonstrating that there is a genuine issue for trial" ( Wheeler v. Lawson , 539 F.3d 629, 634 (7th Cir. 2008)). Ultimately summary judgment is warranted only if a reasonable jury could not return a verdict for the nonmovant ( Anderson v. Liberty Lobby, Inc. , 477 U.S. 242, 248 (1986)). What follows is a longer summary of the relevant facts.

Statement of Facts[3]

Canham leased a residential apartment from Berkshires in December 2010 (¶ 7). Terms of the lease (1) empowered Berkshires to evict Canham if he defaulted on his rent payments, (2) made Canham liable for monthly rent and utilities if he remained in the apartment after eviction and (3) also made Canham liable for Berkshires' attorneys' fees associated with his default on rental payments (¶¶ 12-14). On August 19, 2011 Berkshires obtained a judgment evicting Canham for his failure to pay rent and awarding Berkshires $3, 540.59 in damages for his default on the lease (¶ 15). Following that judgment of eviction Canham remained in the apartment until October 10, 2011 (¶ 16, Ex. F). Berkshires then prepared a final account statement ("Account Statement") asserting that Canham owed it $6, 224.87, including not just the amount of the judgment but also its legal fees and post-judgment additional rent and utilities costs (¶¶ 19, 21).

Berkshires hired Fair Collections to recover Canham's debt as calculated in the Account Statement (¶ 20), and Fair Collections then sent a December 9, 2011 letter to Canham requesting payment of the $6, 224.87 (Ex. J).[4]Canham initially challenged that amount on the sole basis that it exceeded the $3, 540.59 judgment against him (¶¶ 25-26), though his current filing now acknowledges that he owed Berkshires more than the judgment amount - but, he says, owed less than the $6, 224.77 figure (C. Mem. 6-9).

Fair Collections investigated Canham's initial response by verifying with Berkshires that the $6, 224.87 amount sought accurately reflected the debt Berkshires claimed in the Account Statement (¶¶ 27-29). Thereafter Fair Collections reported to credit bureaus that Canham had an outstanding debt for that amount (¶ 30). In November 2012 Canham filed this lawsuit, claiming that he owed Berkshires less than $6, 224.87 and that Fair Collections had violated Sections 1692 and 425/9 by seeking to collect that amount and had violated Section 1681 by reporting that figure to credit bureaus.

Canham's Section 1692 Claims

Canham first contends that Fair Collections violated three subparts of Section 1692: 1692e, 1692f and 1692g. Section 1692e provides in pertinent part:

A debt collector may not use any false, deceptive, or misleading representation or means in connection with the collection of any debt. Without limiting the general application of the foregoing, the following conduct is a violation of this section:...
(2) The false representation of-
(A) the character, amount, or legal status of any debt;
* * *
(10) The use of any false representation or deceptive means to collect or attempt to collect any debt or to obtain information concerning a consumer....

Section 1692f states in part:

A debt collector may not use unfair or unconscionable means to collect or attempt to collect any debt. Without limiting the general application of the foregoing, the ...

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