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Pantoja v. Portfolio Recovery Associates LLC

United States District Court, Northern District of Illinois, Eastern Division

March 24, 2015



REBECCA R. PALLMEYER, United States District Judge.

Defendant Portfolio Recover Associates, LLC ("PRA"), a debt collector, brought a collection suit in Illinois state court against Plaintiff Manual Pantoja for a credit card debt allegedly owed by Plaintiff. On the day of trial, Defendant dismissed the suit, and the trial court later ordered Defendant to refund Plaintiff's appearance fee. Plaintiff alleges that these circumstances add up to a violation of the Fair Debt Collection Practices Act ("FDCPA"), 15 U.S.C. § 1692 et seq. In his lawsuit before this court, Plaintiff contends that Defendant filed the state court action under false pretenses, in violation of the FDCPA, because Defendant had no intention of actually proceeding to trial. Plaintiff also brings a claim under the Illinois Consumer Fraud and Deceptive Business Practices Act ("ICFA") premised on these the same events and theory of liability. Both parties have moved for summary judgment. For the reasons that follow, Defendant's motion [31] is granted and Plaintiff's motion [26] is denied.[1]


Plaintiff Manuel Pantoja lives in Melrose Park, Illinois and drives a truck for a living. (Def.'s Resp. [30] to Pl.'s Stat. of Mat. Facts [27], hereinafter "Pl.'s 56.1, " ¶ 1(a); Pantoja Dep., Ex. A. to Pl.'s 56.1, hereinafter "Pantoja Dep.", 13:24–14:1.) PRA is a Delaware limited liability company with its principal place of business in Norfolk, Virginia. (Id. ¶ 1(b).) PRA is a "debt collector" within the meaning of the FDCPA because it is in the business of purchasing defaulted consumer credit card accounts from banks and then attempting to recover those debts from account holders. See 15 U.S.C. § 1692a(6); (Def. Answer [13] to Compl. [1], ¶ 9.)

Sometime in 2007, Plaintiff opened a credit card account with HSBC Bank Nevada, NA ("HSBC"); he used the card for approximately four years for "general household purposes, " such as "eating, fueling, bathing, [and] living." (Pl.'s Resp. to Def. Interrog. 6, Ex. 4 to Def.'s 56.1 [30-4], ¶ 6; Pantoja Dep. at 38:19–39:10; 39:18–22.) By 2010, Plaintiff had incurred an unpaid balance of $5, 198.86 on the card. (See PRA Payment Demand Letter, Ex. A [30-1] to Def.'s Stat. of Mat. Facts [30], PRA0096.) PRA purchased Plaintiff's account from HSBC on August 24, 2010 as part of a portfolio of defaulted credit accounts. (See Knickerbocker Aff., Ex. 1 to State Court Complaint [1-1], Ex. 1 to Compl., ¶ 3.) The Purchase and Sale Agreement that HSBC and PRA negotiated as part of that sale applies to Plaintiff's account and contains the following relevant language:

2.2 The Purchased Accounts and Purchased Receivables shall not include accounts and receivables (hereinafter referred to as "Unqualified Accounts" and “Unqualified Receivables’’) which, as of the applicable date of the Sale File, are classified as follows: [categories of accounts likely not recoverable because debtor is bankrupt, deceased, subject to a fraud charge, disputed, etc[.]
2.3 Except as otherwise provided herein or in the case of a breach of the [HSBC's] warranties, representations or covenants pursuant to this Agreement, all Purchased Accounts and Purchased Receivables sold to [PRA] under this Agreement are sold and transferred without recourse as to their enforceability, collectability, or documentation. [PRA] has made an independent investigation as [PRA] deems to be warranted into the nature, enforceability, collectability and value of the Purchased Accounts and Purchased Receivables, and all other facts it deems material to such purchase, and is entering into the transactions herein provided for solely on the basis of that investigation and [PRA's] own judgment, and is not acting in reliance on any representation of, or information furnished by [HSBC], specifically including, but in no way limited to, that information contained in each Sale File, except as otherwise provided for herein.

(Purchase and Sale Agreement [28]; see Bills of Sale, Ex. A to Def.'s 56.1 at PRA0056, PRA00110–111.)

On June 18, 2013, Defendant, through its attorney, filed a lawsuit against Plaintiff in the Circuit Court of Cook County, Illinois. (See State Court Complaint, Ex. 1. to Compl. [1-1], 13-M1-135886, hereinafter "State Court Complaint, " 2.) The State Court Complaint alleged that Plaintiff had an unpaid credit card balance of $5, 198.86, that Defendant was HSBC's "successor in interest" to the account, and that Defendant demanded payment of the balance. (Id. at 3.) Defendant attached the affidavit of David L. Knickerbocker, then an employee of PRA, to support the Complaint's allegations. (See generally Knickerbocker Aff.) Mr. Knickerbocker’s affidavit states that he reviewed the business records of "[PRA] and those records transferred to [PRA] from HSBC Bank Nevada, N.A./Metris" before executing the affidavit, and that such records included Plaintiff's account information. (Knickerbocker Aff. ¶¶ 2–3.) Mr. Knickerbocker ended his employment with PRA on April 12, 2013; he was not deposed by either party. (Pl.'s Resp. to Def.'s 56.1 [38] ¶ 1.) Plaintiff filed an appearance in the state court case on July 23, 2013, and the case was scheduled for trial on August 6. (Def.'s Resp. to Pl.'s 56.1 ¶ 3(d)(ii).) On the day of trial, however, Defendant voluntarily withdrew the complaint. (Id.) The state trial court later ordered that Defendant refund Plaintiff's $186 appearance fee. (See Trial Court Order, Ex. 3 to Compl. [1-3].)

Plaintiff alleges in this court that Defendant's State Court Complaint was "inherently deceptive, false, and misleading because it is based on unverified information that PRA acquired 'as-is.'" (Compl. ¶ 48.) Further, Plaintiff alleges, "[i]t can be reasonably inferred that PRA voluntarily dismissed the lawsuit because it knew it could not meet its burden of proving that [Plaintiff] owed the debt by a preponderance of the evidence" (id. ¶ 53), and that such conduct entitles Plaintiff to relief under the FDCPA and the ICFA.


The court will grant a motion for summary judgment 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); Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247 (1986). The court "construe[s] all facts and draw[s] reasonable inferences in the light most favorable to the nonmoving party." Righi v. SMC Corp., 632 F.3d 404, 408 (7th Cir. 2011). The court will grant summary judgment against a party that does not produce evidence that would allow a reasonable jury to find in its favor on a material question. McGrath v. Gillis, 44 F.3d 567, 569 (7th Cir. 1995). Summary judgment "is the put up or shut up moment in a lawsuit, when a party must show what evidence it has that would convince a trier of fact to accept its version of the events." Springer v. Durflinger, 518 F.3d 479, 484 (7th Cir. 2008) (internal quotation marks and citation omitted).

I. FDCPA Sections 1692e(2) and 1692e(10)

In Count I, Plaintiff alleges that Defendant violated 15 U.S.C. § 1692e(2) and (10) by filing the State Court Complaint based on unverified account information and with no intention of attempting to prove its case at trial. Plaintiff points to Defendant's Purchase and Sale agreement with HSBC, which contains language that Plaintiff interprets as a “disclaim[er]” of the “accuracy of its records and information." (Compl. ¶ 44; see Purchase and Sale Agreement, Ex. A to Def.'s 56.1 at PRA0056 (PRA agrees to purchase the defaulted credit accounts from HSBC "without recourse as to their enforceability, collectability, or documentation.").) Without accurate information to assess the validity of the debt, Plaintiff argues, Defendant's decision to file a lawsuit in state court "perpetrates a fraud on the consumer" in violation of the FDCPA because Defendant would never be able to prove the validity of the debt owed. (Id.; see Id. ¶¶ 45–57.) In other words, ...

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