United States District Court, N.D. Illinois, Eastern Division
MEMORANDUM OPINION AND ORDER
JOHN J. THARP, Jr., District Judge.
Edward Hayward ("Hayward") filed an action against Blatt, Hasenmiller, Leibsker & Moore, LLC, ("BHLM") and Portfolio Recovery Associates ("PRA") for violating § 1692i(a)(2) of the Fair Debt Collection Practices Act ("FDCPA"), 15 U.S.C. § 1692 et seq. Hayward alleges that BHLM conducted abusive forum shopping when it filed a wage deduction summons in a venue where Hayward did not reside. Hayward also alleges that PRA engaged in abusive forum shopping when it directed BHLM to file the wage deduction summons. Currently pending before the Court is BHLM's motion for judgment on the pleadings, which is joined by PRA. See Mot., Dkt. 24; Mot., Dkt. 27. For the reasons outlined below, the Court grants the motion to dismiss with prejudice.
Plaintiff Edward Hayward resides in Oak Lawn, Illinois. Compl., Dkt. 1, at ¶ 15. Defendant Blatt, Hasenmiller, Leibsker & Moore, LLC, is a law firm that regularly uses the mails or the telephone to collect, or attempt to collect, delinquent consumer accounts. Id. at ¶ 6. Defendant Portfolio Recovery Associates is a corporation that regularly uses the mails or the telephone to collect, or attempt to collect, delinquent consumer accounts. Id. at ¶ 8.
On May 22, 2013, BHLM, on behalf of PRA, filed a suit (the "collection action") against Hayward in the Circuit Court of Cook County, Illinois, in an attempt to collect an unpaid consumer debt. Id. at ¶¶ 9-10. The collection action was filed at the Richard J. Daley Center Courthouse, which serves Cook County's First Municipal District. Id. at ¶¶ 11-12. Oak Lawn, Illinois, where Hayward lives, is within the Circuit Court of Cook County's Fifth Municipal District and is served by the Bridgeview Courthouse. Id. at ¶ 16-17. The collection action resulted in a judgment entered against Hayward on September 13, 2013. On April 24, 2014, BHLM, directed by PRA, filed a proof of service of a wage deduction summons ("the wage garnishment summons") to enforce its judgment in the collection action. As part of the same collection case, this wage garnishment summons was also filed at the Richard J. Daley Center Courthouse for the First Municipal District, rather than the Bridgeview Courthouse for the Fifth Municipal District. Id. ¶ 30, 38.
Hayward then filed suit against BHLM in this Court, alleging that BHLM and PRA violated the FDCPA by filing the wage garnishment summons in a municipal district where Hayward did not reside. BHLM has filed a motion for judgment on the pleadings, arguing that Hayward's claim is time-barred and should be dismissed, because the only FDCPA violation that Hayward has alleged was the filing of the collection action on May 22, 2013, more than one year before this case was filed.
The relevant provision of the FDCPA provides: "Any debt collector who brings any legal action on a debt against any consumer shall... bring such action only in the judicial district or similar legal entity-(A) in which such consumer signed the contract sued upon; or (B) in which such consumer resides at the commencement of the action." 15 U.S.C. § 1692i(a)(2). The statute of limitations for the FDCPA is "one year from the date on which the violation occurs." Id. § 1692k(d). Hayward alleges that the defendants violated the FDCPA when they filed the original collection action on May 22, 2013, and when they filed the wage garnishment summons on April 24, 2014. Hayward concedes that more than a year passed between the filing of the collection action and the filing of this FDCPA complaint, so the parties' only dispute is whether the later wage garnishment summons is a separate violation of the FDCPA.
The parties agree that Hayward qualifies as a consumer, that BLHM and PRA qualify as debt collectors, and that an affidavit for wage garnishment is a legal action on a debt within the meaning of the FDCPA. The parties contest whether a wage garnishment proceeding is a legal action on a debt against a consumer within the meaning of the FDCPA. BHLM maintains that a wage garnishment proceeding is not against the consumer, but is rather against the third-party employer. Hayward maintains, however, that a wage garnishment proceeding is an action against both the consumer and the employer, and is therefore subject to the venue provision of the FDCPA. Pl.'s Resp., Dkt. 41, at 7.
The parties agree that the statutory text does not define the term "against the consumer" and so does not answer the question of whether a wage garnishment action is against the consumer or the third-party employer. See also Smith, 714 F.3d at 75 ("The text of the FDCPA provides no definition of that phrase and thus no guidance on the issue."). Accordingly, the issue turns on the nature of the state law garnishment proceeding; the court must consider whether Illinois law treats a wage garnishment proceeding as an action against the debtor or against the employer. BHLM argues that in Illinois, wage garnishment proceedings are against the third-party employer and not the consumer. Hayward counters that because garnishment targets the consumer's wages, which the employer has no beneficial interest in, and because Illinois law requires that judgment creditors provide notice of garnishment proceedings to debtors, a wage garnishment proceeding in Illinois is at the very least a hybrid action against both the garnishee (the employer) and the consumer. Holding otherwise, he maintains, would thwart the purpose of the FDCPA.
Illinois law defines wage garnishment proceedings as supplementary proceedings prosecuted for the purpose of enforcing a judgment already entered. See 735 ILCS 5/2-1402(a). As in all civil actions in Illinois, the general provisions of the Illinois Code of Civil Procedure apply to wage garnishment proceedings except as otherwise provided by other statutes specifically governing wage garnishment. See id. at 5/1-108(a)-(b). Illinois Supreme Court Rule 277 is a separate rule that further governs wage garnishment proceedings, and to the extent Rule 277 governs procedure, it controls. Id. at 5/1-108(b); see also In re Riverwoods Park Dist., 247 Ill.App.3d 702, 706, 617 N.E.2d 464, 467 (Ill.App.Ct. 1993); Bank of Hickory Hills v. Hammann, 108 Ill.App.3d 834, 838, 439 N.E.2d 1048, 1052 (Ill.App.Ct. 1982). Rule 277 expressly distinguishes between an action against a third party and an action against a judgment debtor and prescribes different venue rules as to each, a fact that undermines Hayward's theory that a garnishment proceeding is a "hybrid" action against both: "A supplementary proceeding against a third party must, and against the judgment debtor may, be commenced in a county of this State in which the party against whom it is brought resides...." ILCS S.Ct. R. 277(d). An employer of the judgment debtor is indisputably a "third party" under the rule, which it defines to include anyone other than the judgment debtor who is "indebted to the judgment debtor, " ILCS S.Ct. R. 277(a), so there can be no dispute that an employer of the judgment debtor is a "third party" under subparagraph (d). It follows, then, that Rule 277 must be read to provide that an action to garnish wages that an employer owes to a judgment debtor is an action against the employer rather than against the judgment debtor.
Article XII of the Illinois Code of Civil Procedure imposes additional procedural requirements for wage garnishment proceedings. See 735 ILCS 5/12-801, et. seq. The wage garnishment summons is issued against the employer only and imposes upon the employer a duty to respond, in writing and under oath, to interrogatories designed "to elicit all the information necessary to determine the proper amount of non-exempt wages." Id. at 5/12-805(a); see also ILCS S.Ct. R. 277(b) (providing that "[t]he supplementary proceeding shall be commenced by the service of a citation on the party against whom it is brought"). The judgment debtor is entitled to receive a wage deduction notice and the employer's completed interrogatories. Id. at 5/12-805(b). Both the judgment creditor and the debtor each have the right to contest the truth or sufficiency of the employer's answer, and the judgment debtor may request a hearing to dispute the wage deduction if it includes wages the debtor believes are exempt. Id. at 5/12-811(a)-(b). A successful wage garnishment proceedings results in a judgment entered against the employer and a lien on wages due to the judgment debtor/employee. Id. at 5/12-808(b), (e). The costs of the wage garnishment proceedings are charged to the judgment debtor unless the court determines that costs incurred by the judgment creditor were improperly incurred. Id. at 5/12-814(a).
The requirements outlined above compel the conclusion that garnishment proceedings are actions against the third-party employer rather than against the debtor/employee. First, wage garnishment proceedings must be commenced in the venue where the third party resides, regardless of where the judgment debtor resides. See ILCS S.Ct. R. 277(d). Second, the summons imposes an affirmative duty on the employer to act: the employer must respond to the summons, answer a series of interrogatories, and ensure the judgment debtor receives a copy of the necessary notice materials. Id. at 5/12-805(a)-(c). Third, and by contrast, a garnishment proceeding imposes no duties or obligation on the judgment debtor; the judgment debtor is neither required to respond nor to become involved in the proceedings whatsoever. See id. at 5/12-811(a). Fourth, if the judgment debtor seeks to participate in the garnishment proceeding, it is only permitted to litigate the issue of wage exemption, not the validity of the underlying debt. Id. at 5/12-811(b). Fifth, the judgment that results from wage garnishment proceedings is entered against the employer, rather than the consumer. Id. at 5/12-808(b). Finally, the relevant rule governing such actions describes the proceeding as being "against" the employer. See ILCS S.Ct. R. 277(a).
Hayward argues that the 1990 Amendments of the Illinois Code of Civil Procedure, which require notice and permit limited participation by debtors, support her characterization of garnishment proceedings as actions against the consumer. These provisions include requirements to provide judgment debtors with notice of, and the right to participate in, wage garnishment proceedings. See Act of Sept. 6, 1990 (the "1990 Amendments"), Pub. Act 86-1268, 1990 Ill. Laws 2197. The 1990 Amendments, for example, gave judgment debtors the right to contest the truth or sufficiency of the employer's answer and provided that "no deduction order shall be entered in favor of the judgment creditor unless the affidavit filed by the judgment creditor certifies that a copy of the wage deduction notice has been mailed to the judgment debtor." ...