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Evans v. Portfolio Recovery Associates, LLC

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

November 20, 2016




         Katherine Evans has filed an action under the Fair Debt Collection Practices Act (FDCPA) against Portfolio Recovery Associates, LLC (PRA). Evans alleges that PRA violated the FDCPA by reporting to a credit agency that Evans failed to pay her credit card debt without also disclosing that Evans disputed the debt. Evans has moved for summary judgment, and PRA has filed a cross motion for summary judgment.


         Evans obtained an Avenue credit card that was financed by World Financial Network Bank. Evans used this card to purchase "clothes, purses, underwear, " and similar personal items. Pl.'s Mot. for Summ. J., Ex. B (Evans Dep.) at 124:8-9. Due to a change to her financial circumstances, Evans could not pay her credit card debt, and the debt went into default.

         PRA is licensed as a collection agency in the State of Illinois. On April 23, 2013, PRA purchased Evans's defaulted account. It sent Evans collection letters for several months reporting that her Avenue balance of $1, 297.87 was due. Evans eventually retained attorneys from Debtors Legal Clinic. When Evans reviewed her credit report with her attorneys, she told them she did not believe the amount of $1, 297.87 was accurate because her credit limit had been only $400. On March 27, 2014, Debtors Legal Clinic faxed a letter to PRA on Evans's behalf that included the following statement: "This client regrets not being able to pay, however, at this time they are insolvent, as their monthly expenses exceed the amount of income they receive, and the amount reported is not accurate. If their circumstances should change, we will be in touch." Def. Resp. to Pl.'s Stat. of Material Facts, Ex. C.

         In December 2014, PRA reported Evans's debt to Experian, a consumer reporting agency. PRA failed to communicate to Experian, however, that Evans had disputed the amount reported as her debt. Evans has filed this lawsuit claiming that PRA's actions violated the FDCPA.


         A party is entitled to summary judgment if it "shows that there is no genuine dispute as to any material fact and [it] is entitled to judgment as a matter of law." Fed.R.Civ.P. 56(a). On cross motions for summary judgment, the court assesses whether each movant has satisfied the requirements of Rule 56. See Cont'l Cas. Co. v. Nw. Nat'l Ins. Co., 427 F.3d 1038, 1041 (7th Cir. 2005). "As with any summary judgment motion, we review cross-motions for summary judgment construing all facts, and drawing all reasonable inferences from those facts, in favor of the non-moving party." Laskin v. Siegel, 728 F.3d 731, 734 (7th Cir. 2013) (internal quotation marks omitted).

         Section 1692e of the FDCPA states that "[a] debt collector may not use any false, deceptive, or misleading representation or means in connection with the collection of any debt." 15 U.S.C. § 1692e. Evans contends that PRA violated this provision. PRA contends that Evans cannot prove that it was a debt collector, that the debt meets the FDCPA's definition of that term, or that it knowingly made a materially false, deceptive, or misleading representation. PRA also argues that it is protected from liability by the FDCPA's bona fide error provision. Finally, it contends that Evans lacks standing to sue.

         A. Consumer debt

         A "debt" within the meaning of the FDCPA is an obligation arising from a transaction that was primarily for personal, family or household purposes. 15 U.S.C. § 1692a(5). As indicated earlier, Evans testified that she used her credit card to purchase clothes, purses, underwear, and similar personal items. PRA offers no evidence to call Evans's testimony into question. The Court concludes that no reasonable jury could find that the obligation in question did not involve a debt within the meaning of the FDCPA.

         B. Debt collector

          The FDCPA defines a "debt collector" as "any person who uses any instrumentality of interstate commerce or the mails in any business the principal purpose of which is the collection of any debts, or who regularly collects or attempts to collect, directly or indirectly, debts owed or due or asserted to be owed or due another." 15 U.S.C. § 1692a(6). PRA is licensed as a collection agency. And it has admitted in its answer to Evans's complaint that "in certain circumstances and in certain instances, it acts as a 'debt collector' as defined by the FDCPA . . . ." Answer ¶ 3. The only basis for PRA's hedging on this point was its claimed lack of knowledge of whether Evans's debt was a consumer debt. See Id. This uncertainty having been eliminated via undisputed evidence as discussed in the preceding section, the basis for PRA's hedging is now gone. PRA was a debt collector; no reasonable jury could find otherwise.

         C. Use of a false, misleading, or ...

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