United States District Court, N.D. Illinois, Eastern Division
MEMORANDUM OPINION AND ORDER
JOHNSON COLEMAN United States District Judge
Puncochar (“Puncochar”) filed a four count second
amended complaint (Dkt. 27) against Revenue Management of
Illinois Corporation (“RMIC”), Ronald R.
McLaughlin (“McLaughlin”), RMK Holdings, Inc.
(“RMK Holdings”), and Sue Patterson
(“Patterson”) alleging multiple violations of the
Fair Debt Collection Practices Act (“FDCPA”). 15
U.S.C. § 1692 et seq. RMIC and McLaughlin
(collectively, “RMIC Defendants”) and Puncochar
filed cross-motions for summary judgment. The RMIC Defendants
also filed a Rule 11 motion for sanctions. For the following
reasons, Puncochar's motion for summary judgment  is
denied, the RMIC Defendants' motion for summary judgment
 is granted, and the RMIC Defendants' motion for
sanctions  is denied.
following facts are undisputed unless otherwise indicated.
November 12, 2014, Puncochar incurred a debt of $108.10 to
Kurtz Ambulance Service, Inc. (“Kurtz”). (Dkt.
67-1 ¶ 2; Dkt. 70 ¶ 6). This debt (the “Kurtz debt”)
is the subject of this suit. (Dkt. 67-1 ¶ 2). Kurtz
passed the Kurtz debt on to RMK Holdings for collection.
(Dkt. 67-1 ¶ 3; Dkt. 70 ¶ 11). On April 23, 2015,
RMK Holdings forwarded the Kurtz debt to RMIC for collection.
(Dkt. 67-1 ¶ 4; Dkt. 70 ¶ 12). On or about April
24, 2015, McLaughlin, the RMIC owner and operator, (Dkt. 67-1
¶ 6), sent a dunning letter on RMIC letterhead to
Puncochar for the Kurtz debt. (Dkt. 67-1 ¶ 5; Dkt. 70
¶ 13). The letter contained the following:
The [Kurtz debt] has been referred to our office for
collection. Unless you notify this office within 30 days
after receiving this notice that you dispute the validity of
this debt or any portion thereof, this office will assume the
debt is valid . . . If you do not contact our office in the
time specified, we will proceed with the collection of this
account, which may include referring this account for legal
action or reporting this delinquency to the credit bureau . .
. This is an attempt to collect a debt and any information
obtained will be used for that purpose. (Dkt 65-1 at PDF p.
January 27, 2015, Puncochar filed for Chapter 13 bankruptcy.
(Dkt. 67-1 ¶ 1; Dkt. 70 ¶ 7). Puncochar did not
list the Kurtz debt, Kurtz, RMK Holdings, or RMIC in her
bankruptcy petition schedules. (Dkt. 67-1 ¶ 2). She also
did not include Kurtz or any of the defendants on the
bankruptcy service list. (Dkt. 53-4). On May 19, 2015,
Puncochar's counsel, Richard Meier, sent the RMIC
Defendants a letter in response to the dunning letter
informing them of possible FDCPA violations. (Dkt. 67-1
¶ 6; 53-3 at PDF p. 10). The letter attached a draft
complaint informing the RMIC Defendants that Puncochar was
involved in a bankruptcy proceeding. (53-3 at PDF pp. 11-13).
The RMIC Defendants immediately ceased all collection
activities. (Dkt. 67-1 ¶ 6). Kurtz and the defendants
never received notice of the bankruptcy proceedings prior to
the May 19 letter. (Dkt. 67-1 ¶ 7; Dkt. 53-4).
Holding's relationship with RMIC was governed by the
“Third Party Delinquent Accounts Receivable
Agreement.” (“RMK/RMIC Agreement”) (Dkt.
67-1 ¶ 8). The RMK/RMIC Agreement provides that
“RMK agrees all accounts placed with [RMIC] are valid
and legally enforceable debts and are not disputed or subject
to defense . . . or bankruptcy proceedings, unless otherwise
disclosed in writing by RMK or its clients.” (Dkt. 67-1
¶ 8; Dkt. 53-5). Any bankruptcy notice affecting an
account covered by the RMK/RMIC Agreement would be
communicated to RMIC so that any collection proceedings would
be terminated. (Dkt. 67-1 ¶ 9).
of their collection efforts on behalf of RMK Holdings, the
RMIC Defendants implemented several procedures to ensure
compliance with the FDCPA. First, the RMIC Defendants rely on
the RMIC/RMK Agreement which is meant to ensure that RMK will
not pass along any debt known to be the subject of a
bankruptcy proceeding. (Dkt. 67-1 ¶ 25). Next, the RMIC
Defendants provide debtors with a 30-day period to dispute a
debt. (Id.) Before filing any action following that
waiting period, RMIC searches TLO and Pacer. (Id.)
Finally, the RMIC Defendants subscribe to BAE Systems
Bankruptcy Notifications through which they are notified when
RMIC, a client, or an underlying creditor on an account are
listed in a bankruptcy. (Id.)
judgment is proper where the pleadings, depositions,
admissions and affidavits demonstrate that there is no
genuine issue as to any material fact and that the movant is
entitled to summary judgment as a matter of law. Fed.R.Civ.P.
56(a); Celotex Corp. v. Catrett, 477 U.S. 317,
322-23, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986). Summary
judgment is appropriate where the nonmoving party has failed
to make a sufficient showing on an essential element of his
case with respect to which it has the burden of proof.
Celotex, 477 U.S. at 322-23. Thus, “[s]ummary
judgment is appropriate if, on the record as a whole, a
rational trier of fact could not find for the non-moving
party.” Commercial Underwriters Ins. Co. v. Aires
Envtl. Servs., Ltd., 259 F.3d 792, 795 (7th Cir. 2001).
Court may impose sanctions on any attorney, law firm, or
party that violates Rule 11(b). Fed.R.Civ.P. 11(c)(1).
“The central goal of Rule 11 is to deter abusive
litigation practices.” Corley v. Rosewood Care
Ctr., Inc. of Peoria, 388 F.3d 990, 1013 (7th Cir.
Cross-motions for ...