Searching over 5,500,000 cases.


searching
Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.

Infante v. Portfolio Recovery Associates, LLC

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

June 6, 2017

VICTORIA INFANTE, Plaintiff,
v.
PORTFOLIO RECOVERY ASSOCIATES, LLC, Defendant.

          MEMORANDUM OPINION AND ORDER

          JOHN Z. LEE United States District Judge.

         Plaintiff Victoria Infante (“Plaintiff”) brought this action against Defendant Portfolio Recovery Associates, LLC (“Defendant”), alleging a violation of the Fair Debt Collection Practices Act, 15 U.S.C. § 1692 et seq. After Defendant moved for summary judgment, Plaintiff voluntarily dismissed her claim, and Defendant thereafter moved for sanctions under Rule 11. The Court referred Defendant's motion to Magistrate Judge M. David Weisman, who recommended that the motion be denied. For the reasons that follow, the Court adopts Magistrate Judge Weisman's report and recommendation [97], overrules Defendant's objections [100], and denies Defendant's motion [73].

         Factual and Procedural Background

         Plaintiff defaulted on a Synchrony Bank consumer credit card account. Am. Compl. ¶¶ 9-10, ECF No. 7. Defendant allegedly purchased Plaintiff's debt and thereafter tried to collect it from Plaintiff. Id. ¶¶ 11-12. In response, Plaintiff informed Defendant in June 2015 that she disputed the debt. Id. ¶ 12. Plaintiff claims that, despite informing Defendant of the disputed nature of the debt, Defendant failed to communicate this information to Experian in July 2015 in violation of 15 U.S.C. § 1692e(8). Id. ¶ 17. Her basis for this allegation is an Experian report dated July 14, 2015, which does not indicate that her debt was disputed. Id., Ex. D.

         Plaintiff filed her First Amended Complaint in this action on November 15, 2015. On January 21, 2016, prior to filing an answer to the complaint, Defendant shared internal documentation with Plaintiff that, in Defendant's view, established that it had in fact informed Experian (along with TransUnion and Equifax) on July 8, 2015, that Plaintiff's debt was disputed. Def.'s Objs. 1, ECF No. 100; see Def.'s Mot. Sanctions, Ex. A, ECF No. 74. Then, in February 2016, Plaintiff produced a TransUnion report from July 16, 2015, that indicated her debt was disputed. Def.'s Objs. at 2; see Def.'s Mot. Sanctions, Ex. B, ECF No. 75. Finally, in March 2016, Defendant served an initial Rule 11 motion on Plaintiff, attaching a declaration from one of Defendant's executives authenticating its internal records that Defendant had in fact reported to Experian (along with TransUnion and Equifax) on July 8, 2015, that Plaintiff's debt was disputed. Def.'s Objs. at 2; see Def.'s Mot. Sanctions, Ex. C, ECF No. 76.

         Defendant thereafter filed its initial Rule 11 motion in April 2016, at which time the Court dismissed the motion without prejudice and granted Defendant leave to refile after moving for summary judgment. Defendant moved for summary judgment in September 2016. In October 2016, Plaintiff filed a suggestion of bankruptcy, following which she moved to voluntarily dismiss the case. The Court granted the motion but later reopened the case in order to permit Defendant to file its present motion for sanctions. In its motion, Defendant states that Plaintiff's claim lacked a factual basis. Def.'s Mot. Sanctions ¶ 30. It further asserts that Plaintiff's counsel failed to adequately investigate the factual basis of the claim and pursued the claim despite its lack of a factual basis. Id. ¶¶ 30-32.

         The Court referred the motion to Magistrate Judge Weisman, who recommended that the motion be denied. See Report & Rec., ECF No. 97. He explained that the evidence that Defendant produced against Plaintiff's claim did not establish that it was meritless such that Plaintiff should have dismissed the claim earlier. Id. at 3. “Given this contradictory evidence, ” he reasoned, “plaintiff and her counsel were not required blindly to accept defendant's version of the facts.” Id. He noted that the Experian report “squarely disputed” Defendant's representations, and that “[b]ased on the divergence of information that the parties possessed, plaintiff was entitled to investigate the veracity of the relevant facts through the discovery process without running afoul of Rule 11.” Id.

         Legal Standard

         The imposition of sanctions is a dispositive matter for which magistrate judges make a recommendation that district courts review de novo. See Cleversafe, Inc. v. Amplidata, Inc., 287 F.R.D. 424, 431 (N.D. Ill. 2012). The Seventh Circuit has further articulated the de novo standard:

De novo review requires the district judge to decide the case based on an independent review of the evidence and arguments without giving any presumptive weight to the magistrate judge's conclusion. The district judge is free, and encouraged, to consider all of the available information about the case when making this independent decision. A district judge may be persuaded by the reasoning of a magistrate judge or a special master while still engaging in an independent decision-making process.

Mendez v. Republic Bank, 725 F.3d 651, 661 (7th Cir. 2013).

         Analysis

         Defendant seeks sanctions under Rule 11 and 28 U.S.C. § 1927.[1] Rule 11 states, in pertinent part, that “[b]y presenting to the court a pleading, written motion, or other paper- whether by signing, filing, submitting, or later advocating it-an attorney or unrepresented party certifies to the best of the person's knowledge, information, and belief, formed after an inquiry reasonable under the circumstances . . . [that] the factual contentions have evidentiary support.” Fed.R.Civ.P. 11(b)(3). In determining if sanctions for violating Rule 11 are warranted, “[t]he court must ‘undertake an objective inquiry into whether the party or his counsel should have known that his position is groundless.'” Cuna Mut. Ins. Soc. v. Office & Prof'l Emps. Int'l Union, Local 39, 443 F.3d 556, 560 (7th Cir. 2006) (quoting Nat'l Wrecking Co. v. Int'l Bhd. of Teamsters, Local 731, 990 F.2d 957, 963 (7th Cir. 1993)). A number of factors bear on the reasonableness of an inquiry into factual allegations, including

[w]hether the signer of the documents had sufficient time for investigation; the extent to which the attorney had to rely on his or her client for the factual foundation underlying the pleading, motion or other paper; whether the case was accepted from another attorney; the complexity of the facts and the attorney's ability to do a sufficient pre-filing ...

Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.