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Washington v. Portfolio Recovery Associates, LLC

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

July 11, 2017

BRENDA WASHINGTON, Plaintiff,
v.
PORTFOLIO RECOVERY ASSOCIATES, LLC and FREEDMAN ANSELMO LINDBERG, LLC, Defendants.

          MEMORANDUM OPINION AND ORDER

          Robert M. Dow, Jr. United States District Judge.

         On September 29, 2016, the Court granted summary judgment in favor of Plaintiff on her claim that Freedman's March 20, 2014 wage deduction notice violated 15 U.S.C. § 1692c(a)(2) and in favor of Defendants on (1) Plaintiff's claim that Defendant Freedman's February 13, 2014 letter to Plaintiff's counsel violated 15 U.S.C. §§ 1692e, 1692e(5), 1692(e)(10), 1692f and 1692f(1); and (2) Plaintiff's claim that Defendant Freedman's March 20, 2014 wage deduction notice violated 15 U.S.C. §§ 1692e, 1692e(5), 1692(e)(10), 1692f and 1692f(1). See [99]. Both Plaintiff and Defendants move for reconsideration of parts of the Court's summary judgment order. See [111], [115]. For the reasons explained below, both motions for reconsideration [111], [115], are denied. This case is set for status hearing on July 25, 2017 at 9:45 a.m.

         I. Background

         The full background of this case is set forth in the Court's summary judgment order, knowledge of which is assumed here. See [99] at 2-5. Facts relevant to resolving the parties' motions are set forth in the analysis below.

         II. Legal Standard

         Rule 59(e) of Federal Rules of Civil Procedure allows a party to direct the court's attention to a “manifest error of law or fact or to newly discovered evidence.” United States v. Resnick, 594 F.3d 562, 568 (7th Cir. 2010). “A ‘manifest error' occurs when the district court commits a ‘wholesale disregard, misapplication, or failure to recognize controlling precedent.'” Burritt v. Ditlefsen, 807 F.3d 239, 253 (7th Cir. 2015) (quoting Oto v. Metro. Life Ins. Co., 224 F.3d 601, 606 (7th Cir. 2000)).

         III. Analysis

         A. Plaintiff's Motion for Reconsideration

         On February 13, 2014, Freedman sent a letter to Plaintiff's attorney stating the following:

Pursuant to your request, we enclose a copy of the contract and/or payment history and/or supporting documentation to validate this particular issue. Please note that the original creditor is GE CAPITAL RETAIL BANK at PC BOX 960061, ORLANDO, FL 32896-0061, my client [is] now the assignee of this particular creditor. After your review, I invite you to contact our office in hopes of amicable resolution of this matter without further inconvenience to your client. Further, as of the date of this letter, the balance claimed is $1, 035.60. Because of interest, late charges, and other charges that may vary from day to day, the amount due on the day your client may pay could be greater. Hence, if your client pays the amount shown above, an adjustment may be necessary after we receive your client's check, in which event we will inform you before depositing the check for collection. It is important that you contact this office regarding this account.

[94-1] at 2 (emphasis added).

         Plaintiff argues that the Court erred by granting summary judgment for Defendants on her claim that the letter violated 15 U.S.C. §§ 1692e, 1692e(5), 1692(e)(10), 1692f and 1692f(1) by falsely representing that Defendants could impose late charges on Plaintiff's debt when, as a matter of law and contract, they could not.

         15 U.S.C. §§ 1692f and 1692f(1) prohibit “[a] debt collector [from] us[ing] unfair or unconscionable means to collect or attempt to collect any debt, ” including “[t]he collection of any amount (including any interest, fee, charge, or expense incidental to the principal obligation) unless such amount is expressly authorized by the agreement creating the debt or permitted by law.” (Emphasis added.) 15 U.S.C. §§ 1692e, 1692e(5), and 1692(e)(10) prohibit the use of “any false, deceptive, or misleading representation or means in connection with the collection of debt, ” including “[t]he threat to take any action that cannot legally be taken or that is not intended to be taken, ” and “[t]he use of any false representation or deceptive means to collect or attempt to collect any debt or to obtain information concerning a consumer.”

         Plaintiff's first argument on reconsideration is that under Section 1692(f)(1), the burden was on Defendants to show that its late charges were “expressly authorized by the agreement creating the debt or permitted by law.” [115] at 3. In support of her argument, Plaintiff relies on the general proposition set forth in Fed'l Trade Comm'n v. Morton Salt Co., that “the burden of proving justification or exemption under a special exception to the prohibitions of a statute generally rests on one who claims its benefits.” 334 U.S. 37, 44-45 (1948) (interpreting antidiscrimination provision of Robinson-Patman Price Discrimination Act). Plaintiff also relies on a Third Circuit case interpreting another section of the FDCPA. See Evankavitch v. Green Tree Servicing, LLC, 793 F.3d 355, 362-63 (3d Cir. 2015) (debt collector has burden of proving exemption from 15 U.S.C. § 1692b(3), which prohibits a debt collector from “communicating with any person other than the consumer for the purpose of acquiring location information about the consumer . . . more than once unless requested to do so by such person or unless the debt collector reasonably believes that the earlier response of such person is erroneous or incomplete and that such person now has correct or complete location information”). The Court is not persuaded to follow Evankavitch because it is inconsistent with Seventh Circuit case law addressing who bears the burden of proving that the “unless” clause of Section 1692f of the ...


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