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Keys v. Collection Professionals, Inc.

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

March 25, 2018

JAVARI KEYS, Plaintiff,



         This case involves a remarkably small amount of disputed charges, specifically $390, from five years ago, which have led to this federal case and the current cross-motions for summary judgment on Plaintiff Javari Keys' complaint, which alleges violations of the Fair Debt Collection Practices Act (“FDCPA”), 15 U.S.C. § 1692 et seq., and the Illinois Collection Agency Act (“ICAA”), 225 ILCS 452/1 et seq. For the reasons explained below, Keys' motion (Dkt. 27) is granted in part and denied in part, and Defendant Collection Professionals, Inc.'s cross-motion (Dkt. 34) is granted in part and denied in part.


         The following facts are drawn primarily from the parties' Local Rule 56.1 statements (Dkt. 29), (Dkt. 33), (Dkt. 39), and are largely undisputed unless otherwise noted.

         Plaintiff Javari Keys incurred charges for medical services on two accounts from Sarah Bush Lincoln Health System - Physicians First (“Physicians First”). (Dkt. 33) at ¶ 35. According to his declaration and deposition, Keys and his family visited Physicians First for personal purposes. (Dkt. 29-2) at ¶ 2; (Dkt. 33-1) (J. Keys Dep.) at 30:3-21. Keys could not pay two bills - one for $218 and one for $172 -- and so his accounts went into default. (Dkt. 29) at ¶ 7. While it held Keys' debts, Physicians First did not charge him interest. Id. at ¶ 16. In 2013, Physicians First assigned the defaulted debts to-or “placed them for collection” with- Defendant Collection Professionals, Inc. (“CPI”). Id. at ¶ 8. Specifically, CPI purchased one account with a balance due of $218 on September 24, 2013, and it purchased the second account with a balance due of $172 on October 16, 2013. (Dkt. 33) at ¶¶ 38, 42. CPI is a licensed debt collection agency in Illinois, and it acts as a “debt collector” as defined by the FDCPA. Id. at ¶¶ 2-3. There was no contract between CPI and Physicians First that allowed CPI to charge interest on Keys' accounts. Id. at ¶ 16.

         It is CPI's practice and policy to send an initial collection letter that includes validation language under § 1692g of the FDCPA and also notifies the consumer that balances remaining after 30 days “may have interest added to them as permitted by law.” (Dkt. 33) at ¶ 28. Internally, CPI refers to this as “SN10, ” and it is automatically generated for every new account. Id. at ¶ 39. Then, per its policy, CPI charges 5% interest 35 days after “placement of the account” and begins to report the account-both the principal debt and interest due-to the credit reporting agencies 60 days after “placement” if the account is not paid. Id. at ¶¶ 29-31. In line with these practices and policies, CPI sent Keys an SN10 on September 25, 2013 after receiving his first account, but the letter was returned to CPI and not received by Keys. Id. at ¶¶ 39, 41; see (Dkt. 29-4) (S. Edwards Dep.) at 11:16-18, 12:8-9. The return was recorded in CPI's notes for Keys' account with CPI. No SN10 was sent out regarding Keys' second account; CPI's system “suppressed” it because of the return of the previous letter. (Dkt. 33) at ¶ 43; (Dkt. 29-4) at 45:5-13. CPI's CEO, serving as its corporate representative, testified that it “could not send out letters to accounts if they're marked mail return. The letter gets suppressed. We're not sending letters to bad addresses.” (Dkt. 29-4) at 45:7-9. However, over the course of the next two years, CPI acquired different addresses for Keys and attempted to send him at least seven various other notices that referenced both accounts placed for collection. No other initial collection letters, or SN10s, were mailed. Id. at 11:16-14:9. Further, there is no dispute that CPI reported Keys' delinquent accounts to the credit reporting agencies, although, despite CPI's stated practice of reporting both the principal and interest due on such accounts, there is no evidence in the record that CPI reported anything other than the principal amounts due. See (Dkt. 33) at ¶ 44; (Dkt. 39) at ¶ 19.

         CPI sent Keys a notice dated October 15, 2015, and Keys received it. Id. at ¶ 48. The letter provided Keys' CPI account number and itemized Keys' two accounts (or “previous debts”) with Physicians First-the first with a principal balance of $218 and the second with a principal balance of $172. The letter also noted interest associated with those accounts, $12.57 and $9.92 respectively, making Keys' total “amount owed” $412.49. See (Dkt. 1-1) at 10 (Oct. 15, 2015 Letter); see also (Dkt. 29) at ¶¶ 13-15. The letter further stated: “[b]efore proceeding with our collection efforts we would like to request that you pay the entire amount due or call our office to make other arrangements.” Id. Keys did not contact CPI or pay the amount due. (Dkt. 33) at ¶¶ 49-50. Instead, Keys sought legal representation. Id. at ¶ 51.

         With the alleged debts still outstanding, in November 2015, a CPI collection agent recommended that litigation be initiated to collect the debt. Id. at ¶ 45. Because CPI has a policy not to report interest accrued on any debts considered for litigation, on November 23, 2015, CPI communicated two outstanding accounts for Keys to credit-reporting agency TransUnion without interest: (1) $218 and (2) $172, for a total of $390. (Dkt. 29) at ¶ 20; (Dkt. 33) at ¶¶ 20, 32, 46-47. In January 2016, CPI communicated the same two outstanding amounts and total debt of $390 to Experian. (Dkt. 29) at ¶ 22. Although Keys' counsel ordered his TransUnion credit report, Keys testified that he ordered his Experian report, which cost $11.50. The parties, however, dispute the purpose for which Keys ordered the Experian report. CPI argues that Keys ordered the report in preparation of filing bankruptcy; Keys argues that he ordered the report to verify the alleged debt held by CPI after receiving the October 2015 collection notice.

         Nevertheless, on August 30, 2016, Keys filed the instant lawsuit. See (Dkt. 1). In Count I of his complaint, Keys alleges that CPI violated three separate sections of the FDCPA: Keys contends that CPI added interest to his debt that was not authorized by Keys' contract with Physicians First or permitted by law in violation of 15 U.S.C. § 1692f and § 1692e(8) and then reported the debt without interest to TransUnion and Equifax, meaning that CPI misrepresented the amount of the debt by attempting to collect multiple amounts of the same debt in violation of 15 U.S.C. § 1692e. In Count II, Keys alleges that CPI violated the ICAA by attempting to collect interest to which it was not entitled and also by conveying varying balances due on the alleged debt to Plaintiff and the credit reporting agencies in violation of 225 ILCS 425/9(a). To date, Plaintiff has not made any payments on his alleged debt. (Dkt. 29) at ¶ 19. Plaintiff seeks $11.50 in actual damages for obtaining his credit report, statutory damages of $1, 000, and reasonable attorneys' fees on his FDCPA claim, and compensatory and punitive damages on his ICAA claim.


         The court shall grant summary judgment if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law. Fed.R.Civ.P. 56(c); see also Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986); Celotex Corp. v. Catrett, 477 U.S. 317, 324 (1986). A genuine issue of material fact exists if “the evidence is such that a reasonable jury could return a verdict for the nonmoving party.” Anderson, 477 U.S. at 248. The party seeking summary judgment has the burden of establishing the lack of any genuine issue of material fact. See Celotex Corp., 477 U.S. at 323. In ruling on a motion for summary judgment, the court must consider the record as a whole, in a light most reasonable to the non-moving party, and draw all reasonable inferences in favor of the non-moving party. Anderson, 477 U.S. at 255. To survive summary judgment, a party cannot rely on his pleadings and “must set forth specific facts showing that there is a genuine issue for trial.” Id. at 248. When there are cross motions, the court should “construe the evidence and all reasonable inferences in favor of the party against whom the motion under consideration is made.” Premcor USA, Inc. v. Am. Home Assurance Co., 400 F.3d 523, 526-27 (7th Cir. 2005).


         A. The Fair Debt Collection Practices Act Claim (Count I)

         The FDCPA was enacted “to eliminate abusive debt collection practices, to ensure that debt collectors who abstain from such practices are not competitively disadvantaged, and to promote consistent state action to protect consumers.” Jerman v. Carlisle, McNellie, Rini, Kramer & Ulrich LPA, 559 U.S. 573, 577 (2010) (citing 15 U.S.C. § 1692(e)); see also Henson v. Santander Consumer USA, Inc., 137 S.Ct. 1718, 1720 (2017) (the FDCPA aims to deter “wayward debt collection practices” that disrupt debtors' lives). A plaintiff who prevails on an FDCPA claim is entitled to “(1) any actual damage sustained by such person as a result of [a debt collector's failure to comply with the FDCPA], ” ...

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