United States District Court, N.D. Illinois, Eastern Division
MEMORANDUM OPINION AND ORDER
S. Shah, United States District Judge.
Mehdi Abdollahzadeh brings this action against the Mandarich
Law Group for mailing a collection letter that did not inform
him that the expiration of the statute of limitations
prevented MLG from suing to collect the debt and for filing a
state-court action against him on a time-barred debt, in
violation of the Fair Debt Collection Practices Act, 15
U.S.C. §§ 1692 et seq. The parties filed
cross-motions for summary judgment. See , .
For the following reasons, plaintiff's motion for summary
judgment is denied, and defendant's motion for summary
judgment is granted.
judgment is appropriate 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(a).
A genuine dispute as to any material fact exists if
“the evidence is such that a reasonable jury could
return a verdict for the nonmoving party.” Anderson
v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). The
party seeking summary judgment has the burden of establishing
that there is no genuine dispute as to any material fact.
See Celotex Corp. v. Catrett, 477 U.S. 317, 323
(1986). A court must view all facts and reasonable inferences
in the light most favorable to the non-moving party. Roh
v. Starbucks Corp., 881 F.3d 969, 973 (7th Cir. 2018).
On cross-motions for summary judgment, a court must draw
inferences “in favor of the party against whom the
motion under consideration [was] made.” Hess v.
Reg-Ellen Mach. Tool Corp., 423 F.3d 653, 658 (7th Cir.
2005) (citation omitted). Cross-motions must be evaluated
together; the court may not grant summary judgment for either
side unless the admissible evidence as a whole-from both
motions-establishes that no material facts are in dispute.
Davis v. Time Warner Cable of Southeastern Wis.,
L.P., 651 F.3d 664, 671 (7th Cir. 2011).
opened a credit account in 1998 and he incurred charges for
personal, family, and household purposes.  ¶
Almost twelve years later, Abdollahzadeh defaulted on that
debt. Id. ¶ 8. Several years after the
charge-off date, a debt-buying entity named CACH, LLC
purchased Abdollahzadeh's debt from the seller pursuant
to a Loan Sale Agreement. Id. ¶¶ 10, 13;
[74-1] ¶ 7. Since CACH's parent corporation had
retained MLG for debt collection, [74-1] ¶ 13, CACH
placed the debt with MLG for collection.  ¶ 17.
At the time of placement, CACH provided MLG a copy of the
Bill of Sale, the seller's electronic transfer file for
the account called “Schedule 1, ” and CACH's
document called the Account Information Report. [74-1]
¶¶ 9-10. Schedule 1 included information about the
account, such as the account holder's name, the account
number, the open date, the balance, the date and amount of
the last payment, the interest rate, the charge-off date, and
the balance at the charge-off date. Id. ¶ 11.
The Account Information Report, which CACH created using its
proprietary software, contained similar information as
Schedule 1 about the account, including the date of last
payment, but it also had information such as notes and
comments about the account and any related litigation.
Id. ¶ 9; [58-1] ¶ 12.
December 3, 2015, MLG mailed a letter to Abdollahzadeh
stating that he owed CACH a balance due of $16, 709.62 in
connection with the debt.  ¶ 23; [64-2] at 16. The
letter also explained that MLG was “acting solely as a
debt collector, ” and included two additional
cautionary messages: “this communication is from a debt
collector, ” and “this is a demand for payment of
your outstanding obligation.” ¶ 23. The letter
did not warn Abdollahzadeh that the debt was too old for MLG
to sue upon or that making a payment toward the alleged debt
after the statute of limitations had passed would restart the
statute of limitations clock on the alleged debt.
Id. ¶ 25. MLG did not receive a response from
Abdollahzadeh regarding the December 3, 2015 letter. [77-1]
months after MLG sent the letter, the firm filed a complaint
for breach of unwritten contract on behalf of CACH in the
Circuit Court of Cook County, alleging that Abdollahzadeh
owed $16, 709.62 on the account. [74-1] ¶ 34.
Abdollahzadeh moved to dismiss the state-court action because
MLG filed the complaint after the expiration of the five-year
statute of limitations.  ¶ 29. MLG opposed the
motion, arguing that the accrual date was July 8, 2011, when
Abdollahzadeh's payment of the alleged debt was returned
for insufficient funds, and therefore, the complaint was
timely. Id. ¶¶ 31-32. Ultimately, the
state court found that MLG filed the complaint more than five
years after Abdollahzadeh's last payment, so the state
court dismissed the complaint with prejudice on September 6,
2016, id. ¶ 30; [74-1] ¶ 50.
the pendency of the state-court action, MLG never alleged
that it made a mistake in connection with filing that
complaint.  ¶ 33. MLG acknowledges that when it
filed the state-court complaint, it knew that the charge-off
date was March 31, 2011, the last payment date was June 30,
2011, and that the Account Information Report and Schedule 1
listed $16, 709.62 as both the charge-off balance and the
current balance. But, MLG did not know the manner in which
the last payment was presented, nor did it know the banking
institution from which it originated. Id. ¶ 21.
Only after Abdollahzadeh moved to dismiss the state-court
action, did MLG seek clarification from CACH about the date
of the last payment, and only at that time did CACH inform
MLG that CACH had conferred with the seller and had learned
that Abdollahzadeh's June 30, 2011 payment never cleared,
which meant the last payment without such a reversal was
tendered on August 3, 2010. [77-1] ¶¶ 25-26.
mistake conflicted with CACH's and MLG's policies
prohibiting the collection of a debt for which the statute of
limitations had expired. Id. ¶ 11; [58-1] ¶
21. Specifically, if the statute of limitations for any
account that was placed with MLG expired, it was MLG's
policy to immediately cancel the account and to return it to
the creditor, so long as that account was not in active
litigation. [77-1] ¶ 10. As such, before it filed the
state-court complaint, MLG had analyzed Abdollahzadeh's
account to determine whether a suit would be outside of the
statute of limitations. Id. ¶ 17. MLG had
considered the last payment date provided in Schedule 1, as
well as in the Account Information Report, which had the
benefit of CACH's software that scrubbed all open and
active accounts nightly to identify accounts in which the
statute of limitations had expired. Id. ¶¶
4-5; [58-1] ¶ 22. Additionally, CACH had sent MLG an
affidavit certifying that the information contained in the
draft complaint was accurate and supported by CACH's
business records. [64-4] at 100:1- 11. It was MLG's
policy that before filing suit, its attorneys must review the
relevant affidavit from a CACH custodian of records to ensure
that the information in CACH's business records matched
the information contained in the proposed complaint.
circumstances led MLG to attempt to collect an out-of-statute
debt from Abdollahzadeh. As a result of MLG's actions,
Abdollahzadeh says that he experienced emotional distress,
including panic, fear, anxiety, and sleeplessness. [64-2] at
3, ¶¶ 10, 13-14. This was due in part to the fact
that MLG's letter made Abdollahzadeh believe that the
firm could file a lawsuit against him to collect the debt.
Id. at 3, ¶¶ 10, 15. Abdollahzadeh did not
seek any medical treatment for these symptoms, though. [77-1]
¶ 30. Abdollahzadeh also says that he experienced
financial harm from MLG's actions because he had to pay
attorneys' fees and costs in the state-court action.
[64-2] at 3, ¶¶ 11-12. Accordingly, Abdollahzadeh
brought this FDCPA claim against the firm.
moves for summary judgment, arguing that it is entitled to
the bona fide error defense, that 15 U.S.C. § 1692f is
not implicated, and that Abdollahzadeh is not entitled to
emotional distress or punitive damages. See ,
. Abdollahzadeh moves for summary judgment, arguing that
MLG violated § 1692e and § 1692f, that MLG is not
entitled the bona fide error defense, and that he is entitled
to emotional distress damages. See , [64-1].
FDCPA regulates when and where a debt collector may
communicate with a debtor, 15 U.S.C. § 1692c; it
prohibits the use of harassing, oppressive, or abusive
measures to collect a debt, id. § 1692d; and it
bans the use of false, deceptive, misleading, unfair, or
unconscionable means of collecting a debt, id.
§§ 1692e, 1692f. See Gburek v. Litton Loan
Servicing LP, 614 F.3d 380, 384 (7th Cir. 2010). Two
threshold criteria must be met to state an FDCPA claim: (1)
the defendant must qualify as a “debt collector,
” and (2) the communication by the debt collector must
have been made “in connection with the collection of
any debt.” Id. (citing 15 U.S.C. §§
1692a(6), 1692c(a)-(b), 1692e, 1692g). Even assuming that MLG
is a debt collector and that both MLG's letter and ...