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Taylor v. I.C. Systems, Inc.

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

July 31, 2018

I.C. SYSTEMS, INC., Defendant.


          John J. Tharp, Jr, Judge

         For the reasons set forth in the Statement below, plaintiff Kathleen Taylor's motion for summary judgment is denied and defendant I.C. Systems, Inc's cross-motion for summary judgment is granted. Judgment on Taylor's Fair Debt Collection Practices Act ("FDCPA") claim will be entered in favor of I.C. Systems, Inc. Taylor's state law claim based on the Illinois Collection Agency Act ("ICAA") is dismissed without prejudice pursuant to 28 U.S.C. § 1367(c)(3). Enter Judgment Order. Civil case terminated.


         I. Background[1]

         Taylor, a Chicago resident, incurred an alleged debt on her credit card account with Target Corporate Services ("Target"). Taylor used the credit card solely for personal expenses and not for business purposes; the alleged debt was for personal goods only Taylor was unable to pay the debt and her account went into default. Target assigned Taylor's debt to I.C. Systems, Inc. ("ICS") for collection. ICS is licensed and acts as a deb? collection agency in Illinois. It regularly collects defaulted consumer debt.[2]

         On July 8, 2016, ICS mailed Taylor a collection letter that conveyed information about her debt, including an account number and balance. The collection letter stated that Taylor owed $2, 973.56. Most of this debt consists of interest and fees.[3] In the collection letter, ICS offered to settle Taylor's debt in full if she paid the reduced amount of $2, 081.49. The letter stated:

Would you be willing to pay 70% of your balance of $2, 973.56 now to settle your account in full? To help you resolve this delinquent account, our office will accept a reduced payment amount of $2, 081.49 to settle your account in full. This settlement may have tax consequences. Please consult your tax advisor.

LR56.1 Statement of Uncontested Material Facts in Supp. of Pl.'s Mot. for Summ. J. ("Pl.'s SOF") ¶ 11, ECF No.19.

         Taylor filed her complaint on January 24, 2017, alleging that ICS violated the FDCPA by making a materially false statement in its collection letter and by using unconscionable means to collect a debt. The complaint also alleges that ICS violated the ICAA.

         II. Discussion

         Taylor and ICS both move for summary judgment. Taylor argues that she is entitled to judgment in her favor because the statement in ICS's collection letter-"[t]his settlement may have tax consequences"-is deceptively misleading on its face and violates the FDCPA as a matter of law.[4] Mem in Supp. of Pl.'s Mot. for Summ. J ("Pl.'s Mem.") 1, ECF No. 20. ICS argues that the language of the collection letter is not false, misleading, or deceptive as a matter of law and therefore, judgment should be entered in favor of ICS.

         Summary 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). When considering a motion for summary judgment, the court must "construe all facts and reasonable inferences in the light most favorable to the non-moving party." Bentrud v. Bowman, Heintz, Boscia & Vician, P.C, 794 F.3d 871, 874 (7th Cir. 2015). On cross-motions for summary judgment, the court draws inferences "in favor of the party against whom the motion under consideration was made." Id.

         The FDCPA prohibits debt collectors from using "any false, deceptive, or misleading representation or means in connection with the collection of any debt." 15 U.S.C. § I692e. The statute outlaws certain specific conduct, including "the threat to take any action that cannot legally be taken or that is not intended to be taken" and "the use of any false representation or deceptive means to collect or attempt to collect any debt or to obtain information concerning a consumer." 15U.S.C.§1692e(5), (10).

         When determining whether a communication violates the FDCPA, the court must examine it from the standpoint of an unsophisticated consumer. Fields v. Wilber Law Firm, P.C,383 F.3d 562, 564 (7th Cir 2004). To prevail, a plaintiff must prove that an unsophisticated consumer would be deceived or misled by the statement. Ruth v. Triumph Partnerships,577 F.3d 790, 800 (7th Cir. 2009). The unsophisticated consumer "may be 'uninformed, naive, or trusting, '" but also possesses "rudimentary knowledge about the financial world, is wise enough to read collection notices with added care, possesses 'reasonable intelligence' and is capable of making basic logical deductions and inferences." Gruber v. Creditors' Prot. Serv., Inc.,742 F.3d 271, 273 (7th Cir. 2014) (quoting Petit v. Retrieval Masters Creditor Bureau, Inc.,211 F.3d 1057, 1060 (7th Cir. 2000)). An unsophisticated consumer "may tend to read collection letters literally, [but] he does not interpret them in a bizarre ...

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