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McCoy v. Midland Funding, LLC

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

July 2, 2019

CHERYL McCOY, individually and on behalf of a class of similarly situated individuals, Plaintiff,
v.
MIDLAND FUNDING, LLC, MIDLAND CREDIT MANAGEMENT, INC., and ENCORE CAPITAL GROUP, INC., Defendants.

          MEMORANDUM OPINION AND ORDER

          GARY FEINERMAN JUDGE.

         Cheryl McCoy alleges that a collection letter she received from Midland Credit Management, Inc. violated the Fair Debt Collection Practices Act (“FDCPA”), 15 U.S.C. § 1692 et seq. Doc. 1. (There are other defendants, but the claims against them rise or fall with the claim against Midland.) With discovery closed, the parties cross-move for summary judgment, Docs. 36, 62, and McCoy moves for class certification, Doc. 41. Midland's summary judgment motion is granted, McCoy's summary judgment motion is denied, and McCoy's class certification motion is denied as moot.

         Background

          Because summary judgment will be granted to Midland, the facts are sets forth as favorably to McCoy as permitted by the record and Local Rule 56.1. See Calumet River Fleeting, Inc. v. Int'l Union of Operating Eng'rs, Local 150, 824 F.3d 645, 647-48 (7th Cir. 2016). On summary judgment, the court must assume the truth of those facts, but does not vouch for them. See Donley v. Stryker Sales Corp., 906 F.3d 635, 636 (7th Cir. 2018).

         McCoy defaulted on a credit card account. Doc. 58 at ¶¶ 8-9. The account's owner placed the account with Midland for servicing, and Midland sought to collect the amount owed. Id. at ¶¶ 11-13. Only Midland communicated with McCoy about the account. Id. at ¶ 14. McCoy received eighteen letters from Midland, each with Midland's name, logo, and address at the top. Id. at ¶ 15.

         In January 2015, McCoy agreed to a payment plan, but one of her checks was returned for insufficient funds. Id. at ¶ 16. She agreed to a second payment plan in March 2015, but again one of her checks was returned for insufficient funds. Id. at ¶ 17. In November 2015, Midland transferred the account to its internal collections department. Id. at ¶ 18.

         On November 7, 2016, the account's owner, represented by Midland's counsel, sued McCoy to collect on the account. Id. at ¶ 19. On March 22, 2017, the parties reached a settlement, and McCoy signed an agreed order dismissing the case with leave to reinstate. Id. at ¶¶ 20-23. The agreement set out a payment plan and provided that the suit was subject to reinstatement if McCoy defaulted. Id. at ¶¶ 23-24. The order also provided: “In the event of reinstatement …, [the account owner] shall be entitled to judgment on the date of hearing of its Motion for the balance prayed for on the Complaint, less payments to date thereof.” Id. at ¶ 25 (quoting Doc. 38-9 at ¶ 3). McCoy knew that entry of a judgment could be a consequence of failing to make payments. Id. at ¶ 29. After McCoy failed to make the required payments, the case was reinstated on November 7, 2017, and the court entered judgment against her in the amount of $1, 008.62 plus costs. Id. at ¶¶ 26-28.

         Midland then sent McCoy a letter dated December 1, 2017, the first page of which is reproduced here:

         (Image Omitted)

         Doc. 38-12 at 1; Doc. 58 at ¶ 30.

         The letter began: “On November 07, 2017 a judgment was entered against you in the amount of $1, 347.62. We have the right to inquire regarding the existence and location of assets, and your ability to satisfy the judgment.” Doc. 38-12 at 1. The letter then stated: “Complete the enclosed Financial Disclosure Form and send your response [by email or mail].” Ibid. (emphasis omitted). The enclosed disclosure form sought McCoy's contact information and asked nine questions about her income and assets. Id. at 3-4; Doc. 58 at ¶ 33.

         The letter continued: “If you wish to resolve this matter voluntarily, it's not too late. Call (866) 300-8750 if you would like to discuss one of the payment options listed below.” Doc. 38-12 at 1 (emphasis omitted). The listed options were paying in full or agreeing to a monthly payment plan. Ibid. The letter warned: “If we are unable to reach a voluntary resolution with you, [the account owner] may seek to enforce the judgment in accordance with applicable state laws.” Ibid. (emphasis omitted).

         Discussion

         McCoy alleges that Midland violated §§ 1692e(13) and 1692f of the FDCPA by falsely implying that the letter and enclosed financial disclosure form were legal process. Doc. 57 at 2, 6-11. Section 1692e prohibits a debt collector from using “any false, deceptive, or misleading representation or means in connection with the collection of any debt.” 15 U.S.C. § 1692e; see Ruth v. Triumph P'ships, 577 F.3d 790, 799-800 (7th Cir. 2009). This provision, essentially a “rule against trickery, ” Beler v. Blatt, Hasenmiller, Leibsker & Moore, LLC, 480 F.3d 470, 473 (7th Cir. 2007), sets forth “a nonexclusive list of prohibited practices” in sixteen subsections, McMahon v. LVNV Funding, LLC, 744 F.3d 1010, 1019 (7th Cir. 2014). Although “a plaintiff need not allege a violation of a specific subsection in order to succeed in a § 1692e case, ” Lox v. CDA, Ltd., 689 F.3d 818, 822 (7th Cir. 2012), McCoy invokes subsection (13), which proscribes “[t]he false representation or implication that documents are legal process, ” 15 U.S.C. § 1692e(13). Section 1692f ...


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