United States District Court, N.D. Illinois, Eastern Division
MEMORANDUM OPINION AND ORDER
Z. LEE, UNITED STATES DISTRICT JUDGE
Nancy Bielawski brought this suit pursuant to the Fair Debt
Collection Practices Act (“FDCPA”), 15 U.S.C.
§ 1692e(8), alleging that Defendants Midland Funding LLC
(“Midland”) and Midland Credit Management, Inc.
(“MCM”) are debt collectors who failed to report
her dispute of a delinquent debt to TransUnion, a credit
reporting agency. Both sides have filed cross-motions for
summary judgment. For the reasons stated herein,
Bielawski's motion  is granted in part and denied in
part, and Defendants' motion  is denied.
we begin, the Court notes that both parties fall short of
complying with the dictates of N.D.Ill. Local Rule 56.1. The
rule requires the parties to file statements of fact and
responses supported by reference to evidence in the record.
In numerous places in their Local Rule 56.1 statements, the
parties take inconsistent positions with respect to their own
facts and cite evidence unsupportive of their positions. See,
e.g., infra Section I.A at 4 n.3, 4 n.5, 4-5 n.6, 5 n.7;
Section I.B at 7-8 & n.10. The Court requires strict
compliance with Local Rule 56.1, see Raymond v. Ameritech
Corp., 442 F.3d 600, 604 (7th Cir. 2006), and will note
when certain material factual statements are stricken or
deemed admitted due to noncompliance with the rule. The
ramifications of the parties' actions are significant, as
we shall see, and provide a cautionary lesson to the
litigants that appear in this district.
to the facts here, Bielawski incurred credit-card debt with
Citibank N.A. (“Citibank”) that she later became
unable to pay. Pl.'s LR 56.1(a) Stmt. Facts
(“Pl.'s SOF”) ¶¶ 9-10, ECF No. 32.
After the account went into default, Midland purchased it.
Pl.'s SOF ¶ 11. Midland is a debt purchaser that
does not have any employees of its own; instead, it hires MCM
to service and collect debt. Defs.' LR 56.1(a) Stmt.
Facts (“Defs.' SOF”) ¶¶ 2, 5-6, ECF
No. 40. In this case, Midland assigned Bielawski's debt
to MCM for collection. Pl.'s SOF ¶ 11.
Bielawski's Dispute Letter and Defendants'
Communications with TransUnion
MCM began attempting to collect the debt from Bielawski, she
retained counsel. Defs.' SOF ¶ 14. Bielawski's
counsel sent a letter addressed to Midland on March 8, 2018,
containing the following statement about Bielawski's
This client regrets not being able to pay, however, at this
time they are insolvent, as their monthly expenses exceed the
amount of income they receive, and the debt reported on the
credit report is not accurate. If their circumstances should
change, we will be in touch.
Pl.'s SOF ¶ 12; Pl.'s Ex. D (“Dispute
Letter”), ECF No. 32-4. Defendants received the letter
the same day. Pl.'s SOF ¶ 13. This letter marked the
first time Bielawski communicated her dispute to Defendants.
Defs.' SOF ¶¶ 35-36. Prior to this time,
Bielawski had not contacted her original creditor or any
credit bureau to dispute the amount of the
debt. Id. ¶ 19.
follows certain policies with respect to processing and
reporting disputes. Its Consumer Support Services department
reports approximately 6.7 million accounts to various credit
bureaus and processes approximately 152, 000 disputes each
month related to these accounts. Id. ¶ 28. Its
policies require disputes to be addressed internally within
48 to 72 hours, and to be reported to third parties such as
credit bureaus within 30 days. Id. ¶ 30.
Furthermore, on the Monday morning following the first and
third Sunday of each month, MCM finalizes a list of data from
consumer-debt accounts, including any disputes on the
accounts, to be furnished to credit bureaus. Id.
¶ 22. After the list is finalized on Monday morning, it
is furnished to credit bureaus the following Friday.
Pl.'s SOF ¶ 20. During the intervening week after
finalizing the list, but before furnishing it to credit
bureaus, MCM “engages in quality control checks to
ensure that the data is accurate.” Defs.' SOF
set of policies impacted the way MCM addressed
Bielawski's dispute. MCM furnished data from
Bielawski's debt account to TransUnion on March 9, 2018,
the day after receiving Bielawski's Dispute
Letter. See Defs.' SOF ¶ 23; Consumer
Reporting Data at 2. But MCM did not mark Bielawski's
account as disputed until March 13; furthermore, based on
MCM's policies, the March 9 report was finalized on
Monday, March 5, 2018-three days before Defendants received
the Dispute Letter. Defs.' SOF ¶¶ 21-22.
March 14, 2018, an MCM representative “took further
steps” to process Bielawski's dispute, but
“inadvertently removed” the dispute code from the
system.Id. ¶ 24. By March 21, MCM
placed the dispute code back on Bielawski's account.
Id. ¶ 26. But Defendants furnished
Bielawski's debt information to TransUnion again on
Friday, March 23, Pl.'s SOF ¶ 15, in a report that
would have been finalized the prior Monday, March 19, see
Defs.' SOF ¶ 22. Not surprisingly, the March 23
report did not contain Bielawski's dispute. See Pl.'s SOF
¶¶ 15-17. The dispute was reflected, however, in
Defendants' next report to TransUnion on April 6, 2018.
Defs.' SOF ¶ 27.
April 2, 2018, Bielawski purchased her TransUnion credit
report and discovered that her debt to Midland was being
displayed as undisputed. Pl.'s SOF ¶¶ 16-17.
Bielawski contends that the fifteen-day delay between
Defendants' receipt of her dispute and their conveying it
to TransUnion has caused her “annoyance, aggravation,
humiliation[, ] and emotional distress.” Id.
Defendants' Status as Debt Collectors
does not dispute that, “in certain circumstances and in
certain instances, ” including in Bielawski's case,
it “acts as a debt collector as defined by the
FDCPA.” Defs.' LR 56.1(b) Resp. Pl.'s SOF
¶ 6. But the parties dispute whether Midland is a
“debt collector.” Pl.' SOF ¶ 3;
Defs.' LR 56.1(b) Resp. Pl.'s SOF ¶ 3.
undisputed that Midland holds a collection-agency license
from the State of Illinois. Pl.'s SOF ¶ 3;
Defs.' LR 56.1(b) Resp. Pl.'s SOF ¶ 3. But
according to Midland, it does not have any direct contact
with consumers regarding debt-collection efforts. Defs.'
SOF ¶ 6. Rather, it says, “[a]ny actions taken on
accounts owned by Midland Funding are taken by MCM, ”
which devises its own collection strategies without
Midland's input. Id. ¶¶ 7-8. Bielawski
rejects these assertions. Pl.'s LR 56.1(b) Resp.
Defs.' SOF ¶¶ 6-8.
first points out that Midland regularly files collections
lawsuits in the Circuit Court of Cook County. See Docket
Search, Clerk of the Circuit Court of Cook County,
Search.aspx (select “Civil Division, ” search by
name, type “Midland Funding, ” and select
“Plaintiff”). Midland does not dispute this
next contends, and Midland disputes, that Midland
“derives all of its revenue from purchasing and
recovering portfolios of defaulted receivables from
consumers.” Pl.'s SOF ¶ 22; Defs.' LR
56.1(b) Resp. Pl.'s SOF ¶ 23. To support this
assertion, Bielawski relies upon SEC filings from Encore
Capitol Group, Inc. (“Encore”). Pl.'s SOF
¶ 22; see Pl.'s Ex. M, SEC filings excerpt, Encore
Capital Group, Inc., Annual Report (Form 10-K) (Dec. 31,
2016) (“Encore SEC Filings”), ECF No. 32-13. But
neither Bielawski nor the SEC filings explain Encore's
relationship to Midland. Not only that, even if the SEC filings
showed that all of Encore's revenues come from defaulted
receivables-a dubious proposition, see Encore SEC Filings at
30 (“Selected Financial Data”)-they say nothing
about Midland's revenue stream. Accordingly, Bielawski
has failed to support her SOF ¶ 23 with admissible
evidence, and it is stricken. See N.D.Ill. Local Rule
Bielawski also asserts that Midland attempted to collect her
debt by reporting it to TransUnion. Pl.'s SOF ¶ 15.
This factual dispute is particularly vexing, because
Defendants agree that Bielawski's statement of fact is
“undisputed, ” Defs.' LR 56.1(b) Resp.
Pl.'s SOF ¶ 15, but simultaneously assert that it
was actually MCM that reported the debt to TransUnion,
Defs.' SOF ¶¶ 22-23, 33. Normally, based on
Defendants' failure to contest Bielawski's version,
the Court would deem it undisputed. But here, Bielawski's
version is not supported by the evidence she cites. Bielawski
points to (1) Defendants' Answer, which states that it
was MCM that furnished her data to TransUnion, and (2) her
TransUnion credit report, which lists the Midland debt but
does not indicate where the information came
from. See Pl.'s SOF ¶ 15 (citing
Defs.' Answer ¶ 22; 4/2/18 TransUnion Credit
Report). The Court cannot deem admitted facts which are
unsupported by the record. Accordingly, Bielawski's SOF
¶ 15 is stricken as unsupported, as are her responses to
Defendants' statements of fact based on the same
evidence. See Pl.'s LR 56.1(b) Resp. Defs.' SOF
¶ 8. The Court deems it undisputed that MCM, not
Midland, furnished Bielawski's debt information to
TransUnion. See N.D.Ill. Local Rule 56.1(a)(3), (b)(3)(B).
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(a); see also Shell v. Smith, 789
F.3d 715, 717 (7th Cir. 2015). To survive summary judgment,
the nonmoving party must “do more than simply show that
there is some metaphysical doubt as to the material facts,
” Matsushita Elec. Indus. Co. v. Zenith Radio
Corp., 475 U.S. 574, 586 (1986), and instead must
“establish some genuine issue for trial such that a
reasonable jury could return a verdict in her favor.”
Gordon v. FedEx Freight, Inc., 674 F.3d 769, 772-73
(7th Cir. 2012). In reviewing a motion for summary judgment,
the Court gives the nonmoving party “the benefit of
conflicts in the evidence and reasonable inferences that
could be drawn from it.” Grochocinski v. Mayer
Brown Rowe & Maw, LLP, 719 F.3d 785, 794 (7th Cir.
2013). The Court must not make credibility determinations or
weigh conflicting evidence. McCann v. Iroquois Mem'l
Hosp., 622 F.3d 745, 752 (7th Cir. 2010).
Rule 56 requires the district court to grant a motion for
summary judgment after discovery “against a party who
fails to make a showing sufficient to establish the existence
of an element essential to that party's case, and on
which that party will bear the burden of proof at
trial.” Celotex Corp. v. Catrett, 477 U.S.
317, 322 (1986). The moving party has the initial burden of
establishing that there is no genuine issue of material fact.
See Id. Once the moving party has sufficiently
demonstrated the absence of a genuine issue of material fact,
the nonmoving party must then set forth specific facts
showing that there are disputed material facts that must be
decided at trial. See Id. at 321-22.
FDCPA prohibits any “debt collector” from
“communicating or threatening to communicate to any
person credit information which is known or which should be
known to be false, including the failure to communicate that
a debt is disputed.” 15 U.S.C. § 1692e(8). To
establish Defendants' liability under this section,
Bielawski must show that they are both “debt
collectors” and that they knew or should have known
that Bielawski's debt was disputed, but failed to
communicate the dispute when reporting the debt to
TransUnion. See id.; Evans v. Portfolio Recovery
Assocs., LLC, 889 F.3d 337, 346 (7th Cir. 2018).
Additionally, Defendants may defeat Bielawski's claim by
showing that their error was “not intentional and
resulted from a bona fide error notwithstanding the
maintenance of procedures reasonably adapted to avoid any
such error.” 15 U.S.C. § 1692k(c).
have moved for summary judgment, arguing that Bielawski has
failed to set forth sufficient evidence that Midland is a
“debt collector” or that Defendants failed to
communicate a known dispute to TransUnion; they further argue
that they are entitled to a bona fide error defense based on
their policies and procedures. Bielawski has cross-moved for
summary judgment, arguing that Defendants ...