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Alleman v. Collection Professionals, Inc.

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

October 29, 2019

GAIL ALLEMAN, Plaintiff,
v.
COLLECTION PROFESSIONALS, INC. Defendant.

          MEMORANDUM OPINION AND ORDER

          Honorable Marvin E. Aspen United States District Judge

         This dispute concerns whether third-party collectors may charge service fees for online payment. Plaintiff Gail Alleman received medical services from Sarah Bush Lincoln Health System (“SBLHS”), for which she had an outstanding debt. SBLHS contracted Defendant Collection Professionals, Inc. (“CPI”) to collect Plaintiff's outstanding debt. Plaintiff received eight communications from CPI, all of which advertised both online, check, and in-person payment options. Plaintiff paid a portion of her debt to CPI through its online portal that caused CPI to assess her a $3.00 service fee for online payment. Plaintiff claims the service fee was unlawful under the Fair Debt Collection Practices Act (“FDCPA”), the Illinois Collection Agency Act (“ICAA”), and the Illinois Consumer Fraud Act (“ICFA”). The Parties cross-moved for summary judgment on all counts. (Def. Motion for Summary Judgment (Dkt. No. 98); Pl. Motion for Summary Judgment (Dkt. No. 95).) For the foregoing reasons, we grant Defendant's motion for summary judgment. We deny Plaintiff's cross-motion for summary judgment.

         BACKGROUND

         This dispute boils down to a disagreement over the meaning of the phrase “reasonable collection costs” in a medical billing agreement. The majority of the facts are undisputed, except the meaning of this phrase. We briefly summarize the facts below, then turn to the legal questions at the center of the dispute.

         Plaintiff Gail Alleman is a resident of Illinois. (Def.'s Mot. Summary Judgmt. Statement of Undisputed Material Facts (“Def. SMF”) (Dkt. No. 100) ¶ 1; Pl.'s Cross-Mot. for Summary Judgmt. Statement of Material Facts (“Pl. SMF”) Dkt. No. 96-1 ¶ 3). Plaintiff received medical services from SBLHS. (Def. SMF ¶ 14; Pl. SMF ¶ 9.) Plaintiff entered a service agreement with SBLHS, which is the subject of the collection activity before this Court. (Def. SMF ¶ 14; Pl. SMF ¶ 9; SBLHS Agreement (Dkt. No. 100-5) at 1.) Plaintiff failed to pay the amount due to SBLHS. (Def. SMF ¶ 19; Alleman Deposition (Dkt. No. 100-1) at 37:12-17.) SBLHS hired Defendant CPI to collect its debt from Alleman. (Pl. SMF ¶ 9.)

         Defendant Collection Professionals, Inc. (“CPI”) is an Illinois corporation that collects consumer debt and holds a collection agency license in Illinois. (Pl. SMF ¶¶ 5-6.) Defendant attempted to collect Plaintiff's debt created in the SBLHS Agreement. (Id. ¶¶ 9-10.) Between November 5, 2016 and April 7, 2017, CPI sent Plaintiff eight letters seeking payment of this debt. (Def. SMF ¶ 20; Pl. SMF ¶ 10.) Plaintiff did not pay the balance of the SBLHS debt in response to these eight letters. (Def. SMF ¶ 23.) She did make a payment in the amount of $43.22 on March 19, 2017 (Def. SMF ¶ 24; Pl. SMF ¶ 12; Payment Screen Capture (Dkt. No. 96-1, Appendix C); Payment Screen Capture (Dkt. No. 100-7).). Plaintiff's made this payment on CPI's website. (Def. SMF ¶ 26; Pl. SMF ¶ 12.) The payment screen broke down the charge Plaintiff paid into two categories: a $40.22 “subtotal, ” and a $3.00 “Service Fee.” (Def. SMF ¶ 27; Payment Screen Capture.)

         The SBLHS Agreement contained language stating that Ms. Alleman agreed to “pay the balance on the account plus the late charge fee, all reasonable collection costs, court, and reasonable attorneys' fees.” (SBLHS Agreement at 1). The parties dispute the meaning of the phrase “all reasonable collection costs.” (Def. Memo. in Support of Mot. Summary Judgement (“Def. MSJ Memo”) (Dkt. No. 103) at 5; Pl. Memo. in Support of Cross-Mot. Summary Judgmt. (“Pl. MSJ Memo”) (Dkt. No. 96) at 8.). Defendant understands this phrase to include its Service Fee. (Def. MSJ Memo at 5-6.) Plaintiff understands this phrase to at most include pass-through fees or fees SBLHS itself incurred in collecting her debt. (Pl. MSJ Memo at 8-9.)

         LEGAL STANDARD

         Under Federal Rule of Civil Procedure 56, a party is entitled to summary judgment only if it demonstrates there is no genuine issue of material fact and that it is entitled to judgment as a matter of law. Fed.R.Civ.P. 56(a). We may not grant summary judgment “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, 106 S.Ct. 2505, 2510, 91 L.Ed.2d 202 (1986). “One of the principal purposes of the summary judgment rule is to isolate and dispose of factually unsupported claims or defenses....” Celotex Corp. v. Catrett, 477 U.S. 317, 323-24, 106 S.Ct. 2548, 2553, 91 L.Ed.2d 265 (1986). “On cross-motions for summary judgment, the Court assesses whether each movant has satisfied the requirements of Rule 56.” Portalatin v. Blatt, Hasenmiller, Leibsker & Moore, LLC, 125 F.Supp.3d 810, 813 (N.D. Ill. 2015). As with any summary judgment motion, we consider cross-motions for summary judgment “construing all facts, and drawing all reasonable inferences from those facts, in favor of the non-moving party.” Laskin v. Siegel, 728 F.3d 731, 734 (7th Cir. 2013) (citing Wis. Cent., Ltd. v. Shannon, 539 F.3d 751, 756 (7th Cir. 2008)).

         ANALYSIS

         Plaintiff alleges CPI violated the FDCPA, the ICAA, and the ICFA when they assessed her a service fee to pay a portion of her debt using a debit card. (Compl. ¶¶ 28, 38, 48.) Alleman alleges CPI's service fee was both false or misleading, and unfair and unconscionable in violation of § 1962e and § 1692f of the FDCPA, respectively. (Compl. ¶ 28.) Defendants respond their fee was neither false and misleading, nor unfair and unconscionable, either because it reflects their actual costs to offer online payment options or because the fee was included in “all reasonable collection costs” that Alleman agreed to pay. (Def. MSJ Memo at 6-8). She further claims the service fee violates the ICAA's prohibition on charging fees prohibited under state law. (Compl. ¶ 38.) Alleman argues the ICAA itself confers a private right of action for her claim. (Pl. MSJ Memo at 13). Defendants argue the ICAA does not confer a private right of action. (Def. Resp. Pl. MSJ Memo at 13). Finally, Alleman claims CPI's service fee violates the prohibition on unfair or deceptive acts or practices. (Compl. ¶ 48; Pl. MSJ Memo at 12). Defendants claim their service fee was neither unfair nor deceptive. (Def. MSJ Memo at 18-19.) The Parties cross-moved for summary judgment on all counts.

         (Def. Motion for Summary Judgment (Dkt. No. 98); Pl. Motion for Summary Judgment (Dkt. No. 95).)

         I.FDCPA

         The Fair Debt Collection Practices Act, 15 U.S.C. § 1692, seeks to protect consumers from abusive collection practices. The FDCPA proscribes debt collectors use of unfair or unconscionable means to collect any debt. 15 U.S.C. § 1692f. The Act also proscribes false or misleading representations or means in connection with the collection of any debt.

         15 U.S.C. § 1692e. Both sections contain examples of possible violations, but neither is limited to the application of ...


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