United States District Court, N.D. Illinois, Eastern Division
MEMORANDUM OPINION AND ORDER
C. Seeger, United States District Judge.
Bonnie Castle received a letter from a debt collector,
Defendant Global Credit & Collection Corporation, to
collect an outstanding balance on her credit card account.
That was news to her. Plaintiff had settled with the owner of
that debt, Defendant LVNV Funding, LLC, about six months
earlier. One month after the first letter, Global Credit sent
a second one, this time offering to settle the debt for 50
cents on the dollar (when, mind you, she owed nothing).
Plaintiff, feeling “annoyed and harassed, ” filed
this lawsuit. Cplt. ¶ 60.
first, Defendants engaged the dispute in this federal forum.
But a few months later, Defendants moved to compel
arbitration. That tactical move was not a complete surprise.
After all, Defendants invoked the possibility of arbitration
in their answers. Plaintiff now argues that Defendants waived
their right to arbitration by not filing their motions
light of the strong federal policy favoring arbitration and
the enforcement of arbitration agreements, this Court holds
that Defendants did not waive their right to arbitration.
Defendants did not act with alacrity, but they did not delay
the issue long enough to surrender their contractual right to
Bonnie Castle applied online for a credit card with Credit
One Bank, N.A. in 2014. See Dckt. No. 39-1, at
¶ 13. During the application process, Plaintiff had
access to the proposed credit agreement, and acknowledged its
terms by finalizing the application. Id. at ¶
15. Credit One accepted her application and opened her credit
card account, which she used for several years. Id.
at ¶ 14; Dckt. No. 39-4. Sometime later, Credit One
amended the credit agreement, and mailed a copy to Plaintiff.
See Dckt. No. 39-1, at ¶ 16; Dckt. No. 39-3.
She continued to use her account. See Dckt. No.
39-1, at ¶ 17; Dckt. No. 39-4.
the original and amended agreements included an arbitration
provision. See Dckt. No. 39-2, at 6-7; Dckt. No.
39-3, at 6-7. The arbitration provision was not hidden in the
depths of a long contract. Instead, the title of the
agreement itself - the VISA/MASTERCARD CARDHOLDER
AGREEMENT, DISCLOSURE STATEMENT AND ARBITRATION
AGREEMENT - highlighted the agreement to arbitrate.
See Dckt. No. 39-2, at 2 (bold in original); Dckt.
No. 39-3, at 2 (same). The agreement devoted an entire
section to arbitration, spanning a full page. See
Dckt. No. 39-2, at 6-7; Dckt. No. 39-3, at 6-7.
agreement entitled either party to submit “any
controversy or dispute between [the parties] . . . to
mandatory, binding arbitration.” See Dckt. No.
39-2, at 6; Dckt. No. 39-3, at 6. “Claims subject to
arbitration include . . . collections matters relating to
your Account.” See Dckt. No. 39-3, at 6. The
agreement covered class actions, too. Id. Either
party had a right to “compel arbitration of Claims
subject to arbitration, or to stay the litigation of any
Claims pending arbitration, in any court having
jurisdiction.” Id. at 7.
parties agreed that it was fair game to demand arbitration
until the eve of trial itself: “Such action may be
brought at any time, even if any such Claims are part of a
lawsuit, unless a trial has begun or a final judgment has
been entered.” Id. The parties also agreed
that a delay in enforcing the right to arbitration would not
be a waiver (although the parties presumably could waive that
non-waiver provision). “Failure or forbearance to
enforce this Arbitration Agreement at any particular time, or
in connection with any particular Claims, will not constitute
a waiver of any rights to require arbitration at a later time
or in connection with any other Claims.” Id.
2017, Credit One assigned the rights to Plaintiff's
account to a credit agency, and the receivables went through
a string of assignments from one company to another.
See Dckt. No. 39-1, at ¶¶ 22-23; Dckt. No.
39-5, at ¶¶ 3-6; Dckt. No. 39-6, at ¶¶ 3,
6; Dckt. No. 39-7, at ¶¶ 3-6. At the end of the
string, Defendant LVNV, a debt collection agency, ultimately
acquired Plaintiff's account. See Dckt. No.
39-7, at ¶ 6; Dckt. No. 39-8, at ¶ 3. LVNV assumed
all “rights, title, and interest in”
Plaintiff's account. Dckt. No. 39-8, at ¶ 3.
that year, LVNV sued Plaintiff to collect an outstanding
balance on her credit card account. See Cplt. ¶
35. The parties settled the suit and released Plaintiff from
her debt in January 2018. Id. at ¶ 36. Sometime
after settlement, Defendant Resurgent Capital Services, L.P.,
a debt collection agency acting on behalf of LVNV, hired
Defendant Global Credit to collect the discharged debt.
Id. at ¶ 37. Aptly-named Resurgent attempted to
collect a debt that Plaintiff no longer owed.
Credit sent Plaintiff two collection letters. Id. at
¶¶ 39, 44. The first letter claimed that Castle
owed a balance of $2, 203.79, and that Global Credit was
“authorized to collect the outstanding amount
owed.” See Dckt. No. 1-1, at 2. The letter
failed to acknowledge that the debt was settled. But reading
between the lines, Global Credit seemed aware of the fact
that it needed to tread lightly. After requesting payment for
an expired debt, Global Credit offered a nugget of truth:
“The law limits how long you can be sued on a debt.
Because of the age of your debt, LVNV Funding LLC will not
sue you for it, and LVNV Funding LLC will not report it to
any credit reporting agency.” Id.
Credit tried again one month later. Global Credit sent Castle
a second letter, claiming that it had “approval to
settle your account.” Id. at 5. Global Credit
floated a 50% haircut, offering to settle for $1, 101.90.
Id. Global Credit didn't mention that, in truth,
Castle owed nothing.
of paying a debt that she did not owe, Castle turned the
tables. On October 12, 2018, Castle filed suit under the Fair
Debt Collection Practices Act on behalf of herself and a
putative class. Plaintiff essentially alleges that the
letters were a trick. The debt was time-barred, but making a
partial payment on the debt arguably could have restarted the
statute of limitations. See Dckt. No. 1, at ¶
43; see also Pantoja v. Portfolio Recovery Assoc.,
LLC, 852 F.3d 679, 684 (7th Cir. 2017) (discussing the
“danger that a debtor who accepts the offered terms of
settlement will, by doing so, waive his otherwise absolute