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Knox v. Weltman, Weinberg & Reis Co., L.P.A.

United States District Court, N.D. Indiana, Hammond Division

August 11, 2014

HENRY L. KNOX, Plaintiff,


JON E. DeGUILIO, District Judge.

Now before the Court is Defendant Weltman, Weinberg & Reis Co., L.P.A's ("Weltman") revised motion for summary judgment [DE 21, 22] on the complaint [DE 1] filed by Plaintiff Henry L. Knox ("Knox") alleging Weltman violated the Fair Credit Reporting Act ("FCRA") by obtaining Knox's consumer credit reports from credit reporting agencies without a permissible purpose as required under 15 U.S.C. § 1681b.[1] Proper notice of the summary judgment motion was also given to Knox consistent with Lewis v. Faulkner, 689 F.2d 100 (7th Cir. 1982) [DE 21]. The Court denied [DE 18] Weltman's first motion for summary judgment on the grounds that it failed to provide the best evidence establishing the existence of the debt collected which provided a permissible purpose for requesting Knox's consumer reports [DE 18]. The Court advised that "[i]f the original documentation of the account, its ownership, and Weltman's authority to collect on it are unavailable, then sufficient basis for its unavailability should be provided." [DE 18 at 12].

Weltman's revised submissions now include exhibits which trace back the transfer of consumer credit accounts from agency to agency until they reached LVNV Funding LLC, who then hired Weltman through Resurgent to collect on the accounts. Knox responded to the revised motion on November 8, 2013 [DE 25] with a series of allegations unsupported by any admissible evidence. For the following reasons, Weltman's revised motion for summary judgment is GRANTED.

I. Factual Background

Weltman is accused of accessing Knox's consumer debt information without a permissible purpose in violation of the FCRA [DE 1]. According to Doreen Abdullovski and Marsha Makel, Weltman's compliance attorneys, Weltman is a law firm that performs consumer and commercial collection services, and was hired by creditor LVNV Funding, LLC through its servicing agent to collect on a consumer credit account debt owed by Knox to LVNV [DE 22-1 at 1; DE 22-3 at 1]. Weltman received an Account Summary Statement from LVNV on Knox's 0300 account, which was filed with the Court [DE 22-3 at 2-3], and this document sets forth, among other things, the account origination date (September 6, 2000), the original creditor (Citibank/Sears), the current owner (LVNV), the current owner's purchase date (July 10, 2003), and the account balance [DE 22-3 at 2-3]. Weltman's compliance attorneys acknowledge that on behalf of LVNV and in connection with the collection of that account, Weltman requested Knox's credit report and credit score, which Weltman then accessed at least once (and maybe twice per Knox [DE 25 at 2, 4; DE 25-1 at 3]) from Trans Union on January 22, 2011 [DE 22-1 at 1-2; DE 22-3 at 2]. Weltman later explained its actions were pursuant to a permissible purpose under the FCRA, 15 U.S.C. § 1681b(a)(3)(A), and it has not otherwise requested or used Knox's credit report, nor furnished any information (including credit-related information) regarding Knox to consumer reporting agencies [DE 22-1 at 2, 4].

Tonya Henderson, an employee of Resurgent Capital Services, LP ("Resurgent"), the servicing agent for LVNV, provided an affidavit indicating that based "upon [her] review of such books, records, and documents, ... LVNV Funding LLC became the owner through purchase of account number ending in 0300, in the name of Henry Knox, on July 10, 2003 by purchase from Sears, Roebuck and Co./Citibank, N.A., the original creditor." [DE 22-2 at 1]. Attached to Henderson's affidavit is the "Bill of Sale and Assignment" indicating that specific sellers, one of which was Sears, Roebuck and Co., transferred various consumer credit accounts to Sherman Originator LLC [DE 22-2 at 1, at 3-6], which, per the chain of assignments, were ultimately transferred to LVNV [DE 22-2 at 1, 7-13]. Henderson attested that it was through this series of transactions that LVNV became the owner of account 0300 in the name of Henry Knox [DE 22-2 at 1, at 3-12]. Henderson also confirmed that on January 21, 2011, LVNV, through Resurgent, referred the account to Weltman for collection efforts on behalf of LVNV, and that a copy of the Account Summary Statement was sent to Weltman [DE 22-2 at 1, 13]. Henderson attested that when the 0300 account was opened by the original creditor on September 6, 2000, the account was charged off in 2003 and no original account statements were retained beyond the original creditor's seven-year retention policy, and therefore other 0300 account documents are currently unavailable [DE 22-2 at 2].

II. Standard of Review

On summary judgment, the moving party bears the burden of demonstrating 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). A "material" fact is one identified by the substantive law as affecting the outcome of the suit. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). A "genuine issue" exists with respect to any material fact when "the evidence is such that a reasonable jury could return a verdict for the nonmoving party." Id. Where a factual record taken as a whole could not lead a rational trier of fact to find for the non-moving party, there is no genuine issue for trial, and summary judgment should be granted. Matsushita Elec. Indus. Co., Ltd. v. Zenith Radio Corp., 475 U.S. 574, 587 (1986) (citing First Nat. Bank of Ariz. v. Cities Servs. Co., 391 U.S. 253, 289 (1968)).

In determining whether a genuine issue of material fact exists, this Court must construe all facts in the light most favorable to the non-moving party and draw all reasonable and justifiable inferences in that party's favor. King v. Preferred Technical Grp., 166 F.3d 887, 890 (7th Cir. 1999). However, the non-moving party cannot simply rest on the allegations or denials contained in its pleadings, but must present sufficient evidence to show the existence of each element of its case on which it will bear the burden at trial. Celotex Corp. v. Catrett, 477 U.S. 317, 322-23 (1986); Robin v. Espo Eng'g Corp., 200 F.3d 1081, 1088 (7th Cir. 2000).

III. Discussion

Read liberally, Knox's response to Weltman's revised motion for summary judgment raises the following arguments: 1) Weltman (again) failed to provide the best evidence establishing the legitimacy of account 0300, that LVNV became the owner of account 0300, and Weltman was engaged by LVNV to collect on the account; 2) Weltman's affidavits and the attached Account Summary Statement should be stricken because they are based on a lack of personal knowledge and contain hearsay; and 3) Weltman illegally obtained Knox's credit report by not having a permissible purpose for doing so, in violation of 15 U.S.C. § 1681b(a)(3)(A) of the FCRA.

As detailed below, Weltman has now provided sufficient evidence under the Federal Rules of Evidence to substantiate on summary judgment that its actions in accessing Knox's credit information were permissible under 15 U.S.C. § 1681b.

A. The best evidence.

Knox raises an argument based on Federal Rule of Evidence 1002, by arguing that Weltman failed to provide the best evidence establishing the legitimacy of account 0300 and LVNV's purchase of it from Sears in 2003. He also contends that Weltman has failed to produce any contract or invoice ...

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