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Crail v. I.C. System, Inc.

United States District Court, S.D. Indiana, Indianapolis Division

September 2, 2016

JILL CRAIL, Plaintiff,
I.C. SYSTEM, INC., Defendant.



         The Plaintiff brings this action against the Defendant under the Fair Debt Collection Practices Act (“FDCPA”). This cause is before the Court on the parties' cross-motions for summary judgment. Both motions are fully briefed, and the Court, being duly advised, now GRANTS the Defendant's motion (Dkt. No. 45) and DENIES the Plaintiff's motion (Dkt. No. 47) for the reasons and to the extent set forth below.


         Federal Rule of Civil Procedure 56(a) provides that summary judgment is appropriate “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.” In ruling on a motion for summary judgment, the admissible evidence presented by the non-moving party must be believed, and all reasonable inferences must be drawn in the non-movant's favor. Zerante v. DeLuca, 555 F.3d 582, 584 (7th Cir. 2009) (“We view the record in the light most favorable to the nonmoving party and draw all reasonable inferences in that party's favor.”).

         When the Court reviews cross-motions for summary judgment, as is the case here, “we construe all inferences in favor of the party against whom the motion under consideration is made.” Speciale v. Blue Cross & Blue Shield Ass'n, 538 F.3d 615, 621 (7th Cir. 2008) (quotation omitted). “‘[W]e look to the burden of proof that each party would bear on an issue of trial.'” Diaz v. Prudential Ins. Co. of Am., 499 F.3d 640, 643 (7th Cir. 2007) (quoting Santaella v. Metro. Life Ins. Co., 123 F.3d 456, 461 (7th Cir. 1997)). However, a party who bears the burden of proof on a particular issue may not rest on its pleadings, but must show what evidence it has that there is a genuine issue of material fact that requires trial. Johnson v. Cambridge Indus., Inc., 325 F.3d 892, 901 (7th Cir. 2003). Finally, the non-moving party bears the burden of specifically identifying the relevant evidence of record, and “the court is not required to scour the record in search of evidence to defeat a motion for summary judgment.” Ritchie v. Glidden Co., 242 F.3d 713, 723 (7th Cir. 2001) (citation omitted).


         Plaintiff Jill Crail subscribed to and received AT&T's Uverse service. She could not pay her bill, and her account went into default. Crail received collection letters from AT&T and two debt collectors prior to receiving a letter from the Defendant. Crail received from the Defendant a debt collection letter dated January 1, 2014, indicating a “balance due” of $1, 065.76. Dkt. No. 48-1. The letter also contained the following statements: “The balance shown above is the amount due as of the date of this letter. This amount may change due to interest or other charges that may be added to the account after the date of this letter.” Id. Crail received no other letters from the Defendant, and no interest or other charges were added to her account after January 1, 2014.

         Crail filed suit in this Court on December 31, 2014, alleging that the statement in the Defendant's dunning letter warning of the potential addition of interest and other charges to her account balance violated the FDCPA. In her complaint, she alleges that the Defendant violated 15 U.S.C. §1692d by engaging in conduct intended to harass her by threatening interest and additional charges that would not accrue; violated §1692e by misrepresenting the character of the debt; and violated § 1692f by threatening consequences that would not occur. Compl. ¶¶ 2, 3, and 4 of “First Claim for Relief.”


         A. Cross Motions for Summary Judgment

         In response to the Defendant's motion for summary judgment, the Plaintiff contends that the Defendant misrepresented her debt and that that misrepresentation was intended to harass her and constituted an unfair and unconscionable attempt to collect her debt, in violation of the FDCPA. She essentially raises three arguments in support of her claims: 1) the dunning letter was false because no interest or other charges were actually added to her account after she received the letter; 2) the Defendant had no authority and thus no ability to add interest, collection fees, or other charges; and 3) there is no contract authorizing the collection of interest or collection fees.

         The Court will find a triable issue of fact if the Defendant's collection letter is confusing or unclear on its face. Chuway v. Nat'l Action Fin. Servs., Inc., 362 F.3d 944, 948 (7th Cir. 2004). The FDCPA “requires, among other things, that any dunning letter by a debt collector state ‘the amount of the debt' that [it is] trying to collect.” Taylor v. Cavalry Inv., L.L.C., 365 F.3d 572, 574 (7th Cir. 2004) (citing 15 U.S.C. § 1692g(a)(1); Chuway, 362 F.3d at 946-47; Miller v. McCalla, Rayner, Padrick, Cobb, Nichols & Clark, L.L.C., 214 F.3d 872, 875 (7th Cir. 2000)). However, “[i]t is not enough that the dunning letter state the amount of the debt that is due. It must state it clearly enough that the recipient is likely to understand it.” Chuway, 362 F.3d at 948 (citations omitted).

         The Court reviews collection letters from the “‘standpoint of the so-called unsophisticated consumer or debtor.'” Sims v. GC Servs. L.P., 445 F.3d 959, 963 (7th Cir. 2006) (quoting Durkin v. Equifax Check Servs., Inc., 406 F.3d 410, 414 (7th Cir. 2005)). This is an objective standard, Lox v. CDA, Ltd., 689 F.3d 818, 826 (7th Cir. 2012), and requires a letter to be confusing to “‘a significant fraction of the population, '” id. at 822 (quoting Taylor, 365 F.3d at 574). Where a collection letter is not misleading or confusing on its face, “summary judgment should be granted in favor of the defendant, unless the plaintiff has presented ‘objective evidence of confusion' [by the unsophisticated consumer].” Sims, 445 F.3d at 963 (citing Taylor, 365 F.3d at 575); see also Janetos v. Fulton Friedman & Gullace, LLP, 825 F.3d 317, 322-23 (7th Cir. 2016) (describing the various evidentiary requirements for the three categories of false, deceptive, or misleading statements and practices claims).

         Here, Crail has presented no objective evidence of confusion. Instead, she contends both that she was misled by the letter and that it is misleading on its face. Specifically, she asserts that no interest or other charges accrued, so the statement in the dunning letter was false.[1] In Taylor, the Seventh Circuit addressed the same argument applied to very similar facts. See 365 F.3d at 574. At issue were two different dunning letters, one that stated, “if applicable, your account may have or will accrue interest at a rate specified in your contractual agreement with the original creditor, ” Taylor, 365 F.3d at 574, and another that said, “your account balance may be periodically increased due to the addition of accrued interest or other charges as provided in your agreement with your creditor, ” id. at 575. The plaintiffs who received letters with the first statement above but did not have interest added to their accounts claimed that the letter was false and violated 15 U.S.C. § 1692e. The Taylor Court called the claim “downright frivolous, ” explaining that “[t]he letter didn't say they would [add interest], only that they ...

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