Joseph Bernal, individually and on behalf of others similarly situated, Plaintiff-Appellant,
NRA Group, LLC, Defendant-Appellee.
March 28, 2019
from the United States District Court for the Northern
District of Illinois, Eastern Division. No. 16 C1904 - Gary
Ripple, Manion, and Sykes, Circuit Judges.
Bernal bought a monthly pass to Six Flags amusement parks.
The contract said that if he fell behind on his payments, he
would "be billed for any amounts that are due and owing
plus any costs (including reasonable attorney's fees)
incurred by [Six Flags] in attempting to collect amounts
due." This case asks whether a debt collector's fee
counts as a collection cost under that Ianguage. We hold that
it does. The contract unambiguously permits Six Flags to
recover any cost it incurs in collecting past-due payments,
and that includes a standard collection fee.
Bernal missed several monthly payments, Six Flags hired AR
Assist, a debt collector, to help recover the balance. Under
their contract, AR Assist could charge Six Flags a 5%
management fee plus an additional amount based on the number
of days the debt was delinquent (in this case, an additional
20%). No one disputes that this was a reasonable fee, nor
that arrangements like this are common in the market. In
turn, AR Assist hired the NRA Group as a subcontractor.
then sent Bernal a collection letter asking for the $267.31
he owed, plus $43.28 in costsâwhich is technically even less
than the 25% fee NRA was authorized by contract to charge.
The letter gave Bernal two options: He could pay the sum
directly to NRA, which would then remit the collection fee to
AR Assist, minus its own fee. Or he could pay the sum to Six
Flags, in which case Six Flags would have to pay AR Assist
did neither. He reasoned that it couldn't possibly have
cost NRA $43.28 to mail a single collection letter. So rather
than pay, he filed this class-action lawsuit under the Fair
Debt Collection Practices Act ("FDCPA"), alleging
that NRA charged a fee not "expressly authorized by the
agreement creating the debt." 15 U.S.C. § l692f(1).
Each class member had entered into a contract with
essentially the same language.
rejecting the parties' motions for summary judgment, the
district judge held a bench trial. As part of his legal
conclusions, he held that the percentage-based collection fee
was expressly authorized by the following language in the
If your account is in arrears for more than 30 days (after
you miss two payments) and ... the Minimum Term has expired,
then your account will be permanently cancelled and you will
be billed for any amounts that are due and owing plus any
costs (including reasonable attorney's fees) incurred by
us in attempting to collect amounts due or otherwise
enforcing this agreement.
judge reached this conclusion even though two other circuits
have said otherwise when interpreting almost identical
language. Because no class member was charged more than what
was authorized by the contracts, the judge entered judgment
parties agree that NRA is allowed to collect this fee if it
was "expressly authorized by the agreement creating the
debt." § l692f(1). That, in turn, depends on
whether the collection fee was a "cost ... incurred by
[Six Flags] in attempting to collect amounts due." The
judge said it was, and we review that legal conclusion de