Lemke v. Escallate, LLC
374 F. Supp. 3d 727
E.D. Ill.2019Background
- In Oct. 2016 Escallate, LLC (debt collector) sent Laura Lemke a collection letter for $1,225 from a medical provider; Lemke does not dispute the underlying debt.
- The letter itemized: Amount Assigned $1,225; Accrued Interest $0.00; Balance Due $1,225.
- The letter also stated a $20 Non-Sufficient Funds (NSF) fee could be charged for any payment not honored; a detachable payment slip with a credit-card payment form immediately followed this NSF notice.
- Lemke sued under the FDCPA (15 U.S.C. §§1692e, 1692g) alleging the zero interest line and the NSF notice were false, deceptive, and misleading; she also alleged a claim under the Illinois Collection Agency Act.
- At summary judgment the court found the statements could “possibly” mislead an unsophisticated consumer (not plainly misleading), but Lemke produced no extrinsic evidence (e.g., consumer survey) of actual confusion; she also failed to oppose the state-law claim.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether itemizing “Accrued Interest: $0.00” and the NSF notice violated §1692e (false/misleading) | Lemke: those statements are false/misleading and could deceive an unsophisticated consumer | Escallate: itemization is clear and not misleading; listing components is proper compliance | Court: statements fall into Ruth second category (might possibly mislead); plaintiff failed to present extrinsic evidence, so §1692e claims dismissed |
| Whether the letter violated §1692g(a)(1) (must state amount of debt) | Lemke: the interest line and NSF notice made the amount unclear/misleading | Escallate: letter clearly stated the balance due; no confusing language like in Chuway | Court: letter could possibly mislead but is not plainly misleading; without extrinsic evidence claim fails; §1692g claim dismissed |
| Whether Escallate could have used Miller safe-harbor language to avoid confusion | Lemke: safe-harbor should have been used to clarify potential changes | Escallate: Miller language applies only where amounts may vary (interest/fees accrue); here interest/fees could not be collected | Court: Miller language would have been inappropriate and could create more confusion given no right to collect interest/fees here |
| ICAA claim and procedural default | Lemke: asserted violation of Illinois law | Escallate: moved for summary judgment | Court: Lemke failed to respond; claim waived and summary judgment entered for Escallate |
Key Cases Cited
- O'Boyle v. Real Time Resolutions, Inc., 910 F.3d 338 (7th Cir.) (describes the "unsophisticated consumer" standard)
- Ruth v. Triumph Partnerships, 577 F.3d 790 (7th Cir.) (sets three-category framework for evaluating deceptive collection statements)
- Fields v. Wilber Law Firm, 383 F.3d 562 (7th Cir.) (discusses itemization as a way to comply with FDCPA prohibitions)
- Chuway v. Nat'l Action Fin. Servs., Inc., 362 F.3d 944 (7th Cir.) (§1692g(a)(1) requires the amount be stated clearly enough to be understood)
- Miller v. McCalla, Raymer, Padrick, Cobb, Nichols & Clark, L.L.C., 214 F.3d 872 (7th Cir.) (provides "safe-harbor" language for notices where the listed amount may vary)