MEMORANDUM OPINION AND ORDER
Plaintiff Jonathan Simkus brings a two-count complaint against Defendants Cavalry SPV I, LLC (SPV), and Cavalry Portfolio Services, LLC (CPS) for violations of § 1692e and § 1692f of the Fair Debt Collections Practices Act. 15 U.S.C. § 1692 et seq. (“FDCPA”). Mr. Simkus contends Defendants SPV and CPS (collectively, “Defendants”) unlawfully charged him interest retroactively on a debt SPV purchased from Bank of America (“BOA”) for the purposes of collection. Defendants contend that BOA never waived its right to collect interest, and therefore, Defendants were permitted to charge that interest as BOA’s assignee. Before us are cross-motions for summary judgment as to liability on both counts. For the reasons set forth below, we deny Mr. Simkus’s motion. We deny Defendants’ motion in part, and grant it in part. We also request additional briefing for the parties to address whether Defendants’ dunning letter was misleading.
BACKGROUND
Plaintiff Jonathan Simkus accrued $7,077.66 in BOA credit card debt. (Pl.’s 56.1 SOF ¶¶ 11-13.) Mr. Simkus opened the account on July 18, 2003. (Id. ¶ 6.) According to the cardholder agreement, the applicable law is Arizona and federal Law. (Id., Ex. D, Cardholder Agreement at 956.) Mr. Simkus testified that from 2003 to 2010, he lived in various locations in Arizona. (Id., Ex. A, Simkus Dep. at 10.) After Mr. Simkus stopped making payments, the account went into default and BOA charged-off the account on April 30, 2009. (Id. ¶¶ 11-12.) Mr. Simkus understood that under his agreement with BOA, the bank would charge interest on any unpaid balances. (Id. ¶ 10.) Also, he testified that he believed he knew how BOA would calculate this interest. (Defs.’ 56.1 SOF, Ex D, Simkus Dep. at 34.) On December 9, 2010, Capital Management Services, L.P, attempted on BOA’s behalf to collect the charged-off debt of $7,077.66. (Defs.’ 56.1 SOF ¶ 15.)
On May 11, 2011, BOA’s subsidiary, FIA Card Services, sold Mr. Simkus’s credit card account to SPV, LLC, a debt collection agency. (Pl.’s 56.1 SOF ¶ 18.) That same month, BOA reported to TransUnion that the “High Balance” on the account was $7,077.66. (Defs.’ 56.1 SOF ¶ 18.) In the agreement between BOA and SPV, the contract indicated that the balance “may include interest (accrued or unaccrued).” (PL’s 56.1 SOF, Ex. K, Loan Sale Agreement § 1.7.) BOA did not charge interest for the twenty-five months after the charge-off prior to its selling the account to Defendant SPV. (PL’s 56.1 SOF, Ex. C, Aff. of Sale and Certification of Debt.) In the cardholder agreement between BOA and Mr. Simkus, the agreement states that “failure to exercise any rights ... will not waive any of our rights in the future.”
After purchasing the accounts from BOA, SPV then retroactively added interest to the account from the period BOA owned the account after the charge-off date until SPV purchased the account. (Pl.’s 56.1 SOF ¶ 22.) One month after SPV purchased the account, CPS
Mr. Simkus argues that Defendants’ retroactive charging of interest violates § 1692e and § 1692f of FDCPA. (PL’s MSJ at ¶ 5.) Each party seeks summary judgment on liability.
STANDARD OF REVIEW
Summary judgment is proper only when “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 genuine issue for trial exists when “the evidence is such that a reasonable jury could return a verdict for the nonmoving party.” Anderson v. Liberty Lobby, Inc.,
ANALYSIS
Mr. Simkus argues that BOA waived the interest on his credit card debt because it did not charge him interest for the twenty-five month period from the date of charge-off to BOA’s selling the debt to SPV. He argues therefore that Defendants’ adding retroactive interest and attempting to collect on that debt violated FDCPA § 1692e and § 1692f. Under FDCPA, debt collectors cannot use “false, deceptive, or misleading representation or means in connection with the collection of any debt.” 15 U.S.C. § 1692e. Whether a violation occurs is viewed through an objective standard of the “unsophisticated consumer.” Fields v. Wilber Law Firm, P.C.,
Mr. Simkus’s § 1692e and § 1692f arguments in part depend on whether BOA waived interest, we must discuss the appropriate choice of law for determining waiver as a threshold matter. After considering the applicable waiver standard, we will turn to analyze Mr. Simkus’s contention that Defendants violated § 1692f(l) because they tried to collect on a debt not authorized by law or contract. Finally, we will address Mr. Simkus’s claim that Defendants violated § 1692f(l) and § 1692e, regardless of the issue of waiver, because they failed to explain in their dunning letter how the debt amount had increased.
A. DID BOA WAIVE ITS RIGHT (AND THUS ITS ASSIGNEE’S RIGHT) TO COLLECT INTEREST?
1. Choice of Law Governing Waiver
Before deciding whether BOA waived its right to interest, we must decide which state’s law to use in interpreting the alleged waiver. Although the parties generally relied on Illinois law in their briefs, the Purchase Agreement between Mr. Simkus and BOA states that “APPLICABLE ARIZONA AND FEDERAL LAW” apply. (Pl.’s 56.1 SOF, Ex. D, Cardholder Agreement at 956.) Under Illinois law, a court will apply a contract’s choice-of-law clause to disputes that arise from that contract, so long as the contract is valid. Kohler v. Leslie Hindman Inc.,
Courts generally defer to the parties’ designated choice of law provision in the contract. TEKsystems, Inc. v. Lajiness, 12 C 10155,
Here, because waiver involves contract interpretation, we interpret state law. The parties have not contested the validity of the contract, and the agreement expressly provides that applicable Arizona and federal law apply. Like in TEKsys-tems, neither party here has raised a public policy argument for why a specific fo
2. Under Arizona law, a factfinder must decide whether BOA waived its right to collect interest.
Mr. Simkus argues that Defendants violated FDCPA because they tried to retroactively collect interest that BOA had previously waived. A waiver is an intentional relinquishment of a known right. Yuma Cnty. v. Arizona Edison Co.,
A trier of fact’s finding of waiver would require a ruling in favor of Mr. Simkus and a finding that Defendants violated FDCPA § 1962e. A finding of waiver also would mean that the rights of an assignee would be “no higher than those of the bank.” In re Nixon,
Whether a right has been waived is a question of fact for the trial court. Goglia,
B. EVEN IF BOA WAIVED INTEREST, DID DEFENDANTS VIOLATE § 1692(f)(1) BY ATTEMPTING TO COLLECT AN UNAUTHORIZED DEBT?
Although the finder of fact will need to decide the issue of waiver, we can dispense with Mr. Simkus’s specific § 1692f(l) claim. FDCPA broadly prohibits unfair conduct in debt collection. Ter-ech,
Courts have construed the statute to apply only to the original agreement creating the debt. In Terech, for example, the court held that § 1692f(l) is “directed at debt collectors who charge fees not contemplated by the original agreement, not debt collectors who seek to charge fees contemplated by the agreement but arguably waived thereafter.”
Similarly here, even if BOA waived its right to collect interest, Defendants cannot have violated 1692f(l) if the original agreement between Mr. Simkus and BOA allowed for charging interest on late payments. As in Terech, where the plaintiff did not show that the original agreement between Mr. Terech and U.S. Bank barred interest charges, Mr. Simkus understood that&emdash;under his agreement with BOA&emdash;the bank would charge interest on any unpaid balances. (PL’s Resp. to Defs.’ 56.1 SOF ¶ 10.) Mr. Simkus testified that he believed he knew how BOA would compute those charges. (Simkus Dep. at 34.) Mr. Simkus has thus failed to raise a factual question about BOA’s right to charge interest under the original agreement. Accordingly, we grant summary judgment on the § 1692f(l) claim in favor of Defendants.
C. LEGALITY OF THE DUNNING LETTERS
We turn then to Mr. Simkus’s final claim and consider whether the dunning letters he received were misleading in violation of § 1692e(2)(A) and § 1692f. To prevail on this claim, Mr. Simkus must show either that the text of the challenged letters “plainly reveal that [they] would be
1. Defendants’ lack of explanation in the dunning letters of the charge increase does not constitute a plain violation of § 1692e(2)(A) or § 1692f.
Mr. Simkus argues that, even if Defendants properly added retroactive interest, they violated FDCPA because CPS failed to explain in its dunning letters how the balance increased by $3,750.62, or about 45%, in a few months. Mr. Simkus contends that CPS should have itemized the interest so that the new sum would make sense to him. “Courts may determine as a matter of law that a collection letter, on its face, violates the FDCPA” when the letter is plainly misleading. Acik v. I.C. Sys., Inc.,
In deciding whether the collection letters violated FDCPA, we look at the letters from the perspective of an unsophisticated consumer. Fields,
Courts have held that debt collectors have an obligation to itemize and explain additional charges in a collection-dunning letter. Acik,
A court may grant summary judgment in favor of the plaintiff when the collection letter “on its face” clearly violates FDCPA. Acik.,
Although courts have found that lumping charges without explanation is confusing to the unsophisticated consumer and therefore misleading, courts in this jurisdiction have not held that combining interest and principal into one item violates § 1692e. In Wahl v. Midland Credit Management., the court held that it was not confusing to include interest in an item listed as “principal balance,” where it included interest from the previous creditor.
Further, in Hahn v. Triumph Partnership, LLC, the court granted summary judgment for the defendant debt collector and found no FDCPA violation for describing an “AMOUNT DUE” that encompassed interest that the previous creditor had added prior to the debt collector purchasing the debt.
Accordingly, we must deny Mr. Simkus’s motion for summary judgment on this theory. Applying the aforementioned authorities to Mr. Simkus’s claim, we conclude that CPS was not required to itemize interest and principal. The amount that CPS listed as the outstanding balance as $10,828.28 on June 13, 2011, represented the amount that Mr. Simkus owed on that date if BOA had not waived interest. The parties do not dispute that this outstanding balance consisted of $7,077.66 in principal and $3,750.62 in interest. Because combining interest and principal is permissible, the dunning letter is not confusing “on its face.” Acik.,
2. Mr. Simkus has failed to provide any extrinsic evidence demonstrating that the dunning letter was confusing to an objective unsophisticated consumer.
Having concluded that Defendants’ letter is not clearly misleading on its face, we turn to address whether Defendants’ dunning letter is nonetheless misleading under these circumstances. In cases where the dunning letter does not clearly violate FDCPA on its face, a plaintiff must provide some extrinsic evidence showing that an unsophisticated consumer would be confused to survive a defendant’s summary judgment motion. Smith v. First Nat’l Collection Bureau, 06 C 4742,
“ ‘[M]ere speculation that a collection letter confuses the unsophisticated
Likewise, Mr. Simkus offers no extrinsic evidence detailing how an unsophisticated consumer would find CPS’s dunning letter confusing. He merely stated in his deposition that he was confused and that his parents speculated that the additional amount could be the result of interest. (Simkus Dep. at 90:17-18.) Yet despite claiming that he was confused, Mr. Simkus also testified that he believed he knew how BOA would calculate interest. (Simkus Dep. at 34.) Mr. Simkus does not contend that the interest was charged beyond that contractual rate, relying instead on his waiver argument.
Although Defendants requested that we deny summary judgment to Mr. Simkus on this issue (Defs.’ Resp. at 10.), they did not independently seek summary judgment. Because resolution of this question may narrow the issues remaining for trial, we ask the parties to brief whether Defendants violated FDCPA for not explaining how the balance increased $3,750.62 in one month after they purchased the debt and sent Mr. Simkus the dunning letter. In accordance with Rule 56(f), we give the parties until February 21, 2014 to file supplemental briefs (not to exceed seven pages) addressing whether Defendants are entitled to summary judgment on Mr. Sim-kus’s claim that their failure to itemize interest violated §§ 1692e(2)(A) and 1692f. If necessary, the parties may each submit up to ten additional 56.1 Statements of Fact, as long as they directly pertain to this narrow question.
CONCLUSION
For the reasons set forth above, we grant Defendants’ motion for summary judgment with respect to Mr. Simkus’s claim under § 1692f(l) that they attempted to collect an unauthorized debt. We deny Defendants’ motion as to all other claims. We also deny Plaintiffs’ motion for summary judgment. The parties shall submit the supplemental briefing described above no later than February 21, 2014. This case is set for status on April 3, 2014. It is so ordered.
Notes
. Defendant CPS is an affiliated debt collection agency and SPV’s assignee. (Defs.' MSJ at 4.) The two companies are under common management and common control. (Pl.’s 56.1 SOF ¶ 8.)