Slick v. Portfolio Recovery Associates, LLCSlick v. Portfolio Recovery Associates, LLC
Memorandum Opinion and Order
Plaintiff Donna M. Slick alleges that defendant Portfolio Recovery Associates, LLC (“PRA”) violated various provisions of the Fair Debt Collection Practices Act (“FDCPA”) when it attempted to collect a delinquent debt. The Court previously granted Slick’s motion for partial summary judgment, and denied PRA’s cross-motion for summary judgment, with respect to Slick’s claim that PRA violated
Background
The Court will assume that the reader is familiar with its memorandum opinion addressing the parties’ original cross motions for summary judgment.
Analysis
I. PRA’s Motion for Reconsideration
PRA’s supplement to its cross-motion for summary judgment is essentially a motion to reconsider the Court’s prior ruling. See R. 140 at 3-4. “Motions for reconsideration under Rule 54(b) serve the limited function of correcting manifest errors of law or fact.” Ace Hardware Intern. Holdings Inc. v. Masso Expo Corp., No. 11 C 3928,
shall begin, with respect to any delinquent account that is placed for collection (internally or by referral to a third party, whichever is earlier), charged to profit and loss, or subjected to any similar action, upon the expiration of the 180-day period beginning on the date of the commencement of the delinquency which immediately preceded the collection activity, charge to profit and loss, or similar action.
In its supplemental brief, PRA contends that the relevant dates are instead: (1) December 3, 2004 (the date Capital One charged-off Slick’s account); and (2) July 28, 2011 (the date PRA purchased the account). R. 140 at 5. Capital One charged-off Slick’s account before PRA purchased it, so — according to PRA — the limitation period started running on December 3, 2004 and expired on June 3, 2012. Id. In support of this argument, PRA contends that the Court “incorrectly relied on a partial quote in [Gillespie ]” in ruling that the delinquency date triggered the limitation period, “whereas the full quote supports [PRA’s] position.” Id. at 3. Here is the relevant language from Gillespie :
The FCRA prohibits a consumer reporting agency from providing a consumer report containing “accounts placed for collection or charged to profit and loss which antedate the report by more than seven years.”15 U.S.C. § 1681c(a)(4) . The seven year period begins to run 180 days after the account is placed in collection or charged off by the creditor so the effective result is a seven and one-half year period from the original delinquency.
Id. at 4 (quoting Gillespie,
Equifax lists the date of the consumer’s last activity for the reported account in the Date of Last Activity field. If the account is delinquent, with no subsequent activity, then the Date of Last Activity reflects the date of delinquency. If the consumer has been paying the account, the Date of Last Activity reflects the last payment. In the case of a previously delinquent account in which the consumer has started to make subsequent payments, the last payment by the consumer replaces the delinquency date in the Date of Last Activity field.
Id. at 939, 942. In a separate disclosure, Equifax explained that “Collection Accounts” remain in a debtor’s credit file for seven years “measured from the date in your credit file shown in the ‘date of last activity field’ accompanying the particular
Viewed in the context of the entire decision, it is clear that the Seventh Circuit did not hold that the 7-year reporting period limitation is measured from the date that the creditor charges off the account. On the contrary, the statute plainly measures the reporting period from the account’s delinquency date, whether the triggering event is: (1) collection activity; (2) a charge to profit and loss; or (3) a “similar action.” In this case, the delinquency immediately preceding PRA’s collection activity (and Capitol One’s decision to charge-off the account) occurred on December 2, 2003. The reporting period expired on June 3, 2011. PRA’s letters to Slick in August and September 2011 implied that it could legally report her delinquent account and that the account would appear on her credit report, which was “both false and misleading.” Slick,
II. The Parties’ Cross Motions For Summary Judgment on Slick’s
In her supplemental brief, Slick argues that PRA’s letters violated
In [the Third and Eight Circuits’] view, if a dunning letter on a time-barred debt states that the collector could sue but promised not to, that letter would not violate the FDCPA, since no litigation was actually threatened (and indeed was expressly rejected). On its face, that may seem reasonable, but closer examination reveals why it is not. The plain language of the FDCPA prohibits not only threatening to take actions that the collector cannot take, but also the use of any false, deceptive, or misleading representation, including those about the character or legal status of any debt. If a debt collector stated that it could sue on a timebarred debt but was promising to forbear, that statement would be a false representation about the legal status of that debt.
Id. at 1020-21. The court reasoned that the defendants’ letters were more misleading than the hypothetical letter promising not to forbear. Id. at 1021 (“In any event, the case before us is nowhere near that line.”). “Neither LVNV nor CMS gave a hint that the debts they were trying to collect were vulnerable to an ironclad limitations defense.” Id. The fact that the letters “contained an offer of settlement makes things worse, not better, since a gullible consumer who made a partial payment would inadvertently reset the limitations period and made herself vulnerable to a suit on the full amount. That is why those offers only reinforced the misleading impression that the debt was legally enforceable.” Id.
Judge Gettleman relied on McMahon in a recent decision granting summary judgment against PRA in case involving a letter similar to the McMahon court’s hypothetical. See Pantoja v. Portfolio Recovery Assoc., LLC, No. 13 C 7667,
PRA opposes Slick’s
Substantively, PRA argues that Slick has failed to provide extrinsic evidence to support her claim that its communications would mislead an unsophisticated consumer. The Seventh Circuit has established three categories of FDCPA cases: (1) “cases involving statements that plainly, on their face, are not misleading or deceptive”;
The Court concludes that extrinsic evidence is unnecessary in this case to show that PRA’s communications would mislead an unsophisticated consumer. In Pantoja, the court persuasively reasoned that PRA’s letter in that case was plainly misleading on its face, and therefore extrinsic evidence was unnecessary.
In sum, the Court concludes that PRA’s communications with Slick were plainly misleading. Thus, Slick is entitled to summary judgment on her claim that PRA-violated
III. The Plaintiffs § 1692g Claim
The parties also seek summary judgment on Slick’s § 1692g claim. Within 30-days after an initial communication from a debt collector, a consumer may dispute the debt and/or request the name and address of the original creditor.
In the alternative, PRA argues that it is not liable because it committed a good-faith mistake. Section 1692k(c) of the FDCPA creates an affirmative defense for “bona fide errors”:
A debt collector may not be held liable in any action brought under this sub-chapter if the debt collector shows by a preponderance of evidence that the violation was not intentional and resulted from a bona fide error notwithstanding the maintenance of procedures reasonably adapted to avoid any such error.
PRA’s argument is devoted almost entirely to the third element of the defense. See R. 96 at 17-19. It trains its employees to comply with the FDCPA, see R. 106 ¶¶ 17-20, and specifically trains them to make a notation in the consumer’s file if the consumer asks for verification. “Upon receipt of a written request for validation of an account from a debtor, the collector is to note the account with the result code ‘DSP’ and to change the status of the account to ‘DISP.’ ” Id. ¶ 21. After the collector applies the “DSP” result code, “the account is placed with PRA’s dispute department, and PRA’s collector cannot initiate any written or verbal communication with the debtor on that account until the Disputes department’s investigation is complete.” Id. ¶ 28; see also R. 91-2 ¶ 37 (Deck of Tara Privette). In this instance, the collector did not update Slick’s file with the result code “DSP.” R. 96 at 19.
PRA essentially collapses the three elements of the bona fide error defense into one; ie., because it provides training and guidelines to its collectors, any deviation from that guidance must be unintentional and undertaken in good faith. It has not provided testimony from anyone with firsthand knowledge of the way that PRA handled Slick’s account. And it concedes that this person would have known that Slick had made a verification request. See R. 90 ¶ 37. It would be pure speculation to conclude that PRA’s employee (or employees): (1) did not intentionally violate
IV. Slick’s Other Claims
Slick’s complaint also alleges that PRA violated § 1692c(b), by sending the September 7, 2011 letter to Louden without plaintiffs consent (see R. 27 ¶53), and § 1692f, which bars debt collectors from using “unfair or unconscionable means to collect or attempt to collect any debt.” See R. 27 ¶¶ 63, 65-66. Slick has abandoned her § 1692c(b) claim by failing to respond to PRA’s arguments addressing that claim. See R. 96 at 3; R. 105; R. 107
Conclusion
For the foregoing reasons, the Court grants Slick’s renewed motion for summary judgment (R. 73) in part and denies it in part. Her motion is granted with respect to her claims that PRA violated
Notes
. The Court concludes that PRA's communications are not “plainly, on their face ... not misleading,” and PRA has not argued otherwise.
. PRA argues that, "as explained in Pantoja, Defendant does not revive the statute of limitations; it owns the accounts it collects upon, and it does not sell or transfer its accounts. If the plaintiff had made a payment (which she did not and which she never intended to do), she would not have owed the full balance she incurred.” Judge Gettleman characterized this argument as "pure sophistry,” Pantoja,