Johnson v. Waypoint Res. Grp.

596 F.Supp.3d 1184

Alicia JOHNSON, Plaintiff

v.WAYPOINT RESOURCES GROUP, Defendant

Cause No. 1:19-CV-3823 RLM-DLP

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

Signed March 31, 2022

Angie K. Robertson, Mary E. Philipps, David J. Philipps, Philipps & Philipps, Ltd., Palos Hills, IL, John Thomas Steinkamp, John Steinkamp & Associates, Indianapolis, IN, for Plaintiff.

Holly H. Campbell, Thompson Coburn LLP, Chicago, IL, Matthew Guletz, Pro Hac Vice, Thompson Coburn LLP, Saint Louis, MO, for Defendant.

OPINION AND ORDER

Robert L. Miller, Jr., United States District Judge

Alicia Johnson sued Waypoint Resources Group, for violation of the Fair Debt Collection Practices Act. 15 U.S.C. § 1692 et seq. Ms. Johnson alleges violations of the FDCPA's prohibition against false or misleading representations, 15 U.S.C. § 1692e, and the FDCPA's catch-all prohibition against unfair practices, 15 U.S.C. § 1692f. Ms. Johnson moves for summary judgment on both of her claims. [Doc. No. 51]. Waypoint cross-moves for summary judgment on both claims and moves for summary judgment on the issue of actual damages as well. [Doc. No. 53]. For the reasons stated below, the court denies Ms. Johnson's motion for summary judgment and grants in part and denies in part Waypoint's cross-motion for summary judgment.

I. BACKGROUND

Alicia Johnson sought a home loan in 2018. She obtained a credit report and found a debt owed to Charter Communications she didn't recognize. She thought it might belong to her ex-husband. They'd separated in 2014, but Ms. Johnson thought he might have signed up for cable in her name and stopped paying the bill when they separated. The debt appeared under her former name, Alicia Price, and didn't include a last date of payment.

Ms. Johnson had her attorney dispute the debt with Waypoint Resources Group, the entity that had reported her debt. Her attorney sent a fax to Waypoint saying that Ms. Johnson disputed the debt and Waypoint should communicate with Ms. Johnson through her attorney. The letter included her full name ("Alicia K. Johnson") and her current husband's name, her address in Indianapolis, and the last four digits of her Social Security number.

Waypoint couldn't find her account. Waypoint had the disputed debt but the information in its records didn't match the information in Ms. Johnson's letter. Waypoint's records had the debt under the name "Alicia Price" who resided at an address in Fortville, Indiana, not Indianapolis. A Waypoint employee searched their records by the last four digits of Ms. Johnson's Social Security number, which produced more than two hundred results. Waypoint's recordkeeping software didn't give the option of searching by multiple data points, so Waypoint couldn't search by Social Security number and first name or Social Security number and state of residence. Waypoint's procedures called for any dispute letter that couldn't be matched to a debt to be marked with a question mark and put in a folder labeled "UNABLE TO LOCATE," for future investigation. If a consumer contacted Waypoint again about a disputed debt, employees were to check the folder to see if one of the unidentified disputed debts belonged to the consumer. The Waypoint employee who handled Ms. Johnson's letter didn't mark it with a question mark and might or might not have put it in the "UNABLE TO LOCATE" folder.

Ms. Johnson got a new copy of her credit report later in 2019. The new credit report showed that the Waypoint reported the Charter debt after her attorney had sent a fax to Waypoint disputing the debt. Ms. Johnson reported feeling stress and anxiety because the debt brought back memories of her ex-husband, and she even reported losing sleep. She then filed this lawsuit.

II. STANDARD OF REVIEW

Summary judgment is appropriate when there is no genuine issue of material fact and that the moving party is entitled to judgment as a matter of law. Fed. R. Civ. P. 56(a). A genuine issue of material fact exists whenever "there is sufficient evidence favoring the nonmoving party for a jury to return a verdict for that party." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 249, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). In deciding whether a genuine issue of material fact exists, a court accepts the non-movant's evidence as true and draw all inferences in his favor. Id. at 255, 106 S.Ct. 2505. Nevertheless, the nonmoving party is not entitled to "[i]nferences that are supported by only speculation or conjecture." Argyropoulos v. City of Alton, 539 F.3d 724, 732 (7th Cir. 2008). The existence of an alleged factual dispute, by itself, won't defeat a summary judgment motion; "instead, the nonmovant must present definite, competent evidence in rebuttal," Parent v. Home Depot U.S.A., Inc., 694 F.3d 919, 922 (7th Cir. 2012), and "must affirmatively demonstrate, by specific factual allegations, that there is a genuine issue of material fact that requires trial." Hemsworth v. Quotesmith.com, Inc., 476 F.3d 487, 490 (7th Cir. 2007) ; see also Fed. R. Civ. P. 56(e)(2). On cross-motions for summary judgment, the court construes all inferences in favor of the party against whom the motion under consideration is made. O'Regan v. Arb. Forums, Inc., 246 F.3d 975, 983 (7th Cir. 2001) (quoting Hendricks-Robinson v. Excel Corp., 154 F.3d 685, 692 (7th Cir. 1998) ).

III. ANALYSIS

Ms. Johnson brings claims against Waypoint under two provisions of the Fair Debt Collection Protection Act. 15 U.S.C. § 1692 et seq. Her first claim is for false or misleading representations. Id. § 1692e. She specifically alleges that Waypoint violated the prohibition against "[c]ommunicating ... to any person credit information which is known or which should be known to be false, including the failure to communicate that a disputed debt is disputed." Id. § 1692e(8). Her second claim is for unfair or unconscionable debt collection practices. Id. § 1692f. Ms. Johnson moves for summary judgment on both claims. Waypoint opposes Ms. Johnson's motions and cross-moves for summary judgment on both claims. Waypoint also contends that if there's genuine issue as to any FDCPA violation, it's entitled to the bona fide error defense. 15 U.S.C. § 1692k(c). Waypoint moves for summary judgment on Ms. Johnson's claim for actual damages as well.

A. False or Leading Misrepresentations, 15 U.S.C. § 1692e(8).

Both parties move for summary judgment on Ms. Johnson's claim of false or misleading representations. Ms. Johnson argues that Waypoint either knew or should have known that her debt was disputed, so it violated the FDCPA by reporting the debt without noting that the debt was disputed. Waypoint argues that Ms. Johnson's dispute letter was insufficient to show that Waypoint knew or should have known that the debt was disputed, so it didn't violate the FDCPA by omitting that the debt was disputed.

The FDCPA prohibits debt collectors from using false, deceptive, or misleading representations in connection with debt collection and specifically defines practices that violate the statute, without limiting the prohibition to those practices. 15 U.S.C. § 1692e. Ms. Johnson claims Waypoint violated the specific prohibition against "[c]ommunicating or threatening to communicate to any person credit information which is known or which should be known to be false, including the failure to communicate that a disputed debt is disputed." Id. § 1692e(8). This subsection establishes a "knows or should know" standard and depends solely on the debt collector's knowledge. Evans v. Portfolio Recovery Assocs., LLC, 889 F.3d 337, 347 (7th Cir. 2018). This standard doesn't require notification by the consumer since the focus is on the debt collector's knowledge, no matter how the debt collector gains that knowledge. Id. (citing Brady v. Credit Recovery Co., 160 F.3d 64, 67 (1st Cir. 1998) (debt collector knew of dispute by oral communication of dispute)). Nor does § 1692e(8) incorporate procedural requirements, writing requirements, or more specific definitions of "disputed debts" applied in other sections of the FDCPA or the Fair Credit Reporting Act. Id. (rejecting arguments that requirements from 15 U.S.C. §§ 1681s-2, 1692g(b) should be read into § 1692e(8) ).

There's no dispute that Ms. Johnson's debt dispute letter contained identifying information that didn't match Waypoint's records. The letter included the names "Ludwig W. Johnson, III & Alicia K. Johnson," a home address in Indianapolis, Indiana, and the last four digits of her Social Security number. Her attorney sent the letter, so the letter included the attorney's contact information as well. Waypoint's records, on the other hand, included the name "Alicia Price," the account number, the original creditor's name, the amount of debt, Ms. Johnson's full Social Security number, and an address in Fortville, Indiana. The names didn't match because Ms. Johnson had remarried and changed her name, and the addresses didn't match because she had moved. The parties dispute Ms. Johnson's motives and reasons for omitting other identifiers and more complete information.

Ms. Johnson argues that the information in her debt dispute letter was enough to establish that Waypoint should have known that her debt was disputed. She proposes that once Waypoint searched by Social Security number and found 200 or so potential matches, it could have manually searched for accounts associated with the first name "Alicia" or with Indiana addresses. Alternatively, Waypoint could have contacted her attorney. The first proposal really leads to the second because even if Waypoint had manually searched the results by Social Security number for "Alicia" or for an Indiana address, there would be lingering doubts about whether any partial match was for the right account. Waypoint might be unwise to take action on an account with mismatched information without first contacting the attorney, so this first proposal folds into the second proposal to form one theory: Waypoint...