ANN L. NIELSEN, Plaintiff V. DAVID D. DICKERSON, DAVID D. DICKERSON & ASSOCIATES, a Professional

ANN L. NIELSEN, Plaintiff
v.
DAVID D. DICKERSON, DAVID D. DICKERSON & ASSOCIATES, a professional corporation, and HOUSEHOLD CREDIT SERVICES, INC., and JOHN DOES 1-10, Defendants
98 C 5909
UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF
ILLINOIS, EASTERN DIVISION
1999 U.S. Dist. LEXIS 13931
September 8, 1999, Decided
DISPOSITION: [*1] Plaintiffs' motion for summary judgment granted and Defendants' motions for summary judgment denied.
COUNSEL: For Plaintiff: Daniel A. Edelman, Cathleen M. Combs, James O. Latturner, James S. Harkness, Edelman, Combs & Latturner, Chicago, Illinois.
For Defendants: Peter D. Sullivan, Caroline A. Mondschean, Matthew R. Henderson, HINSHAW & CULBERTSON, Chicago, Illinois.
For Defendants: Nathan P. Eimer, Nancy A. Temple, SIDLEY & AUSTIN, Chicago, Illinois.
JUDGES: Charles P. Kocoras, United States District Judge.
OPINIONBY: Charles P. Kocoras
OPINION: MEMORANDUM OPINION
CHARLES P. KOCORAS, District Judge:
Before the Court are the individual motions for summary judgment filed by each party, the class representative plaintiff Ann L. Nielsen, defendants David D. Dickerson and David D. Dickerson & Associates, and defendant Household Creditor Services, Inc. For the reasons set forth below, we will grant Plaintiffs' motion for summary judgment in its entirety, and deny the motions for summary judgment of the defendants.
BACKGROUND
Class representative Ann L. Nielsen ("Plaintiffs") alleges that the defendants David D. Dickerson ("Dickerson"), David D. Dickerson & Associates ("Dickerson [*2] & Associates"), (together with Dickerson (the Dickerson Defendants")) Household Credit Services Inc. ("Household Credit"), and John Does 1-10 (collectively referred to as "the Defendants"), violated the Fair Debt Collection Practices Act, 15 U.S.C. @ 1692 et. seq. ("the FDCPA"). Specifically, Plaintiffs claim that the Defendants concocted a scheme whereby Household Credit sent to debtors mass-produced dunning letters purportedly prepared by the Dickerson Defendants, making it appear that a law firm had been retained to pursue collection of the debts, when in fact they were not retained to perform any significant legal activities prior to, or subsequent to, mailing the letters. Rather, Plaintiffs allege that the Dickerson Defendants were hired solely to lend their name and perform a ministerial mailing function. Plaintiffs claim this practice entails so-called "flat-rating," mailing collection letters under an attorney's name, and on his letterhead, to assist a debt service company in its individual debt collection efforts, when the attorney has no real involvement with the case. Thus, Plaintiffs claim that these activities entail a violation of @@ 1692e(3), [*3] 1692e(10), and 1692j.
On January 7, 1998 Nielsen received a letter addressed to her that was printed on the letterhead of Dickerson & Associates, and affixed with a facsimile of Dickerson's signature. In the letter, Dickerson referred to GM Card as his client, who had requested that Dickerson write to her regarding her delinquent account. The letter directed Nielsen to make payment to GM Card, or to call GM Card to make payment arrangements.
Nielsen filed suit and eventually moved for class certification pursuant to Federal Rule of Civil Procedure 23. After reviewing the briefs of all parties, on May 20, 1999, we granted the motion to certify the class for recipients in Illinois of letters from Dickerson & Associates. Nielsen v. Dickerson, 1999 WL 350649 (N.D. Ill. 1999). The instant motions for summary judgment followed.
LEGAL STANDARD
Summary judgment is appropriate if the pleadings, answers to interrogatories, admissions, affidavits and other materials show that "there is no genuine issue as to any material fact and the moving party is entitled to judgment as a matter of law." Fed.R.Civ.P. 56(b). "Only disputes over facts that might affect the outcome [*4] of the suit under the governing law will properly preclude the entry of summary judgment." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S. Ct. 2505, 2510, 91 L. Ed. 2d 202 (1986). The party seeking summary judgment carries the initial burden of showing that no such issue of material fact exists. Pursuant to Rule 56(b), when a properly supported motion for summary judgment is made, the adverse party must set forth specific facts showing that there is a genuine issue of material fact and that the moving party is not entitled to judgment as a matter of law. See Anderson, 477 U.S. at 250.
In making our determination, we are to draw inferences from the record in the light most favorable to the non-moving party. We are not required to draw every conceivable inference, but only those that are reasonable. See DeValk Lincoln Mercury, Inc. v. Ford Motor Co., 811 F.2d 326, 329 (7th Cir. 1987). The nonmovant may not rest upon mere allegations in the pleadings or upon conclusory statements in affidavits; rather, the party must go beyond the pleadings and support his contentions with proper documentary evidence. See Celotex Corp. v. Catrett, 477 U.S. 317, 324, 106 S. Ct. 2548, 2553, 91 L. Ed. 2d 265 (1986). [*5] Rule 56 mandates the entry of summary judgment against a party who fails to establish the existence of an element essential to that party's cause of action. See Celotex, 477 U.S. at 422.
For cross-motions for summary judgment, each movant must individually fulfill the stringent requirements necessary to obtain summary judgment under Rule 56, such standards still being applicable. United Transportation Union v. Ill. Central R.R., 998 F. Supp. 874, 880 (N.D. Ill. 1998). By filing cross-motions for summary judgment the parties do not waive trial by the merits, merely that each party believes the court should grant it judgment without trial, unless the judge disagrees. Miller v. LeSea Broadcasting, Inc., 87 F.3d 224, 230 (7th Cir. 1996). Indeed, upon receipt of cross-motions for summary judgment, the court is not required to grant summary judgment as a matter of law for either side. Brownlee v. City of Chicago, 983 F. Supp. 776, 779 (N.D. Ill. 1997); Boozell v. United States, 979 F. Supp. 670, 674 (N.D. Ill. 1997). Rather, the court will evaluate each motion on its merits, resolving factual uncertainties [*6] and drawing all reasonable inferences against the movant. Brownlee, 983 F. Supp. at 779; Boozell, 979 F. Supp. at 670; United Transportation Union, 998 F. Supp. at 880. With these principles in mind, we turn to the merits of the motions.
DISCUSSION
I. Section 1692e(3)
Plaintiffs allege that by sending the January 7, 1998 letter to her, the defendants violated @ 1692e(3), which prohibits debt collectors from engaging in the "false representation or implication that any individual is an attorney or that any communication is from an attorney." It is undisputed that the letter at issue is printed on the letterhead of Dickerson & Associates, and was signed by attorney Dickerson. Plaintiffs, however, claim that Dickerson was merely a rubber stamp for Household Credit, and the letter is a so-called "dunning letter," which is improper under the FDCPA. Naturally, defendants disagree and point to the amount of time and energy expended by Dickerson in pursuit of obtaining satisfaction of Plaintiffs' debts to Household Credit. With the field of battle defined, our analysis is focused on whether the involvement of Dickerson and his [*7] law firm was sufficient to defeat liability or is so grossly lacking as to impose liability under @ 1692e(3).
Congress enacted the FDCPA to combat the "abusive, deceptive, and unfair debt collection practices by many debt collectors." 15 U.S.C. @ 1692(a). The FDCPA defines a debt collector as "any person who uses any instrumentality of interstate commerce or the mails in any business the principal purpose of which is the collection of any debts, or who regularly collects or attempts to collect, directly or indirectly, debts owed or due or asserted to be owed or due another." 15 U.S.C. @ 1692a(6). When analyzing a claim under the FDCPA, the court should view its analysis through the eyes of an "unsophisticated consumer." Gammon v. GC Services. Ltd. Partnership, 27 F.3d 1254, 1257 (7th Cir. 1994). If an attorney regularly undertakes debt collection efforts she fulfills the definition of "debt collector" under the FDCPA. Heintz v. Jenkins, 514 U.S. 291, 296, 131 L. Ed. 2d 395, 115 S. Ct. 1489 (1995).
It is undisputed, and is in fact admitted by Dickerson, that he and his firm regularly undertake debt [*8] collection efforts. Thus, Dickerson is deemed a debt collector under the FDCPA, and our analysis turns to whether Household Credit may be deemed the same.
Household Credit denies that it is a debt collector, and insists that it is an affiliate of a creditor, and thus exempt under @ 1692a(6)(B). However, a creditor or its affiliate may be adjudged a debt collector under the FDCPA if it "uses any name other than [its] own which would indicate that a third person is collecting or attempting to collect such debts. 15 U.S.C. @ 1692(a)(6); See also Friedman v. May Dept. Stores Co., 990 F. Supp. 571, 575 (N.D. Ill. 1998) (to avoid failing to state a cause of action against a creditor, plaintiff must present evidence that the creditor used a different name in attempting to collect the debt). Based on our analysis infra holding that the letter was an improper dunning/form letter which did not involve sufficient legal involvement by Dickerson, we find that Household Credit was a debt collector under the FDCPA because it used Dickerson's name and letterhead in the dunning letter mailed to plaintiffs, improperly indicating that a third person was [*9] attempting to collect Plaintiffs' debt.
With this threshold issue resolved, we turn to whether the letter mailed to Plaintiffs falsely represented that Dickerson was an attorney attempting to collect a debt, when viewed by an unsophisticated consumer. Though somewhat obvious, it is worth noting that a consumer is more likely to promptly react to a threat emanating from an attorney than one from a collection agency. Avila v. Rubin, 84 F.3d 222, 229 (7th Cir. 1996). The reasoning is that a collection letter from an attorney conveys authority and inherently implies that an actual lawyer supervised or actually controlled the procedures by which the letter was sent. Id.
@ 1692e(3) requires that an attorney sending a dunning letter must have direct and personal involvement in the mailing of the letters, which may include reviewing the file of individual debtors to determine whether a letter should be sent. Avila, 84 F.3d at 228. An attorney may also comply with @ 1692e(3) by reviewing and approving the mailing of letters based on recommendations given by others. Id. However, personal approval of the "form" of collection letters is insufficient [*10] to comply with the requirements of @ 1692e(3). Clomon v. Jackson, 988 F.2d 1314, 1321 (2nd Cir. 1993). As a result, there will be few, if any, cases in which a mass-produced collection letter bearing the facsimile of the signature of an attorney will comply with the restrictions imposed by @ 1692e. Clomon, 988 F.2d at 1321.
The Dickerson defendants point to several factors they claim absolve it from having acted improperly under the FDCPA. Dickerson & Associates signed an agreement directly with Household Services, the creditor. Dickerson himself claims to work two to three hours per day on the estimated 2,000 accounts he receives per month from Household Credit. Dickerson employees also perform three "reviews" of the information given them.
This veneer of compliance with the FDCPA, however, is deceiving. To the reasonable unsophisticated consumer, the letters appear to be from an attorney that is aware of the facts of her case, and is preparing to zealously pursue the case. In fact, the opposite is true. The letter mailed on Dickerson's letterhead prompts debtors to contact Household Credit by telephone or mail, not Dickerson. The letter was not [*11] created specifically for Household Credit to serve its unique purposes, but was a customizable form letter used by Dickerson before he landed Household Credit as a client.
Household Credit also does not forward Dickerson & Associates its entire file for each debtor. Rather, it only sends him the debtor's account number, name, address, city, state, balance and amount due. In other words, Dickerson & Associates receives only the information necessary to complete the form letter that it sends to the debtors. The role of the Dickerson defendants is to check for incorrect amounts and typographical errors. They do not analyze contracts or any other information about the debtor.
The Dickerson defendants argue that by reviewing this wealth of information Dickerson is exercising his professional judgment to determine whether a collection letter is warranted under the circumstances. We disagree. The information analyzed by Dickerson is insignificant and does not contain any information that would enlighten Dickerson on the particular circumstances of the account prior to the mailing of the dunning letter to Plaintiffs. Checking for "typos" is admirable; however, it cannot be construed as an [*12] attorney exercising independent, trained legal judgment on the validity of a claim. n1 Therefore, we believe that Dickerson did not exercise any meaningful professional judgment before issuing a collection letter on his letterhead and under his signature.
------Footnotes------
n1 This is especially true given that Household Credit never informs Dickerson if it receives a letter in response to one of his letters. Also, Household Credit continues its collection efforts with a debtor, even after giving Dickerson the information necessary to generate and mail a collection letter to the debtor.
------End Footnotes------
Nor does Dickerson & Associates mail its own debt collection letters. Instead, it has retained a mailing service, Contract U.S.A. to actually print out and mail the letters to the individual creditors. Thus, Dickerson does not review any letters prior to their transmittal, nor does he personally sign the letters. For its printing and mailing work, Contract U.S.A. is paid ninety nine cents per letter, out of the $ 2.45 received by Dickerson & Associates [*13] for each letter mailed.
The Dickerson defendants also admit that they have never pursued a judgment on behalf of Household Credit. In addition, they have never filed a lawsuit on behalf of Household Credit, nor has Household Credit requested that they do so. We find this lack of litigation activity contradicts the impression given to an unsophisticated consumer; namely, that if she does not pay, the attorney sending her the collection letter will pursue a collection suit against her.
The key factor, however, is that the letters themselves are objectionable. No matter how the defendants attempt to posture them, it is inescapable that the letters are form letters which are modified to reflect the meager information provided to Dickerson by Household Credit. In addition, Dickerson does not sign each individual letter, but instead has a facsimile of his signature affixed to it. The Seventh Circuit in Avila adopted the reasoning of the Second Circuit in Clomon which had determined that these two facts alone are near guarantees of a @ 1692e(3) violation. When viewed in conjunction with the reams of other evidence of noncompliance, the letter clearly demonstrates a lack of involvement [*14] and an extraordinary abdication of legal duties by the Dickerson defendants in a large-scale, bulk operation. Thus, we find that as a matter of law Dickerson and Dickerson & Associates were not sufficiently involved in preparing the letter to Plaintiffs, and while the letters were on his letterhead, and his signature was on the letter, the letters were not from him in any meaningful sense of the word. Accordingly, the Dickerson defendants and Household Credit falsely represented that the form letter received by Plaintiffs was a communication from an attorney, in violation of @ 1692e(3) of the FDCPA.
Defendants cite Anthes v. Transworld Systems, Inc., 765 F. Supp. 162 (D. Del. 1991), in support of their claims for summary judgment, or at least to stave off summary judgment for Plaintiffs. However, in finding that the defendant attorney did not violate Sections 1692e(3), 1692e(10) & 1692j, the Court in Anthes determined that the attorney was not paid for each letter he sent out, but was paid a set retainer; was not forwarded merely the information necessary to fill in a form letter, but was given a substantial amount of information which he analyzed to determine [*15] whether to send a letter; was not using a mailing service, but was mailing the letters directly from his office; and was not affixing a facsimile of his signature to the letters, but was actually signing each one. These facts present a marked difference between the conduct of the Dickerson defendants and the attorney defendant in Anthes. Based on these material differences, we find Anthes distinguishable and thus does not compel judgment for the defendants.
Similarly, defendants seek to raise a question of fact as to whether Dickerson remained involved in the debt collection process following the issuance of the letters by Contract U.S.A. We believe, however, that the undisputed facts already presented and discussed in this opinion are more than sufficient to constitute a violation of @ 1692e(3). Even if we accept as true that Dickerson actually may have spoken to one or more of the recipients of the letter generated on his letterhead, this is more evidence of a surface veneer of compliance with the FDCPA by the Dickerson defendants and does not remove their activities from the realm of improper practice. Therefore, we grant Plaintiffs' motion for summary judgment as to liability [*16] under @ 1692e(3), and deny the motions of the defendants.
II. @ 1692e(10)
Plaintiffs also claim that the letter violates @ 1692e(10), which prohibits "the use of any false representation or deceptive means to collect or attempt to collect any debt or to obtain information concerning a consumer." Because we found supra that the Dickerson defendants were not sufficiently involved with the preparation of the dunning letter sent to Plaintiffs, having it printed on the letterhead of a law firm and having it affixed with the facsimile signature of a lawyer amounts to a false representation in violation of @ 1692e(10). The court therefore grants Plaintiffs' motion for summary judgment on the @ 1692e(10) claim.
III. Section 1692j
Finally, Plaintiffs allege that the Dickerson defendants violated @ 1692j, which states in pertinent part:
It is unlawful to design, compile, and furnish any form knowing that such form would be used to create the false belief in a consumer that a person other than the creditor of such consumer is participating in the collection of or in an attempt to collect a debt such consumer allegedly owes such creditor, when in fact such person is not [*17] so participating.
By enacting 1692j, Congress sought "to combat 'flat-rating,' whereby a 'flat-rater,' masquerading as a debt collector, writes and mails 'dunning letters' to the debtors to intimidate them into paying the creditor." Randle v. GC Svcs., L.P., 25 F. Supp. 2d 849, 852 (N.D. Ill. 1998). In Anthes, the court also analyzed whether the defendant attorney engaged in flat-rating, and with its focus on the legislative history of the FDCPA, the court observed that a defendant can be either a debt collector or a flat rater, but not both. Anthes, 765 F. Supp. at 168. However, in Randle, Judge Gettleman respectfully disagreed with the Anthes decision, observing that Anthes contradicts the plain language of 1692j which focuses on the state of mind of the flat-rater. Randle, 25 F. Supp.2d at 853. "Liability under @ 1692j therefore should rest on whether a defendant created and disseminated a letter with the intent to deceive consumers, not on the exact path this letter took in reaching the consumer. Id. Moreover, Judge Grady in Laubach v. Arrow Service Bureaus, Inc., 987 F. Supp. 625 (N.D. Ill. 1997), [*18] determined that "defendants generally incur liability under @ 1692j where they actually write or otherwise originate the form letter." Id. at 630. In contrast, mere label merging, letter printing and mass mailing are not violations of @ 1692j. Id. In addition, @ 1692j liability may attach even when the defendant furnishes the dunning letter to a debt collector, instead of a creditor. Taylor v. Perrin, Landry, deLaunay & Durand, 103 F.3d 1232, 1237-38 (5th Cir. 1997).
We held in Section I supra that the Dickerson defendants are debt collectors under the FDCPA, and that the dunning letter at issue creates the false belief that the Dickerson defendants are participating in the collection of the debt. We are persuaded by Judges Gettleman and Grady that being deemed a debt collector does not constitute a bar to liability under @ 1692j. Instead, we believe the better approach is to determine whether the defendants wrote or otherwise originated the misleading form letter at issue. It is undisputed that the Dickerson defendants are responsible for creating the misleading and improper dunning letter at issue, and thus they are also liable under [*19] @ 1692j. Accordingly, we grant Plaintiff's Motion for Summary Judgment as to liability under @ 1692j, and deny the motion for summary judgment of Dickerson and Dickerson & Associates.
Finally, Household Credit invites the Court to reconsider its class certification ruling on standing. We have considered its arguments and finding them to be without merit, reject them without comment. n2
------Footnotes------
n2 During the pendency of these motions the defendants brought motions to strike certain portions of Plaintiff's response to Defendant Dickerson's 12(N)(3) statement. Because the Motions do not pertain to the undisputed facts of this case, the resolution of this Motion does not affect our decision here, so we hereby deny the Motions to Strike of the Defendants.
------End Footnotes------
CONCLUSION
For the reasons set forth above, Plaintiffs' motion for summary judgment is granted, and the Defendants' motions for summary judgment is denied. The Court will retain jurisdiction to address the remaining issues of appropriate damages, attorneys' fees, [*20] and notice to the class.
Charles P. Kocoras
United States District Judge
Dated: September 8, 1999