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1:04-cv-01304-JBM-JAG # 19 Page 1 of 8 E-FILED Monday, 07 March, 2005 10:37:02 AM Clerk, U.S. District Court, ILCD IN THE UNITED STATES DISTRICT COURT FOR THE CENTRAL DISTRICT OF ILLINOIS PEORIA DIVISION KAY F. MANN, Plaintiff, v.
NATIONAL ASSET MANAGEMENT
ENTERPRISES, INC.;
LAW OFFICES OF GERALD E. MOORE
& ASSOCIATES, P.C.,
Defendants.
04 C 1304
Judge McDade Magistrate Judge Gorman PLAINTIFF’S RULE 59 MOTION AND INCORPORATED MEMORANDUM TO RECONSIDER RULING ON DEFENDANTS’ MOTION TO DISMISS Plaintiff respectfully requests, pursuant to Fed.R.Civ.P. 59, that this Court reconsider its ruling granting defendants’ motion to dismiss this case. In support of this motion, plaintiff states:
1.
On February 27, 2005, this Court granted defendants’ motion to dismiss. Its opinion was largely based on an interpretation of the word “collection” as used by Congress and the Illinois Legislature – an issue that was not addressed by the parties – and application of two cases based on facts contrary to those alleged in the complaint. For these reasons, plaintiff moves for reconsideration.
2.
“A motion for reconsideration performs a valuable function where the Court ... made a decision outside the adversarial issues presented to the Court by the parties....” Bank of Waunakee v. Rochester Cheese Sales, Inc., 906 F.2d 1185, 1191 (7th Cir. 1991). 3.
Plaintiff brings this motion for reconsideration so that she may have the
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1:04-cv-01304-JBM-JAG # 19 Page 2 of 8 chance to address the issue that the Court views as the dispositive issue in this case, that the parties did not have the chance to brief before.
4.
This Court’s dismissal of plaintiff’s allegations rested primarily on an interpretation of 15 U.S.C. §1692f(1) and 225 ILCS 425/9(a)(29) that defendants were not “collecting” a debt when they offered the alleged “check by phone” service. This was not an argument raised by defendants, and plaintiff respectfully requests that this Court permit her to submit argument.
Meaning of “collect” 5.
The Court interpreted the words “collection” and “collecting” as meaning “demand as a matter of right,” holding that the Illinois Collection Agency Act and the FDCPA do not cover a debt collector’s actions if it is not collecting an amount claimed owed or due as a matter of right. Plaintiff respectfully disagrees.
6.
While one meaning of “collect” is to demand as of right, another is simply to “receive.” “Collection” and “collecting” are generally used to refer to “taking in,” “gathering” or “reaping”. Thus, the practice of circulating baskets for donation of money at church services is regularly known as “collection” even though the money is not claimed as a matter of right; the church “receives” the money.
7.
Courts define “collect” consistent with plaintiff’s position. Gardin v.
Long Beach Mortgage Co., 661 N.W.2d 193, 198 (Iowa 2003) (“‘Collect’ is defined as ‘to receive payment.’ Black's Law Dictionary 238, 238 (5th ed. 1979); see also Webster's Encyclopedic Unabridged Dictionary 403 (defining ‘collect’ as ‘to receive payment’); Polakoff v. State, 586 So. 2d 385 (Fla. App. 1991) (defining “‘collect’ to mean to receive payment....”); All American Life Ins. Co. v. Rylander, 73 S.W.3d 299, 302 (Tex. App. 2001) ("’Collect’"
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means ‘to receive, gather, or exact from a number of persons or other sources.’ citing Webster's Third New International Dictionary 1894 (1986), at 444.); Stagner v. Wyoming State Tax Comm'n, 682 P.2d 326, 329 (Wyo. 1984) (“"Collect" is said to mean "to receive, gather, or exact from a number of persons or other sources," Webster's Third International Dictionary (1961). The plain meaning of the term "collect" is to obtain something from another.”). 8.
Both the FDCPA and the Illinois Collection Agency Act refer to
“collecting” and “attempting” to collect or enforce debts. E.g., 15 U.S.C. §1692f (“A debt collector may not use unfair or unconscionable means to collect or attempt to collect any debt”); 225 ILCS 425/9 (a)(20) (defining as a violation “Attempting or threatening to enforce a right or remedy with knowledge or reason to know that the right or remedy does not exist”). The concept of “attempting” to collect or enforce clearly encompasses the notion of purposefully demanding money as if due. “Collecting” is used in a broader sense. The conjunctive “collect or attempt to collect” includes all forms of receiving or attempting to induce the payment of money.
9.
Because it is part of the Consumer Credit Protection Act, 15 U.S.C.
§§1601 et seq., the FDCPA should be liberally construed in favor of the consumer to effectuate its purposes. Cirkot v. Diversified Fin. Services, Inc., 839 F.Supp. 941 (D. Conn. 1993). The [Consumer Credit Protection] Act is remedial in nature, designed to remedy what Congressional hearings revealed to be unscrupulous and predatory creditor practices throughout the nation. Since the statute is remedial in nature, its terms must be construed in liberal fashion if the underlying Congressional purpose is to be effectuated.
N.C. Freed Co. v. Board of Governors, 473 F.2d 1210, 1214 (2d Cir. 1973). To accomplish this goal, whichever meaning of “collect” or “collection” affords the broadest coverage and the most protection to the consumer should be applied.
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# 19 Page 4 of 8 The following legal and common usage definitions of “collect” and “collection” also support plaintiff’s position:
(1) Collect - “to bring together into one body or place b : to gather or exact from a number of persons or sources <collect taxes> 2 : INFER, DEDUCE 3 : to gain or regain control of <collect his thoughts> 4 : to claim as due and receive payment for 5 : to get and bring with one; specifically : PICK UP <went to collect her at the train station> intransitive senses 1 : to come together in a band, group, or mass : GATHER 2 a : to collect objects b : to receive payment <collecting on the insurance>”, Merriam-Webster OnLine Dictionary (March 6, 2005).
(2) Collection - A group of things assembled, as a collection of rocks; an item of business of a collection agency or, as the term is sometimes used, of a lawyer in the commercial line; the act of receiving payment of a debt, whether payment be voluntary or compelled by legal action or process.” Ballantine’s Law Dictionary (3d Ed.). (3) Collect - TRANSITIVE VERB: 1. To bring together in a group or mass; gather. 2. To accumulate as a hobby or for study. 3. To call for and obtain payment of: collect taxes. 4. To recover control of: collect one's emotions. 5. To call for (someone); pick up: collected the children and drove home. INTRANSITIVE VERB: 1. To come together in a group or mass; gather. See synonyms at gather. 2. To take in payments or donations: collecting for charity. ADVERB & ADJECTIVE: With payment to be made by the receiver: called collect; a collect phone call. American Heritage Dictionary (4th Ed. 2000).
11.
The collection of the “check by phone” fee is not segregable from the collection of the debt. The check by phone offer was made within the text of a letter designed to collect a debt, was intended to induce the consumer to pay her debt, and to provide added money
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1:04-cv-01304-JBM-JAG # 19 Page 5 of 8 to the debt collector for basically doing nothing. Defendants requested the payment of money in addition to the debt claimed to be owed. The collection letter at issue states that “[t]his fee is addition [sic] to your actual payment and the fee will not be credited to your outstanding balance.” When a debtor pays the fee, the debt collector collects it at the same time it collects the money for the debt.
12.
Section 9 of the Illinois Collection Agency Act defines as a violation “Collecting or attempting to collect any . . . charge or fee in excess of the actual debt or claim unless such interest or other charge or fee is expressly authorized by the agreement creating the debt or claim unless expressly authorized by law or unless in a commercial transaction such interest or other charge or fee is expressly authorized in a subsequent agreement.” 225 ILCS 425/9(a)(29). Plaintiff alleged that neither the underlying agreement nor any law permitted the collection of the $7.50 fee. Requesting any money in addition to the amount claimed due while in the process of collecting a debt is a violation of the Illinois Act, unless such collection is authorized by the underlying contract or by law. Even requesting optional payment of $7.50 in an attempt to collect a debt is a violation of 225 ILCS 425/9(a)(29), and therefore violates the FDCPA.
Fee is not a “pass-on” 13.
In addition, the Court appears to have erred in finding that this case is analogous to Lee v. Main Accounts, Inc., 125 F.3d 855 (6th Cir. 1997) (unpublished) and Lewis v. ACB Business Serv’s, Inc., 911 F.Supp. 290, 292-93 (S.D.Ohio 1996). The Court held that they were persuasive because in those cases and this one, “the fee was optional and the debt collector was passing the fee along to the consumer.” Opinion at 3-4.
14.
Plaintiff argued in her response to defendants’ motion to dismiss that
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1:04-cv-01304-JBM-JAG # 19 Page 6 of 8 defendants retain the entire fee. Nothing in the complaint or anything else before the Court supports the proposition that the $7.50 represents a pass-on of any sum charged by any third party.
15.
Indeed, the little discovery that has happened in this case so far has revealed that defendant Moore keeps the entire $7.50 fee – it is not passed to another entity. Disc. Resp. at 3, #8 (Exhibit A, attached).
16.
This important fact distinguishes this case from the two cases relied upon by defendants and this Court. In this case, the fee was not passed through the debt collector to the consumer; it was instead made up and kept by the debt collector. It was not a pass through of any sort.
17.
The $7.50 fee was for a “service” that other debt collectors “perform” for nothing (Exhibit B).
18.
The check by phone fee is pure profit by the collector, 100% of which is retained by the collector. Lee and Lewis emphasized the pass-on nature of the charge, indicating that fact was important to the courts’ conclusions. Because this Court seems to have made an error of fact and law in assuming that defendants’ fee is similar in this respect, plaintiff moves to reconsider.
19.
The difference between a consumer paying for a stamp to pay for payment and using the “check by phone” system is substantial. The consumer’s payment for a stamp (or for Western Union or FedEx) goes to a third party, whereas the $7.50 goes to the debt collector. It therefore does not matter whether the $7.50 is owed to the debt collector, or whether the payment is voluntary or not. If a debt collector asks for extra money in the process of collecting a debt, and retains that money, such collection is illegal.
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WHEREFORE, plaintiff respectfully requests that this Court reconsider its ruling granting defendants’ motion to dismiss this case.
Respectfully submitted,
/s/ Daniel A. Edelman Daniel A. Edelman
Daniel A. Edelman Cathleen M. Combs James O. Latturner Alexander H. Burke EDELMAN, COMBS, LATTURNER & GOODWIN, LLC 120 S. LaSalle Street, Suite 1800 Chicago, IL 60603
(312) 739-4200
(312) 419-0379 (FAX) j:\case\national-mann12.365\pleading\rule59.mot.wpd
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CERTIFICATE OF SERVICE
I, Alexander H. Burke, hereby certify that on March 7, 2005, I electronically filed the foregoing with the Clerk of the Court using the CM/ECF system which will send notification of such filing to the following: Paul C. Ziebert, pziebert@mcguirewoods.com.
/s/ Alexander H. Burke Alexander H. Burke Attorney for Plaintiff (6281095) EDELMAN, COMBS, LATTURNER & GOODWIN, LLC 120 S. LaSalle Street, 18th Floor Chicago, IL 60603
(312) 739-4200
(312) 917-0379 (FAX) Aburke@edcombs.com
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