United States District Court, E.D. Wisconsin
DECISION AND ORDER GRANTING IN PART AND DENYING IN PART JOHNSON’S MOTION FOR SUMMARY JUDGMENT (DOC. 28) AND DENYING LVNV FUNDING’S MOTION FOR SUMMARY JUDGMENT (DOC. 23)
C.N. CLEVERT, JR. U.S. DISTRICT JUDGE.
In this consumer-rights action, Lindsay Johnson claims that LVNV Funding violated certain provisions of the Wisconsin Consumer Act (“WCA”) and the federal Fair Debt Collection Practices Act (“FDCPA”). The parties have filed cross-motions for summary judgment. LVNV Funding seeks dismissal of all counts, while Lindsay Johnson seeks summary judgment as to liability, with determination of damages to follow.
Summary judgment is proper if the depositions, documents or electronically stored information, affidavits or declarations, stipulations, admissions, interrogatory answers or other materials show that there is no genuine dispute of material fact and the moving party is entitled to judgment as a matter of law. Fed.R.Civ.P. 56(a), (c); Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986). The moving party bears the initial burden of demonstrating it is entitled to summary judgment. Celotex, 477 U.S. at 323. Once this burden is met, the nonmoving party must designate facts to support or defend each element of its cause of action, showing that there is a genuine issue for trial. Id. at 322-24. In analyzing whether a question of fact exists, the court construes the evidence in the light most favorable to the party opposing the motion. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 255 (1986).
The mere existence of a factual dispute does not defeat a summary judgment motion; there must be a genuine issue of material fact for the case to survive. Id. at 247-48. “Material” means that the factual dispute must be outcome-determinative under governing law. Contreras v. City of Chicago, 119 F.3d 1286, 1291 (7th Cir. 1997). Failure to support any essential element of a claim renders all other facts immaterial. Celotex, 477 U.S. at 323. To establish that a question of fact is “genuine, ” the nonmoving party must present specific and sufficient evidence that, if believed by a jury, would support a verdict in its favor. Fed.R.Civ.P. 56(e); Anderson, 477 U.S. at 249.
When both parties have moved for summary judgment, each is required to show that no genuine issues of material fact exist, taking the facts in the light most favorable to the party opposing each motion. If genuine issues of material fact exist, neither party is entitled to summary judgment. Lac Courte Oreilles Band of Lake Superior Chippewa Indians v. Voigt, 700 F.2d 341, 349 (7th Cir. 1983).
On or about November 29, 2004, Lindsay Johnson, formerly known as Lindsay Reinbold, opened a Washington Mutual Bank, NA (“WaMu”) credit card account ending in numbers 1798 (the “Account”). (Doc. 25, ¶ 1.) WaMu sent monthly account statements (the “Account Statements”) to Johnson at her home address of 546 Black Earth Court, Wales, WI 53183, reflecting the activity on the Account. (Id. ¶ 2.) Between February 1, 2007, and April 23, 2008, Johnson made three payments on the Account: $20 on February 2, 2007; $600 on May 28, 2007; and $100 on January 8, 2008. (Id. ¶ 3.) She made no further payments on the Account in the three and one-half month period between January 8, 2008, and April 23, 2008. (Id. ¶ 4.)
Johnson admits that while she attended college, she had “a couple of credit cards, ” though she does not recall who issued them or what the balances were. (Doc. 28 Lindsay Johnson Decl. ¶ 4.) She admits that after graduation in 2007 she had a period of unemployment and fell behind on some of her debts. (Id. ¶ 5.)
Ten of the last thirteen Account Statements WaMu sent to Johnson advised her: “YOUR ACCOUNT IS PAST DUE AND OVER ITS CREDIT LINE. Please pay the minimum payment listed above along with the over limit amount immediately. You may also call us at 1 800-280-9441 or visit us at www.wamucanhelp.com for payment options.” (Doc. 25, ¶ 5; Doc. 26 Ex. D.) The Account Statements provided the name and address of WaMu, the minimum amount due, the previous and new balances, the credit line amount, the payment due date, and each month’s transactions (including late payment and overlimit charges). (Doc. 26, Ex. D.) Further details regarding the Account Statements are set forth below.
WaMu charged off the entire balance of the Account on February 29, 2008. (Doc. 25, ¶ 6.) At the time of charge-off, Johnson owed $2, 893.97 on the Account. (Id. ¶ 7.) On or about April 23, 2008, WaMu sold the Account to Sherman Originator, LLC, as part of a portfolio of accounts. (Id. ¶ 8.) Sherman Originator transferred the Account to LVNV. (Id. ¶ 9.) LVNV is a debt purchaser; it is not a credit originator. (Id. ¶ 10.)
On or about March 26, 2009, the Account was placed with SIMM Associates, Inc. (“SIMM”), a debt collector, to undertake collection. (Id. ¶ 11.) SIMM sent correspondence to Johnson informing her that her Account with WaMu had been purchased by LVNV and that SIMM was attempting to collect the amount due on behalf of LVNV. (Id. ¶¶ 12, 13.) On or about March 27, 2009, SIMM sent Johnson a letter at 546 Black Earth Court, Wales, WI 53183, indicating that LVNV had purchased the Account from WaMu, which it identified as the “ORIGINAL CREDITOR, ” and that there was a balance due as of that date of $3, 196.62. (Id. ¶ 14.)
Johnson made two credit card payments of $125 each to SIMM regarding the Account-one payment on March 31, 2009 (a few days after SIMM had mailed Johnson one of its letters), and one payment on April 17, 2009. (Doc. 35, Additional Facts (“Add’l”) ¶¶ 3-6.) Johnson made the payments by using a credit card issued in the name of “Lindsay Reinbold” with an address of 546 Black Earth Court and a zip code of 53183. (Id. Add’l ¶ 7.) Johnson made no subsequent payments on the Account. (Id. Add’l ¶ 8.)
SIMM sent Johnson another letter on May 10, 2009, offering to settle her account. The letter indicated that LVNV was the “current creditor” and that WaMu was the “original creditor.” (Id. Add’l ¶¶ 9, 10.) Pursuant to SIMM’s records, this letter was never returned. (Id. Add’l ¶ 11.) The letter was mailed to Johnson’s parents’ house, where Johnson received mail. (Id. Add’l ¶¶ 12-14.)
SIMM was unable to collect on the Account and the Account was eventually recalled on or about September 24, 2009. (Doc. 25, ¶ 15.) Between May 5, 2012, and October 26, 2012, JCC&A provided collection services to LVNV on the Account. (Doc. 35, Add’l ¶ 15.) During that time, JCC&A sent four separate “NOTICE OF LEGAL REVIEW AND SETTLEMENT OPTION” letters to Johnson at 900 Hawthorn Drive, Waukesha, Wisconsin, 53188-2956. (Id. Add’l ¶ 16.) The letters indicated a balance due and offered an opportunity to settle the Account for a lump sum. (Id. Add’l ¶¶ 17-26.) WaMu was identified as the “ORIGINAL CREDITOR(S)” and LVNV was identified as the “CURRENT CREDITOR(S)” on each of the letters. (Id. Add’l ¶ 21.) None of the letters were returned as undeliverable. (Id. Add’l ¶ 22.)
On or about May 3, 2013, LVNV filed a lawsuit against Johnson in Wisconsin state court, case 13SC2337, seeking payment on her debt balance (the “state-court action"). (Doc. 25, ¶ 17; see Doc. 30, ¶ 1.) LVNV identified the debt account as involving a consumer credit transaction and alleged in the alternative that any required notice to cure had been issued or that the account was entirely past due and fully owed and no right to cure was necessary. (Doc. 1, Ex. A, ¶ 5.) Johnson was served with the state-court action summons and complaint in late spring 2013. (Doc. 30, ¶ 1.) She says she had no idea that a lawsuit was coming and had never been involved in a lawsuit before. (Id. ¶¶ 7, 8.) Johnson maintains she was shocked, stunned, upset, and confused because she did not recognize the company that was suing her. She asserts that she worried about being jailed as a result of the lawsuit. (Id. ¶¶ 10-12.) Other claimed reactions, included crying and lost sleep over being sued. (Id. ¶¶ 13, 17.)
Johnson asserts that between her graduation from college in 2007 and the filing of LVNV’s lawsuit, she never received collection letters, notice of assignment letters, notice of right to cure letters, demand letters, or other correspondence from LVNV. (Doc. 30, ¶ 9; Doc. 28-1, ¶¶ 5, 11.) After graduation, Johnson had her mail sent to her parents’ house and then to her current address. (Doc. 28-1, ¶ 11.) Johnson says that if she had received a notice or letter in the mail she would have contacted the sender to work the matter out. (Doc. 30, ¶ 28; Doc. 35, ¶ 28.)
LVNV did not send Johnson a notice of right to cure the default. (Doc. 25, ¶ 16; Doc. 30, ¶ 4.) Johnson asserts that prior to the state-court lawsuit, she did not receive a notice of right to cure a default regarding any obligations and had not heard of LVNV. (Doc. 30, ¶¶ 5, 6.)
On or about June 6, 2013, Johnson filed a motion to dismiss the state court action. (Doc. 25, ¶ 18.) She also alleged that notice of right to cure default and notice of assignment had not been served. (Doc. 30, ¶¶ 44, 45.) LVNV filed a voluntary dismissal of the collection lawsuit on or about June 25, 2013. The lawsuit was dismissed about four days later. (Doc. 25, ¶ 19; see Doc. 30, ¶ 47.) Shortly thereafter, Johnson received a signed order informing her of the voluntary dismissal of the lawsuit against her. (Doc. 30, ¶ 41.)
A. WCA Claims
The Wisconsin legislature’s expressly stated purposes for the WCA include protecting customers against unfair, deceptive, and unconscionable merchant practices and encouraging the development of fair practices in consumer transactions. Wis.Stat. § 421.102(2); Kett v. Cmty. Credit Plan, Inc., 228 Wis.2d 1, 18 & n.15, 596 N.W.2d 786 (1999). The WCA may go further to protect consumer interests than legislation in any other state. Kett, 228 Wis.2d at 18 n.15; Credit Acceptance Corp. v. Kong, 2012 WI.App. 98, ¶ 8, 344 Wis.2d 259, ¶ 8, 822 N.W.2d 506, ¶ 8. At the heart of each of the purposes of the WCA is the protection of customers. Brunton v. Nuvell Credit Corp., 2010 WI 50, ¶ 26, 325 Wis.2d 135, ¶ 26, 785 N.W.2d 302, ¶ 26.
The WCA should be liberally construed to promote these purposes. § 421.102(1); Kett, 228 Wis.2d at 18; Credit Acceptance Corp., 2012 WI.App. 98, ¶ 8. In addition, the WCA should be interpreted in coordination with the FDCPA, pursuant to which claims of unfair debt collection practices are viewed through the lens of the unsophisticated consumer, protecting the gullible as well as the shrewd. Brunton, 2010 WI 50, ¶¶ 45-46 (citing Gammo ...