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Heling v. Creditors Collection Service Inc.

United States District Court, E.D. Wisconsin

September 6, 2016

LORI HELING, Plaintiff,


          J.P. Stadtmueller U.S. District Judge

         1. INTRODUCTION

         On June 14, 2016, the defendant Creditors Collection Service, Inc., (“CCS”) filed a motion for summary judgment on all of the plaintiff Lori Heling's (“Heling”) claims. (Docket #20). CCS contemporaneously filed a brief in support of the motion, statement of facts, and various affidavits with exhibits thereto. (Brief in Support, Docket #21; Statement of Facts, Docket #22; Affidavits of Nancy Wagner, Andrew Morgan, Donald Waage, and Vicky Barclay, Docket #23, #24, #25, and #26, respectively). On August 5, 2016, Heling filed a brief in opposition to CCS's motion, a response to CCS's statement of facts, and a statement of additional facts with exhibits thereto. (Brief in Opposition, Docket #33; Response to Statement of Facts, Docket #32 at 1-13 (“RSOF”); Statement of Additional Facts, Docket #32 at 13-19). Finally, on August 10, 2016, CCS submitted a reply in support of its motion and a response to Heling's statement of additional facts. (Reply in Support, Docket #37; Response to Statement of Additional Facts, Docket #38 at 17-29 (“RSAF”)). The motion is fully briefed and, for the reasons explained below, it will be denied in its entirety.


         Federal Rule of Civil Procedure (“FRCP”) 56 provides the mechanism for seeking summary judgment. Rule 56 states that the “court shall grant summary judgment if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.” Fed.R.Civ.P. 56(a); see Boss v. Castro, 816 F.3d 910, 916 (7th Cir. 2016). A “genuine” dispute of material fact is created when “the evidence is such that a reasonable jury could return a verdict for the nonmoving party.” Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). The Court construes all facts and reasonable inferences in a light most favorable to the non-movant. Bridge v. New Holland Logansport, Inc., 815 F.3d 356, 360 (7th Cir. 2016). In assessing the parties' proposed facts, the Court must not weigh the evidence or determine witness credibility; the Seventh Circuit instructs that “we leave those tasks to factfinders.” Berry v. Chicago Transit Authority, 618 F.3d 688, 691 (7th Cir. 2010). Internal inconsistencies in a witness's testimony “create an issue of credibility as to which part of the testimony should be given the greatest weight if credited at all.” Bank of Illinois v. Allied Signal Safety Restraint Systems, 75 F.3d 1162, 1170 (7th Cir. 1996) (quoting Tippens v. Celotex Corp., 805 F.2d 949, 953 (11th Cir. 1986)). The non-movant “need not match the movant witness for witness, nor persuade the court that [their] case is convincing, [they] need only come forward with appropriate evidence demonstrating that there is a pending dispute of material fact.” Waldridge v. American Hoechst Corp., 24 F.3d 918, 921 (7th Cir. 1994).

         3. FACTS

         The Court will address the parties' ancillary motions relevant to the facts, then the facts themselves.

         3.1CCS's Admissions

         CCS moves to withdraw its admissions to Heling's requests for admission, which were deemed admitted by operation of FRCP 36(b). (Docket #39). That Rule further provides that admissions may be withdrawn “if it would promote the presentation of the merits of the action and if the court is not persuaded that it would prejudice the requesting party in maintaining or defending the action on the merits.” FRCP 36(b); see Banos v. City of Chicago, 398 F.3d 889, 892 (7th Cir. 2005). The Court finds that these elements are present. Allowing the admissions to stand would remove consideration of the merits of at least one of Heling's claims. (Docket #39 at 3). In her response, Heling does not directly explain how she would be prejudiced; it appears that she implies prejudice from her reliance on the admissions in responding to summary judgment. (Docket #41 at 3-4). In the Court's view, both parties are at fault for the present state of affairs, and FRCP 36(b) favors withdrawal. The Court will, therefore, grant the motion and permit CCS to withdraw its admissions to Heling's requests for admission numbered 8, 9, 11, 12, 17, 18, 21, 22, and 23. See (Docket #39 at 1).

         3.2 Affidavit of Andrew Morgan

         Heling moves to strike the affidavit testimony of Andrew Morgan (“Morgan”), the attorney who represented the creditor in the underlying state court collection lawsuit, and the exhibits attached thereto. (Docket #31). She claims that Morgan was never identified by CCS in its Rule 26(a)(1) disclosures or in interrogatory responses, and that, pursuant to FRCP 37(c)(1), CCS should not be allowed to use his testimony. Id.; (Docket #42 at 2-3). CCS responds that Heling identified Morgan in her Rule 26(a)(1) disclosures (and CCS's disclosures incorporate her identified witnesses by reference), and, in any event, she was well aware throughout this litigation that Morgan had information relevant to her claims. (Docket #40). Additionally, Heling failed to provide the good-faith “meet and confer” certification required by the Local Rules.[1] Id.; Civil L. R. 37. Though Morgan appears to have been adequately identified in CCS's Rule 26(a)(1) disclosures by reference to Heling's own disclosures, [2] it failed to identify him in its interrogatory responses. (Docket #31-2 at 7-8). In fact, CCS makes no attempt to argue otherwise. See generally (Docket #40). The motion to strike will, therefore, be granted.

         3.3 Relevant Facts

         The Court will provide a timeline of events, noting the parties' disagreement where appropriate.[3] In accordance with the standard of review, the facts and inferences therefrom are construed in Heling's favor. Given the parties' disputes on nearly every proffered fact, the Court will attempt to limit this narrative to the facts material to its holdings.

         The parties dispute whether CCS sent any letters to Heling prior to their interactions in fall 2015. CCS claims that its first letter was sent on October 17, 2014 (the “October Letter”) when it received Heling's account from her creditor, a dentist named Dr. Delasanta (“Delasanta”). RSOF ¶¶ 6-7; RSAF ¶ 31.[4] Heling counters that CCS did not identify such a letter in its interrogatory responses, and CCS's account notes have no entry corresponding to the letter. RSOF ¶¶ 6-7.[5] Further, for CCS to send the letter on the same day the account was received, it would need to generate the letter on a computer, print it, apply postage, and put it in the outgoing mail by 2:30 p.m. RSAF ¶ 42.

         CCS asserts that it did identify the letter in discovery, and further states that additional letters were sent after that time, and none, including the first letter, were ever returned as undeliverable by the postal service. RSOF ¶ 8; RSAF ¶ 31. Only the first letter included certain disclosures contained in 15 U.S.C. § 1692g(a). RSAF ¶ 55; see infra Part 4.3. Heling never received any of the letters because she had not lived at the address to which they were sent for approximately five years. RSOF ¶ 8. Heling criticizes CCS for failing to make any efforts to validate the address, which had been provided to CCS by Delasanta. RSOF ¶¶ 7-8.

         On April 23, 2015, Morgan filed a lawsuit against Heling on Delasanta's behalf to recover her debt for dental services. RSOF ¶¶ 6, 10. Heling notes that the summons, directed to her old address, was returned as undeliverable (Heling was eventually “served” by publication). RSAF ¶ 56. A judgment was obtained for $390.09 on June 1, 2015. RSOF ¶ 10. The judgment was docketed on June 8, 2015. RSOF ¶ 11. The parties dispute whether this triggered the accrual of post-judgment interest. RSOF ¶ 11. They also dispute the existence of yet another letter, this time dated June 17, 2015. RSOF ¶ 11. On July 21, 2015, Delasanta filed a garnishment request seeking $396.14, comprising the judgment amount, docketing fee, and post- judgment interest. RSOF ¶ 12. Estimated additional costs, including $20 of anticipated costs to file a satisfaction of judgment (the “satisfaction fee”), were included in the total $540.64 balance sought. RSOF ¶ 12.[6]

         Heling's first notice of the debt was from her payroll department, informing her that the garnishment order had been received. RSAF ¶ 44-45. CCS argues Heling should have known about the debt as of the time she received the services, because she knew her insurance did not cover the entire balance. RSAF ¶ 44-45. Heling called Delasanta's office on July 27, 2015, to obtain more information about the debt. RSAF ¶ 46. She was apparently told to contact Morgan, who directed her on to CCS. RSAF ¶ 47. Heling claims she then called CCS that same day. RSAF ¶¶ 32, 48. CCS denies that the conversation occurred at all, as no CCS employee can recall it. RSAF ¶¶ 32, 48. Heling claims the conversation involved the debt balance, CCS's attempts to contact her, and her payment options. RSAF ¶¶ 48, 50-51.

         Heling called CCS on August 3, 2015, and spoke with Nancy Wagner (“Wagner”). RSOF ¶ 14. Wagner kept contemporaneous notes of the conversation but Heling disputes whether they are accurate or exhaustive. RSOF ¶ 14; RSAF ¶ 59-60.[7] No audio recording of the call exists. RSAF ¶ 60. Heling indicated that she was aware of the garnishment and gave Wagner her current address, where she lived since 2013. RSOF ¶ 15; RSAF ¶ 52. CCS did not send any letters to that address after August 3, 2015. RSAF ¶ 58.

         The parties dispute the remainder of the conversation. Heling says she expressed a willingness to pay the debt in exchange for having the judgment vacated, which CCS denies. RSAF ¶ 53. Wagner claims to have said that the summons in the collection suit was accomplished by “publication, ” and that CCS “would” not vacate the judgment. RSOF ¶¶ 15-16; RSAF ¶ 54. Heling recalls that when she asked about vacating the judgment, Wagner said she “could” not do so. RSOF ¶¶ 15-16; RSAF ¶ 54. Heling further questions Wagner's memory of the conversation given that when she was deposed, Wagner could not remember certain facts about her work from even the day before. RSAF ¶ 64. CCS admits that only Delasanta could make a decision about vacating the judgment. RSAF ¶¶ 40, 68-69.

         Wagner says she told Heling that she owed a balance of $538.64 which included the satisfaction fee. RSOF ¶ 17. Heling asserts that the balance was provided without a breakdown of the various fees. RSOF ¶ 17. Specifically, Wagner claims to have represented that the satisfaction fee was optional, while Heling says that no such explanation occurred. RSOF ¶ 23. Heling questions whether the balance was accurate; namely, she contends that the satisfaction fee was not yet incurred as of the date of the conversation. RSOF ¶ 19. CCS's credit reporting item for the debt reflected a balance of $518.64 as of the date the garnishment request was filed. RSOF ¶ 19.

         On August 28, 2015, CCS received the first garnishment check. RSOF ¶ 20. CCS asserts that “shortly before” September 17, 2015, Heling's employer called to determine a final payoff amount for the garnishment. RSOF ¶ 21. CCS offered two amounts, one with the satisfaction fee and one without, and the employer chose the option with the satisfaction fee included. RSOF ¶¶ 21, 24. Heling disputes whether the call occurred, because it is not reflected in the account notes, and Donald Waage, CCS's owner, indicates that notes are usually made contemporaneously with an event relating to an account. RSOF ¶¶ 21, 24; RSAF ¶ 63.

         4. ...

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