United States District Court, E.D. Wisconsin
STADTMUELLER, U.S. DISTRICT JUDGE.
obtained a student loan through the Department of Education
(“DOE”). When she defaulted on the loan, the DOE
brought in Defendant Immediate Credit Recovery, Inc.
(“ICR”) to help collect what was owed. The DOE
also began administratively garnishing Plaintiff's wages.
Plaintiff contacted ICR in an attempt to stop the
garnishment. Over several months, Plaintiff worked with ICR
to become eligible for the DOE's loan rehabilitation
program, which would end the garnishment. Plaintiff's
lawsuit alleges that ICR obstructed her efforts to enter the
program, unnecessarily prolonging her garnishment. She
maintains that this conduct violated the Fair Debt Collection
Practices Act (“FDCPA”), 15 U.S.C. § 1692
et seq., and the Wisconsin Consumer Act
(“WCA”), Wis.Stat. § 427 et seq.
September 5, 2017, ICR filed a motion for summary judgment.
(Docket #40). Plaintiff opposed the motion on October 9,
2017, and ICR replied on October 23, 2017. (Response, Docket
#49; Reply, Docket #51). Plaintiff then sought leave to
submit a sur-reply, alleging that ICR raised new arguments in
its reply brief. (Docket #53). The Court will grant that
motion and accept Plaintiff's sur-reply. It does not
change the result-summary judgment is appropriate in
ICR's favor on all of Plaintiff's claims.
STANDARD OF REVIEW
Rule of Civil Procedure 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 Auth., 618 F.3d 688, 691
(7th Cir. 2010).
review of the parties' factual briefing, the Court finds
that the following facts are material to ICR's motion.
The Court notes the parties' disputes where
appropriate. ICR works for the DOE to help collect
delinquent DOE-issued student loans. ICR receives a
commission for this work, which in Plaintiff's case was
15.2% of the wages which had been garnished from her. The DOE
refers to ICR, and the many other companies performing
similar services, as “private collection
agencies” or “PCAs.” The activities of PCAs
are governed by a DOE-issued document known as the PCA manual
(the “Manual”), as well as various laws. PCAs are
charged not only with collecting student loans, but assisting
in rehabilitating defaulted loans. Rehabilitation is one way
to end wage garnishment for a borrower in default.
use a multi-step process to determine eligibility for loan
rehabilitation. First, they obtain information about the
borrower's income, expenses, and family size over the
phone. The PCA uses that information to arrive at an
estimated rehabilitation payment. The borrower immediately
begins making estimated payments, while also sending a
“Financial Disclosure for Reasonable and Affordable
Rehabilitation Payments” form (“Financial
Disclosure” form) and income verification documents
(such as pay stubs) to the PCA. Once all of the documents and
forms are submitted, the information is processed by the PCA
and the DOE. The borrower must also make nine of the
estimated monthly payments to qualify for rehabilitation.
confirm the borrower is eligible for loan rehabilitation, the
PCA sends a rehabilitation agreement letter
(“RAL”) containing the final terms. The final
rehabilitation payment stated therein may be higher or lower
than the estimated payment. If it is higher, the borrower has
an opportunity to challenge that figure. If the borrower
accepts the terms of the RAL, they must sign and return it to
the PCA. Only then is the borrower formally entered into the
rehabilitation program. Plaintiff says that according to the
Manual, the RAL must be sent within fifteen days of receiving
the borrower's completed paperwork.
April 30, 2016, the DOE placed Plaintiff's defaulted
student loan with ICR for collection. In October 2016, wage
garnishment began. At that time, Plaintiff attempted to
contact ICR. She called and left messages with ICR on October
20, and the called on each day from November 1 to November 4,
2016. She was unable to speak with someone in the department
handling her loan, however, and ICR could not reach her each
time it tried calling back.
on November 28, 2016, Plaintiff spoke with an ICR
representative, Ashley Hunter (“Hunter”). Hunter
told Plaintiff about the loan rehabilitation program. She
noted that an active wage garnishment may be suspended after
the fifth consecutive estimated rehabilitation payment is
made, so long as the borrower has met all of the other
requirements for rehabilitation. Hunter further stated that
Plaintiff was required to send in proof of her income, and
that “[o]nce your proof of income is received and
reviewed, a [RAL] will be sent to you within 15 days.”
(Docket #48 at 8). Finally, Hunter informed Plaintiff that
she would not be entered into the rehabilitation program
until the Financial Disclosure and RAL forms were signed and
returned, and advised Plaintiff to complete those tasks as
soon as possible.
then took Plaintiff's relevant financial information.
Plaintiff's statements indicated that she had one
dependent and a family size of two, meaning that her
estimated rehabilitation payment was five dollars. Hunter
told Plaintiff she could make her payment over the phone or
by mail. Hunter said that a payment made that day would be
credited to November 2016 (thus speeding along
Plaintiff's path towards rehabilitation). Plaintiff made
a payment over the phone at that time. On December 30, 2016,
Plaintiff called to make her next payment. No one was
available to take her call, so she left a message.
January 10, 2017 conversation with ICR, ICR's
representative said that the November 2016 payment was posted
on December 1, 2016. To Plaintiff, this suggested that the
payment was credited to December 2016. Thus, in her view, it
had not been not processed in accordance with Hunter's
promise in the November 28 telephone conversation. ICR
explains that the even though the payment was posted on
December 1, it still counted as a November payment. In fact,
ICR states that Plaintiff could have elected to apply the
payment to November or December. Shifting the payment from
one month to the other may have assisted Plaintiff in
completing the above-described steps towards entry into the
rehabilitation program. Plaintiff was not told about these
policies, however, during the January 10 conversation or at
any other time.
faxed the Financial Disclosure form and her paystubs to ICR
on April 25, 2017. In an affidavit submitted with her
response brief, Plaintiff explains that she waited to send in
the documents because she wanted to complete the five
payments required to suspend the garnishment. By her
calculation, her fifth payment was made in April 2017. If she
had been told about the ability to move the November 2016
payment to December 2016, she could have reached her fifth
payment in March 2017. Plaintiff further states that ICR did
not process her paperwork within fifteen days as they had
promised to do. Instead, it took ICR seventy-one days to
process her documents and issue the RAL.
counters that the fifteen-day period only began once it
reviewed her documents, not simply upon their receipt.
Further, it claims that Plaintiff's instant explanation
for waiting until April 2017 to return her paperwork
contradicts her deposition testimony. During her deposition,
she stated that she waited because of her difficulties in
obtaining the paperwork in October and November 2016. She
acted in April 2017 apparently upon advice from her lawyer.
Finally, as to Plaintiff's focus on the continuing
garnishment, ICR informed her in the November 28 conversation
that she could request a hearing to dispute the garnishment
at any time.
account was placed in a suspended status when ICR received
this lawsuit on January 26, 2017. ICR says that it does not
communicate with borrowers who are in suspended status. Thus,
when it received Plaintiff's paperwork in April 2017, ICR
claims that it could not contact Plaintiff. Plaintiff
counters that ICR spoke with her a number of times to take
monthly payments. ICR also communicated about the garnishment
through Plaintiff's counsel.
fact, Plaintiff's counsel asked ICR about the status of
Plaintiff's rehabilitation paperwork on June 13,
2017. Plaintiff's counsel was told that
Plaintiff had left blank the “family size”
portion of the Financial Disclosure form. ICR implies that it
did not contact Plaintiff earlier about this issue because of
the suspended status of Plaintiff's account. In
accordance with DOE standards, when confronted with the blank
family size on Plaintiff's Financial Disclosure form, ICR
defaulted to a family size of one. This meant that, from
ICR's perspective, Plaintiff's five dollar monthly
payments were too low and did not count towards her entry
into the rehabilitation program.
was, of course, different than the information Plaintiff
provided in the November 2016 phone call, and ICR claimed
that they were required to use what was in the form. On June
29, 2017, ICR, via counsel, asked Plaintiff, via counsel, to
complete another Financial Disclosure form consistent with
the telephone information. The updated form was provided on
June 30, 2017. Plaintiff's updated form corrected the
issue by confirming that Plaintiff's family size was two.
This allowed Plaintiff to receive appropriate credit for her
earlier payments. ICR performed this review on July 5, 2017.
Normally, however, it was ICR's practice to process the
Financial Disclosure form and related paperwork within 48
hours of receipt.
the paperwork correctly completed, ICR was finally able to
send Plaintiff her RAL on July 6, 2017. Plaintiff signed and
returned the letter that same day. ICR notified the DOE that
it should stop the garnishment on August 1, 2017. The last
garnishment occurred in Plaintiff's July 2017 paycheck.
Plaintiff maintains that the Manual require the RAL to be
processed within three days, meaning that ICR's stop
order was extremely late. ICR objects to the version of the
Manual provided by Plaintiff, which contains this three-day
limit, because it lacks foundation and is heavily redacted
for unknown reasons. See (Docket #50-3 at
the saga of the improperly-completed Financial Disclosure
form, Plaintiff says it was largely unnecessary. She suggests
that ICR should have used a family size of one-a default
assumption contained in ICR's training materials-to
complete its review of her paperwork. ICR would have then been
equipped to issue the RAL within fifteen days of receiving
Plaintiff's April 25, 2017 fax. Again, Plaintiff believes
this fifteen-day turnaround time was promised to her at the
beginning of the rehabilitation process. Plaintiff also cites
the relevant portion of the Manual, which states that
“the PCA must send the RAL letter within 15 days of the
receipt of all required documentation.” Id. at
87. Plaintiff could have then objected to the payment amount
listed in the RAL. Plaintiff asserts that all of this would
have resulted in stopping the garnishment sooner.
stresses that “all required documentation” must
actually be received, which was not the case on April 25,
2017, namely with respect to the incomplete Financial
Disclosure form. Plaintiff finds that this contention,
supported by ICR's internal policies, is in conflict with
the Manual. ICR argues that “[l]ogically, . . . ICR
must actually review the documents it receives for ...