On remand from the Court of Appeals for the Seventh Circuit, a District Court judge in Illinois has again granted summary judgment in favor of the defendant on the issue of actual damages in a Fair Debt Collection Practices Act case after the defendant was accused of not flagging the underlying account as disputed with the credit reporting agencies.
The background: The plaintiff incurred a credit card debt with a credit union and formally disputed the debt in April 2017. The credit union investigated and responded that the delinquency was valid and would remain on the credit report. The plaintiff did not respond to that communication. As a result, the credit union coded the account as “XH” in the Metro 2 format, indicating a previously disputed debt that had been resolved. The credit union then sold the debt to the defendant under an agreement that excluded accounts with “unresolved disputes.”
- The defendant subsequently reported the debt to the credit bureaus without marking it as disputed. The plaintiff later filed suit, accusing the debt buyer of violating Section 1692e(8) of the FDCPA, alleging the failure to indicate the dispute was misleading.
- A District Court judge initially ruled in favor of the defendant, finding it had no reason to know the account had been disputed. But the Seventh Circuit reversed, holding that a factual dispute existed over the defendant’s understanding of what constituted a disputed debt, and that summary judgment was therefore inappropriate on the issue of liability.
The ruling: Back in front of Judge Sara L. Ellis of the District Court for the Northern District of Illinois, she addressed the remaining issue: whether the plaintiff could establish actual damages. She ruled that he could not.
- The plaintiff argued that he lost sleep for several nights after discovering the reporting error and felt anxiety about its effect on his ability to purchase a home. He also mentioned having negative emotions, including frustration and agitation.
- These claims were deemed to be too conclusory to support a finding of actual damages. “While Wood has some evidence of emotional damages, he does not have enough evidence in the record for a jury to award actual damages,” Judge Ellis wrote.
- She also dismissed any claim of financial damages. The plaintiff did not provide evidence that he was denied credit or paid higher loan interest as a result of the reporting issue, nor did he respond to the defendant’s arguments on these points.
