Appeals Court Upholds MSJ For Defense After Plaintiff Could Not Prove Debts Were Consumer-Related

This is one of those cases that make me, a non-lawyer, dizzy. The Seventh Circuit Court of Appeals has upheld a lower court’s summary judgment ruling in favor of a defendant that was sued for violating the Fair Debt Collection Practices Act because the plaintiff could not prove the debt was a “consumer” debt even though the plaintiff denied having the debt in the first place.

A copy of the ruling in the case of Burton v. Kohn Law Firm can be accessed by clicking here.

The defendant, on behalf of its client, filed a lawsuit in Wisconsin state court attempting to recover an unpaid credit card debt. The plaintiff denied the debt was his, claiming never to have applied for the card, never receiving a statement, and never making a payment. While that case was pending, the plaintiff sued the defendant, alleging that the defendant violated Section 1692d and 1692e of the FDCPA by not notifying him of a right to cure the debt before filing suit against him.

The defendant’s lawsuit was ultimately dismissed, based on the plaintiff’s denial the account was his. Unable to prove the debt was not a consumer debt subject to the FDCPA, a District Court judge granted summary judgment in favor of the defendant in the FDCPA case. The plaintiff appealed the ruling to the Seventh Circuit.

In upholding the lower court’s ruling, the Appeals Court ruled the plaintiff did not provide “sufficient evidence to create a triable issue of fact that the debt incurred on the Citibank account was for personal, family, or household purposes.” The plaintiff submitted five pieces of evidence to prove the debt was a consumer debt:

  • his statements that, to the extent he was liable for the debt, it was a consumer debt;
  • the defendants’ treatment of the debt as a consumer debt by including FDCPA disclaimers on the collection letters, suing Mr. Burton in his personal capacity, and sending communications to his personal address;
  • Kohn and Unifund’s description of their consumer debt collection services on their websites;
  • a Citibank employee’s email description of the underlying account as a “consumer account”;
  • the billing statements listing purchases made on the credit card for personal, family, or household purposes.

The Appeals Court would not buy the plaintiff’s argument that the debt was a consumer debt because he completely disavowed the debt was his in the first place. The email was the Citibank employee was hearsay and not admissible, the Appeals Court ruled. Finally, because the plaintiff could not explain the purchases made on the card, they could not be used as evidence that the card was used for consumer-related transactions.

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