Commercial Banking, Collections, and Bankruptcy

Dist. Ct. did not err in dismissing for failure to state viable cause of action plaintiffs-debtors’ action under Fair Debt Collection Practices Act (FDCPA), alleging that defendant-debt collector’s practice of reporting obligations to single creditor separately instead of in aggregate fashion constituted unfair way to collect debts under section 1692f of FDCPA. It is reasonable and not deceptive for debt collector to report individually accurate debts that correspond to different charges, and that said practice was not within plain meaning of “unfair” or “unconscionable” in context of FDCPA. Moreover, plaintiffs’ proposed debt-reporting rule requiring single aggregate total of debt to single creditor would conceal debt-specific information that other consumers may prefer to see on their credit reports. Fact that plaintiffs’ credit scores would have been higher had defendant reported debts in aggregated manner did not require different result.

Bankruptcy Ct. erred in confirming Chapter 13 plan that kept debtor’s car in bankruptcy estate, which essentially prevented City of Chicago from using devices such as towing or booting to collect on fines that had been assessed against debtor for parking and other vehicular offenses. Confirmation of said plan was contrary to holding of Steenes I, 918 F.3d 554, and in Steenes II, 942 F.3d 834, which held that there must be a good, case specific reason for keeping car in bankruptcy estate after confirmation of Chapter 13 plan, and that vehicular fines are administrative expenses under 11 USC section 507(a)(2). Moreover, record did not contain good, case specific reason for why instant confirmation of plan should not vest all estate property in debtor, and Ct. rejected claim that debtor is entitled to have property remain in bankruptcy estate following confirmation of plan, even if debtor’s choice was motivated by desire to avoid payment of fines.

Dist. Ct. did not err in dismissing (for failure to exhaust remedies under FIRREA mandatory claims process) defendants’ petition to quash service in state-court foreclosure action filed by failed bank now under receivership by FDIC. While defendants asserted in petition that service of process in foreclosure action had been defective and that state-court lacked personal jurisdiction over defendants so as to render void foreclosure order against defendants, dismissal of petition was appropriate because defendants had failed to submit any claim to FDIC by submission deadline set forth in FDIC notice to defendants. Ct. rejected defendants’ contention that mandatory claims process did not apply to them because their petition did not seek financial restitution, since: (1) defendants’ petition constituted “claim” against failed bank; and (2) 12 USC section 1821(d)(13)(D)(ii) precluded Dist. Ct. from reviewing claims “relating to any act or omissions” of failed bank or of FDIC as receiver of failed bank, unless said claims had been first subjected to FIRREA’s administrative claims process.

Dist. Ct. did not err in granting defendant's motion for summary judgment in plaintiff-debtor's action under Fair Debt Collections Practices Act, alleging that defendant sent dunning letter that was misleading. While plaintiff alleged that sentence in dunning letter, i.e., "This letter serves as notification that your delinquent account may be reported to credit bureaus," was misleading because her debt had already been reported to credit bureaus by time she had received dunning letter, said sentence was not deceptive because it simply apprised her that defendant has/had permission to report her delinquent debt at any time. Moreover, defendant's explanation in letter that payment of settlement amount by certain date would stop collection activity was not promise that if offered settlement was paid then delinquent debt would not be reported. As such, plaintiff was required to produce evidence of letter's confusion with respect to "significant fraction" of population, and plaintiff failed to do so through use of objective measure such as consumer survey. Moreover, record lacked evidence of how unsophisticated (as opposed to least sophisticated) consumer would actually read defendant's dunning letter, and plaintiff's own testimony regarding her alleged confusion was not enough to support her claim.

Bankruptcy Judge did not err in denying debtor's motion in instant Chapter 13 bankruptcy proceeding to extend 30-day automatic stay under 11 USC section 362(c)(3)(B) to preclude creditor-bank from proceeding on state-court foreclosure action, where debtor's prior bankruptcy petition had been dismissed within 12 months of filing instant petition. Filing of Chapter 13 contemplates that debtor has income that enables her to pay most debts within five years and still have something left for living expenses, and record suggests that debtor filed Chapter 13 petition in bad faith, where debtor, in her affidavit in support of her in forma pauperis petition, stated that: (1) she had not received more than $200 in total income in last 12 months, did not own personal property worth more than $1,000 and owned no real property. Moreover, by trying to achieve principal benefit of Chapter 13 by keeping her home without detriment of paying her debts, debtor had demonstrated that she is not entitled to seek extension of 30-day automatic stay. Ct. also observed that individuals informing Bankruptcy Ct. that they qualify for relief under Chapter 13 cannot persuade Ct. of Appeals that they lack money for judicial filing fees, and thus cannot proceed on appeal in forma pauperis under section 1915 in absence of extraordinary circumstances.

Dist. Ct. erred in granting plaintiff's motion for summary judgment in action seeking declaration that it had already paid defendant appropriate commission under umbrella contract between parties for clients that defendant had brought to plaintiff. Both parties had agreed that clause in contract requiring parties to develop future agreements as to appropriate commission rates on job-by-job basis was non-binding on its own, and that record otherwise showed that parties had agreed to job-by-job commission rates for clients subsequent to signing of instant umbrella agreement. As such, said clause could be enforceable in view of subsequent job-by-job agreements, so as to find that said subsequent agreements were covered under instant umbrella contract. Moreover, summary judgment was inappropriate because material fact existed as to: (1) existence of authority that one individual, who was employed by both parties, could bind both parties to particular commission rate; and (2) proper commission rate at issue in instant lawsuit. (Dissent filed.)

Dist. Ct. did not err in dismissing plaintiffs' action alleging that defendant-consumer reporting agency violated sections 1681e(b) and 1681i(a) of Fair Credit Reporting Act by listing as debts delinquent loans from Native American tribes, where: (1) plaintiffs had disputed legality of said loans with defendant; and (2) plaintiffs had not sought legal action against said lenders prior to defendant posting of said debts on plaintiffs' credit reports. Dist. Ct. could properly find that dismissal was warranted, because: (1) plaintiff had failed to allege that their credit reports listing said debts were factually inaccurate; and (2) neither section 1681e(b) nor 1681i(a) require defendant to determine legal validity of any disputed debt prior to posting said debt on plaintiffs' credit reports. Result would be different if court had found said debts to be legally invalid, and defendant reported said debts on plaintiffs' credit report anyway.

Dist. Ct. did not err in granting defendant's motion for summary judgment in plaintiff's action alleging that defendant breached distribution agreement calling for plaintiff to be exclusive distributor of certain products manufactured by defendant to Veterans Administration (VA) and to Dept. of Defense (DOD). Record showed that: (1) sales to DOD and VA were to be facilitated  through Distribution and Pricing Agreement (DAPA), while sales to VA required Federal Supply Schedule (FSS); (2) instant agreement called for plaintiff to obtain FSS; (3) VA would not provide FSS to plaintiff without first having access to defendant's commercial sales, which defendant declined to give; and (4) defendant eventually told plaintiff that it would not use plaintiff to obtain sales to DOD. No breach of contract by defendant occurred, since agreement did not require defendant to provide confidential records to VA in order for plaintiff to obtain FSS or to deactivate its DAPA in order for plaintiff to obtain DAPA to make sales to DOD. Ct. also rejected plaintiff's claim that defendant breached any duty of good-faith by failing to submit its sales record to VA. Too, Dist. Ct. did not err in finding that plaintiff breached agreement by not obtaining FSS, but that plaintiff owed no damages due to force majeure clause in agreement that excused plaintiff from any liability, where VA had denied plaintiff's application for FSS that was outside both parties' anticipation and outside plaintiff's control.

Dist. Ct. did not err in granting defendant's motion for summary judgment in plaintiff-truck driver's action alleging that defendant had failed to pay him portion of gross revenues it had collected on plaintiff's loads as required by parties' contract. Contract gave plaintiff right to receive 70 percent of gross revenues that defendant had collected pursuant to "rated freight bill" or "computer-generated document with same information" to prove that defendant had properly paid plaintiff for each load. However, contract also required that all disputes regarding pay be resolved within 30 days of receipt of either rated freight bill or computer-generated document, and record showed that: (1) plaintiff received computer-generated document at time he received his pay; (2) plaintiff never disputed or requested to view source documents within instant 30-day window; and (3) plaintiff did not bring instant action until years after his last haul/pay check from defendant. Fact that defendant did not receive computer-generated documents containing all of the same information that was contained in rated freight bill did not require different result, since plaintiff always had ability to verify accuracy of computer-generated document for purpose of raising any pay dispute.