UNITED STATES DISTRICT COURT 

NORTHERN DISTRICT OF ILLINOIS 

EASTERN DIVISION

NACOLA MAGEE and 

JAMES PETERSON, individually and on 

behalf of all others similarly situated, 

Plaintiffs,

v.

PORTFOLIO RECOVERY

ASSOCIATES, LLC,

Defendant.

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Case No. 12 cv 1624

Judge John W. Darrah

MEMORANDUM OPINION AND ORDER

Plaintiffs Nacola Magee and James Peterson have brought this class action against 

Portfolio Recovery Associates, LLC (“PRA”) for alleged violations of the Fair Debt Collection 

Practices Act (“FDCPA”), 15 U.S.C. § 1692 et. seq. Both parties filed Motions for Summary 

Judgment pursuant to Federal Rule of Civil Procedure 56. For the reasons stated below, 

Defendant’s Motion for Summary Judgment [277] is denied as to Counts I and II. Plaintiffs’ 

Motion for Summary Judgment [269] is granted. 

LOCAL RULE 56.1

Local Rule 56.1(a)(3) requires the moving party to provide “a statement of 

material facts as to which the party contends there is no genuine issue for trial.” Ammons v. 

Aramark Uniform Servs., 368 F.3d 809, 817 (7th Cir. 2004). Local Rule 56.1(b)(3) requires the 

nonmoving party to admit or deny every factual statement proffered by the moving party and to 

concisely designate any material facts that establish a genuine dispute for trial. See Schrott v. 

Bristol-Myers Squibb Co., 403 F.3d 940, 944 (7th Cir. 2005). Pursuant to Local Rule 

56.1(b)(3)(C), the nonmovant may submit additional statements of material facts that “require 
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the denial of summary judgment.” To the extent that a response to a statement of material fact 

provides only extraneous or argumentative information, this response will not constitute a proper 

denial of the fact, and the fact is admitted. See Graziano v. Vill. of Oak Park, 401 F.Supp.2d 

918, 936 (N.D. Ill. 2005). Similarly, to the extent that a statement of fact contains a legal 

conclusion or otherwise unsupported statement, including a fact that relies upon inadmissible 

hearsay, such a fact is disregarded. Eisenstadt v. Centel Corp., 113 F.3d 738, 742 (7th Cir. 

1997).

BACKGROUND

The following facts are taken from the Complaint and the parties’ statements of 

undisputed material facts submitted in accordance with Local Rule 56.1.

PRA is a business that engages in the purchasing of defaulted debts originally owed to 

others and incurred for personal, family, or household purposes. (Am. Compl. ¶ 8.) On 

October 3, 2011, PRA sent Magee, a resident of Illinois, a letter to collect on a debt originally 

owed by Magee to Capital One Bank. (Id. ¶¶ 14-19 & Ex. A.) The letter stated:

Your account was purchased on 7/8/2011 from Capital One Bank, N.A. This 

letter confirms your arrangement to make the following payment(s) to settle this 

account. 

Payment in the amount of $250.00 is due by 10/5/2011. 

Payment in the amount of $193.93 is due by 10/29/2011. 

Payment in the amount of $198.93 is due by 11/29/2011.

 

Should you miss any of the payments described herein, this payment plan may 

become null and void. 

If you complete this payment plan and our company is reporting our company’s 

trade line for this account to the three major credit reporting agencies, our 

company will report this account as settled. 
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(Am. Compl. Ex. A.) Magee alleges that this debt was incurred prior to 2004, if it was incurred 

at all. (Am. Compl. ¶ 19.)

On August 22, 2011, and August 29, 2011, PRA sent Peterson, an Indiana resident, letters 

to collect on two separate debts that were originally owed to Capital One Bank. (Id. ¶¶ 20-34 & 

Exs. B, C.) Peterson alleges that these debts were incurred prior to 2005, if they were incurred at 

all. (Id. ¶¶ 28, 34.) Both letters stated:

We want to help you resolve your account and have developed three affordable 

options for you to pay off this account [including] Single Payment Settlement 

Option [,] 6 Month Settlement Plan [and] Balance in Full Payment Plan. 

Your account will be considered “Settled in Full” after we post your final 

payment. 

[PRA] purchased the account referenced above on 07/28/2011.

(Am. Compl. ¶¶ 27, 33 & Exs. B, C.) 

In Count I, Plaintiffs allege that PRA violated the FDCPA by “sending consumers 

collection letters that contain settlement offers on time-barred debts without disclosure of the fact 

that the debt is time barred.” (Id. ¶ 45.) Plaintiffs further allege that the “nondisclosure in 

conjunction with the offers of a ‘settlement’ in Exhibit A-C implies a colorable obligation to pay 

and is misleading to the consumer.” (Id. ¶ 47.) In Count II, Magee alleges that PRA violated the 

FDCPA “by referring to credit reporting on debts so old that they cannot be reported on an 

ordinary credit report.” (Id. ¶ 63.) Plaintiffs seek actual and statutory damages pursuant to the 

FDCPA. Plaintiffs filed this action on March 6, 2012. After this Court granted PRA’s Motion to 
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Dismiss, Plaintiffs filed a First Amended Complaint on August 23, 2012.

1

 Defendant then filed a 

Motion to Dismiss the First Amended Complaint. The Motion was denied. 

LEGAL STANDARD

Summary judgment should be granted where the “pleadings, the discovery and disclosure 

materials on file, and any affidavits show that there is no genuine issue as to any material fact 

and that the movant is entitled to judgment as a matter of law.” Fed.R.Civ.P. 56(c)(2). The 

moving party is responsible for informing the court of what in the record or affidavits 

demonstrates the absence of a triable issue. Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986).

If the moving party meets its burden, the nonmoving party must go beyond the face of the 

pleadings, affidavits, depositions, answers to interrogatories, and admissions on file to 

demonstrate, through specific evidence, that there is still a genuine issue of material fact. 

Celotex, 477 U.S. at 322-27; Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 254-56 (1986); 

Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 586-87 (1986). “The mere 

existence of a scintilla of evidence in support of the [nonmovant's] position will be insufficient; 

there must be evidence on which the jury could reasonably find” for the nonmovant. Anderson, 

477 U.S. at 252. 

Disputed facts are material when they might affect the outcome of the suit. 

First Ind. Bank v. Baker, 957 F.2d 506, 507-08 (7th Cir. 1992). When reviewing a motion 

for summary judgment, a court must view all inferences to be drawn from the facts in 

the light most favorable to the nonmoving party. Anderson, 477 U.S. at 247-48; Popovits v. 

 

1 On January 17, 2013, this Court denied PRA’s Motion to Dismiss Plaintiffs’ Amended 

Complaint. On April 30, 2013, on PRA’s Motion, the case was stayed; the stay was lifted on 

March 19, 2014. 
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Circuit City Stores, Inc., 185 F.3d 726, 731 (7th Cir. 1999). However, a metaphysical doubt will 

not suffice. Matsushita, 475 U.S. at 586. If the evidence is merely colorable or is not 

significantly probative or is no more than a scintilla, summary judgment may be granted. 

Anderson, 477 U.S. at 249-250.

ANALYSIS

Count I

Plaintiffs contend PRA engaged in unfair and deceptive acts and practices in violation of 

Sections 1692e, 1692e(5), 1692e(10), and 1692f of the FDCPA by failing to disclose to the 

Plaintiffs that the statute of limitations had expired and that the debt could not be collected 

through a court action. Plaintiffs further allege that PRA’s offers in the collection letters to 

“settle” the debt are misleading because it implies that a time-barred debt is legally enforceable. 

(Id. ¶ 30.) 

Section 1692e provides: 

A debt collector may not use any false, deceptive, or misleading 

representation or means in connection with the collection of any 

debt. Without limiting the general application of the foregoing, the 

following conduct is a violation of this section:

* * *

(2) The false representation of –

(A) the character, amount, or legal status of any debt; . . . 

(5) The threat to take any action that cannot legally be 

taken or that is not intended to be taken. 

* * *

(10) The use of any false representation or deceptive 

means to collect or attempt to collect any debt or to obtain 

information concerning a consumer.

15 U.S.C. § 1692e. 
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Section 1692f prohibits debt collectors from using “unfair or unconscionable means to 

collect or attempt to collect any debt.” “[I]n deciding whether . . . a representation made in a 

dunning letter is misleading the court asks whether a person of modest education and limited 

commercial savvy would be likely to be deceived.” Evory v. RJM Acquisitions Funding L.L.C.,

505 F.3d 769, 774 (7th Cir. 2007). The court views the letter through the perspective of an 

“unsophisticated consumer.” Lox v. CDA, Ltd., 689 F.3d 818, 822 (7th Cir. 2012). This standard 

applies to claims under both § 1692e and § 1692f. Turner v. J.V.D.B. & Assoc., Inc., 330 F.3d 

991, 997 (7th Cir.2003).

The Seventh Circuit has held that “a debt collector violates the FDCPA when it misleads 

an unsophisticated consumer to believe a time-barred debt is legally enforceable regardless of 

whether litigation is threatened . . . .” McMahon v. LVNV Funding, LLC, 744 F.3d 1010, 1020

(7th Cir. 2014). Further, “a settlement offer on a time-barred debt implies that the creditor could 

successfully sue on the debt. If unsophisticated consumers believe either that the settlement offer 

is their chance to avoid court proceedings where they would be defenseless, or if they believe 

that the debt is legally enforceable at all, they have been misled, and the debt collector has 

violated the FDCPA.” McMahon, 744 F.3d at 1022. However, the McMahon court does not 

hold that a dunning letter for a time-barred debt is a violation of the FDCPA as a matter of law, 

stating that “an unsophisticated consumer could be misled by a dunning letter for a time-barred 

debt, especially a letter that uses the term “settle” or “settlement.” Id (emphasis added). 

There are three categories of § 1692e cases: (1) cases in which the allegedly offensive 

language is plainly and clearly not misleading; (2) cases that include debt collection language 

that is not misleading or confusing on its face, but has the potential to be misleading to the 

unsophisticated consumer; and (3) cases involving letters that are plainly deceptive or 
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misleading. Cases in the first category do not require any extrinsic evidence to show that the 

reasonable unsophisticated consumer would not be confused by the pertinent language. If a case 

falls into the second category, “plaintiffs may prevail only by producing extrinsic evidence, such 

as consumer surveys, to prove that unsophisticated consumers do in fact find the challenged 

statements misleading or deceptive.” Cases in the third category do not require any extrinsic 

evidence in order for the plaintiff to be successful. Ruth v. Triumph P'ships, 577 F.3d 790, 800-

801 (7th Cir. 2009); Lox, 689 F.3d at 822.

It has been well established by the Seventh Circuit that typically, whether a dunning letter 

is confusing is a question of fact. McMahon, 744 F.3d at 1020; Evory, 505 F.3d at 776; Lox, 689 

F.3d at 822. However, Plaintiffs may prevail on a motion for summary judgment without 

providing extrinsic evidence if the statements in question are plainly and clearly misleading on 

its face and if the statements are materially false. Hahn v. Triumph P'ships, 557 F.3d 755, 757–

58 (7th Cir. 2009) (finding that, “[m]ateriality is an ordinary element of any federal claim based 

on a false or misleading statement”); Lox, 689 F.3d at 822. A false or misleading statement is 

material if it has “the ability to influence a consumer's decision.” O'Rourke v. Palisades 

Acquisition XVI, LLC, 635 F.3d 938, 942 (7th Cir. 2011). If the letter “does not plainly reveal 

that it would be confusing to a significant fraction of the population, the plaintiff must come 

forward with evidence beyond the letter and beyond his own self-serving assertions that the letter 

is confusing in order to create a genuine issue of material fact for trial.” Durkin v. 

Equifax Check Servs., Inc., 406 F.3d 410, 415 (7th Cir. 2005)

At issue is whether the “settlement” language in the Magee and Peterson letters misleads 

the consumer to believe that their time-barred debt is legally enforceable. Magee’s letter, as 

more fully set out above, states, “[i]f you complete this payment plan and our company is 
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reporting our company’s trade line for this account to the three major credit reporting agencies, 

our company will report this account as settled.” Both Peterson letters refer to three payment 

options, two of which are called “Settlement Option” or “Settlement Plan”. The Peterson letters 

also note that Peterson’s account “will be considered ‘Settled in Full’ after [Defendant] post[s] 

[Peterson’s] final payment.” 

Plaintiffs cite to Pantoja v. Portfolio Recovery Associates, LLC, No. 13 C 7667, 2015 

WL 848568, *3 (N.D. Ill. Jan. 14, 2015), for the proposition that any dunning letter that does 

“not tell the consumer that the debt is time-barred and defendant cannot sue plaintiff to collect 

it . . . [and] the effect of making (or agreeing to make) a partial payment on a time-barred debt is 

to revive the statute of limitations for enforcing that debt” is deceptive on its face and violates 

the FDCPA. The Pantoja court held that the failure to include language regarding the law’s 

limits on how long the plaintiff could be sued on the debt was deceptive on its face in light of the 

language implying that the debt was legally enforceable and that the defendant chose not to sue. 

Here, as in Pantoja, Defendant failed to include language stating that Plaintiffs’ debt was time 

barred, that they could no longer be sued on that debt, and that a partial payment would reset the

statute of limitations period. Defendant’s failure to include such language in the dunning letter 

is clearly deceptive on its face. Thus, summary judgment may be awarded without extrinsic 

evidence as the deceptive language is materially false. 

The “settlement” language in the Magee and Peterson letters offer a significant savings 

on the consumers’ debts and encourage them to act quickly to take advantage of these savings. 

By failing to include language that the law limits how long consumers can be sued on their debt, 

the statements in question urge them to make payments on time-barred debt without informing 

them of the consequences of making those payments, i.e. “a gullible consumer who made a 
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partial payment would inadvertently have reset the limitations period and made herself 

vulnerable on the full amount.” McMahon, 744 F.3d at 1021. Such language could influence a 

consumer’s decision, and is material. Thus, Plaintiffs’ Motion for Summary Judgment as to 

Count I is granted. 

Count II

In Count II, Magee alleges that PRA violated Sections 1692e and 1692f of the FDCPA 

“by referring to credit reporting on debts so old that they cannot be reported on an ordinary credit 

report.” (Id. ¶ 63.) Magee’s letter states, “If you complete this payment plan and our company 

is reporting our company’s trade line for this account to the three major credit reporting agencies, 

our company will report this account as settled.”2 

In Lox, the Seventh Circuit cited the Ninth Circuit’s decision in Gonzalez v. 

Arrow Fin. Servs., LLC, 660 F.3d 1055 (9th Cir. 2011) (Gonzalez), holding that the decision 

“establish[ed] that it is improper under the FDCPA to imply that certain outcomes might befall a 

delinquent debtor when, legally, those outcomes cannot come to pass.” Id. In Gonzalez, the 

“debt collector sent a collection letter that stated, “if we are reporting the account, the 

appropriate credit bureaus will be notified that this account has been settled.” Id. at 1059. The 

Gonzalez court held, “[a]s there is no circumstance under which [the debt collector] could legally 

report an obsolete debt to a credit bureau, the implication that [the debt collector] could make a 

positive report in the event of payment is misleading.” Id. at 1063; Lox, 689 F.3d at 824-25. 

 

2 Counts I and II are both premised on this language from Magee’s letter. In Count I, 

Plaintiffs base their claim on the “settlement” language in Magee’s letter and in Peterson’s 

letters. In Count II, Plaintiffs base their claim on the “credit reporting” language in Magee’s 

letter.
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As stated above, whether a dunning letter is confusing is a question of fact. McMahon, 

744 F.3d at 1020; Evory, 505 F.3d at 776; Lox, 689 F.3d at 822. However, Plaintiffs may prevail 

on a motion for summary judgment without providing extrinsic evidence if the statements in 

question are plainly and clearly misleading on its face and if the statements are materially false. 

Hahn, 557 F.3d at 757–58. The language at issue here is the statement in the Magee letter that 

indicates that Defendant would report Magee’s debt as “settled” to a credit reporting agency if 

Magee agreed to the suggested payment plan. This language is nearly identical to the language 

discussed in Gonzalez. As in that case, there is no circumstance under which Defendant could 

legally report an obsolete debt to a credit reporting agency or make a positive report in the event 

of payment. The implication that Defendant could do so here is misleading on its face. Thus, 

extrinsic evidence is unnecessary. See Slick v. Portfolio Recovery Associates, LLC, 

No. 12 C 2562, 2014 WL 4100416 (N.D. Ill. Aug. 20, 2014).

To prevail on its Motion for Summary Judgment on Count II, Plaintiffs must also show 

that the false or misleading statements are material. A false or misleading statement is material 

if it has “the ability to influence a consumer's decision.” O'Rourke v. Palisades Acquisition XVI, 

LLC, 635 F.3d 938, 942 (7th Cir. 2011). As noted by Plaintiffs, misleading a consumer to 

believe a debt is legally reportable and that making a payment on that debt will improve his or 

her credit score is a deception that has the ability to influence that consumer’s decision. 

Therefore, because the statements regarding “credit reporting” are misleading on their face and 

materially false, Plaintiffs’ Motion for Summary Judgment is granted as to Count II. 

Defendant’s Motion for Summary Judgment is denied as to both Counts I and II of Plaintiffs’

First Amended Complaint.
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CONCLUSION

For the reasons stated above, Defendant’s Motion for Summary Judgment [277] is 

denied and Plaintiffs’ Motion for Summary Judgment [269] is granted.

Date: May 9, 2016 ______________________________

JOHN W. DARRAH

United States District Court Judge