Opinion
Case No. 03 C 1541.
September 2, 2004
MEMORANDUM OPINION AND ORDER
Plaintiff Lisa Cohn brought this two-count action against ATT Corp. for defamation (Count II) and Gulf State Credit LLC, d/b/a Palisades Collection ("Gulf State") for violations of the Fair Debt Collection Practices Act ("FDCPA"), 15 U.S.C. § 1692 (Count I). On plaintiff's motion, on March 18, 2004, the court dismissed Gulf State with prejudice as a defendant in this case; plaintiff's FDCPA claim against Gulf State is accordingly dismissed with prejudice. Thus, the only items remaining before the court are defendant ATT's motion for summary judgment on plaintiff's defamation claim and motion to strike plaintiff's affidavit.
I. BACKGROUND
Plaintiff's defamation claim against ATT asserts that ATT published inaccurate statements about an unpaid balance of $40.61 on her ATT account to various creditors, prospective grantors, and other credit-reporting agencies which caused her to suffer serious injury, namely, personal humiliation, embarrassment, mental anguish, and emotional distress. The following facts are undisputed.
In April 2000 plaintiff learned that ATT sought to collect an unpaid balance of $40.61 on her account. At some later time plaintiff disputed this debt by contacting ATT. On January 13, 2000, ATT referred plaintiff's account to its internal review staff to assess whether the charge was valid after a notation appeared on her account that she disputed owing the $40.61. On January 18, 2000, ATT concluded that plaintiff's $40.61 charge was actually owed.
Pursuant to ATT procedures, plaintiff's debt was then placed with a collection agency while ATT retained control over her account. This initial placement proved unsuccessful and plaintiff's debt was returned to ATT. Plaintiff's debt was then placed with a second collection agency while ATT retained control over her account. The second placement was also unsuccessful and plaintiff's debt was returned to ATT. Finally, on January 17, 2002, in accordance with ATT collection procedures, plaintiff's debt was sold outright to a third collection agency, OSI Portfolio Services ("OSI"). After this sale ATT no longer owned the debt nor controlled nor directed any of OSI's collection efforts.
On April 4, 2002, plaintiff received a dunning letter from Gulf State which indicated that her $40.61 debt was unpaid, due, and owing and that she must repay it immediately. The letter clearly stated that Gulf State was collecting the debt on behalf of OSI, which had purchased plaintiff's past-due account from ATT. Plaintiff contacted Gulf State to dispute the debt, and on May 24, 2002, Gulf State sent plaintiff a letter stating that her account had been closed and reference to it would be deleted from Gulf State's next credit bureau reporting cycle.
On September 25, 2002, plaintiff obtained a copy of her credit report from Equifax which contains an entry stating that her ATT account was delinquent. The credit report names Palisades Collection (aka Gulf State) as the reporting company, the amount due as $41, the status as more than 120 days past due, and the date reported as May 2002. Plaintiff at no time paid ATT, Gulf State, or any other entity any amount of money in satisfaction the $40.61 debt.
II. DISCUSSION
Plaintiff claims that she has been defamed by ATT's disclosure of her debt to collection agencies and credit companies because ATT at all times knew that she did not owe the $40.61 and yet persisted in reporting to third parties that she did. ATT maintains that it is entitled to summary judgment because ATT did not make a false statement about plaintiff's account, did not publish the allegedly false statements which plaintiff complains of, and did not act with reckless disregard of plaintiff's rights, as is required to bring a defamation claim independent of the relief available under the Fair Credit Reporting Act ("FCRA").
Summary judgment is appropriate "if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." Fed.R.Civ.P. 56(c). When considering a motion for summary judgment, the court must view the record and any inferences to be drawn from it in the light most favorable to the party opposing summary judgment. See Griffin v. Thomas, 929 F.2d 1210, 1212 (7th Cir. 1991). The party moving for summary judgment bears the initial burden of demonstrating the absence of a genuine issue of material fact. Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986). The party opposing summary judgment may not rest upon the pleadings, but "must set forth specific facts showing that there is a genuine issue for trial." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). There is no genuine issue for trial unless there is "sufficient evidence favoring the non-moving party for a jury to return a verdict for that party." Id.
Though ATT makes several valid arguments for why it should prevail on summary judgment, the court need address only one: that ATT is not liable for defamation because its statement that plaintiff owed $40.61 on her account was true. To prove defamation, plaintiff must show (1) a false statement by ATT, (2) an unprivileged publication of the defamatory statement; and (3) damages. Haywood v. Lucent Technologies, Inc., 323 F.3d 524, 533 (7th Cir. 2003). An allegedly defamatory statement is not actionable if it is true. Thus, a plaintiff must prove "that the defendant either knew the statement to be false, or believing it to be true, lacked reasonable grounds for that belief." Klug v. Chicago School Reform Bd. of Trustees, 197 F.3d 853, 860 (7th Cir. 1999). A defendant invoking the truth defense need only establish the "substantial truth" of the allegedly defamatory statement, that the "gist" or "sting" of the statement is true. Harrison v. Chicago Sun-Times, 793 N.E.2d 760, 767 (Ill.App.Ct. 2003).
Here, ATT maintains that plaintiff actually owed $40.61 on her account and presents unrebutted evidence establishing its reasonable grounds for that belief. ATT submits the affidavit of Mark Farinella, an attorney in ATT's Law Government Affairs department, whose job is to manage ATT's compliance with collection laws. Farinella avers that ATT conducted an internal review of plaintiff's debt upon receiving notice that plaintiff disputed the charge and concluded that the amount was actually owed. ATT then complied with its three-part procedure for collecting debts by placing plaintiff's account with two separate collection agencies, and when those efforts failed, by selling plaintiff's account to a third agency, OPI. After the sale of plaintiff's account, ATT no longer retained control of plaintiff's account. ATT's internal reports of plaintiff's account confirm that these procedures were followed, and plaintiff offers no evidence showing that ATT's accounting reports were flawed or its collection procedures were not followed.
Plaintiff's only evidence in support of her contention that ATT knew its allegedly defamatory statement about her account was false is her own affidavit and deposition testimony stating that ATT knew she did not owe any money to the company. In her affidavit, plaintiff avers that after she disputed the charge by contacting ATT, she "received correspondence from ATT indicating the settlement of the alleged delinquent payment." In her deposition testimony, plaintiff again asserts that she received a "letter of settlement" from ATT stating that the company would delete the charge from her account. When pressed on the details of this letter, plaintiff admitted that she could not remember exactly what the letter said and that "[m]y lawyer has the letter." Plaintiff failed to produce the letter when requested by ATT during discovery and has offered no additional explanation about its contents.
ATT argues that plaintiff's affidavit must be stricken because it is improperly executed and contains material, i.e., reference to a letter which plaintiff refuses to produce, deemed inadmissible under Fed.R.Evid. 1002. The court notes that after ATT's motion to strike was filed, plaintiff filed with the court her signature page for the affidavit which she claims was inadvertently omitted from her response to ATT's motion for summary judgment. The court finds that this submission rectifies any execution flaws in the affidavit. The court also finds that, while Rule 1002 states that a content of a writing must be proved by producing the original, plaintiff may avail herself of an exception to that rule which allows admission of the letter's contents through testimony when the document has been lost or destroyed. Fed.R.Evid. 1004. ATT's motion to strike is therefore denied.
In light of ATT's evidence establishing that it had a reasonable basis for its belief that plaintiff in fact owed $40.61 on her account, plaintiff's conclusory and self-serving statements to the contrary are insufficient to defeat summary judgment on her defamation claim. Even if plaintiff's affidavit and deposition testimony were credited, plaintiff offers no evidence for the court to find that ATT lacked a reasonable basis for believing that plaintiff's debt was owed. Plaintiff has simply not come forth with enough evidence to provide a basis for a jury verdict in her favor. Because plaintiff cannot prove that ATT's allegedly defamatory statement about her past due account was false, she cannot establish the elements of her defamation claim.
III. CONCLUSION
Defendant ATT's motion for summary judgment on plaintiff's defamation claim is granted.