Portalatin v. Blatt, Hasenmiller, Leibsker & Moore, LLC
Opinion of the Court
Iwona Portalatin allegedly owed $1,330.75 in consumer debt. In October 2013 the law firm of Blatt, Hasenmiller, Leibsker & Moore, LLC ("Blatt") on behalf of its client Midland Funding, LLC ("Midland") filed a debt-collection suit against Portalatin in downtown Chicago at the Richard J. Daley Center Courthouse, which serves the Circuit Court of Cook County's First Municipal District. Our then-governing precedent interpreting the Fair Debt Collection Practices Act ("FDCPA") allowed Blatt to file suit against Portalatin in that forum even though at the time of filing she lived in the Fourth Municipal District, served by the Maywood Courthouse.
But in July 2014, we overruled our precedent and held the FDCPA requires debt collectors to file suits in the smallest venue-relevant geographic unit where the debtor signed the contract or resides at commencement of suit. Suesz v. Med-1 Solutions ,
Eventually, Portalatin settled with Midland and expressly abandoned all claims against Blatt except her claim for FDCPA statutory damages. Blatt moved for relief on various grounds, including an argument that Portalatin's settlement with Midland mooted her claim for FDCPA statutory damages against Blatt. The district court denied these motions. The jury awarded Portalatin $200 in statutory damages against Blatt. For this achievement, the court awarded Portalatin $69,393.75 in attorney's fees and $772.95 in costs against Blatt. Blatt appeals. We conclude the settlement with Midland mooted Portalatin's claim for FDCPA statutory damages against Blatt. As a result, the district court should have dismissed her claim, and she is not entitled to attorney's fees or costs from Blatt.
I. Background
The FDCPA requires a debt collector in the circumstances relevant here to bring a legal action "only in the judicial district or similar legal entity" where the debtor signed the contract or resides at commencement of the action. 15 U.S.C. § 1692i(a)(2). In 1996, we interpreted "judicial district" to mean (in Illinois) a Circuit Court, and not its municipal subdivisions. Newsom v. Friedman ,
In October 2013, Midland, through Blatt, filed an action against Iwona Portalatin in the Circuit Court of Cook County's First Municipal District (in downtown Chicago) to recover credit card debt. Portalatin lived in the Fourth Municipal District at filing. There is no dispute that both Midland and Blatt are debt collectors under the FDCPA. In April 2014, the state court entered default judgment for Midland for $1,330.75.
But in July 2014, we overruled Newsom and held "judicial district or similar legal entity" in § 1692i means "the smallest geographic area that is relevant for determining venue in the court system in which the case is filed," and we made that holding retroactive. Suesz ,
In October 2014, Portalatin sued Blatt and Midland in federal court. She claimed they violated the FDCPA by suing her in the wrong forum, and she sought statutory damages,
In September 2015, Portalatin expressly abandoned her claim for actual damages against Blatt; her attorney stated in open court that they were only seeking statutory damages.
Blatt moved for dismissal, arguing the settlement with Midland mooted Portalatin's claims against Blatt under the single-satisfaction rule. In November 2015, the district court denied that motion. So Portalatin and Blatt went to trial later that month solely for statutory damages. Portalatin asked for $1,000, the maximum statutory damages. The jury awarded her $200. Blatt then moved to alter or amend the judgment pursuant to Rule 59(e) or to grant relief from the judgment pursuant to Rule 60(b)(5) on the grounds that the award for statutory damages must be set off or deemed satisfied by Portalatin's settlement with Midland. The district court denied that motion as well.
In July 2017, we held that a debt collector who violated the FDCPA cannot avoid liability on the ground it relied on Newsom as controlling precedent. Oliva v. Blatt, Hasenmiller, Leibsker & Moore ,
In October 2017, the district court awarded Portalatin $69,393.75 in attorney's fees and $772.95 in costs against Blatt, because she prevailed by winning $200 at trial.
Blatt pursues two appeals, consolidated before us. It challenges the statutory-damages award, arguing Portalatin received all possible compensation through her settlement with Midland, thus mooting her action against Blatt. Alternatively, it argues it is entitled to a setoff based on the settlement agreement. Blatt also challenges the award of attorney's fees and costs, arguing it falls with the mootness of the statutory-damages claim. Blatt also argues the district court failed to consider the most critical factor in calculating the award: Portalatin's level of success. Blatt claims the district court punished it for choosing to defend. Blatt also argues the district court failed to consider Blatt's good faith as a mitigating factor in setting the fee award.
II. Discussion
A. Mootness
1. Analysis
Blatt appeals from the denials of his motion to dismiss and his post-trial motion.
Blatt argued in its motion to dismiss that the settlement with Midland satisfied Portalatin's claim against Blatt, rendering that claim moot or, alternatively, entitling Blatt to a setoff. Blatt noted the terms of the settlement expressly resolved all claims, which the agreement defined broadly. The district court denied the motion to dismiss, reasoning it did not need to decide whether two recoveries of statutory damages-one from each Defendant-were possible "because there were plenty of actual damages and attorneys' fees ... that would be greater than the amount that was paid in settlement by Midland. And so when you're trying to figure out how this is best allocated and whether it moots the rest of the case, I don't think it does ...." (Trans. Hearing Nov. 23, 2015, App. 014.)
Blatt echoed its arguments in its post-trial motion, where it maintained entitlement to a setoff or the benefit of satisfaction due to the settlement. The district court denied the post-trial motion because Portalatin sought various forms of recovery from Midland which she did not seek *383from Blatt at trial. For example, Portalatin pursued claims against Midland for FDCPA actual damages, ICFA actual damages, and ICFA punitive damages. But Portalatin never pursued ICFA claims against Blatt, and before trial Portalatin expressly abandoned all claims against Blatt except her claim for FDCPA statutory damages. So, reasoned the district court, even if the FDCPA permits only one recovery of statutory damages from multiple defendants, Portalatin's settlement with Midland "is reasonably attributable to other types of relief, some of which she did not seek against Blatt (actual and punitive damages under the ICFA)." Portalatin v. Blatt, Hasenmiller, Leibsker & Moore , No. 14-CV-8271,
We disagree. The court erred by not dismissing the statutory-damages claim as moot. Federal courts have only limited jurisdiction. U.S. Const. art. III, § 2, cl. 1. "Under Article III of the Constitution, the judicial power of the United States extends only to cases and controversies." Wis. Right to Life v. Schober ,
Generally, a plaintiff is only entitled to a single recovery for a single injury, regardless of how many defendants could be liable for that single injury, or how many different theories of recovery could apply to that single injury. See Swanigan v. City of Chi. ,
*384Portalatin does not dispute that her suit arises out of a single violation of the FDCPA: filing a debt-collection suit in the wrong courthouse. Nor does she dispute that her claimed harm-having to defend herself in the wrong courthouse-is indivisible between the two Defendants. Nor does she dispute that the two Defendants acted in concert at all relevant times. Neither acted independently of the other. Blatt filed and maintained the debt-collection suit in the wrong courthouse on behalf of Midland. Portalatin does not allege Blatt took any ultra vires actions. Rather, she admits "plaintiff's claims stem from the same conduct" and "plaintiff's claims arise from a single, indivisible act." (Appellee's Br., No. 16-1578 at 6, 10.)
When a plaintiff wants to settle with one defendant but maintain a claim against another defendant, one possibility is for the plaintiff to allocate all the funds in such a way as to maximize recovery against the non-settling defendant, if this is possible in good faith. See Johnson v. Belleville Radiologists, Ltd. ,
Under Illinois law, absent express allocation, "[w]here a promise on one side is supported by several promises on the other, the single promise will provide consideration for all the promises." Wodziak v. Kash ,
*3852. Separate awards of additional damages?
Still, Portalatin's claim for FDCPA additional damages from Blatt could potentially survive mootness despite the lack of allocation in the settlement agreement if separate awards of additional damages each capped at $1,000 are recoverable from each Defendant based on a single incident and a single, indivisible injury. There is no precedent in this circuit directly on point. We start with the FDCPA's plain language:
(a) Amount of damages
Except as otherwise provided by this section, any debt collector who fails to comply with any provision of this subchapter with respect to any person is liable to such person in an amount equal to the sum of-
(1) any actual damage sustained by such person as a result of such failure;
(2)(A) in the case of any action by an individual, such additional damages as the court may allow, but not exceeding $1,000 ....
15 U.S.C. § 1692k(a).
The word "action" limits the additional damages, capping them at $1,000 per action, not per violation and not per defendant. See Harper v. Better Bus. Servs., Inc. ,
Also, the actual-damages provision mirrors the additional-damages (also known as "statutory damages") provision. There is no doubt actual damages for the same single, indivisible injury are not multiplied by the number of defendants. This tends to suggest the additional damages provided in the parallel clause also are not multiplied by the number of defendants.
Moreover, we construe statutes in derogation of the common law strictly and narrowly. Haven v. Polska ,
Congress could have said a plaintiff may recover additional damages on a "per defendant" basis, but it did not. For example, in the Freedom of Access to Clinic Entrances Act ("FACE") Congress said any person aggrieved by a violation of FACE could elect "to recover, in lieu of actual damages, an award of statutory damages in the amount of $5,000 per violation."
Therefore, we conclude FDCPA additional damages are not multiplied by the number of defendants where the plaintiff suffered an indivisible harm caused by defendants who did not violate the FDCPA independently of each other.
*387As Portalatin was only entitled to one recovery of FDCPA additional damages capped at $1,000 for her indivisible injury, her settlement with Midland mooted this claim against Blatt, and the district court should have dismissed it.
B. Attorney's fees and costs
The district court concluded Portalatin was a prevailing party-and therefore entitled to an award of attorney's fees and costs under 15 U.S.C. § 1692k(a)(3) -because she won summary judgment on the issue of liability and won an award of $200 in statutory damages. But when she settled with Midland, her claim against Blatt for statutory damages became moot, and the district court should have dismissed it. She prevailed at trial, but she should not have reached trial. Therefore, Portalatin is not entitled to an award of attorney's fees or costs against Blatt.
III. Conclusion
We REVERSE the district court's denials of Blatt's motions regarding mootness.
The FDCPA calls them "additional damages." 15 U.S.C. § 1692k(a)(2)(A). We use "statutory damages" and "additional damages" interchangeably.
Portalatin notified the district court on July 27, 2015, that she and Midland settled all claims between them and were completing the documentation.
"[T]he general rule is that rulings on interlocutory orders are encompassed within a subsequent final judgment and may be reviewed as part of that judgment ...." Sere v. Bd. Trs. Univ. Ill. ,
"The only question raised in a Rule 60(b) appeal is whether the trial court abused its discretion by refusing to grant the extraordinary relief recognized in that rule ...." Gleason v. Jansen ,
Portalatin made a glancing reference to Illinois' Joint Tortfeasor Contribution Act ("JTCA") without developing argument for its direct or analogous application. Therefore, this argument is forfeited. In any event, the JTCA provides that a release given in good faith to one person liable in tort does not discharge another tortfeasor from liability for the same injury unless the terms of the release say so, but the release "reduces the recovery on any claim against the others to the extent of any amount stated in the release or the covenant, or in the amount of the consideration actually paid for it, whichever is greater." 740 ILCS 100/2(c) ; see Donovan v. Robbins ,
Portalatin heavily relies on Strasters v. Weinstein & Riley, P.S. , No. CV-10-3070,
Our conclusion also comports with the reasoning of numerous district courts. See Green v. Monarch Recovery Mgmt. , No. 1:13-CV-418,
We note there are other grounds, rooted in the plain language of the settlement agreement, on which Blatt might have prevailed in these consolidated appeals. But because the settlement agreement is under seal at Midland's request, and because Blatt did not develop these other grounds on appeal, we will not discuss them. All references to the settlement agreement in this opinion stem from the parties' appellate briefs, which are in the public record, and which no one asked us to strike or seal.
Blatt devotes a section of its initial brief in the fee appeal (No. 17-3335) to the argument that the fee award must be vacated because Portalatin's settlement with Midland mooted the case against Blatt. In her response brief in the fee appeal, Portalatin puzzles why Blatt "rehashes" arguments, and Portalatin purports to incorporate her additional-damages response brief (No. 16-1578). But Portalatin does not directly or fully respond to Blatt's argument that the mootness of the claim for additional damages means she is not entitled to an award of attorney's fees or costs, and she therefore forfeited any pertinent arguments.
Section 1692k(b)(1) requires a court to consider the following factors in determining the amount of liability: "the frequency and persistence of noncompliance by the debt collector, the nature of such noncompliance, and the extent to which such noncompliance was intentional." 15 U.S.C. § 1692k(b)(1) ; Oliva ,
We have sympathy for the district judge. He sagaciously tried to encourage the parties to resolve this case, but they would not agree. As a result, this unique case generated further attorney's fees and costs, and imposed on limited judicial resources, without ultimately benefitting the debtor, which was supposed to have been the FDCPA's goal.
Reference
- Full Case Name
- Iwona PORTALATIN v. BLATT, HASENMILLER, LEIBSKER & MOORE, LLC
- Cited By
- 23 cases
- Status
- Published