Thomas v. Law Firm of Simpson & Cybak

NONPRECEDENTIAL DISPOSITION
To be cited only in accordance with
Fed. R. App. P. 32.1

United States Court of Appeals
For the Seventh Circuit
Chicago, Illinois 60604

Submitted July 25, 2007*
Decided July 25, 2007

Before

Hon. WILLIAM J. BAUER, Circuit Judge

Hon. RICHARD D. CUDAHY, Circuit Judge

Hon. MICHAEL S. KANNE, Circuit Judge

No. 06-3732

FRANK THOMAS, Appeal from the United States District
Plaintiff-Appellant, Court for the Northern District of
Illinois, Eastern Division.
v.
No. 00 C 8211
LAW FIRM OF SIMPSON & CYBAK,
et al., David H. Coar,
Defendants-Appellees. Judge.

ORDER

Frank Thomas sued the law firm of Simpson & Cybak (“Simpson”) under the
Fair Debt Collection Practices Act (“FDCPA”), 15 U.S.C. §§ 1692-1692o. After
Thomas rejected its offer of settlement, Simpson moved to dismiss his claim as
moot. The district court granted the motion, and Thomas appeals.

*
After examining the briefs and the record, we have concluded that oral
argument is unnecessary. Thus, the appeal is submitted on the briefs and the record.
See Fed. R. App. P. 34(a)(2).
No. 06-3732 Page 2

This case—now in its seventh year of litigation—stems from Thomas’s failed
purchase of a Chevrolet Blazer. After he missed scheduled payments, General
Motors Acceptance Corporation (“GMAC”), through its attorneys at Simpson, sued
Thomas in Illinois state court to recover the Blazer. Thomas then sued GMAC,
Simpson, and several of their employees in federal court, alleging that they violated
the FDCPA when they failed to send him a debt validation notice within five days of
their initial communication advising him of his rights as a debtor. The district
court dismissed his complaint for failure to state a claim. After hearing Thomas’s
appeal en banc, we reversed the court’s dismissal of Thomas’s claim against
Simpson, remanded that claim only, and left intact the judgment of dismissal as to
the remaining defendants, including GMAC. See Thomas v. Law Firm of Simpson
& Cybak, et al., 392 F.3d 914 (7th Cir. 2004).

Six months later Thomas moved under Federal Rule of Civil Procedure 60(b)
to vacate the district court’s judgment dismissing his claims against GMAC—the
same judgment that we had left intact. The court construed Thomas’s motion as
alleging fraud on the court, and accordingly concluded that it was not subject to
Rule 60(b)’s one-year limit. The court nonetheless denied the motion on the merits,
finding no evidence to support Thomas’s allegations that GMAC’s attorneys had
made false statements to the court. Thomas did not appeal the court’s decision on
this post-judgment motion within 30 days of its entry.

Meanwhile, as the remanded claim against Simpson proceeded, an attorney
for Simpson took Thomas’s deposition. When asked to describe his actual damages,
Thomas said only that he had lost the “use and enjoyment” of the Blazer.
Furthermore, he admitted that this loss had “no relationship” to the FDCPA claim
against Simpson, though he objected to the relevance of this admission. Consistent
with this admission, he later stated that he would not have been able to make
payments on and acquire the Blazer even if Simpson had complied with the
FDCPA.

Soon thereafter Simpson served Thomas with an offer of judgment, see Fed.
R. Civ. P. 68, in the amount of $5,000 plus costs, and when he rejected the offer, it
moved to dismiss his claim as moot. Relying on Thomas’s sworn concession that
there was no relationship between the alleged FDCPA violation and his only
identified damages—the loss of use and enjoyment of the Blazer—Simpson
reasoned that all Thomas could hope to recover at trial was $1,000 in statutory
damages plus costs. The district court agreed, but recognized that Thomas may not
have understood the implications of his refusal to accept the offer. It thus denied
the motion without prejudice to give Thomas the chance to consider a renewed
settlement offer in light of the court’s conclusion that for him to reject the offer
would render his claim moot. Simpson renewed its offer, and when Thomas again
rejected it, the court dismissed his claim with prejudice. Thomas appeals both the
No. 06-3732 Page 3

dismissal and the court’s denial of his motion to vacate the judgment against
GMAC.

On appeal Thomas first argues that the district court erred in determining
that his rejection of Simpson’s settlement offer rendered his FDCPA claim moot.
Our review of the court’s Rule 12(b)(1) dismissal order is de novo, see Kikalos v.
United States, 479 F.3d 522, 525 (7th Cir. 2007), but we review the court’s
“resolution of jurisdictional factual issues for abuse of discretion,” see Sapperstein v.
Hager, 188 F.3d 852, 856 (7th Cir. 1999). “A case becomes moot when the dispute
between the parties no longer rages, or when one of the parties loses his personal
interest in the outcome of the suit.” Holstein v. City of Chi., 29 F.3d 1145, 1147 (7th
Cir. 1994). A plaintiff may lose his personal interest in the suit if he rejects a
defendant’s offer to settle a claim for more than the plaintiff could recover by
proceeding to trial. Griesz v. Household Bank, 176 F.3d 1012, 1014-15 (7th Cir.
1999); Holstein, 29 F.3d at 1147. In other words, by rejecting an offer that would
otherwise make him whole on the claim he brings, the plaintiff “eliminates a legal
dispute upon which federal jurisdiction can be based.” Griesz, 176 F.3d at 1015; see
Gates v. Towery, 430 F.3d 429, 431-32 (7th Cir. 2005).

Thomas, however, wants money for actual damages beyond the $5,000 that
Simpson offered him. (He also demands punitive damages, but that remedy is not
available under the FDCPA and is therefore not part of the case, see 15 U.S.C.
§ 1692k(a)(1); Randolph v. IMBS, Inc., 368 F.3d 726, 728 (7th Cir. 2004).) He
admits, though, that he cannot link those damages to the only claim he has
pending—the alleged FDCPA violation. This admission is highly relevant because
only losses flowing from an FDCPA violation are recoverable as actual damages.
See 15 U.S.C. § 1692k(a)(1); Lewis v. ACB Bus. Servs., Inc., 135 F.3d 389, 404 (6th
Cir. 1998). Because of this admission, this case is remarkably similar to Griesz,
where the plaintiff, after receiving what she thought was an overcharge on her
credit card bill, sued Household Bank alleging that it had not made required
disclosures under the Truth in Lending Act. See 176 F.3d at 1014. After the
plaintiff rejected the bank’s Rule 68 offer of $1,200 in statutory damages plus costs,
the district court dismissed the suit as moot. Id. On appeal we noted that the
bank’s offer of judgment did not take into account the plaintiff’s claim that the
credit card overcharge caused her emotional distress. But because the alleged
Truth in Lending Act violation was unrelated to the overcharge or the emotional
distress that resulted from it, we concluded that the bank “was offering her more
than her claim was worth to her in a pecuniary sense.” Id. at 1014-15. We thus
agreed with the district court that the offer rendered the plaintiff’s claim moot.

This is an even stronger case for mootness than Griesz. Thomas actually
admitted in his deposition that “there is no relationship” between what he swore
were his actual damages—the loss of use and enjoyment of the Blazer—and the
No. 06-3732 Page 4

alleged FDCPA violation—Simpson’s purported failure to send a timely validation
notice.1 Because Thomas admits that this loss is unrelated to the only claim he has
pending against Simpson, the maximum that Thomas can link to his pending claim
is $1,000 plus costs. See 15 U.S.C. § 1692k(a)(1). Thus the district court did not
abuse its discretion in determining that the $5,000 offer was more than Thomas
could obtain from Simpson by proceeding to trial, and because “you cannot persist
in suing after you’ve won,” Griesz, 176 F.3d at 1015, the court properly concluded
that a live controversy no longer exists.

Nonetheless, in arguing that a live controversy persists, Thomas asserts in
his brief that he seeks $20,000 “for extreme embarrassment and humiliation.” But
when asked at his deposition what caused his embarrassment and humiliation, he
did not attribute that injury to Simpson’s alleged FDCPA violation either. Rather,
he explained that one of Simpson’s attorneys elicited from a GMAC employee
during the state proceedings testimony that embarrassed Thomas, and that another
Simpson attorney sent him a letter that distressed him during those proceedings.
Thus Thomas’s own testimony demonstrates that, like the loss of use and
enjoyment of the Blazer, he does not regard the asserted emotional damages as
arising from Simpson’s alleged FDCPA violation. As a result, this is not a case
where the defendant simply has offered everything that the defendant admits is
related to a claim, see Gates, 430 F.3d at 431-32, but rather a case where it has
offered everything that the plaintiff has admitted is related to the claim. This
renders the claim moot.

Thomas next argues that the district court should not have considered the
settlement offer because, he says, that evidence is inadmissible under Federal Rule
of Civil Procedure 68. Rule 68 states that “[a]n offer not accepted shall be deemed
withdrawn and evidence thereof is not admissible except in a proceeding to
determine costs.” But the offer was admissible under Federal Rule of Evidence 408,
which states that “conduct or statements made in compromise negotiations” are
admissible unless offered “to prove liability for, invalidity of, or amount of a claim
that was disputed as to validity or amount.” Rule 68 is construed in harmony with
Rule 408. Cf. Fed. R. Evid. 408, Advisory Committee Notes (noting that the same
policy of encouraging settlement underlies both rules). The district court had broad

1
Thomas argues that we should not consider his deposition testimony because,
he says, the district court never ruled on his relevance objection to Simpson’s questions
about actual damages. The court referenced his objection, and although it did not
explicitly render a ruling, it obviously concluded that the testimony was relevant
because it relied on Thomas’s answers to determine that subject matter jurisdiction
was lacking. And because Thomas’s testimony is central to the question of mootness,
the court’s relevance determination was not an abuse of discretion.
No. 06-3732 Page 5

discretion to admit evidence under Rule 408 for a purpose other than proving
liability, see Zurich Am. Ins. Co. v. Watts Indus., Inc., 417 F.3d 682, 689 (7th Cir.
2005), and it did not abuse that discretion here, where it considered the offer for the
limited purpose of determining jurisdiction, see Greisz, 176 F.3d at 1014; Rand v.
Monsanto Co., 926 F.2d 596, 597-98 (7th Cir. 1991).

Thomas also raises a frivolous challenge to the district court’s order allowing
two attorneys for Simpson to appear nunc pro tunc after they filed an appearance
form that did not conform to the local rules. But the decision to forgive a violation
of the local rules is squarely within the district court’s discretion, see Little v. Cox’s
Supermarkets, 71 F.3d 637, 641 (7th Cir. 1995), and Thomas has not explained why
he believes the court abused its discretion here.

Finally, Thomas argues that the district court erroneously denied his Rule
60(b) motion to vacate its judgment dismissing the GMAC defendants. But Thomas
waited to appeal the order until after the court dismissed his claim against
Simpson—more than two months after the court denied his motion to vacate. The
court’s ruling on his Rule 60(b) motion covered a claim that was not subject to the
remand. It therefore was a separate, post-judgment order, immediately appealable
after the court denied it. See Goffman v. Gross, 59 F.3d 668, 673 (7th Cir. 1995);
Moore’s Federal Practice § 60.68[1] (3d ed. 2006). Because he filed a notice of
appeal outside the 30-day limit, we lack jurisdiction to review the denial of his 60(b)
motion. See Fed. R. App. P. 4(a)(1); United States v. Hirsch, 207 F.3d 928, 930 (7th
Cir. 2000).

Thomas’s challenge to the denial of his motion to vacate the judgment against
GMAC is DISMISSED for lack of jurisdiction, and in all other respects we AFFIRM.