Webster v. ACB Receivables Management, Inc.
Filing
59
MEMORANDUM OPINION. Signed by Magistrate Judge Susan K. Gauvey on 4/22/14. (jnls, Deputy Clerk)
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MARYLAND
Sarah Webster,
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Plaintiff
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V.
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CIVIL NO. SKG-12-3620
ACB Receivables Management, Inc.
Defendant
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Memorandum Opinion
Plaintiff, Sarah Webster, by her attorney, Mitchel E.
Luxenburg, filed this action against defendant ACB Receivables
Management, Inc. (“ACB”) alleging that defendant violated the
Fair Debt Collection Practices Act (“FDCPA”), 15 U.S.C. § 1692,
et seq., by attempting to collect a debt owed by Ms. Webster.
Plaintiff seeks statutory damages in the amount of $1,000.00
pursuant to 15 U.S.C. § 1692k(a)(2)(A).
This case has been
referred to the undersigned magistrate judge by consent of the
parties pursuant to 28 U.S.C. § 636(c) and Local Rule 301.4 (D.
Md. 2011).
1
The parties have filed cross-motions for summary judgment.1
Briefing is complete. A telephone hearing was held on April 1,
2014.
For the reasons set forth below, the Court GRANTS Ms.
Webster’s motion for summary judgment as to Counts I, II, and
III and DENIES the motion as to Count IV.
The Court GRANTS
ACB’s motion for summary judgment as to Count IV but DENIES the
same as to Counts I, II, and III.
Ms. Webster has also filed a
motion to strike an exhibit attached to ACB’s briefs filed in
support of its motion for summary judgment.
The Court DENIES
Ms. Webster’s motion to strike.
I. FACTUAL BACKGROUND
The parties largely agree on the facts, with only one
notable exception.
The parties dispute the date that ACB
initially contacted Ms. Webster and informed her of its attempts
to collect the debt.
Defendant maintains that the initial
communication took the form of an FDCPA-compliant “dunning”
letter that the collection agency sent to Ms. Webster on
November 4, 2010.
(Def.’s Mot. Summ. J. & Opp. Pl.’s Mot. Summ.
J., ECF No. 44, at 15).2
1
On February 3, 2014, plaintiff filed her motion for summary judgment. (ECF
No. 36). On February 4, 2014, defendant filed their motion for summary
judgment (ECF No. 37) and on February 14, 2014, defendant filed their
opposition to plaintiff’s motion and in an apparent effort to fully comply
with Local Rule 105.2(c) (D. Md. 2011), also styled the submission as a cross
motion for summary judgment (ECF No. 44). Both defense motions raise the
same issues and are treated as one in the Court’s ruling.
2
As discussed infra, Defendant has failed to support this factual position
with evidence that is capable of admission. Accordingly, there is no genuine
2
Plaintiff disagrees, asserting instead that the collection
agency initially notified her of the outstanding debt
indirectly, by way of ACB’s reporting the debt to credit
reporting agencies.
(Pl.’s Rep. Mem., ECF No. 47, at 18-19).
Ms. Webster testified that she reviewed her credit report
in July of 2012 and saw a debt that was being collected and
reported by ACB, causing her to contact the agency in an attempt
to resolve this mark on her credit history.
(Pl.’s Mem. Supp.
Pl.’s Mot. Summ. J., ECF No. 36-1, at 1; Def.’s Mot. Summ. J. &
Opp. Pl.’s Mot. Summ. J., ECF 44, at 2).
Defendant does not
dispute this entry on the credit report nor Ms. Webster’s
testimony as to the date of her discovery of the debt and
collection efforts on her credit report.
On July 23, 2012, Ms. Webster mailed a letter to ACB
wherein she requested that the agency provide “validation” of
the debt.
(Pl.’s Mem. Supp. Pl.’s Mot. Summ. J., ECF No. 36-1,
at 1; Def.’s Mot. Summ. J. & Opp. Pl.’s Mot. Summ. J., ECF No.
44, at 2).
In response to this request, ACB mailed a letter
dated August 29, 2012, to Ms. Webster requesting additional
information to verify her identity.
(Pl.’s Mem. Supp. Pl.’s
Mot. Summ. J., ECF No. 36-1, at 1; Def.’s Mot. Summ. J. & Opp.
Pl.’s Mot. Summ. J., ECF No. 44, at 2).
There is no dispute
that this letter did not contain verification of the debt.
dispute as to material fact as to the date of initial collection agency
contact.
3
(Pl.’s Mem. Supp. Pl.’s Mot. Summ. J., ECF No. 36-1, at 1;
Def.’s Mot. Summ. J. & Opp. Pl.’s Mot. Summ. J., ECF No. 44, at
2).
Plaintiff responded via letter dated September 2, 2012,
requesting that ACB “cease and desist” communication with her.
(Pl.’s Mem. Supp. Pl.’s Mot. Summ. J., ECF No. 36-1, at 1;
Def.’s Mot. Summ. J. & Opp. Pl.’s Mot. Summ. J., ECF No. 44, at
2).
Lucy Hankinson, an ACB employee, received this letter on
September 12, 2012, at 11:27 a.m.
(Pl.’s Mem. Supp. Pl.’s Mot.
Summ. J., ECF No. 36-1, at 1; Def.’s Mot. Summ. J. & Opp. Pl.’s
Mot. Summ. J., ECF No. 44, at 2).
Ms. Hankinson acknowledged
receipt and review of the letter, but in her affidavit stated
that she “simply failed to see” the cease and desist request,
instead mailing Ms. Webster an additional request for
identifying information and forwarding her file to Darrell Cole,
an ACB debt collector.
2).
(Decl. of Lucy Hankinson, ECF No. 49-1,
Three and one-half hours later (4:41 p.m.), ACB received
verification from Experian, a credit reporting agency, that Ms.
Webster was indeed the person from whom ACB was attempting to
collect the debt.
(Pl.’s Mem. Supp. Pl.’s Mot. Summ. J., ECF
No. 36-1, at 1; Def.’s Mot. Summ. J. & Opp. Pl.’s Mot. Summ. J.,
ECF No. 44, at 2).
Mr. Cole acknowledged receipt of the file
that evening, but he testified in his affidavit that due to a
“momentar[y] distraction” or a “misread[ing] of the screen,”
4
manually overrode a computer code that was intended to prevent
further collection activities on Ms. Webster’s file, generating
an additional request for payment that was sent the following
day, September 13, 2012.
(Decl. of Darrell Cole, ECF No. 49-2,
2).
II. STANDARD OF REVIEW
Summary judgment under Rule 56 is appropriate when “there
is no genuine dispute as to any material fact and the movant is
entitled to judgment as a matter of law.”
56(a).
Fed. R. Civ. P.
A genuine dispute remains “if the evidence is such that
a reasonable jury could return a verdict for the nonmoving
party.”
Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106
S. Ct. 2505, 2508, 91 L. Ed. 2d 202 (1986).
A material fact is
one “that might affect the outcome of the suit under the
governing law.”
Id.
The party moving for summary judgment has
the burden of demonstrating the absence of any genuine issue of
material fact.
Fed. R. Civ. P. 56(a); Pulliam Inv. Co. v. Cameo
Props., 810 F.2d 1282, 1286 (4th Cir. 1987).
When considering a motion for summary judgment, the court
views all facts and makes all reasonable inferences in the light
most favorable to the nonmoving party.
Matsushita Elec. Indus.
Co. v. Zenith Radio Corp., 475 U.S. 574, 587, 106 S. Ct. 1348,
1356, 89 L. Ed. 2d 538 (1986).
The non-moving party must show
that specific, material facts exist to create a genuine, triable
5
issue.
Id.; see also Celotex Corp. v. Catrett, 477 U.S. 317,
324, 106 S. Ct. 2548, 2553, 91 L. Ed. 2d 265 (1986).
On those
issues for which the nonmoving party has the burden of proof, it
is his or her responsibility to oppose the motion for summary
judgment with affidavits or other admissible evidence specified
in the rule.
Fed. R. Civ. P. 56(c); Mitchell v. Data Gen.
Corp., 12 F.3d 1310, 1315-16 (4th Cir. 1993).
If a party fails
to make a showing sufficient to establish the existence of an
essential element on which that party will bear the burden of
proof at trial, summary judgment is proper.
Celotex, 477 U.S.
at 322-23, 106 S. Ct. 2548.
The role of the court at the summary judgment stage is not
to “weigh the evidence and determine the truth of the matter,”
but rather to determine whether “there are any genuine factual
issues that properly can be resolved only by a finder of fact
because they may be resolved in favor of either party.”
Anderson, 477 U.S. at 249-50, 106 S. Ct. 2505.
The issue is
“whether the evidence presents a sufficient disagreement to
require submission to a jury or whether it is so one-sided that
one party must prevail as a matter of law.”
Id. at 251-52, 106
S. Ct. 2505.
The fact that parties file cross-motions for summary
judgment does not generally relieve the court of its obligation
to determine whether there are disputes as to material fact
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which prevents entry of judgment as a matter of law.
Bryant v.
Better Bus. Bureau of Greater Md., Inc., 923 F. Supp. 720, 729
(D. Md. 1996) (“[C]ross-motions for summary judgment do not
automatically empower the court to dispense with the
determination of whether questions of material fact exist.”)
(quoting Lac Courte Oreilles Band of Lake Superior Chippewa
Indians v. Voigt, 700 F.2d 341, 349 (7th Cir.), cert denied, 464
U.S. 805, 104 S. Ct. 53, 78 L. Ed. 2d 72 (1983)).
When cross-
motions for summary judgment demonstrate a basic agreement,
however, concerning what legal theories and material facts are
dispositive, they may be probative of the lack of a factual
dispute.
Id. (citing Shook v. United States, 713 F.2d 662, 665
(11th Cir. 1983)).
III. DISCUSSION
A.
The Fair Debt Collection Practices Act
Congress enacted the FDCPA to curb abusive debt collection
practices, to ensure that debt collectors who play by the rules
are not competitively disadvantaged, and to provide a framework
to facilitate consistent state action to protect consumers.
U.S.C. § 1692(e).
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Consonant with its purposes, the FDCPA
regulates interactions between consumer debtors and debt
collectors.3
The FDCPA prohibits a wide range of untoward debt
3
Under the Act, a debt “means any obligation or alleged
obligation of a consumer to pay money arising out of a
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collection practices, such as making false representations as to
a debt’s character, amount, or legal status, § 1692e(2)(A);
communicating with consumers at “unusual time[s] or place[s],” §
1692c(a)(1); the use of abusive language, § 1692d(1); and
threats or actual violence, § 1692d(2).
The FDCPA is enforced through administrative action and
private lawsuits.
Jerman v. Carlisle, McNellie, Rini, Kramer &
Ulrich LPA, 559 U.S. 573, 577, 130 S. Ct. 1605, 1609, 176 L. Ed.
2d 519 (2010).
To prevail in a private action, the plaintiff
must prove that “[he or she] has been the object of collection
activity arising from consumer debt, (2) the defendant is a
debt[] collector as defined by the FDCPA, and (3) the defendant
has engaged in an act or omission prohibited by the FDCPA.”
Stewart v. Bierman, 859 F. Supp. 2d 754, 759-60 (D. Md. 2012)
(citation omitted); see Sterling v. Ourisman Chevrolet of Bowie,
Inc., 943 F. Supp. 2d 577, 585 (D. Md. 2013).
In the parties’
transaction” where the consideration is “primarily for personal,
family, or household purposes.” 15 U.S.C. § 1692a(5). The
FDCPA defines a consumer as “any natural person obligated or
allegedly obligated to pay any debt.” 15 U.S.C. § 1692a(3).
Notwithstanding a number of exclusionary provisions found in §
1692a(6)(A)-(F), the Act understands a debt collector as “any
person who uses any instrumentality of interstate commerce . . .
in any business the principal purpose of which is the collection
of any debts.” 15 U.S.C. § 1692a(6). The parties are in
agreement that Ms. Webster is a consumer, ACB is a debt
collector, and that plaintiff’s alleged $70.00 obligation is a
debt as contemplated by the Act. (Pl.’s Rep. Mem., ECF No. 47,
at 2; Def.’s Mot. Summ. J. & Opp. Pl.’s Mot. Summ. J., ECF No.
44, at 2-3).
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motions for summary judgment, there is no dispute that Ms.
Webster has been the object of collection activity arising from
consumer debt and that ACB is a debt collector under the FDCA.
The parties disagree as to whether ACB has violated the FDCPA,
and, if so, whether the application of an affirmative defense
absolves liability.
B.
The Alleged FDCPA Violations
Both parties move the Court to grant summary judgment in
their favor on all counts of the Complaint.
Accordingly, the
Court shall address each count in turn.
1.
Count I: Defendant’s Continued Communication
This count requires the Court to determine whether ACB
violated the FDCPA and, if so, whether an affirmative defense
applies.
For the following reasons, the Court concludes that
ACB violated the Act and that it is not entitled to an
affirmative defense as a matter of law.
Plaintiff alleges that ACB violated the FDCPA by continuing
to communicate with her after receiving her mailed cease and
desist request.
Notwithstanding several exceptions inapplicable
here, § 1692c(c) provides that a debt collector must cease
communication with a consumer who has requested the same in
writing.
15 U.S.C. § 1692c(c).
If the consumer makes his or
her request by mail, then the statute imputes notice to the debt
collector upon receipt.
Id.
It is indisputable that Defendant
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twice violated § 1692c(c) of the FDCPA by sending Ms. Webster
two letters, dated September 12, 2012, and September 13, 2012,
after receiving her mailed “cease and desist” request.
However,
ACB invokes the “bona fide error” defense under 15 U.S.C. §
1692k(c).
The “bona fide error” defense is “an affirmative defense
that insulates debt collectors from liability even when they
have violated the FDCPA.”
Puffinberger v. Commercion, LLC, No.
SAG-13-1237, 2014 WL 120596, at *4 (D. Md. Jan. 10, 2014)
(quoting Johnson v. Riddle, 443 F.3d 723, 727 (10th Cir. 2006)).
The bona fide error provision provides:
A debt collector may not be held liable in any action
brought under [the FDCPA] if the debt collector shows
by a preponderance of evidence that the violation was
not intentional and resulted from a bona fide error
notwithstanding the maintenance of procedures
reasonably adapted to avoid any such error.
15 U.S.C. § 1692k(c).
Defendant bears the burden of proof to
demonstrate that its violations were “1) unintentional, 2) []
bona fide error[s], and 3) made despite the maintenance of
procedures reasonably adapted to avoid the error.”
Johnson, 443
F.3d at 727-28; see also Warren v. Sessoms & Rogers, P.A., 676
F.3d 365, 375 (4th Cir. 2012) (placing the burden on the
collection agency to prove a “bona fide error”); cf. Sayyed v.
Wolpoff & Abramson, 485 F.3d 226, 232 (4th Cir. 2007) (stating
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that § 1692k(c) “offers a kind of qualified immunity to debt
collectors”).
With regard to first element of the defense, the Supreme
Court recently examined the FDCPA’s legislative history to
determine what types of violations are “not intentional.”
Jerman v. Carlisle, McNellie, Rini, Kramer & Ulrich LPA, 559
U.S. 573, 581-96, 130 S. Ct. 1605, 1611-20, 176 L. Ed. 2d 519
(2010).
The Court construed the bona fide error exception as
applying to unintentional acts such as clerical or factual
mistakes,4 Jerman, 559 U.S. at 599 n.12, 605 S. Ct. 1605, but not
to FDCPA violations that result from a debt collector’s
incorrect interpretation of the Act’s requirements.
Id. at 605;
Bradshaw v. Hilco Receivables, LLC, 765 F. Supp. 2d 719, 731 (D.
Md. 2011).
The second element of the defense, that such errors be bona
fide, requires that the error be “a genuine mistake, as opposed
to a contrived mistake.”
Kort v. Diversified Collection Servs.,
Inc., 394 F.3d 530, 538 (7th Cir. 2005).
To satisfy the third element of the defense, “[t]he
procedures themselves must be explained, along with the manner
in which they were adapted to avoid the error.
Only then is the
4
The Jerman Court expressly declined to identify the types of
factual mistakes that qualify under the bona fide error defense.
Jerman, 559 U.S. at 591 n.12.
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mistake entitled to be treated as one made in good faith.”
Rose, 2013 WL 1563655, at *4 (quoting Reichert v. Nat’l Credit
Sys., Inc., 531 F.3d 1002, 1007 (9th Cir. 2008)).
a. The acts of ACB’s employees were unintentional.
Applying Jerman to this case,5 the evidence, viewed in the
light most favorable to Ms. Webster, establishes that ACB’s
violations of the FDCPA were not intentional.
Defendant has
submitted affidavits from its employees that demonstrate that
the September 12 and 13 communications resulted from human
errors.
Human errors, ACB argues, are more closely akin to
clerical or factual mistakes rather than mistakes of law.
The
first human error occurred when one of ACB’s employees, Lucy
Hankinson,6 failed to “pick up” the cease and desist language
contained in Ms. Webster’s September 2, 2012, correspondence.
(Def.’s Resp. to Pl.’s Rep., ECF No. 49, at 3).
This is
obviously a serious error, especially given the clarity of Ms.
Webster’s request and the importance of this consumer right.
5
The Fourth Circuit has not interpreted the intent element of
the bona fide error defense since the Jerman decision. But see
Warren, 676 F.3d at 375 (remanding so that the district court
could resolve the defendant’s bona fide error defense); McLean
v. Ray, 488 Fed. App’x 677, 683 (4th Cir. 2012) (affirming the
district court’s acceptance of the bona fide error defense where
a defendant attempted to collect an incorrect amount on a debt
but a colorable basis existed for this erroneous figure).
6
Ms. Hankinson married between the events of 2012 and the
current litigation. Therefore, her maiden name, Johnson,
appears throughout the record.
12
And, as a direct result of this error, Ms. Hankinson sent the
September 12 letter to Ms. Webster and forwarded her file to
Darrell Cole, another one of ACB’s employees.
Pl.’s Rep., ECF No. 49, at 4).
(Def.’s Resp. to
Mr. Cole committed the second
error, when he, “due to a believed distraction,” disregarded a
“red flag” code designed to notify ACB’s collectors that the
consumer had disputed the debt and that no further collection
correspondence were to be generated.
Instead, Mr. Cole manually
entered the code that directed ACB’s computer system to generate
the September 13 collection notice.
ECF No. 49, at 4).
(Def.’s Resp. to Pl.’s Rep.
Again, this is a serious error, flatly
defeating an important consumer right.
Defendant finds support for its position in Rose v. Roach,
No. 6:12-CV-00061, 2013 WL 1563655 (W.D. Va. Apr. 12, 2013),
where the alleged violation of the FDCPA consisted of a
collection agent’s failure to recite the statute’s mandated
disclosures in a telephone call to a debtor.
1563655, at *2.
Rose, 2013 WL
The agent became distracted and lost his place
in a prepared script that the collection agency had designed to
be FDCPA compliant.
Id.
The court stated that this was neither
“a judgment or legal error” but instead was the “result of a
human error” protected by the bona fide error defense.
6.
13
Id. at
Plaintiff counters that, under Jerman, ACB must show that
the underlying acts (e.g. human errors) that lead to the FDCPA
violations were not intentional.7
to meet its burden.
She avers that ACB has failed
To support her position, plaintiff relies
primarily on Allen v. Checkredi of Ky., LLC, No. 09-103-DLB,
2010 WL 4791947 (E.D. Ky. Nov. 17, 2010).
In Allen, the debt collector violated the FDCPA by
disclosing private information about the debtor to a third party
and also by failing to provide timely written notice that the
debt was being collected.
Allen, 2010 WL 4791947, at *11.
The
court read Jerman to “indicate[] that ‘not intentional’ covers
only a defendant who did not intend to commit the act that
violated the FDCPA.”
Id. at *10.
Applying Jerman to the facts
of the case, the court rejected the defendant’s bona fide error
defense.
However, the court noted that “[a] review of
[d]efendant’s memoranda and the record reveal[s] no evidence
that [d]efendant’s communication was not intentional.
Id. at
*11 (emphasis added).
The flaw in plaintiff’s argument lies not in its premise—
that Jerman requires ACB to show that the underlying acts that
caused the FDCPA violations were not intentional—but in its
7
Defendant does not dispute that Ms. Webster accurately restates
Jerman’s holding. Applying Jerman, the Rose court found that
the collection agent’s failure to recite the entirety of the
script was not an intentional act. Rose, 2013 WL 1563655, at 6.
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focus.
Plaintiff centers on her preferred interpretation of
Jerman, but fails to counter ACB’s affidavits wherein its
employees affirm that their errors were not intentional.
Unlike
the defendant in Allen, ACB has supported its factual position
by “citing to particular parts of materials in the record.”
Fed. R. Civ. P. 56(c).
The record before the Court illustrates
that the two mistakes in this case were not intentional acts.
Applying Jerman, ACB has satisfied its burden to show by a
preponderance of the evidence that the underlying acts that
resulted in the violations of the FDCPA were not intentional.
b. Ms. Hankinson and Mr. Cole’s errors were bona fide.
Both Ms. Hankinson and Mr. Cole have submitted declarations
to this Court that their actions were the result of good faith
human errors.
There is no evidence before the Court that
indicates that the employees’ mistakes were anything but bona
fide.
As Ms. Webster has failed to cite any material in the
record to support her factual position, the evidence “is so onesided that [ACB] must prevail as a matter of law” with regard to
the first and second prongs of its bona fide error defense.
Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 251-52, 106 S.
Ct. 2505, 91 L. Ed. 2d 202 (1986).
c. ACB did not maintain procedures reasonably adapted to
avoid human error.
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Having prevailed on the first two elements of the bona fide
error defense, ACB next must show that its employees’ errors
occurred “notwithstanding the maintenance of procedures
reasonably adapted to avoid any such error.”
1692k(c).
15 U.S.C. §
To satisfy its burden of proof on this element, ACB
cites to the declarations of its owner, Alex Shnayderman, as
well as to a copy of the business’s policies and procedures
regarding the FDCPA training of its employees.
(Def.’s Resp. to
Pl.’s Rep., ECF No. 49 at 5-8).
Plaintiff’s response is two-fold.
First, Ms. Webster
attacks the required nexus between the procedures and the
specific errors that occurred.
(Pl.’s Rep., ECF No. 47, 12).
Second, Ms. Webster asks the Court to strike Mr. Shnayderman’s
declarations, arguing that inconsistencies between these two
documents warrants application of the “sham affidavit” rule.
(Pl. Rep., ECF No. 47, 6).
i. ACB fails to show a nexus between its procedures to
ensure FDCPA compliance and the specific errors that
occurred.
Turning to the procedures, it is uncontested that ACB has
maintained a set of rules on FDCPA compliance.
its four-page compliance policy.
ACB has attached
(ECF No. 44-1, at 17-20).
What Ms. Webster does contest is the nexus between the
procedures and the errors that occurred, arguing that the policy
was not reasonably adapted to avoid human errors.
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Defendant
responds with the declarations of Mr. Shnayderman (ECF No. 44-1,
at 2), Ms. Hankinson, (ECF No. 49-1, at 1-3), and Mr. Cole, (ECF
No. 49-2, at 1-2).
All three affirm that ACB’s employees
undergo extensive training in the FDCPA, with the understanding
that the passage of further periodic FDCPA testing is required
for continued employment.
(ECF No. 44-1, at 2; ECF No. 49-1, at
1; ECF No. 49-2, at 1).
However, ACB fails to demonstrate a nexus between the
procedural safeguards and the types of errors that occurred.
Though the written procedures state that contested debt files
are marked “[c]onsumer disputing account,” to prevent employees
from generating further correspondence on the file, (ECF No. 441, at 17-20), neither the procedures nor the declarations
describe any redundancy or safeguards in the system reasonably
adapted to catch the stunning employee errors, by these two
employees on the same consumer matter.
The absence of procedures in this area is in contrast with
Rose, which ACB relies on for much of its bona fide error
defense.
In finding that the defendant maintained procedures
reasonably adapted to prevent its employees from departing from
their prepared script, the Rose court noted that the defendant’s
Compliance Director was responsible for monitoring “one call per
collector per week.”
Rose, 2013 WL 1563655, at *5.
As this was
exactly the type of error that occurred, the court concluded
17
that the defendant met the procedural requirement.
Id.
at *4.
In this case, ACB has failed to present any evidence of
redundancy or safeguards in its procedures to prevent the
mistaken violation of the FDCPA by its employees.
Much like the
collection agency in Rose, ACB could have had one of its
supervisors periodically monitor incoming mail to ensure that
all language triggering FDCPA obligations had been acknowledged.
That would have addressed and perhaps caught Ms. Hankinson’s
mistake.
Perhaps incoming mail could be processed in some
fashion to allow a word search for key language, like “cease and
desist.”
Also, ACB could have required a signoff by a second
employee or some additional process (key strokes) before manual
override of a “red flag” code was permitted.
Either procedure
obviously would address Mr. Cole’s error.
It is clear that the quid pro quo in the FDCPA for
forgiveness for human errors resulting in violations of the Act
is the maintenance of a system that will make such human errors
rare.
ACB has failed to demonstrate a robust, effective system
designed to minimize the type of errors that occurred here which
resulted in indisputable violations of important consumer
rights.
As ACB has failed to meet its burden on the third prong of
the bona fide error defense, that is, proof of “procedures
reasonably adapted to avoid any such errors,”
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the Court
concludes that Ms. Webster is entitled to judgment as a matter
of law as to Count I.
ii.
Mr. Shnayderman’s declaration is not a sham affidavit.
Given the context of summary judgment, the Court declines
to strike the affidavit of Mr. Shnayderman.
“[T]o avoid
infringing upon the province of the fact finder, application of
the sham affidavit rule at the summary judgment stage must be
carefully limited to situations involving flat contradictions of
material fact.”
Mandengue v. ADT Sec. Sys., Inc., No. ELH-09-
3103, 2012 WL 892621, at *18 (D. Md. Mar. 14, 2012);
see also
Cleveland v. Policy Mgmt. Sys. Corp., 526 U.S. 795, 806, 119 S.
Ct. 1597, 1603, 143 L. Ed. 2d 966 (1999) (stating that a party
cannot create a genuine issue of fact by filing an affidavit
that “flatly contradicts” the party’s prior statements).
A
party’s sworn statements that exhibit “minor inconsistencies”
resulting from “an honest discrepancy, a mistake, or newly
discovered evidence” should not be disregarded.
Mandengue, 2012
WL 892621, at *18 (citing Van Asdale v. Int’l Game Tech., 577
F.3d 989, 998-99 (9th Cir. 2009)).
Here, any inconsistencies between Mr. Shnayderman’s
deposition and his declaration are not so egregious as to flatly
contradict each other.
Plaintiff principally relies upon
discrepancies between Mr. Shnayderman’s statements describing
the actions of Ms. Hankinson and Mr. Cole.
19
(ECF No. 47, 11).
With regard to Ms. Hankinson’s actions, Ms. Webster has failed
to cite any examples of inconsistent statements made by Mr.
Shnayderman.
Though Mr. Shnayderman indeed stated for the first
time in his declaration that Ms. Hankinson had erred, (ECF No.
44-1, 4), he was not asked in his deposition about Ms.
Hankinson’s work on the file.
(ECF No. 47-1, at 7, 15).
On the other hand, Mr. Shnayderman was asked about Mr.
Cole’s handling of the file, to which he responded that Cole
“never did anything.”
(ECF No. 47-1, at 15).
However, Mr.
Shnayderman quickly revised this statement, vaguely mentioning
that a change in the file resulted in generation of the
September 13 collection notice.
(ECF No. 47-1, at 15).
In his
later declaration, Shnayderman states that Cole “erroneously”
entered a computer code that resulted in the collection notice
being sent to Ms. Webster.
(ECF No. 44-1, at 7).8
Plaintiff
offers no evidence that demonstrates that these minor
inconsistencies were anything other than good faith mistakes.
Exemplifying the narrow circumstances that warrant
application of the sham affidavit rule, Judge Ellen Lipton
Hollander in Mandengue v. ADT Sec. Sys., Inc., No. ELH-09-3103,
8
As Ms. Webster notes, Mr. Shnayderman lacked personal knowledge
to testify about Ms. Hankinson’s and Mr. Cole’s actions. (ECF
No. 47, at 8). Defendant remedied this omission by submitting
declarations from each employee, outlining the circumstances of
their respective mistakes. (ECF No. 49-1, at 1-3; ECF No. 49-2,
at 1-2).
20
2012 WL 892621 (D. Md. Mar. 14, 2012), declined to disregard a
party’s later affidavit that contradicted her deposition
testimony in at least six instances.
Id. at *18.
Judge
Hollander reasoned that these discrepancies “may be fruitful
avenues of cross-examination at trial,” but that none were “so
stark as to justify invocation of the sham affidavit rule.”
Id.
Judge Hollander’s reasoning is applicable here, as these
inconsistencies fail to rise to level of flat contradictions but
may nevertheless have proven fruitful on cross-examination.
2.
Counts II and III: Alleged Violations of § 1692g
As both Counts II and III allege violations of § 1692g and
thus implicate many of the same issues, the Court shall resolve
them together.
Adjudicating these claims requires the Court to
first affix the date of initial communication from the debt
collector to the consumer.
For the reasons that follow, the
Court finds that there is no genuine dispute as to material fact
regarding the date of the initial communication and that it
occurred in early July of 2012.
Based on this date of initial
communication, the Court concludes that Ms. Webster is entitled
to judgment as a matter of law with regard to both Count II,
which alleges that ACB failed to comply with the statute’s
disclosure requirements, and Count III, which alleges that ACB
failed to provide verification of the debt.
21
Under § 1692g, a debt collector’s disclosure obligations
arise at two points.
First, the debt collector must satisfy its
disclosure requirement within five days of the initial
communication.
§ 1692g(a).
Second, the debt collector is
obligated to provide the consumer with verification of the debt
if he or she requests the same within thirty days of the initial
communication.
§ 1692g(b).
Plaintiff argues that ACB’s initial communication with her
regarding the debt occurred indirectly, by way of ACB’s
reporting the debt to credit reporting agencies.
Mem., ECF No. 47, at 18-19).
(Pl.’s Rep.
As ACB concedes that it reported
Ms. Webster’s debt to credit reporting agencies, it is
undisputed that there was an indirect communication to Ms.
Webster in July of 2012.
However, ACB argues that the “initial
communication” took place earlier in the form of a November 4,
2010 “dunning” letter that the collection agency sent to Ms.
Webster.
In support of its position, ACB cites Mr. Shnayderman’s
declaration and three exhibits: a letter that Mr. Shnayderman
sent to the Maryland Commissioner of Financial Regulation, a
blank form dunning letter allegedly representative of the
initial communication, and a recorded and transcribed statement
of Ms. Webster.
Plaintiff responds that the materials cited do
not establish a genuine dispute because they “cannot be
22
presented in a form that would be admissible in evidence.”
R. of Evid. 56(c)(2).
position.
Fed.
The Court agrees with Ms. Webster’s
Each piece of evidence will be discussed in turn.
a. Mr. Shnayderman’s Statement in the Declaration is
Inadmissible.
Mr. Shnayderman’s declaration states that “a computer
generated dunning letter was forwarded” on November 4, 2010.
(ECF No. 44-1, 3).
Federal Rule of Civil Procedure 56 (c)(4)
provides that affidavits or declarations used to support a
motion for summary judgment “must be made on personal knowledge”
and “set out facts that would be admissible in evidence.”
R. Civ. Pro. 56(c)(4).
Fed.
Federal Rule of Evidence 602 embodies
this personal knowledge requirement.
Fed. R. Evid. 602.
To
satisfy the rule, evidence must be introduced that is
“sufficient to support a finding that the witness has personal
knowledge of the matter.”
observed the fact.
Id.
The witness must have actually
Fed. R. Evid. 602 Advisory Committee Note.
Mr. Shnayderman does not, however, have personal knowledge
that “a computer generated dunning letter was forwarded” on
November 4, 2010.
As Mr. Shnayderman stated in his deposition
(ECF No. 47-1, 4), ACB employs Lason, a third party vendor, to
send out these letters.
from Lason.
ACB has failed to submit an affidavit
Moreover, there is no electronic record to support
that the letter was ever sent.
Therefore, Mr. Shnayderman’s
23
declaration does not establish the requisite personal knowledge
of the mailing because the basis of his averment is absent, and
therefore his statement is inadmissible.
b. Mr. Shnayderman’s Letter to the Maryland Commissioner of
Financial Regulation is Inadmissible.
On December 4, 2012, Mr. Shnayderman sent a letter to the
Office of the Maryland Commissioner of Financial Regulation
stating that his agency had sent initial notice to Ms. Webster
on November 4, 2010.
(ECF No. 36-10, 1).
As “written assertions” fall under the hearsay umbrella,
Mr. Shnayderman’s written statement, which was not made while
testifying at the current trial or a hearing, is hearsay if
offered to prove that ACB sent its first notice on November 4,
2010.
Unless a hearsay exception applies, the statement is
inadmissible.
Federal Rule of Evidence 803 provides that, “regardless of
whether the declarant is available as a witness,” certain
records of a regularly conducted activity “are not excluded by
the rule against hearsay.”
Fed. R. Evid. 803(6).
Commonly
referred to as the business records exception, 803(6) applies to
a “record of an act, event, condition, opinion, or diagnosis” if
five requirements are met.9
First, the record must be “made at
9
The Federal Rules of Evidence define “record” to include a
“memorandum, report, or date compilation.” Fed. R. Evid.
101(b)(4).
24
or near the time by—or from information transmitted by—someone
with knowledge.”
Id. 803(6)(A).
Second, the record must be
“kept in the course of a regularly conducted activity of a
business, organization, occupation, or calling, whether or not
for profit.”
Id. 803(6)(B).
Third, “making the record [must
be] a regular practice of that activity.”
Id. 803(6)(C).
Fourth, the first three requirements must be “shown by the
testimony of the custodian or another qualified witness, or by a
certification that complies with Rule 902(11) or (12) or with a
statute permitting certification.”
Id. 803(6)(D).
Fifth, the
exception will only apply if “neither the source of information
nor the method or circumstances of preparation indicate a lack
of trustworthiness.”
Id. 803(6)(E).
As the Advisory Committee explains, business records are
presumed to be unusually reliable as the product of “systematic
checking, by regularity and continuity which produce habits of
precision.”
Fed. R. Evid. 803 Advisory Committee Note.
Moreover, “businesses depend on such records to conduct their
own affairs; accordingly, the employees who generate them have a
strong motive to be accurate and none to be deceitful.”
Doali-
Miller v. SuperValu, Inc., 855 F. Supp. 2d 510, 516 (D. Md.
2012) (quoting Certain Underwriters at Lloyd’s, London v.
Sinkovich, 232 F.3d 200, 204-05 (4th Cir. 2000)).
25
Simply put,
“routine and habitual patterns of creation lend reliability to
business records.”
Id. (quoting Sinkovich, 232 F.3d at 205).
Here, Mr. Shnayderman’s written assertion fails to satisfy
this exception.
First, the recordation was not created “at or
near the time” of the event, as the letter was written over two
years after the notice was allegedly sent.
803(6)(A).
Fed. R. Evid.
Cf. Doali-Miller, 855 F. Supp. 2d at 516-17 (finding
that a one day gap between the event and recordation did not
implicate lapse of memory concerns).
Also, there is no showing
that Mr. Shnayderman had personal knowledge to support this
assertion as required by Federal Rule of Evidence 602.
To the
extent Mr. Shnayderman drafted this memorandum using other
business records, this statement is hearsay within hearsay,
admissible only if “each part of the combined statements
conforms with an exception” to the rule against hearsay.
Fed.
R. Evid. 805.
Though a collection agency may, as a “regular practice,”
preserve written contact with a state regulatory agency “in the
course of a regularly conducted activity,” ACB has not shown
that it can produce a “qualified witness” at trial.
803(6)(B)-(D).
Id.
Mr. Shnayderman stated in his deposition that
his collection agency uses a third-party to generate initial
notices.
By definition, neither Mr. Shnayderman nor his
employees would be qualified under Rule 602 to attest to this
26
assertion at trial.
Indeed, the “source of [this] information
[and] method or circumstances of preparation indicate a lack of
trustworthiness.”
Fed. R. Evid. 803(6)(E).
Moreover, despite
at least three discovery requests by Ms. Webster, ACB has not
produced business records or any employee of Lason to support
its assertion that the initial notice was sent on November 4,
2010.
Thus, this letter is inadmissible.
c. The Blank Form Dunning Letter is Inadmissible.
Attached to Mr. Shnayderman’s declaration, ACB has included
a blank form dunning letter that allegedly represents the
correspondence that Lason sent to Ms. Webster.10
While this
exhibit is conspicuously FDCPA compliant, the Court finds that
it is inadmissible because ACB cannot “produce evidence
sufficient to support a finding that the item is what the
proponent claims it is.”
Fed. R. Evid. 901(a).
While authenticity is a special aspect of relevancy, it
also insures that the evidence is trustworthy.
Lorraine v.
Markel American Ins. Co., 241 F.R.D. 534, 542 (D. Md. 2007).
Rule 901(b) provides a list of examples of describing how
authentication may be accomplished.
Of this non-exclusive list,
10
Ms. Webster moves to strike this exhibit as a sanction for
ACB’s failure to respond to discovery requests regarding Lason.
As the Court has considered this evidence, Ms. Webster’s motion
to strike is hereby DENIED.
27
three stand out as possible avenues towards authentication of
the letter.11
First, ACB could authenticate the letter through the
testimony of a witness with knowledge.
Fed. R. Evid. 901(b)(1).
However, ACB has failed to produce a qualified witness.
None of
its own employees have personal knowledge that Lason sent this
form letter.
Though Lason’s employees may have the requisite
knowledge, ACB has failed to produce them.
Second, Defendant
could authenticate by way of distinctive characteristics such as
“contents, substance, [or] internal patterns . . . taken in
conjunction with circumstances.
Fed. R. Evid. 901(b)(4).
While
supporting documentation from Lason may be sufficient to support
a finding of authenticity, ACB has failed to provide any type of
evidence linking the blank form letter with Lason.
For example,
the letter may be authenticated if one of ACB’s employees’
stated that he or she had obtained the letter from Lason.
Third, Defendant could authenticate the letter through evidence
“describing a process or system used to produce a result and
showing that the process or system produces an accurate result.”
Fed. R. Evid. 901(b)(9).
This method of authentication is
particularly useful in authenticating evidence generated by
computers.
Fed. R. Evid. 901(b)(9) Advisory Committee Note.
11
The other examples provided by Fed. R. Evid. 901(b) are
inapplicable as concerning either handwriting, comparisons,
spoken words, public records, or ancient documents.
28
Under 901(b)(9), the proponent must “provide evidence of the
input procedures and their accuracy, and evidence that the
computer was regularly tested for programming errors.”
Lorraine, 241 F.R.D. at 549 n.26.
Defendant has failed to
present any evidence relating to the accuracy of Lason’s
computer system.
Given that Defendant has failed to properly authenticate
the blank form dunning letter, the Court concludes that it is
inadmissible.
d. Plaintiff’s Recorded Statement is Inadmissible.
Defendant has submitted a purported transcript of a March
17, 2012 recorded personal phone call between Ms. Webster and
Mr. Shnayderman, wherein plaintiff is told that she owes ACB
money, to which she responds, “What; well, I kind of figured
that.”12
(Def.’s Resp. to Pl.’s Rep., ECF No. 49, at 13).
ACB
argues that this transcript provides evidence that Ms. Webster
had knowledge of ACB’s attempts to collect this debt prior to
12
New Jersey law generally prohibits such recording, N.J. Stat.
Ann. § 2A:156A-24 (West 2014). However, there is an exception
that allows this practice where the individual responsible for
the recording is a party to the communication and does not have
a criminal or tortious purpose. N.J. Stat. Ann. § 2A:156A-4
(West 2014); see Bradley v. Atl. City Bd. of Educ., 736 F. Supp.
2d 891, 899 (D. N.J. 2010) (granting summary judgment under the
New Jersey statute to a defendant who had recorded conversations
without the other party’s knowledge). The circumstances here do
not suggest a criminal or tortious intent on Mr. Shnayderman’s
part, and plaintiff has not so argued. While the Court is not
making a finding on Mr. Shnayderman’s intent, it will not reject
the recorded statement on that basis at this time.
29
July of 2012, contradicting her position that she did not
receive the “dunning” letter in November of 2010.
(Def.’s Resp.
to Pl.’s Rep., ECF No. 49, at 13).
At first blush, it would appear that this statement is
capable of admission as an opposing party’s statement.
Evid. 801(d)(2)(A).
Fed. R.
Under the Federal Rules, an opposing
party’s statement is not hearsay if made by the party in an
individual capacity and if offered against that same party.
Id.
However, evading the hearsay prohibition is not the end of the
analysis, as the statement must still reflect the declarant’s
personal knowledge.
Plaintiff’s use of the qualifier “kind of”
and “figured” is indicative of a lack of personal knowledge.13
Moreover and more critically, her statement in no way supports
an admission that she received any official notice from ACB
meeting the requirements of the FDCPA regarding the $70 medical
debt in question.
13
According to the Oxford English Dictionary, the word “figure”
means “[t]o picture in the mind; to imagine.”
http://www.oed.com/view/Entry/70080?rskey=ZbBuYX&result=2&isAdva
isAd=false#eid. Assuming for the sake of argument that ACB
could introduce evidence sufficient to support a finding that
this statement reflected Ms. Webster’s personal knowledge, the
expression of the verb “figure” in the past tense demonstrates
that the statement looks backwards in time. This assures that
it is not admissible as a “statement of the declarant’s thenexisting state-of-mind.” Fed. R. Evid. 803(3) (stating that
this exception does not include “a statement of memory or belief
to prove the fact remembered”).
30
Ms. Webster is entitled to summary judgment as a matter of
law on Counts II and III.
Thus, defendant does not dispute that
it failed to satisfy the disclosure requirements mandated by §
1692g(a)
14
within five days of the initial communication,
instead relying on its argument that notice was first sent at an
earlier date.
There is no genuine dispute as to any material
fact regarding Count II, as the Court has rejected all the
defendant’s evidence purportedly controverting plaintiff’s
factual basis for her motion.
Accordingly, Ms. Webster is
entitled to judgment as a matter of law as to Count II.
Turning to Count III, Ms. Webster argues that ACB violated
§ 1692g of the FDCPA by failing to provide her with verification
of the debt as she requested in her July 23, 2012, letter to the
collection agency.
No. 36-1, at 11).
(Pl.’s Mem. Supp. Pl.’s Mot. Summ. J., ECF
Defendant responds that Ms. Webster’s July
23, 2012, letter did not request verification of the debt, as
the correspondence stated that “[t]his is NOT a request for
14
The written notice must contain: (1) the amount of the debt,
(2) the name of the creditor to whom the debt is owed, (3) a
statement disclosing that the debt collector will assume the
validity of the debt unless disputed by the consumer within
thirty-days after receipt of the notice, (4) a statement
detailing that the consumer’s exercise of her right to dispute
the validity of the debt triggers an obligation for the debt
collector to obtain verification of the debt and mail a copy to
the consumer, and (5) a statement describing the consumer’s
right to request that the debt collector provide the consumer
with the name and address of the original creditor if different
from the current creditor. 15 U.S.C. § 1692(g)(1)-(5).
31
‘verification’ or proof of my mailing address, but a request for
VALIDATION made pursuant to the above named Title and Section.”
(Def.’s Mot. Summ. J. & Opp. Pl.’s Mot. Summ. J., ECF No. 44, at
18-19) (citing Exhibit A of Pl.’s Mot. Summ. J., ECF No. 36-2,
at 4)).15
Subsection (b) of § 1692g provides that, in the event that
the consumer disputes the debt or requests the name and address
of the original creditor, the debt collector must “cease
collection of the debt” until the collection agency has provided
the consumer with verification of the debt or acquiesced to the
consumer’s demand to provide the name and address of the
original creditor.
15 U.S.C. § 1692g(b).
Upon inspection of Plaintiff’s initial letter to ACB, (ECF
No. 36-2, at 4), this Court concludes that the letter disputed
the debt as a matter of law, triggering ACB’s duty to cease
communication with her until she had been provided with
verification of the same.
See 15 U.S.C. § 1692g(a)-(b).
Aside
from the above-quoted language requesting “validation” instead
of “verification,” Plaintiff’s July 23, 2012 letter to ACB
stated that she “disputed” the debt and requested that ACB
provide “competent evidence” of the obligation, such as
“verification or copy of any judgment.”
(ECF No. 36-2, at 4)
15
The “above named Title and Section” referred to 15 U.S.C. §
1692g. (Exhibit A of Pl.’s Mot. Summ. J., ECF No. 36-2, at 4).
32
(emphasis added).
Plaintiff also requested that ACB provide her
with identification of the original creditor.
4).
(ECF No. 36-2, at
By borrowing nearly the exact language from § 1692g(a)-(b),
Plaintiff triggered ACB’s duty to verify the debt as well as the
identity of the original creditor within thirty-days.
ACB argues that even if Ms. Webster requested verification,
the Health Insurance Portability and Accountability Act of 1996
(“HIPAA”), 42 U.S.C. § 1320d et seq., prohibited ACB from
complying until her identity could be verified.
6).
(ECF No. 56,
While it is true that HIPPA prohibits “covered entity[s]”
from disclosing protected health information, 45 C.F.R. §
164.502(a), the Fourth Circuit has explained that “verification
of a debt involves nothing more than the debt collector
confirming in writing that the amount being demanded is what the
creditor is claiming is owed.
Chaudhry v. Gallerizzo, 174 F.3d
394, 406 (4th Cir. 1999) (citations omitted).
To be sure,
“[t]here is no concomitant obligation to forward copies of bills
or other detailed evidence of the debt.”
Id.
ACB itself
concedes that it “may have been able” to provide Ms. Webster
with verification of the debt without violating HIPAA.
56, 6 n.1).
(ECF No.
Given this admission and ACB’s failure to provide
Ms. Webster with verification of the debt, this Court finds that
Ms. Webster is entitled to judgment as a matter of law on Count
III.
33
3.
Count IV: False, Deceptive, or Misleading Practices
Plaintiff alleges generally that ACB violated § 1692e of
the FDCPA by acting in a deceptive, unfair, or unconscionable
manner where the agency requested additional information from
her on August 29, 2012, prior to verifying the debt, and again
on September 12, 2012, after Experian provided ACB with
verification of the debt.
(Pl.’s Mem. Supp. Pl.’s Mot. Summ.
J., ECF No. 36-1, at 13-14; Pl.’s Rep. Mem., ECF No. 47, at 1920).
Defendant responds that both its August 29, 2012, and
September 12, 2012, requests for additional information were
sent prior to the receipt of verification from Experian,
ensuring that neither communication equates to a false,
misleading, or deceptive representation.
(Def.’s Mot. Summ. J.
& Opp. Pl.’s Mot. Summ. J., ECF No. 44, at 19-20).
The Act prohibits debt collectors from using “any false,
deceptive, or misleading representation or means in connection
with the collection of any debt.”
15 U.S.C. § 1692e.
This
section also provides a non-exhaustive list of “conduct” that
falls within this general prohibition.
Id. § 1692e(1)-(16).
Though it is unclear which portions of § 1692e that Ms. Webster
alleges were violated, it appears that this claim is grounded in
§ 1692e(5), which prohibits “[t]he threat to take any action
that cannot legally be taken or that is not intended to be
taken.”
34
In the Fourth Circuit, the “least sophisticated debtor”
standard applies to evaluate violations of § 1692e(5).
See
United States v. Nat’l Fin. Servs. Inc., 98 F.3d 131, 136 (4th
Cir. 1996) (adopting the same in evaluating an alleged violation
of § 1692e(5)); see also Jeter v. Credit Bureau, Inc., 760 F.2d
1168, 1175 (11th Cir. 1985) (phrasing the standard as whether
the “least sophisticated consumer” would be deceived by the debt
collector’s representations).
Even when evaluating Ms.
Webster’s claim under § 1692e(5) using this standard, it is
difficult to find any threat of action, whether legally
available or not, in either the August 29, September 12, or
September 13 letters to Ms. Webster.
The August 29 and
September 12 communications contained requests for information.
(ECF No. 36-5, at 1; ECF No. 36-7, at 1).
The September 13
letter requested payment, but similarly contained no threat of
further action.
(ECF No. 36-8, at 1).
Instead, Ms. Webster
relies on several alleged procedural improprieties, principally
that ACB mailed two requests for additional information while
verification of the debt remained outstanding.
To construe §
1692e(5) as including procedural improprieties would require an
expansive reading of the statute, a reading for which Ms.
Webster fails to cite any precedent.
See Bryant v. Wells Fargo
Bank, Nat’l Ass’n, 861 F. Supp. 2d 646, 665 (W.D.N.C. 2012)
(declining to take such an expansive view of § 1692e(5)); see
35
also Hauk v. LVNV Funding, LLC, 749 F. Supp. 2d 358, 367 n.2 (D.
Md. 2010) (stating that § 1692e(5) had not been implicated where
the plaintiff failed to allege any threatened action that the
defendant did not intend to take).
Moreover, even assuming that
ACB had sent the November 4, 2010 dunning letter, there is
nothing in the form letter provided to this Court that would
suggest any type of threatened legal action.
21-22).
(ECF No. 44-11, at
The letter requests payment and outlines the debtor’s
right to dispute the validity of the underlying obligation.
Given that the totality of alleged communications sent by ACB to
Ms. Webster do not contain any threat of legal action, this
Court finds that ACB is entitled to summary judgment as to the
claimed violation of § 1692e.
4.
Damages
The Act provides that “any debt collector who fails to
comply with any provision of th[e] [FDCPA] with respect to any
person is liable to such person.”
15 U.S.C. § 1692k(a).
This
broad language entitles any successful plaintiff to actual
damages, costs, and a reasonable attorney’s fee that is set by
the court.
Id.
The court may also allow additional damages,
subject to a $1,000 limit.
Id.
In considering whether to award
additional damages, a court must consider “the frequency and
persistence of [the debt collector’s] noncompliance,” “the
36
nature of such noncompliance,” and “the extent to which such
noncompliance was intentional.”
15 U.S.C. § 1692k(b).
Plaintiff has requested $1,000 in statutory damages, costs,
and attorneys’ fees.
Though the actions of ACB’s employees that
led to the FDCPA violations in this case were not intentional,
the collection agency failed to maintain adequate procedures
reasonably adapted to prevent the types of errors that occurred.
Given that this oversight led to two FDCPA violations, the Court
concludes that an award of $1,000 in statutory damages, and
costs, and a reasonable attorney’s fee is appropriate.
V. CONCLUSION
For the reasons set forth above, the Court GRANTS
Plaintiff’s motion for summary judgment as to the first, second,
and third counts but DENIES her motion as to the fourth count.
The Court DENIES Defendant’s motions for summary judgment as to
the first, second, and third counts, but GRANTS the same as to
the fourth count.
The Court also DENIES Plaintiff’s motion to
strike.
Pursuant to 15 U.S.C. § 1692k(a)(2), the Court awards Ms.
Webster $1,000 in damages, and costs and a reasonable attorney’s
fee, to be determined.
Counsel for Ms. Webster is ordered to
submit a petition with an appropriate affidavit and
contemporaneous time records for the Court’s consideration in
37
setting the costs and attorney’s fee award, by May 9, 2014.
Defendant shall file any response by May 23, 2014.
Date: 4/22/14
/s/
Susan K. Gauvey
United States Magistrate Judge
38
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