Pettitt v. Chiari & Ilecki, LLP

Filing 97

DECISION AND ORDER adopting 87 Report & Recommendation, granting in part and denying in part 67 Motion for Summary Judgment, and denying 68 Motion for Summary Judgment. Signed by Hon. Elizabeth A. Wolford on December 16, 2019. (JT)

DEC 1 6 2019

UNITED STATES DISTRICT COURT
WESTERN DISTRICT OF NEW YORK

iOEWENGUlti.

^DISTRICT
CHAREES PETTITT,

Plaintiff,

DECISION AND ORDER

l;17-CV-00640 EAW

V.

CHIARI & lEECKI, LLP,
Defendant.

BACKGROUND

Plaintiff Charles Pettitt ("Plaintiff) commenced this action on July 12, 2017,
alleging that defendant Chiari & llecki, LLP ("Defendant") violated the Fair Debt

Collection Practices Act ("FDCPA") under 35 U.S.C. § 1962 et seq., by attempting to
collect a debt owed by Plaintiff to family law attorney Ann Giardina Hess ("Hess") based

on a judgment in the amount of $1,110.55 obtained over 20 years ago—on April 16, 1992.
(Dkt. 1).

The ease was originally assigned to United States District Judge Lawrence J.
Vilardo, who issued an order of recusal on July 14, 2017. (Dkt. 3). The case was then
reassigned to United States Senior District Judge William M.Skretny, who issued a referral

order to United States Magistrate Judge Jeremiah J. McCarthy for all pre-trial matters,
including dispositive motions, pursuant to 28 U.S.C. § 636(b)(1). (Dkt. 17; Dkt. 69).

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On May 30, 2019, Judge McCarthy issued a Report and Recommendation (the
"R&R"), recommending that Defendant's motion for summary judgment be partially
granted, dismissing Plaintiffs claim for abuse of process. (Dkt. 87 at 10). Additionally,
Judge McCarthy determined that:

(1) collection of the 1992 judgment against [Plaintiff] was not permitted by
law in 2016;(2) in 2016 [Defendant] did not intend to violate the FDCPA;
and(3)in 2016[Defendant] had a subjective good faith beliefthat [Plaintiff]
had acknowledged the debt in 2006.

{Id.). Based on these conclusions. Judge McCarthy recommended that the pending motions
for summaryjudgment be otherwise denied. {Id.). On June 3,2019,Judge Skretny recused
himself, and the matter was reassigned to the undersigned. (Dkt. 88). Plaintiff and

Defendant both filed objections to the R&R.(Dkt.89; Dkt.91). The parties filed responses
on July 22, 2019. (Dkt. 95; Dkt. 96). Familiarity with the R&R and underlying facts of
this matter, as set forth in the R&R,is assumed for purposes of this Decision and Order.
After conducting a careful de novo review ofthe R&R,and the record in this matter,

see 28 U.S.C. § 636(b)(1)(C), the Court adopts the R&R in its entirety. This Decision and

Order addresses the specific objections raised by each party.
DISCUSSION

I.

Judgment Collectabilitv

Judge McCarthy concluded that the 1992 judgment was uncollectable. (Dkt. 87 at

6). Judge McCarthy found Hess's deposition testimony was "insufficient to create a
genuine issue of material fact as to whether [Plaintiff] had acknowledged the debt." {Id.)
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(citing Rojas v. Roman Catholic Diocese ofRochester, 660 F.3d 98, 106 (2d Cir. 2011)

("in certain circumstances a party's inconsistent and contradictory statements transcend

credibility concerns and go to the heart of whether the party has raised genuine issues of
material fact to be decided by a jury.")).

Defendant objects on the grounds that Judge McCarthy erred by making a credibility
determination as to Hess, arguing there was additional evidence from which a reasonable

jury could find Plaintiff had signed a written acknowledgment. (Dkt. 91 at 4-6).
Specifically, Defendant cites Plaintiffs statement that funds were removed from his
restrained bank account, and a draft ofthe signed written acknowledgment. {Id. at 5). The
Court finds Defendant's arguments are without merit.

Plaintiffs deposition testimony regarding the removal of funds from his Bank of
America account does not raise a genuine issue of material fact as to whether Plaintiff
signed a written acknowledgment. Plaintiff testified that his account was restrained in
connection with the 1992judgment by Defendant. {See Dkt. 67-5 at 89). Plaintifftestified
the account contained $300.00, but that Bank of America had removed $100.00 in "service

fees for the paperwork," $5.00 a month as a service charge, and $15.00 a month after the
account had insufficient funds. {Id. at 92-96). As such. Plaintiff only testified that the
funds were removed by Bank of America for service charges. He did not testify that the

funds were removed by a creditor executing the 1992judgment pursuant to a signed written
acknowledgment.

Defendant has not submitted evidence demonstrating otherwise.

Accordingly, the removal of fiinds does not raise an issue of fact as to whether Plaintiff
signed a written acknowledgment ofthe 1992 judgment.

The draft template of the written acknowledgment also does not raise a genuine
issue of material fact as to whether Plaintiff signed a written acknowledgment. The
template is a draft of a "Turnover Authorization and Agreement." (Dkt. 67-16 at 3-4; Dkt.
68-12 at 1-2). The draft provides that Plaintiff authorizes Bank of America to withdraw

and forward to Hess "all monies contained in accounts maintained in [his] name." {Id. at
1). The draft also provides that upon the forwarding of such monies, Hess authorizes the
removal of the restraint upon Plaintiffs account. {Id.). Significantly, the template is not
dated, is not signed by either Plaintiff or Hess, and does not include an acknowledgment
ofthe 1992judgment.

Additionally, it is unlikely the Court can even consider the draft template. Pursuant
to Federal Rule of Evidence 901(a), the proponent of an item of evidence "must produce
evidence sufficient to support a finding that the item is what the proponent claims it is."

Fed. R. Bvid. 901(a). However, Hess, the purported author, testified that she had no
"independent recollection" as to whether the document was ever signed. (Dkt. 70-3 at 33).
Additionally, there is no testimony from Lisa the "techie," who located the document
pursuant to the subpoena, authenticating the template. As such, because the template is not

in admissible evidentiary form, it cannot be used to raise a genuine issue of material fact

as to whether Plaintiff signed a written acknowledgment. See GlobalRock Networks, Inc.

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V. MCI Communs. Servs., 943 F. Supp. 2d 320, 335 (N.D.N.Y. 2013)(evidence not in

admissible evidentiary form so as to be considered on summary judgment because it had
not been properly authenticated through testimony or an affidavit from its author); Lachira
V. Sutton, No. 3:05cvl585 (PCD), 2007 WL 1346913, at *3 (D. Conn. May 7, 2007)

(plaintiff had not met burden of authenticating letter, in part, where plaintiff did not
reference letter in her affidavit, attest date on which letter was written, and state whether

letter was actually mailed).

Additionally, the Court finds Judge McCarthy did not err in rejecting Hess's
statements about the purported authorization.

In her affidavit, Hess affirmatively

represented that she had obtained Plaintiffs signed written acknowledgment. (See Dkt.
68-13). Hess's affidavit, in relevant part, provides:

4.
In 2006, Plaintiff signed a document that both acknowledged the
judgment and extended the statute of limitations. Likewise, the document
released his bank account for purposes of paying the judgment, to the extent
the account contained the money, less any bank charges.

7.
If I had not obtained Plaintiffs acknowledgment of the judgment, I
would never have retained [Defendant] to collect on the judgment, as Mr.
Ilecki confided that he did not want to collect any judgment files unless he
had approximately ten years to enforce same.

(Id. at 1-2). However, at her deposition, Hess consistently testified that she did not have
personal knowledge as to her statements in her affidavit. (See Dkt.68-11 at 33(upon being
asked whether she witnessed Plaintiff sign the acknowledgment, Hess answers "I don't

recall"), 34(upon being asked whether she had physically ever seen the acknowledgment,

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Hess answers "I don't know"), 35(upon being asked whether she had personal knowledge
for her statement in her affidavit that Plaintiff had signed a written acknowledgment, Hess
answers "Do I recall, no"), 41 (upon being asked whether she recalled holding a signed
copy of Plaintiffs written acknowledgment, Hess answers "I don't recall"); Dkt. 70-3 at

126(upon being asked whether she had personal knowledge as to her affidavit statement

that Plaintiff signed the written acknowledgment, Hess answers "I can't say personally -1
can't say I have personal knowledge")).

In fact, Hess testified that her affidavit was based not on her own personal
knowledge, but rather based on the fact that Defendant had proceeded with collection

activities. (See Dkt. 70-3 at 118("If he didn't have the right documents, he wouldn't have
proceeded with that. He always made sure he had what he needed. 1 turned the things
over. He wouldn't proceed if he didn't have everything he needed. That was the history
ofthese many cases.")). At the summary judgment stage, Hess's affidavit, which was not
based on personal knowledge, is insufficient to create an issue of fact. See Fitzgerald v.
Henderson, 251 F.3d 345, 361 (2d Cir. 2001)(a party opposing summary judgment "must
present affidavits, based on personal knowledge,.. . setting forth such facts as would be
admissible in evidence, and as to which the affiant would be competent to testify"); United
States V. Private Sanitation Indus. Ass'n, 44 F.3d 1082, 1084(2d Cir. 1995)(an affidavit

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not based upon personal knowledge does "not suffice to create an issue of fact precluding

summary judgment").'
In light ofthe above, Judge McCarthy correctly found that the record here presented
the case where "a party's inconsistent and contradictory statements transcend credibility

concerns and go to the heart of whether the party has raised genuine issues of material fact
to be decided by a jury." Rojas,660 F.3d at 106. Plaintiff denied having signed a written
acknowledgment(Dkt. 68-3 at ^ 5), and Defendant has not submitted admissible evidence

raising a genuine issue of material fact. Accordingly, the Court adopts Judge McCarthy's
finding that the judgment was uncollectable.
II.

Bona Fide Error Defense

The bona fide error defense allows debt collectors to avoid liability under the
FDCPA "ifthe debt collector shows by a preponderance ofevidence 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). In order

to avail itself ofthis defense,"a defendant must prove:(1)the presumed FDCPA violation
was not intentional;(2) the presumed FDCPA violation resulted from a bona fide error;

and (3) that [the defendant] maintained procedures reasonably adapted to avoid any such

'

Defendant also argues that Judge McCarthy erred by not taking into account that

Hess had "reaffirmed her affidavit, line by line, on cross examination." (Dkt. 91 at 6).
When asked ifshe reaffirmed paragraph number four in her affidavit, Hess answered "yes."
(Dkt. 71-2 at 103). However,Hess did not correct or explain her earlier statements denying
she had personal knowledge as to the statements contained in her affidavit.
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error." Lee v. Kucker & Brush LLP,958 F. Supp. 2d 524, 529(S.D.N.Y. 2013)(quotation

and citation omitted). "To survive summary judgment,[the non-moving party] must make
a showing sufficient to establish the existence of, or at least a factual question as to, every
element of the defense." Id.

A.

First Prong—Not Intentional Violation

Judge McCarthy found there was no evidence that Defendant intended to violate the
FDCPA. (Dkt. 87 at 8). Plaintiff objects on the ground that the bona fide error defense

requires the underlying conduct be intentional, not the violation. In support of this
argument. Plaintiff cites Jerman v. Carlisle, McNillie, Rini, Kramer & Ulrich LPA, 559

U.S. 573 (2010). (Dkt. 89 at 6-8). However, the Jerman decision was limited in scope,
resolving what types of mistakes constitute "bona fide errors" under the second prong of

the defense, see Jerman, 559 U.S. at 583-84, not whether the defendant's underlying
conduct was intentional under the first prong of the defense. The Court held bona fide
errors excluded mistakes of law. Id. at 587. The Court's discussion was limited to

supporting the proposition that Congress did not intend to make the bona fide error defense

available for mistakes of law, not the broader proposition that the bona fide error defense
is categorically unavailable where the underlying conduct is intentional.
Although the Second Circuit has not declared its view, it appears courts are

generally in agreement that the first prong of the bona fide error defense requires the

violation of the FDCPA, not the underlying conduct, be "not intentional."

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See

Abdollahzadeh v. Mandarich Law Grp., LLP, 922 F.3d 810, 815 (7th Cir. 2019) (a
defendant"must show only that its FDCPA violation was unintentional, not that its actions
were unintentional"(quotation and citation omitted)); Arnold v. Bayview Loan Servicing,
LLC,659 F. App'x 568,570(11th Cir. 2016)
(must show FDCPA violation, not underlying

conduct, was unintentional); Garcia v. Law Offices Howard Lee Schiff, P.C.,401 F. Supp.
3d 241,252(D. Conn. 2019)(finding not intentional violation satisfied where no evidence
the defendant intended to send debtor letter containing mistake); Moore v. Express
Recovery Serv., Inc., No. l:16-cv-00126-TC-EJF, 2019 WL 77325, at *4(D. Utah Jan. 2,

2019)("The element depends on the 'lack of specific intent to violate the act.'" (citing
Johnson v. Riddle,443 F.3d 723,728(10th Cir. 2006)
("[T]he only workable interpretation

of the intent prong of the FDCPA's bona fide error defense is that a debt collector must
show that the violation was unintentional, not that the underlying act itself was
unintentional."))); Lee,958 F. Supp. 2d at 529(not intentional violation where no evidence

that the defendant "knowingly misrepresent[ed] [the plaintiffs] debt"); Marisco v. NCO

Fin. Sys., 946 F. Supp. 2d 287,293(E.D.N.Y. 2013)("Ifviolations ofthe FDCPA required
deliberate or purposeful intent, then the bona fide error defense's 'not intentional' element
would tend towards surplusage." (citation and quotation omitted)); Jerman v. Carlisle,
McNellie, Rini, Kramer & Ulrich, No. 1:06 CV 1397, 2011 WL 1434679, at *10 (N.D.

Ohio April 14,2011)
(Supreme Court's Jerman decision left undisturbed the district court's
prior finding that where the defendant's noncompliance was not intentional, the violation

was "not intentional" for purposes of bona fide error defense); McLean v. Ray, No. 1:10cv-456, 2011 WL 1897436, at *6 (E.D. Va. May 18, 2011)(bona fide error defense
available to defendant who did not knowingly pursue collection matter with intent to
violate FDCPA), aff'd, 488 F. App'x 677(4th Cir. 2012).
Here, the record demonstrates that Defendant made a mistake offact, not a mistake

of law. Defendant relied upon information provided by Hess and, at the time of the
collection activities. Defendant had no knowledge that Hess lacked a signed written
acknowledgment. {See Dkt. 68-7 at 23-28).

Plaintiff does not argue the record

demonstrates otherwise. {See Dkt. 89). Accordingly, the Court adopts Judge McCarthy's
finding that the violation was not intentional.
B.

Second Prong—Bona Fide Error

As an initial matter, the parties disagree as to the preclusive effect ofLockport City
Court Judge Thomas DiMillo's order that Defendant had a good faith belief as to the
existence of a written acknowledgment. As such, the Court addresses this argument first.

"Under the full faith and credit statute, 'a federal court must give to a state-court
judgment the same preclusive effect as would be given thatjudgment under the law ofthe
State in which the judgment was rendered.'" Graham v. Select Portfolio Servicing, Inc.,
156 F. Supp. 3d 491, 505 (S.D.N.Y. 2016)(citing Migra v. Warren City Sch. Dist. Bd. Of

Educ.,465 U.S. 75, 81 (1984)). "Therefore, New York law governs this Court's collateral

estoppel analysis." Id. "Under New York law,the doctrine ofissue preclusion only applies

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if(1)the issue in question was actually and necessarily decided in a prior proceeding, and
(2)the party against whom the doctrine is asserted had a full and fair opportunity to litigate

the issue in the first proceeding." Colon v. Coughlin, 58 F.3d 865, 869(2d Cir. 1995).
"Issue preclusion ... bars 'successive litigation of an issue of fact or law actually
litigated and resolved in a valid court determination essential to the prior judgment,' even
if the issue recurs in the context of a different claim." Taylor v. Sturgell, 553 U.S. 880,
892(2008). "The party asserting collateral estoppel bears the burden of showing that the
identical issue was previously decided, while the party against whom the doctrine is
asserted bears the burden ofshowing the absence of a full and fair opportunity to relitigate
in the prior proceeding." Ho-Shing v. Budd, No. 17 Civ. 4633(LGS),2018 WL 2269245,

at *5 (S.D.N.Y. May 17, 2018).

Plaintiff moved to vacate the state order requiring compliance with the information
subpoena pursuant to CPLR 5015(a)(3), alleging that Defendant had procured the order to
compel by fraud, misrepresentation, or misconduct. (See Dkt. 67-10 at 2). Judge DiMillo
denied Plaintiffs request and found that Defendant "had a good faith belief the written

acknowledgment existed and was in [Hess's] possession." (Id.). Judge DiMillo's Decision
and Order, in relevant part, stated:

Plaintiffs counsel at the time, Chiari & Ilecki, LLP, argued that the motion
to obtain the Order to Compel was made in good faith based upon a
conversation William Ilecki, ofcounsel, had with his client, also an attorney,
confirming there existed a written acknowledgment of debt which was in his
client's possession. The court finds that the Plaintiff had a good faith belief
the written acknowledgment existed and was in his client's possession.
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(Dkt. 67-10 at 2). In concluding that Defendant acted in good faith, Judge DiMillo cited
the conversation between William Ilecki ("Ilecki") and Hess. Judge DiMillo did not cite

any other fact that would be a basis for finding Ilecki had a good faith beliefthat the signed
acknowledgement existed and,thus. Judge DiMillo necessarily found that the conversation
had occurred. See Kravitz v. Abrams, Fensterman, Fensterman, Eisman, Formato, Ferrera

& Wold, LLP, No. 2:14-cv-7031 (DRH)(AYS), 2019 WL 1471128, at *4(E.D.N.Y. Apr.

3, 2019)(in federal FDCPA action, issue of whether "Defendants misrepresented the debt

or communicated false credit information" had been "actually and necessarily decided"
where state breach of contract action found "Plaintiff was liable for the debt in question"

and, thus, necessarily found that "the lawsuit seeking to collect the debt could not have
been predicated on false credit information").

Nonetheless, even ifthe Court were not to give preclusive effect to Judge DiMillo's
finding, the Court finds there are no triable issues of fact as to whether the conversation
occurred. In his declaration, Ilecki stated that Hess had contacted him in 2009. (Dkt.67-17

at ^ 4). Although Hess testified that she could not recall whether she had personally called
Ilecki, and that it was unlikely she would have contacted Ilecki herself(Dkt. 70-3 at 48-50),
she does not deny the 2009 conversation occurred {see id.). As such. Plaintiff has not
rebutted Defendant's evidence and, thus, there are no triable issues of fact as to whether

the 2009 conversation occurred. See Motiva Enterprise LLC v. W.F. Shuck Petroleum, No.
3:lO-cv-793(JCH),2012 WL 601245,at * 14(D.Conn. Feb. 22,2012)
("[The defendant's]
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assertion that he does not remember signing the document is not, in itself, sufficient to

create a material issue of fact to defeat [the plaintiffs] Motion for Summary Judgment.")?
Petrunti v. Cablevision, No. 08-CV-2277 (JFB) (AKT), 2009 WL 5214495, at *11
(E.D.N.Y. Dec. 30, 2009)("Plaintiffs lack of recollection is insufficient... to create a
triable issue of fact.").

The Court now turns to the second prong of the bona fide error defense. Judge
McCarthy found that Defendant had a subjective good faith belief that Plaintiff had
acknowledged the debt in 2006(Dkt. 87 at 10), but could not conclude "as a matter of law

that [Defendant's] reliance upon Hess's seven-year-old statement that [Plaintiff] had
acknowledged the debt, without more, was objectively reasonable"(id at 9).
Plaintiff argues the error was objectively unreasonable as a matter of law because

"no reasonable fact finder could conclude that it was reasonable for an attorney to rely on

his unaided recollection of a conversation from seven years ago," in light of Defendant's
volume ofcases. (Dkt. 89 at 12). In support. Plaintiff cites to McCollough v. Johnson,637
F.3d 939 (9th Cir. 2011). (Dkt. 89 at 16). However, the Court finds McCollough is
distinguishable.

In McCollough, the Ninth Circuit determined it was objectively

unreasonable for the defendant to rely on their client where the client's contract with the

defendant "expressly disclaimed 'the accuracy or validity of data provided' and instructed
that [the defendant] was 'responsible to determine [its] legal and ethical ability to collect'
the account," and considering the defendant's own electronic files informed the defendant

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that the debtor "had asserted a statute of limitations defense to a collection action filed

against him in 2005 over the same debt." McCollough,637 F.3d at 949.
In contrast, here, Hess never expressly disclaimed the accuracy or validity of her
statements to Ilecki. Additionally, unlike the defendant in McCollough, Ilecki's own files
did not indicate that Plaintiff had previously asserted a statute of limitations defense or
some other objection to the 1992 judgment. {See Dkt. 67-17 at 69 ("Plaintiff never

contested the debt, never responded to the information subpoenas or any correspondence
from [Defendant's] office, and never appeared with respect to the motion.")). It was not
until January 2017 that Defendant was made aware ofa potential issue with thejudgment's
collectability and, upon confirming Hess lacked proofofa signed written acknowledgment.
Defendant immediately ceased collection activities. {Id. at

73-75). Accordingly,

Plaintiffs reliance on McCollough is misplaced.

Plaintiff also argues the error was objectively unreasonable as a matter of law
because "Hess was not an accurate source of information regarding a purported
acknowledgment of the 1992 judgment" as she knew nothing about collections work.
(Dkt. 89 at 13-14). In support of his argument. Plaintiff cites to Miller v. Updton, Cohen
& Slamowitz, 687 F. Supp. 2d 86, 101 (E.D.N.Y. 2009) for the proposition that "in order
to be entitled [to] the benefit of reasonable reliance, ... the debt collector [must show] a

history ofpast reliability,[and must] also show reputational quality and the use ofrigorous
procedures." (Dkt. 89 at 14). However, Miller neither involved nor discussed the

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availability of the bona fide error defense. Instead, Miller''s discussion was limited to an

attorney's independent duty to review in order to avoid liability under FDCPA § 1692(e)

for making a "false representation or implication that any individual is an attorney or that
any communication is from an attorney." Miller,687 F. Supp. at 94.

Plaintiff does not cite to any factually analogous case demonstrating Defendant's
error was objectively unreasonable as a matter of law. The Court's own research reveals
the facts here are unlike those in cases where courts have determined the errors were

objectively unreasonable as a matter of law. Those cases involve facts demonstrating the
defendants possessed information or knowledge that put them on notice as to their error.
See Hepsen v. Resurgent Capital Servs., L.P., 383 F. App'x 877, 883 (11th Cir. 2010)
(despite its practice of listing name of client as "creditor," objectively unreasonable for
debt collector to do so where it had knowledge from prior dealings that debt was owed to
a different entity); Micks v. Gurstel Law Firm, P.C., 365 F. Supp. 3d 961, 977(D. Minn.
2019)(objectively unreasonable for debt collector to not conduct any factual investigation

despite receiving two calls from debtor's employer indicating he had paperwork relating
to debtor's bankruptcy discharge and court release, and court paperwork indicating
debtor's wages should not have been garnished). By contrast, here, there is no evidence
that Defendant knew the signed written acknowledgment no longer existed or that the debt
was not otherwise uncollectable.

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On the other hand,Defendant argues the error was objectively reasonable as a matter
oflaw. Defendant asserts that Judge McCarthy's conclusion was in error because it "rests

on the faulty premise that [Ilecki] suddenly recommenced collection proceedings in 2016
after ignoring the file for 7 years." (Dkt. 91 at 16). Defendant cites to the firm's activity
report which demonstrates Defendant worked on this case from April 2009 through January

2017 (Dkt. 91-1 at 1-2), and Plaintiffs own testimony confirmed he had received many
letters from Defendant over the years (Dkt. 67-5 at 115-34). Additionally, Defendant
argues the error was objectively reasonable as a matter of law because;(1) the FDCPA
does not require debt collectors to independently verify the debt and debt collectors may

rely on representations from their clients; and (2) Ilecki, informed by his thirty-years of
experience, reasonably relied on Hess, a practicing attorney. {Id. at 9, 11).
In support of its argument that it was objectively reasonable for Ilecki to rely on
Hess's statement. Defendant cites to Abdollahzadeh, 922 F.3d at 812.

However,

Abdollahzadeh is distinguishable. There, the defendant had relied on reports generated by
its client, which included the last-payment date for debtors, and the reports were "created

using proprietary software." Id. at 812-13. Additionally, there, the client had submitted
an affidavit attesting to the accuracy of its reports. Id. at 817. In finding the error was

objectively reasonable as a matter oflaw,the Seventh Circuit distinguished the case as one
in which the defendant relies on the "account information itself," and not "a

communication from the creditor." See id. at 816. Here, Defendant did not rely on the

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written acknowledgment itself. Instead, Defendant relied on a communication from Hess,
the creditor. As such, Abdollahzadeh does not demonstrate that Defendant's reliance on

Hess's representations was objectively reasonable as a matter of law.
Reasonable jurors could disagree as to whether Defendant's error was reasonable.

As such, the Court agrees with Judge McCarthy that it cannot determine whether
Defendant's mistake was objectively reasonable as a matter oflaw. Accordingly, whether

Defendant's reliance on Hess's statement was objectively reasonable is a question of fact
properly reserved for the jury and, thus, precludes summary judgment. See Werbicky v.
Green Tree Servicing. LLC, No. 2:12-cv-01567-JAD-NJK,2016 WL 1248697, at *11 (D.

Nev. Mar. 28, 2016)(FDCPA does not impose duty for debt collectors to independently

authenticate instruments comprising mortgage loan so question of whether reasonable for
loan servicer to rely on representations of its creditor-client is a question offact precluding
summary judgment); Eide v. Coltech, Inc., 987 F. Supp. 2d 951, 966 (D. Minn. 2013)

(although collections agreements supported finding that defendant's error was reasonable,
still a question of fact as to whether reasonable for debt collector to rely on creditor's
representations); Beattie v. D.M. Collections, Inc., 754 F. Supp. 383, 391 (D. Del. 1991)
(question of fact as to whether defendant reasonably relied on information provided by
creditor and debtor's father that the debt was owed by debtor).

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C.

Third Prong—Maintained Procedures Reasonably Adapted

The third prong requires a two-step inquiry: (1) "whether the debt collector

maintained—i.e., actually employed or implemented—^procedures to avoid errors," and(2)
"whether the procedures were reasonably adapted to avoid the specific error at issue."
Campbell v. Hall, 624 F. Supp. 2d 991, 1003 (N.D. Ind. 2009); Abdollahzadeh, 922 F.Sd

at 817. With this prong, the Court concludes there are disputed issues of fact as to both
steps.

It does not appear that Judge McCarthy definitively resolved whether Defendant
had actually employed or implemented procedures under the first step. {See Dkt. 87 at 9)
(when a "judgment has less than 10 years' collectability, [Ilecki] routinely asks the client
whether the debtor has made payment on the judgment or has signed a written
acknowledgment ofdebt, and only accepts the judgment for collection ifthe answer is yes,"
and "[this] may qualify as a 'procedure'" (emphasis added)). Instead, Judge McCarthy

found that"the decisive question" is whether under the second step. Defendant's procedure
was "reasonably adapted to avoid the specific error at issue—^namely[,] the filing of
motions []to compel compliance with an information subpoena relating to an uncollectable
judgment...." {Id. at 9). As to this step. Judge McCarthy found there were issues of
material fact precluding summary judgment. {See id. at 10). This Court agrees.

Plaintiffargues Defendant's "policy ofceasing collection activities after notification

from the debtor that it was pursuing time-barred debt is not reasonably adapted to avoid

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collecting on time-barred debt. By definition, this notification can only come after
Defendant has already violated the FDCPA." (Dkt. 96 at 22). In support of his argument,
Plaintiff cites to Vangorden v. Second Round, L.P., 897 F.3d 433, 441 (2d Cir. 2018). In
Vangorden,the defendant argued that the debtor could not state § 1692e false or misleading
representations and § 1692f unfair practices claims where the debtor did not first dispute

the validity of the debt as required under § 1692g. Vangorden, 897 F.3d at 439. In
responding to the defendant's assertion that "in the real world, creditors and debt collectors

make mistakes, and sometimes initiate collection activities against persons who do not owe

a debt," the Second Circuit explained that the "the [only] protection the FDCPA affords
debt collectors in those circumstances is the affirmative [bona fide error] defense, not an

immunity from suit inferred from the dispute notice provision of § 1692g." Id. As such,
the Second Circuit necessarily concluded that the bona fide error defense was available
even where the FDCPA violation occurs before the debtor's notification that the debt was

not valid. Id. at 440. Thus, FawgorJen does not support Plaintiffs broad proposition that
making the bona fide error defense available where a debt collector ceases collection
activity after notification by the debtor "perverts the intent of the FDCPA by shifting the
burden to consumers to bring violations to the attention of debtors." (Dkt. 96 at 22).
By contrast. Defendant avers that because it"has never been found to have collected

on a stale debt... there can be no question that [Defendant] maintains reasonably adapted

procedures to ensure the debts it collects are timely." (Dkt. 91 at 14). Defendant's

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procedures include confirming there are at least 10 years remaining on the debt and asking
whether the debtor has made a payment or signed a written acknowledgment of the debt.
(Dkt. 67-17 at

64-65). The Court cannot conclude as a matter of law the procedures at

issue were reasonably adapted to avoid collecting a time-barred debt because questions as

to whether a debt collector maintained reasonably adapted procedures are factual questions
properly reserved for thejury. See Richburg v. Palisades Collection LLC, et al., 247 F.R.D.
457, 467-68 (E.D. Pa. 2008)(whether defendant's development of nationwide survey of
statutes oflimitations constituted a procedure reasonably adapted to avoid collecting timebarred debt is a question offact); Blarekv. Encore Receivable Mgmt.,'Ho.06-C-0420,2007
WL 984096, at *11-14 (E.D. Wis. Mar. 27, 2007)(issue of fact as to whether procedures

reasonably adapted to avoid error of misidentifying creditor where defendant's various
procedures included requiring employees to complete FDCPA training, to pass test on

FDCPA, and to sign FDCPA acknowledgment contacting consumers; sending notice to
employees that violation of FDCPA may result in termination; and relying on clients to
provide accurate information regarding debtors); Gonzalez v. Lawent, No.03C2237,2005
WL 1130033, at *7-8 (N.D. 111. April 28, 2005)(issue of fact as to whether procedures
reasonably adapted to avoid error of collecting debt not owed where evidence that:
defendant relied on oral agreement with client to provide accurate information and refer

only current and collectible debts; there was a low percentage of unauthorized incorrect

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charges in the accounts referred to defendant; and defendant immediately ceased collection
activities upon becoming aware that accounts contained errors).
Accordingly, whether Defendant maintained procedures that were reasonably
adapted to avoid the error at issue is a question of fact properly reserved for the jury and,
thus, precludes summary judgment.
CONCLUSION

For the reasons set forth above, the Court adopts the R&R, grants summary
judgment in favor ofDefendant on Plaintiffs abuse of process claim, and otherwise denies
Plaintiffs and Defendant's motions for summary judgment(Dkt. 67; Dkt. 68).

SO ORDERED.

ELlZmET^A. WOLFORD
id States District Judge
Dated:

December 16, 2019
Rochester, New York

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