San Jose Bankruptcy & Fair Debt Collection Practices Act Lawyer Blog

On July 29, 2011, a federal jury in Santa Fe, New Mexico, reached a verdict of $1.26 million against a debt collection law firm for pursuing a woman for a debt she did not owe.

The debt collection law firm of Farrell & Seldin spent three years chasing Lucinda Yazzie. Ms. Yazzie had the identical name of another Navajo woman. Despite protests that they had the wrong person, the collection law firm persisted and ignored numerous opportunities to correct the situation and pursued the wrong Ms. Yazie mercilessly. The debt collection law firm made two attempted wage garnishments, and placed a lien on the wrong Ms. Yazzie's her property (which wasn't released even after the jury returned its verdict!)

The verdict was $161,000 in actuals damages (or emotional distress) under the Fair Debt Collection Practices Act (FDCPA), New Mexicos' Unfair Deceptive Acts and Practices statute, and common law. The jury found that it was appropriate to levy punitive damages against the collection law firm in the amount of $1.1 million for its unlawful debt collection.

The consumer, and her employer, made repeated attempts to tell the debt collection law firm it was attempting to collect the debt from the wrong person. The debt collection law firm withdrew its first attempt to garnish Ms. Yazzie's wages, but then inexplicably made a later attempt to garnish her wages. It seems the debt collection law firm did not stop its wrongful pursuit of Ms. Yazzie until she hired an attorney to sue the debt collection law firm.

Ms. Yazzie's attorneys argued that the debt collection law firm took a factory approach to litigation, employing abbreviated procedures for filing lawsuits, citing other court cases condemning the practice of suing on scant, often unverified information. McCollough v. Johnson, Rodenberg & Lauinger, 645 F.Supp.2d 917 (D. Mont. 2009).

Ms. Yazzie also pointed the Court to two other recent jury verdicts against debt collectors for pursuing someone for a debt they did not owe. Fausto v. Credigy, where a San Jose, California jury reached a verdict of $500,000 against the debt collector, and McCollogh v. Johnson Rodenberg & Lauinger, where the jury reached a $311,000 verdict.

Ms. Yazzie's attorneys also argued that the Court should reject the debt collection law firm's position- that the FDCPA should not protect people who do not owe the debt- citing to other courts that have found the FDCPA also protects consumer that are being harassed for debts they do not owe; indeed one federal judge held:

Indeed, to read the FDCPA in this manner would allow unscrupulous debt collectors, and particularly buyers of junk debt who cannot verify the accuracy of the debts or the identities of the debtors, to simply file debt collection actions with impunity against all persons having a similar name as the debtor, on the chance that one of the named defendants is the true debtor, or that one of the named defendants will simply pay the debt allegedly owed under the threat of having a judgment obtained against them, with a resulting levy against their property.

In reaching the $1.2 million verdict it is obvious the jury disagreed with the debt collection law firm's tactics.

A federal judge in Florida has ruled that a jury will get to decide whether a debt collector's collection telephone calls were harassing in violation of the Fair Debt Collection Practices Act ("FDCPA").

In Holland v. Bureau of Collection Recovery, a consumer alleged that a debt collector violated the FDCPA by:

• Engaging in conduct of which the natural result is abuse and harassment
  
• Causing a telephone to ring repeatedly and continuously to harass
  
• Placing telephone calls without meaningful disclosure of the caller's identity
  
• Using deceptive means in an attempt to collect a debt by failing to leave voice mail messages when calls were not answered

The consumer alleged the debt collector called her over 30 times in a span of less than 2 months, with the debt collector calling multiple times per day. During some of these calls the debt collector failed to identify who they were, and that they worked for a debt collection company. The consumer asked that they stop calling and send her proof of the debt. The debt collection agency did not send proof of the debt, and continued calling the consumer. In subsequent communications, the debt collection agency did not disclose to the consumer that it was a debt collection company that was placing the calls to her.

The debt collectors tried to get the judge to decide before trial that:

• The consumer failed to demonstrate the type of harassing, abusive, or oppressive language or conduct necessary to establish that Defendant violated the FDCPA
  
• That Defendant's representatives did in fact disclose their identity and that choosing not to leave voicemail messages did not violate the FDCPA
  
• And that on May 4, 2010, the debt collector sent a written notice containing all of the language necessary to comply with the FDCPA

The judge refused to throw out the lawsuit and held that it would be up to a jury to decide whether the debt collector violated the FDCPA. The Court noted that the Eleventh Circuit Court of Appeals has held that a debt collector's intent to annoy, abuse, or harass a consumer may be inferred by examining the nature and frequency of debt collection calls. Meadows v. Franklin Collection Services, Inc., 2011 WL 479997 (11th Cir. February 11, 2011) .

Furthermore the Court said that numerous courts have held that the intent to harass is a question of fact for the jury jury to decide, and it couldn't be decided by the judge before trial. Akalwadi v. Risk Mgmt. Alternatives, Inc., 336 F.Supp.2d 492, 505 (D. Md. 2004); Kavalin v. Global Credit & Collection Corp., 2011 WL 1260210, at *4 (W.D.N.Y. 2011); Rucker v. Nationwide Credit, Inc.,, 2011 WL 25300, at *2 (E.D. California, Jan. 5, 2011); Clark v. Quick Collect, Inc., 2005 WL 1586862, at *4 (D. Or. 2005).

The Judge went on to say that in the Meadows case the Court specifically rejected the debt collector's argument that its calls were not harassing because the consumer did not answer the phone. The Judge also said that the plain language of the FDCPA makes it clear that the debt collector must make a meaningful disclosure (i.e. the name of the collection agency and that they are a debt collector) when placing telephone calls. Finally, the Judge said that whether failing to leave voice mail messages violated the FDCPA was also a question for the jury.