WHITAKER v. HUDSON & KEYSE, LLC, USDC-INSD No. 1:05-CV-1597-JDT-WTL, 2007 U.S.Dist. LEXIS 57706, before USDJ Tinder, filed 06 Aug 2007. Not binding anywhere but may be persuasive.
Plaintiff did not repay a Bank One, now Chase Bank, credit card debt of $3,558.96. A collection agency sent him a dunning letter seeking $4,726.89, and Plaintiff paid them about $1,200 in installments. Chase later sent him a letter stating that his account was reduced from $3,326.89 to $2,236.07, having been improperly stated before. American Coradius, another collection agency, dunned Plaintiff two months later for $2,436.07, which Plaintiff disputed and demanded cease-comm (and then American Coradius illegally sent him another dunning letter, but is not a defendant here). Finally, Defendant Hudson & Keyse, another collection agency, mailed Plaintiff a dunning letter demanding $4,802.37, which was the figure that Chase Bank had given them. Plaintiff did not dispute this amount with Defendant.
Plaintiff sued Defendant in U.S. District Court for the Southern District of Indiana per 15 U.S.C. § 1692e, alleging that Defendant had falsely represented the amount of the debt. Defendant moved for summary judgment, arguing that Plaintiff's failure to dispute the debt within 30 days allowed Defendant to assume the debt was valid per 15 U.S.C. § 1692g(a)(3), and also it was entitled to the bona fide error defense per 15 U.S.C. § 1692k(c) because its client had given it wrong information, contrary to its service agreement with its client. Plaintiff cross-moved for summary judgment.
The trial court noted that in the Seventh Circuit, collection agencies do not have to independently investigate accounts that their clients give them to collect. Also, it did not appear that Defendant had deliberately misrepresented anything to Plaintiff. However, in this case, the error was possibly due to miscalculation of interest, and Defendant had not produced enough evidence to show that its interest calculation procedures were adequate to establish a good faith error defense before trial. Defendant sent a dunning letter with an incorrect alleged amount of debt, even if not intentionally, which would be a violation absent the good faith error defense. PLAINTIFF'S SUMMARY JUDGMENT MOTION GRANTED IN PART and the jury would be instructed that the amount of debt was misstated, but DENIED in all other respects. DEFENDANT'S SUMMARY JUDGMENT MOTION DENIED, and it would have to prove its good faith error defense before the jury.
EDITORIAL: Makes sense to me. I have occasionally heard debt collector defense lawyers claim that you have to dispute the debt within 30 days or else you can never again say it was invalid. Well, if the letter already went out, the law has already been violated. Sorry, bill collectors, but the dispute thingie is NOT a tool for you to make a lie into the truth! Also, why in the doodle can't people compute interest correctly anymore? If these guys had only done so, they wouldn't have been sued. I predict this one will settle and we won't hear anything more about it.
Monday, August 20, 2007
FDCPA Short Note: Class Certified Against Encore For "HSB/" Dunning Letters
BLAREK v. ENCORE RECEIVABLE MANAGEMENT, INC., USDC-WIED No. 06-C-420, 2007 U.S.Dist. LEXIS 58182, before USMJ Callahan, filed 08 Aug 2007.
Plaintiff owed a debt to Citibank USA, N.A. that she discharged in bankruptcy. Later, she received a mass-mailed form dunning letter from Encore that attempted to collect the same debt. The letter claimed that Plaintiff owed the debt to creditor "HSB/" instead of Citibank. Plaintiff sued Encore in U.S. District Court for the Eastern District of Wisconsin per 15 U.S.C. §§ 1692e and 1692g(a)(2) for misrepresenting the name of the creditor. Plaintiff also moved to certify a class of similarly situated plaintiffs.
The trial court considered the four prerequisites of federal class certification: (1) numerosity, which Encore did not dispute, and a class of 40 or more is clearly numerous; (2) commonality, or common nucleus of operative fact, which was present because Encore sent the same "HSB/" letter to all class members; (3) typicality, which was present because each class member's claim rested on the same legal theory that Encore's "HSB/" representation was confusing and deceptive, regardless of whether Plaintiff had an additional FDCPA claim for Encore's trying to collect a bankrupted debt; and (4) adequacy of representation, which was present because Plaintiff only needed to give a deposition and did not have to know much if anything about the case, and Plaintiff's class counsel was very experienced in consumer class actions.
Then the trial court had to rule whether class action was superior to any other way of resolving the case. Statutory damages would be $100 to $1,000 for each plaintiff, probably not enough to inspire individual actions, and class actions exist primarily to enable many together to do what one or few could not. Legal and factual questions of whether "HSB/" confused an unsophisticated consumer, which did not depend on whether class members were actually confused or even if they read the letter, were common to all. CLASS CERTIFICATION GRANTED.
EDITORIAL: Another greedy junk debt buyer learns a slightly expensive lesson in compliance. Does nobody at Encore even read these stupid letters? Wouldn't it have cost less to get the name of the creditor right instead of getting sued? There are dozens of entities under the HSBC empire, some of whom lend money, but none of them is called "HSB/" and from "HSB/" it is impossible to tell which, if any, of HSBC's tentacles is supposed to be owed. Putting a nonexistent company name on dunning letters is plain premeditated carelessness. Good job to Ademi & O'Reilly LLP of Cudahy, Wisconsin for sticking a well-deserved pin into Encore Receivable Management, Inc.
Plaintiff owed a debt to Citibank USA, N.A. that she discharged in bankruptcy. Later, she received a mass-mailed form dunning letter from Encore that attempted to collect the same debt. The letter claimed that Plaintiff owed the debt to creditor "HSB/" instead of Citibank. Plaintiff sued Encore in U.S. District Court for the Eastern District of Wisconsin per 15 U.S.C. §§ 1692e and 1692g(a)(2) for misrepresenting the name of the creditor. Plaintiff also moved to certify a class of similarly situated plaintiffs.
The trial court considered the four prerequisites of federal class certification: (1) numerosity, which Encore did not dispute, and a class of 40 or more is clearly numerous; (2) commonality, or common nucleus of operative fact, which was present because Encore sent the same "HSB/" letter to all class members; (3) typicality, which was present because each class member's claim rested on the same legal theory that Encore's "HSB/" representation was confusing and deceptive, regardless of whether Plaintiff had an additional FDCPA claim for Encore's trying to collect a bankrupted debt; and (4) adequacy of representation, which was present because Plaintiff only needed to give a deposition and did not have to know much if anything about the case, and Plaintiff's class counsel was very experienced in consumer class actions.
Then the trial court had to rule whether class action was superior to any other way of resolving the case. Statutory damages would be $100 to $1,000 for each plaintiff, probably not enough to inspire individual actions, and class actions exist primarily to enable many together to do what one or few could not. Legal and factual questions of whether "HSB/" confused an unsophisticated consumer, which did not depend on whether class members were actually confused or even if they read the letter, were common to all. CLASS CERTIFICATION GRANTED.
EDITORIAL: Another greedy junk debt buyer learns a slightly expensive lesson in compliance. Does nobody at Encore even read these stupid letters? Wouldn't it have cost less to get the name of the creditor right instead of getting sued? There are dozens of entities under the HSBC empire, some of whom lend money, but none of them is called "HSB/" and from "HSB/" it is impossible to tell which, if any, of HSBC's tentacles is supposed to be owed. Putting a nonexistent company name on dunning letters is plain premeditated carelessness. Good job to Ademi & O'Reilly LLP of Cudahy, Wisconsin for sticking a well-deserved pin into Encore Receivable Management, Inc.
Saturday, August 11, 2007
Always Signal Your Lane Change When Carrying Meth
STATE v. STYLES, NCApp No. COA06-684, on appeal from Swain Co. Superior Court, before CJ Martin, Js Steelman, Stephens, opinion by Steelman, dissent by Stephens, filed 07 Aug 2007.
LONG STORY SHORT: Officer had probable cause to stop a motorist who was directly in front of him and did not signal before changing lanes. Binding in NC unless reversed by the NC Supreme Court.
FACTS: At 0100 one morning, Officer Jones of Bryson City PD was traveling on a three-lane road in the same direction as Defendant. Two lanes ran in their same direction, and the third ran opposite. Defendant's vehicle was directly in front of Officer Jones' vehicle. Without signaling his intent beforehand, Defendant changed lanes. Officer Jones stopped Defendant and smelled marijuana on Defendant's person. Defendant did not consent to a search of his vehicle, so Officer Jones deployed his K9 partner to sniff the air around Defendant's vehicle. The K9 alerted, and Officer Jones found a small amount of marijuana and a pipe inside Defendant's vehicle. A search incident to arrest found methamphetamine on Defendant's person.
PROCEDURE: North Carolina indicted Defendant in Swain County Superior Court for possession of schedule II controlled substances, paraphernalia, and marijuana. Defendant moved to suppress all evidence, on grounds that that North Carolina statute required him to signal lane changes only when "the operation of any other vehicle may be affected by such movement." Defendant argued that since Officer Jones' vehicle could not have been affected, there was no traffic violation and therefore no readily observable probable cause to stop him. The trial court ruled that since Officer Jones was right behind Defendant, the operation of Officer Jones' vehicle may have been affected, and an investigatory stop was proper. MOTION TO SUPPRESS DENIED. Defendant pleaded guilty, reserving his right to appeal the denial of suppression to the Court of Appeals of North Carolina.
DECISION: The trial court found as fact that Defendant was directly in front of Officer Jones when he changed lanes without signaling. This was a readily observable traffic violation, and Officer Jones had probable cause to stop Defendant. In one respect, the trial court did err, in that the stop was not "investigatory;" readily observable traffic violations need no further "investigation," as would a suspected violation, such as driving while impaired. Probable cause exists whenever a reasonable officer readily observes a traffic violation, which Officer Jones did, so Defendant suffered no violation of any constitutional right. DENIAL OF SUPPRESSION AFFIRMED.
The dissent would have reversed the trial court's probable cause ruling. A careful reading of the trial court's findings of fact and Officer Jones' brief testimony did not clearly indicate that Defendant was "immediately" in front of him, just somewhere in front of him. At that late hour, no one else was on the road, and Defendant's lane change could not have affected any other vehicle's operation.
EDITORIAL: I dunno. Probably the guy WAS right in front of the officer, but the dissent's attention to detail does leave me a bit disquieted. Sure enough, there was no direct testimony as to how close or far away the guy was. I would have remanded it for further factfinding, and all the officer would have to do is testify truthfully that the guy was right in front of him. The NC Supreme Court recently took some of the elastic out of "the operation of any other vehicle may be affected by such movement," so remember to hold off on the blue lights if you have any doubt. At worst, you can follow him around until he commits another violation.
LONG STORY SHORT: Officer had probable cause to stop a motorist who was directly in front of him and did not signal before changing lanes. Binding in NC unless reversed by the NC Supreme Court.
FACTS: At 0100 one morning, Officer Jones of Bryson City PD was traveling on a three-lane road in the same direction as Defendant. Two lanes ran in their same direction, and the third ran opposite. Defendant's vehicle was directly in front of Officer Jones' vehicle. Without signaling his intent beforehand, Defendant changed lanes. Officer Jones stopped Defendant and smelled marijuana on Defendant's person. Defendant did not consent to a search of his vehicle, so Officer Jones deployed his K9 partner to sniff the air around Defendant's vehicle. The K9 alerted, and Officer Jones found a small amount of marijuana and a pipe inside Defendant's vehicle. A search incident to arrest found methamphetamine on Defendant's person.
PROCEDURE: North Carolina indicted Defendant in Swain County Superior Court for possession of schedule II controlled substances, paraphernalia, and marijuana. Defendant moved to suppress all evidence, on grounds that that North Carolina statute required him to signal lane changes only when "the operation of any other vehicle may be affected by such movement." Defendant argued that since Officer Jones' vehicle could not have been affected, there was no traffic violation and therefore no readily observable probable cause to stop him. The trial court ruled that since Officer Jones was right behind Defendant, the operation of Officer Jones' vehicle may have been affected, and an investigatory stop was proper. MOTION TO SUPPRESS DENIED. Defendant pleaded guilty, reserving his right to appeal the denial of suppression to the Court of Appeals of North Carolina.
DECISION: The trial court found as fact that Defendant was directly in front of Officer Jones when he changed lanes without signaling. This was a readily observable traffic violation, and Officer Jones had probable cause to stop Defendant. In one respect, the trial court did err, in that the stop was not "investigatory;" readily observable traffic violations need no further "investigation," as would a suspected violation, such as driving while impaired. Probable cause exists whenever a reasonable officer readily observes a traffic violation, which Officer Jones did, so Defendant suffered no violation of any constitutional right. DENIAL OF SUPPRESSION AFFIRMED.
The dissent would have reversed the trial court's probable cause ruling. A careful reading of the trial court's findings of fact and Officer Jones' brief testimony did not clearly indicate that Defendant was "immediately" in front of him, just somewhere in front of him. At that late hour, no one else was on the road, and Defendant's lane change could not have affected any other vehicle's operation.
EDITORIAL: I dunno. Probably the guy WAS right in front of the officer, but the dissent's attention to detail does leave me a bit disquieted. Sure enough, there was no direct testimony as to how close or far away the guy was. I would have remanded it for further factfinding, and all the officer would have to do is testify truthfully that the guy was right in front of him. The NC Supreme Court recently took some of the elastic out of "the operation of any other vehicle may be affected by such movement," so remember to hold off on the blue lights if you have any doubt. At worst, you can follow him around until he commits another violation.
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