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Judge Denies MSJ in FDCPA Case Because Letter Was Sent One Day Before Defendant Learned of BK Filing

A District Court judge in Ohio has denied a defendant’s motion for summary judgment after it was sued for allegedly violating the Fair Debt Collection Practices Act by sending a collection letter three days after an individual filed for bankruptcy protection and one day before it was notified of the filing.

A copy of the ruling in Peterson v. Capital Management Services, LP can be accessed by clicking here.

The account was placed with the defendant on Sept. 5, 2018, at which time the defendant checked to see if the individual had filed for bankruptcy protection. Not finding any filing, the defendant called the plaintiff on Sept. 6, who notified the defendant that he was represented by counsel. The defendant sent a collection letter to the plaintiff’s attorney on Sept. 7. The plaintiff filed for bankruptcy protection on Nov. 3, 2018. The defendant sent another letter to the plaintiff’s attorney on Nov. 6. On Nov. 7, the defendant received notice of the bankruptcy filing.

The defendant attempted to argue that the Nov. 6 letter should not constitute a violation of the FDCPA because it did not know at that time that the plaintiff had filed for bankruptcy protection. But because the FDCPA is a strict liability statute and the plaintiff does not have to prove knowledge or intent and does not have to have suffered actual damages, the judge denied the motion for summary judgment.

The defendant also attempted to argue that ruling against it would represent a “radical shift in the burdens imposed on debt collectors” and lead to “absurd results,” but Judge Patricia Gaughan of the District Court for the North District of Ohio, Eastern Division, was not persuaded. Because the defendant opted not to move for summary judgment on the basis that it made a bona fide error, the judge denied the motion.

The “Defendant has not presented arguments or evidence relating to the bona fide error defense,” Judge Gaughan wrote. “Rather, Defendant appears to ask the Court to read an intent or knowledge requirement into the FDCPA” that it could not do.

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