Judge Partially Grants MSJ For Defendant in FDCPA Case Over BK Filing

A Magistrate Court judge in Indiana has partially granted a defendant’s motion for summary judgment, but denied other claims it violated the Fair Debt Collection Practices Act by sending a collection letter to individuals who had filed for bankruptcy protection and had requested that the defendant stop communicating with them.

A copy of the ruling in the case of Kinnick v. Med-1 Solutions can be accessed by clicking here.

The plaintiff and his wife filed for bankruptcy protection on March 12, 2019. A month earlier, they had their attorney send a notice of representation to the defendant. Six weeks after the bankruptcy petition was filed, the defendant sent the plaintiffs a collection letter seeking payment for debts that were included in the bankruptcy filing. The letter was sent a day after the accounts were placed with the agency, and it did perform a bankruptcy scrub prior to sending the letter. However, a programming error related to managing multiple accounts owed to the same creditor caused the letter to be sent the day before the scrub was performed.

The plaintiffs filed suit, alleging the defendants violated Section 1692e(3), 1692c(3), and 1692c(c) of the FDCPA.

After first going through a lengthy analysis to determine whether the plaintiffs had standing to sue, Judge Tim Baker of the District Court for the Southern District of Indiana then attacked the competing summary judgment motions from the plaintiff and the defendant.

The defendant attempted to argue that the letter being sent to the plaintiff was the result of a bona fide error under the FDCPA. But Judge Baker determined that summary judgment on the 1692e(3) claim was precluded because genuine issues of material fact remained after analyzing the defendant’s argument that it should be entitled to the bona fide error defense.

With respect to the claim that it attempted to collect a debt after the plaintiffs demanded that communications be ceased, Judge Baker agreed with the defendant that it should receive summary judgment on this claim because the defendant did not have any active accounts for the plaintiff when it received the letter demanding that communications be ceased.

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