Judge Denies MSJ Motions from Plaintiff, Defendant in FDCPA Case over Dispute Removal Request

A District Court judge in Michigan has denied a plaintiff’s motion for summary judgment, while also denying the defendant’s motion to dismiss or, in the alternative, for summary judgment in a Fair Debt Collection Practices Act case involving the alleged failure of a credit reporting agency to remove a dispute flag from the plaintiff’s account after she notified the defendant she no longer wanted to dispute the account.

A copy of the ruling in the case of Evans v. Merchants and Medical Credit Corp. can be accessed by clicking here.

The plaintiff received a letter from the defendant, attempting to collect on an unpaid debt. The plaintiff contacted the defendant to dispute the debt. About a year later, the plaintiff’s attorney contacted the defendant and said the plaintiff no longer disputed the account. The plaintiff was attempting to obtain a home equity loan and the dispute was causing her application to be denied. The defendant removed the dispute flag from the plaintiff’s account in its system, but the debt was still being reported by the credit reporting agencies as disputed. The credit reporting agency claims the tradeline was being reported with an “XB” code, indicating the account was in dispute, and no request was found from the defendant to remove the code from the tradeline.

Because there is a genuine issue of whether the defendant notified the credit reporting agency to remove the dispute, Judge Gershwin A. Drain of the District Court for the Eastern District of Michigan denied the plaintiff’s motion for summary judgment. “On this record, both sides have offered sufficient evidence upon which a reasonable jury could find in their favor,” Judge Drain wrote. “Indeed, whether MMCC’s procedures are reasonably adapted to avoid the error that occurred here is a question of fact for the jury to decide.”

The defendant attempted to argue that the plaintiff lacked standing to sue, but the denial of her home equity loan applications was enough of an injury to confer standing, Judge Drain determined.

Judge Drain also determined there were remaining questions of fact regarding the defendant’s bona fide error defense and ruled that granting the defendant’s motion was “inappropriate.”

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