A Magistrate judge in New York has denied a defendant’s motion for sanctions in a Fair Debt Collection Practices Act case after the plaintiff and her attorneys — from Credit Repair Lawyers of America — were accused of engaging in a frivolous action after filing a lawsuit alleging the defendant failed to remove a dispute notification from the plaintiff’s credit report when the plaintiff notified the defendant she was no longer disputing the debt in question.
A copy of the ruling in the case of Walker v. I.C. System can be accessed by clicking here.
There is a lot of back-and-forth emails between the lawyers representing the defendant and the plaintiff that lay the groundwork for the defendant filing its motion for sanctions and attorney’s fees. Summarizing it as quickly as possible — the plaintiff filed her lawsuit in June 2022 accusing the defendant of violating the FDCPA by failing to remove a dispute notification on a debt it was attempting to collect. The plaintiff had notified the defendant in March that she was no longer disputing the debt. After exchanging the emails, the plaintiff ultimately dismissed the lawsuit, but not before the defendant filed its motion for sanctions, alleging it was forced to incur nearly $10,000 in additional legal fees because the plaintiff refused to dismiss the action for several months.
Ultimately, the decision to deny the motion for sanctions hinged on the plaintiff’s attorney’s denial that he knew what the “XR” code meant on the plaintiff’s credit report. As well, Judge Leslie G. Foschio of the District Court for the Western District of New York said an affidavit from the defendant did not properly explain how the updated notation was sent to the credit reporting agencies nor did it state that the “XR” code was sent. “… Plaintiff’s insistence on a reasonable degree of proof that Defendant had fully complied timely with Plaintiff’s request demonstrates the absence of bad faith,” Judge Foschio wrote.