Lawson v. I.C. System, Inc.

          MEMORANDUM OPINION

          ABDUL K. KALLON, UNITED STATES DISTRICT JUDGE

         Daniel Lawson brings this action under the Fair Debt Collection Practices Act (“FDCPA”), 15 U.S.C. § 1692 et seq., against I.C. System (“ICS”) for making false representations in connection with the collection of a debt. See doc. 1. At issue here is ICS's attempts to collect a debt Lawson successfully discharged in bankruptcy. The parties have filed cross-motions for summary judgment, docs. 33 and 35, which are fully briefed and ripe for consideration, docs. 37 and 40. After reading the briefs, reviewing the evidence, and considering the relevant law, the court finds that ICS has established that it is entitled to the bona fide error defense and, as such, is entitled to summary judgment, and Lawson's motion is due to be denied.

         I. LEGAL STANDARD FOR SUMMARY JUDGMENT

         Under Rule 56(a) of the Federal Rules of Civil Procedure, summary judgment is proper “if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.” Fed.R.Civ.P. 56. “Rule 56[] mandates the entry of summary judgment, after adequate time for discovery and upon motion, against a party who fails to make a showing sufficient to establish the existence of an element essential to that party's case, and on which that party will bear the burden of proof at trial.” Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986) (alteration in original). At summary judgment, the court must construe the evidence and all reasonable inferences arising from it in the light most favorable to the non-moving party. Adickes v. S. H. Kress & Co., 398 U.S. 144, 157 (1970); see also Anderson, 477 U.S. at 255. Any factual disputes will be resolved in the non-moving party's favor when sufficient competent evidence supports the non-moving party's version of the disputed facts. See Pace v. Capobianco, 283 F.3d 1275, 1276, 1278 (11th Cir. 2002). However, “mere conclusions and unsupported factual allegations are legally insufficient to defeat a summary judgment motion.” Ellis v. England, 432 F.3d 1321, 1326 (11th Cir. 2005) (per curiam) (citing Bald Mountain Park, Ltd. v. Oliver, 863 F.2d 1560, 1563 (11th Cir. 1989)). Moreover, “[a] mere ‘scintilla' of evidence supporting the opposing party's position will not suffice; there must be enough of a showing that the jury could reasonably find for that party.” Walker v. Darby, 911 F.2d 1573, 1577 (11th Cir. 1990) (citing Anderson, 477 U.S. at 252)).

         The moving party bears the initial burden of proving the absence of a genuine issue of material fact. Id. at 323. The burden then shifts to the nonmoving party, who is required to “go beyond the pleadings” to establish that there is a “genuine issue for trial.” Id. at 324 (internal quotations omitted). A dispute about a material fact is genuine “if the evidence is such that a reasonable jury could return a verdict for the nonmoving party.” Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986).

         The simple fact that both sides have filed a motion for summary judgment does not alter the ordinary standard of review. See Chambers & Co. v. Equitable Life Assurance Soc., 224 F.2d 338, 345 (5th Cir. 1955) (explaining that cross-motions for summary judgment “[do] not warrant the granting of either motion if the record reflects a genuine issue of fact”). Rather, the court will consider each motion separately “‘as each movant bears the burden of establishing that no genuine issue of material fact exists and that it is entitled to judgment as a matter of law.'” 3D Med. Imaging Sys., LLC v. Visage Imaging, Inc., 228 F.Supp.3d 1331, 1336 (N.D.Ga. 2017) (quoting Shaw Constructors v. ICF Kaiser Eng'rs, Inc., 395 F.3d 533, 538-39 (5th Cir. 2004)). “[C]ross motions for summary judgment will not, in themselves, warrant the court in granting summary judgment unless one of the parties is entitled to judgment as a matter of law on facts that are not genuinely disputed.” Bricklayers, Masons & Plasterers Int'l Union v. Stuart Plastering Co., 512 F.2d 1017, 1023 (5th Cir. 1975).^[1]

         II. FACTUAL BACKGROUND

         This case arises out of a dispute over a debt collector's attempts to collect a debt that was no longer owed. While living on Smith Street in Florence, Alabama, Lawson incurred a debt to Comcast. Doc. 35-1 ¶ 3. Lawson subsequently filed a petition for Chapter 13 bankruptcy, which he then converted to Chapter 7. See doc. 35-1 ¶ 3; In re: Lawson, No. 14-82442-CRJ7 (Bankr. N.D. Ala. Dec. 23, 2015), ECF Nos. 1, 31. The amended Schedule F listed the Comcast debt, and the bankruptcy court sent notice of Lawson's petition to Comcast. See docs. 1-2; 1-3. Ultimately, the court discharged Lawson's debts, and sent the requisite notice to Comcast and the various credit agencies. See docs. 1-4; 1-5.

         Over a year after the discharge, Comcast placed Lawson's account balance of $388.00 with ICS, via a file transfer, for collection. Docs. 33-1 at 1-2, 4, 16; 35-2 at 5; 47-2 at 1. Comcast provided a Waynesboro, Tennessee address for Lawson, doc. 47-2 at 2; see docs. 47-1 at 2; 33-1 at 8, ^[2] and also did not notify ICS that the bankruptcy court had discharged Lawson's debt, doc. 33-1 ¶ 8. On the same date it received the account, ICS relayed Lawson's information to Lexis-Nexis to perform a “bankruptcy scrub, ” which involved a search of Lexis-Nexis' “bankruptcy and deceased database to identify any matching records.” Doc. 35-2 at 8. The search did not reveal Lawson's bankruptcy petition or discharge. Doc. 33-1 ¶ 10. Thereafter, ICS sent an initial collection letter to Lawson at the Tennessee address, which contained the written notice required by 15 U.S.C. § 1692g(a).^[3] Doc. 33-1 ¶ 12. Lawson never received this letter because he had not resided at that address “since at least 2013.” Doc. 35-1 ¶¶ 3-4. ICS sent a second letter to Lawson at the Tennessee address, and then sent two more letters to Lawson in Florence, Alabama. Doc. 35-2 at 6. Concurrent with the letters, ICS reported the purported debt to the various credit agencies. Docs. 33-1 ¶ 13; 35-2 at 6; 1-5 at 1. Lawson never responded to ICS's letters or otherwise disputed the purported debt, and filed the present action instead. See doc. 33-1 ¶¶ 12, 14.

         III. ANALYSIS

         A. Whether ICS Made False Representations in Connection with the Collection of a Debt

         The FDCPA aims, in part, to “eliminate abusive debt collection practices by debt collectors[.]” 15 U.S.C. § 1692(e). Towards this end, the Act prohibits a debt collector from “us[ing] any false, deceptive, or misleading representation or means in connection with the collection of any debt, ” 15 U.S.C. § 1692e, including “the false representation of the character, amount or legal status of any debt, ” id. § 1692e(2)(A). Furthermore, “the FDCPA typically subjects debt collectors to liability even when violations are not knowing or intentional.” Owen v. I.C. Sys., Inc., 629 F.3d 1263, 1271 (11th Cir. 2011). “Nevertheless, a debt collector's knowledge and intent can be relevant-for example, a debt collector can avoid liability if it ‘shows by a preponderance of evidence that the violation was not intentional and resulted from a bona fide error notwithstanding the maintenance of procedures reasonably adapted to avoid any such error.'” Crawford v. LVNV Funding, LLC, 758 F.3d 1254, 1259 n.4 (11th Cir. 2014) (quoting 15 U.S.C § 1692k(c)).^[4]

         Turning to the specifics here, Lawson's § 1692e claim is based on the third letter ICS sent, ^[5] and the decision to report the debt as delinquent to credit agencies. Docs. 1 at 4; 35 at 9. In analyzing the claims related to the letter, the court must “employ the ‘least sophisticated consumer' standard.” LeBlanc, 601 F.3d at 1193 (citations omitted). “The least sophisticated consumer can be presumed to possess a rudimentary amount of information about the world and a willingness to read a collection notice with some care.” Id. at 1194. This standard is an objective test that “protect[s] naive consumers, . . . [but] also prevents liability for bizarre or idiosyncratic interpretations of collection notices by preserving a quotient of reasonableness.” Id. Viewed under the “least sophisticated consumer” standard, the court agrees with Lawson that the letter makes false representations in connection with the collection of a debt by demanding payment for a debt Lawson discharged in bankruptcy. See Ross v. RJM Acquisitions Funding LLC, 480 F.3d 493, 495 (7th Cir. 2007) (“Dunning people for their discharged debts . . . is prohibited by the [FDCPA], which so far as relates to this case prohibits a debt collector . . . from making a false representation of the character, amount, or legal status of any debt.” (citations and quotations omitted)); Randolph v. IMBS, Inc., 368 F.3d 726, 728 (7th Cir. 2004) (“A demand for immediate payment while a debtor is in bankruptcy (or after the debt's discharge) is ‘false' in the sense that it asserts that money is due, although, because of the automatic stay (11 U.S.C. § 362) or the discharge injunction (11 U.S.C. § 524), it is not.”); Bacelli v. MFP, Inc., 729 F.Supp.2d 1328, 1332 (M.D. Fla. 2010) (quoting Randolph, 368 F.3d at 728)).

         Likewise, reporting Lawson's purported debt to the credit agencies, which ICS admits it did, see docs. 33-1 ¶ 13; 1-5, also constitutes “false . . . representation[s] . . . in connection with the collection of [a] debt.” 15 U.S.C. § 1692e. Moreover, “§ 1692e is . . . read to bar ‘any' prohibited representation, regardless of to whom it is directed, so long as it is made ‘in connection with the collection of any debt.'” Miljkovic, v. Shafritz & Dinkin, P.A., 791 F.3d 1291, 1301 (11th Cir. 2015) (citation omitted) (emphasis in original). Thus, although the credit reports were directed to the credit agencies instead of Lawson, they constitute “false . . . representation[s]” to the credit agencies because they “erroneously state the amount of the debt owed” by Lawson and “incorrectly identify the holder of the alleged debt.” See Miljkovic, 791 F.3d at 1306. Furthermore, the testimony of ICS's Vice President Michael J. Selbitschka that ICS reported the debt as delinquent due to its “statement of work” with Comcast, see doc. 35-2 at 7, establishes that ICS reported the debt “in connection with the collection of” Lawson's purported debt. See Caceres v. McCalla Raymer, LLC, 755 F.3d 1299, 1302 (11th Cir. 2014) (noting that “if a communication conveys information about a debt and its aim is at least in part to induce the debtor to pay, it falls within the scope of the Act.” (citing Romea v. Heiberger & Assocs., 163 F.3d 111, 116 (2d Cir. 1998))).

         These findings establish that ICS made “false . . . representation[s] . . . in connection with the collection of a debt.” See 15 U.S.C. § 1692e. ICS resists these findings by arguing that, based on Montgomery v. Florida First Financial Group, No. 6:06-CV-1639-ORL-31KRS, 2008 WL 3540374, at *5-6 (M.D. Fla. 2008), finding a violation of § 1692e would “render the specific provisions in § 1692e(8) meaningless.” Doc. 37 at 13.^[6] But the court in Montgomery held only that a debt collector's threats to arrest the plaintiff violated § 1692e(4), rather than § 1692d, noting that, “because § 1692e(4) specifically addresses misrepresentations regarding arrest for nonpayment of a debt, to construe the same act as violative of the general provisions of § 1692d would render it superfluous.” Id. at *6. Neither provision of the FDCPA is at issue here. Moreover, the language and structure of § 1692e indicate ICS's credit reporting activity can violate the general provision of § 1692e, notwithstanding subsection (8)'s focus on communications regarding credit information. See Milijkovic, 791 F.3d at 1301 (“Section 1692e broadly prohibits ‘any false, deceptive, or misleading representation or means in connection with the collection of any debt[, ]” and proceeds to “list[] examples of conduct that would violate § 1692e.” (emphasis in original)). And, “[t]he plain text of § 1692e . . . makes clear that the examples of violations under that section are not meant to ‘limit[] the general application'” of the broad prohibition contained in its first sentence. McCamey v. Capital Mgm't, Servcs., LP, No. 5:17-cv-1429-UJH-VEH, 2018 WL 3819828, at *1 n.1 (N.D. Ala. Aug. 10, 2018) (quoting § 1692e). Thus, while subsection (8) provides an example of conduct related to credit information that violates § 1692e, it does not preclude the general application of the first sentence of § 1692e to a debt collector's misrepresentations in reporting a debt. See id.

         B. Whether ICS's Reliance on Comcast's Representations Bars Its Liability.

         The court turns next to ICS's contentions that it did not violate § 1692e because: (1) it “had the right to rely on Comcast to determine the validity of the debt at issue, ” and (2) it was entitled to assume the validity of the debt when Lawson failed to dispute it within thirty days of receiving the notice required by § 1692g(a). Doc. 33 at 4. The court addresses these contentions in turn.

         1. Whether ICS had the right ...