S.D. of Illinois Rules Law Firm’s Debt Collection Actions Legal

On January 30, 2014 the U.S. District Court for the Southern District of Illinois issued an order granting summary judgment in favor of all defendants in a case captioned Jerome Tilmon v. LVNV Funding, LLC; Blatt, Hasenmiller, Liebsker & Moore, LLC; Baker & Miller, P.C., 2014 U.S. Dist. LEXIS 11326 (S.D. IL Jan. 30, 2014).  In Tilmon, a consumer brought a myriad of claims against an asset purchaser and two law firms that sought to collect on a debt owed for the purchase of gym equipment. The asset purchaser and law firms, recognizing that Plaintiff’s claims lacked any evidentiary basis, defended the claim through a successful motion for summary judgment. The following is a recitation of the Court’s decision:

15 U.S.C. §1692g(b):

Plaintiff alleged that the law firms violated 15 U.S.C. §1692g(b) by “not ceasing collection efforts until the debt was validated and continued their collection activities” and by failing to validate the debt properly by providing proof of the “legal status” of the debt between Plaintiff and the original creditor.  However, the Court determined that the firms’ validation was all that was require under the law. The record revealed that the letter provided the reference number from the account, the account number, name of the debtor, name of the creditor, name of the original creditor, last date of payment, balance due, date account was opened, and date account was charged off.  According to Fourth Circuit of Appeals in Chaudhry v. Gallerizzo, 174 F.3d 394, 406 (4th Cir. 1999): “[V]erification of a debt involves nothing more than the debt collector confirming in writing that the amount being demanded is what the creditor is claiming is owed; the debt collector is not required to keep the detailed files of the alleged debt…”  Therefore, the Court found that firms provided sufficient verification and did not violate §1692g(b).

15 U.S.C. §1692e(2):

Plaintiff claimed that Defendants violated 15 U.S.C. §1692e(2)by “falsely representing the character, amount, or legal status of the alleged debt when the amount allegedly owed went up and down in every communication.”  The letter at issue, however, included safe-harbor language adopted by the Seventh Circuit in Miller v. MCCalla, Raymer, Padrick, Cobb, Nichols, & Clark, L.L.C., 214 F3d 872, 875 (7th Cir. 2000) (“As of the date of this letter, you owe x. . “).  The Court found that this language, as a matter of law, was sufficient to advise the Plaintiff that the balance of the debt would increase or decrease over time.  Therefore, the Court found that the letter would not mislead the unsophisticated consumer.

15 U.S.C. §1692f(1):

Plaintiff alleged that Defendants violated 15 U.S.C. §1692f(1) by attempting to collect a debt not authorized by any agreement or permitted by law.  However, Defendants noted that Plaintiff failed to specify which charges were allegedly not authorized by the agreement creating the alleged debt or permitted by law.  Because Plaintiff could not point to any specific charges or additions that were unauthorized, the Court held that there was no violation of 15 U.S.C. §1692f(1).

Vicarious Liability:

Lastly, Plaintiff asserted that the asset purchaser was vicariously liable for the conduct of law firms in collecting the debt.  Although it was not necessary to address this contention, considering that the law firms were not found liable for any violations of the law, the court ended its discussion with a well-reasoned explanation of vicarious liability under the FDCPA. As the Court discussed, generally, “a client is not responsible for its attorney’s misconduct because an attorney usually pursues a client’s legal rights without specific direction from the client, using independent professional judgment to determine the manner and form of the work.” Grant-Hall v. Calvary Portfolio Servs., LLC, 856 F.Supp. 2d 929, 941 (N.D. Ill. 2012).  Because there was no evidence in the record that defendant LVNV directed, controlled, or authorized the law firm’s method in performing work, the Court held there could be no basis to hold the asset purchaser liable for the firms’ actions. 

For any questions on this decision, feel free to contact Nicole Strickler at (312) 334-3442 or by e-mailing nstrickler@messerstrickler.com