In a recent opinion, the District of Connecticut dismissed cross-motions for summary judgment filed by a debtor and a debt collector for claims arising under the Fair Debt Collection Practices Act. The case is Garcia v. Law Offices of Howard Lee Schiff, P.C., No. 3:16-cv-791 (D. Conn. Dec. 14, 2018). This case arises from a debt collection letter mailed from the Law Offices of Howard Lee Schiff, P.C. (the “Schiff firm”), to Luis Garcia in an attempt to collect a deficient bank account balance. The letter indicated that Garcia owed a “charge-off balance” of $663.94 and a “current balance” of $565.46. It listed as $0.00 the post charge-off interest accrued, post charge-off fees accrued, and post charge-off payments and credits.
After receiving the letter, Garcia filed suit in the District of Connecticut alleging various violations of the FDCPA. The Court dismissed all but two of Garcia’s claims against the Schiff firm. Thereafter, the parties engaged in discovery and filed cross-motions for summary judgment. In evaluating the parties’ summary judgment motions, the Court confined its analysis to Garcia’s only remaining FDCPA claim, which arose under 15 U.S.C. § 1692e. This section of the FDCPA prohibits debt collectors from using “any false, deceptive, or misleading representation or means in connection with the collection of any debt.”
The Court first examined whether the balances stated in the letter constituted a violation of § 1692e, which requires that a false, deceptive, or misleading representation be open to more than one reasonable interpretation (one of which is inaccurate), be material, and could be interpreted as such by the least sophisticated consumer. The Court held that a jury could find the letter to be violative of the FDCPA. In so holding, the Court noted that the least sophisticated consumer could be confused by the difference between the charge-off and current balance stated in the letter. It further noted that, although the monetary difference between the two amounts may not appear substantial, a jury could find it to be material because “a reasonable debtor might choose to satisfy other debts or delay repayment . . . based on this difference.”
The Court then examined whether, despite the above genuine issue of material fact, the debt collector had demonstrated that any violation of the FDCPA was caused by a bona fide error, which required the debt collector to demonstrate that (1) there was an unintentional clerical or factual error, (2) the debt collector’s actions were objectively reasonable, and (3) the debt collector’s procedures constitute reasonable precautions against error.
In evaluating the debt collector’s bona fide error claim, the Court found that the first prong was met based on an affidavit from the Schiff firm’s managing partner indicating that the programmer who programmed the letter to automatically fill in the balances “forgot to include payments which may have been made by the consumer” after the charge-off date. However, the Court found that reasonable jurors could disagree about whether the second and third prongs were met because they could disagree about “what errors constitute unreasonable debt collection practices,” the managing partner’s credibility, and whether the Schiff firm’s safeguards “were reasonable precautions against the mailing of letters with different and unexplained charge-off and current balance amounts.” For these reasons, the Court denied both motions for summary judgment and allowed Garcia’s FDCPA claim to proceed to the jury.