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Post your case law here with a brief description of what it pertains to. I think this will be an easy go-to resource if we can get all the different case laws into one area. Likewise if new rulings take precedent, point it out.

1. Bankruptcy and Foreclosures

Fidelity Fin. Serv., Inc. v. Fink, U.S. 118 S.Ct. 651 (1998) - Where all step necessary to perfect the security interest were not been completed within 20 days of bankruptcy debtor's receipt of possession of the vehicle, purchase-money security interest in vehicle may be avoidable in Chapter 13 bankruptcy as impermissibly preferential, and the interest does not fall within the "enabling loan" exception to trustee's preference-avoidance power, 11 U.S.C. ' 547©(3)(B).

Kawaauhau v. Geiger, U.S. 118 S.Ct. 974 (1998) - Debts arising from malpractice judgment based upon acts that were intended, but were not intended to cause damage, do not fall within the willful and malicious injury exception to discharge from bankruptcy, and therefore are dischargable.

Cohen v. Cruz, U.S. 118 S.Ct. 1212 (1998) - An award of treble damages pursuant to state law, for charging tenants rent in excess of rent control laws, is not dischargable in bankruptcy. The award falls within the scope of 11 U.S.C. ' 523(a)(2)(A), which excepts from discharge in bankruptcy Aany debt ... for money, property, services, or an extension, renewal, or refinancing of credit, to the extent obtained by ... false pretenses, a false representation, or actual fraud, including costs and attorney's fees.

Levine v. Weissing, 134 F.3d 1046 (11th Cir. 1998) - Chapter 7 debtors who converted non-exempt assets to annuities that were exempt under Florida law, shortly after learning that such transfer would be beyond reach of a particular creditor whom debtors had reason to believe would likely prevail in a lawsuit filed against them, purchased exempt annuities with intent to hinder or defraud known creditor, under Florida fraudulent transfer law, Fla. Stat. ' 726, and transfer therefore may be set aside by bankruptcy trustee.

Jost v. Key Bank of Maine, 136 F.3d 1455 (11th Cir. 1998) - Where creditor objects to Chapter 7 debtor's claimed Florida homestead exemption, alleging debtor converted nonexempt assets into exempt homestead with intent to hinder, delay, or defraud creditors, bankruptcy court is required to make finding of fact as to whether debtor's purchase of home and/or her prepayment of home mortgage were fraudulent transfers with intent to hinder, delay, or defraud any creditor. Left undecided was whether the Florida homestead exemption may be claimed in cases in which the home is purchased with non-exempt assets with fraudulent intent to hinder, delay, or defraud creditors in violation of Fla. Stat. ' 726.

Charles R. Hall Motors, Inc. v. Lewis, 137 F.3d 1280 (11th Cir. 1998) (panel decision) - In Chapter 13 bankruptcy, vehicle that was repossessed prior to bankruptcy petition was not property of bankruptcy estate where, at time of petition under applicable state law (Alabama), debtor did not retain title, possession, or any other functionally equivalent ownership interest in repossessed vehicle. Instead, the debtor's statutory right of redemption in vehicle under state law became property of the bankruptcy estate.

United States v. May, 211 B.R. 991 (M.D.Fla. 1997) - In Chapter 13 bankruptcy, debtors' disputed debt to the IRS, that was subject of pending Tax Court litigation, was not sufficiently certain as to amount or liability to be unliquidated debt that would disqualify debtor from Chapter 13 eligibility.

Kapila v. Plave, Pfg, Inc., 11 Fla. L. Weekly Fed. D518, 217 B.R. 336 (S.D. Fla 1997) - Bankruptcy trustee established prima facie case of debtor's fraudulent transfer under Florida law, Fla. Stat. ' 726, where trustee presented evidence that debtor, while insolvent, used her own money to pay $45,000 legal fees owed by her husband, an "insider," for which she received no reasonably equivalent value from either third party or her husband.

Bakst v. Bennett, 208 B.R. 582 (Bankr.S.D.Fla. 1997) - In Chapter 7 bankruptcy, execution of promissory note by debtor in favor of his ex-wife for money which she had loaned him to purchase automobile, together with debtor's recording of lien in favor of ex-wife on certificate of title for vehicle and delivery of certificate of title to ex-wife, is not sufficient to create valid security interest on vehicle under Florida law, F.S. ' 319.27(2), because the note did not contain language granting the ex-wife a security interest.

In re Willoughby, 11 Fla. L. Weekly Fed. B71, 212 B.R. 1011 (Bankr.M.D.Fla. 1997) - Chapter 7 debtor could not avoid his former wife's child support judgment lien on debtors' jointly owned homestead property, under 11 U.S.C. ' 522(f)(1); but debtor's current wife could avoid such lien, as judgment was not against her, and lien impaired her homestead exemption, even though it could not attach to the debtors' homestead pursuant to Article X, ' 4(a) of the Florida Constitution.

In re Sheffield, 11 Fla. L. Weekly Fed. B87, 212 B.R. 1019 (Bankr.M.D.Fla. 1997) - Insurance proceeds that Chapter 7 debtor received upon death of her former husband, under policy that former husband was required to maintain pursuant to reciprocal insurance clause in decree dissolving parties' marriage, were not in nature of alimony, in which debtor could claim exemption of proceeds from bankruptcy estate pursuant to 11 U.S.C. ' 522(d)(10)(D). Reciprocal nature of insurance obligation precluded finding that ex- husband's obligation to maintain policy for his former wife was intended by way of spousal support, though insurance provision was placed between two alimony-related provisions of dissolution decree.

In re Franklin, 11 Fla. L. Weekly Fed. B 105, 213 B.R. 781 (Bankr.N.D.Fla. 1997) - In Chapter 13 bankruptcy, replacement value of sports utility vehicle to be retained by debtor is average between vehicle's retail and wholesale bluebook values, as adjusted based on cost of repairs and value of remaining extended warranty coverage purchased by debtor.

In re Monzon, 11 Fla. L. Weekly Fed. B113, 214 B.R. 38 (Bankr.S.D.Fla. 1997) - Chapter 7 trustee can administer entireties property held by debtor and his nondebtor spouse, to the extent of the parties= joint unsecured debt, pursuant to 11 U.S.C. ' 522(B)(2)(B), even if debt is not reduced to judgment. The decision disagrees with In re Himmelstein, 203 B.R. 1009 (Bankr.M.D.Fla.1996), which held that under Florida law the joint debts must be reduced to judgment in order to reach entireties property. The decision also concluded that the liquidation proceeds should be available only to the joint creditors, with any excess proceeds from property's liquidation remaining exempt.

In re Campbell, 11 Fla. L. Weekly Fed. B120, 214 B.R. 411 (Bankr.M.D.Fla. 1997) - Chapter 7 debtor's exemption in automobile is limited to $1,000 under Florida law. Debtor's failure to provide documentary proof of intent to create entireties estate in household furnishings defeated her claim of their exemption from the bankruptcy estate. Real property was not subject to administration by trustee for benefit of couple's joint creditors, as no joint creditor held judgement against debtor and her husband.

In re Hickox, 11 Fla. L. Weekly Fed. B133, 215 B.R. 257 (Bankr.M.D.Fla. 1997) - Chapter 7 debtor's individual retirement account is exempt from creditors under Florida law, Fla. Stat. ' 222.21(2). The account=s proceeds could be traced to 401(k) disbursement that debtor had received upon termination from her employment, so that IRA was funded by rollover contribution from qualified trust, even though funds of the trust had been commingled with non-exempt funds in debtor's checking account and transferred to third- party's account prior to creation of IRA.

Jensen v. Groff, 11 Fla. L. Weekly Fed. B171, 216 B.R. 883 (Bankr.M.D.Fla. 1998) - Chapter 7 debtor=s discharge is denied based upon 'false oath' exception to discharge, where debtor was sophisticated and made numerous omissions from statement of financial affairs, including his funds transfers from the joint account he shared with wife, his interest in various businesses, and his income tax refund; and also based upon fraudulent transfer of assets, where his transfer of wholly owned assets into to joint ownership with himself and his wife occurred subsequent to creditors obtaining judgments against him and within one year of his bankruptcy filing.

First Deposit Nat. Bank v. Mack, 11 Fla. L. Weekly Fed. B 215, 216 B.R. 981 (Bankr.N.D.Fla. 1997) - Credit card issuer failed to show that Chapter 7 debtor's charges on her credit card account were made with requisite fraudulent intent, so as to except debt from bankruptcy discharge, where debtor was a housewife who was financially unsophisticated, not involved in management of her family's finances, and unaware of their financial difficulties at the time the charges were incurred; her spending habits did not change leading up to bankruptcy; and the charges were not incurred for luxury items. Also, regardless of debtor's intent, the issuer failed to show that it had justifiably relied on representations, implied or otherwise, made by debtor, where issuer did not conduct credit investigation prior to issuing credit card to debtor.

In re McFadyen, 11 Fla. L. Weekly Fed. B149, 216 B.R. 1006 (Bankr.M.D. Fla. 1998) - Federal tax lien attaches to Chapter 13 debtor's Florida homestead, under 11 U.S.C. ' 522©(2)(B).

In re Bennett, 11 Fla. L. Weekly Fed. B156, 217 B.R. 654 (Bankr.M.D.Fla. 1998) - Revocable nature of Chapter 13 debtor's payee status, under annuity purchased by out-of-state insurer to fund its obligations under settlement with debtor, did not prevent debtor from claiming annuity proceeds as exempt under Florida law, and these proceeds thus could not be included in hypothetical Chapter 7 liquidation, for purpose of judging confirmability of debtor's plan.

In re Lazin, 11 Fla. L. Weekly Fed. B197, 217 B.R. 332 (Bankr.M.D. Florida 1998) - Chapter 7 debtor's accumulated benefits from Social Security and annuity contracts did not lose the exempt status because they were received and deposited by debtor into bank account; but allowance of an exemption in accumulated benefits from Social Security is contingent upon a factual showing that the allowance is necessary to enable debtor to satisfy her basic needs, following Citronelle-Mobile Gathering, Inc. v. Watkins, 934 F.2d 1180, 1192 (11th Cir.1991) (garnishment case).

Smallwood v. Finlayson, 11 Fla. L. Weekly Fed. B213, 217 B.R. 666 (Bankr.S.D.Fla. 1998) - Attorney fee obligation imposed on Chapter 7 debtor in marital dissolution action is properly characterized as nondischargeable "support" obligation, under 11 U.S.C. ' 523(a)(5), even though majority of issues litigated in state court case involved the equitable distribution of assets and not maintenance or support issues, where state court specifically indicated that it was awarding attorney fees because of disparity in parties' respective incomes, earning capacities and financial positions.

In re Allen, 11 Fla. L. Weekly Fed. B151, 217 B.R. 945 (Bankr.M.D.Fla. 1998) - Denial of Chapter 7 debtor's discharge, on grounds that he transferred property to individual retirement accounts within one year prior to bankruptcy petition date with intent to hinder, delay, or defraud creditor, did not bar debtor from avoiding judgment lien on the IRAs using 11 U.S.C. ' 522(f), which permits avoidance of leins on property described in federal bankruptcy exemptions, 11 U.S.C. ' 522(B).

In re McMurray, 218 B.R. 867 (Bankr.E.D.Tenn. 1998) - In deriving balances owed on lenders' claims in Chapter 13 bankruptcy, "Rule of 78" accounting method cannot be used to calculate rebate for unmatured interest on debtor's precomputed loans. The Rule results in inaccurate approximation of actuarial rate that favored creditor-companies to detriment of debtor, the estate, and other creditors, rather than true measure as required by the Bankruptcy Code. Bankr.Code, 11 U.S.C. ' 502(B)(2).

Galloway v. Long Beach Mortgage Co., 220 B.R. 236 (Bankr.E.D.Pa. 1998) - Pre-bankruptcy petition foreclosure judgment against Chapter 13 debtor does not bar litigation in bankruptcy case of mortgage arrearage or costs and fees associated with foreclosure action, where those issues were not addressed or required to be addressed in the foreclosure action.

American Express v. Tabar, 220 B.R. 701 (Bankr.M.D.Fla. 1998) - On motion for summary judgment by creditor, consumer debt of bankruptcy debtor of $16,700.50, representing luxury purchases made within 60 days of petition date, was excepted from discharge where, based upon admissions on file, purchases were of antiques, Persian rugs, antique reproductions, and floor coverings, and debtor did not respond to motion. 11 U.S.C. '523 (a)(2)©. Full amount of credit card debt was excepted from discharge on actual fraud grounds where debtor failed to respond to, and thus admitted, requests for admission that he incurred charges at issue by actual fraud and that he did not intend to repay credit card issuer when he incurred charges.

Cohen v. Pond, 11 Fla. L. Weekly Fed. B267, 221 B.R. 29 (Bankr.M.D.Fla. 1998) - Chapter 7 debtors intended to defraud creditors, justifying denial of discharge, where they granted lien on their vehicle to debtor-wife's sister. Debtors' and sister's testimony that sister loaned debtors $5,000 in cash in exchange for lien was not credible where debtors admitted prior to trial to having no documentation for the loan.

In re Black, 221 B.R. 38 (Bankr.S.D.Fla. 1998) - Bank is not a "lender," within meaning of federal Thrift Institutions Restructuring Act, ' 341(d), 12 U.S.C. ' 1701j-3(d), which prohibits lenders from enforcing a due-on-sales clause in a mortgage simply because the mortgaged property is transferred, without its consent, pursuant to a dissolution of marriage decree or property settlement agreement; but bank's failure to invoke the due-on-sales clause until after Chapter 13 debtor had filed petition, when automatic stay went into effect, precluded bank from asserting that entire balance was due and payable. [The decision=s construal of Alender@ appears to be in error. The Comptroller of the Currency had determined that national banks are covered by the Act, 12 C.F.R. Part 34.5, and provided therein that they would be regulated on due-on-sale clauses as provided by the Act.]

In re Applegarth, 11 Fla. L. Weekly Fed. B 273, 221 B.R. 914 (Bankr.M.D.Fla. 1998) - Chapter 13 plan not confirmed, and evidentiary hearing required to determine whether debtor is unfairly classifying unsecured claims, where plan proposes to separately classify and pay in full an unsecured consumer debt incurred by debtor and guaranteed by debtor's mother, while paying distributions of approximately 10% to remainder of general unsecured creditors.

In re Lazin, 11 Fla. L. Weekly Fed. B314, 221 B.R. 982 (Bankr.M.D.Fla. 1998) - Homestead exemption of Chapter 7 debtor is not lost, even assuming that debtor=s prepetition conversion of non-exempt property to exempt form was accomplished with specific intent to defraud her creditors, where nonexempt assets that were used to acquire homestead were not fraudulently acquired. Seventy-nine-year-old debtor=s conversion of non-exempt stocks and bonds into exempt annuities was not accomplished with actual intent to defraud her creditors, so as to result in loss of debtor's exemption under Florida law, given that debtor was required to liquidate her investment portfolio by broker, because her account balance had fallen below the required minimum, and that broker's son had selected annuities solely because they would provide debtor with a stable, guaranteed income stream.

Leucht v. Leucht, 221 B.R. 1003 (Bankr.M.D.Fla. 1998) - Chapter 7 debtor "transferred" assets, within meaning of discharge exception, when he left certain property in possession of former wife; and transfers were made with requisite fraudulent intent to hinder, delay or defraud creditor, so as to warrant denial of debtor's discharge.

In re Leucht, 11 Fla. L. Weekly Fed. B298, 221 B.R. 1009 (Bankr.M.D.Fla. 1998) - Chapter 7 debtor would not be denied state law exemption of $1,000 in personal property based on lack of specificity in identifying household goods, where lack of specificity was result of mere transcribing error, and debtor clarified which goods were being claimed as exempt by his testimony at hearing on objection to his claimed exemptions. It was not appropriate for bankruptcy court, upon objection to debtor's claimed exemption, to determine extent of debtor's and estranged wife's respective interests in property claimed as exempt.

In re Williams, 222 B.R. 662 (Bankr.S.D.Fla. 1998) - After filing bankruptcy petition, Chapter 7 debtor cannot make election to receive distribution of benefits under life insurance policy in form of annuity rather than of cash distribution, in order to remove proceeds of policy from reach of creditors pursuant to Florida statute exempting beneficiary's interest in proceeds of annuity contract. The election instead was up to the trustee.

Del Rio v. Brandon, 696 So.2d 1197 (Fla. 3rd DCA 1997) - In foreclosure action brought by mortgagee, home purchasers' counterclaim against mortgagee for rescission based upon breach of contract and of implied warranty, for alleged faulty repairs of property by mortgagee, is compulsory, and final summary judgment of foreclosure should not be ordered before consideration of counterclaim.

Bates v. Bates, 705 So.2d 1045 (Fla. 4th DCA 1998) - In dissolution of marriage proceeding, a spouse may not raise claims that the some of the other spouse=s debts should be exempted from a prior bankruptcy discharge order obtained by the other spouse, where the spouse was given notice of the proceeding, because state court authority to apportion marital debt is abrogated by federal bankruptcy law, so that such claims must be brought in the bankruptcy court.

2. Consumer Credit and Usury

Beach v. Ocwen Fed. Bank, U.S. 118 S.Ct. 1408 (1998) - Statutory right of rescission under Truth in Lending Act may not be revived beyond three-year expiration period. Section 1635(f) was held to bar assertion of the right of rescission in recoupment after three years because it made reference Anot of a suit's commencement but of a right's duration, which it addresses in terms so straightforward as to render any limitation on the time for seeking a remedy superfluous. 118 S.Ct. 1412.

Smith v. Highland Bank, 108 F.3d 1325 (11th Circuit 1997) - Mortgagee does not violate Truth in Lending Act's requirement of clear and conspicuous disclosure of right to rescind, 12 C.F.R. ' 226.23(B)(1), by a Notice of Right to Cancel that contains on the same page both an "Acknowledgment of Receipt," that the debtor was to sign to confirm that the mortgagee complied with TILA; and a "Certificate of Confirmation," that the debtor was to separately sign after three-day rescission period to indicate that she had not exercised rescission rights. A note below the Certificate of Completion stating that all parties executing the Acknowledgment of Receipt had to execute the Certificate, was not misleading, but rather was intended to ensure that all signatories to the Acknowledgment of Receipt concurred in the decision not to rescind. The decision affirmed the district court opinion.

Podell v. Citicorp Diners Club, Inc., 112 F.3d 98 (2d Cir. 1997) - Credit reporting agencies do not breach Fair Credit Reporting Act by relying upon reports from creditors, issued subsequent to consumer dispute of information, that continue to contain the same erroneous information, where consumer does not dispute these later reports.

Cushman v. Trans Union Corp., 115 F.3d 220 (3d Cir. 1997) - Credit reporting agency is required by the Fair Credit Reporting Act, in certain circumstances, to verify the accuracy of its initial source of information under 15 U.S.C. 1681(i). Whether the credit reporting agency has a duty to go beyond the original source depends upon (a) whether the consumer has alerted the reporting agency to the possibility that the source may be unreliable or the reporting agency itself knows or should know that the source is unreliable; and (B) the cost of verifying the accuracy of the source versus the possible harm inaccurately reported information may cause the consumer. In this case, the consumer notified the agency of error, and agency spent only approximately 75 cents per investigation, so question of whether agency should have verified accuracy of its source of information was question for jury. Consumer also stated a claim for defamation against agency under state law. The decision distinguished Podell on the ground that the opinion in that case does not indicate that the consumer questioned the sufficiency of the agencies= verification of the disputed information.

Buckman v. American Bankers Ins. Co. of Fla. et al, 115 F.3d 892 (11th Cir. 1997) - Execution of contingent note and mortgage as part of bail bond transaction is not extension of credit subject to the Truth in Lending Act, and bondsman's efforts to collect on note were covered by originator exception to Fair Debt Collection Practices Act.

Culpepper v. Inland Mortgage Corp., 132 F.3d 692 (11th Cir. 1998) - Lender's payment of yield spread premium to mortgage broker which originated loan is a splitting of a referral fee in connection with the funding and origination of federally related mortgage loans, that is prohibited by anti-kickback provisions of Section 8 of the Real Estate Settlement Procedures Act, 12 U.S.C. ' 2607(a, c). The yield spread premium, based solely upon the interest rate charged by lender, is not payment for goods or for services for purposes of exemption from RESPA's prohibition against referral fees.

Northrop v. Hoffman of Simsbury, Inc., 134 F.3d 41 (2d Cir. 1997) - Former provision of the Fair Credit Reporting Act, superseded September 30, 1997 by the 1996 amendments to the Act, that imposes liability upon users of credit reports that willfully fail to comply with Act requirements, 15 U.S.C. ' 1681n, applies to violations of ' 1681q, which prescribes criminal penalties for "any person" that procures credit information under false pretenses.

Chandler v. Norwest Bank Minnesota, N.A.,137 F.3d 1053 (8th Cir. 1998) - Mortgage company that uses financing from independent third party does not table-fund borrowers' mortgage loan for bank which serves as trustee for buyer that subsequently acquired loan pursuant to agreement made between buyer, mortgage company and trustee bank prior to loan closing, even though mortgage company received yield spread points from the bank for the mortgage, and thus the mortgage company does not bring loan transaction within coverage of Real Estate Settlement Procedures Act=s prohibitions against splitting unearned fees. The decision applies Rule 11 sanctions against borrowers' counsel for failure to conduct necessary inquiry to support borrowers' claim against bank. A dissenting opinion concludes that mortgagors had raised an issue of material fact as to whether the loan was Atable-funded,@ where the real financier of the loan appeared to be the eventual loan buyer, who agreed to buy the loan before it closed; and the mortgage company received yield spread points from the trustee bank on behalf of the buyer.

Stevenson v. Employers Mutual Association, 960 F.Supp. 141 (N.D.Ill. 1997) - Employee who is wrongly identified as convicted felon by credit reporting agency and, consequently, suspended from his job would be entitled to relief against credit reporting agency and its president under the Fair Credit Reporting Act and state law, where agency and president failed to check court files for physical description of felon; failed to contact employee's former company to check whether he was absent from work for years in which felon was imprisoned; and failed to report to employer that felon's birth date differed from employee's.

Yeager v. TRW, Inc., 961 F.Supp. 161 (E.D.Texas 1997) - Credit report that is issued in response to application for commercial credit, to a farmer for farm equipment, is not "consumer report" within meaning of Fair Credit Reporting Act, and therefore is not covered by the Act.

White v. Diamond Motors, Inc., 962 F.Supp. 867 (M.D.La. 1997) - Difference between amount actually paid for car license and amount charged by car dealership as license fee is not "finance charge" under Truth in Lending Act, since dealership charged license fee in both cash and credit sales if customer elected to have dealership handle application for title and license, and thus fee was not required precursor for extension of credit.

Taylor v. Union Planters Bank of So. Miss., 964 F.Supp. 1120 (S.D.Miss. 1997) - Bank's daily overdraft fee of $5.00, charged to checking account customers when their accounts became overdrawn, is not "finance charge" under Truth in Lending Act and Regulation Z.

Lukas v. Lucci Ltd., Inc., 966 F.Supp. 1163 (S.D. Fla. 1997) - Home remodeling contractor who executed ten contractual documents for different phases of one project, each of which required partial payment upon signing, and the remainder by completion of work under the particular contract, was not creditor for purposes of the Truth in Lending Act.

Burney v. Thorn Americas, Inc., 970 F.Supp. 668 (E.D.Wisc. 1997) - Rent-to-own transactions are not, as a matter of law "consumer credit transactions" under state (Wisconsin) law, reversing earlier summary judgment by court on a motion to reconsider, because cash purchase option prices of rent-to-own companies may not be a sham. Unresolved factual issues regarding this issue are whether option prices were nominal, and whether customers' obligations upon exercising option were enforceable.

Goodwin v. Ford Motor Credit Co., 970 F.Supp. 1007 (M.D.Ala. 1997) - Truth in Lending Act claims are subject to decision under arbitration agreements accompanying installment sales contracts between buyers and dealerships. The arbitration agreements are not void under Alabama law for lack of mutuality of remedy, since Alabama, according to the decision, does not require such mutuality; nor are they unconscionable. Buyers were equitably estopped from preventing assignee automobile credit corporation from enforcing arbitration agreements, where buyers sued assignees based upon contracts containing those agreements.

Edwards v. Your Credit, Inc., 971 F.Supp. 1045 (M.D.La. 1997) - Premium for lender's nonfiling insurance, written to protect lender from losses caused by failure to perfect security interests, could be included in amount financed, and was not for general default insurance, which must be included in finance charge, even though insurer may have paid for claims outside of policy=s limitations.

Noel v. Fleet Finance, Inc., 971 F.Supp. 1102 (E.D.Mich. 1997) - Mortgage broker which originated loans and allegedly assessed undisclosed finance charge is "creditor" under Truth in Lending Act. One year statute of limitations on borrowers' TILA claim against mortgage broker was subject to equitable tolling because broker allegedly actively concealed pertinent information. Yield spread premium paid by lender to mortgage broker, that was indirectly payable by borrowers over life of loan in higher interest payments, is a "finance charge" subject to disclosure under TILA, but is not a "prepaid finance charge" that was part of the amount financed.

Allen v. Aronson Furniture Co., 971 F.Supp. 1259 (N.D.Ill. 1997) - Credit application fee charged by furniture retailer is not a Truth in Lending Act Afinance charge, under 12 C.F.R. ' 226.4©(1), because it was charged to all applicants for credit, including applicants who failed to qualify for credit.

Ramadan v. Chase Manhattan Corp., 973 F.Supp. 456 (D.N.J. 1997) - One-year time limit on cause of action under Truth in Lending Act, for automobile finance company's alleged failure to properly disclose to buyer that dealer was retaining, as commission or finder's fee, a portion of fee allegedly paid to third party for extended warranty coverage on car buyer's behalf, was intended by Congress to be jurisdictional in nature, rather than statute of limitations, so as not to be equitably tolled during time that finance company and other defendants allegedly concealed true cost of extended warranty coverage. The court followed Hardin v. City Title & Escrow Co., 797 F.2d 1037 (D.C.Cir.1986), rather than Jones v. TransOhio Sav. a$$'n, 747 F.2d 1037, 1040-41 (6th Cir.1984), and King v. California, 784 F.2d 910 (9th Cir.1986).

Ditty v. Checkrite, Ltd., Inc., 973 F.Supp. 1320 (D.Utah 1997) - Issue of material fact exists as to whether debt collection agency which maintains nationwide database of makers of dishonored checks is consumer credit reporting agency. The agency=s debt collection attorney, though, is not.

Williams v. First Gov=t Mtg. And Investors Corp., 974 F.Supp. 17 (D.D.C. 1997) - Disbursement made by borrower in loan documents for life insurance is not for credit life insurance, and therefore not included in finance charge, for purposes of Truth in Lending Act disclosure requirements, where estate, rather than lender, is designated beneficiary.

Dubose v. First Security Savings Bank, 974 F.Supp. 1426 (M.D.Ala. 1997) - Real Estate Settlement Procedures Act does not preempt state (Alabama) law that does not require a mortgage broker and lender to disclose "yield-spread premium" arrangement to a borrower, such as would support state law claim for fraudulent nondisclosure, or a federal civil RICO claim, following Briggs v. Countrywide Funding Corp., 949 F.Supp. 812 (1996). Decision's discussion and holdings on yield-spread premiums under RESPA have been overridden by Culpepper v. Inland Mortgage Corp., 132 F.3d 692 (11th Cir. 1998).

Morgan v. Markerdowne Corp., 976 F.Supp. 301 (D.N. J. 1997) - A lender that delegates loan-making duties arising under the Federal Family Education Loan program to a school thereby establishes an "origination relationship" with loan borrowers, subjecting the lender and assignees to school-related defenses for loans made after promulgation of relevant regulations in 1986. Assignee liability is based upon the FTC "Holder Rule." However, the Higher Education Act of 1965 impliedly preempts state law that would impose additional treble damages upon lender and assignee, for misrepresentations by school to borrower, because the application of such penalties, in the opinion of the Court, Awould totally frustrate the purpose of HEA to encourage lenders and guarantors to make funds readily available to large numbers of low income students.@ Page 319.

Young v. 1st American Financial Svcs., 977 F.Supp. 38 (D.D.C. 1997) - Motion to dismiss borrowers' Truth in Lending Act rescission count would be denied, given dispute about validity of foreclosure sale that purportedly extinguished borrowers' TILA rescission rights. Fraud is pled with sufficient particularity where complaint alleges that mortgage broker's representatives promised borrowers that company would refinance original loan at lower interest rate if borrowers made timely payments for one year; that borrowers entered into loan agreement based on that promise; and that representatives made promise knowingly and with intent to induce borrowers into accepting loan. Claim for unconscionability also is sufficiently pled where complaint alleges that defendants held themselves out as experts in field of loan financing; that borrowers had no knowledge or expertise in that area and did not believe they had choice about terms offered; that defendants "contrived to trap" borrowers into making loan that would eventually default so that defendants could foreclose on their home; and that substantive terms of loan, particularly fees that amounted to ten percent of loan principal, were one-sided.

Cemail v. Viking Dodge, Inc., 982 F.Supp. 1296 (N.D.Ill. 1997) - Allegations that warranty disclosure statement in automobile sales contract is misleading, as falsely suggesting that entire extended warranty charge was paid to warranty provider, when, in fact, car dealer retained a substantial portion of fee; and that car dealer's assignee, an entity with considerable experience in automobile financing, should have realized that dealer was in fact retaining a portion of this fee, were sufficient to state claim against assignee under the Truth in Lending Act.

Morales v. Attorneys' Title Insurance Fund, Inc, 983 F.Supp. 1418 (S.D. Fla. 1997) - Filed rate doctrine, and doctrine of standing, bar insureds' claims that title insurers' practice of always or nearly always adhering to 70/30 split of premiums with their agents, though ostensibly in compliance with state law, violates federal Real Estate Settlement Procedures Act kickback provisions, 12 U.S.C. ' 2607, where state's scheme for regulating title insurance rates is comprehensive, including the splitting of premiums with agents, and allows for public input, even though HUD report had found that Florida title insurers= practices violate RESPA.

Brister v. All Star Chevrolet, Inc., 986 F.Supp. 1003 (E.D.La.1997) - Overstated registration fee and license fee in automobile dealer's purchase financing agreement are not "finance charges," under Truth in Lending Act, since they were charges also payable in a comparable cash transaction. Dealer's assignee is not liable for alleged inaccurate disclosures under Act because they were not apparent on the face of the agreement.

Hamilton v. York, 987 F.Supp. 953 (E.D.Kty. 1997) - Charges incurred by customers of check-cashing company that requires presentment of check two weeks after loan, and allows customers to defer presentment of checks in exchange for additional charges, constitute "interest" from short-term loans, not "service fees," so that customers stated claims under state (Kentucky) usury statutes. Customers also stated claims under federal and state RICO Acts; the Truth in Lending Act for lack of required disclosures; and state law fraud and UDAP laws, because check-cashing company disguised their consumer loan business as check-cashing operation, that company failed to disclose interest rates and finance charges, and that company threatened criminal prosecution for writing bad checks when it had to have known that customers could not have been prosecuted for failing to pay usurious loans.

Randolph v. Green Tree Financial Corp., 991 F.Supp. 1410 (M.D.Ala. 1998) - Arbitration provision contained in financing documents for mobile home purchases applies to claims under Truth in Lending Act and Equal Credit Opportunity Act. Arbitration provision that did not require that both parties submit dispute claims to arbitration, according to the decision, is valid and enforceable contract under Alabama law because such mutuality is not required. The decision distinguishes the case from the general waiver of remedies struck down in Parker v. Dekalb Chrysler Plymouth, 673 F.2d 1178 (11th Cir. 1982), even though Parker provides at page 1181 that Athe public must rely largely on the efforts of individual consumers acting as >private attorneys general= to achieve the disclosure system envisioned by the [Truth in Lending] Act.

Katz v. The Dime Savings Bank, FSB, 992 F.Supp. 250 (W.D.N.Y. 1997) - Pattern or practice of noncompliance is required to support statutory damages under the Servicer Act, 12 U.S.C. ' 2605, which governs the servicing of federally related mortgage loans. The parties were ordered to brief the court on how damages should be awarded under this standard.

Young v. 1st American Financial Svcs., 992 F.Supp. 440 (D.D.C. 1998) - Mortgage lender's inability to identify charge for title search of borrowers' property is insufficient to create genuine issue of material fact as to whether work was done, given invoice showing that charge was for title search. Lender's failure to include settlement agent fee in finance charges does not constitute TILA violation, absent evidence that lender required closing agent to be present to complete closing of borrowers' loan. Fact questions preclude summary judgment for mortgage broker on claims relating to its alleged fraudulent promise to refinance mortgage while knowing that mortgagors could not repay, but lender could not be held liable for mortgage broker's alleged fraud, on theory that broker was acting as lender's agent, absent evidence that lender exercised control over broker.

Hammons v. Enterprise Leasing Co., 993 F.Supp. 1388 (W.D.Okla. 1998) - Vehicle lessor did not violate Fair Credit Reporting Act by obtaining lessee's credit report after lessee failed to timely return vehicle, given lessee's written authorization for lessor to verify his personal information "through credit agencies or other sources."

Bolduc v. Beal Bank, SSB, 994 F.Supp. 82 (D.N.H. 1998) - Equal Credit Opportunity Act violation may be asserted as a right of recoupment to prevent mortgage foreclosure, even after the expiration of Act's two-year statute of limitations. Bank that had acquired promissory note from FDIC was not a "holder in due course" under state law, and therefore was subject to ECOA defenses, since bank had ample notice that notes had been dishonored as well as actual notice of existence of claim in recoupment. Original lender violated Act when it required borrower's wife to sign promissory notes, even though borrower was independently creditworthy; thus, wife's obligation under notes was invalid. Since parties mistakenly assumed, at time of forbearance agreement on which foreclosure was based, that borrower's wife was obligated on prior promissory notes, and mistaken assumption clearly had material effect on resulting forbearance agreement, mutual mistake rendered the forbearance agreement void. Mortgagors were entitled to preliminary injunction prohibiting bank from foreclosing on mortgages.

Ali v. Vikar Mgt. Ltd., 994 F.Supp. 492 (S.D.N.Y. 1998) - Landlord which lied to credit reporting agency as to its reasons for accessing address information about tenants in rent-stabilized apartment, claiming that it sought to forward mail to the tenants, obtained information about the consumers under false pretenses, in violation of the Fair Credit Reporting Act, even though the information requested was not a credit report. The mere presence of a landlord-tenant relationship does not permit landlord to access tenant's credit report to determine rent-stabilized tenant's primary residence.

Bumgardner v. Lite Cellular, Inc., 996 F.Supp. 525 (E.D. Va. 1998) - Fair Credit Reporting Act does not authorize injunctive relief as remedy, following Mangio v. Equifax, Inc., 887 F.Supp. 283 (S.D.Fla.1995). The consumer in this case sought an injunction ordering creditor to deliver to consumer all materials it has regarding consumer; to refrain from disseminating any information regarding consumer; to implement policies and procedures to verify names, addresses, and billing addresses of applicants for cellular telephone accounts; and to implement procedures and training for verifying applicants before accessing credit reports. The holding is based upon the Act=s failure to mention injunctive relief, combined with its grant of authorization to the Federal Trade Commission to enforce the Act. The court noted two cases as contrary authority, Greenway v. Information Dynamics, Ltd., 399 F.Supp. 1092 (D.Ariz.1974), aff'd per curiam, 524 F.2d 1145 (9th Cir.1975); and Wenger v. Trans Union Corp., No. 95-6445 (C.D.Cal. Nov. 14, 1995) (unpublished).

DeLeon v. Beneficial Construction Co., 998 F.Supp. 859 (N.D.Ill. 1998) - Allegation that mortgage brokerage fee for home improvement loan is a "sham" because broker did not provide mortgage broker services, but simply made referrals to pre-selected sources of financing, sufficiently states claim that charge constitutes a "referral fee" or "kickback" charge, as prohibited by Real Estate Settlement Procedures Act, ' 8, 12 U.S.C. ' 2607 and 24 C.F.R. ' 3500.14©.

American Bankers Ins. Group, Inc. v. Board of Governors of the Federal Reserve, 3 F.Supp.2d 37 (D.D.C. 1998) - In challenge of regulation by credit insurance underwriters, held that Federal Reserve was authorized to adopt regulation which treated debt cancellation agreements and credit insurance uniformly for purposes of Truth In Lending Act disclosure requirements.

Williams v. AT&T Wireless Services, Inc., 5 F.Supp.2d 1142 (W.D.Wash. 1998) - Cellular telephone service provider has "legitimate business need" under Fair Credit Reporting Act for obtaining potential consumer's credit report, being to determine whether to grant consumer's application to become a cellular service subscriber, and thus obtains report for permissible purpose. Transaction is similar to credit transaction, and subscribers, particularly new subscribers, might incur very large bills within span of even one month.

Willis v. Quality Mortgage USA, Inc., 5 F.Supp.2d 1306 (M.D. Ala. 1998) - Real Estate Settlement Procedures Act's prohibition against splitting fees with third person, unless service was actually performed, is not expanded by HUD regulation that prohibits unearned payments. HUD was attempting to clarify kinds of fees that were included in prohibition against split fees and referral, not expand prohibition to include fees which were not split. 24 C.F.R. ' 3500.14© (1997).

Andrews v. Trans Union Corp., 7 F.Supp.2d 1056 (C.D.Cal. 1998) - Fair Credit Reporting Act allows individual consumer, injured when credit reporting agency erroneously included information regarding imposter's account in credit report on consumer, to seek injunctive relief requiring removal of this information from her file. Consumer credit reporting agency's failure to correct inaccuracy in consumer's file, consisting of entry regarding request for information filed by merchant dealing with admitted imposter, even after reporting agency determined that consumer was victim of fraud and that she had never opened account with merchant, would constitute "willful" violation of agency's duty under Fair Credit Reporting Act to reinvestigate, and also would entitle consumer to punitive damages under the Act.

Lopez v. Orlor, Inc., 176 F.R.D. 35 (D.Conn. 1997) - Debt cancellation fee charged by car dealer that was never identified as being optional, that would pay off car loan in event car was stolen or totaled, is "finance charge" under the Truth in Lending Act, and should have been disclosed as such. Car dealer's designation of the fee as "amount paid to others" was misleading, where only some of it was, and subjected dealer to TILA liability. Proposed class of customers charged fee by dealer is certified.

Washington v. CSC Credit Services, Inc., 178 F.R.D. 95 (E.D.La. 1998) - Consumers suing credit reporting agencies under Fair Credit Reporting Act, for failure of agencies to have reasonable procedures to ensure that insurance companies that requested reports had valid authorizations from consumers, granted class certification, where consumers contended that it was not reasonable under 15 U.S.C. ' 1681e(a) for agencies to rely solely on the insurance companies' blanket assertions that they had authorizations. The decision states at page 102 that having one's credit history released into electronic circulation without reasonable procedures in place to ensure permissible use is cause for sufficient anxiety and invasion of privacy to constitute an injury-in-fact in and of itself.

Soto v. PNC Bank, 221 B.R. 343 (Bankr.E.D.Pa. 1998) - Chapter 13 debtor, who granted bank prepetition mortgage on her house to in order to secure loan for her nephew, was entitled to receive from the bank Truth in Lending Act disclosures as a 'consumer', with the right to rescind the transaction. Her TILA damages claims, asserted as recoupment defense in Chapter 13 bankruptcy, were not time barred, because she never received the required notices. State court foreclosure judgment was not res judicata as to Chapter 13 debtor's claims relating to that case, because the state court did not appear to have personal jurisdiction over the debtor, due to absence of evidence of return of service; or subject matter jurisdiction, absent evidence of proper pre-foreclosure notice required of state law.

Kasket v. Chase Manhattan Mortgage Corp., 695 So.2d 431 (Fla. 4th DCA 1997) - Nongovernmental assignee of mortgage can be liable for originator's Truth in Lending Act violations, even though the assignor, the Resolution Trust Corporation, as federal agency, would have been exempt from such claims. The doctrine of D'Oench, Duhme & Co. v. Federal Deposit Ins. Corp., 315 U.S. 447 (1942), codified as 12 U.S.C. ' 1823(e), which provides that assignees of the FDIC are entitled to avoid claims that are based upon agreements not in the records or books of the failed institutions under FDIC control, in order to protect the FDIC when it assesses these institutions, applies, but does not bar TILA claims because the claims are based upon mistakes on the face of the documents of the failed institution themselves.

Great Western Bank v. Shoemaker, 695 So.2d 805 (Fla. 2d DCA 1997) - Federal Express fee assessed to mortgagor for transmitting check to predecessor mortgagee need not, under Truth in Lending Act, be included in finance charge, following Veale v. Citibank, F.S.B., 85 F.3d 577 (11th Cir.1996); and Florida intangible tax paid by mortgagee could be excluded from finance charge under TILA, following Pignato v. Great Western Bank, 664 So.2d 1011 (Fla. 4th DCA 1995).

Dove v. McCormick, 698 So.2d 585 (Fla. 5th DCA 1997) - Original mortgage lender's involuntary assignment of mortgage to Resolution Trust Corporation (RTC) permanently extinguished mortgagor's right to pursue damages under Truth In Lending Act from subsequent purchasers, under Section 1641(a) of the Act.

BankAmerica National Trust Co. v. Zayas-Bazan, 698 So.2d 1261 (Fla. 4th DCA 1997) - Mortgagee's failure to recognize rescission demand did not constitute Truth in Lending Act violation, so as to warrant statutory penalty, because the demand was made after the statutory time limit for rescission had expired.

3. Debt Collection and Repossession

Terran v. Kaplan, 109 F.3d 1428 (9th Cir. 1997) - Language in debt collector-attorney's initial letter to debtor that warns debtor of need to "immediately" contact attorney in order to avoid possible legal action, does not contradict or overshadow validation notice itself, in violation of Fair Debt Collection Practices Act (FDCPA), where attorney did not require immediate payment but only an immediate call to his office, and where letter was typed in uniform, same-size type, which did not emphasize any particular statement in letter.

Garrett v. Derbes, 110 F.3d 317 (5th Cir. 1997) - Attorney who during nine-month period attempts to collect debts owed by 639 different debtors "regularly" attempts to collect debts owed another, and thus is "debt collector" under Fair Debt Collection Practices Act, even though debt collection services may have been only a small fraction of his total business activity.

Bass v. Stolper, Koritzinsky, Brewster & Neider, S.C., 111 F.3d 1322 (7th Cir. 1997) - Payment obligation arising from dishonored check creates "debt" triggering protections of Fair Debt Collection Practices Act. Offer or extension of credit is not required for payment obligation to constitute "debt" under the Act. The decision found that Athe plain language of the Act defines 'debt' quite broadly as 'any obligation to pay arising out of a [consumer] transaction', 111 F.3d 1325, and that, while unnecessary to consider, legislative history shows that the Congress considered and chose not to adopt a limitation of the Act to extensions of credit. Zimmerman v. HBO Affiliate Group, 834 F.2d 1163 (3d Cir.1987), was distinguished on the grounds that the conduct at issue in that case, a demand of payment for pirated cable signals, was not an obligation arising out of a consumer transaction, and the reasoning in Zimmerman that the Act applied only to debts owed on extensions of credit was disagreed with. A dissent concluded that the Act did not apply because checks are payments on debts, rather than debts themselves, and that the writing of bad checks often constitutes theft as was present in Zimmerman.

Chauncey v. JDR Recovery Corp., 118 F.3d 516 (7th Cir. 1997) - Debt collection letter sent by collection agency that informed consumer, "Unless we receive a check or money order for the balance, in full, within thirty (30) days from receipt of this letter, a decision to pursue other avenues to collect the amount due will be made" contradicts mandatory validation notice disclosures giving consumer 30 days to dispute debt and request verification, leaving unsophisticated consumer confused as to what his rights were, and thus violates Fair Debt Collection Practices Act.

McKenzie v. E. A. Uffman and Assoc.,119 F.3d 358 (5th Cir. 1997) - Debt collector, by identifying itself as "Collections Department, Credit Bureau of Baton Rouge," violates Fair Debt Collection Practices Act prohibition against using "false, deceptive, or misleading representation" in connection with collection of debt. Collector licensed use of name "Collection Department, Credit Bureau of Baton Rouge" for five percent royalty on every collection.

Newman v. Boehm, Pearlstein & Bright, Ltd., 119 F.3d 477 (7th Cir. 1997) - Past-due condominium association assessment qualifies as "debt" covered by Fair Debt Collection Practices Act. The decision concluded that Athe obligation to pay [the assessments] arose in connection with the purchase of the homes themselves, even if the timing and amount of particular assessments was yet to be determined. Cf., In re Rosteck, 899 F.2d 694, 696 (7th Cir.1990) (obligation to pay condominium assessments arose upon purchase of unit, thereby satisfying Bankruptcy Code's definition of 'debt', and Atherefore qualify as obligation of a consumer to pay money arising out of a transaction, as required by the Act. 19 F.3d 481

Charles v. Lundgren & Assoc., 119 F.3d 739 (9th Cir. 1997) - Dishonored check is debt within meaning of Fair Debt Collection Practices Act. The decision agreed with Bass v. Stolper, Koritzinsky, Brewster & Neider, S.C., 111 F.3d 1322 (7th Cir.1997), because A>an offer or extension of credit is not required for a payment obligation to constitute a 'debt' under the FDCPA, id. at 1326. 119 F.3d 740.

Brown v. Budget Rent-a-Car, 119 F.3d 922 (11th Cir. 1997) - Unpaid administrative fees and other fees, that were charged under rental car agreement after the lessee had an accident involving the motor vehicle during the rental agreement, constitute "debt" covered by the Fair Debt Collection Practices Act. Following Bass v. Stolper, Koritzinsky, Brewster & Neider, S.C., 111 F.3d 1322 (7th Cir.1997), infra, the decision, at 111 F.3d 1125, adopted the interpretation of the Act that "[a]s long as the transaction creates an obligation to pay, a debt is created."

Jang v. A. M. Miller and Assoc., 122 F.3d 480 (7th Cir. 1997) - After sending a debtor a notice of a right to contest debt within 30 days that is in compliance with the Fair Debt Collection Practices Act, a collection agency which receives a request for verification of a debt from a purported debtor is permitted by the Act, according to this decision, to choose between providing verification or ceasing collection of the debt, even though the agency is required in the notice to state that it will provide verification of a debt upon request.

Jenkins v. Heintz, 124 F.3d 824 (7th Cir. 1997) - Attorney and law firm retained only to collect a debt cannot be held liable for violating Fair Debt Collection Practices Act for collecting debt that included unauthorized premiums for force placed collateral insurance, absent sufficient evidence that they knew premiums were unauthorized. In addition, law firm's internal procedures to avoid Act violations, including requiring client to verify under oath true and correct nature of charges, was held to establish bona fide error defense under Act, 15 U.S.C. ' 1692k©. A dissent, feeling that the majority failed to properly allocate burden of proof and to take into account the legal practice of the law firm, concluded that the evidence was sufficient for a fact finder to impute to the law firm knowledge of the unauthorized status, and that the firm=s internal procedures therefore were immaterial; and stated Athe majority goes a long way toward creating the very exemption for lawyers under the FDCPA that the Supreme Court, and this court in its earlier opinion, rejected.@ 124 F.3d 835.

Bartlett v. Heibl, 128 F.3d 497 (7th Cir. 1997) - Debt collection letter that informed debtor that he would be sued absent payment within one week, but also told debtor of right to contest debt within 30 days, was confusing and violated Fair Debt Collection Practices Act. Debtor's failure to read collection letter did not preclude him from obtaining statutory damages for the letter's FDCPA violations. The decision includes a draft collection letter approved by the court within the Seventh Circuit that threatens lawsuit within the 30 day period if the debt is not paid.

Whitaker v. Ameritech Corp.,129 F.3d 952 (7th Cir. 1998) - Local telephone service company that acquires, and attempts to collect on debts due other telecommunications services is not "debt collector" for purposes of Fair Debt Collection Practices Act. State court default judgment for balance due on telephone bills bars, under state law doctrine of res judicata, claims based upon Racketeer Influenced and Corrupt Organizations Act, state UDAP law, common law fraud, and breach of fiduciary duty that alleged that company sent out fraudulent telephone bills.

Duffy v. Landberg, 133 F.3d 1120 (8th Cir. 1998) - Fair Debt Collection Practices Act's broad definition of "debt" as any obligation to pay arising from consumer transaction applied to dishonored checks, given that check issuers' payment obligations arose from transactions for personal or household goods; thus, check issuers stated claims under Act when they alleged that attorney and company attempting to collect payment on dishonored checks violated the Act.

Kobs v. Arrow Service Bureau, Inc., 134 F.3d 893 (7th Cir. 1998) - The Seventh Amendment right to jury trial entitles debtors who bring action for damages against debt collection agency under the Fair Debt Collection Practices Act to a jury trial.

Lewis v. ACB Business Services, Inc., 135 F.3d 389 (6th Cir. 1998) - Letter that debt collector sent to debtor who had exercised statutory right to demand cessation of communications, giving debtor opportunity to pay debt through various payment plans, is permissible communication under provision of Fair Debt Collection Practices Act permitting debt collector to notify debtor of collector's right to invoke specified remedies. Debt collector's use of pseudonym on letter sent to debtor did not violate Act because pseudonym was used to alert employees to status of account and only one notified of account status was debt collector. (A dissenting opinion disagreed with both of these conclusions.) Debt collector established bona fide error defense to debtor's FDCPA claim based on telephone contact from debt collector which occurred after debtor exercised right to demand that collection communications cease because contact resulted from coding error by creditor and debt collector's manual and computer systems were reasonably adapted to avoid such errors.

Schweizer v. Trans Union Corp., 136 F.3d 233 (2nd Cir. 1998) - Collection letter that simulates telegram does not violate provision of Fair Debt Collection Practices Act barring false or misleading representations, despite consumer's claim that it creates a false sense of urgency. The court concluded that a Aleast sophisticated debtor would not mistake letter for telegram, even though it had "Priority-Gram" and "Important Notice" printed on it, and that any sense of urgency created by envelope, which resembled a form of express mail delivery, was not sustained by text of letter itself.

Aubert v. American General Finance, Inc., 137 F.3d 976 (7th Cir. 1998) - Pursuant to exception for debt collection efforts of corporate affiliates, corporation whose principal business was not debt collection and which only collected debts for affiliated or related entities was not "debt collector" for purposes of Fair Debt Collection Practices Act, 15 U.S.C. ' 1692a(6)(B).

Snow v. Riddle, 143 F.3d 1350 (10th Cir. 1998) - Dishonored check written in payment for consumer goods created "debt" within purview of Fair Debt Collection Practices Act.

Beggs v. Rossi, 145 F.3d 511 (2nd Cir. 1998) - Personal property taxes levied by town upon plaintiffs' automobiles are not "debts" within meaning of Fair Debt Collection Practices Act (FDCPA), and therefore, debt collection service's efforts to collect those taxes from plaintiffs were not covered by Act.

Ladick v. Van Gemert, 146 F.3d 1205 (10th Cir. 1998) - An assessment owed to a condominium association qualifies as a "debt," within the meaning of the Fair Debt Collection Practices Act, even though the assessment did not involve an extension of credit; assessment qualified as an obligation of a consumer to pay money arising out of a "transaction," and while the assessment was used to maintain and repair the common area, it nevertheless had a primarily personal, family, or household purpose.

Savino v. Computer Credit, Inc., 960 F.Supp. 599 (E.D.N.Y. 1997) - Language in debt collection letter that creditor insists on immediate payment or valid reason for debtor's failure to pay contradicts statutory validation notice requirement of Fair Debt Collection Practices Act. Debtor's initial denial that he did not receive collection letter does not preclude statutory damages, because injury to debtor is not required to state violation under Act.

Trull v. GC Services Ltd. Partnership, 961 F.Supp. 1199 (N.D.Ill. 1997) - Statements in collection letter that debtor's name would be retained in agency's "master debtor file. . . along with others who, despite their good name and reputation, have shirked their payment responsibility" could falsely imply that collection agency is credit reporting agency, in violation of Fair Debt Collection Practices Act. Statement in second collection letter, sent within 30-day validation period, that "Since you ignored our previous notice, we assume this debt is correct," is misleading in violation of the Act. But collection letter's use of yellow paper; "STAR High Priority Communication" heading; and telegram-like layout and typeface, does not violate Act by overstating urgency of message, where letter was sent to debtor through regular mail.

Blum v. Fisher and Fisher, Attorneys at Law P.C., 961 F.Supp. 1218 (N.D.Ill. 1997) - Material questions of fact are raised by allegations that debt collection letter violated Fair Debt Collection Practices Act by misleading debtor into not taking prompt action to prevent foreclosure, through statement that debtor might be allowed to stay on mortgaged property absolutely rent free for roughly seven months following commencement of foreclosure action; and by further misleading debtor into not seeking counsel, through mere partial statement of remedies available to debtor.

Thomas v. Pierce, Hamilton, and Stern, Inc., 967 F.Supp. 507 (N.D.Ga. 1997) - Phrase "additional damages" in section of the Fair Debt Collection Practices Act providing that actual damages may be recovered with additional damages in amount not to exceed $1,000, is meant to include punitive damages, and to preclude award of punitive damages, pursuant to federal common law, in addition to statutory damages amount.

Harrison v. NBD Inc., 968 F.Supp. 837 (E.D.N.Y. 1997) - Offer of special discount in collection agency's demand letter that expired before 30-day period to dispute debt did not overshadow or contradict validation notice in violation of the Fair Debt Collection Practices Act. The letter's statement that "balance due" was $1,979 but that consumer's "liability" was $247.86, though, constituted deceptive means to collect debt in violation of Act.

Thies v. The Law Offices of William A. Wyman, 969 F.Supp. 604 (S.D.Cal. 1997) - Debtors' obligation to pay dues for services of homeowners association based on covenant running with their property, including fees for maintenance and improvement of common areas within housing development, constituted consumer debts covered by Fair Debt Collection Practices Act, even though many households used or benefitted from common areas.

Pittman v. J.J. Mac Intyre Co. of Nevada, Inc., 969 F.Supp. 609 (D.Nev. 1997) - Debt collector violates Fair Debt Collection Practices Act by continuing to call debtor at work after debtor indicates that she "could not talk at work;" and by contacting debtor after debtor informs collector, and collector's own records confirm, that debtor is making payments on schedule to creditor. The Act's requirement that the debtor's notice to debt collector disputing validity of debt be written applies only to initial communication between debt collector and debtor. Debtor is not required to join creditor as indispensable party to her action for Act violations.

Seibel v. Society Lease, Inc., 969 F.Supp. 713 (M.D.Fla. 1997) - Repossession agency's entry on property for self-help repossession after consent has been revoked is breach of peace in violation of Fla. Stat. 79.503

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Coppola v. Arrow Financial Services, 302CV577, 2002 WL 32173704(D.Conn., Oct. 29, 2002) – Information relating to the purchase of a bad debt is not proprietary or burdensome. Debtor must phrase their request clearly to obtain: The source of a debt and the amount a bad debt buyer paid for plaintiff’s debt, how amount sought was calculated, where in issue a list of reports to credit bureaus, and documents conferring authority on defendant to collect debt.

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There appears to be nothing to contradict the 4 year statute of limitations for credit cards in Texas. This case is interesting because the appellate court affirmed the lower courts ruling. Basically, the original creditor failed to make their case.

Also of importance is how courts may view credit cards. We may need to begin making a distinction between, credit cards that are issued by a bank or financial institution and "charge cards" issued by merchants.

In the case of credit cards issued by a bank or financial institution. Courts in some states may see a three-way relationship between the card issuer, the merchant, and the consumer. This allows credit cards in some states to be considered as written contracts, subject to a longer statute of limitations.

PRESTON STATE BANK, APPELLANT, v. LARRY M. JORDAN, APPELLEE

No. 2-84-255-CV

COURT OF APPEALS OF TEXAS, SECOND DISTRICT, FORT WORTH

692 S.W.2d 740; 1985 Tex. App. LEXIS 7129

June 27, 1985

PRIOR HISTORY: [**1]

From the County Court at Law No. 2 of Tarrant County.

COUNSEL: Robert S. Leithiser, Leithiser & Palmer, Fort Worth, Texas for Plaintiff.

Jack R. Lynch, Fort Worth, Texas for Defendant.

JUDGES: Burdock, Spurlock II and Hill, JJ.

OPINIONBY: BURDOCK

OPINION: [*742] Appellant, Preston State Bank, brought suit in the county court at law to collect monies allegedly due to it by the appellee, Larry M. Jordan, under a "bank credit card agreement." Trial was before the Court without a jury. The Court entered a take-nothing judgment against appellant, subsequently filing findings of fact and conclusions of law in support of the judgment. Appellant contends in seven points of error that it successfully established a prima facie case which was unrebutted by appellee, and therefore, the trial court erred in failing to render judgment in favor of appellant.

We affirm the judgment of the trial court.

Prior to discussing the specific evidence and points of error involved in this case, we feel a brief explanation of the nature of "bank credit card" cases is in order. The use of bank credit cards as a convenient substitute for cash and to purchase goods and services on credit has exploded [**2] over the past two decades. Unfortunately, state and federal law has been slow to offer the courts any assistance in directing how these agreements should be interpreted and enforced. There has even been some dispute over how to categorize such arrangements. n1 Our discussion and holding herein will not apply to two-party credit card arrangements wherein a consumer uses a store's card to purchase goods or services at that establishment. Such accounts with oil companies or department stores involve a direct sale on credit between the merchant and the consumer. See, e.g., Magnolia Petroleum Co. v. McMillan, 168 S.W.2d 881 (Tex.Civ.App. -- Austin 1943, no writ); Sears, Roebuck and Company v. Duke, 441 S.W.2d 521 (Tex. 1969).

- - - - - - - - - - - - - - Footnotes - - - - - - - - - - - - - - -

n1 See Davenport, Bank Credit Cards and the Uniform Commercial Code, 85 Banking L.J. 941 (1968); Landey, Consumer-Cardholder Defenses in Tripartite Credit Card Arrangements: A Battleground for the Beleaguered Bank; 88 Commercial L.J. 84 (1983).

- - - - - - - - - - - - End Footnotes- - - - - - - - - - - - - -

The "bank credit card", however, is [**3] a three-party, three-part agreement between the bank, the consumer and the merchant. The original agreement is between the consumer/card holder and the issuing bank. This agreement usually contains a detailed description of each party's rights, duties and liabilities such as the consumer's agreement to pay the bank for all charges incurred through the use of the card. (For a more complete discussion of card holder agreements, their terms and limitations, see Landey, note 1 supra).

The second part of this three-party agreement is between the issuer bank and the merchant. The merchant may be required to keep a minimum balance, to present sales slips to the bank within a certain number of days, and to exercise due care in accepting the card from the consumer. The third agreement is between the consumer and the merchant. Both of these parties naturally benefit from the availability to the consumer of credit, especially in making large purchases.

The above-described arrangement obviously brings to mind the letter of credit transaction, and we believe that although there are differences in the two financial arrangements, the letter of credit is most analogous to bank credit card [**4] transactions. See Landey, footnote 1, supra, at 93; 50 Am. Jur.2d "Letters of Credit, and Credit Cards", sec. 38. Texas law holds that letters of credit are governed by ordinary contract law. Temple-Eastex Inc. v. Addison Bank, 672 S.W.2d 793, 798 (Tex. 1984). We hold, therefore, that many principles of contract law apply to this case.

The evidence of a contract between the parties on appeal is sketchy, at best. Appellant pled that: 1) appellee entered into a written contract with appellant; 2) on the basis of such contract appellant issued a Master Charge card which appellee accepted and used; and 3) appellant advanced or paid money in the sum of $1,439.75 that appellee is obligated to repay pursuant to the contract. Attached to the appellant's [*743] petition was an affidavit of a bank employee attesting that an attached document was a business record of the bank, properly made and kept in the bank's regular course of business by persons with personal knowledge of the act, event or condition recorded, and was made at or near the time of the act, event or condition. The document appears to be a statement of an account in the name of Larry M. Jordan showing a balance [**5] due of $1,439.75. Virtually all of the blanks in this document are just that -- blank. None of the alleged charges are itemized; no transactions are described; no attempt was made to show a breakdown of the balance into previous balances, payments and credits, purchases and adjustments, cash advances or finance charges.

Appellee filed a general and specific denial, contending all lawful offsets and credits had not been made and that he had not made charges in the amount stated by appellant. Appellee filed an affidavit that "each and every allegation contained (in the answer) is true and correct to the best of my belief and knowledge." At trial, appellant introduced into evidence the same bank document and affidavit. Additionally, it introduced what was reputed to be a photocopy of the application of appellee, (Plaintiff's Exhibit No. 1) and a photocopy of a "delinquent work card" for an account in the name of Larry Jordan (Plaintiff's Exhibit No. 2). The only witnesses at trial were appellant's attorney, who testified on the question of attorney's fees, and Michele Stewart, Collections Supervisor for appellant. Her testimony was directed to laying the foundation for the admission [**6] into evidence of the three documents described above. She testified that according to the bank documents, the account in the name of Larry Jordan reflected a balance due to the bank of $1,439.75.

Appellant argues in points of error 1-5 that:

POINT OF ERROR 1

The trial court erred in rendering a take-nothing judgment against appellant, because as a matter of law appellant established an unrebutted prima facie case against appellee and was entitled to judgment;

POINT OF ERROR 2

The trial court erred in rendering a take-nothing judgment against appellant, because appellant established by a preponderance of the evidence its case against appellee and was entitled to judgment;

POINT OF ERROR 3

The trial court erred in finding that appellant had not proved appellee's indebtedness to it, Findings of Fact Nos. 6 and 6A;

POINT OF ERROR 4

The trial court erred in concluding that appellant was not entitled to recover any money judgment from appellee, Conclusion of Law No. 1;

POINT OF ERROR 5

The trial court erred in finding that plaintiff's agent "only knew there was an account, its name and an amount," Finding of Fact No. 4.

These points all are directed in appellant's brief [**7] to the argument that the appellant believed it established a prima facie case and the trial court erred in ordering a take-nothing judgment. We disagree.

Appellant has correctly stated the general rule that in reviewing a trial court's take-nothing judgment, this Court will apply the same standard of review as would be applicable to an instructed verdict in a jury trial. See Getto v. Gray, 627 S.W.2d 437, 439 (Tex.App. -- Houston, 1st Dist., 1981, writ ref'd n.r.e.). This standard requires us to accept as true all evidence favorable to appellant, indulging every intendment in its favor and against the judgment. See Goodale v. Goodale, 497 S.W.2d 116, 118 (Tex.Civ.App. -- Houston [*744] 1st Dist., 1973, writ ref'd n.r.e.); Anglin v. Cisco Mortgage Loan Company, 135 Tex. 188, 141 S.W.2d 935, 938 (1940). Applying this standard of review to the evidence before us, we hold appellant failed to establish a prima facie case.

It was appellant's burden at trial to establish the existence of the contract and compliance with its provisions. See Dalton v. George B. Hatley Co., Inc., 634 S.W.2d 374, 376 (Tex.App. -- Austin 1982, no writ). Appellant failed to introduce [**8] the contract between itself and appellee or the terms and conditions thereof. Plaintiff's Exhibit No. 1 is, at best, no more than a credit application form. The exhibit looks like a page torn out of a magazine. The bulk of the document is entitled "Credit Card Application" and contains spaces for the applicant to provide pertinent credit history, employment information and other data. The applicant is instructed to "initial the cards you want and mail this entire page to: TIMESAVER". We can only speculate that the left hand side of this exhibit contained a list and description of various credit cards. The only one visible (and legible) is for Montgomery Wards and it has not been initialed. The bottom right hand portion of the page also contains boxes the applicant may check to receive subscriptions to various publications such as "TIME" and "Sports Illustrated." There is nothing in the document indicating what credit card was sought, nor through what institution.

The applicant agrees, if the application is accepted, and cards are issued and used, to "pay all charges incurred and I further agree to the terms and conditions accompanying the cards." The address on the application is [**9] that of a business called "TIMESAVER" in Kensington, Maryland. There was no evidence of the relationship, if any, between Timesaver and appellant. The "terms and conditions accompanying the cards" would constitute what is generally called a "card holder agreement." Appellee's use of the card would indicate acceptance of the contract offered by the issuing bank. This vague, generic application, Plaintiff's Exhibit No. 1, is not such a contract, and it cannot substitute for the bank-cardholder contract.

Quite simply put, appellant failed to produce any evidence of a contract agreement under which appellee was allegedly liable to it. The fact that appellee failed to deny under oath under TEX. R. CIV. P. 93(7) that he had executed the contract, does not excuse appellant from having to prove the terms of the contract. See Thompson v. Republic Acceptance Corporation, 388 S.W.2d 404, 405 (1965). Appellant's points of error one through five are overruled.

Appellant's remaining two points of error contend there are no findings which support the judgment and, since the case is fully developed, this Court has authority to reverse and render judgment for appellant. Having found that [**10] appellant failed to establish its cause of action, obviously we need not discuss its remaining grounds of error. They are, accordingly, overruled. The trial court judgment is affirmed in all respects.

PANEL A

BURDOCK, SPURLOCK II and HILL, JJ.

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Found this new little tid bit.. thought you all might like to see this

Defendants move to strike several documents submitted by 1

plaintiff in support of her summary judgment motion, including

those that reference other lawsuits, JBC’s website, JBC’s

licensing application, a 1998 letter, and a West Virginia

subpoena. Because the Court has not relied on these documents in

reaching its decision, defendant’s motion to strike [Doc. # 53]

is DENIED as moot.

1

UNITED STATES DISTRICT COURT

DISTRICT OF CONNECTICUT

Eveline Goins ::

v. : No. 3:03cv636 (JBA)

:

JBC & Associates, P.C. :

Jack H. Boyajian :

Marvin Brandon :

Ruling on Plaintiff’s Motion for Partial Summary Judgment

Plaintiff moves for partial summary judgment on liability

for violations of the Fair Debt Collection Practices Act

("FDCPA"), 15 U.S.C. § 1692e and § 1692f. For the reasons

discussed below, plaintiff’s motion is granted in part.

I. Background1

Plaintiff Eveline Goins ("Goins") is a consumer within the

meaning of the FDCPA, who allegedly owes a debt that is the

subject of collection efforts. See 15 U.S.C. § 1692a(3).

Defendant JBC & Associates, P.C. ("JBC") is a law firm located in

New Jersey, owned by defendant Jack H. Boyajian, an attorney

licensed to practice in California, and employing defendant

Marvan Brandon, an attorney licensed to practice in New Jersey.

Boyajian describes his occupation as "an attorney at law that

2

provides services to clients who have debts that are with

consumers that I am engaged in recovering for." Deposition of

Jack H. Boyjian, Jan. 27, 2004 [Doc. # 38] at 25:7-9. Although

defendants are not licensed as a consumer collection agency in

Connecticut, they have sent letters to Connecticut residents,

identifying themselves as attorneys at law, seeking collection of

debts.

In September 1997, JBC received a claim by Wilson Suede &

Leather for two returned checks written by plaintiff in the

amounts of $243.79 and $158.99. Goins filed suit against

defendants under the FDCPA in June 2002 challenging their

collection activity related to the debt allegedly owed to Wilson

Suede & Leather. See Goins v. JBC & Associates, P.C., et al.,

Civ. No. 3:02cv1069 (MRK). Goins commenced a second FDCPA action

against Brandon in August 2002, which also was related to the

collection of the Wilson Suede & Leather debt. See Goins v.

Brandon, Civ. No. 3:02cv1537 (AVC). In April 2002, plaintiff

filed for bankruptcy, defendants were made aware of the

bankruptcy filing, and JBC put a hold on further communications

with Goins. See Declaration of Jack H. Boyajian [Doc. # 49] at ¶

5.

Despite the hold on her account, on February 17, 2003, JBC

sent Goins another letter demanding payment of the debt allegedly

owed to Wilson Suede & Leather. The text of the February 17, 2003

3

letter that JBC sent to Goins states:

Re: Wilson Suede & Leather

File#: 562183

Driver’s License: 212895428

Balance: $10277.56

Dear Eveline J Goins:

You have obviously chosen to ignore our previous

communication demanding that you make restitution on an NSF

check(s) written to our above-referenced client(s). Our

client(s) may now assume that you delivered the check(s)

with intent to defraud, and may proceed with the allowable

remedies.

Since you have not tendered payment for the full amount of

the check(s) and service charge(s) within the 30 days

provided, pursuant to Connecticut General Statutes Section

52-565a, you may be subject to statutory penalties as

determined by the court, but in no event shall be greater

than the face value of the check or $400.00, whichever is

less, for a total amount of $10277.56.

You may wish to settle this matter before we seek

appropriate relief before a court of proper jurisdiction by

a qualified attorney by contacting Lori Brown at 800-241-

1510. If you qualify, you may also be able to use your

American Express, Discover, Mastercard or Visa credit card

to meet this obligation.

Very truly yours,

JBC & Associates, P.C.

Attorneys at law

This is an attempt to collect a debt by a debt collector.

Any information will be used for that purpose.

II. Standard

Summary judgment is proper "if the pleadings, depositions,

answers to interrogatories, and admissions on file, together with

the affidavits, if any, show that there is no genuine issue as to

any material fact and that the moving party is entitled to a

4

judgment as a matter of law." Fed. R. Civ. P. 56©. In moving

for summary judgment against a party who will bear the burden of

proof at trial, the movant's burden of establishing that there is

no genuine issue of material fact in dispute will be satisfied if

he or she can point to an absence of evidence to support an

essential element of the non-moving party's claim. See Celotex

Corp. v. Catrett, 477 U.S. 317, 322-23 (1986) ("The moving party

is 'entitled to a judgment as a matter of law' because the

nonmoving party has failed to make a sufficient showing on an

essential element of her case with respect to which she has the

burden of proof."). In order to defeat summary judgment, the

non-moving party must come forward with evidence that would be

sufficient to support a jury verdict in his or her favor.

Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 249 (1986) ("There

is no issue for trial unless there is sufficient evidence

favoring the nonmoving party for a jury to return a verdict for

that party.").

When deciding a motion for summary judgment, "’the

inferences to be drawn from the underlying facts . . . must be

viewed in the light most favorable to the party opposing the

motion.’" Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475

U.S. 574, 587-588 (1986) (quoting United States v. Diebold, Inc.,

369 U.S. 654, 655 (1962)). However, "[w]hen a motion for summary

judgment is made and supported as provided in [the Federal

5

Rules], an adverse party may not rest upon the mere allegations

or denials of the adverse party's pleading." Fed. R. Civ. P.

56(e). Instead, the party opposing summary judgment must set

forth the specific facts in affidavit or other permissible

evidentiary form that demonstrate a genuine issue for trial. See

id.

III. Discussion

Plaintiff argues that the February 17, 2003 collection

letter sent by defendants to plaintiff violates the FDCPA because

(1) defendants were not licensed to collect as required by

Connecticut law; (2) defendants knew plaintiff was represented by

counsel; (3) the letter demanded considerably more than any

possible amount of the alleged debt; and (4) the letter

threatened to sue on a time-barred debt.

In opposing plaintiff’s summary judgment motion, defendants

make three arguments. First, they argue that this FDCPA suit,

the third that Goins has brought against them, violates the rule

against splitting causes of action, because they all arise from

the same collection effort that JBC undertook. Second, they

assert that the February 17, 2003 letter resulted from "a bona

fide error notwithstanding the maintenance of procedures

reasonably adapted to avoid any such error," 15 U.S.C. §

1692k©. Finally, they claim that Brandon and Boyajian were not

debt collectors in the transaction at issue in this case.

6

A. Duplicative Litigation

It is well-established that "a district court may stay or

dismiss a suit that is duplicative of another federal court suit"

in the exercise of its discretion, "as part of its general power

to administer its docket." Curtis v. Citibank, N.A., 226 F.3d

133, 138 (2d Cir. 2000). The determination of whether a suit is

duplicative is informed by the doctrine of claim preclusion.

"[T]he true test of the sufficiency of a plea of ‘other suit

pending’ in another forum s the legal efficacy of the first

suit, when finally disposed of, as ‘the thing adjudged,’

regarding the matters at issue in the second suit." Id. (quoting

United States v. The Haytian Republic, 154 U.S. 118 (1894)).

Thus, a suit is duplicative, and claims would be precluded, where

"the same or connected transactions are at issue and the same

proof is needed to support the claims in both suits or, in other

words, whether facts essential to the second suit were present in

the first suit." Id. at 139 (citation omitted); see also Maharaj

v. BankAmerica Corp., 128 F.3d 94, 97 (2d Cir. 1997) (claim

preclusion applies when a second suit "involves the same

‘transaction’ or connected series of transactions as the earlier

suit; that is to say, the second cause of action requires the

same evidence to support it and is based on facts that were also

present in the first.").

Claim preclusion, however, "does not preclude litigation of

7

events arising after the filing of the complaint that formed the

basis of the first lawsuit. . . . The plaintiff has no

continuing obligation to file amendments to the complaint to stay

abreast of subsequent events; plaintiff may simply bring a later

suit on those later-arising claims." Curtis, 226 F.3d at 139

(citing SEC v. First Jersey Sec., Inc., 101 F.3d 1450, 1464 (2d

Cir. 1996)). The instant suit is based on a single letter sent

by JBC to plaintiff in February 2003, after the two earlier

lawsuits had been commenced. Even if the letter were part of the

same debt collection activity that defendants had been engaged in

and which was the subject of plaintiff’s prior suits, the

February 17, 2003 letter constitutes a separate event which may

violate the FDCPA independently of prior communications from

defendants. Because the facts underlying this suit arose

subsequent to the filing of plaintiffs’ previous complaint and

are distinct from the facts underlying the previous suit, this

action is not duplicative.

Defendants argue that by bringing three separate actions,

plaintiff may obtain more damages than if she had brought a

single action based on all claimed violations. The FDCPA

provides that statutory damages "in the case of any action by an

individual" shall not "exceed[ ] $1,000," 15 U.S.C. §

1692k(a)(2)(A), and based on this language at least two circuits

have held that the FDCPA limits additional damages beyond the

8

actual damages sustained by a plaintiff to $1,000 per action, not

per violation. See Harper v. Better Business Services, Inc., 961

F.2d 1561, 1563 (11th Cir. 1992) (holding that additional damages

were limited to $1,000 per action because "[t]he FDCPA does not

on its face authorize additional statutory damages of $1,000 per

violation of the statute, of $1,000 per improper communication,

or of $1,000 per alleged debt. If Congress had intended such

limitations, it could have used that terminology."); Wright v.

Finance Service of Norwalk, Inc., 22 F.3d 647, 651 (6th Cir.

1994) ("Congress intended to limit "other damages" to $1,000 per

proceeding, not to $1,000 per violation."). There is no

prohibition in the FDCPA against separate lawsuits for separate

statutory violations of the FDCPA by the same defendant. Where,

as here, the subsequent action is not duplicative and would not

be barred under the claim preclusion doctrine, plaintiff may

avail herself of the serendipity of an additional FDCPA violation

by the same defendant subsequent to initiation of a prior lawsuit

and thereby avoid a per action damages limitation, as is

undoubtedly plaintiff’s strategy here.

B. Individual Defendants

Defendants also argue that Goins has failed to demonstrate

that Brandon and Boyajian acted as debt collectors, because the

February 17, 2003 letter at issue here is from "JBC & Associates"

and is not signed by either of the individual defendants. In an

Plaintiff moves to strike paragraph 3 of Brandon’s 2

affidavit "to the extent he contradicts earlier sworn statements

and is estopped by his judicial admissions that he is a debt

collector." Memorandum in Support of Plaintiff’s Motion to

Strike Declarations [Doc. # 59] at 2. Plaintiff points to

defendants’ Answer and response to interrogatories in related

cases, Goins v. Brandon, Civ. No. 3:02cv1537 (AVC) and Goins v.

JBC et al., Civ. No. 3:02cv1069 (MRK), in which Brandon is

acknowledged to be a debt collector involved in reviewing or

drafting the form of letters sent in conjunction with the

collection of plaintiff’s debt. Because these admissions do not

necessarily apply to Brandon’s conduct with respect to the

February 17, 2003 letter at issue in this case, it remains proper

to consider Brandon’s affidavit on summary judgment. Compare

Butty v. General Signal Corp., 68 F.3d 1488, 1493 (2d Cir. 1995).

9

affidavit submitted in opposition to summary judgment, Brandon

states that he "did not draft the letter, nor did I cause it to

be printed or mailed," and that he "had no personal involvement

in any effort to collect moneys from the plaintiff relating to

the letter in question or at or about the time of the letter in

question." Affidavit of Marv Brandon [Doc. # 50] at ¶¶ 3-4. In 2

reply, plaintiff notes that the February 17 letter refers to "our

previous communication," "[o]ur client(s)," and threatens that

"we" may seek appropriate relief in court. The use of the first

person plural, plaintiff argues, refers to both individual

defendants. Plaintiff also argues that because Brandon signed

prior letters to plaintiff and acknowledged acting as a debt

collector with regard to the prior communications with plaintiff,

the February 17 letter’s reference to "our previous

communication" clearly implicates Brandon. Plaintiff’s evidence

and inferences therefrom squarely conflict with Brandon’s

10

affidavit that he had nothing to do with preparing or sending the

letter in question. As a result, there exists a genuine issue of

material fact on whether Brandon was part of the plural "we"

involved in the debt collection effort at issue in this case, and

summary judgment in plaintiff’s favor against defendant Brandon

is inappropriate.

Boyajian, however, undisputedly acted as a debt collector in

this case. He is the owner of JBC, has acknowledged that in that

capacity he "provides services to clients who have debts that are

with consumers that I am engaged in recovering for," Deposition

of Jack H. Boyajian, Jan. 27, 2004 [Doc. # 38] at 25, and has

acknowledged in deposition testimony that he has sole control

over which debt collection letters are sent to consumers:

Q. If a letter went to Ms. Goins, you yourself would

decide which letter should go to her?

A. We use several different techniques to decide – I use

several different techniques to decide which letters go

to whom. . .

. . .

Q. Are your collectors allowed to generate or decide what

letters go out?

A. No.

Q. Who other than you decides what letters go out?

A. No one.

. . .

A. I think you are asking me, did I draft a letter,

because the variables are what they are with respect to

each named debtor, right? Are you asking me did I

formulate the letters as to what fields should go in

there? Right?

Q. Okay.

A. The answer is yes. I have been involved. To most of

the degree, I make the final decision on what letters

are sent out and what they contain.

11

Boyajian Deposition Transcript [Doc. # 38] at 37, 39-40.

While defendants’ Local Rule 56(a)(2) Statement denies that

Boyajian is a debt collector, and cites generally to Boyajian’s

Declaration as evidentiary support, the declaration itself does

not state that Boyajian is not a debt collector or was not

involved in preparing or sending out the February 17, 2003 letter

at issue in this case. See Declaration of Jack H. Boyajian [Doc.

# 49]. The Court therefore finds that Boyajian was engaged in

debt collection activity in this case, and was a debt collector

within the meaning of the FDCPA for purposes of this case. See

15 U.S.C. § 1692a(6) (defining debt collector as "any person who

uses any instrumentality of interstate commerce or the mails in

any business who regularly collects or attempts to collect,

directly or indirectly, debts owed or due or asserted to be owed

or due another.").

C. Merits

The FDCPA provides that "[a] debt collector may not use any

false, deceptive, or misleading representation or means in

connection with the collection of any debt." 15 U.S.C. § 1692e.

Section 1692 includes a non-exhaustive list of conduct that

violates the statute, including "(2) [t]he false representation

of--(A) the character, amount, or legal status of any debt;" and

"(5) [t]he threat to take any action that cannot legally be taken

or that is not intended to be taken." §§ 1692e(2)(A), 1692e(5).

12

"[A]n objective standard, measured by how the ‘least

sophisticated consumer’ would interpret the notice received from

the debt collector, is applied" in determining whether a

violation of the FDCPA has occurred. Russell v. Equifax, 74 F.3d

30, 34 (2d Cir. 1996). "The basic purpose of the leastsophisticated-

consumer standard is to ensure that the FDCPA

protects all consumers, the gullible as well as the shrewd."

Clomon v. Jackson, 988 F.2d 1314, 1318 (2d Cir. 1993). "This

least-sophisticated-consumer standard best effectuates the Act’s

purpose of limiting the ‘suffering and anguish’ often inflicted

by independent debt collectors." Id.

1. Amount of the Debt

Plaintiff first argues that defendants falsely represented

the amount of the debt plaintiff owed in the February 17, 2003

letter, in violation of 15 U.S.C. § 1692e(2)(A) (prohibiting

"[t]he false representation of--(A) the character, amount, or

legal status of any debt"); and 15 U.S.C. § 1692f(1) (prohibiting

"[t]he collection of any amount (including any interest, fee,

charge, or expense incidental to the principal obligation) unless

such amount is expressly authorized by the agreement creating the

debt or permitted by law."). The February 17, 2003 letter stated

that the "balance" was $10,277.56 and implied that Goins was

liable that amount in "restitution" based on "an NSF check(s)

written to our above-referenced client," Wilson Suede & Leather.

13

Defendants have acknowledged, however, that the debt owed to

Wilson Suede & Leather was based on two checks written by the

plaintiff during January 1996, totaling $402.78. See Response to

Plaintiffs’ Interrogatories [Doc. # 38] (listing dishonored

checks written by plaintiff referred to JBC for collection,

including the two January 1996 checks totaling $402.78 from

client "WSU"). Defendants now state that the $10277.56 figure

was based on 22 dishonored checks that Goins made out to various

merchants, totaling $4851.28, plus a check charge of $25.00 for

each check, plus damages equal to the face amount of each check,

which were the maximum available statutory damages JBC could

obtain in a civil lawsuit under Conn. Gen. Stat. § 52-565a©.

The amount JBC demanded in its February 17, 2003 letter is

grossly misleading. First, the February 17 letter specified only

a debt owed to Wilson Suede & Leather, and nowhere informs

plaintiff that the claim is also based on debts owed to other

merchants. Moreover, the letter claims an amount representing

not only the actual debt owed, but the maximum obtainable

statutory damages that could be awarded against plaintiff in a

civil action. This is impermissible, because "[t]he ‘amount of

debt’ provision is designed to inform the debtor . . . of what

the obligation is, not what the final, worst-case scenario could

be." Veach v. Sheeks, 316 F.3d 690, 693 (7th Cir. 2003)

(emphasis in original). While the letter obliquely informs

The plaintiff submitted with her reply brief additional 3

documentary support of her claim, including the March 18 denial

letter from the Connecticut Department of Banking. Although

submitted in reply, the Court finds it appropriate to consider

this evidence, as defendants have not disputed that they were

unlicensed, cannot claim surprise at the Department of Banking

letter, which was directed to defendants in response to their

14

plaintiff that the $10277.56 amount includes potential statutory

damages "as determined by the court," supra at 2-3, not actual

debt owed, it demands a "balance" of $10,277.56 in bold print at

the top of the letter, which under the least sophisticated

consumer standard reasonably implies that $10,277.56 is the

amount of plaintiff’s debt. Finally, although defendants have

now justified the $10,277.56 fee by including a $25.00 check

charge on each of the 22 dishonored checks claimed, defendants

did not disclose the $25.00 check charge to Goins in the February

17 letter. Accordingly, the undisputed evidence shows that the

February 17 letter falsely represents the amount of debt owed.

2. License

JBC was not licensed in Connecticut as a consumer collection

agency at the time defendants sent the February 17, 2003 debt

collection notice to plaintiff, and their application for a

license has since been denied. See Letter from John P. Burke,

Banking Commissioner, State of Connecticut, to Jack Boyajian,

Mar. 18, 2004, [Doc. # 60] (denying application for consumer

collection agency license that JBC had filed on November 5,

2002). Although the February 17, 2003 letter does not claim 3

application, and have not sought leave to respond to the

evidence. See Bayway Refining Co. v. Oxygenated Marketing and

Trading A.G., 215 F.3d 219, 227 (2d Cir. 2000).

A license is required under Connecticut law if the 4

collection agency "(2) has its place of business located outside

this state and collects from consumer debtors who reside within

this state for creditors who are located within this state; or

(3) has its place of business located outside this state and

regularly collects from consumer debtors who reside within this

state for creditors who are located outside this state." Conn.

Gen. Stat. § 36a-801(a). Here, there is no dispute that Goins is

a Connecticut resident, and that JBC is a firm located outside of

the state. While defendants argue in their opposition to

plaintiff’s motion for partial summary judgment that plaintiff

15

that JBC is licensed in Connecticut, plaintiff argues that

defendants’ unlicensed attempt to collect a debt from plaintiff,

violates 15 U.S.C. § 1692e(5) (barring any "action that cannot

legally be taken"); § 1692e(9) (prohibiting misrepresentation of

document’s state authorization or approval); and § 1692f

(prohibiting the use of "unfair or unconscionable means to

collect or attempt to collect any debt."). See also Clomon v.

Jackson, 988 F.2d 1314, 1320 (2d Cir. 1993) ("[T]he use of any

false, deceptive, or misleading representation in a collection

letter violates § 1692e regardless of whether the representation

in question violates a particular subsection of that provision.")

Connecticut requires consumer collection agencies acting

within the state to be licensed. See Conn. Gen. Stat. § 36a-

801(a) ("No person shall act within this state as a consumer

collection agency without a consumer collection agency

license."), and prohibits a collection agency from, among other 4

has not provided any evidentiary support showing where JBC’s

client-creditors are located, and that it remains disputed

whether JBC "regularly collects" from Connecticut consumers, the

Court finds that plaintiff’s unchallenged evidence establishes

JBC’s need for a Connecticut license. Defendants have

acknowledged in their responses to plaintiffs’ interrogatories

that they used form letters aimed at Connecticut debtors from

2001 to the present. See [Doc. # 38]; see also Deposition

Transcript of Jack Boyajian, Jan. 27, 2004 [Doc. # 60] at 71

(explaining bar codes on form letters that reflect "that the

transaction was in Connecticut"). Further, the State of

Connecticut Department of Banking’s March 18, 2004 letter denying

JBC a license notes that "it appears that [JBC] has been acting

as a consumer collection agency in Connecticut without a license

in violation of Section 36a-801(a) of the Connecticut General

States. Indeed, between December 2002 and February 2004, 9

Connecticut residents filed with the Division complaints against

[JBC] alleging harassment in connection with the collection of

debts and, in some cases, disputing the debts." Letter from John

P. Burke, Banking Commissioner to Jack Boyajian, Mar. 18, 2004

[Doc. # 60, Ex. P].

16

things, "institut[ing] judicial proceedings on behalf of others."

Conn. Gen. Stat. § 36a-805(a)(1). Considering these provisions

in Gaetano v. Payco of Wisconsin, Inc., 774 F.Supp. 1404 (D.

Conn. 1990), the district court held that a debt collection

agency that was unlicensed by the state of Connecticut, which

demanded payment of the debt and stated that it would use all

means to enforce collection, "violated § 1692e(5) of the FDCPA by

threatening to take action that legally could not be taken." Id.

at 1415. Gaetano has been followed by several other district

courts. See, e.g. Sibley v. Firstcollect, Inc., 913 F.Supp. 469,

471 (M.D. La.1995) (finding violation of § 1692e(5) when

unlicensed debt collector attempted to collect a debt from

consumer); Russey v. Rankin, 911 F.Supp. 1449, 1459 (D. N.M.

17

1995); Kuhn v. Account Control Technology, Inc., 865 F.Supp.

1443, 1451-52 (D. Nev. 1994).

Not all courts have adopted a categorical rule that an FDCPA

violation occurs whenever an unlicensed debt collector sends out

any debt collection notice, and instead some have looked to the

content of the notice. Most notably, in Wade v. Regional Credit

Association, 87 F.3d 1098 (9th Cir. 1996), the Ninth Circuit

found that the defendant’s unlicensed debt collection activity

was not a "threat to take action that could not legally be taken"

in violation of FDCPA § 1692e(5). The single debt collection

agency notice to the plaintiff stated:

WHY HAVEN’T WE HEARD FROM YOU? OUR RECORDS STILL SHOW THIS

AMOUNT OWING.

If not paid TODAY, it may STOP YOU FROM OBTAINING credit

TOMORROW. PROTECT YOUR CREDIT REPUTATION. SEND PAYMENT

TODAY.

. . .

DO NOT DISREGARD THIS NOTICE. YOUR CREDIT MAY BE ADVERSELY

AFFECTED.

Wade, 87 F.3d at 1099.

The notice also stated: "This has been sent to you by a

collection agency and is an attempt to collect a debt and any

information obtained will be used for that purpose." Id. The

Court of Appeals concluded that "body of the notice was

informational, notifying Wade that failure to pay could adversely

affect her credit reputation. There was no threat to sue. The

least sophisticated debtor would construe the notice as a

prudential reminder, not as a threat to take action." Id. at

18

1100. The court also found that the language to the effect that

the notice was an attempt to collect a debt was required by the

FDCPA, and was "also informational," not threatening. Because

the notice could not be characterized as threatening to take

specific action, the court found no FDCPA violation. Similarly,

in Ferguson v. Credit Management Control, Inc., 140 F. Supp. 2d

1293, 1302 (M.D. Fla. 2001), the district court determined no

violation of § 1692e(5) had occurred where the debt collection

agency "did not hold itself out as a licensed debt collector in

Florida. It did not threaten to take legal action if plaintiff

did not respond to the notice. Moreover, the only language that

Ferguson argues is ‘threatening’ is required to be in the notice

by the FDCPA."

Here, in contrast to Wade and Ferguson, the debt collection

notice contained an unequivocal threat to take action, stating,

"[y]ou may wish to settle this matter before we seek appropriate

relief before a court of proper jurisdiction by a qualified

attorney." See February 17, 2003 letter [Doc. # 36] (emphasis

added). The letter also refers to "our" prior "communication

demanding . . . that you make restitution," states that JBC’s

clients "may now assume that you delivered the check(s) with

intent to defraud," and refers to "statutory penalties as

determined by the court." The letter’s references to statutes,

attorneys, court, settlement, and restitution, augmented by its

19

aggressive, accusatory tone (e.g. "You have obviously chosen to

ignore our previous communication"), bolster its syntax as a

threat to sue the plaintiff on the debt. In sum, the letter is

far from Wade’s "prudential reminder" to pay an outstanding debt.

On the undisputed facts of this case, the Court concludes that

the letter violates the FDCPA’s prohibition of threats to take

action that cannot legally be taken. See 15 U.S.C. § 1692e(5).

3. Improper Threat of Litigation

Plaintiff further argues that JBC’s threat to "seek

appropriate relief before a court of proper jurisdiction"

violated the FDCPA because a suit on the January 1996 NSF checks

was time-barred by the applicable six-year statute of limitations

at the time the February 2003 letter was written. Although a

debt collector may seek to collect on a time-barred debt, that

debt collector may not threaten litigation where such suit would

be improper. Cf. Freyermuth v. Credit Bureau Serv. Inc., 248

F.3d 767 (8 Cir. 2001) ("n the absence of a threat of th

litigation or actual litigation, no violation of the FDCPA has

occurred when a debt collector attempts to collect on a

potentially time-barred debt that is otherwise valid.").

As discussed above, the February 17 letter at issue here

unambiguously threatened litigation. Defendants respond by

arguing only that the statute of limitations did not bar them

from pursuing litigation against Goins because the statute of

20

limitations is not a jurisdictional bar, but merely an

affirmative defense that can be waived. As the statute of

limitations would be a complete defense to any suit, however, the

threat to bring suit under such circumstances can at best be

described as a "misleading" representation, in violation of §

1692e. As an officer of the court, Boyajian has an obligation to

represent to the court to the best of his knowledge, "after an

inquiry reasonable under the circumstances," that the claims

presented are "warranted by existing law or by a nonfrivolous

argument for the extension, modification, or reversal of existing

law or the establishment of new law." See Fed. R. Civ. P. 11; see

also State v. Turner, 267 Conn. 414, 430 (2004) (defining

frivolous action as one in which "the lawyer is unable either to

make a good faith argument on the merits of the action taken or

to support the action taken by a good faith argument for an

extension, modification or reversal of existing law.").

Sanctions therefore would be appropriate if an attorney knowingly

filed suit on an undisputedly time-barred claim. See Steinle v.

Warren, 765 F.2d 95 (7th Cir. 1985) (awarding attorneys fees to

opposing party and imposing Rule 11 sanctions where attorney knew

claim was time-barred). That the statute of limitations is an

affirmative defense does not relieve defendants of their

professional responsibility, when they do not dispute the

applicability or viability of the defense. Because defendants

21

were not entitled to sue in such circumstances, the threats to

sue in the February 17 letter are improper. See Kimber v. Federal

Financial Corp., 668 F. Supp. 1480 (M.D. Ala. 1987) (finding

FDCPA violation where attorney threatened to sue on a time-barred

claim).

4. Communication with Consumer Known to be Represented by

Counsel

Finally, plaintiff argues that defendants improperly

communicated directly with her, having received formal

notification that she was represented by counsel because she had

filed a lawsuit against defendants for their collection efforts

in 2002. Under 15 U.S.C. § 1692c(a)(2), a debt collector "may

not communicate with a consumer in connection with the collection

of any debt . . . if the debt collector knows the consumer is

represented by an attorney with respect to such debt and has

knowledge of, or can readily ascertain, such attorney’s name and

address, unless the attorney fails to respond within a reasonable

period of time to a communication from the debt collector or

unless the attorney consents to direct communication with the

consumer." As the Federal Trade Commission commentary on this

provision explains, "f a debt collector learns that a consumer

is represented by an attorney in connection with the debt, even

if not formally notified of this fact, the debt collector must

contact only the attorney and must not contact the debtor."

Federal Trade Commission, Statements of General Policy or

22

Interpretation Staff Commentary on the Fair Debt Collection

Practices Act, 53 Fed. Reg. 50097, 50104 (1988).

Goins’ 2002 lawsuit concerned debt collection activity

regarding a $402.78 debt owed to Wilson Suede and Leather, a debt

which also formed a partial basis for the amount claimed in the

February 17, 2003 letter. See Response to Plaintiffs’

Interrogatories [Doc. # 38]; Goins v. JBC & Associates, P.C., et

al., Civ. No. 3:02cv1069 (MRK), 2004 WL 2063562 (D. Conn. Sept.

3, 2004). As defendants do not dispute that the 2002 lawsuit

gave them sufficient notice that plaintiff was represented by

counsel with respect to the debt on which they sought to collect

through the February 17, 2003 letter, or that the February 17,

2003 letter was sent directly to plaintiff, they are liable under

§ 1692c(a)(2).

D. Bona Fide Error Defense

Defendants defend their actions in this case primarily by

arguing that the February 17, 2003 letter was the result of an

unintentional error. In support, defendants state that when JBC

learned of Goins’ bankruptcy, a hold was placed on her account

pursuant to JBC’s regular procedures for debtors in bankruptcy or

who are represented by counsel. In a Declaration dated May 27,

2004, Boyajian states that "JBC has standardized procedures in

place to avoid further communications with the consumer when JBC

learns that the consumer is represented by counsel or has filed

23

for bankruptcy protection. Upon receipt of notice of such

representation or filing, codes reflecting such representation or

filing are entered into the consumer’s file, notifying collectors

or attorneys working the file that such representation or filing

has taken place. The collectors and/or attorneys are trained and

informed that under such circumstances, further communication

with the consumer is prohibited. No further collection efforts

were to occur as to Ms. Goins master account." Declaration of

Jack H. Boyajian, May 27, 2004 [Doc. # 49] at ¶ 5. Boyajian

states that the February 17, 2003 letter was "triggered by a

later, separate placement by a JBC client of additional bad

checks written by Ms. Goins. This new placement resulted in the

creation of a separate new master account number. Due to an

imperfection in the computer program or an inadvertent creation

of a merged account, the computer issued a letter which included

information, not only about the newly placed checks, but swept in

information concerning the prior placements as well." Id. at ¶

7.

Section 1692k© provides that a "debt collector may not be

held liable in any action brought under this subchapter if the

debt collector 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." "Because the Act imposes strict

24

liability, a consumer need not show intentional conduct by the

debt collector to be entitled to damages. However, a debt

collector may escape liability if it can demonstrate by a

preponderance of the evidence that its violation [of the Act]

[satisfies the requirements of 1692k©]." Russell v. Equifax,

74 F.3d 30, 33-34 (2d Cir. 1996).

Defendants have not met their burden here. Although

Boyajian’s declaration establishes that hold procedures were in

effect at JBC the time the February 17, 2003 letter was sent, and

that JBC received claims for new debts plaintiff owed subsequent

to placing a hold on her account, the undisputed fact remains

that the February 17 letter (1) sought to collect against a

debtor known to have a bankruptcy proceeding pending, and (2)

incorporated the earlier debts on which plaintiff was known to be

represented by counsel. Thus defendants have not demonstrated

the existence of hold procedures which were operative, and cannot

ascribe their error as occurring despite maintenance of

procedures to avoid it. As Boyajian acknowledges, the computer

system did not simply create a new account for Goins based on the

new claims, it merged old information from her "master" account.

The letter selected to be sent, moreover, referred to "prior

communications" that had gone unanswered. And like the previous

communications, the February 17, 2003 letter sought to collect on

the debt owed to Wilson Suede & Leather. Thus, far from being

Plaintiff moves to strike various parts of Boyajian’s 5

declaration, arguing that the statements are conclusory or do not

state admissible facts. As the Court has concluded that

defendants cannot prevail on their bona fide error defense,

plaintiffs’ motion to strike [Doc. # 59] is DENIED as moot.

25

excused as generated in response to a new claim, the letter

referred to a preexisting debt, the attempted collection of which

was the subject of two lawsuits against defendants in which

plaintiff was represented by counsel. Boyajian offers no

explanation about how the procedures were reasonably adapted to

avoid merging "held" accounts, or how the selection of a form

letter referring to "prior communications" could reflect

"maintenance of procedures reasonably adapted to avoid"

processing "held" accounts. Indeed, defendants make no claim

that the content of the letter was a bona fide error. The Court

therefore concludes that defendants cannot prevail as a matter of

law on their bona fide error defense. 5

E. CUPTA Claim

Plaintiff also seeks summary judgment on her claim under the

Connecticut Unfair Trade Practices Act ("CUTPA"), Conn. Gen.

Stat. § 42-110b. Section 42-110b(a) prohibits persons from

engaging in "unfair methods of competition and unfair or

deceptive acts or practices in the conduct of any trade or

commerce." To bring an action under CUTPA, however, plaintiff

must demonstrate that she has "suffer[ed] any ascertainable loss

of money or property, real or personal, as a result of the use or

26

employment of a method, act or practice prohibited by section 42-

110b." Conn. Gen. Stat. § 42-110g(a). Defendants oppose

plaintiff’s CUTPA claim on grounds that she cannot satisfy

CUTPA’s requirement of demonstrating "ascertainable loss."

"The ascertainable loss requirement is a threshold barrier

which limits the class of persons who may bring a CUTPA action

seeking either actual damages or equitable relief." Hinchliffe

v. American Motors Corp., 184 Conn. 607, 615 (1981). The

"ascertainable loss" requirement does not require that a

plaintiff prove a specific amount of actual damages. As the

Connecticut Supreme Court has explained, "‘[a]scertainable’ means

‘capable of being discovered, observed, or established,’" while

"‘[l]oss’ has been held synonymous with deprivation, detriment

and injury. It is a generic and relative term." Id. at 613

(citations omitted). Thus, "[w]henever a consumer has received

something other than what he bargained for, he has suffered a

loss of money or property. That loss is ascertainable if it is

measurable even though the precise amount of the loss is not

known." Id. at 614. Moreover, "nder CUPTA, there is no need

to allege or prove the amount of the ascertainable loss." Id.

CUPTA specifically permits equitable relief, and thus "expressly

contemplates plaintiffs’ judgments which do not include an award

of money damages." Id. at 618. These comprehensive remedies

[are] intended "to create a climate in which private litigants

27

help to enforce the ban on unfair or deceptive trade practices or

acts." Id.

Under this framework, the Connecticut Supreme Court has

found an ascertainable loss where plaintiffs purchased a vehicle

that had been advertised as a "full-time four-wheel drive"

vehicle, but was in fact "something less desirable than a fulltime

four wheel drive," Hinchliffe, 184 Conn. at 619, even though

plaintiffs were not able to attach a particular dollar amount to

their injury from defendant’s deception. The Connecticut Supreme

Court has also found ascertainable loss where there was evidence

that the defendants’ use of surveillance cameras pointed at

plaintiffs’ exotic dance clubs "caused prospective patrons to

refrain from entering plaintiffs’ establishments," despite a lack

of evidence of lost profits. Service Road Corp. v. Quinn, 241

Conn. 630, 640-41 (1997). In A. Secondino and Son, Inc v.

LoRicco, 215 Conn. 336 (1990), however, the defendant’s CUTPA

counterclaim failed because although he demonstrated that the

contractor’s failure to provide a written contract containing

notice of the right to cancel violated the Home Solicitation

Sales Act, an unfair trade practice under CUTPA, he "fail[ed] to

present any evidence concerning the nature and extent of the

injury sustained." Id. at 344. Similarly, in Rizzo Pool Co. v.

Del Grosso, 232 Conn. 666 (1995), the ascertainable loss

requirement was not met where there was no injury shown to result

28

from defendant’s "misrepresentations regarding the effect of the

water level of the pond on the price of the swimming pool," and

plaintiffs did not claim to have "suffered an ascertainable loss

under CUTPA by virtue of the fact that the plaintiff's failure to

install the swimming pool deprived them of the benefit of their

bargain." Id. at 684-85 & n.30 (citation omitted).

Plaintiff has not shown her entitlement to summary judgment

on this count, because, as in A. Secondino and Rizzo, she has not

provided any basis for a finding that she was ascertainably

injured as a result of defendant’s February 17, 2003 letter. At

best, she has demonstrated a potential injury, resulting from

defendants’ attempt to collect from her an amount far exceeding

the actual obligation owed. Plaintiff, however, has not

identified and the Court has not found any authority supporting

the position that threatened rather than actual "deprivation,

detriment or injury" satisfies the "ascertainable loss"

requirement. As construed by the Connecticut Supreme Court and

as the plain meaning of the phrase implies, "ascertainable loss"

refers to some injury that has occurred, and is therefore

"measurable." Hinchliffe, 184 Conn. at 614.

It is possible to speculate that a letter of the kind sent

to plaintiff could cause injury in a variety of ways. A consumer

may respond to the letter by actually paying an amount far

greater than what is actually owed, or may incur other expenses

In her memorandum in support of her motion for partial 6

summary judgment, plaintiff states that she "has ascertainable

loss when she got a letter that violated state and federal laws,"

but offers no explanation of how receipt of such a letter caused

a measurable loss. Plaintiff also argues in her memorandum of

law that "[h]er monetary loss, to be ascertainable, may be as

little as a 33¢ stamp, a toll call, or gas or parking to visit an

attorney." Plaintiff’s Memorandum in Support of Partial Summary

Judgment [Doc. # 37] at 15. Plaintiff has presented no evidence

that she experienced any of these losses, however. The affidavit

that she submitted in support of her motion is silent on the

issue of injury or loss.

29

in challenging the debt collection effort. The debt collection

practice may unfairly damage the consumer’s credit rating, or may

cause the consumer emotional distress. The threshold of showing

a measurable loss is not great. Plaintiff, however, has not set

forth any evidence demonstrating a loss of any kind. 6

Accordingly, summary judgment on plaintiff’s CUTPA claim is

denied.

30

IV. Conclusion

For the foregoing reasons, plaintiff’s Motion for Partial

Summary Judgment [Doc. # 35] is GRANTED in part as to plaintiffs’

FDCPA claims against defendants JBC & Associates, P.C. and Jack

H. Boyajian. Plaintiff’s motion is DENIED as to plaintiffs’

CUTPA claim and her FDCPA claims against defendant Marvin

Brandon. Defendants’ Motion to Strike [Doc. # 53] is DENIED as

moot. Plaintiff’s Motion to Strike Portions of Boyajian and

Brandon Declarations [Doc. # 58] is DENIED.

IT IS SO ORDERED.

/s/

Janet Bond Arterton, U.S.D.J.

Dated at New Haven, Connecticut, this 14th day of January, 2004.

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Found these over the past couple of days and know I saw posts inquiring over some of these situations....

Debt collectors can safely use federally mandated form notices without fear of violating the Fair Debt Collection Practices Act. If a mandatory form notice happens to contain false or misleading statements, debt collectors are insulated from liability by the FDCPA's "bona fide error" defense. (Kort v. Diversified Collection Services, Inc., Nos. 04-1074, 04-1455 (7th Cir. 01/10/05).)

_________________________________________________________

Law firms acting as debt collectors face new uncertainties about how to initiate litigation against debtors without violating the Fair Debt Collection Practices Act. Serving a summons and complaint to initiate a debt collection action could constitute an "initial communication" with a debtor, triggering certain FDCPA notification requirements. Ignoring these notification requirements could subject law firms to liability for violating the FDCPA. (Thomas v. Law Firm of Simpson & Cybak, et al., No. 02-1113 (7th Cir. 12/20/04).)

__________________________________________________________

Credit providers must take care when accessing consumer credit information to prescreen consumers for unsolicited offers of credit. If an offer is deemed a "sham" because it lacks value, a provider's accessing of consumer credit information could be a violation the Fair Credit Reporting Act. Even if the offer is deemed bona fide, the credit provider could be found to have violated the FCRA if statutorily required disclosures are not presented clearly and conspicuously in the provider's offering materials. (Cole v. U.S. Capital, Inc., et al., No. 03-3331 (7th Cir. 11/19/04).)

___________________________________________________________

Debt collectors need to implement operating procedures to ensure that a consumer's verification dispute doesn't get misfiled. Claiming a good faith mistake for failing to validate a debt won't be sufficient to avoid liability because the bona fide error defense under the Fair Debt Collection Practices Act requires a debt collector to have reasonable procedures in place to prevent those types of mistakes. (Owens v. Howe, No. 1:04-CV-152 (N.D. Ind. 11/08/04).)

The U.S. District Court, Northern District of Indiana held a debt collector liable for violating various provisions of the FDCPA in his attempt to collect a debt. The consumer claimed that the debt collector was trying to collect from the wrong debtor. The debt collector said he made a good faith mistake, but the judge said he didn't prove it was a bona fide error under the law.

The bona fide error defense under Section 1692k© requires a debt collector to have procedures in place reasonably adapted to avoid the error.

In this case, Lamont Owens received a collection letter from Howard Howe for a debt he didn't owe. Owens disputed the debt but received no response. Shortly thereafter, Howe served a complaint on Owens seeking to collect a debt different from the debt referred to in the letter and a debt that Owens did not owe. Owens sued, claiming that Howe violated Section1692g(B)(1) of the FDCPA when he failed to validate the debt.

___________________________________________________________

A debt collector is on notice that a debtor's employer prohibits dunning calls when the debtor states that she cannot speak to the debt collector at work, the 7th U.S. Circuit Court of Appeals ruled. The court said it was unreasonable to expect an unsophisticated consumer to assert their rights under the Fair Debt Collection Practices Act in legally precise phrases. (Horkey v. J.V.D.B. & Associates Inc., No. 02-3283 (7th Cir. 06/20/03).)

____________________________________________________________

A debt collector which reports a debt to a credit reporting agency but does not have direct communications with a debtor could still be in violation of Section 1692e(8) of the Fair Debt Collection Practices Act, according to a ruling by a federal District Court. The court said that the FDCPA broadly defines the term "communication," and that the reporting of a debt to a credit reporting agency could be seen as a communication in connection with the collection of a debt. (Sullivan v. Equifax Inc., et al., No. 01-4336 (E.D. Pa. 04/19/02).)

The dispute in this case arose out of the allegedly false reporting of a utility debt to a credit reporting agency. Mary Ellen Sullivan alleged InoVision, Equifax Inc. and Equifax Information Systems reported, or caused to be reported, a debt that was incorrectly listed under her name. Sullivan claimed the debt belonged to another person with the same name.

Sullivan claimed she contacted the defendants by both telephone and in writing to inform them of the error and to contest the matter. She claimed the defendants failed to investigate the debt or have the listing removed from her credit report. As a result of the inaccurate listing, Sullivan claimed she suffered serious financial and pecuniary harm because she was unable to obtain loans and extensions of credit.

Sullivan filed suit in the U.S. District Court, Eastern District of Pennsylvania, alleging violations of the Fair Credit Reporting Act, the FDCPA and Pennsylvania's Unfair Trade Practices and Consumer Protection Law. InoVision, which owned the collection account and who reported the debt to various credit reporting agencies, moved to dismiss the complaint.

Furnisher of credit

InoVision argued the claims under the FCRA should be dismissed because it was not a credit reporting agency. Sullivan pointed out, however, that Congress amended the FCRA in 1997 to cover furnishers of information. Furnishers of information are now covered under the act if they consciously avoid knowing the information it furnishes is inaccurate.

The act also triggers certain duties if the furnisher receives notice from a consumer reporting agency that a consumer is disputing the reported information. The furnisher has a duty to investigate the accuracy of the disputed information and to report the results of its findings to the agency. If the furnisher determines the information was incomplete or inaccurate, then it must report those results to any other consumer reporting agency it sent information.

InoVision did not contest the reasoning Sullivan used in making her FCRA claims. Rather, the debt collector stated that dismissal was appropriate because the allegations in the complaint were insufficiently pled pursuant to Fed. R. Civ. P. 9(B). That rule requires heightened pleadings for allegations of fraud or mistake. The District Court found Sullivan stated a valid cause of action under Fed. R. Civ. P. 8, which only requires a short and plain statement of the claim.

InoVision next argued the Consumer Dispute Verification form attached to its motion clearly discredited Sullivan's FCRA claim it failed to conduct an investigation. The court refused to consider the document at the preliminary stages of the proceedings.

The court did say, however, in a footnote, "the CDV does not demonstrate that InoVision conducted an appropriate investigation or reported the resulting information to all consumers reporting agencies as required by the FCRA."

This statement leaves open the question as to what the furnisher of information has to do once a consumer disputes credit information. The footnote seems to suggest the furnisher must still conduct an investigation after sending the form.

In her complaint, Sullivan alleged the information InoVision reported, the time frame of events, and the failure on the part of the company to report any investigative results to the credit reporting agencies was in violation of the FCRA. The court concluded these allegations were sufficient to maintain a claim under the FCRA.

FDCPA claims

Sullivan alleged InoVision violated the FDCPA by continuing to report to the credit reporting agencies inaccurate information and by failing to mark the debt as disputed after receiving notice from Sullivan. The company argued the court should dismiss the FDCPA claims because it did not engage in debt collection activities with respect to Sullivan. Sullivan rebutted that InoVision's act of reporting the disputed debt to a consumer reporting agency represented a collection tactic that constituted a debt collection.

The court said the FDCPA broadly defines the term "communication" in Section 1692a(2) as "the conveying of information regarding a debt directly or indirectly to any person through any medium."

The court noted that legal commentators have opined that debt collectors use the reporting of a debt as a powerful tool to gain compliance from a debtor with payment terms.

"Because reporting a debt to a credit reporting agency can be seen as a communication in connection with the collection of a debt," the court reasoned, "the reporting of such a debt in violation of the provisions of Section 1692e(8) can subject a debt collector to liability under the FDCPA."

James A. Francis and Mark D. Mailman of Francis & Mailman PC in Philadelphia represented Sullivan. Sean E. Quinn of Swartz, Campbell & Detweiler in Philadelphia represented InoVision.

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Found these over the past couple of days and know I saw posts inquiring over some of these situations....

Debt collectors can safely use federally mandated form notices without fear of violating the Fair Debt Collection Practices Act. If a mandatory form notice happens to contain false or misleading statements, debt collectors are insulated from liability by the FDCPA's "bona fide error" defense. (Kort v. Diversified Collection Services, Inc., Nos. 04-1074, 04-1455 (7th Cir. 01/10/05).)

_________________________________________________________

Law firms acting as debt collectors face new uncertainties about how to initiate litigation against debtors without violating the Fair Debt Collection Practices Act. Serving a summons and complaint to initiate a debt collection action could constitute an "initial communication" with a debtor, triggering certain FDCPA notification requirements. Ignoring these notification requirements could subject law firms to liability for violating the FDCPA. (Thomas v. Law Firm of Simpson & Cybak, et al., No. 02-1113 (7th Cir. 12/20/04).)

__________________________________________________________

Credit providers must take care when accessing consumer credit information to prescreen consumers for unsolicited offers of credit. If an offer is deemed a "sham" because it lacks value, a provider's accessing of consumer credit information could be a violation the Fair Credit Reporting Act. Even if the offer is deemed bona fide, the credit provider could be found to have violated the FCRA if statutorily required disclosures are not presented clearly and conspicuously in the provider's offering materials. (Cole v. U.S. Capital, Inc., et al., No. 03-3331 (7th Cir. 11/19/04).)

___________________________________________________________

Debt collectors need to implement operating procedures to ensure that a consumer's verification dispute doesn't get misfiled. Claiming a good faith mistake for failing to validate a debt won't be sufficient to avoid liability because the bona fide error defense under the Fair Debt Collection Practices Act requires a debt collector to have reasonable procedures in place to prevent those types of mistakes. (Owens v. Howe, No. 1:04-CV-152 (N.D. Ind. 11/08/04).)

The U.S. District Court, Northern District of Indiana held a debt collector liable for violating various provisions of the FDCPA in his attempt to collect a debt. The consumer claimed that the debt collector was trying to collect from the wrong debtor. The debt collector said he made a good faith mistake, but the judge said he didn't prove it was a bona fide error under the law.

The bona fide error defense under Section 1692k© requires a debt collector to have procedures in place reasonably adapted to avoid the error.

In this case, Lamont Owens received a collection letter from Howard Howe for a debt he didn't owe. Owens disputed the debt but received no response. Shortly thereafter, Howe served a complaint on Owens seeking to collect a debt different from the debt referred to in the letter and a debt that Owens did not owe. Owens sued, claiming that Howe violated Section1692g(B)(1) of the FDCPA when he failed to validate the debt.

___________________________________________________________

A debt collector is on notice that a debtor's employer prohibits dunning calls when the debtor states that she cannot speak to the debt collector at work, the 7th U.S. Circuit Court of Appeals ruled. The court said it was unreasonable to expect an unsophisticated consumer to assert their rights under the Fair Debt Collection Practices Act in legally precise phrases. (Horkey v. J.V.D.B. & Associates Inc., No. 02-3283 (7th Cir. 06/20/03).)

____________________________________________________________

A debt collector which reports a debt to a credit reporting agency but does not have direct communications with a debtor could still be in violation of Section 1692e(8) of the Fair Debt Collection Practices Act, according to a ruling by a federal District Court. The court said that the FDCPA broadly defines the term "communication," and that the reporting of a debt to a credit reporting agency could be seen as a communication in connection with the collection of a debt. (Sullivan v. Equifax Inc., et al., No. 01-4336 (E.D. Pa. 04/19/02).)

The dispute in this case arose out of the allegedly false reporting of a utility debt to a credit reporting agency. Mary Ellen Sullivan alleged InoVision, Equifax Inc. and Equifax Information Systems reported, or caused to be reported, a debt that was incorrectly listed under her name. Sullivan claimed the debt belonged to another person with the same name.

Sullivan claimed she contacted the defendants by both telephone and in writing to inform them of the error and to contest the matter. She claimed the defendants failed to investigate the debt or have the listing removed from her credit report. As a result of the inaccurate listing, Sullivan claimed she suffered serious financial and pecuniary harm because she was unable to obtain loans and extensions of credit.

Sullivan filed suit in the U.S. District Court, Eastern District of Pennsylvania, alleging violations of the Fair Credit Reporting Act, the FDCPA and Pennsylvania's Unfair Trade Practices and Consumer Protection Law. InoVision, which owned the collection account and who reported the debt to various credit reporting agencies, moved to dismiss the complaint.

Furnisher of credit

InoVision argued the claims under the FCRA should be dismissed because it was not a credit reporting agency. Sullivan pointed out, however, that Congress amended the FCRA in 1997 to cover furnishers of information. Furnishers of information are now covered under the act if they consciously avoid knowing the information it furnishes is inaccurate.

The act also triggers certain duties if the furnisher receives notice from a consumer reporting agency that a consumer is disputing the reported information. The furnisher has a duty to investigate the accuracy of the disputed information and to report the results of its findings to the agency. If the furnisher determines the information was incomplete or inaccurate, then it must report those results to any other consumer reporting agency it sent information.

InoVision did not contest the reasoning Sullivan used in making her FCRA claims. Rather, the debt collector stated that dismissal was appropriate because the allegations in the complaint were insufficiently pled pursuant to Fed. R. Civ. P. 9(B). That rule requires heightened pleadings for allegations of fraud or mistake. The District Court found Sullivan stated a valid cause of action under Fed. R. Civ. P. 8, which only requires a short and plain statement of the claim.

InoVision next argued the Consumer Dispute Verification form attached to its motion clearly discredited Sullivan's FCRA claim it failed to conduct an investigation. The court refused to consider the document at the preliminary stages of the proceedings.

The court did say, however, in a footnote, "the CDV does not demonstrate that InoVision conducted an appropriate investigation or reported the resulting information to all consumers reporting agencies as required by the FCRA."

This statement leaves open the question as to what the furnisher of information has to do once a consumer disputes credit information. The footnote seems to suggest the furnisher must still conduct an investigation after sending the form.

In her complaint, Sullivan alleged the information InoVision reported, the time frame of events, and the failure on the part of the company to report any investigative results to the credit reporting agencies was in violation of the FCRA. The court concluded these allegations were sufficient to maintain a claim under the FCRA.

FDCPA claims

Sullivan alleged InoVision violated the FDCPA by continuing to report to the credit reporting agencies inaccurate information and by failing to mark the debt as disputed after receiving notice from Sullivan. The company argued the court should dismiss the FDCPA claims because it did not engage in debt collection activities with respect to Sullivan. Sullivan rebutted that InoVision's act of reporting the disputed debt to a consumer reporting agency represented a collection tactic that constituted a debt collection.

The court said the FDCPA broadly defines the term "communication" in Section 1692a(2) as "the conveying of information regarding a debt directly or indirectly to any person through any medium."

The court noted that legal commentators have opined that debt collectors use the reporting of a debt as a powerful tool to gain compliance from a debtor with payment terms.

"Because reporting a debt to a credit reporting agency can be seen as a communication in connection with the collection of a debt," the court reasoned, "the reporting of such a debt in violation of the provisions of Section 1692e(8) can subject a debt collector to liability under the FDCPA."

James A. Francis and Mark D. Mailman of Francis & Mailman PC in Philadelphia represented Sullivan. Sean E. Quinn of Swartz, Campbell & Detweiler in Philadelphia represented InoVision.

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Was afraid to post this in the thread on partial payment as it didn't pertain to Florida but you New Yorkers can use it!

United States District Court, Southern New York;

2002 Payment Is Not Partial Repayment of 1991 Loan Sufficient to Revive Limitations Period

Judge Cote

Gilbert v. Gilbert - Plaintiff pro se Lila Gilbert ["Plaintiff"] brings this lawsuit against her son Dale Gilbert and daughter-in-law Sandee Gilbert ["Defendants"], asserting claims and seeking damages arising from certain financial transactions and the Defendants' alleged mistreatment of Lila Gilbert. The claims are best described as allegations of elder abuse, breach of contract, unjust enrichment and conversion. The Defendants move to dismiss the complaint pursuant to Rule 12[6], Fed. R. Civ. P.

The case was referred to Magistrate Judge James C. Francis IV for general pretrial purposes. On August 28, 2003, Judge Francis issued a Report and Recommendation advising that the motion to dismiss be granted as to the elder abuse claim, and denied as to the remainder of the complaint. Judge Francis also issued an August 28 Order denying Lila Gilbert's motion to compel discovery. Judge Francis identified a defect in subject matter jurisdiction, specifically, that the Plaintiff's potentially viable claims based on the 1991 and 1992 financial transactions fall below the threshold amount required in a diversity action. He advised that the parties would be given an opportunity to address this defect if the Report were adopted.

Any objections to the Report & Recommendation were due by September 8, 2003. By submission dated September 12, 2003, Plaintiff objects to Judge Francis's August 27 Order regarding discovery, and includes an objection to the dismissal of the elder abuse claims. Defendants did not submit objections.

The facts set forth in the Report and summarized here are drawn from the Complaint and from allegations contained in the Plaintiff's response to the motion. The allegations are taken as true for purposes of this motion to dismiss. See Jaghory v. New York State Dep't of Educ., 131 F.3d 326, 329 [2d Cir. 1997]. Lila Gilbert, who was 87 years old at the time of filing, is in failing health. She resides in New York, and visits her son and daughter-in-law in California. In 1991, Lila Gilbert loaned her son $20,000, for which she has not received repayment. At the time of the loan, she expected that $10,000 would be secured by the Defendants' condominium, although she later learned that the condominium was already providing security for a loan from Sandee Gilbert's mother to the Defendants. In 1992, Lila Gilbert placed a sum of money into an Albany, New York bank account in Dale Gilbert's name. The Albany account was intended by Lila Gilbert to fund building permits and supplies needed for her construction of a house in Albany. Although she eventually abandoned the construction project, she understood that Dale Gilbert was holding the balance of the account for her, and that the funds remained hers to use when needed.

Dale and Sandee Gilbert have not repaid the $20,000 loan nor the funds from the Albany account, nor have they indicated any intention to repay. Defendants did, however, pay Lila Gilbert $100 during the pendency of this litigation. The complaint also alleges that the Defendants were verbally abusive toward Lila Gilbert when discussing the subject of repayment, and that they mistreated her while she was visiting them in California.

Discussion

A reviewing court "may accept, reject, or modify, in whole or in part, the findings or recommendations made by the magistrate." 28 U.S.C. §[636[1][C]. The Court shall make a de novo determination of those portions of the Report to which objection is made. See id.; United States v. Male Juvenile, 121 F.3d 34, 38 [2d Cir. 1997]. "To accept to the report and recommendation by a magistrate, to which no timely objection has been made, a district court need only satisfy itself that there is no clear error on the face of the record." Nelson v. Smith, 618 F. Supp. 1186, 1189 [s.D.N.Y. 1985; see also Pizarro v. Bartlett, 776 F. Supp. 815, 817 [s.D.N.Y. 1991].

As the Report states, neither federal nor New York law recognizes a cause of action for "elder abuse." California's civil cause of action for elder abuse is available only to residents of the state of California. See Cal. Welf. & Inst. Code §[15610.27. Plaintiff's objections, like the complaint, do not identify any legal basis for the elder abuse claim. Lila Gilbert does not claim to be a resident of California, and consequently does not have a right of action under that state's statute. Since there is no cause of action for this claim, it is dismissed.

The remaining claims, each of which relates to the unpaid loans made in 1991 and 1992, must be dismissed. Under New York law, Plaintiff's claims are subject to a six-year statute of limitations. See C.P.L.R. §[213 ["an action for which no limitation is specifically prescribed by law ... must be commenced within six years"]. Plaintiff contends that Dale Gilbert's payment of $100 in July 2002 constitutes a partial repayment of the loan sufficient to revive the statute of limitations.

If a party is proceeding pro se, the court must "construe [the] pleadings broadly, and interpret them to raise the strongest arguments they suggest." Cruz v. Gomez, 202 F.3d 593, 597 [2d Cir. 2000]; see also Cucco v. Moritsugu, 222 F.3d 99, 112 [2d Cir. 2000]. On a motion to dismiss, the court may consider "documents that the plaintiffs either possessed or knew about and upon which they relied in bringing the suit." Rothman v. Gregor, 220 F.3d 81, 88 [2d Cir. 2000]. Where a plaintiff is proceeding pro se, the court may consider allegations contained in the plaintiff's response to the motion to dismiss. See Torrico v. IBM, 213 F. Supp. 2d 390, 399 n.4 [s.D.N.Y. 2002].

Although the Report properly considered Lila Gilbert's allegation that Dale Gilbert paid her $100 in July 2002, it committed clear error in concluding that that payment alone is legally sufficient to revive the statute of limitations. "The statute can be tolled only if a debtor pays the creditor under circumstances indicating an unequivocal intention to pay the balance." Schmidt v. Polish People's Republic, 742 F.2d 67, 72 [2d Cir. 1984]; see also Lew Morris Demolition Co. v. Board of Educ., 40 N.Y.2d 516 [1976]; Erdheim v. Gelfman, 303 A.D.2d 714, 714-15 [1st Dep't 2003]. Even read in the light most favorable to her, Plaintiff's submissions are insufficient to state a timely claim. The complaint alleges throughout that the Defendants had not made any attempt to repay the loans, and in fact had not even acknowledged any debt. In the context of these allegations, the payment of $100, unaccompanied by any admission of the debt or declaration of intent to pay, is insufficient to constitute the "absolute and unqualified acknowledgment by the debtor of more being due" required to toll the statute of limitations. Erdheim, 303 A.D.2d at 715. The statute of limitations thus expired long before this action was filed.

Finally, there is no indication that the discovery Lila Gilbert continues to seek would enable her to amend the Complaint to state a claim. Instead, the September 12 objections, like the discovery requests themselves, seek materials relating to the Defendants' alleged misappropriation and dissipation of funds belonging to the Plaintiff. The discovery requests do not seek proof of payment or intention to pay, and instead reflect Plaintiffs' continuing belief that Defendants' have held and used funds without acknowledging or intending to pay any debt owed to her.

Conclusion

The motion to dismiss is granted. The Clerk of Court shall close the case.

So Ordered.

December 16, 2003

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In the

United States Court of Appeals

For the Seventh Circuit

____________

No. 03-4108

JODI FIELDS,

Plaintiff-Appellant,

v.

WILBER LAW FIRM, P.C.,

a dissolved corporation, and

DONALD L. WILBER and KENNETH WILBER,

doing business as WILBER LAW FIRM, P.C.,

a dissolved corporation,

Defendants-Appellees.

____________

Appeal from the United States District Court for the Central District of Illinois.

No. 03 C 1079—Michael M. Mihm, Judge.

____________

ARGUED MAY 27, 2004—DECIDED SEPTEMBER 2, 2004

____________

Before FLAUM, Chief Judge, and MANION and KANNE, Circuit Judges.

KANNE, Circuit Judge.

On March 16, 2002, Jodi Fields incurred $122.06 in charges at Kruger Animal Hospital in Bloomington, Illinois. Despite signing an agreement promising to pay the bill at a later time, Fields had not yet paid any of the debt by November of 2002.

Kruger hired the Wilber Law Firm to collect the debt. On November 6, a dunning letter, signed by Donald Wilber of the Wilber Law Firm (collectively “Wilber”), was sent to Fields; it stated that the “ACCOUNT BALANCE” was $388.54. The account balance reflected the original $122.06, plus interest and service charges assessed pursuant to the contract signed by Fields, plus $250 in attorneys’ fees for the collection of the debt by Wilber.

Three more letters followed, each letter including a slightly higher ACCOUNT BALANCE” to reflect the accumulation of interest. The subsequent letters were sent on December 11, 2002 ($391.34), December 27, 2002 ($392.30), and February 7, 2003 ($395.30). No additional attorneys’ fees were sought in the later letters.

Wilber included the $250 in fees pursuant to a clause in the contract that stated: “I understand that if collection action should become necessary for recovery of any monies due under this contract, I agree to pay any and all collection costs and attorney fees.” The collection letters did not itemize the expenses or explain the amount of the debt in any way.

On March 25, 2003, Fields filed an action in federal court, alleging that Wilber violated the Fair Debt Collection Practices Act, 15 U.S.C. §§ 1692, et seq. (“FDCPA”). Specifically, Fields asserted that the collection letters failed to accurately state the amount of the debt under § 1692g(a)(1), were misleading under § 1692e, and unfairly attempted to collect unauthorized fees under § 1692f(1). The district court dismissed Fields’s FDCPA claims for failure to state a claim and held that $250 in attorneys’ fees was reasonable as a matter of law. For the reasons that follow, we affirm in part and reverse in part.

I. Analysis

We review the district court’s decision to dismiss Fields’s claims de novo, “accepting the well-pleaded allegations in the complaint as true and drawing all reasonable inferences in favor of the plaintiff.” Marshall-Mosby v. Corporate Receivables,Inc., 205 F.3d 323, 326 (7th Cir. 2000).

In deciding whether the collection letters violate the FDCPA, we examine them from the standpoint of an unsophisticated consumer. See Veach v. Sheeks, 316 F.3d 690, 692 (7th Cir. 2003); Bartlett v. Heibl, 128 F.3d 497, 500 (7th Cir.1997). “This assumes that the debtor is uninformed, naive, or

trusting[.]” Veach, 316 F.3d at 693 (internal quotations omitted). However, an unsophisticated consumer possesses “rudimentary knowledge about the financial world” and is “capable of making basic logical deductions and inferences. ”Pettit v. Retrieval Masters Creditors Bureau, Inc., 211 F.3d

1057, 1060 (7th Cir. 2000).

A. The Amount of the Debt under 15 U.S.C. § 1692g(a)

Under the FDCPA, “[w]ithin five days after the initial communication with a consumer in connection with the collection of any debt, a debt collector shall . . . send the consumer a written notice containing—(1) the amount of the debt[.]” 15 U.S.C. § 1692g(a). Fields first contends that Wilber, by unilaterally determining $250 to be the amount of attorneys’ fees charged, misstated the actual amount of the debt. Fields does not deny that she owes some reasonable attorneys’ fees under the contract. But barring a stipulation to a specific liquidated amount in the original debtor-creditor

contract, Fields proposes debt collectors should be required to seek court approval for a specific amount of attorneys’ fees before including them in the account balance. Essentially, Fields asks us to endorse an approach that would require every debt collector under the FDCPA to go to court every time it sought to enforce a provision in a payment agreement signed by the debtor that allows reimbursement of attorneys’ fees and collection costs. Plainly stated, the statute does not require such an extraordinary

result.

Nor, contrary to Fields’s protestations, does our case law. In Veach, an individual (Veach) who had no contractual relationship with the creditor attempted to prevent the repossession of his debtor-friend’s automobile by sending a check for $350 to the creditor. 316 F.3d at 691. The creditor repossessed the auto despite this payment, and Veach responded by

stopping payment on the check. Id. The creditor responded to Veach’s action by hiring an attorney to file suit. The attorney sent Veach a written notice that listed the remaining principal balance as $1050 (reflecting treble damages under an Indiana statute), “plus reasonable attorney fees as permitted by law, and costs if allowed by the court.” Id. at 692. We held that the attorney violated § 1692g(a)(1) by stating the amount of the debt as an estimate of future potential liability in a court action rather than as a statement of the current amount of the debt. Id. at 692-93. The debt collector “took it upon himself to hold Veach liable for [statutory] penalties that had not yet been awarded, penalties that for FDCPA purposes should have been separated from the amount of the debt.” Id. at 692. “[T]he ‘amount of the debt’ provision is designed to inform the debtor (who, remember, has a low level of sophistication) of what the obligation is,

not what the final, worst-case scenario could be.” Id. at 693 (emphasis in original).

The case before us today differs significantly from Veach. Here, based on a written, signed contract, Wilber attempted to collect an undisputed debt amount, an undisputed amount in interest, and an amount in attorneys’ fees (incurred in the initiation of Wilber’s collection attempts), disputed for

its reasonableness only. Some attorneys’ fees have already been incurred in this case and are contractually owed to Kruger, the hospital that provided unpaid veterinary services to Fields. Whereas in Veach, the attorneys’ fees (along with the treble damages and court costs also included in the dunning letter) could only be determined in litigation pursuant to a state statute.

To collect attorneys’ fees from Fields, Wilber necessarily had to specify an amount that it intended to charge (or had already charged) for its services. Fields, of course, could negotiate this payment or contest the reasonableness of the fees through a lawsuit. But when a debtor has contractually agreed to pay attorneys’ fees and collection costs, a debt

collector may, without a court’s permission, state those fees and costs and include that amount in the dunning letter. Doing so does not violate the FDCPA. Indeed, refusing to quantify an amount that the debt collector is trying to collect could be construed as falsely stating the amount of

debt. See Miller v. McCalla, Raymer, Padrick, Cobb, Nichols, and Clark, L.L.C., 214 F.3d 872, 875-76 (7th Cir. 2000) (letter required the consumer to call a toll-free number to determine the full amount of the debt). The

district court correctly determined that no claim for relief was stated under 15 U.S.C. § 1692g(a).

B. 15 U.S.C. § 1692e and 15 U.S.C. § 1692f

Even if attorneys’ fees are authorized by contract, as in this case, and even if the fees are reasonable, debt collectors must still clearly and fairly communicate information about the amount of the debt to debtors. This includes how the total amount due was determined if the demand for payment includes add-on expenses like attorneys’ fees or

collection costs. “A debt collector may not use any false, deceptive, or misleading representation or means in connection with the collection of any debt.” 15 U.S.C. § 1692e. As an example of such conduct, § 1692e(2)(A) states that it is a violation to falsely represent “the character, amount, or legal status of any debt[.]” Section 1692f states that “[a] debt collector may not use unfair or unconscionable means to collect or attempt to collect any debt.”

We conclude that Fields has made allegations sufficient to state a claim under § 1692e and § 1692f and a dismissal pursuant to Federal Rule of Civil Procedure 12(B)(6) was inappropriate because the letters could conceivably mislead an unsophisticated consumer. In the original dunning letter, Wilber listed an account balance that exceeded the principal obligation by $266.48. Wilber’s fees were more than double the original obligation, $122.06. Nowhere did Wilber explain that it was seeking attorneys’ fees of $250. Fields received the initial dunning letter almost eight months after she incurred the charges at the veterinary hospital.

An unsophisticated consumer could reasonably wonder why her bill was now $388.54, even assuming she had saved the original contract that specified she could be charged for attorneys’ fees. It would be difficult for such a consumer to understand how a relatively modest fee for services rendered had tripled in size. Cf. Johnson v. Revenue Mgmt. Corp., 169 F.3d 1057, 1060 (7th Cir. 1999) (“Unsophisticated readers may require more explanation than do federal judges; what seems pellucid to a judge, a legally sophisticated reader, may be opaque to someone whose formal education ended after sixth grade.”).

Or, an unsophisticated consumer may have lost the bill and forgotten the amount of the debt completely. In this circumstance, the debtor (or the debtor’s spouse, or someone else paying bills for the debtor) might logically assume that she simply incurred nearly $400 in charges. By leaving the door open for this assumption to be made, Wilber’s letter was misleading because it gave a false impression of the character of the debt. It is unfair to consumers under the FDCPA to hide the true character of the debt, thereby impairing their ability to knowledgeably assess the validity of the debt. One simple way to comply with § 1692e and § 1692f in this regard would be to itemize the various charges that comprise the total amount of the debt.

The district court agreed that the dunning letter in this case was facially misleading. But we are forced to disagree with the district court’s determination that the letters’ misleading nature was irrelevant as a matter of law because Fields could reference the contract from Kruger Animal

Hospital or because she could telephone Wilber and ask for

an explanation.

As we noted above, even if she saved her contract from nearly eight months earlier, the unsophisticated consumer would not necessarily understand that Wilber was seeking $250 in attorneys’ fees, an amount allowed, but not specified, by the contract. Furthermore, in Miller, 214 F.3d at 875-76, we rejected the proposition that a debt collector could provide incomplete information in a dunning letter so long as it provided a telephone number for the debtor to call. “It is notorious that trying to get through to an 800 number is often a vexing and protracted undertaking, and anyway, unless the number is recorded, to authorize debt collectors to comply orally would be an invitation to just the sort of fraudulent and coercive tactics in debt collection that the Act aimed (rightly or wrongly) to put an end to.” Miller, 214 F.3d at 875. Wilber did not satisfy all of its FDCPA obligations by including a telephone number on the dunning

letter.

II. Conclusion

For the foregoing reasons, we AFFIRM the district court’s determination that Fields did not state a claim for relief under 15 U.S.C. § 1692g(a). We REVERSE the district court’s dismissal of Fields’s remaining claims under 15 U.S.C. §§ 1692e and 1692f, and REMAND for proceedings consistent

with this opinion.

8 No. 03-4108

A true Copy:

Teste:

________________________________

Clerk of the United States Court of

Appeals for the Seventh Circuit

USCA-02-C-0072—9-2-04

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I didn't see this one listed, so here it is.

It discusses what the OC's are expected to do if notified of errors in the reporting to CRA's. One thing about this, is that this was ruled on before the newer provisions took effect from FACTA.

PUBLISHED

UNITED STATES COURT OF APPEALS

FOR THE FOURTH CIRCUIT

LINDA JOHNSON,

Plaintiff-Appellee,

v.

MBNA AMERICA BANK, NA,

Defendant-Appellant,

No. 03-1235 and

EXPERIAN INFORMATION SOLUTIONS,

INCORPORATED; EQUIFAX CREDIT

INFORMATION SERVICES,

INCORPORATED; TRANS UNION LLC,

Defendants.

Appeal from the United States District Court

for the Eastern District of Virginia, at Richmond.

Richard L. Williams, Senior District Judge.

(CA-02-523)

Argued: December 4, 2003

Decided: February 11, 2004

Before WILKINS, Chief Judge, TRAXLER, Circuit Judge, and Richard D. BENNETT, United States District Judge for the District of Maryland, sitting by designation. Affirmed by published opinion. Chief Judge Wilkins wrote the opinion, in which Judge Traxler and Judge Bennett joined.

COUNSEL

ARGUED: Earle Duncan Getchell, Jr., MCGUIRE WOODS, L.L.P., Richmond, Virginia, for Appellant. Richard John Rubin, Santa Fe, New Mexico, for Appellee. ON BRIEF: William H. Baxter, II, James E. Brown, MCGUIRE WOODS, L.L.P., Richmond, Virginia, for Appellant. Leonard A. Bennett, Newport News, Virginia, for Appellee.

OPINION

WILKINS, Chief Judge:

MBNA America Bank, N.A. (MBNA) appeals a judgment entered against it following a jury verdict in favor of Linda Johnson in her action alleging that MBNA violated a provision of the Fair Credit Reporting Act (FCRA), see 15 U.S.C.A. § 1681s-2(B)(1) (West 1998) (amended Dec. 4, 2003), by failing to conduct a reasonable investigation of Johnson’s dispute concerning an MBNA account appearing on her credit report. Finding no reversible error, we affirm.

I.

The account at issue, an MBNA MasterCard account, was opened in November 1987. The parties disagree regarding who applied for this account and therefore who was legally obligated to pay amounts owed on it. It is undisputed that one of the applicants was Edward N. Slater, whom Johnson married in March 1991. MBNA contends that Johnson was a co-applicant with Slater, and thus a co-obligor on the account. Johnson claims, however, that she was merely an authorized user and not a co-applicant.

In December 2000, Slater filed for bankruptcy, and MBNA promptly removed his name from the account. That same month, MBNA contacted Johnson and informed her that she was responsible for the approximately $17,000 balance on the account. After obtaining copies of her credit report from the three major credit reporting agencies—Experian, Equifax, and Trans Union—Johnson disputed the MBNA account with each of the credit reporting agencies. In response, each credit reporting agency sent to MBNA an automated consumer dispute verification (ACDV). The ACDVs that Experian and Trans Union sent to MBNA specifically indicated that Johnson was disputing that she was a co-obligor on the account. See J.A. 278 (Experian) ("CONSUMER STATES BELONGS TO HUSBAND ONLY"); id. at 283 (Trans Union) ("WAS NEVER A SIGNER ON ACCOUNT. WAS AN AUTHORIZED USER"). The ACDV that Equifax sent to MBNA stated that Johnson disputed the account balance.

In response to each of these ACDVs, MBNA agents reviewed the account information contained in MBNA’s computerized Customer Information System (CIS) and, based on the results of that review, notified the credit reporting agencies that MBNA had verified that the

disputed information was correct. Based on MBNA’s responses to the ACDVs, the credit reporting agencies continued reporting the MBNA account on Johnson’s credit report.

Johnson subsequently sued MBNA, claiming, inter alia, that it had violated the FCRA by failing to conduct a proper investigation of her dispute. See 15 U.S.C.A. § 1681s-2(B)(1). A jury trial was held, and, following the presentation of Johnson’s case, MBNA moved for judgment as a matter of law. That motion was denied. After the close of the evidence, the jury found that MBNA had negligently failed to comply with the FCRA, and it awarded Johnson $90,300 in actual damages. MBNA renewed its motion for judgment as a matter of law, asserting that § 1681s-2(B)(1) only required MBNA to conduct a cursory review of its records to verify the disputed information. Alternatively, MBNA argued that even if it were required to conduct a reasonable investigation of Johnson’s dispute, the evidence showed

that MBNA had met that obligation. The district court again denied MBNA’s motion, concluding that § 1681s-2(B)(1) required MBNA to conduct a reasonable investigation and that there was sufficient evidence from which the jury could conclude that MBNA had failed to do so.

II.

MBNA first maintains that the district court erred in ruling that § 1681s-2(B)(1) requires furnishers of credit information to conduct a reasonable investigation of consumer disputes. Section 1681s-2(B)(1) imposes certain duties on a creditor who has been notified by a credit

reporting agency that a consumer has disputed information furnished by that creditor:

After receiving notice pursuant to section 1681i(a)(2) of this title of a dispute with regard to the completeness or accuracy of any information provided by a person to a consumer reporting agency, the person shall—

(A) conduct an investigation with respect to the disputed information;

(B) review all relevant information provided by the consumer reporting agency . . . ;

© report the results of the investigation to the consumer reporting agency; and

(D) if the investigation finds that the information is incomplete or inaccurate, report those

results to all other consumer reporting agencies to which the person furnished the information and that compile and maintain files on consumers on a nationwide basis.1

1While this appeal was pending, § 1681s-2(B)(1) was amended to add

a new provision imposing certain additional duties on creditors in connection

with investigations of consumer disputes. See Fair and Accurate

Credit Transactions Act of 2003, Pub. L. No. 108-159, sec. 314(B),

§ 623(B)(1)(E), 117 Stat. 1952, 1995-96. That provision is not relevant

to our resolution of this appeal.

We recognize that the FCRA applies not only to those that furnish and report consumer credit information but also to those that furnish and report certain other types of information regarding consumers. See 15 U.S.C.A. § 1681a(d)(1) (West 1998 & Supp. 2003). Thus, consistent with other provisions of the FCRA, § 1681s-2(B) uses the general terms "furnisher[ ] of information" and "consumer reporting agency." However, because of the specific nature of this case, and for ease of reference, in this opinion we use the terms "creditor" and "credit reporting agency."

Nonetheless, our discussion of § 1681s-2(B)(1) and other FCRA provisions applies equally to those who furnish other types of consumer information.

MBNA argues that the language of § 1681s-2(B)(1)(A), requiring furnishers of credit information to "conduct an investigation" regarding disputed information, imposes only a minimal duty on creditors to briefly review their records to determine whether the disputed

information is correct. Stated differently, MBNA contends that this provision does not contain any qualitative component that would allow courts or juries to assess whether the creditor’s investigation was reasonable. By contrast, Johnson asserts that § 1681s-2(B)(1)(A)

requires creditors to conduct a reasonable investigation.2 We review this question of statutory interpretation de novo. See Holland v. Pardee Coal Co., 269 F.3d 424, 430 (4th Cir. 2001).

In interpreting a statute, we must first "determine whether the language at issue has a plain and unambiguous meaning with regard to the particular dispute in the case." Robinson v. Shell Oil Co., 519 U.S. 337, 340 (1997). "Our inquiry must cease if the statutory language is

unambiguous and the statutory scheme is coherent and consistent." Id. (internal quotation marks omitted). "The plainness or ambiguity of statutory language is determined by reference to the language itself, the specific context in which that language is used, and the broader

context of the statute as a whole." Id. at 341. The key term at issue here, "investigation," is defined as "[a] detailed inquiry or systematic examination." Am. Heritage Dictionary

920 (4th ed. 2000); see Webster’s Third New Int’l Dictionary 1189 (1981) (defining "investigation" as "a searching inquiry"). Thus, the plain meaning of "investigation" clearly requires some degree of care-

2Neither this court nor any other circuit has addressed the extent to which a creditor must investigate a consumer dispute in order to avoid liability under § 1681s-2(B)(1). However, district courts that have considered the issue have consistently recognized that the creditor’s investigation must be a reasonable one. See Agosta v. Inovision, Inc., 2003 WL 22999213, at *5 (E.D. Pa. Dec. 16, 2003); Buxton v. Equifax Credit Info. Servs., Inc., 2003 WL 22844245, at *2 (N.D. Ill. Dec. 1, 2003); Wade v.

Equifax, 2003 WL 22089694, at *2-*3 (N.D. Ill. Sept. 8, 2003); Betts v. Equifax Credit Info. Servs., Inc., 245 F. Supp. 2d 1130, 1135 (W.D. Wash. 2003); Olwell v. Med. Info. Bureau, 2003 WL 79035, at *5 (D. Minn. Jan. 7, 2003); Kronstedt v. Equifax, 2001 WL 34124783, at *16 (W.D. Wis. Jan. 25, 2001); Bruce v. First U.S.A. Bank, 103 F. Supp. 2d 1135, 1143 (E.D. Mo. 2000).

ful inquiry by creditors. Further, § 1681s-2(B)(1)(A) uses the term "investigation" in the context of articulating a creditor’s duties in the consumer dispute process outlined by the FCRA. It would make little sense to conclude that, in creating a system intended to give consumers a means to dispute—and, ultimately, correct—inaccurate information on their credit reports, Congress used the term "investigation" to include superficial, unreasonable inquiries by creditors. Cf. Cahlin v. Gen. Motors Acceptance Corp., 936 F.2d 1151, 1160 (11th Cir. 1991) (interpreting analogous statute governing reinvestigations of consumer

disputes by credit reporting agencies to require reasonable investigations); Pinner v. Schmidt, 805 F.2d 1258, 1262 (5th Cir. 1986) (same). We therefore hold that § 1681s-2(B)(1) requires creditors, after receiving notice of a consumer dispute from a credit reporting agency, to conduct a reasonable investigation of their records to determine whether the disputed information can be verified.

III.

MBNA next contends that even if § 1681s-2(B)(1) requires creditors to conduct reasonable investigations of consumer disputes, no evidence here supports a determination by the jury that MBNA’s investigation of Johnson’s dispute was unreasonable. We review the denial of MBNA’s motion for judgment as a matter of law de novo. See Baynard v. Malone, 268 F.3d 228, 234 (4th Cir. 2001). We must view the evidence in the light most favorable to Johnson, the nonmovant, and draw all reasonable inferences in her favor without weighing the evidence or assessing the witnesses’ credibility. See id. at 234-35. "The question is whether a jury, viewing the evidence in the light most favorable to [Johnson], could have properly reached the conclusion reached by this jury." Id. at 235 (internal quotation marks omitted).

We must reverse if a reasonable jury could only rule in favor of MBNA; if reasonable minds could differ, we must affirm. See id.

As explained above, MBNA was notified of the specific nature of Johnson’s dispute—namely, her assertion that she was not a coobligor on the account. Yet MBNA’s agents testified that their investigation was primarily limited to (1) confirming that the name and

address listed on the ACDVs were the same as the name and address contained in the CIS,3 and (2) noting that the CIS contained a code 3Under MBNA’s procedures, agents are only required to confirm two out of four pieces of information contained in the CIS—name, address, indicating that Johnson was the sole responsible party on the account.

The MBNA agents also testified that, in investigating consumer disputes generally, they do not look beyond the information contained in the CIS and never consult underlying documents such as account applications. Based on this evidence, a jury could reasonably conclude that MBNA acted unreasonably in failing to verify the accuracy of the information contained in the CIS.

MBNA argues that other information contained in the CIS compels the conclusion that its investigation was reasonable. For example, in support of its alleged belief that Johnson was a co-applicant, MBNA presented evidence that Johnson’s last name had been changed on the

account following her marriage to Slater and that Johnson’s name was listed on the billing statements. But this evidence is equally consistent with Johnson’s contention that she was only an authorized user on Slater’s account and that, to the extent MBNA’s records listed her as a co-obligor, those records were incorrect. MBNA also points to evidence indicating that, during her conversations with MBNA following Slater’s bankruptcy filing, Johnson attempted to set up a reduced payment plan and changed the address on the account to her business address. However, a jury could reasonably conclude that this evidence showed only that Johnson had tried to make payment arrangements even though she had no legal obligation to do so. Indeed, Johnson testified that, during her conversations with MBNA, she had consistently maintained that she was not responsible for paying the account.

Additionally, MBNA argues that Johnson failed to establish that MBNA’s allegedly inadequate investigation was the proximate cause of her damages because there were no other records MBNA could have examined that would have changed the results of its investigation. In particular, MBNA relies on testimony that, pursuant to its five-year document retention policy, the original account application was no longer in MBNA’s possession. Even accepting this testimony, however, a jury could reasonably conclude that if the MBNA agents had investigated the matter further and determined that MBNA no social security number, and date of birth—in order to verify an account holder’s identity. Johnson’s social security number and date of birth were not listed on the CIS summary screen. longer had the application, they could have at least informed the credit reporting agencies that MBNA could not conclusively verify that Johnson was a co-obligor.4 See 15 U.S.C.A. § 1681i(a)(5)(A)

(West 1998) (providing that if disputed information "cannot be verified, the consumer reporting agency shall promptly delete that item of information from the consumer’s file or modify that item of information, as appropriate, based on the results of the reinvestigation")

(amended Dec. 4, 2003).

IV.

MBNA next asserts that the district court improperly instructed the jury regarding the standards for determining liability. We review challenges to jury instructions for abuse of discretion. See S. Atl. Ltd. P’ship of Tenn. v. Riese, 284 F.3d 518, 530 (4th Cir. 2002). "Instructions are adequate if construed as a whole, and in light of the whole record, they adequately inform the jury of the controlling legal principles without misleading or confusing the jury to the prejudice of the objecting party." Id. (internal quotation marks & alterations omitted). Even if we conclude that the challenged instructions are erroneous, we will not reverse "unless the error seriously prejudiced the challenging party’s case." Id.

A.

MBNA first argues that the district court erred in instructing the jury that, in determining whether MBNA’s investigation was reasonable, it should consider "the cost of verifying the accuracy of the information versus the possible harm of reporting inaccurate information."

J.A. 767-68. MBNA apparently contends that the balancing test described in this instruction is inapplicable here because it is derived from cases involving the reasonableness of a credit reporting agency’s reinvestigation, see, e.g., Cushman v. Trans Union Corp., 115

4Because we conclude there is sufficient evidence to support a jury finding that MBNA failed to conduct a reasonable investigation of Johnson’s dispute, we do not consider Johnson’s argument that the judgment should be affirmed on the alternative ground that MBNA failed to "report the results of the investigation to the consumer reporting agenc[ies]," 15 U.S.C.A. § 1681s-2(B)(1)©. F.3d 220, 225 (3d Cir. 1997); Henson v. CSC Credit Servs., 29 F.3d 280, 287 (7th Cir. 1994). We recognize that creditors and credit reporting agencies have different roles and duties in investigating consumer disputes under the FCRA. Nevertheless, we believe that the general balancing test articulated by the district court—weighing the cost of verifying disputed information against the possible harm to the consumer—logically applies in determining whether the steps taken (and not taken) by a creditor in investigating a dispute constitute a

reasonable investigation. The district court therefore did not abuse its discretion in giving this instruction.

B.

MBNA also contends that, after instructing the jury that the FCRA "does not require that credit card account records, including original applications, be kept in any particular form," J.A. 770, the district court erred in further instructing the jury that "the law does prohibit

MBNA from maintaining its record in such manner as to consciously avoid knowing that information it is reporting is [in]accurate," id. MBNA claims that this instruction improperly permitted the jury to assess the adequacy of MBNA’s record keeping system. However, the other detailed instructions given by the district court made clear that Johnson’s claim was based on MBNA’s failure to conduct a reasonable investigation of its records, not on the inadequacy of those records. And, it appears that the brief instruction challenged by MBNA, which the district court gave near the end of its jury instructions, was simply intended to clarify the legal effect of MBNA not maintaining the original account application—not to invite the jury to independently assess MBNA’s record keeping practices.

MBNA further claims that the challenged instruction improperly incorporated a legal standard from another provision of § 1681s-2, relating to the accuracy of information that creditors provide to credit reporting agencies. See 15 U.S.C.A. § 1681s-2(a)(1)(A) (West 1998) (prohibiting creditors from furnishing consumer information to a credit reporting agency "if the [creditor] knows or consciously avoids knowing that the information is inaccurate") (amended Dec. 4, 2003). MBNA emphasizes that this provision is enforceable only by government agencies and officials, not by consumers. See 15 U.S.C.A. § 1681s-2(d) (West 1998) (amended Dec. 4, 2003). Again, however, the extensive instructions by the district court made clear that Johnson’s claim was based on MBNA’s duty to investigate consumer disputes, not its duty to provide accurate information. Indeed, the district court instructed the jury that the damages recoverable by Johnson "may not include any damages that were caused by the inaccuracy of the information itself." J.A. 768. We therefore conclude that the instruction given by the district court did not mislead the jury or otherwise prejudice MBNA.

V.

For the reasons set forth above, we affirm the judgment of the district court.

AFFIRMED

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Adding a straight percentage collection fee (instead of actual collection costs) may violate FDCPA

------------------------------------------------------------------

Kojetin v. C.U. Recovery, Inc., No. 97-2273 (D. Minn. Feb. 17, 1999); affirmed 212 F.3d 1318 (8th Cir. May 18, 2000)

------------------------------------------------------------------

DELORIS KOJETIN, Plaintiff, v. C U RECOVERY, INC., a Minnesota Corporation, Defendant.

Civil No. 97-2273 (JRT/RLE)

UNITED STATES DISTRICT COURT FOR THE DISTRICT OF MINNESOTA

1999 U.S. Dist. LEXIS 10930

March 29, 1999, Decided

March 30, 1999, Filed

DISPOSITION: [*1] Defendant's objections [Docket No. 18] OVERRULED and the Magistrate Judge's Report and Recommendation [Docket No. 17] ADOPTED. Plaintiff's motion for partial summary judgment [Docket No. 10] GRANTED. Defendant's motion for summary judgment [Docket No. 7] DENIED.

COUNSEL: Eric L. Crandall, CRANDALL LAW OFFICE, Stillwater, MN, for plaintiff.

James F. Roegge, Randy Alan Sharbono, MEAGHER & GEER, Minneapolis, MN, for defendant.

JUDGES: JOHN R. TUNHEIM, United States District Judge.

OPINIONBY: JOHN R. TUNHEIM

OPINION: ORDER ADOPTING REPORT AND RECOMMENDATION OF MAGISTRATE JUDGE

This action arises out of defendant C.U. Recovery, Inc.'s ("C.U.") attempts to collect from Plaintiff Deloris Kojetin outstanding debts she owed to Minne-Mine Credit Union ("MMCU"), plus a fifteen percent collection fee. Kojetin's unsatisfied debt to MMCU was pursuant to a note for the purchase of an automobile for her son. Kojetin alleges that C.U.'s validation notice to her identifying a lump sum of $ 4,862.65 owed, which includes the fifteen percent fee, violated the Fair Debt Collection Practices Act ("FDCPA"), 15 U.S.C. § 1692 et seq.

This matter is before the Court on C.U.'s objections [*2] to the Report and Recommendation of Magistrate Judge Raymond L. Erickson dated February 17, 1999. The Magistrate Judge recommended that the Court grant plaintiff's motion for partial summary judgment (as to liability) and deny C.U.'s motion for summary judgment. Specifically, the Magistrate Judge found the C.U.'s validation notice violated the FDCPA, see § 1692e(2)(A), because it misrepresented the amount Kojetin owes pursuant to the terms of the note by adding a collection fee based on a percentage rather than on actual collection costs. While C.U. agrees that the terms of the note govern the analysis under the FDCPA, it objects to various portions of the Magistrate Judge's analysis and his ultimate legal conclusion.

The Court has reviewed de novo the Report and Recommendation on these dispositive pretrial matters. See 28 U.S.C. § 636(B)(1)©; D. Minn. LR 72.1©. The Court agrees with the Magistrate Judge that Kojetin is entitled to summary judgment as to liability and that C.U.'s motion for summary judgment should be denied. C.U. is correct that the Report and Recommendation contains a typographical error regarding the amount incurred in collection [*3] efforts (the actual figure is $ 590.53, not $ 490.53) and that this amount relates to costs C.U. billed to MMCU for repossession services, rather than for other collection efforts. However, these misstatements of fact are not material. The Court also rejects C.U.'s suggestions that the statute of limitations bars portions of Kojetin's claim and that, because it gave Kojetin the right to dispute the amount and obtain verification, C.U. is entitled to judgment as a matter of law.

C.U.'s principal objection that the Magistrate Judge misconstrued the language of the note presents a somewhat closer question. C.U. does not dispute that a fair reading of the language of the note precludes it from seeking to collect from Kojetin amounts in excess of the actual costs associated with collection. Rather, C.U. argues that, because the note indicates that Kojetin must pay MMCU's costs of collection, the Magistrate Judge's focus on the fact that C.U. charged MMCU a percentage fee instead of a fee based on actual costs of collection was erroneous. n1 In other words, according to C.U., the fee amount it included in the lump sum did not violate the terms of the note because such amount represented [*4] the actual cost to MMCU for collecting from Kojetin -- namely, the cost of hiring C.U. to undertake collection efforts.

- - - - - - - - - - - - - - Footnotes - - - - - - - - - - - - - - -

n1 The note provides in pertinent part that Kojetin agreed "to pay reasonable attorney's fees and costs incident to collection of due and unpaid installments." Although C.U. takes issue with portions of Magistrate Judge's analysis, it does not appear to quarrel with the Magistrate Judge's conclusion that this language should be construed narrowly, such that "reasonable costs incident to collection" means the actual costs associated with collection. Indeed, such a narrow construction comports with the spirit of the FDCPA. For example, it is a violation of the FDCPA for a debt collector to collect any amount "unless such amount is expressly authorized by the agreement created a debt or permitted by law." 15 U.S.C. § 1692f(1) (emphasis added).

- - - - - - - - - - - - End Footnotes- - - - - - - - - - - - - -

The Court agrees with the Magistrate Judge, however, that C.U.'s inclusion of this fee in the validation notice contravenes [*5] the terms of the note. n2 While it is true that MMCU's costs of collection would include C.U.'s fifteen percent fee, Kojetin did not authorize MMCU to hire a collection agency on such a percentage basis. Had MMCU undertaken collection efforts on its own, it undisputedly could not have accessed a percentage fee wholly unrelated to the actual cost of its collection efforts. Nothing in the note precluded MMCU from hiring C.U. as its agent to undertake these efforts, but MMCU and C.U. cannot alter Kojetin's obligation by the terms of their independent agreement. n3 Under the terms of the note, Kojetin is required to pay only the actual costs of the collection efforts. C.U.'s inclusion of the percentage fee amount in the notice, therefore, violated the FDCPA for the reasons set forth in the Report and Recommendation. n4

- - - - - - - - - - - - - - Footnotes - - - - - - - - - - - - - - -

n2 Again, C.U. does not appear to object to the Magistrate Judge's construction of the terms of the note, except to the extent that it contends that the percentage fee is in fact part of MMCU's costs of collection.

n3 The Court agrees with the Magistrate Judge that to hold otherwise would contravene the purpose of the FDCPA and would open the door to abuse. The FDCPA would provide little protection to a debtor like Kojetin if, in agreeing to pay "reasonable collection costs," a debtor was held to have agreed to pay whatever percentage fee a debt collection service happened to charge a lender such as MMCU for collection efforts. Construing the contract more narrowly -- as authorizing collection of the actual cost of the service's efforts -- conforms to the purpose of the FDCPA. While actual costs may include some provision for a reasonable profit margin for a collection service, such costs cannot be derived from a fee based solely on a percentage of the outstanding debt. [*6]

n4 Nothing herein shall be construed as determining the amount of damages, if any, to which Kojetin is entitled.

- - - - - - - - - - - - End Footnotes- - - - - - - - - - - - - -

ORDER

Based on the foregoing, and all of the records, files, and proceedings herein, the Court OVERRULES defendant's objections [Docket No. 18] and ADOPTS the Magistrate Judge's Report and Recommendation [Docket No. 17]. Accordingly, IT IS HEREBY ORDERED:

1. Plaintiff's motion for partial summary judgment [Docket No. 10] is GRANTED.

2. Defendant's motion for summary judgment [Docket No. 7] is DENIED.

Dated: March 29, 1999.

JOHN R. TUNHEIM

United States District Judge

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The U.S. Supreme Court ruled in favor of a national credit card company that charged its out-of-state customers an interest rate that was allowed by its home state, but it was higher than what other states permitted.

"The whole issue in Smiley vs. Citibank was whether the words `interest at the rate' specifically controlled the other contractual terms that affect our lending relationships, such as late fees, grace periods, prepayment penalties, attorney fees for collections and everything else."

http://www.bizjournals.com/philadelphia/stories/1996/10/07/focus2.html

Posted October 7, 1996

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Question,

What does it take to increase a fico score? Does disputing impact score either way, when items are deleted does your score go up immediately, or does it take time to see results? I was reading here the other day where someone had increased their score from 580 to 750 within 6 months time...and I found that really impressive and would like to know how to make that happen for me.

Please share:) :)++

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Question,

What does it take to increase a fico score? Does disputing impact score either way, when items are deleted does your score go up immediately, or does it take time to see results? I was reading here the other day where someone had increased their score from 580 to 750 within 6 months time...and I found that really impressive and would like to know how to make that happen for me.

Please share:) :)++

The search button is your friend....:)++

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What "search button" are you referring to? I'm new here and not quite sure where to look to get answers and I've read the "newbie" instructions, so maybe you could help me out by telling me where to look. I print out what helps, and value all the excellent advice.

Thanks for the advice

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Do a search on increasing Fico score. You can also try hitting one of the links at the top of the page, "Credit Repair" is a good one.

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Case law on heresay in an affadavit

-1-

UNITED STATES DISTRICT COURT

DISTRICT OF CONNECTICUT

MARIO RICHARDS, :

Plaintiff, ::

V. : No. 3-03-CV-00630(DJS)

:

COMPUTER SCIENCES :

CORPORATION, :

Defendant. :

MEMORANDUM OF DECISION

Plaintiff Mario Richards has motioned the court for permission to proceed as a collective

action pursuant to 29 U.S.C. §216(B). Richards alleges that he and other Customer Support

Analysts (“CSA”) are entitled to unpaid regular and overtime wages under the Fair Labor

Standards Act. Defendant now seeks to strike portions of the affidavit of Mario Richards

submitted in support of the motion to proceed as a collective action. [doc. # 37] Computer

Sciences Corporation (“CSC”) also moves to strike the affidavits of various other CSC

employees submitted by Richards in a reply brief intended to support the motion to proceed as a

collective action. [doc. #61]

DISCUSSION

The Federal Rules of Civil Procedure do not create a standard for reviewing affidavits

submitted in support of motions other than a motion for summary judgment. The court will adopt

the language of Rule 56(e) as a guide for purposes of ruling on the present motion. Rule 56(e)

succinctly states the general principles that are understood to apply to any testimony that is

proffered to this court in support of a legal claim, although that rule explicitly applies only to

motions for summary judgment.

-2-

“Supporting and opposing affidavits shall be made on personal knowledge, shall set forth

such facts as would be admissible in evidence, and shall show affirmatively that the affiant is

competent to testify to the matters stated therein.” Fed. R. Civ. P. 56(e). See also Union Ins.

Soc’y of Canton, Ltd., v. William Gluckin & Co., Inc., 353 F.2d 946, 952 (2d Cir. 1965)(holding

“conclusory statements and statements not made on personal knowledge do not comply with the

requirements of Fed. R. Civ. P. 56(e) and, therefore, may not be considered").

A motion to strike is appropriate if documents submitted in support of a motion for summary

judgment are not made on the basis of personal knowledge or contain inadmissible hearsay or

conclusory statements.” Pokorne v. Gary, 281 F. Supp. 2d 416, 418 (D. Conn. 2003); Spector v.

Experian Info. Sys., No. 3:01-CV-1955, 2004 WL 1242978, at *4 (D. Conn. June 2, 2004).

However, the entire affidavit need not be stricken, United States v. Alessi, 599 F.2d 513, 514-

515 (2d Cir. 1979), even if a party moves to strike parts of an affidavit that do not comply with

the requirements of Fed. R. Civ. P. 56(e). Jewell-Rung Agency, Inc. v. Haddad Org., Ltd., 814

F.Supp 337, 339. (S.D.N.Y. 1993).

A. The First Motion to Strike

Defendant contends that paragraphs 3, 15, 16 and 17 of Richards’s affidavit should be

stricken, as well as portions of paragraph 4 of the affidavit. Paragraph 3 is alleged to be hearsay.

The other problematic paragraphs and statements are, CSC argues, not based on personal

knowledge. The court will address each argument in turn.

“Hearsay is a statement, other than one made by the declarant while testifying at trial or

hearing, offered in evidence to prove the truth of the matter asserted.” Fed. R. Evid. 801©.

“Hearsay testimony that would be inadmissible if testified to at trial may not properly be set

-3-

forth in a Rule 56 affidavit accompanying a summary judgment motion.” Spector, 2004 WL

124978, at *5. Richards’s assertion in paragraph 3 that there are many other CSAs who desire to

join his suit fits squarely within the definition of hearsay. Richards cannot testify as to the

intentions of other employees, where those intentions were allegedly expressed in statements

made outside the presence of the court. Richards may testify that other workers told him they

were interested in his suit, but only to prove that such statements were made, not that they are

true. Richards offers his assertion as proof of the intentions of his co-workers and such testimony

is inadmissible hearsay. Paragraph 3 is stricken.

The remaining contested portions of the affidavit are allegedly deficient because they are

not based on personal knowledge. “Generally, affiants have personal knowledge to testify about

their experiences.” Larouche v. Webster, 175 F.R.D. 452, 454 (S.D.N.Y. 1996). Hearsay and

secondhand information do not constitute personal knowledge. Isaacs v. Mid Am. Body &

Equip. Co., 720 F. Supp. 255, 256 (D. Conn. 1989). Paragraph 4 is a statement regarding CSC’s

hiring practices as they relate to CSAs and the training and skills required to become a CSA.

Paragraphs 15 and 16 assert personal knowledge of the tasks and duties of other CSAs in

Norwich–specifically that the other CSAs also perform tasks that are not properly compensated

with regular and overtime pay. CSC argues that Richards is not qualified to testify as to CSC’s

hiring practices and requirements or the job responsibilities of other CSAs.

The court finds that the contested portions of paragraph 4 are not supported by personal

knowledge and should be stricken. Richards does not establish that his own experiences with

hiring, qualifications and training are reflective of other employees or that he could reasonably

have knowledge of company policy in this area. It is possible that Richards is aware of the

-4-

experiences of other CSAs hired with him or during his term of employment, but he does not

establish the basis for his assertions or his own qualifications to address CSC hiring policies.

Paragraphs 15 and 16 are not stricken. The statements made in paragraph 15 regarding

the duties of other CSAs can obviously have a basis in the personal observations of Richards

during his work day. CSC’s disagreement with the statements made in the affidavit does not

invalidate the testimony. The conclusory nature of paragraph 15 serves only to lessen its

probative value, not to render the testimony inadmissible. Similarly, paragraph 16 is absolutely

something that the plaintiff could observe–and according to his testimony, did observe–during

the course of his work day. Again, disputed testimony is not necessarily improper.

Finally, CSC is correct in arguing that paragraph 17 must be stricken. There is no basis in

the plaintiff’s arguments or his affidavit for his assertion that the CSAs in other parts of the

country face the same conditions that allegedly exist in Norwich. The court finds there is no

evidence of personal knowledge to support Richards’s statement in paragraph 17.

B. The Second Motion to Strike

Defendant raises two arguments in its second motion to strike affidavits. First, defendant

claims that affidavits may not be included in a reply brief. Second, CSC contends that Richards’s

affidavit is contradicted by his deposition testimony and so should be disregarded. CSC also

rehashes some of its arguments from the first motion to strike.

The court finds that Richards’s affidavit is appropriate and should not be stricken. The

court does not consider the affidavit and deposition testimony to be in direct conflict. Further,

even if a conflict did exist, the defendant’s use of the summary judgment standard of proof is

inappropriate. The standard for proceeding with discovery and notice as a collective action under

-5-

the Fair Labor Standards Act is lower than the bar imposed on non-movants attempting to show

a genuine issue of material fact at the summary judgment stage. Obviously, Richards cannot

establish facts through affidavits that contradict his sworn testimony, but he can allege facts,

which is all the burden that the law places on him at this stage of the proceedings. Richards does

not need to prove anything at present but need only make a modest factual showing supported by

substantial allegations and affidavits. See, Grayson v. K-Mart Corp., 79 F.3d 1086, 1096 (11th

Cir. 1996); Hoffman v. Sbarro, Inc., 982 F.Supp. 249, 261 (S.D.N.Y. 1997). Thus, even if there

were a clear contradiction it would not necessarily require the court to strike the affidavit, but

would only be one factor in the court’s assessment of Richards’s success in meeting the burden

of proof required to prevail on his motion.

The court also finds the defendant’s reliance on the local rules unavailing. First, the court

notes that the proper local rule is D.Conn.L.Civ.R.7(e), not 9(g) as the defendant claims. The

rule does not prohibit the inclusion of affidavits with a reply brief. It does limit the reply to a

discussion of the matters raised by the opposition, but there is no reason for this court to hold

that the discussion contemplated cannot include further evidentiary support. Indeed, the interests

of justice demand that the court consider any and all appropriate materials when deciding a

matter, and the affidavits submitted by Richards are appropriate. There is nothing in the local

rules that prevents Richards from including an affidavit and no precedent cited to the court that

interprets the rules in the manner desired by the defendant.

Finally, the court finds that none of the arguments raised against the supporting affidavits

attached to the Richards reply brief has merit. The affidavits contain statements of personal

experience and knowledge that are intended to support the plaintiff’s motion and are entirely

appropriate.

-6-

CONCLUSION

The court finds that certain paragraphs of Mario Richards’s affidavit submitted with his

motion for permission to proceed as a collective action are improper hearsay and not based on

personal knowledge. Paragraphs 3 and 17 and a portion of paragraph 4 are stricken accordingly.

The defendant’s motion to strike [doc. #37] is GRANTED in part. The second motion to strike

[doc. #61] is DENIED.

IT IS SO ORDERED at Hartford, Connecticut, this 28th day of September, 2004.

/s/DJS

DOMINIC J. SQUATRITO

UNITED STATES DISTRICT JUDGE

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I spent five hours yesterday just looking in 23 Fla D 2d Limitations on Actions, which is the Florida Digest section on SOL. This is just the INDEX! the listings there are hundreds of pages. I found it in my local State University (UF) Levin College of Law, which has a fabulous law library. There are all kinds of things in there, both federal and state rulings that apply to Florida law. They also have every other state and territory, and international and maritime and tax laws, and anything you could want! Even if you just look through the index like I did, you will get enough info to perhaps find the actual cases on the internet, at FindLaw or someplace like that.

I found one case which specifically states that SOL laws are to be liberally interpreted in favor of dropping the action--but of course, there are cases which state just the opposite as well! One Federal appeals court decision stated that where multiple statutes apply to a case--and I'm thinking that this refers to an open account which is sued for breach of contract instead, which has a longer SOL--the shorter one applies, and the dilatory Plaintiff will get caught up in this.

When I get my quotes in WORD format, I might upload a few of them here. But the law library is a simply fascinating place to be, and they usually have a reference librarian who is available to assist you--even leading you by hand if necessary--in finding what you need. Find out where the colleges of law are in your state, and spend a day in the law library. You might find just what you need there. And don't forget to look in what is called the "pocket part"--it's the update in the flap inside the back cover, which adds the newest cases. Even so, of course, it will not keep up with the weekly reporters and such.

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