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herauntsis

Chaudhry v Gallerizzo & Spears v Brennan

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Hi folks -- it's been a while since I've been around -- how are you all doing?

Here is my problem. On behalf of a customer, I wrote a validation letter to Sherman Acquisitions. What came back was a letter form Alegis Group, quoting the court's finding in Chaudhry v Gallerizzo:

"verification of a debt involves nothing more than the debt collector confirming in writing that the amount being demanded is what the creditor is claiming is owed; the debt collector is not required to keep detailed files of the debt. There is no concomitant obligation to forward copies of bills or other detailed evidence of the debt."

Accompanying the letter was a notarized affidavit of debt certifying that Sherman Acquisitions had purchased the debt. (What was amusing was that their numbers didn't add up; "principal sum of $1290.55 plus interest in the sum of $90.86, for a total of $881.41" . . . huh?)

Now, in Spears v Brennan, the court said "Brennan maintains, however that there was no violation of the FDCPA because he sent 'adequate verification of the debt . . .' Specifically, Brennan claims that a copy of the consumer credit contract between Spears and American General attached to the notice of claim provided sufficient verification of the debt within the meaning of 15 U.S.C. (say, how do you insert that little curly symbol for "paragraph"?) paragraph 1692g. We cannot agree." The court went on to talk about accounting of payments made, late fees which had accrued, etc.

My problem is that the case Alegis quoted to me was decided by the 4th Circuit, and Spears was decided by the Indiana Court of Appeals. I am assuming that the Indiana decision does not have national significance; am I wrong about that? Can I argue a decision that was made in Indiana on behalf of a customer who lives in California against a company in South Carolina? How do I get around this? What am I missing?

Does anyone know of more recent national case law than Chaudhry that supports my position? I read through the entire FDCPA case law thread and couldn't find anything.

Any suggestions are welcome, and thanks!

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Do a search for "Chaundry letter" and see how many posts spring up. Hold onto that letter, btw. That is proof of a false or misleading representation.

These idiots are data mining a decision, that's all. That is NOT what the Chaundry decision says, only part of it. They are leaving out the stuff about how the creditor already validated with a full accounting of the debt.

The fact of the matter is that courts hold that you can't just write a number on a napkin and toss it in front of a judge. They don't have to agree with your dispute, hence the word dispute. It is a material disagreement.

I'd just log the continued collection attempts from here on out and get in contact with a good consumer atty to close the loop.

Further, remember the 4th circuit means nothing to you. They might as well have picked up some decision from Canada (well, not exactly)

The only circuit ruling you need to worry about are the 9th (I think that is California) which is VERY pro consumer. You would be suing them IN california.

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What CA's "conveniently" fail to point out is that in Chaudhry there was the issue that A) the court was talking about validation requirements with regards to attorney fees that were accrued after the debt went into default, not validation of the debt in general, and that 2) the Chaudhry's were deadbeats who brought the claim before the court in bad faith, and were attempting to abuse the system in order to get out of paying a debt that was admitted to being valid.

The court simply smacked down everything they said in retaliation for them wasting the court's time.

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The most ironic part of Chaudhry, is that other circuit court of appeals have cited it in their holdings that validation is an itemized accounting of the debt.

No CAs are using it as an authority for their claims that validation is merely whatever the heck that judge rambled about before he got to his ruling.

I think that in itself puts this stupid Chaudhry tactic to bed. Send them a letter back asking if they really want to cite that in court and have them ask their lawyer what their chances are of winning with that.

There are three circuit court cases dealing on what validation is.

Graziano v Harrison (3rd circuit which cites Chaudhry).

Chaudhry v Gallerizo (4th circuit)

Guerrero v RJM Acquisitions (9th circuit AKA bingo for your cali friend because its CONTROLLING).

Also have your friend send back his own affidavit which should at the very least, be amusing.

1) I am not in receipt of any document which verifies I have a contract with Alegis.

2) I am not in receipt of any document which verifies I owe Alegis money.

3) The actions of Alegis attempting to collect this debt have damaged me financially, socially and emotionally.

See what they have to say about that. :)

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This was included in my Summary Judgment in response to a Chaudhry letter...

The Defendant’s also violated 1692e (3) by including legal references and case cites (See Attached Exhibit # ) , creating the false implication that the individual writing the collection notice was an attorney. If we utilize the least sophisticated consumer test see Clomon v. Jackson , 988 F.2d 1314, 1318 (2d Cir. 1993) (adopting test for § 1692e); see also Bentley v. Great Lakes Collection Bureau , 6 F.3d 60, 62 (2d Cir. 1993) it can be said that the average person can not cite case law because of the plain lack of legal knowledge of the least sophisticated consumer. The least sophisticated consumer would believe that the only person who possessed the knowledge to cite case law would be an attorney therefore leading the Plaintiff to believe, the person who wrote the letter (See Attached Exhibit # ) was in fact an attorney.

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Chaudry was never overturned. As a matter of fact there is even more recent caselaw August 13, 2001 (Chaudry was in 1999) Stonehart v. Rosenthal (S.D.N.Y.) which still holds that a collector does not need to maintain detailed files on the debt.

The point is that the CA is NEVER required to validate anything more than the amount. Where everyone seems to trip up is that the validation CANNOT come from the CA's own records. The validation is obtained by the CA from the original creditor and forwarded to the consumer. It's nothing more than the original creditor giving the CA a document that shows the amount the CA is after is the same as what the OC hired them for.

Now for what came up in the original post, an affidavit from Sherman is not validation by law because it didn't come from the original creditor.

There is one more big tripping point here. If you neglect to reply back and tell them that you do not accept their affidavit, then they can later make a claim of "Account Stated" because you didn't dispute their affidavit.

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Good point, Methuss. They probably don't have documents, so they will go with the account stated route, which cannot be defended absent a showing that you complained.

Chaudry is of limited value, as it was just a 4th cirsuite case. It is best used to say that the CA or OC has to specify what figures make up their demand.

It is wrong to equate DV with legally competent proof. The CA does not have to prove a case to you before collecting from you. I would still, though, answer their letter with whatever arguments you can make, so you have that. Obviously, disputing the debt as yours, its timeliness, and the amount is important going forward.

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We've been over this before. Fields has to do with the addition of fees on top of a legitimate debt. Proper validation is achieved by getting the document fromt he OC and showing how the additional fees/interest affected the original balance. If the added fees are proper through contract and law, then showing how they are added is proper. In Fields, the CA failed to distinguish how those fees were applied...that was the brunt of the case. It doesn't have anything in it at all that requires a CA to provide detailed records on an alleged debt beyond what is stated above.

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