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TURNER v. J.V.D.B & ASSOCIATES INC.

May 19, 2004.

STEPHEN P. TURNER, Plaintiff, V. J.V.D.B. & ASSOCIATES, INC., an Illinois Corporation, Defendant


The opinion of the court was delivered by: IAN LEVIN, Magistrate Judge

MEMORANDUM OPINION AND ORDER

Plaintiff Stephen P. Turner ("Turner") moves for summary judgment as to Defendant's affirmative defense of bona fide error in this Fair Debt Collection Practices Act action. For the reasons hereinafter set forth, the Court grants Turner's motion for summary judgment.

BACKGROUND FACTS

  On March 17, 2000, Turner filed a Chapter 7 bankruptcy petition. (Pl.'s Mem. at 1.) A debt in the amount of $97.80 owed to Pre-Paid Local Access Phone Service Company ("Pre-Paid") was listed on Turner's bankruptcy petition. (Id.) Turner's $97.80 debt to Pre-Paid was discharged in bankruptcy and Pre-Paid received notice of the discharge on March 22, 2000 and July 5, 2000. Turner v. J.V.D.B. & Assocs. Inc., 330 F.3d 991, 994 (7th Cir. 2003). By July of 2000, Turner's bankruptcy was listed on his credit reports. (Id.)

  Despite the fact that Turner's bankruptcy was listed on his credit reports, Pre-Paid turned the debt over to a debt collector, Defendant J.V.D.B. & Associates, Inc. ("J.V.D.B."), Turner, 330 F.3d at 994. J.V.D.B. then sent a collection letter printed on its letterhead dated March 29, 2001 to Turner and stated that the balance due to Pre-Paid was $97.80. (Id.) The collection letter stated the following:
This is an attempt to collect a debt and any information obtained will be used for that purpose. The above claim has been referred to this office for collection.
Pursuant to Public Law 95-109, unless you notify us within 30 days after receiving this notice that you dispute the validity of the debt or any portion thereof, this office will assume this debt is valid. If you notify this office in writing within 30 days from receiving this notice, this office will obtain verification of the debt or obtain a copy of a judgment and mail you a copy of such judgment or verification. If you request . . . in writing within 30 days after receiving this notice, this office will provide you with the name and address of the original creditor, if different from the current creditor.
Very truly yours, J.V.D.B. & Associates, Inc. Collection Agency
(Id.)

  As is pertinent here, after receiving the collection letter, Turner forwarded it to his attorney who subsequently brought suit under 15 U.S.C. § 1692e*fn1 of the Fair Debt Collection Practices Act ("FDCPA"). In his suit, Turner alleges that J.V.D.B. violated § 1692e by telling him that he had to pay a debt that had been previously discharged in bankruptcy. By doing this Turner alleges J.V.D.B. misrepresented the legal status of the debt. (Id.)

  The Defendant has filed an affirmative defense of bona fide error. Turner has moved for summary judgment as to this bona fide error affirmative defense. LEGAL STANDARDS

 I. BONA FIDE ERROR DEFENSE

  A bona fide error defense can be available to a debt collector under the FDCPA. To establish a bona fide error defense, a debt collector must show by a preponderance of the evidence that "(1) it violated the FDCPA unintentionally, and (2) has in place procedures reasonably adapted to avoid the violation it committed." Jenkins v. Union Corp., 999 F. Supp. 1120, 1141 (N.D. Ill. 1998)(citing § 1692k(c)). Specifically, § 1692k(c) of the FDCPA states:
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. 15 U.S.C. § 1692k(c).
The bona fide error defense of § 1692k(c) is "unrelated to the issue of whether a plaintiff has proven a debt collector's actual knowledge of facts sufficient to sustain a cause of action under § 1692e." Union Corp., 999 F. Supp. at 1141 (quoting Hubbard v. National Bond & Collection Assocs., Inc., 126 B.R. 422, 429 (D.Del. 1991). Moreover, "[t]he mere assertion of good intent, absent a factual showing of actual safeguards reasonably adopted to avoid violations of the FDCPA, is insufficient" to sustain the bona fide error defense. Id. (quoting Oglesby v. Rotche, No. 93 C 4183, 1993 WL 460841, at *9 (N.D. Ill. Nov. 5, 1993); see also Green v. Hocking, 792 F. Supp. 1064, 1066 n.5 (E.D. Mich. 1992)(rejecting bona fide error defense where the defendant debt collector merely asserted that the error was unintentional without supplying evidence of procedural safeguards).

 II. SUMMARY JUDGMENT

  Summary judgment is appropriate where "the pleadings, depositions, answers to interrogatories, and admissions on file, together with affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law." Fed.R.Civ.P. 56(c). See also Celotex Corp. v. Catrett, 477 U.S. 317, 322, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986). Once the moving party has produced evidence to show that it is entitled to summary judgment, the party seeking to avoid such judgment must affirmatively demonstrate that a genuine issue of material fact remains for trial. LINC Fin. Corp. v. Onwuteaka, 129 F.3d 917, 920 (7th Cir. 1997).

  In deciding a motion for summary judgment, a court must "review the record in the light most favorable to the nonmoving party and . . . draw all reasonable inferences in that party's favor." Vanasco v. National-Louis Univ., 137 F.3d 962, 964 (7th Cir. 1998). See also Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 255, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). Nevertheless, the nonmovant may not rest upon mere allegations, but "must set forth specific facts showing that there is a genuine issue for trial," Fed.R.Civ.P. 56(e). See also Linc, 129 F.3d at 920. A genuine issue of material fact is not shown by the mere existence of "some alleged factual dispute between the parties," Anderson, 477 U.S. at 247, 106 S.Ct. 2505, 91 L.Ed.2d 202, or by "some metaphysical doubt as to the material facts." Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 586, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986). Rather, a genuine issue of material fact exists only if "a fair-minded jury could return a verdict for the [nonmoving party] on the evidence presented." Anderson, 477 U.S. at 252, 106 S.Ct. 2505, 91 L.Ed.2d 202. Therefore, if the court concludes that "the record taken as a whole could not lead a rational trier of fact to find for the nonmoving party, there is no `genuine issue for trial,'" and summary judgment must be granted. Matsushita Elec. Indus. Co., 475 U.S. at 587, 106 S.Ct. 1348, 89 L.Ed.2d 569 (quoting First Nat'l Bank of Arizona v. Cities Serv. Co., 391 U.S. 253, 289, 88 S.Ct. 1575, 20 L.Ed.2d 569 (1968)). DISCUSSION

  Turner avers that J.V.D.B. cannot assert a bona fide error defense herein because J.V.D.B. cannot show by a preponderance of the evidence that the March 29, 2001 debt collection letter was sent unintentionally and was the result of a bona fide error. (Pl.'s Mem. at 5-8.) Thus, Turner specifically contends that J.V.D.B.'s bona fide error defense falls short of the standard set by Seventh Circuit case law and the FDCPA because the principal alleged procedure J.V.D.B. uses to avoid such errors is to "rely on its creditor clients to provide it with all relevant, current and accurate information on a debtor's account including whether a debtor has filed bankruptcy." Id. at 6-8; Am. Affirm. Defense ¶ 7.) Accordingly, Turner alleges that J.V.D.B. failed to adequately maintain procedures to avoid collecting on debts that do not exist as required by § 1692k(c). (Pl.'s Mem. at 5-8.)

  J.V.D.B., on the other hand, alleges that it has set forth a valid bona fide error defense because it has appropriate procedures in place to avoid pursuing collection on accounts that have been discharged in bankruptcy. (Def.'s Resp. at 6-9.) Specifically, J.V.D.B. avers that it reasonably relies on clients to provide it with all relevant, current and accurate information on a debtor's account including whether a debtor has filed for bankruptcy and, moreover, if it receives information that an account is subject to bankruptcy, it will not pursue collection on that account. Id. at 7.) Moreover, J.V.D.B. contends that it is undisputed that it had no knowledge (or notice) that Turner had filed for bankruptcy when ...


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