Senior Citizen Recovers Triple Damages On State, Federal Debt Collection Claims
By Tiffany Friesen Milone
A senior citizen who challenged a debt collector’s practices under state and federal debt collection law won summary judgment of his claims, as well as triple damages under a state statute penalizing defendants that target the elderly, according to an April 28 decision by the U.S. District Court for the Northern District of California (Johnson v. CFS II Inc., N.D. Cal., No. 5:12-cv-01091-LHK, 4/28/13).
Wrong Address Used
In attempting to collect an allegedly outstanding debt owed by 77-year-old Bruce Albert Johnson, CFS II Inc. mailed a collection letter containing all required statutory notices to an address that it later learned was not associated with Johnson.
Upon learning that it had the wrong address, however, it did not resend the original letter; rather, it sent a different one that, according to Johnson, misrepresented his right to dispute or obtain verification of the debt, as well as his right to obtain the name and address of the original creditor. Such conduct, he claimed, violated the Fair Debt Collection Practices Act (FDCPA), 15 U.S.C. §1692 et seq., and California’s Rosenthal Fair Debt Collection Practices Act (RFDCPA), Cal. Civ. Code §1788.
Statutory Requirements Not Met
On Johnson’s motion for summary judgment, Judge Lucy H. Koh agreed that the second letter failed to satisfy statutory requirements.
CFS, however, contended that, even if the second letter violated the statutes, it should not be held liable thereunder because the first letter contained all statutorily-required notices. It further asserted that Johnson’s receipt of the letter is irrelevant because the statute only requires that such a letter be sent, not that a consumer actually receive it.
Based on the evidence on record from CFS’s call logs demonstrating that CFS knew it had sent the letter to the wrong address and failed to resend it, even though it knew it should, Judge Koh concluded that the motion should be granted. Although CFS attempted to argue that Johnson may have in fact received the first letter, she reckoned that nothing on record supports such a proposition.
The court next rejected CFS’s contention that, even if Johnson did not receive the letter, the letter was nonetheless compliant because it need only have “sent” the letter to the debtor. It agreed with several other federal courts “that have found that, if a debtor rebuts the presumption of proper delivery by showing that notice was sent to an incorrect address or returned as undeliverable, the language and purpose of the FDCPA require further action by a debt collector.” See, e.g., Johnson v. Midland Credit Mgmt., Inc., No. 1:05-cv-01094, 2006 BL 91088 (N.D. Ohio Aug. 23, 2006).
CFS, therefore, was obligated to send Johnson another fully compliant letter, which it did not. As such, the court held that Johnson is entitled to summary judgment on his FDCPA and RDCPA claims.
Damages Award Tripled
Turning to damages, Judge Koh reckoned that, because “it appears  likely that CFS made a mistake” in failing to resend the first letter, $700 in statutory damages is appropriate under the FDCPA, as well as reasonable fees and costs. She next awarded Johnson $800 in statutory damages under the RDCPA. Because there is evidence that CFS knew its conduct was directed “at a vulnerable senior citizen,” Judge Koh also tripled the damages award, as provided by Cal. Civ. Code §3345. As such, CFS was ordered to pay Johnson $5,100 in damages.
Counsel for plaintiff: Fred W. Schwinn and Raeon Rodrigo Roulston, Consumer Law Center Inc., San Jose, Cal.; counsel for defendant: Robert Charles Chandler and Mario F. Botkin, Chandler, Potter & Associates, Riverside, Cal.
By Tiffany Friesen Milone