Anderson v. Credit Bureau Collection Services, Inc.

Citation: 422 F. App'x 534Docket: No. 10-3815

Court: Court of Appeals for the Seventh Circuit; May 25, 2011; Federal Appellate Court

SummaryOriginalCytator Case TreatmentBackward CitatorAnalysis

EnglishEspañolSimplified EnglishEspañol Fácil

Joshua Anderson filed a lawsuit against Credit Bureau Collection Services (CBCS) for allegedly violating the Fair Debt Collection Practices Act (FDCPA) by failing to send the required notice within five days of their initial communication regarding a claimed debt of $1,013 owed to U.S. Cellular. The district court initially ruled in favor of CBCS, but upon review, it was determined that CBCS did not provide admissible evidence to demonstrate that the notice was sent. The FDCPA mandates that debt collectors send a notice to consumers, including the creditor's name and the amount owed, within five days of initiating contact (15 U.S.C. § 1692g(a)). If this notice is not sent or is deficient, consumers may seek damages up to $1,000 (15 U.S.C. § 1692k).

In January 2010, CBCS communicated with Anderson regarding a settlement, which he claims was the only correspondence he received from them. CBCS, however, stated that it had sent a letter in October 2009 providing the required notice. The case hinges on the truth of this assertion, as it is not enough for CBCS to claim that notice was mailed; they must substantiate that claim. CBCS's summary judgment motion lacked necessary proposed findings of fact and did not comply with local rules. The supporting evidence included an affidavit from CBCS's general manager, who stated that CBCS does not retain copies of its correspondence but asserted that its electronic system indicated a letter was sent to Anderson in October 2009. However, CBCS did not provide physical evidence, such as a mailing receipt or any documentation, to corroborate this claim. The appellate court vacated the summary judgment and remanded the case for further proceedings, emphasizing that a jury must determine whether admissible evidence exists to support CBCS's claim of timely notice.

Ki failed to clarify his connection to Anderson’s account or to communications from Columbus and did not provide any relevant records from the CBCS database. A month later, CBCS recognized noncompliance with local rules and filed an amended motion with a proposed statement of facts while excluding Ki’s affidavit. Concurrently, Anderson sought to compel CBCS to respond to his discovery requests and requested a revised scheduling order, citing delays that would hinder his ability to file dispositive motions by the October deadline. 

Anderson, who was incarcerated, later requested more time to oppose summary judgment, stating he had not received CBCS's original motion or supporting documents, learning of it only through the amended motion. CBCS opposed his motions but did resend the original motion for summary judgment. Anderson received Ki’s affidavit on September 23 and subsequently responded to CBCS's opposition. He highlighted an acknowledgment from CBCS regarding a "third-party letter vendor" responsible for sending the October 2009 correspondence, arguing this indicated a misleading statement in Ki’s affidavit about CBCS sending the correspondence directly. 

Anderson reiterated his requests for discovery and additional time, but the district court ultimately granted CBCS summary judgment, reasoning that CBCS's manager's sworn statement about the correspondence's existence outweighed Anderson's lack of evidence for a Fair Debt Collection Practices Act (FDCPA) violation. Anderson moved for reconsideration, asserting he was not given sufficient time to respond to CBCS’s motion and that the court should have addressed his other pending motions before ruling. He also sought to amend his complaint to include a claim against CBCS for disclosing personal information to the third-party mailer.

The district court's denial of Anderson's motions was based on its finding that he had sufficient opportunity to contest the summary judgment and that amending the complaint was unnecessary, viewing CBCS's use of a third-party mailing service as a minor violation of the Fair Debt Collection Practices Act (FDCPA) without demonstrable damage to Anderson. On appeal, it was determined that the court erred; Anderson's argument highlighted that Ki's affidavit presented only inadmissible hearsay regarding whether CBCS sent a statutory notice to him in October 2009. CBCS's acknowledgment of outsourcing the mailing process rendered Ki's statements misleading. The affidavit failed to provide adequate proof that the correspondence was sent, as Ki did not claim personal involvement in the mailing process or offer personal knowledge of the business practices at the Columbus office. CBCS's lack of a business record to substantiate its claim further weakened its position. The court noted that CBCS conceded the insufficiency of Ki's affidavit by not contesting Anderson's hearsay argument. Anderson's denials under penalty of perjury about not receiving communication from CBCS prior to January 2010 were not countered with admissible evidence, negating CBCS's entitlement to summary judgment. Other arguments from Anderson regarding discovery and amending the complaint were deemed unnecessary to address at this stage. The court also clarified that the FDCPA is a strict liability statute, allowing Anderson to pursue statutory damages irrespective of proving actual damages. Consequently, the district court's judgment was vacated, and the case was remanded for further proceedings. The correct name of the defendant was confirmed as Credit Bureau Collection Services, Inc.