The second time before the Ninth Circuit Court of Appeals turned out to be the charm for a debt collector that was accused of violating the Fair Debt Collection Practices Act by attempting to collect more than what was owed after a hospital made a billing error. The Court yesterday affirmed a judgment as a matter of law that was made by a District Court judge in favor of the defendant.
A copy of the ruling in the case of Fangsrud v. Asset Systems, Inc., and Legacy Salmon Creek Hospital can be accessed by clicking here.
The plaintiffs received a medical bill that was $5,000 more than what they owed. After attempting to collect on it, the hospital placed the bill with the defendant debt collector. The plaintiffs disputed the debt, but the defendant continued to try to collect on it until the account was recalled by the hospital.
The plaintiffs sued, and a District Court judge granted summary judgment in favor of the defendants. The plaintiffs appealed and the Ninth Circuit overturned the summary judgment award in favor of the debt collector, saying it was not entitled to the bona fide error defense because it should have done something after the plaintiffs and their attorney told it of the billing error.
The case was remanded back to the District Court, where a three-day trial was held. Prior to being sent to the jury for deliberations, the defendants filed a motion for judgment as a matter of law, and won. The plaintiffs once again appealed that decision to the Ninth Circuit.
This time, the Ninth Circuit affirmed the ruling in favor of the defendant. While it held in the initial appeal that the defendant was not entitled to the bona fide error defense based on the current record of the case, the additional information that was then presented during the trial “presented sufficient evidence” that proved its policies and procedures were “reasonably adapted” to avoid collecting an incorrect amount.
