A District Court judge in Indiana has preliminarily approved a settlement in a Fair Debt Collection Practices Act case over letters that allegedly threatened or implied that litigation may be instituted against the plaintiff when the defendant had no plans to take such action.
A copy of the order in the case of Hollins v. Church Church Hittle + Antrim can be accessed by clicking here.
The plaintiff received two collection letters from the defendant, attempting to collect a medical debt of $81.52. The plaintiff filed suit, alleging the content of the letters violated Section 1692e the FDCPA because the plaintiff never intended to initiate litigation. The plaintiff’s suit sought to include anyone who received a letter from the plaintiff in which the following statements were made: (i)”[W]e may . . . take legal action against you for the collection of the above amount”, or (ii) “[W]e may file suit against you” or (iii) “[client] does not wish to file suit against you. However, if you do not pay or make payment arrangements, we will proceed as necessary.”
After initially denying a motion for certification and preliminary approval of the settlement because the plaintiff did not provide enough information, Chief Judge Jon E. Deguilio of the District Court of the Northern District of Indiana approved the second attempt.
Members of the class — about 1,700 or so — will split $4,000. The named plaintiff will receive $1,000, and the plaintiff’s attorneys will receive $14,000.
“… even though the case may be somewhat strong, the Defendants’ limited financial resources weigh in favor of the settlement being fair, reasonable, and adequate,” Judge Deguilio wrote. “Plaintiff’s counsel represents that, after obtaining ‘detailed financial information from Defendants, including various financial statements, balance statements, and insurance coverage documents,’ it was revealed that the Defendants’ had a limited net worth and that ‘[f]urther protracted litigation might risk any recovery at all for the class and thus, it was in the best interest of the class to explore an early resolution.’ ”
