A District Court judge in Texas has partially granted a defendant’s motion for summary judgment in a Fair Debt Collection Practices Act and Fair Credit Reporting Act, especially on a claim that would have awarded the plaintiffs punitive damages, in a case involving the legal validity of a debt.
A copy of the ruling in the case of Ruiz v. Equifax Information Services et al. can be accessed by clicking here.
The plaintiffs leased a trailer home and a lot for 12 months. The plaintiffs allege they notified the property manager in advance that they would be leaving after the 12 months were up and did so. The landlord’s files show a move out date of a month after the lease ended. The landlord sought to charge the plaintiffs for the additional rent and engaged a collection agency — one of the defendants — to recover the unpaid debt. The agency began reporting the debt to the credit reporting agencies. The plaintiffs disputed the debt with the agency and the credit reporting agencies and provided their evidence that the debt was not owed.
The plaintiffs filed suit, alleging the defendants violated the FDCPA by attempting to collect a debt that was not legally owed, and the FCRA by not properly investigating a dispute.
Judge Lee H. Rosenthal of the District Court for the Southern District of Texas granted the defendant’s motion on the claim it violated Section 1692e(8) of the FDCPA, ruling the defendant was not negligent in reporting information to the credit reporting agencies. He did deny the defendant’s motion on the claim related to the attempts made to collect on the debt, saying there was a dispute of fact — the date the plaintiffs moved out — that is material to determining the validity of the debt.
On the FCRA reasonable investigation, the judge found that the defendant did not consider the legal validity of the debt, instead relying “entirely” on statements from the property manager. But the conduct did not warrant the award of punitive damages, Judge Rosenthal determined.
“Ultimately, whether the plaintiffs are liable on the debt turns on whether they timely moved out,” the judge wrote. “That is a disputed fact in this lawsuit — and one that could not have been resolved by the documents received by ProCollect. This is not a case in which the invalidity of the debt is not subject to question or might be ascertained from documents alone. It will rely on the factfinder’s evaluation of the plaintiffs’ testimony and evidence indirectly supporting their testimony. Nothing in the plaintiffs’ documents submitted to ProCollect or to this court finally resolves the question of the debt’s validity, such that punitive damages would be appropriate.”
