The Court of Appeals for the Fourth Circuit has partially affirmed and partially vacated an award in a case the Court said would make for a great hypothetical law school exam involving allegations of improper debt collection activity and alleged violations of the Telephone Consumer Protection Act and the Fair Credit Reporting Act.
A copy of the ruling in the case of Guthrie v. PHH Mortgage, TransUnion, Equifax, and Experian Information Solutions can be accessed by clicking here.
The background of the case is complicated, but can essentially be boiled down to this situation — a husband and wife, whose names were both listed on the deed for a property, separated and divorced. The husband filed for bankruptcy protection and his obligations for the property were discharged. The lender never foreclosed on the property.
The husband sued the lender, alleging it had violated the TCPA by contacting him after he revoked permission to be contacted, violated the FCRA by misreporting the debt to the credit reporting agencies by stating he was still liable for the loan and in default, and violated the North Carolina Debt Collection Act when it attempted to collect on the loan after the bankruptcy had been discharged and by contacting him after he had informed the lender he was being represented by an attorney. A District court judge granted summary judgment in favor of the lender.
While it determined that the plaintiff’s state law claims were not preempted by the federal bankruptcy code, the Court did rule the plaintiff had established a genuine issue of material fact that the lender violated the NCDCA. The Court also found the plaintiff established a genuine issue of material fact in related to his claims that the defendants willfully and negligently violated the FCRA. The Appeals Court upheld the ruling in favor of the defendant on the TCPA claim.
