7th Circuit rules on debtor issues

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The 7th Circuit Court of Appeals handed down a decision today addressing issues that have frequently arisen under the Fair Debt Collection Practices Act, which have caused some splits at the Circuit level. In its opinion, the court combined two cases from Indiana and two from Illinois that dealt with similar issues.

The four cases in the opinion include Tammy A. Evory, et al. v. RJM Acquisitions Funding LLC, et al., 06-2130 to 2132, 06-2134, and 06-2157, and Kevin I. Captain v. ARS National Services, Inc., 06-3129 from the U.S. District Court, Southern District of Indiana, Indianapolis Division. Judge David Hamilton presided over both cases. The Illinois cases are Kelly and Karla Lauer v. Mason, Silver, Wenk & Mishkin, LLC, et al., 06-2271 and Philip Jackson, et al. v. National Action Financial Services Inc., et al., 06-3162, 06-3327-06-3439, and 06-3446.

In the opinion authored by Circuit Judge Richard Posner, the court determined there are three overlapping groups of issues to be addressed: the application of the Fair Debt Collection Practices Act, 15 U.S.C. 1692, to lawyers; the proper treatment under the act of settlement offers; and the role of Federal Rules of Civil Procedure12(c) in deciding claims of violations of section 1692e.

The 7th Circuit concluded that any written notice sent to the attorney of a consumer being contacted by a debt collector must contain the same information required by the act that would be sent to the consumer directly. It would be odd if a consumer with an attorney would be excused from receiving information to which he or she is entitled under the statute, wrote Judge Posner.

In the opinion, the judges decided that a representation by a debt collector that would not deceive a competent attorney, even if he or she is not a specialist in consumer debt law, would not be actionable under the act; however misleading or misrepresentation toward an attorney with information a lawyer may not be able to determine, such as the balance of the consumer's debt, would be actionable.

In terms of proper treatment under the act of settlement offers, the 7th Circuit wrote the settlement offers should include language such as "We are not obligated to renew this offer," so even unsophisticated consumers can understand that the debt collector may or may not present a similar offer again. Consumers often interpret offers such as "act now and receive 30 percent off ... if you pay by March 31st" or "we would like to offer you a unique opportunity to satisfy your outstanding debt" as one-time only offers and may not have any further opportunity to settle their debt for less than the full amount if they do not take the offer at that time. By using terms such as "not obligated," the debt collector can let the consumer know the company may or may not extend this offer again.

The 7th Circuit reversed and remanded Evory, Captain, and Lauer for further proceedings consistent with the opinion. In Captain, the 7th Circuit ruled that the District Court erred in dismissing the complaint for failure to state a claim because settlement-offer charges are lawful under the act and the challenge to the lawfulness of the $15 a day representation was made to a lawyer.

In Evory, which is a pure settlement-offer case with no communication with attorneys, the 7th Circuit ruled the dismissal of the complaint was an error.

In Lauer, the 7th Circuit ruled the District Court's dismissal of the plaintiff's complaint on grounds that the communications with a consumer's attorney are beyond the reach of the act was an error.

The court affirmed Jackson.


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  1. If a class action suit or other manner of retribution is possible, count me in. I have email and voicemail from the man. He colluded with opposing counsel, I am certain. My case was damaged so severely it nearly lost me everything and I am still paying dearly.

  2. There's probably a lot of blame that can be cast around for Indiana Tech's abysmal bar passage rate this last February. The folks who decided that Indiana, a state with roughly 16,000 to 18,000 attorneys, needs a fifth law school need to question the motives that drove their support of this project. Others, who have been "strong supporters" of the law school, should likewise ask themselves why they believe this institution should be supported. Is it because it fills some real need in the state? Or is it, instead, nothing more than a resume builder for those who teach there part-time? And others who make excuses for the students' poor performance, especially those who offer nothing more than conspiracy theories to back up their claims--who are they helping? What evidence do they have to support their posturing? Ultimately, though, like most everything in life, whether one succeeds or fails is entirely within one's own hands. At least one student from Indiana Tech proved this when he/she took and passed the February bar. A second Indiana Tech student proved this when they took the bar in another state and passed. As for the remaining 9 who took the bar and didn't pass (apparently, one of the students successfully appealed his/her original score), it's now up to them (and nobody else) to ensure that they pass on their second attempt. These folks should feel no shame; many currently successful practicing attorneys failed the bar exam on their first try. These same attorneys picked themselves up, dusted themselves off, and got back to the rigorous study needed to ensure they would pass on their second go 'round. This is what the Indiana Tech students who didn't pass the first time need to do. Of course, none of this answers such questions as whether Indiana Tech should be accredited by the ABA, whether the school should keep its doors open, or, most importantly, whether it should have even opened its doors in the first place. Those who promoted the idea of a fifth law school in Indiana need to do a lot of soul-searching regarding their decisions. These same people should never be allowed, again, to have a say about the future of legal education in this state or anywhere else. Indiana already has four law schools. That's probably one more than it really needs. But it's more than enough.

  3. This man Steve Hubbard goes on any online post or forum he can find and tries to push his company. He said court reporters would be obsolete a few years ago, yet here we are. How does he have time to search out every single post about court reporters and even spy in private court reporting forums if his company is so successful???? Dude, get a life. And back to what this post was about, I agree that some national firms cause a huge problem.

  4. rensselaer imdiana is doing same thing to children from the judge to attorney and dfs staff they need to be investigated as well

  5. Sex offenders are victims twice, once when they are molested as kids, and again when they repeat the behavior, you never see money spent on helping them do you. That's why this circle continues