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Attorney: Marion County small claims 'forum shopping' problems persist

Dave Stafford
February 27, 2013
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A Chicago attorney who has filed at least six federal class-action lawsuits alleging collections companies engaged in “forum shopping” in Marion County Small Claims Courts said the practice appears to be continuing despite township court reforms announced last year.

Daniel Edelman of Edelman Combs Latturner & Goodwin LLC has brought the suits in the U.S. District Court for the Southern District of Indiana. The suits allege that collections companies engaged in practices of filing actions in a particular township court against defendants who neither lived in the township nor signed contracts in the townships where the collections actions were filed.

New small-claims court rules were announced in October and take effect in March, though courts have already implemented some of the changes.

“I have been informed of instances (of forum shopping) by various local attorneys,” Edelman said. He said it wasn’t clear whether new rules for township courts have had an impact on forum shopping.

“Our viewpoint was forum shopping could have been prohibited all along. All that was necessary was to enforce the federal restriction,” Edelman said.

The suits filed by Edelman are brought under the Fair Debt Collection Practices Act. The act allows class-action suits that may recover a maximum of actual damages suffered by class members plus the lesser amount of 1 percent of the net worth of defendants or $500,000. Individual litigants may recover up to $1,000 plus actual damages.

Settlements are pending court approval in two suits. Under terms of one proposed settlement, allegations of forum shopping would cost one set of defendants $43,000 in damages plus payment of plaintiffs’ legal fees. Another collections defendant would pay just over $2,700 in damages and $7,000 in attorney fees and costs.

The more sizeable proposed settlement is in Richard O. Bovey v. Medshield Inc., Jacob, Hammerle & Johnson, LLC, Derek F. Johnson, Jeffrey S. Jacob and Christopher Hammerle, 1:12-CV-728-DML. Richard Bovey’s suit alleges he is a Lawrence Township resident who incurred a medical debt in that township but was sued in Decatur Township.

The proposed settlement filed Jan. 17 calls for payment to anyone sued by any of the defendants in this case in a Marion County Small Claims Court from May 25, 2011, to June 8, 2012. According to the proposed settlement, Bovey will receive $4,500; four additional plaintiffs will receive $1,000 each; and $21,000 will be paid to a class fund. The settlement stipulates that the class fund represents 88 percent of the possible recoverable amount.

Defendants in Bovey identified about 7,100 class members. Plaintiff’s counsel estimates 10 percent of class members will submit a claim, in which case the payment per claimant would be about $30. The settlement includes plaintiff’s attorney fees and costs totaling $13,500.

In Theon C. Parker v. Inland Collection Services, 1:12-CV-924-TAB, the defense proposes to settle with 29 class members defined as those Inland Collection Services sued in a Marion County Small Claims Court between July 8, 2011, and Oct. 5, 2012. Theon Parker’s suit alleges that he is a resident of Hendricks County who was sued for a medical debt incurred in Pike Township, but the matter was filed in Decatur Township.

Under the proposed settlement filed Jan. 16, Parker and another named plaintiff would receive $1,000 each and the class members would be mailed checks in the amount of about $27 from a class fund of $729. The proposed class fund represents 100 percent of the possible recoverable amount under FDCPA. Defendants also would pay $7,000 in attorney fees and costs.

Edelman has brought similar actions involving collections filings in Franklin, Perry and Pike township courts.

Attorney Peter Velde of Kightlinger & Gray LLP in Indianapolis defended both suits in which settlement offers are pending as well as two other FDCPA actions brought by Edelman’s firm. Velde declined to comment on the pending settlements or similar litigation.

Defendants in both settlement proposals deny liability.•

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  1. I have been on this program while on parole from 2011-2013. No person should be forced mentally to share private details of their personal life with total strangers. Also giving permission for a mental therapist to report to your parole agent that your not participating in group therapy because you don't have the financial mean to be in the group therapy. I was personally singled out and sent back three times for not having money and also sent back within the six month when you aren't to be sent according to state law. I will work to het this INSOMM's removed from this state. I also had twelve or thirteen parole agents with a fifteen month period. Thanks for your time.

  2. Our nation produces very few jurists of the caliber of Justice DOUGLAS and his peers these days. Here is that great civil libertarian, who recognized government as both a blessing and, when corrupted by ideological interests, a curse: "Once the investigator has only the conscience of government as a guide, the conscience can become ‘ravenous,’ as Cromwell, bent on destroying Thomas More, said in Bolt, A Man For All Seasons (1960), p. 120. The First Amendment mirrors many episodes where men, harried and harassed by government, sought refuge in their conscience, as these lines of Thomas More show: ‘MORE: And when we stand before God, and you are sent to Paradise for doing according to your conscience, *575 and I am damned for not doing according to mine, will you come with me, for fellowship? ‘CRANMER: So those of us whose names are there are damned, Sir Thomas? ‘MORE: I don't know, Your Grace. I have no window to look into another man's conscience. I condemn no one. ‘CRANMER: Then the matter is capable of question? ‘MORE: Certainly. ‘CRANMER: But that you owe obedience to your King is not capable of question. So weigh a doubt against a certainty—and sign. ‘MORE: Some men think the Earth is round, others think it flat; it is a matter capable of question. But if it is flat, will the King's command make it round? And if it is round, will the King's command flatten it? No, I will not sign.’ Id., pp. 132—133. DOUGLAS THEN WROTE: Where government is the Big Brother,11 privacy gives way to surveillance. **909 But our commitment is otherwise. *576 By the First Amendment we have staked our security on freedom to promote a multiplicity of ideas, to associate at will with kindred spirits, and to defy governmental intrusion into these precincts" Gibson v. Florida Legislative Investigation Comm., 372 U.S. 539, 574-76, 83 S. Ct. 889, 908-09, 9 L. Ed. 2d 929 (1963) Mr. Justice DOUGLAS, concurring. I write: Happy Memorial Day to all -- God please bless our fallen who lived and died to preserve constitutional governance in our wonderful series of Republics. And God open the eyes of those government officials who denounce the constitutions of these Republics by arbitrary actions arising out capricious motives.

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  4. "Meanwhile small- and mid-size firms are getting squeezed and likely will not survive unless they become a boutique firm." I've been a business attorney in small, and now mid-size firm for over 30 years, and for over 30 years legal consultants have been preaching this exact same mantra of impending doom for small and mid-sized firms -- verbatim. This claim apparently helps them gin up merger opportunities from smaller firms who become convinced that they need to become larger overnight. The claim that large corporations are interested in cost-saving and efficiency has likewise been preached for decades, and is likewise bunk. If large corporations had any real interest in saving money they wouldn't use large law firms whose rates are substantially higher than those of high-quality mid-sized firms.

  5. The family is the foundation of all human government. That is the Grand Design. Modern governments throw off this Design and make bureaucratic war against the family, as does Hollywood and cultural elitists such as third wave feminists. Since WWII we have been on a ship of fools that way, with both the elite and government and their social engineering hacks relentlessly attacking the very foundation of social order. And their success? See it in the streets of Fergusson, on the food stamp doles (mostly broken families)and in the above article. Reject the Grand Design for true social function, enter the Glorious State to manage social dysfunction. Our Brave New World will be a prison camp, and we will welcome it as the only way to manage given the anarchy without it.

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