Opinion ID: 624915
Heading Depth: 2
Heading Rank: 3

Heading: The grant of summary judgment against ICC

Text: The district court granted Cruz summary judgment on her FDCPA claim, holding that Cruz's cause of action was not barred by the statute of limitations and that ICC's letters to Cruz violated the FDCPA by falsely claiming ICC was entitled to interest and legal fees, although Nevada law does not permit such a recovery. The debt collectors appeal these holdings and also argue that they are entitled to an affirmative defense that any violation of the FDCPA resulted from a bona fide error.
The FDCPA bars the use of any false, deceptive, or misleading representation in connection with the collection of any debt. 15 U.S.C. § 1692e. [1] The FDCPA is a strict liability statute; there is no mental state required to violate it. McCollough v. Johnson, Rodenburg & Lauinger, LLC, 637 F.3d 939, 948 (9th Cir.2011); Clark v. Capital Credit & Collection Serv., 460 F.3d 1162, 1175 (9th Cir.2006). The FDCPA also prohibits contacting a debtor who has notified a debt collector in writing that the consumer refuses to pay a debt. . . . 15 U.S.C. § 1692c(c). ICC sent letters to Cruz claiming that Cruz was liable for pre-judgment interest, fees, and treble damages. The parties agreed at oral argument that Nevada law governs this debt, and we assume, without deciding, that this is correct. [2] Under Nevada law, a debt collector may not collect any interest or fees unless the interest or fees have been added to the principal by the creditor before the debt collector received the item of collection. Nev.Rev.Stat. § 649.375(2)(a) (2011). Here, there is no evidence that Harrah's Casino added any interest or fees to its claim for $500 before it assigned the claim for collection to the debt collectors. For aught that appears, ICC added those items to the claim. It was ICC who sent Cruz numerous letters stating that Cruz owed varying amounts for interest and fees in addition to $500 in principal. As Nevada law does not permit ICC to add nor to collect such interest and fees, the communications were false and misleading (by suggesting that ICC was entitled to collect such fees) and violated the FDCPA. Nevada law also permits a creditor to collect a maximum of $500 in treble damages for each check written without sufficient funds on deposit. Nev.Rev.Stat. 41.620(1) (2011). The fifth, sixth, seventh, and eighth letters sent by ICC to Cruz stated that Cruz owed $1,500 in treble damages, when the maximum ICC could have collected would be $500 for each check, for a total of $1000. [3] Further, the FDCPA prohibits contacting a debtor who has notified a debt collector in writing that the consumer refuses to pay a debt. . . . irrespective of whether the statement is false under state law or otherwise. 15 U.S.C. § 1692c(c). There are three limited exceptions to this prohibition. Id. As this court has explained, those exceptions are: (1) to advise the consumer that the debt collector's further efforts are being terminated; (2) to notify the consumer that the debt collector or creditor may invoke specified remedies which are ordinarily invoked by such debt collector or creditor; or (3) where applicable, to notify the consumer that the debt collector or creditor intends to invoke a specified remedy. Clark v. Capital Credit & Collection Services, Inc., 460 F.3d 1162, 1169 (9th Cir. 2006). A settlement offer is an example of a specified remedy. See Lewis v. ACB Business Services, Inc. 135 F.3d 389, 399 (6th Cir. 1998) (holding that a letter that can be construed as a type of settlement offer fell within the exception in § 1692c(c)(2)). In this case, Cruz sent a letter entitled REFUSE TO PAY LETTER to ICC on October 27, 2006 stating, I have enclosed a copy of the last collection letter that you sent to me. In this regard, please be advised that I dispute this debt and refuse to pay. She sent this letter certified mail, and Hendrickson signed to receive it on October 31, 2006. ICC continued to send Cruz letters after this. None fall under any of the three exceptions. They were merely continued attempts to collect. Therefore, ICC's letters to Cruz also violated § 1692c(c) of the FDCPA.