Opinion ID: 1443113
Heading Depth: 3
Heading Rank: 2

Heading: Applicability of the FDCPA's Bona Fide Error Defense to Defendants' Mistake of Law

Text: Holding that the FDCPA's bona fide error defense applies to mistakes of law, we now apply the defense to the specific facts of this case. To qualify for the bona fide error defense, a debt collector must prove by a preponderance of the evidence that: (1) the violation was unintentional; (2) the violation was a result of a bona fide error; and (3) the debt collector maintained procedures reasonably adapted to avoid any such error. See, e.g., Lewis v. ACB Bus. Servs., Inc., 135 F.3d 389, 402 (6th Cir.1998). In doing so, [t]he debt collector must only show that the violation was unintentional, not that the communication itself was unintentional. Id. On appeal, Jerman argues that there is a genuine issue of material fact regarding the third prong: whether Defendants maintained procedures reasonably adapted to avoid any legal error as to the written-dispute requirement. The district court found to the contrary. We agree and conclude that Defendants, specifically through Richard McNellie, the senior principal and the attorney responsible for Defendants' compliance with the FDCPA, maintained procedures reasonably adapted to avoid legal error relating to the written-dispute requirement. After reviewing the record, we agree with the district court's conclusion that Defendants employed the following specific procedures to comply with the FDCPA and its ever-changing body of law: Defendant law firm has designated its senior principal, Richard McNellie, as the individual responsible for compliance with the FDCPA; McNellie regularly attends conferences and seminars that focus on FDCPA issues; the firm subscribes to Fair Debt Collection, a part of The Consumer Credit and Legal Practice Series, together with the supplements thereto; McNellie routinely distributes copies of cases relevant to the firm's practices and procedures to all attorneys at the firm; all new employees, attorneys and nonattorneys, are advised of the firm's obligations under the FDCPA and provided with the firm's FDCPA Procedures Manual, and encouraged to seek McNellie's advice with questions regarding the FDCPA; McNellie conducts a mandatory meeting at least twice a year for all available employees wherein FDCPA issues and developments are discussed. . . . Jerman, 502 F.Supp.2d at 695. Jerman argues that Defendants have only shown that these procedures were in place when Jerman was served with the foreclosure complaint and Validation Notice. Jerman claims that the legal error took place when the original Validation Notice form was drafted in 1997, and that because Defendants only speak to the procedures in place in 2006 when the violation took place, they should lose on summary judgment. Jerman, however, fails to cite any legal authority to support her novel assertion that the court must distinguish between the procedures in place when the error (i.e., the drafting of the document) occurred and the procedures in place when the violation (i.e., the serving of the faulty document) occurred. In any event, Defendants testified that they relied on case law at the time the Validation Notice was drafted and when it was actually sent to Jerman. Jerman further argues that had Defendants established any meaningful procedures they would have either (1) sought a formal advisory opinion from the Federal Trade Commission on the in writing requirement, or (2) adopted the model notice contained in the International Guide to the FDCPA of the American Collector's Association, which does not include the in writing requirement. Jerman's arguments fail. First, if seeking an advisory opinion is the only meaningful procedure that can be adopted in order to avoid liability for bona fide legal errors under § 1692k(c), then the FDCPA's separate safe-harbor provision for collectors who act upon the advice of the Commission would be superfluous. See 15 U.S.C. § 1692k(e). [5] Because a court should read the statute as a whole and avoid a construction that renders a statutory word superfluous, Grable & Sons Metal Prods. v. Darue Eng'g & Mfg., 377 F.3d 592, 596-97 (6th Cir.2004), Jerman's argument is unpersuasive. Second, while it could be argued that adoption of the model language would be a better practice for Defendants, Jerman provides no support for her assertion that adopting the language is the only acceptable procedure to avoid legal error of this type. The bona fide error defense calls for maintenance of procedures reasonably adapted to avoid any such bona fide error. Here, Defendants demonstrated that considerable time, effort and research were spent in evaluating the validity of the in writing requirement. Defendants' compliance officer regularly attended FDCPA seminars, examined and distributed relevant case law, regularly held meetings, and encouraged open discussion of FDCPA issues. Further, after Defendants sent the Validation Notice, they continued to take reasonable and good faith steps, particularly through the firm's compliance department, to comply with the law. We, therefore, agree with the district court that the bona fide error defense appropriately applies in this case.