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JOHNSON v. EQUIFAX RISK MANAGEMENT SERVICES

March 16, 2004.

CHRIS JOHNSON, Plaintiff, -against- EQUIFAX RISK MANAGEMENT SERVICES, a division of EQUIP AX CREDIT INFORMATION SERVICES, INC., Defendant


The opinion of the court was delivered by: HAROLD BAER, JR., District Judge

OPINION & ORDER

On October 16, 2003, Magistrate Judge Ronald L. Ellis issued a report and recommendation ("R&R") with respect to plaintiff's motion for partial summary judgment on his various claims under the Fair Debt Collection Practices Act and defendant's cross-motion for summary judgment. Magistrate Judge Ellis recommended that most of the claims asserted in defendant's cross-motion be denied and that most of the claims asserted in plaintiffs motion for partial summary judgment be granted. The parties subsequently filed objections to Magistrate Judge Ellis' R&R.*fn1 For the following reasons, plaintiffs motion is granted in part and denied in part and defendant's cross-motion is granted in part and denied in part.

I. BACKGROUND

 A. Facts

  The basic facts in this matter are generally not in dispute. On September 15, 1999, a check in the amount of $337.50 bearing the name and address of plaintiff Chris Johnson ("plaintiff' or "Johnson") was accepted by a Bloomingdale's*fn2 store for the purchase of merchandise. *fn3 (Deposition of Chris Johnson ("Johnson Dep.") Exhibit ("Ex.") 6.) The check was returned by the bank unpaid, and subsequently forwarded to defendant Equifax Risk Page 2 Management Services ("defendant" or "Equifax"). On or about October 14, 1999, Equifax sent a letter to Johnson demanding payment of $357.50, including $337.50 for the unpaid check and a $20 service charge.*fn4 (Johnson Dep. Ex. 1 at 1.) On October 22, 1999, Johnson, who is an attorney, mailed a letter to Equifax in which he asserted that he had not written the check to Bloomingdale's, and that Bloomingdale's had been defrauded.*fn5 (Johnson Dep. Ex. 2.) On Page 3 October 29, 1999, Equifax sent two letters to Johnson, one that requested full payment for the dishonored check,*fn6 (Johnson Dep. Ex. 3 at 1), and another that acknowledged Johnson's claim of forgery and required that he complete, sign, and notarize an enclosed "Affidavit of Forgery" to confirm that he had not written nor authorized anyone else to write the check, (Johnson Dep. Ex. 4 at 1.) Johnson did not complete and return this "Affidavit of Forgery." (Johnson Dep. Ex. 3; Gordon Aff. Ex. B.) Page 4

  On November 2, 1999, Johnson wrote to Equifax and asked it to respond to the requests he made in his prior letter, including the identity of the bank on which the contested check was drawn. (Johnson Dep. Ex. 5.) Further, Johnson asked Equifax to respond to these requests in writing, to "not communicate with [him] again for any other purpose," and that Equifax "honor [its] legal obligations under the Fair Debt Collection Practices Act" (Johnson Dep. Ex. 5.) On November 11, 1999, Johnson received a fax with a cover page from "FACS Fax Financial and Credit Services, Return Check Department," Bloomingdale's in-house credit and collection unit. (Johnson Dep. Ex. 6.) Attached to the fax was a copy of the returned check used in the transaction with Bloomingdale's; the check was drawn on an account at Chase in the name of Christopher Johnson, and includes his address. This fax also contained an "Affidavit of Forged Signature," which plaintiff again did not sign and return.

  On November 15, 1999, Equifax again sent two letters to Johnson, (Johnson Dep. Ex. 7 at 1; Ex. 8 at 1.) In one, it requested payment for the "dishonored check" in question, referred to "repeated requests and notifications," and asserted that Johnson "seemingly elected to ignore [his] original obligation." Further, this letter again informed Johnson of the suspension of his check writing privileges at tens of thousands of merchants nationwide. The second letter was an affidavit of forgery, identical to the one sent on October 29. On December 10, 1999, and December 24, 1999, Equifax mailed additional affidavits of forgery to Johnson; Johnson responded to neither one. (Johnson Dep. Ex. 9; Ex. 10.)

  On October 13, 2000, Johnson filed this lawsuit.*fn7 In his motion for partial summary judgment, Johnson claimed that: (1) the October 14 and 29 letters "overshadow" and contradict the validation notice required by Title 15 U.S.C. § 1692g; (2) the October 14 and 29 letters were false, deceptive, and misleading, in violation of Title 15 U.S.C. § 1692e in that they contradicted the validation notice, led him to believe that his October 22 letter was ineffective, failed to inform Johnson that his dispute would be shared with users of Equifax's "negative file," and this was a more onerous requirement to dispute the debt than required by statute; (3) the two Page 5 collection letters and four affidavits of forgery that Equifax mailed after it received Johnson's October 22 letter violated Title 15 U.S.C. § 1692g(b); (4) that each of the collection letters and three affidavits of forgery sent after it received Johnson's November 2 letter violated Title 15 U.S.C. § 1692c(c). Johnson further argued that he was entitled to the maximum amount of statutory damages. In its cross-motion, Equifax made the opposite contention with respect to each of Johnson's four contentions regarding statutory violations and claimed in addition that any violations Equifax may have committed were unintentional and the result of bona fide error, thereby precluding liability. In addition, Equifax contended that Johnson was hot entitled to any actual and statutory damages.

 B. Magistrate Judge Ellis' R&R

  Magistrate Judge Ellis concluded that Equifax violated several provisions of the Fair Debt Collection Practices Act and he therefore recommended that plaintiff's motion for partial summary judgment be granted in part and denied in part and that defendant's motion for summary judgment be granted in part and denied in part. Specifically, Magistrate Judge Ellis concluded that: (1) the October 14 and October 29 collection letters overshadowed or contradicted the validation notice and as such, violated Title 15 U.S.C. § 1962g;*fn8 (2) the October 14 and October 29 collection letters were false, deceptive, or misleading and as such, violated Title 15 U.S.C. § 1692e;*fn9 (3) the October 29 affidavit of forgery was false, deceptive, or misleading and violated Title 15 U.S.C. § 1692e because, in conjunction with the October 29 collection letter, it created confusion;*fn10 (4) because the October 29 and November 15 collection Page 6 letters were sent at a time when Equifax was obligated to cease debt collection, they were in violation of Title 15 U.S.C. § 1692g(b);*fn11 (5) the collection letters and affidavits of forgery sent after November 2 were sent at a time when Equifax was obligated to have ceased communication with Johnson and as such, violated of Title 15 U.S.C. § 1692c(c); and (6) that these violations were not the result of bona fide error, such that Equifax would be shielded from liability pursuant to Title 15 U.S.C. § 1692k(c). Johnson v. Equifax Credit Info. Svcs., Inc., No. 00 Civ. 7836 (HB)(RLE), 2003 U.S. Dist. LEXIS 18705, at *23-*24 (S.D.N.Y. Oct. 16, 2003). Magistrate Judge Ellis recommended that Johnson be awarded the maximum amount of statutory damages — $1,000 for all violations — and that the amount of actual damages be presented at a trial. Id. at *24.

  Each side filed objections to the R&R. Johnson objected to Magistrate Judge Ellis' conclusion that the affidavit of forgery that Equifax sent on October 29 violated Title 15 U.S.C. § 1692e only to the extent that, in conjunction with the October 29 collection letter, it created confusion. Specifically, Johnson contends that this letter violated § 1692e in a second respect, namely that it communicated a more onerous requirement for disputing a debt — i.e., submitting an affidavit — than is required by the statute and thus was deceptive or misleading.*fn12

  Equifax asserted eight objections to the R&R. Equifax contended that summary judgment should not have been granted to plaintiff, but instead summary judgment should have been granted to Equifax on the following grounds: (1) the October 14 and October 29 collection letters did not violate Title 15 U.S.C. § 1692g; (2) the October 14 and October 29 collection Page 7 letters did not violate Title 15 U.S.C. § 1692e; (3) the October 29 affidavit of forgery did not violate Title 15 U.S.C. § 1692e; (4) the collection letters and affidavits*fn13 of forgery did not violate Title 15 U.S.C. § 1692g(b); (5) the post-November collection letters and affidavits of forgery did not violate Title 15 U.S.C. § 1692c(c); (6) Equifax's bona fide error defense precluded any finding of liability; (7) Johnson was not entitled to actual damages; and (8) Johnson was not entitled to statutory damages.

  II. DISCUSSION

  Those recommendations by Magistrate Judge Ellis to which the parties interpose objections are reviewed de novo. Fed.R.Civ.P. 72(b); 28 U.S.C. § 636(b)(1); United ...


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