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Berry v. National Financial Systems

August 27, 2009


The opinion of the court was delivered by: Honorable Richard J. Arcara Chief Judge United States District Court



Plaintiffs Stephen and Gwendolyn Berry filed a complaint in this case on January 10, 2008, accusing defendant National Financial Systems, Inc. of multiple violations of the Fair Debt Collection Practices Act ("FDCPA"), 15 U.S.C. §§ 1692--1692p. Plaintiffs served defendant with the summons and complaint, but defendant failed to answer or appear. On July 10, 2009, this Court granted plaintiffs' motion for default judgment and ordered an evidentiary hearing as to damages. The hearing occurred on August 13, 2009, at which plaintiffs testified and submitted exhibits pertaining to defendant's conduct. Given the allegations that defendant is deemed to have admitted by default, and given the evidence that plaintiffs submitted at the evidentiary hearing, the Court awards damages along with costs and fees as described below.


This case concerns defendant's conduct in attempting to collect on a credit card debt totaling less than $800. In early 2007, Mr. Berry incurred a debt (the "Debt") on a Household Bank Platinum MasterCard account maintained by HSBC Bank. Exhibit 1 from the evidentiary hearing, an undated statement for this account, states that Mr. Berry's balance in early 2007 was $691.99, with a payment due on March 8, 2007. The statement also contains a notice that the account "has been placed with a collection agency." Plaintiffs do not contest that Mr. Berry defaulted on the Debt.

According to the complaint, defendant called Mr. Berry by telephone in June 2007. During the ensuing conversation, defendant asked Mr. Berry to issue a post-dated check that would pay the Debt in part. Mr. Berry objected, telling defendant that he did not have sufficient funds in his checking account to cover any such check that he issued. Defendant pressured Mr. Berry to issue a post-dated check anyway, claiming that if he did not then HSBC Bank would take him to court and the Debt would increase to $12,000. In response to this threat, Mr. Berry reluctantly agreed to issue a post-dated check. Exhibit 2 from the evidentiary hearing is a letter from defendant to Mr. Berry, dated June 21, 2007, stating that the Debt at that time was $770.09 and that Mr. Berry's post-dated check would be cashed on June 29, 2007 in that amount. When defendant attempted to cash Mr. Berry's check, the check did not clear due to insufficient funds. Mr. Berry incurred bank fees as a result.

In July 2007, defendant called plaintiffs' residence and spoke to Mrs. Berry by telephone. During the conversation, Mrs. Berry specifically requested the caller to identify himself. The caller refused to do so. On or about July 30, 2007, defendant called plaintiffs' residence and left a message on plaintiffs' answering machine. The microcassette tape containing defendant's message was entered into evidence at the evidentiary hearing as Exhibit 3. Defendant's message played as follows:

Good morning Stephen Berry, Mr. Holbert's*fn1 office, uh, Mr. Berry you've got quite a serious situation here on your hands regarding the arrangements that you and I had set forth. Uh, literally you've gone from the pot directly into the fire but I don't think that you did it on purpose. There must have been a problem that was out of your control and if you're having a difficult time that's understandable, I can appreciate that but I need to hear from you immediately. Uh, I got a call from my client Friday so as long as you give me a call we'll do what we can to help you straighten this out but if I don't hear back from you, Mr. Berry, rest assured, my client's already given me the authorization to do what's necessary to protect their interests so, I explained to them you were sincere, I don't think it was done intentionally, they seem to think otherwise, but . . . . [answering machine beeps to signal that the maximum message length has been reached, ending the call].

In or about August 2007, Mr. Berry called defendant with the intention of negotiating a payment plan to repay the Debt. During that conversation, defendants informed Mr. Berry that "it has gone too far, our client has authorized us to sue you." Defendants then asked Mr. Berry for the name of his lawyer. Later that month, defendant called plaintiffs' residence and spoke with Mrs. Berry. When Mrs. Berry answered the telephone, defendant asked to speak with Mr. Berry. When Mrs. Berry informed defendant that Mr. Berry was not available, defendant responded, "What did you do, kick him out?" Mrs. Berry then asked the caller to identify himself and his company. The caller refused to do so.

On January 10, 2008, plaintiffs filed the complaint in this case. The complaint contained a single claim that defendant committed multiple violations of the FDCPA. Specifically, plaintiffs alleged the following:

Defendant violated 15 U.S.C. § 1692e, 15 U.S.C.§ 1692e(5), 15 U.S.C. § 1692e(10), [15] U.S.C. § 1692f, and 15 U.S.C.§ 1692f(1) by misrepresenting that

1. Defendant and/or HSBC Bank had intended to, or had decided to, file a lawsuit against Stephen Berry to collect the subject debt, and that Bank of America had authorized the commencement of such a suit.

2. That the debt would increase from $770.00 to $12,000.00 if Stephen Berry was sued on the subject debt.

Defendant violated 15 U.S.C. § 1692d and 15 U.S.C. § 1692d(2) by asking Gwendolyn Berry if she had kicked ...

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