Circuit Court Upholds Bona Fide Error Defense for ARM Firm in FDCPA Case

A three-judge panel in the Eleventh Circuit Court of Appeals affirmed a lower court ruling granting summary judgment to a collection agency that used a bona fide error defense in case brought against it under the Fair Debt Collection Practices Act (FDCPA). The Circuit Court also upheld an award of certain costs to the defendant.

In the case, Isaac v. RMB, Inc., a couple sued the collection agency over calls placed to their residence. The Isaacs, in fact, were not the intended target of the debt collection activity. They sent a cease-and-desist letter to RMB asking that the calls stop.

But the calls did not stop immediately. The Isaacs continued to receive automated collection calls for at least two weeks after the letter was received. The Isaacs sued, pro se, arguing that the continued calls constituted harassment under the FDCPA and that RMB ignored their cease letter.

In the course of the case, RMB presented a bona fide error defense that the lower court judge, and ultimately the Eleventh Circuit, accepted.  RMB had two specifically trained employees who ordinarily processed cease-and-desist letters. Both employees were absent when RMB received the Isaacs’ cease-and-desist letter—one on maternity leave and the other with an unexpected illness. Although the calls continued for seventeen days after RMB received the letter, as soon as the letter was logged the calls ceased without further action by the Isaacs.

The 11^th panel wrote, in an unpublished opinion, “The Magistrate Judge properly held that RMB’s policies and procedures were reasonably adapted to avoid the kinds of errors that occurred in this case, and that the errors did not occur in bad faith.”

The lower court judge in the case also awarded RMB the cost of filing a particular motion later in the case. In her first deposition, one of the plaintiffs refused to answer many of RMB’s questions and repeatedly objected that the questions were irrelevant. RMB was forced to file a motion compelling the plaintiff to attend a second deposition. The collection agency subsequently moved for costs associated with filing that motion, which the judge granted.

The plaintiffs in the case also appealed the judge’s decision to force her to appear a second time.

The Circuit Court found that her refusal to initially answer questions did not fall under any allowable exceptions and so she “wrongfully refused to answer nearly all of RMB’s questions.” The panel said that the magistrate judge had authority to compel her to attend another deposition and that the award of costs to RMB was also proper.