Lichter v. Bureau Of Accounts Control, Inc.

Background

Joseph Lichter brought a proposed class action against Bureau of Accounts Control, Inc. (BAC), a debt collection agency. He alleged that BAC violated the Fair Debt Collection Practices Act (FDCPA), a federal law regulating debt collection. Lichter relied on BAC’s February 2, 2019 letter, which identified Bergen Urological as his creditor and sought to collect a $1,025 balance for medical services allegedly provided on August 3, 2016. Lichter denied owing any debt to Bergen Urological.

BAC also sent Lichter a December 28, 2018 letter, but Lichter disclaimed any claim based on that letter and relied only on the February 2, 2019 letter. BAC’s records stated that, on February 18, 2019, an individual named Judy asked BAC to cancel the account because a corrected insurance claim had not been sent and the patient should not have been liable. BAC then canceled the account and charged Bergen Urological a cancellation fee.

Legal standard

The parties filed cross-motions for summary judgment under Federal Rule of Civil Procedure 56. Summary judgment is appropriate when there is no genuine dispute about a fact that could affect the outcome and the moving party is entitled to judgment under the law. The court considers each motion separately and views the evidence in favor of the party opposing that motion.

To establish an FDCPA violation, Lichter had to show that he was a consumer, BAC was a debt collector, and BAC committed an act or omission prohibited by the statute. The parties agreed on the first two elements. The remaining question was whether BAC falsely represented the existence, character, amount, or legal status of the alleged debt.

The court applied the objective “least sophisticated consumer” standard. Under that standard, a communication violates the FDCPA if such a consumer could reasonably be misled about the nature or legal status of a debt. The court also explained that the FDCPA imposes strict liability, meaning Lichter did not have to prove that BAC knowingly or intentionally made the false representation.

Evidence and analysis

BAC relied on two documents signed by Lichter on Bergen Urological letterhead. The court held that the documents could be considered, either as properly authenticated business records or as Lichter’s own statements. But the documents did not conclusively show that Lichter received medical services from Bergen Urological, and they did not establish that he owed Bergen Urological a debt.

The court also considered BAC’s account records. It found that the records were adequately supported as business records. BAC raised hearsay objections to statements in those records for the first time in its reply brief, and the court declined to consider those new arguments. The court also found that BAC waived objections to statements on which it had relied in seeking summary judgment.

The court concluded that BAC’s records established that Lichter did not owe a debt to Bergen Urological. In particular, the message requesting cancellation stated that the patient should not have been liable because a corrected insurance claim had not been submitted. BAC’s cancellation of the account reinforced that conclusion. The court held that a reasonable jury could interpret the evidence only one way: Bergen Urological had mistakenly asked BAC to collect a debt from Lichter.

BAC argued that debt collectors should be able to rely on information supplied by their clients and should not have to investigate independently. The court rejected that argument as a basis for denying summary judgment, explaining that the FDCPA does not require Lichter to prove BAC’s intent. The court also stated that whether Lichter owed money to New Jersey Urology was immaterial; Lichter only had to show that he did not owe the debt to Bergen Urological.

Ruling and disposition

The court held that Lichter proved his FDCPA claim on undisputed facts. BAC’s February 2, 2019 letter falsely represented that Lichter owed a debt to Bergen Urological, even though he owed no debt to that entity.

The court GRANTED Lichter’s motion for summary judgment and DENIED BAC’s cross-motion for summary judgment. It directed the parties to appear for a remote telephone status conference on April 16, 2021, and directed the Clerk to terminate the two motions.