A creditor continued to communicate with a consumer despite multiple notices of bankruptcy and attorney representation. ACA member Barron & Newburger weighs in, noting that the case is a good example of the consequences of noncompliance.
08/31/2023 10:15 A.M.
4 minute read
A recent case out of Florida highlights the importance of employee compliance training, documentation and bankruptcy monitoring.
In Medley v. Dish Network, LLC, after the defendant continued to communicate with the plaintiff to collect a debt despite multiple notices of attorney representation, a jury found that it violated the Florida Consumer Collection Practices Act and awarded the plaintiff $234,750 in damages. The defendant, DISH, asked for a remittitur of the punitive damages award ($225,000), which the court denied.
Background
The consumer, Linda Medley, was living in Kenneth City, Florida, when she began her satellite TV service with DISH. Medley contacted DISH two times to let them know that she was filing bankruptcy and wanted to cancel her account. She filed for bankruptcy, through counsel, in late May 2014. A DISH debt in the amount of $831.74 was included in her bankruptcy filing.
Medley testified to receiving several bills from DISH in June, July and August 2014, after she filed for bankruptcy.
In August 2014, she received a notice from the bankruptcy court discharging her debts. The notice would have been sent to her creditors, including DISH. However, DISH did not stop contacting her to collect a debt. DISH emailed and called Medley multiple times asking for payment. Medley told her bankruptcy attorneys each time DISH contacted her, and her attorneys communicated to DISH after each phone call that DISH was to stop calling.
DISH’s internal account notes for Medley’s account reflected that it received the notice of Medley’s bankruptcy from the bankruptcy court on or about June 13, 2014. Bills dated July 1 and Aug. 1, 2014, were emailed to Medley post-notice of bankruptcy, prior to the discharge, and after DISH received notice that Medley was represented by an attorney.
DISH received notice of Medley’s discharge in bankruptcy by mid-September. DISH’s corporate representative, Shannon Picchione, testified that DISH has a bankruptcy monitoring system whereby a DISH customer’s account would be documented if the customer files for bankruptcy. Picchione admitted that DISH account notes reflected DISH contacted Medley on several dates ranging from Oct. 24, 2014, through Jan. 16, 2015. She further acknowledged that, during that time, DISH did not offer any training to its employees regarding the Florida Consumer Collection Practices Act, its requirements, or actions that are precluded under the law.
At trial, Medley prevailed on her claim under Fla. Stat. Section 559.72(18). Paragraph (18) of the FCCPA makes it unlawful for a debt collector to “[c]ommunicate with a debtor if the person knows that the debtor is represented by an attorney with respect to such debt and has knowledge of, or can readily ascertain, such attorney’s name and address, unless the debtor’s attorney fails to respond within 30 days to a communication from the person, unless the debtor’s attorney consents to a direct communication with the debtor, or unless the debtor initiates the communication.” Fla. Stat. Section 559.72(18).
A jury awarded Medley $1,000 in statutory damages; $8,750 in actual damages; and $225,000 in punitive damages. DISH asked the U.S. District Court for the Middle District of Florida to grant it judgment as a matter of law. It also sought a remittitur of the punitive damages award, arguing that it was “constitutionally excessive.”
Decision
While there is no “fixed mathematical formula for assessing whether a particular punitive damages award is so grossly excessive as to violate a defendant’s due process rights,” the Supreme Court has developed guidelines for the courts to use. Williams v. First Advantage LNS Screening Sols. Inc., 947 F.3d 735, 761 (11th Cir. 2020).
Under BMW of North America, Inc. v. Gore, 517 U.S. 559 (1996), courts reviewing punitive damage awards are guided by three factors: (1) the degree of reprehensibility of the defendant’s misconduct; (2) the disparity between the actual or potential harm suffered by the plaintiff and the punitive damages award; and (3) the difference between the punitive damages awarded by the jury and the civil penalties.
“Given the lack of employee training regarding the requirements of the FCCPA or actions that are precluded under the law and the systemic failure to document attorney representation, DISH’s conduct demonstrates an indifference to Medley, and presents a risk to the health and safety of others like her, who are at a low point in their lives and are most vulnerable,” according to the court.
It denied DISH’s motion for remittitur, stating that “this was not the case of a ‘runaway jury,’ but rather was one that rendered a punitive verdict that was large enough to potentially deter DISH’s wrongful conduct but not so large as to bankrupt DISH or fail to satisfy due process.”
Member Takeaways
In a legal alert, ACA International member company Barron & Newburger P.C. noted that the award and the court’s reasoning in denying the motions provide insight into the risks inherent in the violation. It’s also a great opportunity for ACA members to consider employee training on the importance of compliance.
Additionally, Barron & Newburger P.C. stated that it seems likely that this order will affect future case valuations by the consumer bar in Florida.
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