Gonzalez v. Cullimore
417 P.3d 129
Utah2018Background
- Tamara Gonzalez, a condominium owner, fell behind on association assessments; the association hired Cullimore law firm (and later SEB) to collect and recorded a lien and sent demand letters.
- Gonzalez disputed the amount in communications and later the parties litigated; a default judgment was entered then set aside, allowing Gonzalez to file counterclaims including violations of 15 U.S.C. § 1692e of the FDCPA for misrepresenting the character, amount, and legal status of the debt.
- Cullimore and SEB moved for summary judgment on the § 1692e claims, submitting affidavits showing they relied on the association’s ledger; Gonzalez submitted her own accounting and sworn denial of owing the asserted amount.
- The district court granted summary judgment in part, dismissing Gonzalez’s § 1692e claims based on the Utah Court of Appeals decision Midland Funding v. Sotolongo, which held debt collectors may rely on their client’s representations and that § 1692e requires proof of knowledge or intent.
- Gonzalez appealed; the Utah Supreme Court reviewed whether Midland Funding applied the correct standard for § 1692e and whether the district court properly granted summary judgment.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether § 1692e requires proof of intent/knowledge (is it strict liability?) | Gonzalez: §1692e is strict liability; no scienter required to establish a violation; reliance on client does not preclude liability. | Cullimore: A plaintiff must show the debt collector knowingly misrepresented the debt; reliance on client avoids liability. | Court: §1692e is a strict-liability provision (plaintiff need not prove intent); abrogates Midland Funding. |
| Whether Midland Funding correctly applied Clark and §1692g standards to §1692e | Gonzalez: Midland Funding misapplied Clark (which addressed §1692g) and wrongly imported verification/intent standards into §1692e. | Cullimore: Midland Funding is controlling and correctly rejects strict liability. | Court: Midland Funding misread Clark and improperly applied §1692g principles to §1692e; Midland Funding is abrogated. |
| Whether the district court properly granted summary judgment dismissing Gonzalez’s §1692e claims | Gonzalez: The court never addressed whether Cullimore’s communications were false; genuine issues of material fact exist. | Cullimore: Showed it relied on client records; thus no §1692e violation. | Court: District court erred by applying Midland Funding and failing to determine whether a false representation occurred; reversal and remand required. |
| Whether the bona fide error defense (§1692k(c)) bars liability at summary judgment | Gonzalez: Defense was not pleaded or proven; reliance on client is insufficient. | Cullimore: Reasonable reliance/bona fide error should preclude liability. | Court: Bona fide error is an affirmative defense; Cullimore did not plead or prove it at summary judgment and may have waived it; may seek leave to amend; remand for factual determination. |
Key Cases Cited
- Clark v. Capital Credit & Collection Servs., 460 F.3d 1162 (9th Cir. 2006) (distinguishes §1692g verification from §1692e; holds §1692e can impose strict liability)
- Midland Funding LLC v. Sotolongo, 325 P.3d 871 (Utah Ct. App. 2014) (court of appeals decision that allowed reliance on client and required scienter for §1692e; abrogated by Utah Supreme Court)
- Turner v. J.V.D.B. & Assocs., Inc., 330 F.3d 991 (7th Cir. 2003) (treats FDCPA as strict-liability statute for §1692e violations)
- LeBlanc v. Unifund CCR Partners, 601 F.3d 1185 (11th Cir. 2010) (holds FDCPA imposes liability without proof of intentional violation)
- Johnson v. Riddle, 443 F.3d 723 (10th Cir. 2006) (articulates elements and burden for asserting the bona fide error defense under §1692k(c))