Long v. Pendrick Capital Partners II, LLC
374 F. Supp. 3d 515
D. Maryland2019Background
- Pendrick purchased an EmCare medical debt linked to a different "Crystal Long" and placed the accounts with Ability for collection; Pendrick does not resell debts.
- Ability used skip-tracing and associated plaintiff (who shares the name but not SSN, birthdate, or medical history with the debtor) with the EmCare accounts and sent collection letters in Nov. 2016.
- Plaintiff called Ability within 30 days (Nov. 22, 2016), disputed the debt, told Ability her SSN and birthdate did not match the debtor and that she had not received EmCare services; Ability’s agent repeatedly told her to dispute the matter with the credit reporting agencies (CRAs) and said Ability would mark the account disputed.
- Despite knowledge of identifier mismatches, Ability furnished/verified a derogatory tradeline to CRAs; Plaintiff disputed via CRAs and directly; Ability repeatedly verified the account to CRAs until, after suit, it asked CRAs to delete the tradeline.
- Plaintiff presented evidence of credit and employment harms and emotional distress; she delayed job searches and avoided applying for credit while the tradeline remained.
- Procedural posture: Plaintiff moved for partial summary judgment on FCRA and FDCPA claims; Defendants cross-moved on all claims. Court granted some claims and denied others (detailed below).
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Ability violated FCRA §1681s-2(b) by failing to reasonably investigate and by verifying inaccurate information | Ability ignored red flags (mismatched SSN/birthdate/address), performed only cursory checks, and therefore negligently (and possibly willfully) failed to investigate | Ability says it followed its procedures, lacked written dispute, and only verified what its records showed; not willful | Court: Ability failed to reasonably investigate and verified misleading information — summary judgment for plaintiff on negligence liability; willfulness unresolved (fact issue) |
| Whether Ability willfully violated the FCRA (willfulness standard) | Conduct showed reckless disregard (objective high risk of harm); factual record supports willfulness | Ability contends lack of written dispute and employees’ uncertainty about authority create factual dispute as to culpable state of mind | Court: Willfulness is a jury question — denied summary judgment to both sides on willfulness |
| Whether Ability violated FDCPA §1692e by making misleading statements during collection call | Agent misled plaintiff by insisting she must dispute with CRAs after reporting and that disputing with Ability was futile — violates §1692e | Ability contends statements were accurate as to process and plaintiff didn’t provide written dispute; no deception | Court: Plaintiff entitled to summary judgment on §1692e claim against Ability (statements could and did mislead) |
| Whether Ability violated FDCPA §1692f (unfair or unconscionable means) | Sending collection letters without knowing debtor identity is unfair | Ability: §1692e covers the conduct; §1692f requires separate and distinct conduct | Court: §1692f claim fails because it is not separate from §1692e; Ability entitled to summary judgment on §1692f |
| Whether Pendrick is a "debt collector" and vicariously liable for Ability’s FDCPA violation | Pendrick’s business (buying medical debts and outsourcing collection; not reselling) shows principal business is debt collection, making it a debt collector and potentially vicariously liable | Pendrick stresses lack of direct contact with consumer and disputes principal-purpose status | Court: Fact issues exist whether Pendrick’s principal purpose is debt collection; summary judgment denied on vicarious-liability question |
| Defamation and Maryland statutory claims (MCDCA, MCPA) | Ability acted with reckless disregard by furnishing and repeatedly verifying false tradeline after notice; MCDCA/MCPA claims survive | Pendrick argues no basis for vicarious liability; Ability defends its conduct as consistent with procedures | Court: Ability not entitled to summary judgment on defamation, MCDCA, MCPA (fact issues); Pendrick entitled to summary judgment on defamation and MCDCA claims for lack of vicarious-liability showing |
Key Cases Cited
- Safeco Ins. Co. of Am. v. Burr, 551 U.S. 47 (2007) (willfulness under FCRA includes reckless conduct)
- Johnson v. MBNA Am. Bank, NA, 357 F.3d 426 (4th Cir. 2004) (furnisher duties under §1681s-2(b) and unreasonable investigations)
- Saunders v. Branch Banking & Trust Co., 526 F.3d 142 (4th Cir. 2008) (FCRA accuracy includes omissions that make reporting misleading)
- Wood v. Credit One Bank, 277 F. Supp. 3d 821 (E.D. Va. 2017) (finding furnisher liable where only cursory verification occurred; persuasive on investigation sufficiency)
- Sloane v. Equifax Info. Servs., LLC, 510 F.3d 495 (4th Cir. 2007) (actual damages under FCRA may include emotional distress)
- Henson v. Santander Consumer USA, Inc., 817 F.3d 131 (4th Cir. 2016) (discussing "principal purpose" debt-collector definition)
- Barbato v. Greystone All., LLC, 916 F.3d 260 (3d Cir. 2019) (debt buyer whose revenue derives from collecting acquired debts can be a debt collector)
- Janetos v. Fulton Friedman & Gullace, LLP, 825 F.3d 317 (7th Cir. 2016) (debt collector cannot avoid FDCPA liability by outsourcing collections)