Scott v. Portfolio Recovery Associates, LLC
139 F. Supp. 3d 956
S.D. Iowa2015Background
- Portfolio Recovery Associates assigned a defaulted Ford Motor Credit account for Denise A. Scott; Portfolio retained Iowa attorney Kevin Abbott to collect and obtained a default judgment against Denise A. Scott and her husband in 2009.
- Abbott (using Accurint and The WorkNumber per his declaration) gathered information and later sought garnishment; there is dispute about which “Denise Scott” data Abbott used and whether Portfolio provided updated debtor data to Abbott.
- In 2014 Abbott filed garnishment papers that resulted in Wal‑Mart withholding $916.07 from Plaintiff Denise S. Scott’s wages, even though Plaintiff never owed the debt; Abbott later issued a release but subsequent handling of the funds left Plaintiff unpaid.
- Plaintiff sued Portfolio under the FDCPA and Iowa IDCPA; Portfolio removed the case to federal court and moved for summary judgment; Plaintiff cross‑moved for partial summary judgment on liability.
- The court denied summary judgment for Portfolio on most FDCPA and IDCPA claims (communications with third parties, misrepresentations, unlawful garnishment theories) but granted judgment for Portfolio on FDCPA §1692f(1) and several IDCPA provisions that overlap or were inapplicable.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether plaintiff is a “consumer”/the debt is a consumer debt | Denise S. Scott contends she was alleged to owe a consumer debt when her wages were garnished | Portfolio argues plaintiff did not owe the debt and debt is not hers | Genuine issue of fact exists; plaintiff raised sufficient evidence to survive summary judgment |
| Whether communications to employer/sheriff violate FDCPA §1692c(b) | Plaintiff: garnishment and communications to Wal‑Mart/ sheriff alleged she owed the debt — prohibited third‑party communication | Portfolio: claims plaintiff is a third party without standing and communications were post‑judgment remedies | Denied summary judgment; jury could find Portfolio alleged plaintiff owed debt and garnishment was not a necessary post‑judgment remedy |
| Whether third‑party communications/misrepresentations violate FDCPA §1692e(2)(A) & §1692e(5) | Plaintiff: garnishment and filings misrepresented character/legal status and constituted illegal action under §1692e(5) | Portfolio: §1692e doesn’t apply to third parties; §1692e(5) covers threats only | Denied summary judgment; §1692e applies to communications to employer/sheriff and court adopts majority view that §1692e(5) can cover completed unlawful actions |
| Bona fide error defense under FDCPA §1692k(c) | Plaintiff: errors may not be bona fide given evidence suggesting carelessness/possible intent and lack of verification | Portfolio: reliance on counsel and third‑party databases was reasonable; error unintentional | Portfolio failed to carry burden; genuine disputes on intent, good‑faith error, and reasonableness of precautions preclude summary judgment |
Key Cases Cited
- Heintz v. Jenkins, 514 U.S. 291 (U.S. 1995) (FDCPA broadly prohibits certain collection practices)
- Dunham v. Portfolio Recovery Assoc., LLC, 663 F.3d 997 (8th Cir. 2011) (person mistakenly dunned is a “consumer” under FDCPA)
- Strand v. Diversified Collection Serv., Inc., 380 F.3d 316 (8th Cir. 2004) (unsophisticated‑consumer standard)
- Picht v. John R. Hawks, Ltd., 236 F.3d 446 (8th Cir. 2001) (FDCPA is strict liability statute with bona fide error exception)
- Fox v. Citicorp Credit Servs., Inc., 15 F.3d 1507 (9th Cir. 1994) (debt collectors can be vicariously liable for attorneys’ actions)
- McIvor v. Credit Control Servs., Inc., 773 F.3d 909 (8th Cir. 2014) (§1692e not categorically limited to consumer‑directed communications)