Case Information
*1 IN THE UNITED STATES DISTRICT COURXLERKSkFjjjNU jjDtsl coUr T 6 , A FO R TH E W E STERN D IST RICT O F VIRG IN IA sjuro H ARRISO N BU RG D IVISIO N FE2 2 û 2212 J t.l . U , CLERK QY W ILLIAM M A STER S, . CLERK Plaintiffy Civil Action N o.: 5:17cv00006 HARRISON & JOHNSTON PLC, By: Hon. M ichael F. Urbansld
Chief United States District Judge D efendant.
M EM O M N D UM O PIN IO N
This action arises under the Fait Debt Collection Practices Act (ITFDCPAA') 15 U.S.C. j 1692 et Seq. Plaintiff William Mastets (tdMasters'') alleges that Defendant Harrison &lohnston PLC (d<H&J'') violated the FDCPA by irlitiating a time-barred collection action on behalf of its client, Neurologic Associates PLC (ftNelzrologic'). H&J does not contest the violation, but seeks shelter in the bona fide error dcfense under 15 U.S.C. j 1692k(c). Both parties moved for summary judgment, ECF Nos. 14 & 16, and have filed responsive briefs, ECF N os. 18 & 20-21. The coutt dispenses xvith otal argum ent because the facts and legal contentions are adequately presented fn the m atetials before the court and argum ent would not atd tht decistonal ptocess. Fot the follow ing teasons, M astets' m otion fot summ at'y judgment, ECF No. 14, is DEN IED and H&J's ctoss-motion fot summ ary judgment, ECF N o. 16, is D E N IE D .
1- M astets sought medical serdces ftom Neutologic in July 2008, fot which M asters signed an agreem ent prolnising to pay any invoices. See Ex. C to Pl.'s M em . of Law in Supp. of Summ. J., ECF No. 15-5. No payments werc made for the services aftet 2008. See Pl.'s Statem ent of Undisputed Facts, ECF N o. 15-1, at 1.1 ln late 2015 ot eatly 2016, N eurologic sought H&J's assistance in irtitiating collections ûctions for unpaid serviccs. See Def's Mem. in Opp'n to Pl.'s M ot. for Summ. j. and in Supp. of Def.'s Cross-Mot. for Summ. J., ECF No. 18, at 1 (ç6Def.'s Mem.'),2 Stephen L. Pettler, Jê., the managing member and an attorney at H&J, informed Dr. Mark Landrio, the manager of Neurologic, that H&J could not collect accounts that were unpaid for m ore than five years due to Virginia's statute of lirnitations. See D ef.'s M em ., ECF N o. 18, at 1-2. N curologic agreed to only provide accounts with charges incurred or payments received within the last five years. See id.s at 2. Neurologic reviewed its records and the records of its medical billing company, J.D. Matthews & Associates (<I.J.D. Matthews'') during its compilation of accounts. See id. at 2. In July 2016, Neurologic provided infonnation for 442 accounts, including Masters' account, to H&J for the purpose of initiating collection actions. See ttls
Prior to initiating litigation, H&J reviewed al1 of the accounts for ftappropriate documentation and divided gthe accountsj into tranchcs for drafting of warrants in debt and fiting of the sam e.'' See Ex. E to Pl.'s M em. of Law in Supp. of Summ . J., ECF No. 15-7, at 3-4. H&J has no written procedures for its review of accounts received for collections and 1 Neither Masters nor H&J contest the other's statement of undisputed facts. Therefore, for pumoses of summanr judgment, the court accepts all facts alleged as true.
2 H&J's Statement of Undisputed Facts is contained within the body of its summary judgment briefing.
potential litigation. See Pl.'s Statem ent of Undisputed Facts, ECF N o. 15-1, at 2. H owever, Cttalttorneys with H&J reviewged) a11 claims to determine that cases filed for those claims are filed within the applicable statute of lim itations.'' See Ex. G to Pl.'s M em . of Law in Supp. of Sum m. J., ECF No. 15-9, at 3. Although the attorneys reviewed the documents provided by Neurologic, içgnjo teview of the documents from the billing company (the exhibits attached with Plaintifps Motion for Summaryludgment) would indicate if the debtor had made paym ents or otherwise agreed to a paym ent plan or such other accom m odations with N eurologic A ssociates, PLC.'' See D ef's M em ., ECF N o. 18, at 5. Specific to M asters' account, H&J reviewed his patient informational sheet, patient receipt, signed patient pronlise to pay, and signed insurance inform ation sheet. See Pl.'s Statem ent of U ndisputed Facts, ECF No. 15-1, at 1-2. ffllllt was understood, from the information available to H&J from N eurologic A ssociates, PLC, that the M asters' account was currently active.'' See Ex. E
On November 8, 2016, H&J filed a lawskzit against Masters in W inchester Genetal District Court to collect an alleged outstanding balance of $392.99 owed to Neurologic, plus interest, costs, and attozney's fees of $500. See Pl.'s Statement of Undisputed Facts, ECF No. 15-1, at 1. Masters' counsel then notified H&J that the statute of lilnitations had lapsed. Upon learning of the statute of lilnitations defense, H&J <csubsequently detcrnlined, after consultation with N eurologic A ssociates, PLC, that the M asters account was open, but it did not have any activity on the account w ithin the period of the applicable statute of linaitations. The account was sent to H&J for collection by naistake.'' Ex. G to P1.'s M em . of Law in *4 Supp. of Summ. J., ECF No. 15-9, at 2. Prior to Masters responding to the suit, H&J dismissed the suit with prejudice. See id.
ll. Both M asters and H&J move for summ ary judgment, ECF Nos. 14 & 16. ln l'tis motion for summary judgment, Masters argues that H&J's initiation of litigation meets the three teqlzirements for an FDCPA violation: (1) Masters is a consumer as defincd in j 1692a(3) because he is a natural person allegedly obligated to pay a medical debt; (2) H&J, as a law firm seeking repaym ent of a debt on behalf of a client, is a debt collector under j 1692a(6); and (3) H&J engaged in an act oê ornission in violation of the FDCPA by filing a lawsuit to collcct a time-barred debt. Masters contends H&J possessed documents showing that the statute of lirnitations passed in 2013, three years prior to the initiation of the lawsuit.
In opposition and in its cross summary judgment motion, H&J does not contest the FDCPA violation but claims the bona fide etrot defense under 15 U.S.C.S. j 1692k(c). H&J argues that filing the tim e-barred collection action was unintentional and a bona fide lnistake because Neurologic agreed to only fonvard active accounts. Further, H&J contends that its reliance on N eurologic's review of the records w as a procedtzre reasonably adopted to avoid such an error. As different billing records were held by 130th Neurologic and J.D. Matthews, N eurologic agreed to collect and review the records to verify that accounts were not barred by the statute of lirnitations. H&J states that it had to rely on N eurologic's review of the records given the nature of N eurologic's two different account records.
M asters opposed H&J's cross-motion for summary judgm ent and replied in support of its own motion, arguing that the bona fide error defense is inapplicable because H&J did
4 *5 not com nlit a bona fide error and did not have procedures reasonably adapted to avoid the error.3 M astets does not challenge H&J's lack of intention for the error. However, M asters asserts that the error was not bona fide error because, although a debt collector can rely on its client for inform ation, there m ust be a reasonable or colorable factual basis to believe that the information is accurate; H&J had no reasonable basis because the client's provided docum entation showed no activity on the account after 2008. M asters further azgues that H&J lacks written procedures reasonably adapted to avoid time-barred claims, and that reliance on N eurologic's representations as the client is insufficient.
111. Pursuant to Federal Rulc of Civil Procedure 56(a), the court must ççgrant summary judgment if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of lam '' Fed. R. Civ. P. 56(a); see Celotex Cor . v. Catrett, 477 U.S. 317, 322 (1986); Gl nn v. EDO Cor ., 710 F.3d 209, 213 (4th Cir. 2013). W hen making this determination, the court should consider Ifthe pleadings, depositions, answers to interrogatories, and admissions on file, togethet with . . . ganyj affidavits'' filed by the partîes. Celotex, 477 U .S. at 322. W hethcr a fact is m aterial depends on the relevant substantive law. Anderson v. Libcrty Lobby, Inc., 477 U.S. 242, 248 (1986). (ço nly disputes over facts that tnight affect thc outcom e of thc suit under the governing 1aw will properly preclude the entry of summary judgm ent. Factual disputes that are irrelevant or 3 Masters also claims that H&J's summary judgment motion is untimely and should be denied, ECF No. 20, at 1-2. The court recognizes that H&J fzed its motion tavo days after the deadline set forth in the Scheduling O tdet, ECF N o. 12, and that Local Rule 56 states tlaat late m otions for sum m aty judgment will not be considered without good cause shown. As H&J's summary judgment moùon is denied on the merits, and the motion does not delay trial, Masters is not prejudiced by consideration of the m otion.
unnecessary will not be counted.'' ld. (citation ornitted). The moving party bears the initial burden of dem onsttaéng the absence of a gentzine issue of m aterial fact. See Celotex, 477 U .S. at 323. lf that butden has been m et, the non-m oving party m ust then com e fotavatd and establish the specific material facts in dispute to survive summapr judgment. Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 586-87 (1986).
In determ ining'w hether a genuine issue of m aterial fact exists, the court view s the facts and draws al1 reasonable inferences in the light m ost favorable to the non-m oving party. Glynn, 710 F.3d at 213 (citing Bonds v. Leavitt, 629 F.3d 369, 380 (4th Cir. 2011)). lndeed, Ifrijt is an Taxiom that in ruling on a motion for summary judgment, the evidence of the nonmovant is to be believed, and all justifiable inferences are to be drawn in l'tis favor.''' McAirlaids Inc. v. Ivimberl -clark Cor . No. 13-2044, 2014 WL 2871492, at *1 (4th Cir. June 25, 2014) (internal alteration otnitted) (cittng Tolan v. Cotton, 134 S. Ct. 1861, 1863 (2014) (per curiaml). Moreover, tigclredibility detenninations, the weighing of the evidence, and the drawing of legitimate infercnces from the facts are jury functions, not those of a judge . . . .'' Anderson, 477 U.S. at 255. However, the non-moving part.!r (Kmust sct forth specific facts that go beyond the tm ere existence of a scintilla of evidence.''' Gl nn, 710 F.3d at 213 (quoting Anderson, 477 U.S. at 252). Instead, the non-moving party must show that çKthere is suffkient evidence favoring the nonmoving party for a jury to return a verdict for that parpr.'' Res. Bankshares Co . v. St. Paul M ercu lns. Co., 407 F.3d 631, 635 (4th Cir. 2005) (quoting Anderson, 477 U.S. at 249). ddln other words, to grant summary judgm ent the gcqourt must deternaine that no reasonable jury could find for the nonm oving party on the *7 evidence before it.'' Moss v. Parks Cor ., 985 F.2d 736, 738 (4th Cit. 1993) (citing Perini Cor . v. Perini Const. Inc., 915 F.2d 121, 124 (4th Cir. 1990)).
1A?. This actjon arises under the FD CPA , which protects consum ers from the abusive and deceptive practices employed by some debt collcctors. See 15 U.S.C. j 1692; United States v. N at'l Fin. Servs.. Inc.. 98 F.3d 131, 135 (4th Cir. 1996). The FDCPA is considered a strict liability statute. Sec McLean v. Ra , 488 Fed. App'x 677, 682 (4th Cir. 2012); Sears v. Baretta Fin., No. 7:14CV00036, 2015 W L 3507694, at *2 (W.D. Va. June 3, 2015) (noting consumer only needs to prove one violation to ttigger liability). Section 813(c) of the FDCPA, 15 U.S.C. j 1692k(c), creates a safe harbor for debt collectors through the bona fide error dcfense. A debt collector can avoid liability if he or she can show, by a preponderance of the evidence, Ifthe violation was not intentional and resulted from a bona fide error notwithstanding the m aintenance of procedures reasonably adapted to avoid any such error.'' 15 U.S.C. j 1692k(c); see Heintz v. Jenkins, 514 U.S. 291, 295 (1995); ln Re Accelerated Recove S s. lnc., 431 B.R. 138, 147 (W .D. Va. 2010). Fot the reasons explained below, the court agrecs with Masters that H&J violated the FDCPA but finds that the availability of the bona fide error defense is a question for the jury.
1. M asters alleges violations of FD CPA provisions that apply only to a ttdebt collectory'' as defined in 15 U.S.C. j 1692a(6), who commits certain unlawful acts idin connection with the collection of any debt.'' 15 U.S.C. jj 1692e, 1692f. In order to establish a debt collector's violation of the FD CPA , the plaintiff m ust have been a <<consum er,'' the defendant m ust *8 have been a çtdebt collector,'' and the defcndant m ust have violated the FD CPA through an act or omission. See Yarne v. O cw en Loan Servicin LLC, 929 F. Supp. 2(1 569, 574-75 (W .D. Va. 2013).
M asters has estabtished, and H&J does not dispute, that H&J's initiation of a lawsuit m eets the threc elem ents of an FD CPA violation. M asters is a consum er under the FD CPA because he is 'Kallegedly obligated to pay gaj debt.'' 15 U.S.C. j 1692a(3); Yarne , 929 F. Supp. 2û1 at 575 rfplaintiff is a consumer under the FDCPA, which defines the tetm as fany natural person obligated or allegedly obligated to pay any debt.''' (citation olnittedl). H&J is a <tdebt collector'' because it seeks repaym ent of a debt on behalf of its client, N eurologic. See M cLean, 488 Fed. App'x at 682; Craw ford v. Senex Law, P.C., N o. 3:16-CV-00073, 2017 W L 5162821, at *3 (W .D. Va. Nov. 7, 2017) (f<1n removing the exemption for attorneys, Congress expressed its intent that tlawyers be subject to the (FDCPA! whenever they meet the genetal (tdebt collector'' definition.''' (citation omittedl).
H&J further does not dispute that attempting to collect a debt barred by the statute of lirnitations violates the FD CPA . Fourth Circuit case law supports that such activity constitutes a violation. See In re Dubois, 834 F.3d 522, 527 (4th Cir. 2016) rïFederal courts have consistently held that a debt collectot violates the FD CPA by fiting a lawsuit or threatening to file a lawsuit to collect a time-barred debt.'R),' Bickle v. Gre o , No.
2:16CV131, 2016 W L 6306148, at *5 (E.D. Va. Oct. 7, 2016), re ort and recommendation adopted, No. 2:16CV131, 2016 W L 6398804 (.E.D . Va. Oct. 26, 2016) (Ttcourts have regularly interpreted this provision, in conjunction with section 1692e, as prohibiting a debt collector from initiating legal action on a time-barred debt.''). The U.S. Supreme Court *9 recently noted that it has not yet detertnined whether initiating tim e-barred litigation violates the FDCPA. See Midland Funding. LLC v. Johnson, 137 S. Ct. 1407, 1413 (2017) (t<tAppellee) points out that several lower coutts have found or indicated that, in the context of an ordinary civil action to collect a debt, a debt collector's asscrtion of a claim known to be time barred is Kunfair' gwithin the terms of the FDCPA . . . W e assume, for argument's sake, that the precedent is correct in that context (a matter this Cotzrt itself has not decided and does not now decidel.'). Given the U.S. Supreme Coutt's silence, Fourth Citcuit case law governs and initiating litigation to collect a tîm e-barred debt violates the FD CPA .
Virginia's statute of lim itations for a personal action arising out of a written contract is five years. See Va. Code Ann. j 8.01-246; Compl. ! 11, ECF No. 1. Masters' alleged debt was incurred inluly and August 2008 and he has not subnnitted payments since 2008. Sec Compl. !( 7-8, ECF N o. 1; Exh. B to M ot. for Summ. J, ECF No. 15-4. Legal action to collect the debt was tim e barred after 2013. The defendants did not file suit until N ovem ber 2016, thtee years after the expiration of the statute of hnaitations. See Compl. ! 9, ECF No. 1. By fihng a lcgal action to collect a time-barred debt ftom Masters, H&J falsely representcd the legal status of a debt in violation of 15 U.S.C. j 1692e. See Dubois, 834 F.3d at 527.
Based on the evidence presented, no reasonable jury could find that H&J, as a debt collector, did not violate the FD CPA by initiating a lawsuit to collect a tim e-barred debt against M asters, a consumer. H&J does not dispute this detertnination as it did not counter these allegations in its briefing. H&J solely contends that the FDCPA'S bona fide error defense applies to its actions.Therefore, H&J violated the FDCPA and will be liable for its *10 initiation of litkation absent the applicability of the bona fide error defense available undet 15 U.S.C. j 1692k(c).
2. The FD CPA contains a Kfbona fide error'' defense that absolves a debt collector from liability for a violation. d<To qualify for the bona-fide-error defense, a defendant is required to show, by a preponderance of the evidence, that (1) it unintentionally violated the FDCPA; (2) the violation resulted from a bona fide etror; and (3) it maintained procedutes teasonably adapted to avoid the violation.'' Russell v. Absolute Collection Selars., Inc., 763 F.3d 385, 388-89 (4th Cir. 2014) (citing 15 U.S.C. j 1692k(c)). The flrst element regarding intent is governed by a subjective test, and the second and third elements are governed by an objective test. See Rose v. Roach, No. 6:12-CV-00061, 2013 WL 1563655, at *4 (W .D. Va. Apr. 12, 2013) (citing-lohnson v. mddle, 443 F.3d 723, 728-29 (10th Cir. 2006)). The bona fide error defense presents a fnixed question of law and fact. See In Re Accelerated Recove S s. lnc., 431 B.R. at 149 (citing Educ. Credit M t. Co . v. Frushour, 433 F.3d 393, 398- 99 (4th Cir. 2005:.
M asters does not dispute that H&J unintentionally violated the FDCPA. See Pl.'s Response in Support of Mot. for Summ. J., ECF No. 21, at 2 n.1. The evidence subnaitted for briefing supports that H&J made a factual error based on an incorrect understanding of M asters' account. See Jerman v. Carlisle, M cNellie, Rini, lG amer & Ulrich LPA, 559 U.S. 573, 599 (2010) rçgljawyers may invoke the bona fide error defense, for instance, where a violation results from a qualifying factual error.'7). H&J satisfies the first element of the bona fide error defense.
M asters does contest the rem aining tavo elem ents. The second elem ent of the defense reqkzires a bona fide error, w hich is <tan error m ade in good faith; a genuine nlistake, as opposed to a contrived rnistake.'' Rose, 2013 W L 1563655, at *4 (quoting Kort v. Diversified Collection Seta-s., lnc., 394 F.3d 530, 538 (7th Cir. 2005); see also W ebster v. ACB Receivables M t. Inc., 15 F. Supp. 3d 619, 627 (D. Md. 2014) (same). Kfrflhe bona fide component serves to impose an objective standard of reasonableness upon the asserted unintentional violation.'' Puffinbetger v. Com m ercion, LLC, N o. CIV. SAG -13-1237, 2014 WL 120596, at *5 (13. Md. Jan. 10, 2014) (quoting-lohnson, 443 F.3d at 729). Masters argues that H&J's violation did not result from a bona fide error because H&J solely relied on N eurologic's representations and had no colorable basis to believe that M asters' debt w as within the statute of lirnitations period. See Pl.'s Response in Support of Mot. for Summ. J., ECF N o. 21, at 4. This argum ent speaks to the third elem ent of the defense regarding m aintenance of procedures, and not whether the error itself was bona fide.4 M asters has not alleged that H&J's error was not in (fgood faith'' or a ç<genttine naistake.'' See Rose, 2013 R 1563655, at *4 (considering evidence relevant to whether actions were taken in iTgood faith and lack of deceit and fraud7'). The cotzrt finds that H&J's violation resulted from a bona fide error.
4 M any courts m erge their discussions of the second and third elem ents. See e . ., Rush v. Portfolio Recove Assocs. L1,C, 977 F. Supp. 2d 414, 427 O .N.J. 2013) (<<The second and thizd prongs of the gbona fide errorl defense are objective and require an inqutry' into whether any precautions were acttzally im plem ented, and whether such precautions were reasonably adapted to avoid the specific error at issue.'' (internal quotation marks and citations onlittedl). This likely is because of the close relationship betaveen the tavo elem ents: Tfrlqhe procedures themselves must be explained, along with the m anner it'l w hich they w ere adapted to avoid the error. O nly then is the mistake entitled to be treated as one made in good faith.'' Rose, 2013 W L 1563655, at +4 (quoting Reichert v. National Credit S stems lnc., 531 F.3d 1002, 1007 (9th Cir. 2008)) (internal citation omitted). The court addresses 130th elem ents separately for clarity, but notes that the deciding considetation in this action is whether H&J can benefit from the defense based on its reliance on Neurologic's representadons.
H aving established the first two elem ents of the bona fide error defense by a preponderance of the evidence, H&J next must show that its initiation of a time-barred law stzit occurred TTnotavithstanding the m aintenance of procedures reasonably adapted to avoid any such error.'' 15 U.S.C. j 1692k(c). Defendants must identify their procedures and explain how they were adapted to avoid the error at issue. See Rose, 2013 W L 1563655, at *4 (citing Reichert, 531 F''.3d at 1007). ifgAjvailable case law does not set forth definitive standards regarding the third elem ent of the bona fide error defense. . . .'' M ctuean v. Ra , N o. 1:10-CV-456, 2011 W L 1897436, at *7 (E.D . Va. M ay 18, 2011), affd, 488 F. App'x 677 (4th Cir. 2012)9 cf. Owen v, I.C. S s. lnc., 629 F.3d 1263, 1274 (11th Cir. 2011) rfDespite sunreying the case law, we have located no definitive list of procedures, or even universally applicable parameters, b)r which to assess the third element.7).
U nder Fourth Circuit case law, a debt collector m ay ttrely reasonably upon his client's word, at least where there is a colorable basis for the claim .'' M clwean, 2011 Nv1a 1897436, at *6 (citing Amond v. Brincefield, Hartnett & Assocs., P.C., 175 F.3d 1013 (4th Cir. 1999))) Alston v, Cent. Credit Servs., lnc., N o. CIV.A. DKC 12-2711, 2013 N'VL 4543364, at *4 (D. Md. Aug. 26, 2013) rfDebt collectors can rely in thc ftrst instance on information they obtain from creditors concerning a debt.'). Thcre is no ffheightened duty of investigation for lawyers engaged in ordinary debt collection activity.'' M cLean, 488 Fed. App'x at 683; see also ln re Ladd, 516 B.R. 66, 82 (Banltr. D.S.C. 2014) (granting summary judgment because no evidence contradicted lawyer's affidavit that he was unaware of forged signatures); Sa ed v. W o1 off & Abram son LLP, 733 F. Supp. 2d 635, 646 (D . M d. 2010) rT he FDCPA does not require a debt collector to engage in an independent investigation of *13 the debt referred for collection.'). ç<gzl.j rnisrepresentation made by the debt collector solely as a result of inaccurate inform ation provided by its client would be a bona fide error as defined under 15 U.S.C. j 1692k(c).'' Sa ed, 733 F. Supp. 2:1 at 647 (citing Stnith v. Transworld S stem s lnc., 953 F.2d 1025, 1032 (6th Cir. 1992)).
The case 1aw does not delineate what constitutes a t<colorable basis'' for a claim . Courts generally allow a debt collector to rely on his or her client's statem ents where the client's provided records support the statem ents. ln Am ond v. Brincefield, H artnctt, 175 lower court decision granting summary judgment to lawyer-defendants who attempted to collect the incorrect am ount of a debt because the lawyers had no reason to question their client's statem ent of the am ount due. See also Lon v. M cM ullen D ru & Pinder P.A ., N o. CIV.A. RDB-10-2776, 2011 W L 4458849, at +5-6 (13. M d. Sept. 23, 2011) (applying bona fide error defense ovcr discrepancy in am ount owed because lawyer-defendant relied on client's tepresentation and reviewed account statement to verify amount). Sirnilarly in Puffinbet er v. Commetcion LLC, No. CIV. SAG-13-1237, 2014 W L 120596, at *5 (D. Md. Jan. 10, 201$, the court denied plaintiff's summary judgm ent motion because there was a genuine dispute of m aterial fact about w hether the debt collecting 1aw firm 's policy of reviewing each com plaint to detertnine w hether it was within the applicable statute of lirnitations period was an adequate safeguard for the bona fide error defense.
H ow ever, ifin the face of discoverable error, a debt collector cannot invoke the bona f'ide error defense. Said differently, gtlo qualify for the bona fide error defense under the FD CPA , the debt collector has an affirm ative obligation to m aintain procedures designed to *14 avoid discoverable etrors. . . .7:5 G rant-Fletcher v. M cslullen & D ru P.A., 964 F. Supp. 2d 514, 528-30 ('D. M d. 2013) (internal citations and quotation marks onlitted). In Grant- Fletcher v. McMullen & Drury, P.A., the court denied summary judgment for the defendant because the client's overstatem ent of the debt was fdm anifestly discovetable'' and <fa perfunctory review of the account ledger would have revealed this discoverable error hiding in plain sight.'' 1d. at 528-30. Reviewing the defendant's procedures, the court held: f<l jone of the m easures recited by M & D dem onstrate any procedures that it had at the tim e the error occurred that were reasonably adapted to avoid the specific error at issue'', such as <dobtaining a verification of the sum of the debt, under oath, from the creditot.'' 1d. at 530.
The errot generally m ust be discoverable within the client's provided iiles to disqualify the availability of the defense. In Youn v. Thieblot R an P.A., N o. CIV .A. ELH - 11-01562, 2012 W L 6698632, at *8 (13. M d. Dec. 21, 2012), the court granted summary judgment for the debt collecting law firm because the flt'm <fwas not on notice of a discovetable error'' where there w as no docum entation in the file suggestive of an invalid claim . Likewise in M cLean v. Ra , 488 F. App'x 677, 683 (4th Cir. 2012), the Fourth Circtzit affirmed summary judgment for a lawyer who relied on his client's word, teviewed docum ents provided by his client, and sought an affidavit confirnling the am ount owed. There is no obligation under the law to review a client's entite history with a plaintiff or 5 Som e coutts have btoadly held that t<a debt collector is not reqllired to prove that it had procedures in place to guard against the unknown orpotentlàl errors of others instead, the debt collector has to take prom pt steps to correct any errors once it received not:ice.'' Alston, 2013 W L 4543364, at +4-59 see also ln re Creditnzst Co ., 283 B.R. 826, 832 (Bankr. D. Md. 2002). The debt collectors in these actions did not appear to violate the FD CPA due to a discoverable ertor, and thus these decisions are consistent with allowing a collector to çirely reasonably upon llis client's word, at least w here there is a colorable basis for the claim .'' M cLean, 2011 'W L 1897436, at *6.
14 *15 confirm that there were no clerical errors in the m aintenance of the plaintiff's account. See Sa ed, 733 F. Supp. 2:1 at 647.
Even with a discoverable error, a defendant can still benefit from the bona fide error defense w here it em ploys procedures reasonably adapted to avoid the error at issue. A defendant m ust set forth procedures or declarations describing safeguards aim ed at preventing the error. See W ebster, 15 F. Supp. 3d at 629 (rejecting bona fide error defense because d<neither the procedures nor the declarations describe any redundancy or safeguards in the system reasonably adapted'' to prevent error). Specific to statute of limitations problem s, there m ust be evidence that the debt collector em ployed a procedure to prevent the naistake of initiating tim c-barred litigation. See S encer v. H endersen-W ebb Inc., 81 F. Supp. 2d 582, 592 (13. M d. 1999) rfAbsent any evidence that Rupp em ployed procedures to prevent such naistakes gof attempting to collect time-barred debtsj, no reasonable juror could find for the Defendants.'). For example, T<debt collectots can avoid FDCPA liability by putting in place a reasonable procedure to screen unscheduled, tim e-barred claim s.'' In re Dubois, 834 F.3d at 535 (Diaz, J.y dissenting). Infotm al ptactîces and agreements can sufike in dem onstrating a reasonably adapted procedure. ln Yu v. Kevin B. W ilson Law O ffices, 919 F. Supp. 2û1 661, 664-65 (D. Md. 2013), the court gtanted summary judgment in favor of the lawyer-defendant because the lawyer and his clients agreed to exchange banltruptcy inform ation that would bar collection. Based on their decades-long relationship and the law yer's im m ediate cessation of the claim , the cottrt deternained that the inform al agreem ent to not fotavard accounts with debts subject to discharge in bankruptcy constituted a P êocedure. 1d. at 665.
O ut-of-circuit case law analyzing the bona fide error defense tracks silnilarly to cases from the Fourth Circuit. Courts have rejected a debt collector's dtlaw hcense'' as a procedure reasonably adapted to avoid an error. See Lee v. K ucker & Bruh, LLP, 958 F. Supp. 2d 524, 529-32 (S.D.N.Y. 2013) (IKDefendants had no procedures designed to avoid discoverable errors in their client's computation of the am ount due. Their sole procedure was to rely blindly on their client's business record maintained in the regular course of business.'). For FD CPA' actions involving tim e-barred claim s, courts have required m ote than a m ere review of paperwork where the crtor is discoverable. In Kni hten v. Palisades Collections LLC, 721 F. Supp. 2d 1261, 1270-71(S.D. Fla. 2010), the court rejected the debt collector's bona fide error defense because tTgijf the error gof a tim e-barted claimj would not be obvious to those checking it, it cannot follow that the procedures in place were reasonable, nor suffkient to prevent this error from occurrinp'' ld. at 1271(involving review by attotneys and legal assistants). Debt collectors with discoverable errors normally need ptoccdures in place over and above reliance on a client's representations and a general review of the account. See e. ., Gra v. Suttell & Assocs., 123 F. Supp. 3d 1283, 1294 (E.D. W ash. 2015) (applying bona fide error defense where lawyer debt collectors em ployed form al screening process for statute of linaitations and m aintained statute of lirnitations chartl; Richbur v. Palisades Collection LLC, 247 F.R.D. 457, 468-69 (E.D . Pa. 2008) (denying defendants' motion for summ ary judgment because deterrnination of whether maintenancc of nationwide statute of lirnitations chart is a procedure reasonably adapted to avoid a statute of linlitations error is a question for the jury); çfs M ccollough v. Johnson, Rodenburg & Lauinger, LLC, 637 F.3d 939, 948-49 (9th Cir. 2011) (rejecting defense where debt collector's system for potential *17 statute of lirnitations problem s flagxged a problem yet debt collector subsequently relied on client's representation, without verification, that stat-ute of lirnitations had been cxtended).
W here there is a factual question of whether a debt collector m aintained reasonably adapted procedures, including reliance on others for accurate inform ation, courts have sent the issue to the jury for deterrnination. See Thomas v. Altschul, No. 13 CIV. 8320 ItA, 2015 W 'L 5165334, at *2 (S.D.N .Y. Aug. 21, 2015) (<<gl)t tnight be said that having Altschul review the papers she prepares is enough of a safeguard against such errors. Since there is a factual issue, however, as to what precisely the nature of the error w as in the first place clerical on the part of Pizarro or analytical on the part of Altschul- the Court need not address this issue for summ ary judgm ent would be denied regardless.'); Galla her v. Gurstel Staloch & Char o P.A., 645 F. Supp. 2c1 795, 802-03 (13. Minn. 2009) (denying summac judgment on bona fide error defense where defendant stated paralegals were trained but did not describe the training m ethods, did not provide supporting docum entation, and could not explain how the errot occurred); Vu v. Diversified Collection Servs.. lnc., 293 F.R.D. 343, 362 (E.D .N .Y. 2013) (finding defendants made prima facie case raising bona fide error defense, but that there w ere genuine disputes of m aterial fact about the extent of defendant's procedures and ability to prevent specific type of etror that occurred); Bell v. Bowm an, Heintz, Boscia & Vician, P .C., 370 F.supp.zd 805 (S.D. lnd. 2005) (denying cross motions for summ ary judgment in part because defendant's reliance on creditor's procedures was not sufficient to demonstrate reasonable preventative steps to avoid the error as a matter of law).
Here, the cotzrt finds that a jury should decide whether H&J maintained f<procedures reasonably adapted to avoid'' thc initiation of a time-barred suit. See 15 U.S.C. j 1692k(c). *18 This is a close determ ination. W hile debt collectots generally receive the benefh of relying on a client's representations in collection m atters, that benefit disappears if the error is discoverable and the debt collector did not m aintain procedures reasonably adapted to avoid the error. A jury could find that the expiration of the statute of lirnitations period was readily discoverable based on the patient receipt provided by Neurologic. H&J contends that K<gnjo review of the docum ents from the billing company (the exhibits attached with Plaintiff's M otion for Summary Judgment) would indicate if the debtor had m ade payments or othelavisc agreed to a paym ent plan or such other accom m odations with N eurologic Associates, PLC.'' See D ef.'s M em ., ECF N o. 18, at 5. H owever, the receipt's reference to activity last occurring in 2008 should have raised a question about the possible expiration of the statute of linaitations. Reasonably adapted procedures should have been in place.
H&J heavily relied on Neurologic's collection and review of account information to detetnzine whether claim s were tim e-barred. Based on the submitted docum ents, it is unclear what specific actions H&J engaged in to prevent the initiation of time-barred litigation and whether they were reasonably adapted to avoid such errors. lt is undisputed that H&J reviewed docum ents prior to litigation, including M asters' patient info shcet, patient receipt, signed patient protnise to pay, and signed insurance inform ation shcet. See P1.'s Statem ent of Undisputed Facts, ECF No. 15-1, at 1-2. H&J does not discuss its document review in its statem ent of undisputcd facts. See D ef.'s M em ., ECF N o. 18, at 1-2. H owever, in its discovery responses, H&J stated that (tgajttorneys with H&J reviewgedl a11 claims to determ ine that cases filed for those claim s are filed within the applicable statute of *19 does not explain why this review did not raise questions about the statute of litnitations, what the review entailed, or what actions would have been taken if the error had been discovered. Som e procedutes appeat to have been in place, but the court cannot resolve whether they were reasonably adapted to avoid statute of lirnitations errors based on the undisputed facts in the summac judgment briefing.
A jury should deterrnine which procedures H&J had in place to prevent statute of linaitations issues, and whether any of those ptocedures were reasonably adapted to avoid those errors. Therefore, the availability of the bona fide error defense to H&J needs to be resolvcd at trial.
V . For the reasons stated above, Masters' Motion for Summaryludgment, ECF No. 14, is DEN IED, and H&J's Motion for Summaryludgment, ECF No. 16, is DENIED.
An appropriate O rder will be entered this day.
4 /M W - Y ?. W /--:@-'&o, 8 Enteted: O T .- z. o-
M ichael F. Urbanski Chief United States Districtludge ' ' 19