OPINION
STATEMENT OF THE CASE
Greg A. Spears challenges the trial court's entry of summary judgment in favor of attorney and debt collector Timothy R. Brennan on Spears' complaint alleging violations of the Fair Debt Collection Practices Act ("the FDCPA" or "the Act"), 15 TU.S.0. § 1692 et seq. Spears presents four issues for our review, which we restate as:
1. Whether Brennan misrepresented the amount of attorney's fees to which he was entitled for the collection of Spears' debt in violation of 15 U.S.C. §§ 1692e(2)(B) and 1692f(1).
2. Whether Brennan's debt collection notice to Spears complied with 15 U.S.C. § 1692g(a).
3. Whether Brennan violated 15 U.S.C.; § 1692g(a) when he scheduled two hearing dates on the debt collection claim and obtained a default judgment against Spears within the thirty-day debt validation period.
4. Whether Brennan violated 15 U.S.C. § 1692g(b) when he obtained a default judgment against Spears after Spears had notified Brennan in writing that he was disputing the debt and before Brennan had mailed verification of the debt to Spears.
We affirm in part, reverse in part and remand for further proceedings.
FACTS AND PROCEDURAL HISTORY
On September 30, 1994, Spears obtained a loan from American General Finance, Inc. ("American General") in the amount bof $2,561.59. The consumer credit contract executed by Spears contained the following collection costs provision: -
If you don't make any payment when it is due, you will pay us reasonable amounts permitted by law which we spend trying to collect what you owe or trying to take, foreclose or sell the security. You will also pay our reasonable attorney's fees, if referred to an attorney who is not our salaried employee, including any for appeals as permitted by law.
Record at 17 (emphasis added). When Spears stopped making the loan payments, *868 American General retained Brennan to collect the unpaid contract balance.
On October 24, 1996, Brennan sent a debt collection notice 1 to Spears that read: 2
RE: Creditor: American General Finance, Inc.
Balance: $2,918.47 less applicable rebates
Dear Mr. Spears:
This communication is from a debt collector and is an attempt to recover a debt owed to the above named Creditor[;] any information obtained will be used for that purpose. Verification of the debt or the name and address of the original Creditor, if different than the above, will be provided upon written request to this office within thirty (80) days[;] otherwise the debt will be assumed valid.
Record at 83. On October 30, 1996, Brennan filed a notice of claim against Spears on behalf of American General in small claims court, seeking recovery of the $2,918.47 unpaid contract balance and $972.82 in attorney's fees, for a total judgment of $3,891.29. Brennan's notice of claim further stated:
THIS IS AN ATTEMPT TO RECOVER YOUR DEBT OWED TO [AMERLI-CAN GENERALI[;] ANY INFORMATION OBTAINED WILL BE USED FOR THAT PURPOSE. VERIFICATION OF THE DEBT, OR, THE NAME AND ADDRESS OF THE ORIGINAL CREDITOR, IF DIFFERENT THAN THE ABOVE, WILL BE PROVIDED UPON WRITTEN REQUEST TO THIS OFFICE WITHIN 30 DAYSI[;] OTHERWISE THE DEBT WILL BE ASSUMED VALID. A REQUEST FOR INFORMATION WILL NOT RESULT IN A DELAY OF LEGAL PROCEEDINGS.
Record at 16. The small claims court set the debt collection claim for hearing on November 18, 1996, and in the notice of claim ordered Spears to appear on that date.
Spears retained attorney Clifford Shepard to represent him in the debt collection claim on November 12, 1996, on which date counsel moved to continue the hearing. The small claims court granted the motion for continuance, and Shepard subsequently agreed with Brennan by telephone to reschedule the hearing for November 27, 1996. Also on November 12, Shepard sent Brennan a letter informing him that Spears "disputes your debt collection-related allegations, denies the same, and demands strict proof and vеrification thereof. This dispute, denial, and demand are made in accordance with federal law." Record at 21.
On November 26, 1996, Shepard again moved to continue the hearing on grounds that Brennan, on behalf of American General, "has failed or refused to provide the requested validation and verification" of the debt despite Spears' demand of the same. Record at 22. The small claims court denied the motion for continuance as untimely and proceeded with the hearing on November 27, 1996. Neither Spears nor Shepard attended the hearing, and the trial court entered a default judgment against Spears in the amount of $3,891.29.
After learning that a default judgment had been entered against Spears on the debt collection claim, Shepard contacted Brennan, who аgreed not to object to a motion to set aside the default judgment. *869 No such motion was ever filed with the small claims court. Instead, Spears filed for bankruptcy and brought an action against Brennan seeking civil liability under the FDCPA. Brennan and Spears filed cross motions for summary judgment on the FDCPA action. The trial court denied Spears' motion for summary judgment and entered summary judgment in favor of Brennan, concluding that "[a] careful consideration of the record in this cause discloses that ... Brennan, without any issues of material fact[ ], has not violated the provisions of the [FDCPA.]" Record at 164. This appeal ensued.
DISCUSSION AND DECISION
Standard of Review
Our analysis proceeds from the premise that summary judgment is a lethal weapon and that courts must be ever mindful of its aims and targets and beware of overkill in its use. Bunch v. Tiwari,
This case also involves questions of stаtutory interpretation. The interpretation of a statute is a question of law reserved for the courts. Wayne Metal Prods. Co., Inc. v. Indiana Dep't of Envtl. Mgmt., 721 NE.2d 316, 317 (Ind.Ct. App.1999), trans. denied. Appellate courts review questions of law under a de novo standard and owe no deference to a trial court's legal conclusions. Id. If the language of a statute is clear and unambiguous, it is not subject to judicial interpretation. - Montgomery v. Estate of Montgomery,
We ascertain and implement legislative intent by giving effect to the ordinary and plain meaning of the language used in the statute. Clifft v. Indiana Dep't of State Revenue,
The FDCPA
In enacting the FDCPA, Congress stated its findings and declared the purposes of the Act as follows:
(a) There is abundant evidence of the use of abusive, deceptive, and unfair debt collection practices by many debt collectors. Abusive debt collection practices contribute to the number of personal bankruptcies, to marital instability, to the loss of jobs, and to invasions of individual privacy.
(b) Existing laws and procedures for redressing these injuries are inadequate to protect consumers.
(c) Means other than misrepresentation or other abusive debt collection practices are available for the effective collection of debts.
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(e) It is the purpose of this subchapter to eliminate abusive debt collection practices by debt collectоrs, to insure that those debt collectors who refrain from using abusive debt collection practices are not competitively disadvantaged, and to promote consistent State action to protect consumers against debt collection abuses.
Zioobron v. Crawford,
Spears maintains that the trial court erred when it entered summary judgment in favor of Brennan on his complaint alleging violations of the FDCPA. In particular, Speаrs contends that: (1) Brennan misrepresented the amount of attorney's fees to which he was entitled for the collection of Spears' debt in violation of 15 U.S.C. §§ 1692e(2)(B) and 16921); (2) Brennan's debt collection notice to Spears did not comply with 15 U.S.C. § 1692g(a); (8) Brennan violated 15 U.S.C. § 1692g(a) when he scheduled two hearing dates on the debt collection claim and obtained a default judgment against Spears within the thirty-day debt validation period; and (4) Brennan violated 15 U.S.C. § 1692g(b) when he obtained a default judgment against Spears after Spears had notified Brennan in writing that the debt was being disputed and before Brennan had mailed verification of the debt to Spears. We address each of Spears' contentions in turn.
Issue One: Misrepresentation of Attorney's Fees
15 U.S.C. § 1692%e provides in pertinent part:
A debt collector may not use any false, deceptive, or misleading representation or means in connеction with the collection of any debt. Without limiting the general application of the foregoing, the following conduct is a violation of this section:
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(2) The false representation of-
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(B) any services rendered or compensation which may be lawfully received by any debt collector for the collection of a debt. >
15 U.S.C. § 1692e@)(B) 15 U.S.C. § 1692f further provides:
A debt collector may not use unfair or unconscionable means to collect or attempt to collect any debt. Without limiting the general application of the foregoing, the following conduct is a violation of this section:
(1) The collection of any amount (including any interest, fee, charge, or expense incidental to the principal obligation) unless such amount is expressly authorized by the agreement creating the debt or permitted by law.
15 U.S.C. § 1692f(1).
In his consumer credit contraсt with American General, Spears agreed to pay "reasonable attorney's fees" incurred by the company for the collection of any unpaid contract balance. Record at 17. - In the notice of claim subsequently filed on behalf of American General, Brennan sought $972.82 in attorney's fees, equal to one-third of the principal amount of Spears' $2,918.47 debt. The attorney's fees requested were added to the judgment against Spears for a total money judgment of $3,891.29. Brennan conceded in response to a request for admissions that he regularly seeks a one-third contingent fee for his debt collection services, and he admitted that he did not spend more than two hours preparing the notice of claim against Spears. Consequently, Spears asserts that Brennan violаted the foregoing provisions of the FDCPA "by misrepresenting the amount of attorney's fees to which he was entitled." Brief of Appellant at 14. Spears argues that "[all-though ... Brennan believes multiplying the principal [unpaid contract] balance by one-third ... is a reasonable fee, ... this method [is] inappropriate." Brief of Appellant at 15.
Tattorney's] fees by Brennan responds that, regardless of whether a one-third contingent fee was in fact reasonable in the debt collection case, he did not "mispresent" the amount of attorney's fees to which he was entitled simply "by requesting attorney's fees in the amount of approximately one-third ... of the principal loan balance." Brief of Appellee at 6 (emphasis in original). Brennan points out that Spears "did not avail himself of the opportunity to challenge the reasonableness of the amount of appealing the [small claims] court's judgment" on the debt collection claim and argues that Spears "cannot now challenge the award of attorney's] fees by asserting a claim under the FDCPA." Brief of Appellee at 6. We agree with Brennan.
This court held in Valparaiso Technical Inst., Inc. v. Porter County Treasurer,
A contingent fee, even between an attorney and his client, is not enforceable unless it is founded upon a prior agreement. It then follows inexorably that a contingent fee contract of the obligee on an instrument with his attorney cannot be enforced against the party obligor who has merely agreed in the instrument to pay a "reasonable attorney fee" for the fundamental reason that the obli-gor has nеver agreed or has never even been consulted concerning the arrangement.
Waxman,
Here, Brennan sought a one-third contingent fee of $972.82 for the collection of Spears' debt to American General, an amount "presumed to be reasonable" as between Brennan and American General.
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See Valparaiso Technical Inst.,
Moreover, as Brennan suggests, "the determination of the reasonableness of the amount of attorney[']s fees requested in the notice of claim was a decision for the small claims court." Brief of Appellee at 7. The small claims court awarded the full amount of attorney's fees requested by Brennan, and Spears' subsequent claim of misrepresentation under the FDCPA is tantamount to a collateral attack on that award. See Zsamba ex rel. Zsamba v. Community Bank, Abilene, Kansas,
We hold, therefore, that Brennan did not violate 15 U.S.C. §§ 1692e or f(1) when he merely requested $972.82 in attorney's fees in his debt collection claim against Spears. The trial court's entry of summary judgment on this issue is affirmed.
Issue Two: Debt Collection Notice
Next, we address Spears' claim that Brennan's debt collection notice failed to comply with 15 U.S.C. § 1692g(a). That provision governs the verification rights of consumers and requires debt collectors, at the outset, to send consumers a written notice containing the following information:
*873 (1) the amount of the debt;
(2) the name of the creditor to whom the debt is owed;
(3) a statement that unless the consumer, within thirty days after receipt of the notice, disputes the validity of the debt, or any portion thereof, the debt will be assumed to be valid by the debt collector;
(4) a statement that if the consumer notifies the debt collector in writing within the thirty-day period that the debt, or any portion thereof, is disputed, the debt collector will obtain verification of the debt or a copy of a judgment against the consumer and a copy of such verification or judgment will be mailed to the consumer by the debt collector; and
(5) a statement that, upon the consumer's written request within the thirty-day period, the debt collector will provide the consumer with the name and address of the original creditor, if different from the current creditor.
15 U.S.C. § 1692g(a)(1)-(5); Walker v. National Recovery, Inc.,
Here, Brennan's debt collection notice stated that "Ivjerification of the debt ... will be provided upon written request to this office within thirty (80) days[;] otherwise the debt will be assumed valid." Reece-ord at 33. Spears alleges that this notice violated 15 U.S.C. § 1692g(a) in three respects: (1) it failed to inform Spears that he could dispute a portion of the debt; (2) it failed to inform Spears adequately that he had thirty days from the date of receipt to dispute the debt; and (8) it imposed an invalid requirement that Spears dispute the debt in writing. We address each alleged violation in turn.
Spears initially contends that Brennan's debt collection notice violated 15 U.S.C. 1692g(a)(8) because it failed to inform Spears that he could dispute any portion of the debt. He cites the Ninth Circuit's decision in Baker v. G.C. Servs. Corp.,
While recognizing these competing authorities, we need not decide whether a debt collection notice must explicitly inform the consumer he can dispute any portion of a debt within thirty days of receiving the notice because we conclude, as a matter of law, that Brennan's notice did not adequately advise Spears he could
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dispute the debt to American General at all, In so doing, we observe that Brennan's debt collection notice is virtually identical to the notice in Baker. The Baker court declared that the notice "barely informs the debtor that he may even dispute the entire debt[,]" much less any portion thereof. Baker,
We also conclude that Brennan's dеbt collection notice did not adequately inform Spears that he had thirty days from his receipt thereof to dispute the validity of the debt and, thus, failed to comply with 15 U.S.C. § 1692g(a)(8). The debt collection notice advised Spears only' that he must seek verification of the debt "within thirty days [;] otherwise the debt will be assumed valid." Record at 83 (emphasis added). It is unclear from the face of the notice whether Spears had thirty days from the date the notice was sent, October 24, 1996, or the date it was received,
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to seek verification of the debt. See Cavallaro v. Law Office of Shapiro & Kreisman,
Finally, Spears maintains that Brennan's notice advising him that "verification of the debt ... will be provided *875 upon written request" imposed an invalid requirement that he dispute the validity of the debt to American General in writing. Record at 88. Without deciding whether the FDCPA prohibits a debt collector from requiring a debtor to dispute the validity of a debt in writing, 6 we determine only that Brennan did not violate the FDCPA by advising Spears that verification of the debt would be provided if requested in writing. 15 U.S.C. § 1692g(a)(d) clearly requires that a debt collector's notice contain a statement that verification of the debt will be provided if requested in writing within thirty days of receipt of the debt collection notice. Brennan properly advised Spеars of this verification right under the FDCPA.
We thus hold that Brennan's debt collection notice failed, as a matter of law, to comply with 15 U.S.C. § 1692g(a) and, specifically, with 155 U.S.C. § 1692g(a)(8). It did not adequately advise Spears of his right to dispute the validity of the debt or of his right to do so within thirty days from receipt of the debt collection notice. We therefore reverse the trial court's entry of summary judgment in favor of Brennan on this issue.
Issue Three: Thirty-day Debt Validation Period
As discussed above, 15 U.S.C. § 1692g(a) requires a debt collector to send a debt collection notice stating, among other things, that unless the debtor disputes the validity of the debt within thirty days from receipt of the debt collection notice, the debt collector will assume the debt is valid. Johnson v. Revenue Mgmt. Corp.,
In this case, Brennan's notice of claim contained an order for Spears to appear in small claims court and answer to the debt owed American General on November 13, 1996, only twenty days after the debt collection notice had been sent. Spears argues that Brennan "overshadowed, underminеd, and truncated" the FDCPA-required thirty-day debt validation period when he scheduled the hearing for November 13, 1996. Brief of Appellant at 27. Brennan responds that it was the small claims court, not he, that ordered Spears to appear at the hearing, and, therefore, that he could not have violated the FDCPA. We cannot agree with Brennan.
15 U.S.C. § 1692g(a) mandates in no uncertain terms that a debtor has thirty days to dispute the validity of a debt. Accordingly, Brennan was obligated under the Act not to infringe upon this thirty-day debt validation period. While it is trué
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that the small claims court set the hearing on the debt collection claim for November 13, 1996, and ordered Spears to appear on that date, it was Brennan's duty, as a debt collector under the FDCPA, to obtain a hearing date outside the thirty-day debt validation period sо as not to undercut Spears' verification rights. Having filed suit and required Spears to answer to the debt owed American General on November 13, 1996, Brennan violated the FDCPA by implying that Spears did not have thirty days to dispute the same. See Johnson,
Spears similarly asserts that Brennan undéreut his verification rights under 15 U.S.C. § 1692g(a) when he rescheduled the small claims hearing for November 27, 1996, a date Spears alleges also falls within the thirty-day debt validation period. We observe, however, that the thirty-day debt validation period commences from the date of receipt of the debt collection _ notice. See 15 U.S.C. § 1692g(a)(8). Because Brennan sent the debt collection notice to Spears on October 24, 1996, the hearing, rescheduled thirty-four days after the debt collection notice was sent, could well have bеen scheduled outside the thirty-day debt validation period. If Spears received the debt collection notice on or before October 27, 1996, there could have been no undercutting of the thirty-day debt validation period and no violation of the FDCPA when Brennan scheduled the November 27, 1996 hearing. If, on the other hand, Spears received the debt collection notice after October 27, 1996, Brennan violated the FDCPA by scheduling the November 27, 1996 hearing on the debt collection claim and obtaining a default judgment against Spears on that date, thereby undercutting the thlrty—day debt validation period.
Nevertheless, the record is devoid of any evidence indicating when Spears received the October 24, 1996 debt collection notice from Brennan. It is well settled that the party moving for summary judgment carries the burden of establishing that there is no issue as to any material fact and that he is entitled to judgment as a matter of law. Avco Fin. Servs. Of Indianapolis, Inc. v. Metro Holding Co.,
Although we reverse the trial court's entry of summary judgment, in the interest of judicial economy we will address Brennan's contentions, which are likely to be raised again on remand. Brennan alleges that, even assuming he scheduled the November 27, 1996 hearing on the debt collection claim and obtained a default judgment within the thirty-day debt validation period, he cannot be found liable under the FDCPA because Shepard, Spears' attorney, agreed to the hearing date and because the default judgment was entered against Spears only after Spears and Shepard failed to appear. Stated oth *877 erwise, Brennan suggests that by consenting to a hearing date within the thirty-day debt validation period and then failing to appear on that date to answer to the debt owed American General, Spears waived any future claim under the FDCPA. Brennan does not provide, nor have we found, any authority for the proposition that consumers may waive the protections of the FDCPA. To the contrary, several courts have addressed this very issue and determined that consumers may not waive their rights under the Act.
In Oglesby v. Rotche, No. 93-C-4183,
We believe that 15 U.S.C. § 1692g(a) is alsо in the nature of a statutory tort which is completed onee the debt collector undereuts the thirty-day debt validation period or implies the debtor does not have thirty days from receipt of the debt collection notice to dispute the validity of the debt. Spears was not required to invoke his rights under the FDCPA during the course of the debt collection claim or risk waiving those rights altogether. An FDCPA claim "has nothing to do with whether the underlying debt is valid. An FDCPA claim concerns the method of collecting the debt. It does not arise out of the transaction creating the debt[.]" Azar v. Hayter,
Accordingly, we hold that Brennan violated 15 U.S.C. § 1692g(a) when he scheduled the November 12, 1996 hearing on the debt collection claim against Spears. For this reason, the trial court's entry of summary judgment in favor of Brennan is reversed. Additionally, we conclude that there remains a genuine issue of material fact as to when Spears received the October 24, 1996 debt collection notice from Brennan. We must therefore reverse the trial court's entry of summary judgment on Spears' claim that Brennan undercut his verification rights under 15 U.S.C. § 1692g(a) by scheduling the November 27, 1996 hearing and obtaining a default judgment against him on that date. Upon remand, we instruct the trial court to determine, in accordance with the principlеs set forth in this opinion, the date on which Spears received the October 24, 1996 debt collection notice and whether Brennan violated the FDCPA by scheduling the November 27, 1996 hearing on the debt collection claim and obtaining a default judgment against Spears within the thirty-day debt validation period.
Issue Four: Failure to Cease Debt Collection
Finally, we address Spears' claim that - Brennan violated 15 U.S.C. § 1692g(b) when he failed to cease collection of the debt after receiving Spears written notification, within the thirty-day debt validation period, that Spears was disputing the debt. 15 U.S.C. § 1692g(b) reads:
If the consumer notifies the debt collector in writing within the thirty-day period described in subsection (a) of this section that the debt, or any portion thereof, is disputed, or that the consumer requests the name and address of the ° original creditor, the debt collector shall cease collection of the debt, or any disputed portion thereof, until the debt collector obtains verification of the debt or a copy of a judgment, or the name and address of the original creditor, and a copy of such verification or judgment, or name and address of the original creditor, is mailed to the consumer by the debt collector.
15 U.S.C. § 1692g(b) (emphasis added). On November 12, 1996, nineteen days after the date of Brennan's debt collection letter, Spears' counsel Shepard sent Brennan a letter declaring that Spears "disputes your debt collection-related allegations, denies the same, and demands strict proof and verification thereof." Record at 21. As such, Brennan should have ceased his debt collection efforts immediately upon receiving that letter. Instead, Brennan proceeded to obtain a default judgment against Spears on the debt collection claim before he had mailed Spears the necessary verification and, thus, violated 15 U.S.C. § 1692g(b).
Brennan maintains, however, that there was no violation of the FDCPA because he "sent adequate verification of the debt [to Spears] in the October 30, 1996 notice of claim." Brief of Appellee at 13. Specifically, Brennan claims that a copy of the consumer credit contract between Spears and American General attached to the notice of claim provided sufficient verification of the debt within the meaning of 15 U.S.C. § 1692g(b). We cannot agree.
The contract in no way provides sufficient verification of the debt. A review of the document reveаls that it identifies only the terms of Spears' loan, including a 17.99% annual interest rate *879 and the original loan amount of $2,561.59. The loan agreement contains no accounting of any payments made by Spears, the dates on which those payments were made, the interest which had acerued, or any late fees which had been assessed onee Spears stopped making the required payments. Indeed, the existing unpaid contract balance at the time Brennan sent the debt collection notice was at least $350.00 more than the original loan amount. Therefore, Brennan violated 15 U.S.C. § 1692g(b) when he failed to cease collection of the debt by obtaining a default judgment against Spears after Spears had notified Brennan in writing that he was disputing the debt but before Brennan had mailed verification of the debt to Spears. 7 We reverse the trial court's entry of summary judgment in favor of Brennan on this issue. ©
CONCLUSION
In sum, we affirm the trial court's entry of summary judgment in favor of Brennan on Spears' claim that Brennan falsely represented the amount of attorney's fees to which he was entitled for the collection of Spear's debt, because we find no violation of 15 U.S.C. §§ 1692e(2)(B) or 1692f(1).
We reverse the trial court's entry of summary judgment in favor of Brennan on Spears' claim that Brennan violated 15 U.S.C. § 1692g(a) when he scheduled the November 27, 1996 hearing on the debt collection claim and obtained a, default judgment against Spears on that date. Having found the existence of a genuine issue of material fact with respect to this issue, we remand to the trial court with instructions to determine, in accordance with the principlеs set forth in this opinion, when Spears received Brennan's debt collection notice and whether Brennan violated the FDCPA by scheduling the November 27, 1996 hearing and obtaining a default judgment against Spears within the thirty-day debt validation period.
We reverse the trial court's entry of summary judgment in favor of Brennan with respect to the remainder of Spears' claims as identified herein. Having found, as a matter of law, multiple violations of 15 U.S.C. §§ 1692g(a) and (b), we further re- | mand to the trial court for a determination of damages in accordance with the FDCPA. 8
Affirmed in part, reversed in part and remanded for further proceedings.
Notes
See THz 570 (3d 1. Also known as a dunning letter. American - - Dictionary ed.1996).
. The record does not disclose when Spears received the debt collection notice.
. This is, of course, assuming that this contingency fee was "founded upon a prior agreement" between Brennan and American General. See Waxman,
. Seventh Circuit jurisprudence dictates that practices which might violate the FDCPA must be viewed from the objective standard of an "unsophisticated debtor." See Pettit,
. There is no evidence in the record of the date the notice was received.
. There is competing аuthority governing this issue. See Brady v. The Credit Recovery Co., Inc.,
. - We observe additionally that, Spears did not waive his verification rights under 15 U.S.C. § 1692g(b) by failing to appear at the November 27, 1996 hearing. Like 15 U.S.C. §§ 1692g(a) and 16921, 15 U.S.C. § 16922(b) is in the nature of a statutory tort which is completed once the debt collector fails to cease his debt collection efforts after receiving written notification that a debtor is disputing the debt but before mailing verification of the debt to the debtor. See Blakemore,
. See 15 U.S.C. § 1692k (governing civil liability under the Act).