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Clowers v. Mandarich Law Group LLP

United States District Court, M.D. Georgia, Macon Division

October 8, 2019

VERA CLOWERS, Plaintiff,
v.
MANDARICH LAW GROUP LLP, et al, Defendants.

          ORDER

          MARC T. TREADWELL, JUDGE

         Plaintiff Vera Clowers moves to strike the second affirmative defense of Defendants Mandarich Law Group, LLP; CACH, LLC; LVNV Funding, LLC; and Resurgent Capital Services, LP. Docs. 21; 22; 23; 24. The motions (Docs. 21; 22; 23; 24) are denied.

         I. BACKGROUND

         Clowers alleges CACH previously filed a lawsuit against her in 2016 to collect a consumer debt (“first lawsuit”). Doc. 1 at 1. In October 2016, the parties entered into a settlement agreement, pursuant to which CACH paid Clowers $3, 500.00 and agreed to dismiss the lawsuit with prejudice. Docs. 1 at 1; 1-10 at 5.

         CACH subsequently hired new counsel, Mandarich, and attempted to collect the same debt alleged in the first lawsuit. Doc. 1 at 3. Mandarich sent Clowers a demand letter on November 28, 2018 demanding payment of $4.739.40. Id. at 3-4. Clowers, of course, alleges that the debt has been extinguished and, in any event, Georgia's six-year statute of limitations bars the claim. Id. at 4.

         On May 10, 2019, Clowers filed suit in this Court “to recover all available remedies” under the Fair Debt Collection Practices Act (“FDCPA”) (15 USC § 1692 et. seq.), the Fair Business Practices Act (OCGA § 10-1-390 et seq.), the Unfair or Deceptive Practices Toward the Elderly Act (OCGA § 10-1-850 et seq.), and the Defendants' breach of the settlement agreement. Id. at 5.

         All Defendants answered on July 3, 2019. Docs. 11; 12; 13; 14. Clowers moves to strike the second affirmative defense alleged in all four Answers. Docs. 21; 22; 23; 24.

         II. DISCUSSION

         The FDCPA provides for a bona fide error defense: “A debt collector may not be held liable in any action brought under this subchapter if the debt collector shows by a preponderance of evidence that the violation was not intentional and resulted from bona fide error notwithstanding the maintenance of procedures reasonably adapted to avoid such error.” 15 U.S.C. § 1692k(c). All four Defendants raised a bona fide error defense as their second affirmative defense.

         Mandarich alleged that

[a]t all relevant times, Defendant acted in good faith. Any alleged violation of the FDCPA was neither willful nor intentional and would have resulted from a bona fide error notwithstanding the maintenance of reasonable procedures designed to avoid such error. Specifically, Defendant does not collect on out-of-statute debts and has, at all relevant times, had a policy in place to close out accounts for which the statute of limitations has expired. Similarly, Defendant, at all relevant times has maintained a policy to close out accounts, cease collection activity and return accounts to the creditor on all settled debts. Defendant did not know the subject debt was settled or beyond the statute of limitations at the time i[t] was placed with it for collection.

Doc 13 at 32.

         CACH alleged that

at all relevant times, Defendant acted in good faith. Any alleged violation of the FDCPA was neither willful nor intentional and would have resulted from a bona fide error notwithstanding the maintenance of reasonable procedures designed to avoid such error. Specifically, on information and belief, at all relevant times, Defendant's debt servicer, Resurgent, had a policy in place to close out accounts for which the statute of limitations has expired. Similarly, on information and belief, at all relevant times Resurgent maintained a policy to close out accounts on ...

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