Fern Kottler v. Gulf Coast Collection Bureau, Inc.

[DO NOT PUBLISH]
IN THE UNITED STATES COURT OF APPEALS
FOR THE ELEVENTH CIRCUIT
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No. 20-12239
Non-Argument Calendar
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D.C. Docket No. 0:19-cv-61190-BB
FERN KOTTLER,
Plaintiff-Appellee,
versus
GULF COAST COLLECTION BUREAU, INC.,
Defendant-Appellant.
________________________
Appeal from the United States District Court
for the Southern District of Florida
________________________
(February 12, 2021)
Before WILLIAM PRYOR, Chief Judge, NEWSOM and ANDERSON, Circuit
Judges.
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PER CURIAM:
Gulf Coast Collection Bureau, Inc., appeals the summary judgment in favor
of Fern Kottler’s complaint that it violated the Fair Debt Collection Practices Act
by mailing her a validation notice for a debt arising from an injury that was the
subject of a pending worker’s compensation claim. 15 U.S.C. § 1692e(2)(A). Gulf
Coast argues that Kottler suffered no concrete injury to give her standing to sue.
Gulf Coast also argues that it was not liable for sending Kottler a letter that sought
to verify, not to collect, a debt and that its violation of the Act was attributable to a
bona fide error that absolved it from liability. We affirm.
We review de novo both standing and a summary judgment. Ouachita Watch
League v. Jacobs, 463 F.3d 1163, 1169 (11th Cir. 2006). Summary judgment is
appropriate when there exists no genuine dispute as to any material fact and the
movant is entitled to judgment as a matter of law. Fed. R. Civ. P. 56(a).
Kottler suffered a concrete injury that gave her standing to sue Gulf Coast
for violating the Act. “[S]tanding consists of three elements: the plaintiff must have
suffered an injury in fact, the defendant must have caused that injury, and a
favorable decision must be likely to redress it.” Trichell v. Midland Credit Mgmt.,
Inc., 964 F.3d 990, 996 (11th Cir. 2020). An injury in fact consists of four
elements: the injury must invade a legally protected interest and be concrete,
particularized, and imminent. Id. Kottler alleged in her complaint that she received
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a letter and telephone calls from Gulf Coast that falsely suggested she was liable
for medical bills owed by her employer for a work-related accident. See Fla. Stat.
§ 440.13(2), (14). Later, Kottler testified that she was “clustered and jumbled” why
she was receiving collection calls, the messages “scared” her into calling back, and
she feared that the company would “ruin her credit.” Kottler’s evidence satisfied
each element for an injury in fact. Kottler was entitled to avoid communication
concerning collection of a debt she did not owe, see 15 U.S.C. § 1562e, she
expended time addressing unwarranted collection calls, see Trichell, 964 F.3d at
997, and those calls upset her, see id.
Undisputed evidence established that Gulf Coast sent Kottle a dunning letter.
The letter outlined the methods to pay an outstanding debt and stated that Kottler’s
“account . . . had been listed for collection,” that “[t]his is an attempt to collect a
debt and any information provided will be used for that purpose,” and that
“[u]nless [she] notif[ied] [Gulf Coast] within 30 days after receiving this notice
that [she] dispute[d] the validity of this debt, . . . [the company] will assume this
debt is valid.” The letter conveyed that Kottler was responsible for and overdue in
paying outstanding medical bills.
The district court did not err in determining that Gulf Coast violated the Act.
The Act prohibits a debt collector from making a “false representation of the
character, amount, or legal status of any debt,” 15 U.S.C. § 1692e(2)(A), which
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subjects it “to liability even when violations are not knowing or intentional,” Owen
v. I.C. Sys., Inc., 629 F.3d 1263, 1270–71 (11th Cir. 2011). A representation is
false if an unsophisticated or naive consumer would be deceived by the statement
of the debt collector. Jeter v. Credit Bureau, Inc., 760 F.2d 1168, 1172–73 (11th
Cir. 1985). Gulf Coast demanded that Kottler pay her medical bills, but in Florida
an “employee is not liable for payment for medical treatment or services
provided,” Fla. Stat. § 440.13(13)(g), and “[a] health care provider may not collect
or receive a fee from an injured employee,” id. § 440.13(13)(a). Instead, “[s]uch
providers have recourse against the employer or carrier for payment for [medical]
services rendered . . . .” Id. Any consumer in Florida unfamiliar with its worker’s
compensation laws who received the letter Kottler received would be misled to
think that she was obligated to remit payment for medical bills that were owed by
her employer. Gulf Coast falsely represented the legal status of the debt for
Kottler’s medical bills.
The district court also did not err in determining that Gulf Coast could not
avoid liability for violating the Act based on a bona fide error defense. That
defense excepts a debt collector from liability if it proves that its violation of the
Act was not intentional, was a bona fide error, and “occurred despite the
maintenance of procedures reasonably adapted to avoid any such error.” Owen,
629 F.3d at 1271. The parties disagree only about whether Gulf Coast satisfied the
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third requirement. To comply with that requirement, Gulf Coast had to “actually
employ[] or implement[] . . . procedures to avoid errors,” and then ensure those
procedures were “reasonably adapted to avoid the specific error at issue.” Id. at
1274 (internal quotation marks omitted). Gulf Coast implemented procedures that
were not reasonably tailored to identify a debt covered by the worker’s
compensation law. Gulf Coast relied on its clients to provide data that identified
possible worker’s compensation coverage, such as a listing of a common worker’s
compensation carrier, before investigating the status of the debt. Gulf Coast used
no additional screening procedures to detect if a debt was subject to worker’s
compensation before mailing a dunning letter. Because Gulf Coast relegated “its
oversight task to its creditor[s]” and lacked “internal controls . . . to reduce the
incidence of improper debt collection,” it was not entitled to avoid liability for a
bona fide error. See id. at 1276.
We AFFIRM the summary judgment in favor of Kottler.
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