Liability for Employee Cellular Phone Use

Cell Phone Usage and Personal Injury Lawsuits

Cell phone usage has increasingly become the cause of accidents or a contributing factor, resulting in an increase in personal injury litigation involving cell phones. When a driver is using a cell phone at the time of an accident and the accident happens while the driver is on company business, the phone call is a business one, or the cell phone was provided by the company, that company will often be sued along with the driver/employee, under a theory of "vicarious liability" for the actions of its employee. Actual examples include:

• A jury in Miami awarded a 78 year old woman and her husband $20.78 million against a driver and his employer for injuries suffered in an automobile crash. The driver initially admitted owning a cell phone but denied using it at the time of the accident. Cell phone bills indicated otherwise and the driver finally admitted making a sales call "before" calling 911 about the accident.
• The state of Hawaii paid $1.5 million to the family of a New Jersey tourist struck by a car driven by a public school teacher, who was using her cell phone at the time.
• Salomon Smith Barney paid $500,000 in settlement to the family of a motorcyclist killed in a collision with a broker, who was on his cell phone at the time.

Consumer Debt Rises for Young Adults

According to the Wall Street journal A typical young U.S. household—defined as one led by someone under age 35—had $15,000 in total debt in 2010, down from $18,000 in 2001 and the lowest since 1995, according to a recent Pew Research Center report and government data. Total debt includes mortgage loans, credit cards, auto lending, student loans and other consumer borrowing. In addition, fewer young adults carried credit card balances, and 22 percent did not have any debt at all in 2010—the most since government tracking began in 1983.

Bankruptcy Filings on the Rise

While bankruptcies were down from a year ago, February’s bankruptcy filings trended upward from January. Total bankruptcy filings for the month of February represented a 5 percent increase over the 78,565 total filings registered in January 2013. The total noncommercial filings for February also represented a 5 percent increase from the January 2013 noncommercial filing total of 74,831.

FDCPA

Reversing the lower court’s judgment order, the U.S. Court of Appeals for the Third Circuit recently ruled in a putative class action suit under the federal Fair Debt Collection Practices Act that language in a debt collection letter contradicted and overshadowed the FDCPA validation notice, pointing among other things to the statements in the letter to “please call us” “if you feel you do not owe” the debt, the font, typeface and other characteristics.

Defendant debt collector (“Debt Collector”) sent plaintiff debtor (“Debtor”) a letter in an attempt to collect a debt which Debtor supposedly owed for medical services. The letter stated in part: “if you feel you do not owe [the debt], please call us toll free at . . . or write us at the above address. . . SEE REVERSE SIDE FOR IMPORTANT INFORMATION.” The phrase “please call” was in bold face, and the front side of the letter supposedly contained a confusing admixture of font sizes, typeface, contact phone numbers, and mailing and website addresses.

On the reverse side of the letter was the language stating in part: “unless you notify this office within 30 days after receiving this notice that you dispute the validity of this or any portion thereof, this office will assume this debt is valid. If you notify this office in writing within 30 days from receiving this notice that you dispute the validity of this debt . . . , this office will . . . [verify the debt]. . . . If you request this office in writing within 30 days after receiving this notice, this office will provide you with the name and address of the original creditor . . . .”

Debtor filed a putative class action complaint under section 1692(e)(10) and section 1692g of the federal Fair Debt Collection Practices Act (“FDCPA”), alleging that Debt Collector’s letter was a false or deceptive means of collecting on the debts in question because the least sophisticated debtor could reasonably, but incorrectly, believe that he could effectively dispute the debt by calling the phone number listed in the letter.

Debt collector moved for judgment on the pleadings, which the lower court granted. Debtor appealed. The Third Circuit vacated the lower court’s order granting the judgment on the pleadings.

As you may recall, the federal Fair Debt Collection Practices Act requires that a debt collector provide to a consumer: (1) the amount of the debt; (2) the name of the creditor to whom the debt is owed; (3) a statement that the debt will be assumed valid unless the consumer disputes the debt in writing within 30 days after receipt of the notice; (4) a statement that if the consumer does so notify the debt collector in writing that the debt is disputed, the debt collector will verify the debt and send such verification to the consumer; and (5) a statement that, upon the consumer’s written request within the 30-day period, the debt collector will provide the name and address of the original creditor. 15 U.S.C. § 1692g(a).

In addition, section 1692g(b) of the FDCPA provides in part that if the consumer disputes the debt in writing, the debt collector must cease collection of the debt “until the debt collector obtains verification of the debt . . . or the name and address of the original creditor, and a copy of such verification . . . or name and address of the original creditor, is mailed to the consumer by the debt collector. . . .” That section further provides that “[a]ny collection activities and communication during the 30-day period may not overshadow or be inconsistent with the disclosure of the consumer’s right to dispute the debt or request the name and address of the original creditor.” 15 U.S.C. § 1692g(b).

Moreover, Section 1692e specifically prohibits “[t]he use of any false representation or deceptive means to collect or attempt to collect any debt or to obtain information concerning a consumer.” 15 U.S.C. § 1692e.

Addressing Debtor’s claim that the validation notice was inadequate to apprise “the least sophisticated consumer” of his rights under the FDCPA, the Third Circuit observed that “more is required than the mere inclusion of the statutory debt validation notice in the debt collection letter – the required notice must also be conveyed effectively to the debtor.” See, e.g., Wilson v. Quadramed Corp., 225 F.3d 350 (3rd Cir. 2000); Graziano v. Harrison, 950 F.2d 107 (3rd Cor. 1991)(statutory notice must effectively explain a debtor’s rights).

In so doing, the Third Circuit examined the Debt Collector’s collection letter in terms of both its form and substance to determine whether the validation notice was “‘overshadowed’ or ‘contradicted’ by accompanying messages from the debt collector” that would lead the least sophisticated consumer to derive different meanings from the letter. See Graziano, 950 F.2d at 111, 354.

In reaching its conclusion that Debt Collector’s letter was substantively deceptive, the Third Circuit took issue with the lower court’s assessment that the “please call” language, when read in the context of the whole letter, would not be confusing to the least sophisticated debtor.  

Third Circuit reversed the lower court’s order granting judgment in Debt Collector’s favor and remanded for further proceedings.

Russell v. Aurora Bank FSB (In re Russell)

9th Circuit, 11 U.S.C. § 362, Federal Rule 9024, Bankruptcy Process and Procedure

Citation:

BAP No. CC-12-1312-DKiPa
 The BAP ruled that it could not consider the new argument raised for the first time on appeal since the Debtors never raised it in response to the creditor's declaration of default under the APO in the lower court, and in fact never responded to the creditor's declaration of default. The BAP noted, however, that the Debtors still had time to file for relief in the lower court under the Federal Rules of Civil Procedure, Rule 60(b)(1) or (6).

Southern District Forms

Please be advised that LF 8 "Order Converting Case Under Chapter 7 to Case Under Chapter 13" has been abrogated and split into two new Local Form orders, one for use when the motion is considered on negative notice and the other for use when the court conducts a hearing. A public notice has been posted on the court's web page: http://www.flsb.uscourts.gov/web_folder/NEWS/13-03-01_Notice_of_Amendment_to_Local_Form.pdf

The Florida Bar News reported on March 1st that HB 87 has passed the House Civil Justice Subcommittee on February 7. This bill has four important segments.

1.) It Shortens the statue of limitations for seeking a deficiency judgement from five year to one year from the date of the foreclosure sale.

2.) The defendants must show a valid reason for contesting the foreclosure or a Judge can expedite the foreclosure.

3.) Lenders must have their documents in order and complete when they file a foreclosure.

4.) Once a home is sold in foreclosure to a third party, future claims will be limited to monetary damages, should the foreclosure be found to be faulty.

The outcome of HB 87 is worth watching closely. Foreclosures are of prime importance not only to Circuit Civil & Real Estate Attorneys, but also Family Attorneys. Many divorces & family issues are delayed pending the outcome of the disposition of the marital home.