Indiana district court holds debt collection attorney violated FDCPA by serving Request to Admit along with the Complaint

In Patterson v. Howe, Case No. 1:16-cv-03364, (S. D. Ind. Mar. 30, 2018) the district court for the Southern District of Indian found that a debt collector violated the FDCPA when it served the debtor with a “Requests to Admit”, along with the summons and the complaint, which basically asked the debtor to admit there was no defense.

Specifically, the Requests to Admit requested the debtor admit or deny that the allegations contained in the complaint were true and that the plaintiff was entitled to the relief sought and there was no valid counterclaim or offset to the plaintiff’s claims. The Requests did not explain pursuant to state rules that any requests not denied within 30 days would be deemed admitted. The debtor timely answered the complaint, but did not respond to the Requests. The parties subsequently settled the collection case.

Prior to settlement, however, the debtor sued the creditor’s attorney in federal court alleging that the service of the Requests was a “deceptive or misleading representation or means” and an “unfair or unconscionable means of collecting a debt”. The debtor contended on summary judgment that the Requests were essentially requests to admit “you win and I lose” and that an unsophisticated debtor would not know the consequences of failing to deny the requests in a timely manner especially given the fact that the requests were served with the summons and complaint.

On a cross motion for summary judgment, the creditor raised several arguments. Among them were that the preclusive effect of the deemed admissions never applied because they were not served in an electronic format as provided by Indiana Trial Rule 26(A.1). It also contended there was no evidence that an unsophisticated debtor would have found the communications misleading or deceptive.

The court found for the debtor. It noted that nothing under Indiana Trial Court Rules provided that a discovery request is nullified or invalidated if it is not served in an electronic format. In fact, the operation of Rule 26(A.1) would have rendered the Requests even more misleading because how would a debtor know when the responses were actually due if they were not accompanied by electronic service?

The creditor also argued that the FDCPA does not require a debt collector to provide legal advice to a debtor of the legal consequences of failing to timely respond to Requests. While a debt collector is not required to advise a debtor of legal consequences, in this case the combination of the communications served on the debtor was inherently misleading and unfair. The summons unambiguously advised the debtor he faced a judgment if he failed to timely answer– and the debtor did file an answer. An unsophisticated debtor would conclude that was what was necessary to avoid judgment. Yet, the Request “requested” the debtor to do essentially the same thing again, but separately, only a short time after his answer was due, and in a completely different manner (i.e., not filing the response with the court but rather serving the response on creditor). The Requests also merely “requested” a response whereas the summons more directly commanded a response. The Requests to Admit would, therefore, confuse an unsophisticated debtor about the required timing and manner of response.

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