Bingham v. Collection Bureau, Inc.

505 F. Supp. 864, 67 A.L.R. Fed. 952, 1981 U.S. Dist. LEXIS 11471
CourtDistrict Court, D. North Dakota
DecidedJanuary 12, 1981
DocketA1-79-131
StatusPublished
Cited by42 cases

This text of 505 F. Supp. 864 (Bingham v. Collection Bureau, Inc.) is published on Counsel Stack Legal Research, covering District Court, D. North Dakota primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Bingham v. Collection Bureau, Inc., 505 F. Supp. 864, 67 A.L.R. Fed. 952, 1981 U.S. Dist. LEXIS 11471 (D.N.D. 1981).

Opinion

MEMORANDUM and ORDER

VAN SICKLE, District Judge.

This is an action by consumers, Michael and Peggy Bingham, against two related collection agencies, Collection Bureau, Inc. (CBInc), and Collection Bureau of North Dakota, Ltd. (CBLtd) for violations of the Fair Debt Collection Practices Act, 15 U.S.C. § 1692 et seq.

Plaintiffs allege that the defendant CBInc violated the act in the following particulars:

a. Failure to give the written notice required by 15 U.S.C. § 1692g.
b. The making of an unconscionable interest claim in violation of 15 U.S.C. § 1692f(l).
c. Harassment by annoying telephone calls in violation of 15 U.S.C. § 1692d(5).
d. Extortion by threat of imprisonment in violation of 15 U.S.C. § 1692e(4).
e. Harassment by false threats of intent to take legal action in violation of 15 U.S.C. § 1692e(5).
f. Slanderous representations that debtors were committing a crime in violation of 15 U.S.C. § 1692e(7).
g. Falsely threatening nonjudicial attachment and garnishment in violation of 15 U.S.C. § 1692f(6).
h. False and deceptive means to collect a debt by using two corporations with deceptively similar names in violation of 15 U.S.C. § 1692e(10).

They alleged that the defendant CBLtd violated the act in the following particulars:

a. That the notice system used by CBLtd used false, deceptive and misleading language in violation of 15 U.S.C. § 1692e.
b. That CBLtd, by its notice procedure, was guilty of “flat rating” in violation of 15 U.S.C. § 1692j.

The defendants generally deny all allegations of wrongdoing. They deny that CBLtd is a “flat rater,” and allege conscientious efforts to obey the spirit and language of 15 U.S.C. § 1692, et seq. (Fair Debt Collection Practices Act), while still performing their economic obligation of liquidating bad debts.

FACTS

Jarvis Broeckel began working for the Credit Bureau of Bismarck about 1972. His principal activity was as a collector. About 1973, with another employee, he bought the Credit Bureau of Bismarck. He owned 49% and his co-owner owned 51% of the stock. In late 1973 he organized Collection Bureau of North Dakota, Ltd., a North Dakota corporation. In June 1977, the associates separated. Mr. Broeckel bought the collection business, and his associate bought the Credit Bureau. At that time, Mr. Broeckel organized Collection Bureau, Inc. The stock in the corporations is held:

*867 Collection Bureau, Inc. 100% Mr. Broeckel
Collection Bureau of N. D., Ltd. 95% Mr. Broeckel
5% Mrs. Broeckel

Mr. Broeckel is the controlling officer of both corporations. He immediately began plans for automation. He completed his automation, to computer, by June 18, 1979. As is developed later, the collection activities herein complained of occurred during and immediately after completion of the automation.

Mr. Broeckel was active in collector’s associations, and so was cognizant of the passage of the Fair Debt Collection Practices Act. As a member of such associations he attended seminars regarding the Act, and prepared his employees for the restrictions imposed by the Act prior to its effective date (March 20, 1978). As the material became available, he required his collector personnel to review the current “Manual on Fair Debt Collection Practices Act” published by the American Collectors Association, Inc. This study, coupled with on-the-job training, and a telephone monitoring system, constitute his program intended to assure that any violation would be unintentional, and would occur despite procedures designed to avoid such violations.

Michael and Peggy Bingham are a young married couple who must rely on the unskilled labor market for their livelihood. They have two children, Rebecca, born in 1977, and Robert, born in 1978. Peggy Bingham, who claims substantial damages to her personality by virtue of the conduct of the collectors, is 22 years old, obese, doll like, described by a psychologist witness as unsophisticated, immature, with limited ability to act without a leader, having an inadequate dependant personality. In 1977 they were living in Brinsmade, North Dakota. Rebecca was born in Mercy Hospital, Devils Lake. The Binghams had made several payments on current services but the 1977 bill and several subsequent accounts had been written off by the creditor hospital, and set over for collection.

March 23, 1979, Mercy Hospital sent to CBLtd a list of accounts for collection. The accounts, due by the Binghams, as transferred showed a balance of $958.65 due, included no loading for interest, and were computed from the hospital records by the hospital finance officer, Mr. Lindell (see exhibits 6 and 47). Since, at that time, the computer operation was not installed, it was set up on a control card (see exhibit 38). Both parties have agreed that the first notice of a five notice system was sent and received sometime between March 23, 1979 and April 24, 1979.

First was the “Urgent” notice (exhibit 46).
April 24, 1979 the “Past Due” notice was sent (exhibit 2).
April 24, 1979 the “Please Take Notice” notice was sent (exhibit 3).

(Why they were sent out the same day was never satisfactorily explained except for the suggestion this occurred during the changeover from manual to computer record keeping.)

May 5, 1979 the “Avoid Further Action” notice was sent (exhibit 4).

May 14, 1979 the “Notice of Further Action” notice was sent (exhibit 5). 1 These five notices had in common:

a. They showed CBLtd as mailer.
b. They directed payment to Mercy Hospital.

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Bluebook (online)
505 F. Supp. 864, 67 A.L.R. Fed. 952, 1981 U.S. Dist. LEXIS 11471, Counsel Stack Legal Research, https://law.counselstack.com/opinion/bingham-v-collection-bureau-inc-ndd-1981.