Number of debt-collection phone calls, by itself, insufficient evidence of violation - FINANCIAL-24
By Thomas G. Wolfe, J.D.Addressing what it deemed a “matter of first impression,” a majority of justices on the West Virginia Supreme Court of Appeals recently determined that the number of phone calls made to a consumer by a debt collector does not, by itself, constitute sufficient evidence to establish an “intent to annoy, abuse, oppress or threaten” the consumer in violation of the West Virginia Consumer Credit and Protection Act (WVCCPA). Through its programmed auto-dialer system, the third-party debt collector telephoned the consumer 250 times during an eight-month period, and the consumer never answered the phone calls or contacted the collector to contest the debt.
In Valentine & Kebartas, Inc. v. Lenahan, West Virginia’s high court decided that the state trial court erred as a matter of law in ruling in favor of the consumer after a bench trial. While the court’s majority reversed the judge’s verdict, two justices dissented.
Collector’s phone calls. As relayed by the majority’s opinion, the third-party debt collector, Valentine & Kebartas, Inc., purchased a delinquent account from a provider of home security systems to consumers. While the consumer informed the provider that he disputed a $1,350 debt attributed to him, the consumer never notified the collector that he denied owing the debt.
After mailing a collection letter to the consumer, who admitted receiving the letter, the collector made 250 phone calls to him on his cell phone over an eight-month period by use of an auto-dialer system. The system not only was programmed to make calls “according to certain parameters such as time of day and number of calls per day or week in compliance with applicable laws,” it also was programmed to not leave a message. Rather, if a phone call were to be answered, the auto-dialer system would then “connect a collection agent with the person making the call.” The facts showed that the consumer did not answer any of the 250 phone calls.
Trial court’s verdict. Notably, the trial judge found that the debt collector “ramped up its collection campaign” after the initial 22 phone calls, viewing the practice as evidence of the collector’s intent. Consequently, the judge ruled that the volume of the debt collector’s unanswered telephone calls to the consumer constituted “abuse or unreasonable oppression by virtue of ‘causing a telephone to ring … repeatedly or continuously … with intent to annoy, abuse, oppress or threaten” the consumer under the WVCCPA.
Accordingly, the judge rendered a verdict in favor of the consumer and awarded him $75,000—reflecting a statutory penalty of $326.08 per phone call. The debt collector then appealed to the West Virginia Supreme Court of Appeals.
Appellate review. At the outset, the West Virginia Supreme Court framed the legal issue before it as “[w]hether the number of collection calls alone is sufficient to find V&K liable to Mr. Lenahan under West Virginia Code §46A-2-125(d).” In answering that question in the negative, the court stressed that the trial court relied “solely on the volume of telephone calls” placed by the debt collector’s auto-dialer system to find a “lack of legitimate purpose” for the collector’s conduct.
In reviewing the WVCCPA provision and examining state and federal case law on the issue, the court reasoned that: (i) “the weight of federal authority requires some evidence of intent to establish liability under the federal equivalent to West Virginia Code §46A-2-125(d);” (ii) the collector’s calls continued because the consumer never answered them and never informed the collector that he contested the debt; (iii) the trial court made a faulty “inference of intent” derived from the volume of phone calls; (iv) that inference inappropriately relieved the consumer of his burden of proof; and (v) the consumer’s silence about the numerous auto-dialer calls did not trigger “imputed knowledge” to the collector that it should discontinue the calls.
Dissent. In her dissenting opinion, Justice Workman asserted that “the majority reverses the trial court’s verdict in direct contradiction of a universally-accepted rule pertaining to evidence from which intent may be inferred for purposes of unlawful debt collection practices.” Workman indicated that “Justice Davis joins me in this dissent.”
From Workman’s perspective, even though the majority characterized the legal issue in the case as one of first impression, “the majority issues no new syllabus point to this effect, undoubtedly because it flies directly in the face of all written authority and common sense.” Further, she maintained that the majority’s decision represented a “complete departure from the overwhelming consensus of courts addressing this issue.”
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