BILLINGS, Mont.—A Laurel man with a disabling brain injury, who was twice sued over a $3,800 credit card debt, received a $311,000 judgment after a federal judge determined a North Dakota law firm violated debt collection laws.
Timothy McCullough sued the firm of Johnson, Rodenburg & Lauinger in 2007, alleging it violated the federal Fair Debt Collection Practices Act and related Montana law by engaging in abusive, unfair and unlawful debt collection litigation.
The firm had filed a lawsuit against McCullough, on behalf of a Colorado collection company, CACV, seeking to collect on a $3,800 debt he owed Chase Manhattan Bank, along with about $6,000 in interest and attorney’s fees.
Two years earlier, McCullough had a similar lawsuit, also filed on behalf of CACV, dismissed because the five-year statute of limitations had expired.
The case stemmed from a credit card debt McCullough owed Chase from the 1990s.
McCullough was disabled in 1990 after being struck in the head with an iron bar. He eventually began receiving Social Security benefits, which are exempt from collections.
Nevertheless, McCullough testified that he worked with other credit card companies to pay his debts. He said Chase was the only company that would not work with him.
The debt was sold to a collection company. Two years after CACV’s first lawsuit was dismissed, Johnson, Rodenburg & Lauinger again sued McCullough on behalf of CACV.
This time, McCullough sued them back, hiring Billings attorney John Heenan.
“I was being shoved around,” McCullough said. “I don’t like bullies. I never have. I got mad. I’m still mad.”
A jury on Thursday awarded McCullough $250,000 for emotional distress, the statutory maximum of $1,000 for violating the Fair Debt Collection Practices Act and $60,000 in punitive damages, also the maximum allowed in the case.
U.S. Magistrate Carolyn Ostby will determine attorney fees to be paid to Heenan.
“Debt collector lawyers need to follow the rules in Montana,” said Heenan, who said he was going to ask Ostby to triple the $250,000 damage award as allowed by Montana consumer protection laws.
During the three-day trial, Billings attorney James Patten testified that he reviewed cases in which the North Dakota firm sued. He said the firm received default judgments in 90 percent of its cases, which are judgments in its favor when a defendant doesn’t respond.
Patten said the law firm filed about 2,700 lawsuits against Montana residents during an 18-month period ending about mid-2008.
The firm maintained it had done nothing wrong, but partner Lisa Lauinger testified that the McCullough case had prompted the firm to change its procedures and that it now requires more documentation from clients before filing suit.
Attorney Fred Simpson of Missoula, who represented the North Dakota firm, declined comment.
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Information from: Billings Gazette,
