The Ninth Circuit Court of Appeals affirmed a trial court's summary judgment in favor of Plaintiff Timothy McCollough and against collection law firm Johnson, Rodenburg & Lauinger (JRL). McCollough stopped paying on his $3,000 Chase Manhattan credit card balance in 2001. Chase charged off the account and sold it to Collect America, Ltd. (now known as SquareTwo Financial), and its subsidiary CACV of Colorado, Ltd.
Collect America then retained JRL to file a collection suit against McCollough in 2007. Before filing the suit, an employee of JRL emailed an employee of Collect America advising that the claim appeared to be barred by the 5-year statute of limitations. The Collect America employee responded inaccurately that McCollough had made a payment in 2004, extending the statute of limitations until 2009. JRL filed the suit, learned that McCollough had not made a payment in 2004, and then dismissed the suit.
McCollough then sued JRL under the FDCPA, the Montana Unfair Trade Practices and Consumer Protection Act, and common law malicious prosecution and abuse of process. The trial court entered a summary judgment in his favor in the sum of $1,000 (for the FDCPA violation), $250,000 (for emotional distress), and $60,000 (in punitive damages). In its opinion, the Ninth Circuit affirmed both the summary judgment and the amount of damages.