The Indiana Supreme Court has declined to review a case involving the application of the Fair Debt Collection Practices Act (FDCPA) to law firms representing creditors and debt collectors.
By denying the petition for transfer, the court leaves in place the Indiana Court of Appeals’ ruling that Reiling, Teder & Schrier LLC (RTS) did not violate the FDCPA by relying on information and affidavits provided by its client when filing a collection lawsuit.
The Court of Appeals concluded that a law firm may generally rely on a client’s factual representations during the pleading stage and is not automatically liable under the FDCPA if those representations are later determined to be inaccurate.
The case began in February 2020, when landlord Krys Szalasny retained RTS to file a breach of contract lawsuit against former tenants, alleging they caused more than $30,000 in property damage. The tenants filed a counterclaim, alleging that their security deposit had not been returned in accordance with Indiana law. The landlord later dismissed the breach of contract claim, and the tenants prevailed on their statutory security deposit claims.
The Tippecanoe Circuit Court granted summary judgment in favor of RTS. The Indiana Court of Appeals affirmed that decision, finding that the law firm’s reliance on its client’s representations did not violate the FDCPA.
The tenants subsequently petitioned the Indiana Supreme Court to review the appellate decision. Their petition argued that the court should apply a strict liability standard under the FDCPA in these circumstances. Opposing arguments maintained that the petition did not distinguish between the legal standard permitting attorneys to rely on a client’s factual assertions during litigation and the FDCPA’s separate bona fide error defense.
With the Indiana Supreme Court declining to hear the appeal, the Court of Appeals’ decision remains the controlling ruling in the case.
The decision provides additional guidance on how Indiana courts have applied the FDCPA to attorneys representing creditors, particularly with respect to reliance on client-provided information during the early stages of litigation.
Author: Jennifer Evancic
Jennifer.Evancic@ResourceManagement.com
Jennifer Evancic is a third-party auditor valued by creditors and large organizations for her knowledge in call monitoring within the collections industry. With meticulous attention to detail and a firm grasp of regulatory requirements, she ensures compliance with clients’ criteria and state and federal regulations.
Jennifer audits collections calls, ensuring they meet client-specific criteria and comply with regulations, providing valuable insights and maintaining industry standards.
Beyond her auditing responsibilities, Jennifer takes the lead in organizing and facilitating monthly call calibrations. These sessions serve as a collaborative forum where clients and their vendors come together to discuss call monitoring results and address any findings or areas for improvement. Jennifer’s guidance fosters open communication and ensures alignment between clients and vendors, driving continuous improvement in collections practices.
Jennifer stays up-to-date with compliance and industry best practices by participating regularly in peer meetings, regulatory updates and industry webinars. This keeps her informed about emerging issues and ensures she remains a knowledgeable leader in collections compliance.
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