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McCollough v. Johnson, Rodenberg & Lauinger (9th Cir. - March 4, 2011)

By Shaun Martin

Sometimes it takes a very fancy attorney to take on a law firm.  Sometimes it doesn't.

Johnson, Rodenberg & Lauinger -- a North Dakota law firm -- files lots of debt collection lawsuits.  For example, in Montana, the firm files an average of five a day.  One of these Montana suits was against Tim McCollough, a former school custodian.  McCollugh opened a credit card with Chemical Bank (which was later purchased by Chase) and fell behind in his payments, ultimately resulting in a charge-off of $3,000.

So the debt gets sold (per se usual) by "Collect America" -- nice name -- which is now known as SquareTwo Financial.  Which hires the law firm to collect.

Most of the firm's lawsuits result in default judgments.  Which is why it's a pretty productive practice.  Perhaps for that reason, the law firm doesn't just sue for $3,000.  But instead sues for almost $10,000, which includes the account balance, interest, attorney's fees, etc.

But this one doesn't end in a default.  Barely.  McCollough files a "response" to the lawsuit, pro se, that says:  "FORGIVE MY SPELLING I HAVE A HEAD INJURY AND WRITING DOSE NOT COME EASY
(1) THE STACUT OF LIMITACION?S IS UP, I HAVE NOT HAD ANY DEALINGS WITH ANY CREDITED CARD IN WELL OVER 8½ YEARS (2) I AM DISABLED I GET 736.00 A MONTH
S.S.I. . . ."  You get the point.  Not exactly the greatest answer in the universe.
 
But guess what?  That does the trick.  Because, indeed, the stacut of limitacions -- or something like that -- has indeed expired.  As a result, not only is the law firm eventually forced to dismiss the lawsuit (with prejudice), but McCollough sues 'em, and obtains statutory damages of $1000, $60,000 in punitive damages, and $250,000 in damages for emotional distress.  As well as costs, attorney's fees, etc.  A judgment the Ninth Circuit affirms.
 
Admittedly, McCollough isn't able to do this entirely on his own -- had he stayed with all-caps pleadings and the like, instead of getting a lawyer, I'm entirely confident the result would have been the exact opposite of what it turned out to be.  So lawyers are important; indeed, critical.
 
But it all started with that first response.  Without which this would be yet another successful debt collection case by a law firm.

Full post as published by California Appellate Report on March 07, 2011 (boomark / email).