An insurer was not required to defend a debt collection law firm that was sued after it accidentally prosecuted the wrong person under exclusion in its coverage, a federal court of appeal ruled on Wednesday. ]. Louis i Rodenburg LLP v. Certain Underwriters at Lloyd & # 39; s of London, The Cincinnati Insurance Co.
In early November 2016, Rodenburg issued a letter of intent to garner Williams 'wages at the residential address associated with the debt, but when it received no response, it then served Williams' employer with a garnish to notice.
Ms. Williams is said to have informed Rodenburg in December that she was not the debtor against whom it had a standard judgment, but the law firm would have ignored this information and insured her salaries for six weeks. After a lawyer informed the company that Charlene Williams was wrong, it stopped the garnishment and returned the garnished funds.
Ms. Williams then sued the law firm, citing partial violations of the law on fair debt collection, claiming that her actions had caused her emotional distress, among other effects. The case was decided according to the judgment, which did not disclose the settlement amount.
Rodenburg's insurer, Cincinnati Financial, refused to defend or indemnify Rodenburg, and the law firm filed a lawsuit against the U.S. District Court in Fargo, which granted the insurer a summary judgment dismissing the case.
The decision was upheld by a unanimous appellate board of three judges, which declared a policy exclusion for violations of all constitutions, other than the Consumer Protection Act or the CAN-SPAM Act of 2003, "which prohibits or restricts the transmission, transmission, communication or distribution of material or information "
The Panel agreed with Cincinnati that this included the FDCPA. , and upheld the lower court's judgment.