A Zurich Insurance Group Ltd. unit is not required to defend a debt collection company that is accused of harassing a customer under exceptions in its policy, a federal appeals court said Friday with a confirmation of a lower court decision.
Ocwen Financial Corp. , a debt collection company based in West Palm Beach, Florida, was accused by Tracy A. Beecroft of harassment, according to the decision of Zurich American Insurance Co., et al. v. Ocwen Financial Corp., et al.
Ms. Beecroft sued Ocwen in federal court in Minnesota, claiming that the company had aggressively pursued her for debts that had previously been lost in bankruptcy. She said that the company had made 58 calls to its mobile phone or home phone between October 1
Ms. Beecroft said she suffered emotional and physical anxiety, including a stress-induced miscarriage, and was later denied a mortgage because Ocwen incorrectly reported the alleged default to credit institutions.
Her trial accused Ocwen of violating the law of fair debt collection, the Telephone Consumer Protection Act, defamation and invasion of privacy.
TCPA prohibits making calls with an automated telephone system, while FDCPA prohibits calls intended to "irritate, abuse or harass" those who are called. Beecroft is correct that the talks continued even after she had twice asked them to stop, in violation of the FDCPA.
Zurich refused to defend Ocwen in disputes due to exceptions that exclude coverage if violations of TCPA and other laws were alleged.
The insurer brought an action before the U.S. District Court in Chicago requesting a declaration that it was not obligated to defend or replace Ocwen in the lawsuit. The American district court ruled in Zurich's favor.
Ocwen only appealed the court's dismissal of the invasion of privacy, which was the focus of the appellant's judgment. "Even a single covered factual indictment would suffice to trigger Zurich's obligation to defend," the appeals board's ruling said.
However, the unanimous panel court with three judges ruled that the requirement for invasion of privacy was excluded during the coverage.  The charge "explicitly incorporated by reference the 58 calls to Beecroft's cell phone (and potential calls to her home). It was from this set of conversations that the district court concluded Ocwen's intent to "annoy or harass" when it continued to call Beecroft after she asked it to stop, "the decision said.
A" debt collector can harass a debtor by continuing to call the debtor after the debtor has requested that the debt collector cease and refrain from communication, the appeals panel said, citing another decision.
"The district court did not err in drawing a similar conclusion from Ocwen's persistence in Beecroft's request that they stop calling her," the panel said, confirming the lower court's decision.
A lawyer from Zurich had no comment while Ocwen's lawyers did not respond to a request for comment. Catalog