Page 16 - 2019 News Letter 5-5-19

light of the retainer agreement’s disclaimer. The court said the disclaimer didn’t defeat the bona fide error
defense because “the FDCPA does not require collectors to independently verify the validity of the debt”.
Moreover, it said, the defense “doesn’t demand perfection”.
Finally, the parties disputed the adequacy of the firm’s alleged procedures to avoid errors. The court
said this inquiry focused on “the orderliness and regularity of the debt collector’s error-prevention steps,
not on the number or complexity of those steps.” Moreover, it said, the word “reasonable” in the
formulation of the defense “cannot be equated to ‘state of the art’”. It said the statute “does not require
debt collectors to take every conceivable precaution to avoid errors; rather, it only requires reasonable
precaution.” It said the reasonableness inquiry was “flexible” and “fact specific”.
The difficulty with this approach is that from the Abdollahzadeh opinion it is hard to tell
that the defendant there did anything except rely upon a superficial reading of the
disavowed client data – and the court seems to find that sufficient, on summary judgment.
At least theoretically, the court conceded that it on review of a summary judgment decision
it was to “constru[e] all facts and draw[] all reasonable inferences in favor of”
Abdollahzadeh. Given the lack of effort in Mandarich’s error-prevention policy, one would
have thought that there was at least a factual issue as to whether the defense was
applicable.
Verified Pleading Binds Plaintiff On Amendment Attempt

“A sworn statement of fact in a verified pleading remains binding on a party even after an
amendment, and the party cannot subsequently contradict the factual allegation,” a panel of the Appellate
Court in Chicago held recently.
Acting in Axion RMS, Ltd. v. Booth, 2019 IL App (1st) 180724, a non-compete employment case, the
panel sustained a trial court’s refusal to allow the plaintiff to amend to cure what the trial court deemed
fatal allegations in its original complaint.
In Axion, the plaintiff originally alleged that the employee was given a pay raise and shareholder
status in 2014, before commencement of the non-compete in 2015. That complaint was dismissed with
prejudice for violating the Illinois rule that a non-compete supported only by continued employment as
consideration is unenforceable if the employment terminates in less than two years. The plaintiff then
sought to file a second amended complaint alleging that the shareholder status and pay raise actually
were coincident with entering into the non-compete. The appellate panel said the trial court did not abuse
its discretion in refusing that request.
“If the factual allegations in a proposed amended complaint contradict those in a verified complaint,
the allegations in the verified complaint remain binding and the party may not file the proposed amended
complaint,” the panel said. “Once Axion filed its verified complaint, the statements alleged were binding
judicial admissions that it could not later contradict. . . . Any contradictions to previously made judicial
admissions are akin to perjury.”
Brenda\SharpThinking\#169.pdf

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