Two years ago, a Kansas City woman learned she was being sued for not paying a credit card debt of $1,130.14.
The debt was not hers, she said. Yet the debt collection firm kept demanding that she pay.
A Kansas City law firm filed a counterclaim on the woman’s behalf, alleging malicious prosecution and violation of a federal fair debt collection act by the national debt collection firm.
This week, a Jackson County jury awarded $251,000 in damages to Maria Guadalupe Mejia Alcantara and assessed $82 million in punitive damages against the debt collection firm, Portfolio Recovery Associates LLC.
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“I am so thankful to the jury for giving me and my family justice,” Alcantara said in a written statement.
The punitive damages assessment was intended to send a message not only to Portfolio Recovery Associates but others like it that often attempt to collect debts without supporting documentation, said Gina Chiala, Alcantara’s attorney.
Such debt collection companies purchase debt accounts, like those generated with credit cards, but do not always acquire the paperwork showing how the debt was generated, she said.
“The jury issued a verdict that it thought would get this company’s attention,” Chiala said.
A Portfolio spokesman criticized the punitive damages amount and promised a prompt appeal. The company could ask for a new trial or ask the court to reduce the amount.
“This outlandish verdict defies all common sense,” said the spokesman, Michael McKeon.
“We hope and expect the judge will set aside this inappropriate award, and we plan to file motions to make the request formally in the very near term. Any fair reading of the facts of this case makes plain that a verdict of this size is not justice by any means and cannot stand.”
Many individuals sued by debt collection firms don’t have the resources to find a lawyer, Chiala said.
The day after being served notice of this lawsuit, Alcantara went to a Kansas City Legal Aid office.
A Legal Aid lawyer attempted to convince Portfolio Recovery that it was acting on bad information, Chiala said. The person who generated the debt was a man living in Kansas City, Kan., and not Alcantara, who has lived in Kansas City for 20 years.
But Portfolio Recovery continued to pursue Alcantara for about 15 months, said Chiala, whose law firm, Slough Connealy Irwin & Madden, took on the case just before the initial court date in March 2013.
A Jackson County judge ruled in favor of Alcantara last October, saying that Portfolio Recovery had “acted in bad faith, abused the discovery process and repeatedly violated this court’s discovery orders.”
The jury trial that ended Monday took place to determine damages.
If the assessment or damage amounts are upheld by the judge and the Missouri Court of Appeals, or if there is no settlement, half of the $82 million will go to the Missouri attorney general’s office, which will deposit the money in a victims compensation fund.
The other half will go to Alcantara and her lawyers.
“Those punitive damages are expressly designed to both punish and deter not only the defendant but the entire industry,” Chiala said.
“In this case, Portfolio Recovery didn’t know that our client had a different name than the account holder because they didn’t have the account documents. During the trial, Portfolio did not say it was at fault or express any remorse.”
From 2006 through 2014, there were 88 similar complaints submitted to the Missouri attorney general’s office from individuals saying that Portfolio Recovery was asking them for payments on debt they didn’t generate, Chiala said.
In her statement, Alcantara remembered the fear she felt when she learned of the lawsuit in February 2013.
“They wanted me to pay them over $1,000,” she said. “I did not owe this company any money. My husband and I were already struggling just to keep our children fed and the lights on. The lawsuit terrified me.”
Alcantara, who worked in a northeast Kansas City dry cleaners for 15 years before it closed and is looking for a new job, said she feared her home would be seized and she would be arrested.
“I am so thankful to the jury for giving me and my family justice. This should not happen to anyone, and I hope the jury’s verdict will stop Portfolio from doing this to others.”