GEORGE JUBA, Magistrate Judge
This action arises under the federal and state Fair Debt Collection Practices Acts, 15 U.S.C. § 1692 et seq., ORS 646, 639 et seq. Plaintiff alleges that defendant violated both debt collection acts when it attempted to collect $216.28 allegedly owed by plaintiff to Pay `n Save Corporation. Plaintiff seeks to recover statutory damages, attorney's fees and costs, as well as punitive damages under the state act. Jurisdiction is conferred by 15 U.S.C. § 1692k(d). This court has pendent jurisdiction over plaintiff's state claims. United Mine Workers v. Gibbs, 383 U.S. 715 (1966).
In 1976 plaintiff became indebted to Pay `n Save Corporation for $216.78 for medication purchased on an open account. Pay `n Save assigned the debt to defendant for collection.
On June 15, 1976, plaintiff received a letter from defendant demanding payment of the debt (Ex. 1). Approximately four months later, plaintiff was served with a summons and complaint filed in Multnomah County District Court (Ex. 2). Shortly thereafter Roy Smith, an attorney for Multnomah County Legal Aid Service, wrote to Robert Rieke, defendant's attorney, on plaintiff's behalf (Ex. 3). Mr. Smith informed Mr. Rieke that plaintiff's sole source of income was her Social Security benefits and that these benefits were exempt from garnishment.
On November 1, 1976, defendant obtained a default judgment against plaintiff in the sum of $250.08. By letter dated November 2, 1976, defendant informed plaintiff of the judgment and requested prompt payment of this debt (Ex. 4). Plaintiff's counsel again wrote to defendant's attorney on November 10, 1976, reiterating that plaintiff's Social Security benefits were exempt from execution (Ex. 5).
During 1977 defendant continued to attempt to collect the debt. On January 4, 1977, plaintiff was served with a notice to appear for a judgment debtor examination. Defendant subsequently agreed to cancel the appearance. Defendant mailed collection notices to plaintiff in April 1977 (Ex. 6) and November 1977 (Ex. 7).
On February 27 and April 4, 1978, defendant sent identical collection letters to plaintiff (Ex. 8, 9). The letters, white envelopes with a detachable message, were captioned "Is this what you do with your head when you get our letters?" Each depicted a decapitated man holding his head under his arm. The letters asked: "Why do you continue to ignore our letters? What motivates your indifference?" Each urged plaintiff to "[d]o some plain thinking for a change." The letters also commented:
We are not being personal . . . our letters are based on your habits with your mail and your just bills, long overdue.
Asking plaintiff to pay defendant "NOW", the letters counseled that "[t]ime is running out . . . and if you think what we have been writing is unpleasant, don't challenge us to see what happens if you keep avoiding us."
On November 16, 1978, plaintiff received a letter from Max Lesman, defendant's president (Ex. 10). Mr. Lesman informed plaintiff that it was essential for her to "arrange with us now for settlement of the within judgment." He also stated:
The records indicate that up to this time, you have been completely indifferent and negative with regard to settlement even though you are fully aware of your obligations.
Exhibits 9 and 10 are alleged to violate the federal and state debt collection acts in numerous respects. A copy of each notice is attached to this opinion.
I. VIOLATIONS ASSERTED UNDER THE FEDERAL ACT
A. Exhibit 9 (White Envelope)
Plaintiff claims that Exhibit 9, portraying the decapitated man, violates the federal debt collection act in five separate respects. She argues that the language used in Exhibit 9 is harassing, oppressive and abusive in violation of § 1692d, and threatens action which defendant did not intend to take in violation of § 1692e(5). In stating that her cooperation is "essential" and that "time is running out," Exhibit 9 is alleged to falsely represent the legal status of the debt and to be deceptive, in violation of § 1692e(2)(A) and e(10). Finally, plaintiff contends that by sending Exhibit 9 to her defendant communicated directly with her at a time when she was represented by counsel. This conduct is alleged to violate § 1692c(a)(2).
I am persuaded that Exhibit 9 is a harassing communication and violates § 1692d. That section prohibits conduct by a debt collector "the natural consequence of which is to harass oppress or abuse" the debtor. The language used in Exhibit 9 implies that plaintiff is an indifferent, unthinking individual who lacks the common sense to handle her financial affairs properly. The letter also insinuates that plaintiff's habit is to ignore both her mail and her bills. The language "if you think what we have been writing is unpleasant, don't challenge us to see what happens if you keep avoiding us" is threatening in tone. This statement vaguely hints at the onerous consequences to follow continued nonpayment of the debt and leaves the rest to the consumer's imagination. In doing so, Exhibit 9 violates § 1692d.
Exhibit 9 also violates § 1692c's prohibition against unauthorized communication with a debtor represented by counsel. The federal debt collection act provides that
[w]ithout the prior consent of the consumer given directly to the debt collector or the express permission of a court of competent jurisdiction, a debt collector may not communicate with a consumer in connection with the collection of any debt —
* * *
(2) if the debt collector knows the consumer is represented by an attorney with respect to such debt and has knowledge of, or can readily ascertain, such attorney's name and address, unless the attorney fails to respond within a reasonable period of time to a communication from the debt collector or unless the attorney consents to direct communication with the consumer.
15 U.S.C. § 1692c(a)(2). At issue is whether plaintiff's legal representation ceased once defendant obtained a judgment
against her in November 1976 or whether she continued to be represented by counsel up to the present.
I conclude that plaintiff's legal representation was continuous from 1976 to the time of this action. As a general rule, counsel for a defeated party is regarded as having the implied authority to defend against all post-judgment proceedings against his client. Ohlquist v. Nordstrom, 257 N.Y.S. 711, 188 N.E. 125 (1933). Representation of his client continues for a reasonable time after the entry of judgment, unless the attorney clearly informs the client and opposing counsel that he will terminate his legal representation at that point in time.
In this case, plaintiff's attorney, Mr. Smith, communicated with defendant's attorney after a default judgment was obtained against plaintiff (Ex. 5). In 1977 counsel for both parties agreed to cancel the judgment debtor appearance scheduled by defendant. It is clear that plaintiff believed she was represented by counsel well into 1978. On Exhibit 10, dated November 16, 1978, plaintiff noted "called att 11/17 — he will write to stop writing me." There is nothing in the record to indicate that either plaintiff or Mr. Smith intended Mr. Smith to stop acting as her attorney after defendant obtained a judgment against her. Through the letters and other communications from Mr. Smith to Mr. Rieke, defendant was put on notice that plaintiff was represented by counsel. Defendant could have easily learned the name and address of plaintiff's attorney simply by contacting Mr. Rieke. There is nothing in the record to show that plaintiff, her attorney, or the court agreed to permit defendant to communicate directly with plaintiff. I find, therefore, that defendant violated § 1692c(a)(2) when it sent Exhibit 9 to plaintiff.
The remaining violations asserted by plaintiff are unsubstantiated. Exhibit 9 makes no representations as to the legal status of the debt, other than it has not yet been paid. Neither does it threaten any action by defendant which defendant did not intend to take. Exhibit 9 threatens no specific action at all; it merely suggests that continued nonpayment of the debt will have negative consequences for plaintiff. These negative consequences, however, are unspecified. Finally, the statement that plaintiff's "immediate cooperation is essential" and that "time is running out" do not constitute the type of "false representation or deceptive means" prohibited by § 1692e(10). They are simply statements made to encourage plaintiff to pay the debt and are not actionable.
In summary, I find that Exhibit 9 violates §§ 1692d(a)(2) and 1692d of the federal debt collection act.
B. Exhibit 10 (Letter from Max Lesman)
Many of the violations asserted by plaintiff with respect to Exhibit 9 also apply to Exhibit 10, the letter sent to plaintiff by Mr. Lesman. Plaintiff claims that Exhibit 10 is an unauthorized communication with a debtor represented by counsel and violates § 1692c(a)(2); that it falsely represents the legal status of her debt to Pay `n Save in violation of § 1692e(2)(A); and that it is a deceptive means to collect the debt in violation of § 1692e(10). Of the three violations asserted by plaintiff, only the first has merit.
Defendant mailed Exhibit 10 directly to plaintiff at a time when she was represented by counsel. For the reasons stated in Part A above, I find that defendant violated § 1692 c(a)(2) when it sent Exhibit 10 to plaintiff.
Contrary to plaintiff's assertion, Exhibit 10 does not falsely represent the legal status of her debt. At worst, Mr. Lesman's letter informs plaintiff that defendant has obtained a judgment. That is a truthful statement. The statement "[i]t is important that you arrange with us now for settlement of the within judgment" is not a "deceptive means" to collect the debt. Even though plaintiff's Social Security benefits may be exempt from execution, that does not preclude her from repaying the debt on her own initiative. Nor does it preclude defendant from encouraging her to repay it voluntarily. The challenged statement is an attempt to obtain voluntary compliance from plaintiff and is not deceptive.
I find that Exhibit 10 violates only § 1692c(a)(2) of the federal debt collection act.
II. VIOLATIONS ASSERTED UNDER THE STATE ACT
The Oregon Fair Debt Collection Practices Act, ORS 646.639 et seq., parallels the federal act in proscribing certain types of conduct and forms of communication by debt collectors. Among the unlawful debt collection practices prohibited by the state act are the following:
(1) The use of profane, obscene or abusive language in communicating with a debtor or his family;
(2) Communicating with the debtor or a member of his family repeatedly or continuously or at times known to be inconvenient to that person with intent to harass or annoy the debtor or any member of his family; and
(3) Attempting to or threatening to enforce a right or remedy with knowledge or reason to know that a right or remedy does not exist, or threatening to take any action which the debt collector in the regular course of business does not take.
ORS 646.639(2)(d), (e), (k). Plaintiff alleges that Exhibit 9, the white envelope, violates each of the state provisions listed above.
Consistent with my ruling under the federal act, I find that Exhibit 9 contains abusive language in violation of ORS 646.639(2)(d). Many of the sentences and phrases used are insulting and are designed to belittle or annoy the debtor Moreover, Exhibit 9 draws conclusions about plaintiff's habits in handling her mail and bills which are not supported by the record.
Exhibit 9 does not, however, violate either of the remaining state debt collection act provisions as claimed by plaintiff. It is true that Exhibit 9 is only one of several communications mailed to plaintiff by defendant over a two and a half year period. To establish a violation of ORS 646.639(2)(e), plaintiff must also prove that the communication from the debt collector was intended to harass or annoy the debtor. Plaintiff presented no such proof at trial. While plaintiff may believe that any communication from a debt collector is by definition annoying, that is not sufficient to prove a violation of ORS 646.639(2)(e).
Finally, Exhibit 9 does not threaten action against plaintiff which defendant did not intend to take. It does hint that odious consequences may follow nonpayment of the debt. However, Exhibit 9 does not threaten specific action against plaintiff. Even if it did, plaintiff offered no evidence to establish Mr. Lesman's intent or state of mind as of April 1978.
To bring an action for damages under the state act, plaintiff must plead and prove that he was injured "as a result of a wilful use or employment by another person of an unlawful collection practice." ORS 646.641(1) (emphasis added) A wilful violation of the state act occurs "when the person committing the violation knew or should have known that his conduct was a violation." ORS 646.605(9). The term "wilful" as defined by ORS 646.605(9) "requires no more than proof of ordinary negligence by a defendant in not knowing, when it should have known, that a representation made by him was not true." State ex rel. Redden v. Discount Fabrics, 289 Or. 375, 385, ___ P.2d ___ (1980). Similarly, proof that a debt collector negligently failed to ascertain whether his written communications threatened nonexistent or unintended legal remedies would constitute proof of a wilful violation of the state act.
At trial plaintiff introduced the deposition of Mr. Lesman. With respect to the language used in Exhibit 9, Mr. Lesman testified that he didn't "intend to create fear in anybody." (Lesman, p. 30). He also indicated that he had never compared Exhibit 9 with the state debt collection law to determine whether Exhibit 9 complied with its provisions. In his opinion, that wasn't necessary because he submits all of his collection forms to the Real Estate Department Licensing Division for review every one to two years. Had any of the forms violated the state act, Mr. Lesman believed they would have been disapproved by the Licensing Division. None of his forms have been rejected on review. Mr. Lesman could not recall the date on which his collection notices were most recently submitted for review. (Lesman, p. 27-28).
It is well settled that every person is presumed to know and obey the law. I find that Mr. Lesman was negligent in failing to ascertain whether the language used in Exhibit 9 violated the state debt collection act. Accordingly, I find that defendant wilfully violated ORS 646.639(2)(d).
III. DAMAGES
Having found that Exhibit 9 violates the federal and state acts and Exhibit 10 the federal act, I must now analyze plaintiff's claim for damages. As in Lewis v. United Adjusters, Civil No. 80-177, each party has offered a different interpretation of the damage provisions of the federal and state debt collection acts. The issues raised by the parties are: (1) whether statutory damages may be recovered under both acts, absent proof of actual damages; (2) whether each act places a ceiling on the statutory damages recoverable in an individual action; and (3) under what circumstances may punitive damages be awarded under the state act.
A. Damages Under the Federal Act
Under the federal act, a debt collector who violates any provision of the act is liable to the consumer for damages. In an individual action, the damage award equals the sum of:
(1) any actual damages sustained by the consumer;
(2) "such additional damages as the court may allow but not exceeding $1,000;" and
(3) costs and reasonable attorney's fees.
15 U.S.C. § 1692k(a)(1), (2)(A), (3). A debt collector who is found to have violated the federal act is not liable if he
shows by a preponderance of evidence that the violation was not intentional and resulted from a bona fide error notwithstanding the maintenance of procedures reasonably adapted to avoid any such error.
15 U.S.C. § 1692k(c).
At trial defendant offered no evidence to show that the mailing of Exhibits 9 and 10 to plaintiff was unintentional. As Mr. Lesman's deposition testimony reveals, the notices were mailed to plaintiff as part of defendant's normal business practice. Indeed, Mr. Lesman testified at trial that he believed he had a perfect right to mail the notices to plaintiff because his agency had obtained a judgment against her. There is also nothing in the record which leads me to believe that defendant mailed Exhibits 9 and 10 to plaintiff as the result of a bona fide error. Nor does the fact that Mr. Lesman periodically submits his forms to the state for review constitute "the maintenance of procedures reasonably adapted to avoid" any bona fide errors. Review by the state does not alter the fact that defendant mailed Exhibits 9 and 10 directly to a debtor represented by counsel. In sum, I find that defendant is not protected by the defense available under § 1692k(c).
Plaintiff asserts that she is entitled to an award of statutory damages in the sum of $2,400 for defendant's violations of the federal debt collection act. In Lewis v. United Adjusters, Civil No. 80-177, I reviewed the damage provisions and legislative history of the federal act and concluded that an individual plaintiff is limited to a maximum recovery of $1,000 statutory damages. I also determined that a debtor-plaintiff could recover statutory damages absent proof of actual damages. Therefore, plaintiff may not be awarded statutory damages in an amount exceeding $1,000.
Among the factors to be considered by the court in computing the damage award are
the frequency and persistence of noncompliance by the debt collector; the nature of such noncompliance, and the extent to which such noncompliance was intentional.
15 U.S.C. § 1692k(b)(1). Although I have determined that defendant committed multiple violations of the federal act, only two documents are at issue. The fact that defendant mailed Exhibits 9 and 10 to plaintiff when she was represented by counsel renders the violations of § 1692c(a)(2) most serious. Although the language of Exhibit 9 is insulting and abusive, much of the language can be eliminated by rewording the detachable message. After considering the above factors, I conclude that plaintiff is entitled to an award of statutory damages in the sum of $300.
B. Damages Under the State Act
1. Actual and Statutory Damages
Plaintiff also seeks to recover statutory damages of $2,400 under the state debt collection act as well as punitive damages in the sum of $5,000. Under the state act,
[a]ny person injured as a result of wilful use or employment by another person of an unlawful collection practice may bring an action in an appropriate court to enjoin the practice or to recover actual damages or $200, whichever is greater.
ORS 646.641(1). A successful plaintiff is also entitled to an award of attorney's fees and costs. ORS 646.641(2). Unlike the federal act, the state act also permits the court to award a prevailing debtor punitive damages. ORS 646.641(1).
In Lewis v. United Adjusters, supra, I held that a debtor-plaintiff must plead and prove that he suffered some actual injury attributable to defendant's violation of the act in order to recover statutory damages. This conclusion was compelled by the language of the state debt collection act damages provision and by a review of cases decided under the analogous Oregon Unfair Trade Practices Act (UTPA) damages provision.
In this case, plaintiff neither pleaded or proved that she suffered any injury as a result of defendant's unlawful debt collection practices. Accordingly, plaintiff is not entitled to recover statutory damages under the state debt collection act and she shall not prevail on her state claims.
2. Punitive Damages
In addition to statutory damages, plaintiff seeks to recover punitive damages in the sum of $5,000. Both the state debt collection act and the UTPA provide that the court may award a successful plaintiff punitive damages. See, ORS 646.638(1), 646.641(1). According to the Oregon Supreme Court, punitive damages are recoverable in an UTPA action only if the court finds "deterrence is called for and the defendant's conduct is particularly aggravated." Crooks v. Payless Drug Stores, 385 Or. 481, 490, 592 P.2d 196 (1979). In Crooks, the court reasoned:
The legislature used the common law term "punitive damages", and we find that it intended that such damages be awarded only when the common law requirements for punitive damages are met.
Id. In providing for the recovery of punitive damages under the state act, the state legislature expressed a similar intent.
Certainly the tactics employed by some debt collectors, such as defendant, constitute the type of conduct which society wishes to deter. However, the record is devoid of any evidence to suggest that the conduct of Mr. Lesman, defendant's president, was "particularly aggravated." Absent such evidence, an award of punitive damages is not appropriate in this case.
C. Attorney's Fees
Pursuant to the federal debt collection act, plaintiff as the prevailing party is entitled to an award of attorney's fees and costs. Since I have determined that plaintiff is not entitled to prevail on her state claims, plaintiff shall not be awarded attorney's fees for counsel time expended pursuing her state claims. Plaintiff's counsel shall prepare and submit an affidavit within twenty days outlining the attorney time expended with respect to the federal claims.