DECISION and ORDER JURISDICTION On September 27, 2022, by order of Hon. William M. Skretny, this case was referred to the undersigned for all non-dispositive matters. Dkt. 6. The case is presently before the court on Defendant’s motion for sanctions and attorneys fees pursuant to 15 U.S.C. §1692k(a)(3), 28 U.S.C. §1927, Fed.R.Civ.P. 11, and the court’s inherent power, filed January 20, 2023. (Dkt. 16).1 BACKGROUND This action was commenced by Plaintiff by Complaint filed June 10, 2022 (Dkt. 1), alleging a violation of the Fair Debt Collection Practices Act, 15 U.S.C. §1692, et seq. (“FDCPA”) in connection with Defendant’s attempt to collect Plaintiff’s outstanding debt of $283. Specifically, Plaintiff alleged that Defendant had failed to change the status of the debt reported by Defendant on the Experian credit disclosure related to Plaintiff from “disputed” to “not disputed” despite having been informed on March 31, 2022, by March 25, 2022 letter from Plaintiff’s then attorney, that Plaintiff no longer disputed the unpaid debt. Plaintiff alleges that such failure by Defendant violated 15 U.S.C. §1692e(2)(A) by falsely representing the character, or legal status, of the debt, and §1692e(8), including a failure to communicate that the debt is disputed, by communicating credit information known or which should be known to be false, as Plaintiff alleged, by continuing to report a collection item as disputed by Plaintiff after being informed that the debt is no longer disputed by Plaintiff, a so-called “reverse [§1692]e8.”2 By papers filed January 20, 2023, Plaintiff moved, pursuant to Fed.R.Civ.P. 41(a)(2) (“Rule 41(a)(2)”), to dismiss the action with prejudice together with a Certification of [Plaintiff's] attorney and a Memorandum In Support of Plaintiff’s Motion to Dismiss With Prejudice Pursuant to Rule 41(a)(2) and attaching Exhibit 1 to Plaintiff’s Memorandum of Law (Dkt 17-3) (“Plaintiff’s motion”). On January 20, 2023, Defendant filed a Motion for Sanctions and Attorney Fees Under Rule 11, 15 U.S.C. §1692k, and 28 U.S.C. §1927 together with Certification of [Defendant's] Counsel and a Memorandum of Law (“Defendant’s Memorandum of Law”) (Dkt. 16) attaching Exhibits A-E (Dkts. 16-1-16-5).3 On February 6, 2023, Hon. William M. Skretny, finding that Plaintiff’s motion was unopposed, granted Plaintiff’s motion and the Complaint was dismissed with prejudice; however, Judge Skretny’s order also stated that the court’s file would remain open pending resolution of Defendant’s motion (Dkt. 20). On February 8, 2023, Plaintiff filed her Memorandum In Support of Plaintiff’s Response and Opposition to Defendant IC System, Inc.’s Motion For Sanctions Under Rule 11, 15 U.S.C. §1692k and 28 U.S.C. §1927 (Dkt. 21) (“Plaintiff’s Memorandum of Law In Opposition”), attaching as exhibits, Exhibit 1 and 2 (“Exh(s). __ to Plaintiff’s Memorandum in Opposition”). Defendant’s Reply In Support of Motion For Sanctions and Attorneys Fees Under Rule 11, 15 U.S.C. §1692k, and 28 U.S.C. §1927 (Dkt. 22) (“Defendant’s Reply”) was filed February 15, 2023. Oral argument was deemed unnecessary. In response to the court’s e-mail requests sent March 17, 2023 for copies of pertinent documents, Defendant provided copies of several of Defendant’s business records reflecting Defendant’s internal computerized records relating to Plaintiff’s account including Defendant’s internal administrative records as demonstrating Defendant was responsive to Plaintiff’s request. These records are filed as Court Exhibits A-F. On March 23, 2023, the court requested Defendant to provide answers to questions regarding the meaning of codes “XB” and “XR” as such codes appear on Defendant’s undated Credit Bureau Activity report for Plaintiff (Court Exh. C). On March 29, 2023, Plaintiff submitted a Declaration of Daniel Zemel, Plaintiff’s attorney, in response to the court’s March 17, 2023 e-mail. Defendant responded to the court’s March 23, 2023 e-mail request by filing the Affidavit of Michelle Dove, Defendant’s General Counsel (“Dove Affidavit”). Dkt. 24. FACTS4 On March 6, 2022, Plaintiff obtained her Experian credit disclosure report and noticed it stated that Plaintiff owed $283 to a third-party, PMS-50, which debt Plaintiff had until then been disputed by Plaintiff. On March 25, 2022, Credit Repair Lawyers of America (“CRLA”), representing Plaintiff wrote a letter to Defendant stating that Plaintiff no longer disputed the debt and requested Defendant remove the dispute comment from Plaintiff’s account. See Exh. 1 to Plaintiff’s Memorandum of Law In Opposition, Dkt. 21-1. Defendant received Plaintiff’s letter on March 31, 2022. Answer, Dkt. 5 at 4. On May 1, 2022, Plaintiff again obtained a copy of her Experian credit report which showed Defendant’s last reported “tradeline”5 on April 24, 2022 concerning Plaintiff continued to indicate the debt was still disputed by Plaintiff and that, according to Plaintiff, Defendant had therefore either failed or refused to cause the allegedly inaccurate dispute comment to be removed from Plaintiff’s credit report resulting in Plaintiff becoming disqualified for certain residential mortgages. By e-mail dated August 16, 2022, Defendant requested Plaintiff dismiss the Complaint with prejudice based on Defendant’s asserted “system notes” which, according to the e-mail, indicated that on April 1, 2022, Defendant had removed the disputed designation from Plaintiff’s account. Defendant’s Memorandum of Law, Exh. B to Dkt. 16-2 at 1; Court Exh. A (Client Summary referencing ICS10, ICS16) and Exh. B (Account History at 2) (“the August 16, 2022 e-mail. Specifically, the August 16, 2022 e-mail to Plaintiff’s attorney, Daniel Zemel, stated that Defendant’s attorney, Boyd Gentry’s, request was based on the fact that “my client [Defendant] removed the disputed code on April 1, 2022 as Mr. Hanz [a CRLA lawyer then acting on Plaintiff's behalf] requested in his letter [March 25, 2022]. Here are the lines from my [Boyd] client’s system notes which demonstrate this: 4/1/2022 9:49:33 AM Removed Dispute Flag/CBR Written correspondence from Consumer Attorney 4/1/2022 9:44:33 AM Updated Disputed flag Changed from Yes to No Please let me know that you received this, and that you will dismiss this case with prejudice promptly. Otherwise, my client with be forced to incur more unnecessary legal expense.” Dkt. 22-1 at 1-2 attached to Defendant’s Reply (bolding in original). Receiving no response from Plaintiff’s attorney to the August 16, 2022 e-mail, on September 2, 2022, Defendant’s attorney again e-mailed Plaintiff’s attorney that Defendant had not received a response to the August 26, 2022 e-mail and included a copy of a draft motion pursuant to Fed.R.Civ.P. 11(c)(2) (“Rule 11(c)(2)”) as required by Rule 11 (a)(2) and a request to dismiss the action. Dkt. 16 at 12; Dkt. 22 at 2. On September 16, 2022, Defendant again e-mailed Plaintiff stating that Defendant had still received no response to the August 16, 2022 e-mail or Defendant’s September 2, 2022 e-mail, advising that the “Rule 11 safe haven period expired last week,” and that Defendant would file an Answer that day. Id. Defendant served and filed its answer on September 26, 2022 (Dkt. 5). By e-mail to Defendant, dated September 28, 2022, Plaintiff’s counsel stated “concerning your early production, can you provide me [with] proof the CRAs [Credit Reporting Agencies like Experian] were notified of the removal of [Plaintiff's] dispute comment?” Dkt. 22 at 2. Defendant responded to Plaintiff’s September 28, 2022 e-mail on September 30, 2022 as follows: “Daniel — Attached is the business record from ICS [Defendant] that you requested. This shows the actual ‘XR’ code that was sent to the CRAs and the date it was transmitted: April 3, 2022 (Activity Data). Please confirm that you received this and you will dismiss with prejudice.”6 Dkt. 22 at 3. Defendant received no response from Plaintiff to the September 30, 2022 e-mail and the action continued with an entry of a Scheduling Order on November 28, 2022 (Dkt. 9), Defendant’s motion, dated December 8, 2022, to opt-out of the court’s ADR requirement (Dkt. 10), Plaintiff’s motion for a protective order filed December 19, 2022, and Defendant’s present motion for sanctions filed January 20, 2023 (Dkt. 16). On December 27, 2022 (Dkt. 12), Defendant sent a further e-mail to Plaintiff’s attorney (Court Exh. D) serving verified answers and document production responsive to Plaintiff’s First Set of Interrogatories and Requests for Document Production (Court Exh. E).7 As relevant, Plaintiff’s Interrogatory No. 4 asked “Did you [Defendant] inform the consumer credit reporting agency to whom you reported your Trade Line on the Plaintiff to remove the ‘account information disputed by consumer’ or ‘disputed’ notation on the Trade Line. If not, why did you not so inform the consumer credit reporting agency?” (Court Exh. E at 4). Defendant’s answer to Plaintiff’s Interrogatory No. 4 was “Yes.” Id. See Defendant’s Memorandum of Law (Dkt. 16 at 5); Plaintiff’s Memorandum in Opposition (Dkt. 20 at 3). By e-mail sent January 18, 2023, two days before Plaintiff’s scheduled deposition, see Plaintiff’s Memorandum in Opposition (Dkt. 20 at 3), Plaintiff requested Defendant provide an affidavit averring that the Defendant in fact had requested the credit reporting agencies remove the “disputed” notation from Plaintiff’s account. Dkt. 16-3 at 2-3. In Defendant’s response to this e-mail Defendant stated that “we already provided a verified interrogatory response in that topic along with the business records.” Id. Thereafter, in an e-mail sent to Defendant on the same date, Plaintiff stated “In light of this [Defendant's Answer to Plaintiff's Interrogatory No. 4], we [Plaintiff] are willing to dismiss.” Dkt. 16-3 at 2. In response to Plaintiff’s e-mail, Defendant stated that Plaintiff’s proposed conditions (not included in the record) and presumably to be a dismissal without costs to either party were “not acceptable” to Defendant because Defendant had earlier provided Defendant’s business records demonstrating Defendant, in Defendant’s view, had timely acted to remove the disputed notation from Plaintiff’s credit record. Id. at 1. Plaintiff responded by stating Plaintiff intended to move to dismiss the case notwithstanding Defendant’s opposition. Id. Defendant responded to this message by stating Plaintiff should dismiss with prejudice and “pay all of defendant’s attorney’s fees.” Id. In opposition to Defendant’s motion, Plaintiff filed the Declaration of Crystal Walter dated February 8, 2023, Dkt. 21-2, in which Plaintiff avers, inter alia, that the action was filed “after they [Defendant] failed to or refused to remove the dispute comment from their tradeline so I could be eligible for a mortgage.” Dkt. 21-2 2 (underlining added). In his Declaration, Zemel explained that while he was familiar with the “XB” code he was unfamiliar with the “XR” code as it appeared on the Defendant’s Credit Bureau Activity document. See Dkt. 23 4 (explaining that counsel would typically ask a defendant’s witness to identify the meaning of such codes during a Rule 30(b)(6) deposition). Defendant’s response to the court’s e-mail request includes Dove’s assertion that the “XB” code is used by Defendant to “inform the credit reporting agencies” that the account is disputed; the “XR” code is used “to inform” the agencies that “the last code from the Compliance Code field should be removed.” Dkt. 24
