The Court of Appeals for the Eighth Circuit has vacated a judgment in favor of a plaintiff who alleged a debt buyer violated the Fair Debt Collection Practices Act because the collection agency it used to collect on an unpaid debt contacted the plaintiff even though she was represented by an attorney — a fact that the defendant failed to share with the agency. While the defendant met the definition of a debt buyer under the FDCPA, the Appeals Court ruled the actions of the collection agency could not be imputed to the defendant.
A copy of the ruling in the case of Reygadas v. DNF Associates, LLC, can be accessed by clicking here.
The defendant purchased a portfolio of debts, including one owed by the plaintiff. The defendant filed a collection lawsuit in state court against the plaintiff. The plaintiff retained an attorney and moved to dismiss the complaint for insufficient service of process. When the defendant did not respond to the motion, the lawsuit was dismissed. The defendant then placed the debt with a collection agency, but failed to let the agency know that the plaintiff had retained an attorney in the state court action. The agency sent the plaintiff a letter offering to settle the debt, which led the plaintiff to file her lawsuit against the defendant.
The defendant filed for summary judgment, but a District Court judge granted partial summary judgment in favor of the plaintiff. After denying a motion for an interlocutory appeal, the defendant made an offer of judgment in the amount of $4,000, which was accepted. The defendant then filed its appeal.
First ruling that the defendant does meet the definition of a debt collector under the FDCPA — which the defendant did not challenge on appeal — the Appeals Court then turned to the issue of liability.
In this case, because the collection agency did not know that the plaintiff was represented by an attorney, the agency did not violate the FDCPA, which means the defendant could not be held liable for the actions of the agency it hired, the Appeals Court ruled.
Because the plaintiff ” did not put into evidence the agreement between RGS and DNF, which may explain why she did not move for summary judgment on the question of DNF’s liability,” the Appeals Court wrote. “Without such evidence, RGS’s acts cannot be imputed to DNF to establish direct liability.”
