Vicarious liability became a bit of a hot topic within the context of Fair Debt Collection Practices Act cases recently following a District Court ruling that held a debt buyer liable for the actions of a debt collector working its accounts, but a District Court judge in Alabama has now determined that a debt buyer can not be held liable for the actions of a process server working on behalf of a collection law firm hired by the debt buyer because the process server was not acting as an agent of the debt buyer.
A copy of the ruling in the case of Hooper v. Midland Funding can be accessed by clicking here.
In June, a federal judge in Oregon held a debt buyer liable for the alleged FDCPA violations committed by a collector working on its behalf, saying that the debt buyer “bear[s] the burden” of monitoring the collectors activities.
But in Hooper, Magistrate Judge Herman Johnson, Jr., of the District Court for the Northern District of Alabama granted the defendant’s motion for summary judgment, ruling that any alleged issues relating to the service of a summons and complaint in an underlying collection case are not the fault of the defendant.
The defendant contracted with a collection law firm to collect on an unpaid credit card account. The law firm filed a collection lawsuit against the plaintiff and hired a process server to deliver the summons and complaint to the plaintiff. There is some disagreement over whether the service was actually performed or not, but the defendant ultimately obtained a default judgment against the plaintiff and subsequently sought to garnish his wages. The plaintiff then filed his suit against the defendant, alleging it violated the FDCPA by falsely representing it served the summons and complaint.
After stipulating that the defendant itself did not falsify the service return form, Judge Johnson turned to the issue of holding the defendant vicariously liable for any alleged violations undertaken by the collection law firm or the process server.
While first holding that the process server is not considered a debt collector under the FDCPA, Judge Johnson does note that there are circumstances where process servers have been stripped of their exemption if their actions stray beyond what is normally accepted. Even if that were the case here, Judge Johnson noted, there was no agency relationship between the defendant and the process server.
“In short, the record does not contain any evidence engendering a reasonable inference that Midland enjoyed a right to control VanSlam’s process serving methods or practices,” Judge Johnson wrote. “Accordingly, a reasonable jury may not conclude VanSlam served as an agent who may subject Midland to vicarious liability, even if it could conclude VanSlam constitutes a ‘debt collector.’ “
