The Court of Appeals for the Tenth Circuit has affirmed the dismissal of a pair of Fair Debt Collection Practices Act cases involving the assignment of claims, ruling that tort claims are not assignable under state law in Oklahoma.
A copy of the ruling in the cases of Dotson v. AWA Collections and Dotson v. Ad Astra Recovery Services et al. can be accessed by clicking here.
The plaintiff filed separate lawsuits accusing the defendants of violating the FDCPA, noting that the individuals who were harmed by the alleged actions of the defendants had assigned their claims to the plaintiff. In both cases, a District Court judge determined that state law in Oklahoma prohibited the assignment of claims not arising out of a contract and granted motions to dismiss by the defendants, ruling the plaintiff lacked standing to sue.
Noting that the FDCPA does not explicitly address the issue of assignability, the Appeals Court turned to state law in Oklahoma, which is where the cases were originally filed. Oklahoma law prohibits the assignment of claims not arising out of a contract, so if the claims were a tort, they could be assigned, the Appeals Court noted.
The plaintiff argued that the law in Oklahoma “is broad enough to permit the assignment of FDCPA claims so long as they arise from contract,” but the judges on the panel were “not persuaded.”
Given the nature of the claims being made, the Appeals Court determined them to be tort claims, which are not assignable, and then noted the plaintiff’s “contract theory contradicts his own allegations.” The original allegation — the the defendants failed to report to the credit reporting agencies that an account was in dispute — “indicates the claims are predicated on misleading representations, which, for example, AWA points out are analogous to the torts of fraud or misrepresentation,” the Appeals Court wrote. The plaintiff “claimed defendants made a misrepresentation of fact by failing to communicate to CRAs that Mr. Hutson and Ms. Bundy disputed the debts, which caused them to suffer lower credit scores, personal and reputational harm, humiliation, and emotional and mental distress. These allegations confirm the FDCPA claims were akin to torts.”
