Asked for a do-over, a panel of judges from the Court of Appeals for the Tenth Circuit decided they were right the first time and affirmed a District Court ruling in favor of a creditor that was sued for violating the Fair Debt Collection Practices Act because it was not licensed as a collection agency when it filed a lawsuit to collect on an unpaid debt.
A copy of the new ruling in the case of McMurray v. Forsythe Financial can be accessed by clicking here.
The plaintiff purchased a vehicle and defaulted on making the loan payments. The vehicle was repossessed and sold, yielding a deficiency balance that was sold to the defendant. The defendant filed a lawsuit in Utah state court seeking to collect on the balance. The plaintiff responded to the suit, but not to the ensuing summary judgment motion, and the defendant was awarded a default judgment.
Back in August, the same panel of Tenth Circuit judges ruled that the plaintiff should have raised his issues over the defendant’s lack of a license when he was sued by the company in Utah state court, not by filing a separate lawsuit in federal court.
After agreeing to the plaintiff’s motion for reconsideration, the panel reached the same conclusion the second time around.
“In fact, it was the very filing of Forsythe’s complaint that gave rise to McMurray’s claims, because Forsythe’s complaint expressed its intention to collect from McMurray, and now McMurray complains of Forsythe’s legal inability to collect due to its alleged improper registration,” the Appeals Court wrote. “Moreover, Forsythe’s alleged improper registration existed well before Forsythe filed its complaint. Because McMurray’s claims before this Court arose from the same transaction as his Utah state court claims, they could and should have been raised in the Utah state court action.”
