In a case that was defended by Rick Perr and Monica Littman of Kaufman Dolowich, a state court judge in New Jersey has granted a defendant’s motion to dismiss a class-action lawsuit after it was sued for violating the Fair Debt Collection Practices Act and New Jersey state law by attempting to collect on a debt without having the proper license to do so.
A copy of the ruling in the case of Valentine v. Unifund CCR et al. can be accessed by clicking here.
The plaintiff received a collection letter in 2019 from the defendant that was seeking to recover a debt on behalf of Distressed Asset Portfolio III, LLC, (DAP) which acquired the debt from the original creditor. The plaintiff alleged that DAP is not a licensed consumer lender or sales finance company under the New Jersey Consumer Finance Licensing Act, which meant the collection activities were fraudulent because they misrepresented the legal status of the debt and the right to collect it, according to the ruling.
The plaintiff originally sued in federal court, but that case was dismissed earlier this year. Three weeks later, she filed this complaint in state court.
After first determining the plaintiff had standing to pursue her FDCPA claim — because she was seeking statutory damages — Judge Mary F. Thurber of the Superior Court of New Jersey then moved on to the merits of the case. The defendant attempted to argue that the statute of limitations had passed, because the letter had been sent years ago, but Judge Thurber agreed with the plaintiff that statute of limitations clock only started running when the original case was dismissed.
As to whether a license was needed to try and collect on an unpaid debt, the plaintiff failed to prove the defendant engaged in unlawful conduct and she also failed to demonstrate an ascertainable loss. The plaintiff never made any payments on the debt and could not prove the debt was improper.
“Plaintiff has pled that she is a consumer from whom defendants attempted to collect a debt without being licensed as required under New Jersey statutory law,” Judge Thurber wrote. “Her claim relies on a finding that failure to obtain a license rendered plaintiff’s debt void by operation of law, and that subsequent collection activity misrepresented the legal status of that debt in violation of the FDCPA. Those claims are barred.”
