A Utah Appeals Court has affirmed the lower court’s summary judgment ruling in favor of a defendant that was sued for violating the Fair Debt Collection Practices Act because it filed a collection lawsuit against the plaintiff when it was not licensed under the Utah Collection Agency Act.
The Background: The plaintiff had an unpaid medical debt that was placed with the defendant. The defendant retained a lawyer, who sent a letter to the plaintiff indicating that the letter was an attempt to collect a debt and that it would file a lawsuit if the debt was not paid. While this was proceeding, the defendant admits its registration with the state under the UCAA had lapsed.
- The defendant later sued to the plaintiff and obtained a default judgment.
- The plaintiff filed a lawsuit, accusing the defendant of violating the FDCPA and state law in Utah because it pursued collections of the debt without the legal right or license to do so.
- A judge dismissed the action, ruling there was no “actual injury” to support an FDCPA claim.
The Ruling: The Utah Appeals Court has dealt with these claims in a couple of other cases, but usually within the context of alleging violations under the Utah Consumer Sales Practices Act. Similar to those other rulings, the Appeals Court ruled that a violation of the UCAA is not actionable under the UCSPA.
- This claim is slightly different, though, in that it also alleges a violation of the FDCPA. But the plaintiff did not argue for a different resolution for her FDCPA claim. Instead, the plaintiff argued that where the UCSPA prohibits the exact same conduct as the FDCPA, and it is intended to marry federal and state rights, both statutes prohibit the same practices within the debt collection context. Thus, the plaintiff’s position foreclosed her FDCPA claim, the Appeals Court ruled because she did not preserve any argument that her FDCPA claim had a “viability distinct” from the USCPA claim.
