In a case that was defendant by Jacob Bach of Martin Golden Lyons Watts Morgan, a Magistrate Court judge in Texas has recommended the dismissal of a Fair Debt Collection Practices Act case on the grounds that the underlying debt was not personal, but commercial.
The Background: Last November, the plaintiff received a collection email from the defendant. The email was allegedly sent to 26 different email addresses, including the plaintiff’s personal account, and accounts of his family and co-workers, along with email addresses the plaintiff did not recognize.
- In the email, the defendant said, “[o]ne way or the other you will be forced to deal with this. Since it has become obvious through numerous attempts to contact you that you have no intentions on resolving this without suit being filed.”
- The plaintiff filed suit, accusing the defendant of violating Sections 1692c, 1692e, and 1692g of the FDCPA.
The Ruling: In filing its motion to dismiss, the defendant included a copy of the agreement between the plaintiff and the other parties, seeking to show that the debt in question was commercial, not personal, and therefore not subject to the FDCPA.
- The agreement provided the plaintiff, a real estate agent, with an advance for an anticipated sales commission. In the agreement, the plaintiff represents that he will use the proceeds from the commission for business purposes only, with no portion of the proceeds being used for any personal, family, or household purposes.
- The plaintiff attempted to convince the judge that the debt was for a personal loan, but Judge David L. Horan of the District Court for the Northern District of Texas wasn’t buying it.
- “The Advance Agreement states that Burgess would receive an advance on his salary and commission as a real estate broker, the advance would be used for business purposes, and the advance would be repaid from commissions from Burgess’s next sale, a commercial activity,” Judge Horan wrote in recommending the suit be dismissed.
