I’m thrilled to announce that Bedard Law Group is the new sponsor for the Compliance Digest. Bedard Law Group, P.C. – Compliance Support – Defense Litigation – Nationwide Complaint Management – Turnkey Speech Analytics. And Our New BLG360 Program – Your Low Monthly Retainer Compliance Solution. Visit www.bedardlawgroup.com, email John H. Bedard, Jr., or call (678) 253-1871.
Every week, AccountsRecovery.net brings you the most important news in the industry. But, with compliance-related articles, context is king. That’s why the brightest and most knowledgable compliance experts are sought to offer their perspectives and insights into the most important news of the day. Read on to hear what the experts have to say this week.
Judge Grants MTD in FDCPA Class Action Over Language in Letter
A District Court judge in New Jersey has granted a defendant’s motion to dismiss a Fair Debt Collection Practices Act class-action lawsuit, but not on the merits as the defendant had sought. Instead, the judge ruled the plaintiff lacked standing to pursue his suit and dismissed the case. More details here.
WHAT THIS MEANS, FROM CAREN ENLOE OF SMITH DEBNAM: The district court’s unpublished opinion in Martinez serves as another reminder that Article III is the gatekeeper to federal court. In Martinez, the court summarily dismissed the consumer’s claim alleging that the debt collector violated 15 USC § 1692e (and specifically e(5) and e(10)) by sending a settlement letter on a time barred debt. Without reaching the merits of the claim, the Court resorted to an Article III analysis in line with the Third Circuit’s recent rulings on the issue. The district court concluded that the consumer’s allegations of confusion and informational injury were not enough and dismissed the consumer’s claims without prejudice. What is notable about this opinion is that the case had previously been removed to federal court by the defendant. Rather than remand the case to state court, the district court judge dismissed the case without prejudice. Perhaps a subliminal message from the district court that he found the claim to be, as stated by defendant’s counsel in their briefing, “attorney driven litigation”?
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Judge Grants Motion to Compel Arbitration After Letter Sent to Collect on Satisfied Debt
A District Court judge in New Jersey has granted a defendant’s motion to compel arbitration in a dispute involving a collection agency and a consumer, after the agency sent a collection letter to the plaintiff to collect on a debt that had already been satisfied by a judgment. More details here.
WHAT THIS MEANS, FROM MITCH WILLIAMSON OF BARRON & NEWBURGER: There are two interesting aspects of this case which a debt buyer sought to enforce an arbitration agreement contained in the original cardholder agreement. First, the focus on the plain language of the arbitration agreement contained in the cardholder agreement between Glover and the original creditor. The Court pointed to the following language: “It also includes any disputes you have with our . . . assignees” and “any disputes . . . in connect with your Account,” concluding it meant what it said and said what it meant. It sounds like the perfect arbitration agreement. Worth reviewing if you’re rewriting an agreement or to revise what you have.
The second aspect were two of the theories raised by Plaintiff’s counsel in an attempt to defeat the arbitration agreement, both of which were summarily dismissed by the Court. The doctrine of Merger was the first theory sought to be applied. Plaintiff argued that “the contract between the parties is voluntarily surrendered and canceled by merger in the judgment and ceases to exist” . . . therefore, “the prevailing party has only those rights as are set forth in the judgment itself and the contract no longer serves any purpose except as evidence supporting the judgment.” The Court said no. “Glover’s argument rests on a misconstruction of the merger doctrine.” The “merger principle merely extinguishes that specific claim that was adjudicated and replaces it with a final judgment.” Worth reading the full discussion in the discussion and notwithstanding the foregoing I expect we will see this doctrine raised again.
Plaintiff also claimed that the Defendant had waived the right to arbitration when it previously went to court and obtained a default judgment. The Court disagreed for several reasons. My favorite is the fact that the Court pointed out that the instant claim did not exist at the time the collection action was filed four years prior so it could not act as a waiver. Again, the full discussion in the decision is worth a review for future use. This is a New Jersey case, but the reasoning of the Court should be adaptable for other jurisdictions.
Judge Grants MSJ for Plaintiff in FDCPA Case Over Expired Judgment
A District Court judge in Washington has denied a defendant’s motion for summary judgment and granted the plaintiff’s motion in a Fair Debt Collection Practices Act case revolving around the alleged expiration of a judgment. More details here.
WHAT THIS MEANS, FROM JESSICA KLANDER OF BASSFORD REMELE: We can be lulled into assuming that collecting on a judgment is a low-risk endeavor because we have the court’s approval. However, that is simply not the case. Each jurisdiction has its own specific rules and pitfalls that need to be carefully managed when entering, renewing, or extending a judgment. This ruling highlights how crucial it is to adhere to these technical requirements, as failing to do so can effectively negate your collection efforts. It also emphasizes the need to have well-documented and effective collection policies and procedures. While the bona fide error defense may not always be ideal, it can be a valuable tool in challenging questionable claims. Having a thorough and well-documented policy is sometimes the best (or only) way to mount a solid defense.
I’m thrilled to announce that Bedard Law Group is the new sponsor for the Compliance Digest. Bedard Law Group, P.C. – Compliance Support – Defense Litigation – Nationwide Complaint Management – Turnkey Speech Analytics. And Our New BLG360 Program – Your Low Monthly Retainer Compliance Solution. Visit www.bedardlawgroup.com, email John H. Bedard, Jr., or call (678) 253-1871.
