A District Court judge in Minnesota has denied a defendant’s motion for summary judgment in a Fair Debt Collection Practices Act class-action lawsuit, ruling that there were genuine issues of material fact in dispute regarding whether the defendant law firm qualifies as a debt collector under the FDCPA and whether its actions violated the statute.
The background: The defendant filed an eviction lawsuit against the plaintiff on behalf of a landlord in April 2022. The eviction complaint included a demand for “all attorneys’ fees incurred” by the landlord, despite the lease agreement capping such fees at $500. After settling the eviction matter out of court, the plaintiff filed this class action lawsuit September 2022, alleging violations of the FDCPA.
- The plaintiff claimed that the law firm’s statement in the eviction complaint regarding attorneys’ fees was false, misleading, and sought an amount not allowed by law or contract, in violation of multiple FDCPA provisions. The defendant law firm removed the case to federal court and filed a motion to dismiss, which was denied in May 2023. The firm then moved for summary judgment, arguing that it was not a “debt collector” under the FDCPA, that its request for attorneys’ fees was a good-faith prayer for relief, and that the error in the eviction complaint was a bona fide mistake..
The ruling: In her ruling, Judge Susan Richard Nelson of the District Court for the District of Minnesota, cited multiple factual disputes that ultimately must be resolved by a jury. First, Judge Nelson found that there was a genuine issue of fact as to whether the defendant regularly engages in debt collection activities, a requirement for liability under the FDCPA. Evidence was presented that it had filed hundreds of eviction actions during a five-year period, which may support the plaintiff’s claim that the firm regularly engages in debt collection.
- Second, Judge Nelson rejected the defendant’s argument that the demand for attorneys’ fees was a good-faith error. The judge noted that the eviction complaint misrepresented the terms of the lease by demanding all attorneys’ fees when the lease expressly limited such fees to $500. This discrepancy, Judge Nelson ruled, could reasonably be seen as misleading or deceptive under the FDCPA, regardless of whether the misrepresentation was intentional.
- Finally, Judge Nelson addressed the defendant’s bona fide error defense, which requires proof that the error was unintentional and that the firm had procedures in place to prevent such errors. The judge found that there was a genuine issue of fact regarding whether the defendant had sufficient procedures in place to catch the error, as evidence suggested that the misrepresentation occurred in multiple cases over the course of several years.
