In an en banc decision released yesterday, the Virginia Court of Appeals upheld a circuit court ruling that a debt buyer had standing to sue for an unpaid credit account balance, affirming its ownership of the debt, while reversing the circuit court’s decision to dismiss the consumer’s counterclaim, citing lack of jurisdiction.
The background: The legal battle began when the plaintiff, a debt buyer, filed a warrant in debt against the defendant, a consumer, in Virginia’s general district court. The plaintiff sought to recover more than $8,900, claiming it had acquired the account through a series of assignments from the original creditor.
- The consumer disputed the claim, challenging the debt buyer’s standing and alleging violations of the Fair Debt Collection Practices Act in a counterclaim. The general district court ruled in favor of the debt buyer but dismissed the consumer’s counterclaim for procedural reasons.
- The consumer appealed to the circuit court, where the debt buyer again prevailed.
- However, the consumer, acting pro se, continued to argue that the plaintiff lacked standing due to insufficient proof of ownership. The circuit court also denied her FDCPA claim, which it treated as part of the appeal.
- The case then proceeded to the Virginia Court of Appeals, where a three-judge panel reversed the circuit court, finding the debt buyer lacked standing.
The ruling: The en banc court reinstated the circuit court’s judgment on the standing issue. The court clarified that standing is a preliminary threshold that does not require proof of the entire case but rather evidence that the plaintiff has a legitimate interest in the dispute. The debt buyer met this requirement by providing bills of sale, an affidavit of assignment, and account documentation connecting the debt to the consumer.
- However, the court reversed the circuit court’s decision on the consumer’s FDCPA counterclaim, finding that the circuit court lacked jurisdiction because the counterclaim had not been properly appealed from the general district court.
