A District Court judge in Missouri has granted a defendant’s motion for summary judgment in a Fair Debt Collection Practices Act case after the plaintiff claimed the defendant had no legal right to the debt and because it was not registered to do business in the state.
The background: The plaintiff defaulted on a personal credit card account with the original creditor and later received a collection notice from the defendant claiming it had purchased the account. The plaintiff sued under the FDCPA, arguing that the defendant had no legal right to collect the debt and that its failure to register to do business in Missouri constituted a violation of both state and federal law.
- The defendant provided supporting documentation, including a Master Account Sale Agreement and a Bill of Sale confirming the transfer of ownership from Synchrony Bank.
- These documents were submitted after the case was initially brought as a motion for judgment on the pleadings, which Judge Stephen N. Limbaugh, Jr. of the District Court for the Eastern District of Missouri converted into a motion for summary judgment.
The ruling: Judge Limbaugh ruled in favor of the defendant on both major claims:
- Ownership of the debt: The judge found that the defendant “lawfully purchased plaintiff’s debt” and that documents, including the Bill of Sale, confirmed a valid transfer. “Because the sale was valid, defendant did not violate the FDCPA in attempting to collect on plaintiff’s debt,” Judge Limbaugh wrote.
- Registration to do business in Missouri: The court held that Missouri law explicitly exempts foreign limited liability companies from registering with the state when their activities are limited to “securing or collecting debts.” The plaintiff’s argument that this exemption didn’t apply to large-scale operations was dismissed. The judge emphasized that courts are bound by the “plain, unambiguous language of the statute.”
- “It is for the legislature, not the courts, to amend a statute if the plain language of the statute does not accurately reflect the legislature’s intent,” the judge wrote.
