While this looks like a Hunstein case where a ruling in favor of the defendant was overturned, a New Jersey Appeals Court had issue with the plaintiff’s right to due process and not the merits of her argument. The ruling does not decide whether using a letter vendor violates the FDCPA. Instead, it focuses squarely on how the case was dismissed and whether the plaintiff was given a fair chance to respond before her claims were thrown out.
The background: The plaintiff allegedly failed to pay a medical debt that was placed with the defendant for collection. The defendant then transmitted the plaintiff’s information to a third-party letter vendor to prepare and send a collection letter.
- The plaintiff claimed this disclosure of personal and debt related information to a vendor violated the FDCPA’s prohibition on communicating with third parties in connection with the collection of a debt. There were a rash of these cases nationwide following a ruling in Hunstein v. Preferred Collection and Management Services, but that case, and most of the others that were filed that made similar claims, were dismissed either on the merits of the argument — that using a letter vendor was not the kind of third-party disclosure that the FDCPA is meant to prohibit — or because the plaintiffs did not suffer an injury and did not have standing to sue.
- The case proceeded through discovery and was scheduled for trial.
- The defendant obtained an adjournment to file a summary judgment motion but never filed one. On the eve of trial, the parties filed pretrial motions and the trial court held an evidentiary hearing tied to those motions where the judge dismissed the plaintiff’s complaint.
The ruling: On appeal, the Appellate Division said that procedure followed by the trial court judge violated basic due process. The court emphasized that dispositive motions that can end a case must follow the rules for summary judgment, including proper notice and an opportunity to respond.
- The appellate panel added that dismissing a case through a pretrial motion deprives a party of “an opportunity to be heard at a meaningful time and in a meaningful manner.”
