Buckley Sandler has a recap of an interesting case involving a collection agency and some circuitous logic attempted by its client.
The Supreme Court of West Virginia has upheld a lower court’s summary judgment ruling in favor of a plaintiff who alleged that a check cashing company and a collection agency representing the check cashing company contacted her after she filed for bankruptcy protection.
A copy of the Supreme Court’s ruling can be accessed here.
The lower court awarded a $37,000 summary judgment in favor of the plaintiff, Shana Spruce. Spruce cashed a personal check with the company, which bounced. Three months later, she filed for Chapter 7 bankruptcy protection. About a week later, when it received the notification that the plaintiff had filed for bankruptcy, the check cashing company tried to contact the plaintiff twice. The check cashing company then sent a letter, notifying the plaintiff that while the collection efforts would be stayed pending the bankruptcy, it would be pursuing a criminal complaint against her and that all subsequent communications would be conducted by its collection agency, One Way Recovery Solutions. The plaintiff called the collection agency to set up a payment plan. The collection agency subsequently called the plaintiff five times to collect on the debt.
At no point did the check cashing company or the collection agency contact the plaintiff through her attorney after she had filed for bankruptcy protection. She sued, alleging violations of the West Virginia Consumer Credit and Protection Act. The court granted partial summary judgment twice, once awarding $19,000 and then awarding $18,000, agreeing that the defendants violated the statute.
The defendants appealed the decision, arguing that Maryland law should apply, since the check cashing company was based in Maryland, and that even if Maryland law does not apply, the debt does not meet the definition of a “claim” under West Virginia law, because the company claims that contact was made pursuant to a criminal matter. But that argument did not fly with the court, especially because the check cashing company had previously asserted that the collection agency was working on its behalf and the collection agency said its calls were made to collect on a debt.
Further, as respondent notes, although Cash N Go now claims that the contact was made pursuant to a criminal matter in Maryland, this claim contradicts Cash N Go’s answer to the complaint and responses to discovery. Cash N Go admitted that at all times One Way was acting as its agent and within the scope of its mutual agreement; and One Way admitted that the phone calls were made for the purpose of collecting a debt. Accordingly, we find that the circuit court did not err in finding that Cash N Go’s debt constituted a claim under the WVCCPA and granting summary judgment to respondent.