Collection Agency Wins Dismissal of FDCPA Suit Over Claim-Splitting

A collection agency has won a motion to dismiss a lawsuit filed by a plaintiff alleging violations of the Fair Debt Collection Practices Act in a case involving two separate debts that were disputed on the same day in letters that were virtually identical.

A copy of the ruling in Horia v. Nationwide Credit and Collection can be accessed by clicking here.

The plaintiff failed to pay a debt incurred to a hospital. The debt was placed with the defendant for collection. The plaintiff consulted with a legal organization, which sent a letter to the defendant disputing the debt. The plaintiff then obtained a copy of his credit report to verify the debt had been disputed, but while the debt was on his report, it was not noted as being disputed. The plaintiff subsequently filed a complaint, alleging the defendant violated the FDCPA.

What makes this case interesting is that this is not the first time the plaintiff has filed an FDCPA suit against this agency. In fact, the plaintiff has made virtually the same allegations against the defendant in another suit, involving a debt owed to a different hospital. The same legal organization sent almost the same dispute notice to the defendant and after examining his credit report, the plaintiff saw the debt was not disputed on his credit report. That case was dismissed after it was settled, 16 days before this second lawsuit was filed.

The defendant alleged the plaintiff was “claim-splitting by bringing the two suits separately. [The defendant] argues that by splitting his claims, [the plaintiff] is attempting to circumvent the $1,000 limit on statutory damages for an FDCPA action and allow [the legal organization] to recover attorney’s fees twice.”

In applying the doctrine of res judicata, the judge in the case agreed with the defendant and dismissed the charges against it.