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The Court of Appeals for the Third Circuit heard oral arguments yesterday in a case alleging a violation of the Fair Debt Collection Practices Act and whether a debt buyer can be held liable for the actions of a debt collector with which a debt is placed for collection.
Last November, a judge in the District Court for the Middle District of Pennsylvania denied a motion for summary judgment on behalf of Crown Asset Management in the case of Mary Barbato v. Greystone Alliance LLC, et al, which was being sued by an individual who had an unpaid credit card debt that was purchased by Crown. Crown placed the account with a collection agency, and the individual subsequently filed suit against the collector and the debt buyer. Crown attempted to argue that it did not meet the definition of a debt collector under the FDCPA, but was denied. It appealed the decision to the Third Circuit, which hear oral arguments in the case yesterday.
The lawyer for Crown attempted to persuade the three-judge panel that a company can not be both a credit and a debt collector at the same time.
“There is not a company that is both a creditor and a debt collector,” said Michael Rosenkoff, an attorney from Gingo Palumbo who is representing Crown.
Rosenkoff received “push back,” from the judges, however, according to a published report, with the panel asking the lawyer whether Crown’s principal purpose was debt collection. The lawyer representing the plaintiffs argued that Crown is a debt collector because at least 50% of its revenue is derived from debt collection activities.
On rebuttal, Rosenkoff reminded the judges that it was the collection agency, not his client, which sent collection letters and left voicemails for the plaintiff.
The judges reserved judgment in the case.
