Judge Denies Motion to Dismiss on Basis that Response to Lawsuit Serves as Notice of Dispute

A federal judge in Washington has denied a defendant’s motion to dismiss a lawsuit alleging it violated the Fair Debt Collection Practices Act because the plaintiff’s response to an earlier lawsuit and assertions of cross-claims and counterclaims sufficed as an indication that the debt was being disputed by the individual.

A copy of the ruling in Patterson v. Peterson Enterprises, doing business as Valley Empire Collection can be accessed by clicking here.

The plaintiff incurred a medical debt for her child after the healthcare providers failed to bill the plaintiff’s health insurers properly, she claims. The medical debt was placed with the defendant for collections, and the defendant subsequently filed a lawsuit attempting to collect on the debt. The plaintiff filed a response to the lawsuit and opposed summary judgment. Doing so, the plaintiff alleges, qualifies as her disputing the debt and the defendant was obligated to report the debt as being disputed to the credit reporting agencies, which it did not do.

Section 1692e(8) of the FDCPA prohibits making false or misleading representations in connection with the collection of a debt, including the failure to communicate that a disputed debt is disputed. By denying liability for the debt in her response to the defendant’s collection lawsuit, the plaintiff alleges she disputed the debt, which should have been reported to the credit bureaus.

While the judge did not make any reference to whether she thought that a response to a lawsuit was enough to qualify that the plaintiff was disputing the debt, it did enough that she denied the defendant’s motion to dismiss the plaintiff’s lawsuit.