Judge Denies Arbitration Because Defendant Waited Too Long

A federal judge in Florida has denied a motion to compel arbitration in a case in which a collection agency was accused of violating the Fair Debt Collection Practices Act by not identifying itself properly in a voicemail message because the agency waited seven years before seeking arbitration.

The defendant argued it did not receive a copy of the credit agreement until five years after the complaint was filed, but even then it was too late because the agency had already responded to a complaint, engaged in scheduling conferences, filed a joint scheduling report, conducted discovery and mediation, filed discovery motions and responses to substantive motions, which show “an intent to litigate, not arbitrate,” wrote Judge Kenneth Marra from the District Court for the Southern District of Florida.

A copy of the ruling in Helmuth v. ARS National Services, Inc., can be accessed by clicking here.

The plaintiff originally filed the lawsuit in 2011, but the defendant sought — and was granted — a stay in the case pending the outcome of a similar class action lawsuit in California. The court re-opened this case at the request of the plaintiff this April.

The plaintiff received a voicemail message from the defendant, which said:

Hello. The following is a message from [Defendant]. It is very important that we speak with [Plaintiff]. This is not a telemarketing or sales call. Please have them call us toll-free at 1-866-274-3582 and the reference number is 19718228. We need to be able to discuss this matter with you as soon as possible. Thank you. Goodbye.

The plaintiff alleged the defendant violated Section 1692e(11) by not identifying itself as a debt collector in the message and Section 1692d(6) by failing to make a meaningful disclosure.

Judge Marra also denied a request from the defendant for a motion on the pleadings, because within the Eleventh Circuit, “telephone messages are communications and when those messages fail to disclose they are from a debt collector, it is a violation of FDCPA,” Judge Marra wrote. “Defendant’s argument to the contrary are not persuasive. Defendant relies upon cases from outside this Circuit, a proposal by the Consumer Financial Protection Bureau that has not yet been enacted and materials outside of the pleadings. This Court, however, must follow Eleventh Circuit precedent and the law as it stands today.”


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