Judge Grants MSJ For Plaintiff After Being Sued For Time-Barred Debt

A District Court judge in Kentucky has granted summary judgment in favor of a plaintiff who was sued by the defendant for an unpaid debt in which the statute of limitations has expired, even though the defendant cited almost an exact case in which it was involved and was allowed to use the Fair Debt Collection Practices Act’s bona fide error defense.

A copy of the ruling in Thompson v. Midland Funding, LLC can be accessed by clicking here.

Both parties had filed motions for summary judgment, but Judge Henry Wilhoit of the District Court for the Eastern District of Kentucky, Northern Division, granted the plaintiff’s motion and denied the defendant’s.

The plaintiff obtained a credit card and stopped making payments on it in 2002. The original creditor charged off the debt in 2003 and then sold it to the defendant in 2007. Between 2008 and 2011, the defendant sent nine collection letters to the plaintiff seeking payment. The defendant then placed the account with a collection law firm, which filed suit against the plaintiff. The defendant argued the debt was time-barred and the defendant moved to have the case dismissed, which it was.

The plaintiff subsequently filed suit, alleging the defendant violated the FDCPA by filing a lawsuit to collect on a debt in which the statute of limitations has expired.

The defendant attempted to argue that its conduct did not constitute a violation of the specific sections of the FDCPA that the plaintiff cited in his complaint. The judge ruled the plaintiff should be awarded summary judgment under Section 1692e(5) of the FDCPA, which prohibits threatening to take any action that can not be legally taken or that is not intended to be taken.

The defendant also tried to use the bona fide error defense, because it inadvertently filed its suit against the plaintiff as a result of “conflicting” state law as to which statute of limitations applied — the 15-year statute of limitations for written contracts applied or a 5-year statute of limitations for unwritten contracts. But Judge Without ruled that mistakes of law are not subject to the bona fide error defense.

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