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Judge Denies MTD in FDCPA Case In Debate Over Whether Debt Was For Consumer or Commercial Purposes

A District Court judge in New York has denied a defendant’s motion to dismiss a Fair Debt Collection Practices Act lawsuit because even though a box on a contract was checked indicating the plaintiff was signing up as a corporation and not a consumer, the plaintiff’s assertion that he was signing up as a consumer is sufficient to not dismiss the case.

A copy of the ruling in Mueller v. I.C. System Inc. can be accessed by clicking here.

The plaintiff signed up to receive electric service from a utility company. When he stopped paying his bills, the utility placed the account with the defendant for collection. The defendant is accused of leaving “numerous” messages for the plaintiff, according to the complaint. The messages all followed a similar script: an individual from the defendant would say his or her name, indicate he or she was calling from I.C. System, ask that the plaintiff contact him or her with a provided phone number, and gave the plaintiff a reference number. The messages did not say they were calling about a debt.

The plaintiff filed suit, alleging the messages violated the FDCPA because they were deceptive, since the only way he could find out they were in reference to a debt was to call the number left by the representatives.

The defendant moved to have the suit dismissed, arguing the debt arose from a commercial contract and not a consumer transaction. When the contract between the plaintiff and the utility was signed, a box was checked indicating the service was for a corporation, and the title of the service contract was “Energy Services Enrollment Agreement — New York Commercial NON DTD” with a designation of “Business Type: Corporation” at the top of the contract.

Nonetheless, Judge Ann Donnelly of the District Court for the Eastern District of New York ruled that “drawing all reasonable inferences in the plaintiffs favor, I find that the plaintiff has sufficiently pled that he owed a consumer debt, rather than a commercial debt.”

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