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Appeals Court Rules Dismissal of FDCPA Suit Was Premature

The Third Circuit Court of Appeals has overturned a lower court’s summary judgment ruling in favor of a defendant in a Fair Debt Collection Practices Act case on a legal technicality, sending the case back to the District Court for further proceedings. The defendant had withdrawn one of its arguments when seeking to have the case dismissed, only to re-introduce it in a supplemental brief, leaving the plaintiff without an opportunity to oppose the re-introduced argument.

A copy of the ruling in the case of Saroza v. Lyons Doughty & Veldhuis can be accessed by clicking here.

The plaintiff was sued by the defendant in relation to an unpaid credit card debt. The defendant sent the plaintiff a letter, in which the amount owed included an $82 fee for filing the lawsuit and associated court costs. The plaintiff filed suit, alleging the letter violated the FDCPA by mis-stating the amount he owed the creditor.

The defendant filed a hybrid motion to dismiss or motion for summary judgment. The motion argued the plaintiff failed to allege the incurred debt was a “consumer” debt as required by the FDCPA and that the letter was accurate because the plaintiff’s agreement with the creditor allowed for the recovery of court costs. In a reply brief, the defendant withdrew the agreement argument, at which point the judge asked for supplemental briefs. The defendant re-introduced the agreement argument, while the plaintiff did not address it in his brief. The judge granted summary judgment in favor of the defendant.

Because the defendant re-introduced the agreement argument, the plaintiff should have had a chance to argue against that claim, the Appeals Court ruled.

“Saroza did not have adequate notice that the District Court was considering granting summary judgment in favor of Lyons Doughty on the very argument it had expressly withdrawn from its pending motion, and that lack of notice was not harmless error,” wrote Judge Thomas Ambro. “We thus reverse the grant of summary judgment and remand for further proceedings. In so doing, we express no view on the merits.”

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