Judge Grants MSJ For Defense in FDCPA Case Over Attorney Representation

A District Court judge in Indiana has granted a defendant’s motion for summary judgment after it was sued for allegedly violating the Fair Debt Collection Practices Act because the plaintiff sent the original creditor a notice that she was represented by an attorney, but that information was not conveyed when the account was sold and subsequently collected on.

A copy of the ruling in the case of Pennell v. Global Trust Management, LLC can be accessed by clicking here.

The plaintiff defaulted on a loan. An attorney representing the plaintiff sent the original creditor a letter, saying the plaintiff refused to pay the loan and directing all future communications to the attorney. The unpaid debt was subsequently sold to the defendant, which sent the plaintiff a collection letter. The plaintiff’s attorney responded to the defendant’s letter, saying the same thing as in the first letter — the plaintiff refused to pay the debt and directing all communication to the attorney.

The plaintiff filed suit against the defendant, arguing that it violated Section 1692c(a)(2) of the FDCPA by communicating with the individual after being notified that the individual was being represented by an attorney. But that information was never conveyed to the defendant by the original creditor.

But Judge James Sweeney II of the District Court for the Southern District of Indiana, Indianapolis Division, granted the defendant’s motion for summary judgment, determining there was no way the collector could have known the plaintiff was being represented by an attorney.

“A debt purchaser does not acquire the seller’s knowledge — or any other state of mind — any more than a homebuyer acquires the seller’s neighborly grudges or fond memories of last year’s block party,” Judge Sweeney wrote. “Lacking knowledge (actual or otherwise), GTM did not violate the FDCPA by sending the letter, and summary judgment for GTM is warranted.”

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