Home / Compliance / Judge Grants MTD in FDCPA Case Over Misstated Amounts in BK Proof of Claim

Judge Grants MTD in FDCPA Case Over Misstated Amounts in BK Proof of Claim

A District Court judge in Minnesota has granted a defendant’s motion to dismiss after it was sued for violating the Fair Debt Collection Practices Act by allegedly misstating the amount of interest and fees when filing a proof of claim in a bankruptcy proceeding.

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

The plaintiff filed for bankruptcy protection. The defendant filed two proof of claim documents for two debts — one for Citibank and one for Synchrony Bank. The defendant stated in the proof of claim document for the Citibank debt that the plaintiff owed $7,185.18 in principal, $0 in interest, and $0 in fees. On the Synchrony account, the amount owed was $6,409.91 in principal and $0 in interest and fees. The plaintiff contends that the amount of the Citibank debt was $6,990.57 in principal, $157.61 of interest, and $37 of fees, and the Synchrony debt included approximately $40 in interest and fees.

The plaintiff subsequently filed suit against the defendant, alleging violations of Section 1692e(2)(A) and 1692e(10) of the FDCPA by making false representations about the amount owed.

The plaintiff argued that violating the bankruptcy code by not accurately itemizing the amount owed in a proof of claim is actionable under the FDCPA. But Judge Joan Ericksen of the District Court for the District of Minnesota, disagreed.

“Morris’s claims arise from Proofs of Claim filed in a bankruptcy proceeding that allegedly violate Rule 3001 of the Federal Rules of Bankruptcy Procedure,” Judge Ericksen wrote in dismissing the suit. “Johnson suggests that the Bankruptcy Code and Rules provide the exclusive means for determining whether such claims should be allowed. While the Court does not necessarily read Johnson to foreclose all FDCPA claims that implicate the Bankruptcy Code, here, Morris has not provided a plausible legal basis for applying the FDCPA to the non-itemized proofs of claim at issue in this civil proceeding.”

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