Appeals Court Upholds Summary Judgment For Defendant in FDCPA Lien Case

The Court of Appeals for the Fourth Circuit has issued an unpublished opinion affirming a lower court’s summary judgment ruling in favor of a debt collector that sought to collect post-judgment enforcement costs as well as the use of a continuing lien clause in attempting to collect on the unpaid debt.

A copy of the ruling in the case of Archie & Sharma v. Nagle & Zaller can be accessed by clicking here.

The defendant was hired to collect on an unpaid homeowner’s association debt. The plaintiffs alleged that the defendant’s attempts to collect violated two provisions of the Fair Debt Collection Practices Act — Section 1692e for allegedly using false and deceptive means to collect on a debt, and Section 1692f for attempting to use unfair or unconscionable means to collect on a debt.

The original creditor obtained a consent judgment that the defendant attempted to collect on. In the process of collecting, the defendant spent $35 on various fees and costs in having the judgment recorded and attempting to have the defendant’s wages garnished. That $35 was added to the balance owed, which was the source of the plaintiff’s allegations that the defendant violated the FDCPA.

But the District Court determined — and the Appeals Court agreed — that nothing the defendant did was incorrect and constituted a violation of the FDCPA.

The Appeals Court also concurred with the lower court that a continuing lien clause, which state that the lien covers additional costs that may come due after the lien is recorded, do not constitute a violation of the FDCPA.

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