Appeals Court Affirms MSJ Against Debt Buyer in Contract Breach Case

The Third Circuit Court of Appeals has affirmed a lower court’s ruling in favor of a defendant that was sued by a debt buyer for failing to provide the proper information for accounts that were purchased by the buyer because it did not send its emails to the address noted in the underlying agreement.

A copy of the ruling in the case of Ophrys v. OneMain Financial can be accessed by clicking here.

Ophrys and OneMain entered into an agreement under which Ophrys agreed to purchase defaulted consumer loan accounts from OneMain for individuals who had filed for Chapter 13 bankruptcy protection on a monthly rolling basis. Under the terms of the agreement, Ophrys had 180 days from the applicable closing date to notify OneMain of a breach of the agreement and had to send an email to OneMain’s general counsel and to an executive at OneMain’s parent company, Citicorp.

About six months after the sales started, Ophrys received an email from an “account-level employee” at Citibank, saying that all “putbacks and account level questions” should be sent to a general email inbox and “not to our individual emails as it causes email overload.” More than a year after receiving that email, Ophrys sent a series of messages to the general email account regarding 1,691 accounts that were allegedly missing information.

A series of emails and conversations did not resolve the issue and Ophrys finally sent a formal notice to the general counsel and the executive at Citicorp about the breach of the agreement. Ophrys then filed suit against OneMain, accusing it of not providing the full and complete information it was required to send. A District Court judge granted summary judgement in favor of OneMain, ruling that there was no issue of material fact that Ophrys failed to comply with the notice provisions under the original agreement because it did not notify the proper individuals within 180 days as specified in the contract.

Ophrys appealed, arguing that it was not required to submit a Notice of Claim or that any of the emails it sent to the general email account satisfied the requirement. But the Appeals Court noted that the terms of the agreement related to a Notice of Claim were “clear and unambiguous.”

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