Judge Denies Plaintiff’s Attorney’s Request to Withdraw in FDCPA, FCRA Case

A District Court judge in Pennsylvania has denied a plaintiff’s attorney’s renewed motion to withdraw from a case against a student loan servicer for allegedly violating the Fair Debt Collection Practices Act and the Fair Credit Reporting Act, saying her “ill-conceived notion” that her client would be engaging in unlawful or improper behavior by not using the funds from a proposed settlement to pay off the student loan in question, for which the plaintiff is questioning its validity — after she represented him for 18 months after being made aware of the debt — is not grounds for stepping away from the case.

A copy of the ruling in the case of Sereyka v. Navient Solutions can be accessed by clicking here.

Cynthia Pollick, the plaintiff’s attorney, came on board the case in December 2018 after the plaintiff filed a complaint on his own in state court. The defendant had the case removed to federal court and filed a motion to dismiss, after which Pollick asked for and received permission to file an amended complaint. The amended complaint said the plaintiff did not take out the loan, had received harassing calls from the defendant, and that the defendant had falsely reported to credit reporting agencies that the plaintiff owed more than $35,000.

Last April, a settlement conference was conducted where it appeared that the plaintiff agreed to settle the case for $35,000. But before the settlement could be finalized, Pollick filed a motion to withdraw. In December, a hearing was conducted to determine whether to allow her to withdraw. Pollick was instructed to file a brief in support of her motion.

In the brief, she claims that she became aware of the terms of a divorce settlement between the plaintiff and his wife which held the plaintiff responsible for all loans and debts in his name. One of those debts was the student loan in question. The plaintiff filed his suit as a means of not having to pay the loans that were part of the divorce agreement. Pollick also said she was told by the plaintiff that if the case were to be settled, he would not use the funds to pay off the student loan.

At this point, Pollick said she now believed she was party to a case where the federal government was about to be defrauded and that she did not feel comfortable participating in any settlement.

But Judge Malachy Mannion of the District Court for the Middle District of Pennsylvania refused to let Pollick walk away from the case. The Department of Education was not a party in the plaintiff’s lawsuit and would still “be able to pursue any and all legal remedies” against the plaintiff, Judge Mannion said in his ruling.

“Pollick was aware of the student loan debt that plaintiff allegedly owed during her representation of him in this case for about 18 months,” Judge Mannion wrote. “Plaintiff was also aware that plaintiff disputed he owed the student loan debt and that this dispute was central to his claims she raised on his behalf against [the defendant] in this case. Pollick then represented the plaintiff during the settlement conference regarding his claims against [the defendant]. Pollick contends that when plaintiff advised her that he did not intend on using the settlement funds he received in this case to pay the student loan debt, she became concerned that plaintiff would not acknowledge his obligation to pay the debt, that she then believed he owed, and that it was unethical for her to allow plaintiff to use her services unless he agreed to pay the debt.”

If anything, Judge Mannion noted, Pollick was “obligated to make sure” the claims against the defendant were not “frivolous and unfounded” when the amended complaint was filed.

“Pollick’s ill-conceived notion that plaintiff is going to do something unlawful or improper by not paying off the student loan debt with his settlement proceeds from this case against [the defendant] and by continuing his challenge to the debt allegedly owed to the Department, is not grounds for her withdrawal from this case,” Judge Mannion wrote. “Plaintiff’s claims against [the defendant] in this case and any student loan debt he may or may not owe to the Department of Education are unrelated matters, and Pollick’s mistaken understanding that the two matters are somehow connected cannot be the reasonable basis for her to withdraw from this case and leave yet another client without representation at the last minute.”

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