Judge Grants MSJ for Defense Against 31 of 32 Plaintiffs in FDCPA Case

A District Court judge in Indiana has largely granted summary judgment in favor of a defendant that was sued for violating the Fair Debt Collection Practices Act because it allegedly contacting individuals who indicated they were represented by an attorney and wanted communications to cease. Of the 32 plaintiffs, 29 of them were stipulated to be non-testifying and the judge dismissed those claims because those individuals could not establish their debts were incurred for consumer purposes. Two of the remaining three plaintiffs had their claims fail because the legal service that represented them was not licensed to practice law in the states in which those plaintiffs lived and because the plaintiffs notified the original creditor — and not the debt collector — of the request to cease communications. The judge determined there were genuine issues of material fact related to one plaintiff, which was the only claim to survive the defendant’s motion for summary judgment.

A copy of the ruling in the case of Pennell et al v. LVNV Funding LLC and Resurgent Capital Services can be accessed by clicking here.

The plaintiffs — each of whom were elderly and indigent — were all represented by the same program operated by the Chicago Legal Clinic. The program offers limited legal representation for seniors and individuals with disabilities. Each of the plaintiffs had debts that were purchased by LVNV and assigned to Resurgent for collection.

The non-testifying plaintiffs tried to argue that it was “absurd to think that the indigent seniors and people with disabilities comprising the Non Testifying Plaintiffs would be incurring debts for a business purpose,” and while Judge James Sweeney II of the District Court for the Southern District of Indiana, Indianapolis Division agreed that it was a good guess, he would not “engage in such discriminatory stereotyping.”

Judge Sweeney also agreed with the defendant that the legal service’s representation of individuals who live in Florida and Michigan when it was only licensed to practice in Indiana and Illinois “appears to meet the definition of the unauthorized practice of law in those states.”

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