Appeals Court Upholds Dismissal of FDCPA Case After Hospital Sought to Collect From Wife of Deceased Husband

In a case that was defended by Lawrence Bartel and Andrew Schwartz from Gordon Rees Scully Mansukhani, the Third Circuit Court of Appeals has affirmed the dismissal of a Fair Debt Collection Practices Act case in which the wife of a deceased individual sued after she was sent collection letters by a law firm seeking to collect on an unpaid medical debt incurred by her deceased husband.

A copy of the ruling in the case of Klotz v. Celentano, Stadtmauer and Walentowicz can be accessed by clicking here.

After receiving the letters, the plaintiff sued the defendant, alleging it violated Sections 1692e and 1692f of the FDCPA because the letters sought to collect on a debt she did not owe. The defendant moved to dismiss the suit on the grounds that the common-law doctrine of necessaries in New Jersey applied and meant that the wife was liable to repay the debt. A District Court judge agreed with the defendant and dismissed the case.

The plaintiff appealed, arguing that the Equal Credit Opportunity Act preempts the doctrine of necessaries, which will hold spouses liable for the cost and expenses associated with the well-being of their husbands and wives. But the Appeals Court ruled the debt in question is an “incidental credit” which exempts it from the ECOA because it was not a credit card debt, not subject to a finance charge, and not subject to installment payments.

The plaintiff also attempted to argue that the defendant should have tried to recover the debt from her husband’s estate. But there was no estate and precedent within the Third Circuit allows a creditor hospital to assert the doctrine of necessaries argument if an estate is insolvent.