Appeals Court Affirms Dismissal of FDCPA Suit Over Definition of Debt, Consumer

The Court of Appeals for the Eleventh Circuit has affirmed a lower court’s dismissal of a Fair Debt Collection Practices Act suit over whether an underlying debt was a consumer debt as defined by the FDCPA because the plaintiff and his wife used a fictitious name under state law in Florida when making the purchase.

A copy of the ruling in the case of Reed v. Bradley A. Friedman and Star Lakes Association can be accessed by clicking here.

The plaintiff and his wife registered the name “Reed’s Enterprise” under Florida’s Fictitious Name Act and then used that name when they purchased a condominium. When maintenance and assessment fees on the unit went unpaid, the defendant was hired to collect on the debt. The defendant sent a series of letters to the defendants, which the plaintiff claims included mistakes about how much was owed. The plaintiff sued the defendants, alleging they violated the FDCPA by engaging in deceptive acts or practices.

The defendants successfully won a motion to dismiss, arguing the plaintiff lacked standing because the debts were owed by Reed’s Enterprise, not the plaintiff. A District Court judge ruled the plaintiff failed to state a claim because the debt owed by Reed’s Enterprise did not meet the definition of consumer debt under the FDCPA and Reed’s Enterprise did not meet the definition of a consumer.

The plaintiff appealed the decision, arguing that Reed’s Enterprise was not a legal entity and he should be allowed to continue with his lawsuit. But the Eleventh Circuit agreed with the defendants, ruling that the plaintiff did not adequately explain why he and Reed’s Enterprise should be treated as one and the same. “And since Reed and Reed’s Enterprise cannot be treated as an interchangeable entity, Reed proceeding alone lacks standing to bring the FDCPA and related claims based on Defendants’ efforts to collect debts from Reed’s Enterprise,” the panel wrote in its ruling.

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