Judge Partially Grants MTD in FDCPA Case Over ‘Improper’ Default Judgment Motion in Underlying Collection Suit

A District Court judge in Kentucky has partially granted and partially denied a collection attorney’s motion to dismiss a Fair Debt Collection Practices Act lawsuit, ruling that the attorney’s motion for default judgment in an underlying collection case was “improper” because the plaintiff had filed a response to the suit.

A copy of the ruling in the case of Hrdlicka v. Bruce can be accessed by clicking here.

The plaintiff defaulted on a personal loan and the defendant was hired to file a collection lawsuit on behalf of the creditor. The plaintiff responded to the suit, but the defendant still filed a motion for default judgment and motion for attorney’s fees, which he did not serve on the plaintiff. Based on the defendant’s “reputation,” the state court granted the default judgment motion and found the attorney’s fees request to be reasonable.

The defendant then attempted to have the plaintiff’s employer garnish his wages, at which point the plaintiff challenged the garnishment. After reviewing the case, the state court vacated the default judgment and ordered the sides to arbitration. The collection suit was ultimately dismissed.

The plaintiff then sued the defendant, alleging he violated several provisions of the FDCPA by improperly seeking default judgment, failing to serve the motion for default judgment, opposing his wage garnishment challenge, and requesting disingenuous attorney’s fees.

Judge Gregory F. Van Tatenhove of the District Court for the Eastern District of Kentucky granted the defendant’s motion to dismiss on the counts related to attorney’s fees, as well as the counts related to challenging the wage garnishment. But as to the counts related to the filing for default judgment and failure to serve, Judge Van Tatenhove denied the motion to dismiss.

The defendant, in filing his motion for default judgment, claimed the plaintiff had failed to plead or otherwise defend the collection lawsuit, which was not the case. “Unlike in the cases Mr. Bruce relies on, his request for default judgment was more than ‘procedural mishap’ – it was a ‘false, deceptive, or misleading representation in connection with the collection of any debt’ that seemingly caused faulty default judgment to be entered,” Judge Van Tatenhove wrote.

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