Dismissal of Collection Lawsuit Not Enough for Plaintiff to Pursue FDCPA Suit

Winning a collection lawsuit because the judge ruled there was not a sufficient chain of custody to prove the account was transferred by the original creditor to the entity purchasing the account is not enough evidence that a juror could use to conclude a false statement was made, ruled a District Court judge in Pennsylvania, who granted a defendant’s motion for summary judgment.

Background: The plaintiff defaulted on a credit card debt, and was notified that the debt had been purchased by the defendant. The defendant filed a collection lawsuit, and produced documentation to show how it came to obtain the account in question. But the judge ruled the evidence was not sufficient and ruled in favor of the plaintiff, who turned around and filed a lawsuit of her own, accusing the defendant of violating Sections 1692e(2)(A) and 1692f of the Fair Debt Collection Practices Act.

Ruling: The argument made by the plaintiff, though, “attributes a material finding to the Municipal Court that was never actually made” in the underlying collection lawsuit, noted Judge Chad F. Kenney of the District Court for the Eastern District of Pennsylvania. “While the Municipal Court held that LVNV failed to present a chain of assignment that proved it was the assignee of the Account, it made no determination as to whether or not LVNV actually was or was not the assignee of the Account,” Judge Kenney wrote. “Thus, at present, Gwiazda has provided no evidence upon which a reasonable juror could reach the conclusion that Defendants made false or deceptive statements because there is no evidence showing that LVNV was not the assignee of the Account.”

Evidence Needed: What the plaintiff needed, Judge Kenney wrote, especially at the summary judgment stage of the case, was evidence the the defendant was not the assignee of the account. “Without any additional allegations of conduct that could constitute unfair or unconscionable actions, no reasonable juror could conclude that Defendants’ attempts to collect were unfair or unconscionable on the sole fact that Defendants failed to prevail in the underlying suit,” Judge Kenney ruled.

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