A District Court judge in New Jersey has denied a defendant’s motion for summary judgment in a Fair Debt Collection Practices Act class-action case, ruling that it is unclear which state’s statute of limitations apply in determining the enforceability of an unpaid debt, and that the defendant’s actions may indicate it knew that the statute of limitations had expired.
A copy of the ruling in the case of Pazymino v. Portfolio Recovery Associates can be accessed by clicking here.
The plaintiff received four letters from the defendant — On May 8, August 14, and December 18 of 2018 and March 19, 2019. In the last three letters, there was a disclosure that notified the plaintiff that the statute of limitations had expired and that the defendant would not sue to collect on the unpaid debt — the first letter did not contain such a disclosure.
The plaintiff filed suit, alleging the first letter violated the FDCPA, because it did not contain the disclosure that the other three letters did. The plaintiff also alleged, that the second, third, and fourth letters violated the FDCPA, because they made offers to settle a debt, even though the debt was unenforceable.
The defendant argued that the enforcement of the debt was subject to New Jersey’s six-year statute of limitations, while the plaintiff claims the debt was subject to Delaware’s three-year statute of limitations.
While the plaintiff did not have a copy of the original agreement between her and the creditor, she did reference a publicly available database maintained by the Consumer Financial Protection Bureau that included 130 agreements from the original creditor that contained the Delaware choice of law provision. The plaintiff also claimed that by including the SOL disclosure on the second, third, and fourth letters — but not the first — the defendant acknowledged that its right to enforce the debt had expired by August 2018, two years before it would have expired if New Jersey’s SOL were applied.
The evidence created a genuine issue of material fact that Judge Kevin McNulty of the District Court for the District of New Jersey said was up to a jury to decide.
Judge McNulty also noted that regardless of which state’s statute of limitations applies, the claim that the final three letters violated the FDCPA because they made offers to settle debts that were not enforceable would still remain.