Appeals Court Overturns Dismissal of FDCPA Suit

There is a lot of background details to unpack here and I will try to get them all, but this may be one of those cases where you need to read the full ruling to get all the information you’re going to need to fully understand what is going on. The Court of Appeals for the Sixth Circuit has overturned a lower court’s dismissal of a Fair Debt Collection Practices Act lawsuit, ruling that one of the claims brought by the plaintiff was within the FDCPA’s one-year statute of limitations.

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

The plaintiff financed the purchase of some furniture and while she was making payments, the contract was sold to a third party. The plaintiff defaulted on the debt and third party hired the defendant to file a collection lawsuit to recover the unpaid debt. There was some legal wrangling that led to the third party — Mariner Finance — dismissing the collection suit.

A year and 15 days later, the plaintiff sued the defendant, claiming he doctored the original contract to make it look like the assignment of the debt from the original creditor to Mariner was proper.

The defendant moved to have the suit dismissed, because it was barred by the FDCPA’s one year statute of limitations. A District Court judge granted the dismissal. The plaintiff filed a motion for reconsideration, and while that motion was pending, there was more legal wrangling and the plaintiff appealed the dismissal and the defendant appealed dismissal of his motion for attorney’s fees.

The plaintiff claimed in her appeal that filing an updated version of the contract during the original collection lawsuit constituted an FDCPA violation and that her suit was brought within one year of that incident’s occurrence.

The defendant argued the plaintiff lacked standing to sue and that the filing of the updated contract was just a continuing violation related to the filing of the original collection lawsuit. The defendant also attempted to argue that filing the updated version of the contract was subject to the continuing violation doctrine.

Each individual violation of the FDCPA has its own statute of limitations, the Appeals Court wrote. Under that premise, the plaintiff “can hang her hat on this alleged FDCPA violation,” it determined.

If the Court adopted the defendant’s stance, “we’d be saying that ‘so long as a debtor does not initiate suit within one year of the first violation, a debt collector [is] permitted to violate the FDCPA with regard to that debt indefinitely and with impunity.’ “

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