A District Court judge in Pennsylvania has denied a defendant’s motion to set aside a default judgment against it in a Fair Debt Collection Practices Act and Fair Credit Reporting Act case, ruling that it has not submitted enough evidence to prove that service of the lawsuit was ineffective, and because default judgments have been entered agains the defendant in 17 other lawsuits across the country. It appears as though the defendant “made a calculated decision to allow a default judgment to be entered” against it, only to decide to try and fight it after the plaintiff was awarded nearly $400,000 in damages and attorney’s fees.
A copy of the ruling in the case of Hutchins v. Mountain Run Solutions can be accessed by clicking here.
The plaintiff filed suit, accusing the defendant of violating the FDCPA and the FCRA by not properly investigating a dispute and communicating false credit information. The defendant did not answer the complaint and a default judgment was entered against it. The plaintiff was awarded $180,000 in compensatory damages and $180,000 in punitive damages, and the judge awarded nearly $27,000 in attorney’s fees. Only after it learned the penalty it was facing did the defendant do anything.
Using the address on its website as well as the address on a Consent Order with a state regulator, the process server went to serve the summons on the defendant. But the process server found another company in that office. The process server learned the defendant was occupying a new office in the same building and served the summons on an employee, who used a pseudonym to accept the summons and complaint. All future correspondence was sent to the new address. The process server also served additional documents to another employee at that address.
In its motion, the defendant claimed that service was improper, rendering the judgment void. But it did not submit any evidence that the individual did not accept the original summons and complaint nor did it provide any evidence that he as not the person in charge, noted Judge Harvey Bartle III of the District Court for the Eastern District of Pennsylvania. “Significantly, Davis had a sufficiently responsible position and close association with Mountain Run, a debt collector, to use a pseudonym on the job to avoid harassment on social media,” Judge Bartle wrote. “The court can reasonably infer that he was in charge of the office when he was served. In any event, Mountain Run has not shown that Davis had an insufficient connection with Mountain Run so that service was not reasonably calculated to give it notice of this action.”
The plaintiff also noted that the defaults have been entered against the defendant in 17 different federal lawsuits. “It defies belief that it did not have proper notice in all of these actions,” the judge wrote. “The Court can reasonably infer that Mountain Run has deliberately allowed defaults to be taken. The Court can also reasonably infer that Mountain Run was properly served in this action and made a calculated decision to allow a default judgment to be entered. Only after it faced a sizeable judgment did it belatedly experience buyer’s remorse.”