In a case that was defended by David Schultz and Justin Penn of Hinshaw & Culbertson, a state court judge in Illinois has granted a defendant’s motion for judgment on the pleadings in a Fair Debt Collection Practices Act Hunstein class-action case, ruling that the communication between the defendants and their letter vendor were not an attempt to collect a debt and thus not within the purpose of the statute. Getting a ruling on the merits in this type of case has been exceedingly difficult for the ARM industry.
A copy of the ruling in the case of Quaglia et al. v. SN Servicing and McCalla Raymer Leibert Pierce can be accessed by clicking here.
The plaintiff filed suit, alleging — among other claims — that the defendants used a third-party vendor to print and mail letters that included the plaintiffs personal information, without his consent. The disclosure of the plaintiff’s personal information, according to the plaintiff, constituted a disclosure of the debt to a third party, which violated Section 1692a(3) the FDCPA. The defendants removed the case to federal court, but it was remanded back to state court because the plaintiff lacked standing.
In conducting her analysis, Judge Clare Quish of the Circuit Court of Cook County, first noted that the FDCPA only applies to communications that seek to induce a payment from the debtor. In this case, the defendants sending information about the plaintiff to a third party was not an attempt to collect anything from the plaintiffs.
“Even construing the facts in a light most favorable to Plaintiff, it is clear that SN and McCalla’s communication to the letter vendor was not, itself, an attempt to collect the debt and thus, was not made in connection with the collection of a debt,” Judge Quish wrote. Sending information to a letter vendor “is not analogous to an employee of the creditor calling the debtor’s neighbor, giving the neighbor his contact information and telling the neighbor to ask the debtor to contact him because the matter was ‘very important.’ “
Judge Quish even used arguments from the federal judge who remanded the case back to state court and from the Colorado Supreme Court to cement her ruling.
“Communications to mail/letter vendors as alleged by Plaintiff in this case do not fall within the purpose or legislative history of the FDCPA,” Judge Quish wrote.
