A District Court judge in Kentucky has granted a defendant’s motion for summary judgment in an “inside baseball” type of case involving the plaintiff moving from one state to another and then the judge having to determine which state’s statute of limitations applied when the defendant filed a collection lawsuit to recover the unpaid debt.
The Background: The plaintiff opened a credit card in 2013 while he was living in Texas. The plaintiff’s credit card debt was charged off in 2018, which is around the time he moved from Texas to Tennessee.
- The defendant purchased the debt from the original creditor in 2020. Later that year, the plaintiff moved again, this time to Kentucky.
- In 2021, the defendant filed a collection lawsuit against the plaintiff in Kentucky.
- The plaintiff filed suit, alleging the defendant violated the Fair Debt Collection Practices Act because the statute of limitations in Virginia — the choice of law location in the original cardholder agreement — had expired. The defendant counters that Texas law applies, because the underlying cause of action was accrued in that state.
The Ruling: Looking at a recent ruling from the state’s Court of Appeals, Judge Greg M. Stivers of the District Court for the Western District of Kentucky noted that where the plaintiff resided when he failed to make his payments is the jurisdiction that should apply — and that means the plaintiff breached the terms of his agreement while in Texas.
- Because the plaintiff stopped making payments in 2018 and was sued for the debt in 2021, the defendant was within the four-year statute of limitations in Texas to bring the lawsuit, Judge Stivers ruled.