Three FDCPA Cases Revived in One Appeals Court Decision

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The U.S. Court of Appeals for the Eleventh Circuit Monday revived three separate cases that had been consolidated on appeal after reversing lower court rulings that the cases be dismissed because the plaintiffs rejected settlements that would have awarded them full relief under the FDCPA.

All three cases were brought by consumers alleging violations of the Fair Debt Collection Practices Act (FDCPA). In all three cases, the collection agency being sued offered settlements of $1,001 (an amount exceeding by $1 the maximum statutory damages available for an individual plaintiff under the FDCPA) and reasonable attorneys fees and costs. Plaintiffs in each case rejected the settlement offers.

The defendant companies in each case filed motions to dismiss under Federal Rule of Civil Procedure 12(b)(1), arguing that because they had offered the plaintiffs everything they were entitled to under the FDCPA, the FDCPA claims were moot and should be dismissed with prejudice. Judges in the U.S. District Court for Southern Florida agreed and dismissed the cases.

The cases are Anthony W. Zinni v. ER Solutions, Inc., Blanche M. Dellapietro v. ARS National Services, Inc., and Naomi M. Desty v. Collection Information Bureau, Inc.  On the plaintiffs’ appeals and at their request, the cases were consolidated into one for the Eleventh Circuit arguments.

A three-judge appeals panel Monday disagreed with the lower court’s ruling and reversed the decisions.

The primary issue in the case on appeal was that the collection agencies did not offer judgment against themselves in their settlements.

“The district court erred in finding Appellees’ settlement offers rendered moot Appellants’ FDCPA claims because the settlement offers did not offer full relief,” wrote the panel. “Each of the Appellants requested that the district court enter judgment in his or her favor and against an Appellee as part of the prayer for relief in the complaint. Appellees’ settlement offers, however, did not offer to have judgment entered against them. Because the settlement offers were not for the full relief requested, a live controversy remained over the issue of a judgment, and the cases were not moot.”

The appellate judges noted that a judgment was important because “the district court can enforce it. Instead, with no offer of judgment accompanying Appellees’ settlement offers, Appellants were left with a mere promise to pay. If Appellees did not pay, Appellants faced the prospect of filing a breach of contract suit in state court with its attendant filing fees–resulting in two lawsuits instead of just one.”

On that, the panel reversed the decisions in the cases and remanded them to the lower court for further action.

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Posted in Collection Laws and Regulations, FDCPA, Featured Post .

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  • avatar Steve Gold says:

    Once again, negligent lawyers are to blame and the responsibility for creating yet another bad case rests squarely on their shoulders. It is elementary to provide some mechanism to guarantee payment, usually by way of confession of judgment, and the attorney’s failure smacks of hubris.

  • avatar Ameripay says:

    Oh, but the consumers who promised to pay their creditors should have been more than satisfied with promises to pay – since promises are so reliable.

  • avatar sassy Ledsome says:

    @ameripay couldn’t have said it better myself!!

  • avatar todd-bean says:

    What kind of ignorant consumer, or their attorney, is not demanding actual damages in their prayer for relief? Any consumer that does not allege emotional distress, no matter how minor the violation, is leaving money on the table and only deserves $1,000.00.

    An FDCPA case should never settle for less than $3,000.00, and that is a very, very low amount, bottom of the barrel low. Really $5,000.00 is about the norm and if you have a violation in writing or on a voice mail, $7,500.00 – $10,000.

    No way would I not call a collectors bluff if I received an offer of judgement for $1,001 was made. A trip to a doctor to complain of “stress” is enough prima facie evidence for a emotional distress claim to survive a motion to dismiss or defeat a partial granting of summary judgement on the issue of emotional distress.

    Good grief, who is going to all the trouble to sue and then accept $1,000. Right out of the gate for a single intent to sue letter, yes, but not after suit has been filed, good grief.

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