Dorothy Allen v. LaSalle Bank
2011 U.S. App. LEXIS 587
| 3rd Cir. | 2011Background
- Dorothy Rhue Allen defaulted on a 30-year mortgage; the foreclosure action was brought on behalf of LaSalle Bank by Fein, Such, Kahn & Shepard (FSKS) in 2007.
- FSKS sent two letters to Allen’s attorney on June 7, 2007 detailing payoff, charges, fees, and costs purportedly due, followed by a third letter itemizing attorney fees and costs.
- Allen filed a class action counterclaim and third-party complaint alleging FDCPA and state-law violations; LaSalle and FSKS dismissed the foreclosure, then the New Jersey Superior Court dismissed Allen’s claims without prejudice.
- Allen later sued FSKS, LaSalle, and Cenlar in federal court alleging, among other things, inflated charges for attorney fees, searches, recording fees, and service of process that exceeded allowable amounts.
- FSKS moved to dismiss under Rule 12(b)(6), arguing communications to a consumer’s attorney are not FDCPA actionable; the district court adopted a perspective treating communications to counsel as from a competent attorney and dismissed the FDCPA claims.
- The Third Circuit vacated and remanded, signaling the issue centers on whether § 1692f(1) governs communications to a consumer’s attorney and the potential application of New Jersey’s litigation privilege on remand.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Does § 1692f(1) cover communications to a consumer’s attorney? | Allen contends to be actionable under § 1692f(1). | FSKS contends communications to attorney are not subject to FDCPA liability. | § 1692f(1) governs; communications to an attorney can be actionable. |
| Are communications to a consumer’s attorney treated as direct or indirect to the consumer for FDCPA purposes? | Treat them as direct to consumer via indirect conduit through attorney. | Treat as attorney-only communications; not actionable per se. | Such communications fall within the FDCPA as indirect communications to the consumer. |
| Should the New Jersey litigation privilege shield the debt collector from FDCPA liability? | Privilege would bar FDCPA claims based on privileged communications. | Common-law privileges do not trump FDCPA liability. | Litigation privilege cannot bar FDCPA liability; it does not provide exemption. |
Key Cases Cited
- Heintz v. Jenkins, 514 U.S. 291 (U.S. 1995) (defines 'debt collector' to include attorneys who regularly litigate debt collection)
- Evory v. RJM Acquisitions Funding L.L.C., 505 F.3d 769 (7th Cir. 2007) (agency-type analysis of communications to a consumer's attorney under FDCPA)
- Sayyed v. Wolfpoff & Abramson, 485 F.3d 226 (4th Cir. 2007) (treats communications to attorney under FDCPA as actionable)
- Guerrero v. RJM Acquisitions LLC, 499 F.3d 926 (9th Cir. 2007) (dicta on attorney communications and FDCPA scope)
- Kropelnicki v. Siegel, 290 F.3d 118 (2d Cir. 2002) (FDCPA scope and attorney communications considerations)
- Hartman v. Great Seneca Fin. Corp., 569 F.3d 606 (6th Cir. 2009) (acknowledges limits of common-law privileges in FDCPA context)