Feggins v. LVNV Funding LLC (In re Feggins)
535 B.R. 862
Bankr. M.D. Ala.2015Background
- William Feggins and several consolidated debtors sued LVNV Funding, LLC and Resurgent Capital Services for filing time‑barred proofs of claim in their Chapter 13 cases and asserted FDCPA claims plus disallowance under the Bankruptcy Code.
- Defendants moved for judgment on the pleadings under Rule 12(c), arguing the Bankruptcy Code precludes FDCPA liability for filing proofs of claim in bankruptcy.
- The court treated the pleadings as true for purposes of the motion and applied the Ashcroft v. Iqbal plausibility standard.
- The Eleventh Circuit recently held that filing a proof of claim on a stale debt can violate the FDCPA in Crawford v. LVNV Funding, but left open whether the Bankruptcy Code displaces the FDCPA in bankruptcy-related conduct.
- The bankruptcy court concluded § 501(a) permits filing proofs of claim but does not grant immunity for filing frivolous or time‑barred claims; other bankruptcy rules (e.g., Rule 9011) and § 502(b)(1) already address stale claims.
- The court denied defendants’ motion for judgment on the pleadings, holding the Bankruptcy Code does not preclude FDCPA claims based on filing facially time‑barred proofs of claim.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the Bankruptcy Code precludes FDCPA claims for filing time‑barred proofs of claim | Feggins: Bankruptcy does not strip FDCPA remedies; filing stale claims can be FDCPA violations | Defendants: § 501(a) grants an absolute right to file proofs of claim, so FDCPA is precluded | Court: Denied preclusion; § 501(a) does not immunize filing stale claims and statutes should be read to coexist |
| Whether filing a time‑barred proof of claim can violate the FDCPA | Feggins: Such filings are false/deceptive (§ 1692e) and unfair (§ 1692f) because they assert enforceability | Defendants: Filing a claim is not a debt collection attempt subject to the FDCPA or is authorized by bankruptcy law | Court: Followed Eleventh Circuit in Crawford — filing a stale proof of claim can violate FDCPA |
| Proper standard of review and consumer perspective | Feggins: Apply least‑sophisticated‑consumer standard as in Crawford | Defendants: Standard inappropriate because communications were in bankruptcy and routed through counsel | Court: Applied least‑sophisticated‑consumer standard per Crawford; Miljkovic distinction not controlling |
| Whether Crawford is binding precedent here | Feggins: Crawford controls in Eleventh Circuit and is binding on this court | Defendants: Crawford was a Rule 12(b)(6) dismissal and not binding here | Court: Rejected defendants’ argument; Crawford is binding authority on the legal issues presented |
Key Cases Cited
- Crawford v. LVNV Funding, LLC, 758 F.3d 1254 (11th Cir. 2014) (holding filing a stale proof of claim in bankruptcy can violate FDCPA provisions)
- Ashcroft v. Iqbal, 556 U.S. 662 (2009) (pleading standard: factual allegations must state a plausible claim)
- Miccosukee Tribe of Indians v. U.S. Army Corps of Engineers, 619 F.3d 1289 (11th Cir. 2010) (presumption against repeal by implication; statutes should be construed to coexist)
- Morton v. Mancari, 417 U.S. 535 (1974) (repeal by implication requires clear congressional intent)
- Randolph v. IMBS, Inc., 368 F.3d 726 (7th Cir. 2004) (Bankruptcy Code does not impliedly repeal FDCPA; statutes can overlap and be enforced together)
- Johnson v. Midland Funding, LLC, 528 B.R. 462 (S.D. Ala. 2015) (contrary decision holding § 501(a) authorizes filing time‑barred claims and that FDCPA is precluded — analyzed and rejected by this court)