540 B.R. 895
Bankr. M.D. Ala.2015Background
- Consolidated five adversary proceedings in which Chapter 13 debtors allege FDCPA violations by LVNV Funding and Resurgent for filing time-barred proofs of claim.
- All claims were for time-barred debts and facially identifiable as time-barred on the claims themselves.
- Trial featured eight witnesses including the Chapter 13 Trustee and respective debtors; Defendants’ motions for judgment on partial findings were heard.
- Court determined Defendants consented to final judgment via their numerous motions seeking judgment in their favor, albeit without explicit consent.
- Court addressed jurisdiction, Balcom’s trial attendance, prima facie FDCPA violations, bona fide error defense, Rule 52 motions, and damages under the FDCPA.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether bankruptcy court has final-adjudication power over non-core FDCPA claims with consent. | Plaintiffs contend consent implied by conduct supports final judgment. | Defendants did not expressly consent; argue non-core claims barred or improper for final adjudication. | Implied consent found; final adjudication proper. |
| Whether Balcom’s failure to appear warrants dismissal. | Balcom’s absence should not defeat adjudication given other witnesses and prima facie evidence. | Nonappearance justifies dismissal under Rule 41(b). | Balcom’s case not dismissed; trial proceeds based on other evidence. |
| Whether the Defendants violated the FDCPA by filing time-barred proofs of claim. | Stale claims constitute deceptive, unfair, and unconscionable collection. | Filing under Bankruptcy Code allowed; novelty of Crawford raised issue. | Prima facie FDCPA violations established; liable for statutory damages. |
| Whether Defendants can rely on the bona fide error defense. | Defense should fail due to intentional and procedural failures. | Claimed error was bona fide and procedures reasonably adapted. | Bona fide error defense rejected; violations not protected. |
| Whether Defendants’ Rule 52 motions have merit, including retroactivity of Crawford and res judicata arguments. | Prior Crawford ruling binding; no retroactive relief should bar claims. | Argue first-filed rule and res judicata apply. | Rule 52 motions denied; Crawford retroactivity and res judicata defenses rejected. |
Key Cases Cited
- Crawford v. LVNV Funding, LLC, 758 F.3d 1254 (11th Cir. 2014) (FDCPA prohibits filing time-barred debts in bankruptcy claims; least-sophisticated-consumer standard)
- Holloway v. Am. Infosource, L.P., 538 B.R. 137 (Bankr.M.D.Ala. 2015) (Retroactivity of Crawford and application to case posture)
- Feggins v. LVNV Funding, LLC, 535 B.R. 862 (Bankr.M.D.Ala. 2015) (Court's analysis on preclusion and Crawford implications)
- Bonner v. City of Prichard, Ala., 661 F.2d 1206 (11th Cir. 1981) (En banc decision on binding effect of published opinions)