Finch v. LVNV Funding LLC
212 Md. App. 748
| Md. Ct. Spec. App. | 2013Background
- Finch and Dorsey, Maryland consumers with debt, sued LVNV in circuit court after LVNV acquired their debts and filed district court collection actions.
- LVNV filed collection suits in the District Court of Maryland for Baltimore City in 2008; district court judgments were entered against Finch (2009) and Dorsey (2009).
- LVNV was not licensed as a collection agency under MCALA at the time it filed those district court actions.
- Appellants sought to represent a class of all Maryland judgments obtained by LVNV while unlicensed, asserting violations of MCALA, MCDCA, and MCPA, plus related relief.
- The circuit court dismissed the circuit court action as an impermissible collateral attack on the district court judgments, leading to this appeal.
- The court ultimately held that judgments obtained by an unlicensed collection agency are void and that void judgments may be attacked collateral in circuit court.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Are LVNV’s district court judgments void for lack of MCALA license? | Finch contends LVNV’s unlicensed status taints judgments. | LVNV contends judgments are valid and not voidable. | Yes; judgments are void. |
| Can a party collateral attack void district court judgments in circuit court? | Appellants may collaterally attack void judgments. | Collateral attack is barred by principle of finality for valid judgments. | Yes; collateral attack permitted for void judgments. |
Key Cases Cited
- Turkey Point Prop. Owners’ Ass’n., Inc. v. Anderson, 106 Md.App. 710 (Md. Ct. App. 1995) (unlicensed practice yields nullity of proceedings and void judgments)
- Stein v. Smith, 358 Md. 670 (Md. 2000) (corporation not represented by attorney; nullity of conduct)
- McDaniel v. Baranowski, 419 Md. 560 (Md. 2011) (licensure affects claimant status; not merely an affirmative defense)
- Green v. Ford Motor Credit Co., 152 Md.App. 32 (Md. Ct. App. 2003) (defective notice defense; underlying judgment not void; collateral attack barred)
- Hilco Receivables, LLC v. Hilco, 765 F.Supp.2d 719 (D. Md. 2011) (filing collection action without license constitutes action that cannot legally be taken; supports void judgments)
- Cook v. Alexandria Nat. Bank, 263 Md. 147 (Md. 1971) (void judgments may be attacked in any proceeding; collateral attack recognized for void judgments)