Fritz v. Resurgent Capital Services, LP
955 F. Supp. 2d 163
E.D.N.Y2013Background
- LVNV Funding, Resurgent LP/LLC, Alegis, the Harris Firm, and attorney David Waldman were involved in collecting charged-off consumer debts; LVNV owned the debts and contracted Resurgent to collect them.
- Resurgent LLC sued several named plaintiffs in state court, alleging it was the purchaser/owner of the debts and listing a New York City debt-collection license number that in fact belonged to LVNV. Waldman signed the complaints for the Harris Firm.
- Resurgent LP reported plaintiff Fritz’s account to credit agencies including $160 in court costs, although no judgment had been entered.
- Fritz also received a May 27, 2010 collection letter signed by the Harris Firm that identified Resurgent LLC (not LVNV) as the creditor.
- Plaintiffs sued under the FDCPA (15 U.S.C. §§ 1692–1692p) and New York GBL § 349; defendants moved to dismiss under Rule 12(b)(6). The court granted dismissal only for the FDCPA claim based on the May 27, 2010 letter as time-barred and denied dismissal in all other respects.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Misrepresenting creditor and license in collection complaints | Misrepresentations that Resurgent LLC owned debts and held NYC collection license violated §1692e and were material | FDCPA does not apply to litigation activity; misstatements not material | Claims survive: FDCPA applies to litigation activity and misrepresentations about owner/license are material to least sophisticated consumer |
| Reporting court costs to credit agencies for Fritz | Inclusion of court costs misstates amount and violates §1692e(2)(A) & §1692e(8) | Remedy lies under the FCRA, not FDCPA | Claim survives: FDCPA covers false credit reporting; FCRA not exclusive remedy |
| May 27, 2010 collection letter failing to name actual creditor | Letter misidentified creditor in required §1692g(a)(2) initial communication | Letter-based claim untimely under one-year FDCPA statute of limitations | Claim plausible on merits but dismissed as time-barred; plaintiff failed to show discovery-equitable tolling |
| Noerr-Pennington, collateral estoppel, abstention defenses | N/A (defendants invoke these defenses) | Litigation conduct is protected petitioning; prior state litigation should bar/abstain | Defenses rejected: Noerr-Pennington does not shield intentional misrepresentations or objectively baseless suits; collateral estoppel/abstention inappropriate because state suits addressed underlying debt, not collection practices |
Key Cases Cited
- Heintz v. Jenkins, 514 U.S. 291 (1995) (FDCPA applies to attorneys who regularly engage in consumer-debt-collection activity, including litigation)
- Clomon v. Jackson, 988 F.2d 1314 (2d Cir. 1993) (use of attorney signature implies attorney review; pleadings can be "communications" under FDCPA)
- Simmons v. Roundup Funding, LLC, 622 F.3d 93 (2d Cir. 2010) (proof of claim in bankruptcy not subject to §1692e because bankruptcy court protection differs)
- Pollice v. National Tax Funding, L.P., 225 F.3d 379 (3d Cir. 2000) (entity that qualifies as a debt collector can be vicariously liable for another’s unlawful collection acts)
- Hartman v. Great Seneca Fin. Corp., 569 F.3d 606 (6th Cir. 2009) (Noerr-Pennington does not bar FDCPA liability for intentional misrepresentations in litigation)
- Oswego Laborers’ Local 214 Pension Fund v. Marine Midland Bank, 85 N.Y.2d 20 (1995) (GBL §349 requires consumer-oriented conduct affecting the public at large)