RIDGEWAY v. AR RESOURCES, INC.
1:16-cv-01188
D.N.J.Aug 30, 2017Background
- Plaintiff Christine Ridgeway alleges AR Resources (debt collector) failed to mark or delete a debt as "disputed" after a dispute letter was sent on her behalf.
- In Oct. 2015 a one-page fax dispute letter identifying Ridgeway and the debt was sent by Collection Shield 360 (CS360); the letter contained "/s/" signature and boilerplate "I dispute this debt."
- Ridgeway testified she did not draft the letter but contacted CS360 and asked them to dispute the AR Resources debt; a service agreement (electronically signed) between Ridgeway and CS360 authorizes CS360 to act on her behalf.
- AR Resources moved for summary judgment arguing (1) the dispute was invalid because the CS360 agreement violated the Credit Repair Organizations Act (CROA) so CS360 lacked authority, and (2) Ridgeway cannot recover attorneys’ fees because the fee agreement was allegedly illegal under New York law.
- The Court found genuine factual disputes about whether CS360 had actual or apparent authority to send the dispute and therefore denied summary judgment on the FDCPA claim; the court declined to rule on entitlement to attorneys’ fees at this stage and denied that part of the motion without prejudice.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Ridgeway validly disputed the debt | CS360 sent the dispute at Ridgeway’s direction and had authority under their dealings and the service agreement | The CS360–Ridgeway agreement violates CROA, so CS360 had no authority and the dispute was invalid | Denied summary judgment; factual disputes exist on actual/apparent agency so dispute may be valid |
| Whether a CROA-invalid contract defeats agency for third-party communications | Even if CROA voids the contract between consumer and CS360, Ridgeway can still show agency by conduct and authorization | CROA noncompliance voids the agreement and thus negates CS360’s authority to act for Ridgeway | Court rejects automatic nullification of agency for third-party FDCPA claims; material fact issues remain |
| Whether the court should decide attorneys’ fees now | Ridgeway: defer fee determination until liability is established and a full fee application is filed | AR Resources: court may strike attorneys’ fees as an element of damages on summary judgment | Court exercised discretion to defer ruling on attorneys’ fees (denied without prejudice) |
| Credibility of Ridgeway’s testimony about communications with CS360 | Ridgeway consistently says she authorized CS360 despite some deposition/affidavit discrepancies | Defendant argues testimony is a sham and unreliable | Court finds discrepancies insufficient to treat testimony as a sham; credibility for factfinder |
Key Cases Cited
- Celotex Corp. v. Catrett, 477 U.S. 317 (summary judgment allocation of burdens)
- Anderson v. Liberty Lobby, 477 U.S. 242 (standard for genuine issue of material fact)
- Sears Mortg. Corp. v. Rose, 134 N.J. 326 (agency by conduct; no written contract required)
- Baer v. Chase, 392 F.3d 609 (affidavit cannot be disregarded as sham absent clear contradiction)