STATE EX REL. KOSTER v. Portfolio Recovery Associates, LLC
2011 Mo. App. LEXIS 525
| Mo. Ct. App. | 2011Background
- Missouri AG appeals the dismissal of its MPA claims against Portfolio Recovery Associates, LLC (Portfolio, LLC) after the circuit court dismissed the action against both Portfolio entities.
- The petition alleged MPA violations by Portfolio, Inc. (parent) and Portfolio, LLC (subsidiary) in debt collection practices post-sale.
- The circuit court held the MPA does not apply to debt collection, and lacked personal jurisdiction over Portfolio, Inc., dismissing the latter without prejudice and the former with prejudice.
- The trial court acknowledged MPA’s broad remedial scope but found no deception occurred in connection with the sale or advertisement of merchandise.
- On appeal, the State argues MPA covers post-sale debt collection activities and assignees may be liable, while Portfolio argues no connection to the initial sale and absence of privity.
- The Eastern District, applying de novo review, affirms dismissal, holding the challenged conduct was not connected to the sale or advertisement of merchandise and thus outside MPA liability.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Does MPA apply to post-sale debt collection by a non-party to the original sale? | Koster argues 'in connection with' covers post-sale collection. | Portfolio contends no nexus to sale/advertisement; post-sale collection not within MPA. | No; post-sale debt collection by a third party is not connected to the sale. |
| Is the MPA violated when a third party assignee collects a debt without privity to the original sale? | Koster cites Gibbons to support liability of assignees under MPA. | Portfolio distinguishes Gibbons; no direct deception to the consumer pre-sale, hence no MPA violation. | Not stated as MPA violation; no connection to initial sale established. |
| Does the MPA’s language 'before, during or after the sale' broaden coverage to post-sale activities? | Koster seeks broad reading to include post-sale collection. | Portfolio argues 'in connection with' remains the limiting standard. | No; after-sale conduct must be connected to the sale or advertisement; here it is not. |
Key Cases Cited
- Ports Petroleum Co., Inc. of Ohio v. Nixon, 37 S.W.3d 237 (Mo. banc 2001) (unfair practices statutes are broadly construed; 'unfair' defined by statutory language and regulation)
- Gibbons v. Nuckolls, 216 S.W.3d 667 (Mo. banc 2007) (privity not required; assignee liable when deception occurs in connection with sale)
- Danforth v. Independence Dodge, Inc., 494 S.W.2d 362 (Mo. App. 1973) (MPA supplements fraud definitions; broad remedial purpose)
- Schuchmann v. Air Services Heating & Air Conditioning, Inc., 199 S.W.3d 228 (Mo. App. S.D. 2006) (post-sale warranties provide context for 'in connection with' language)
- Ross v. Dir. of Revenue, 311 S.W.3d 732 (Mo. banc 2010) (courts use plain language to interpret broad statutory terms)
- State ex rel. Webster v. Areaco Inv. Co., 756 S.W.2d 633 (Mo. App. E.D. 1988) (remarks on the consumer protection aim of MPA)