STATE EX REL. KOSTER v. Professional Debt Management, LLC
2011 Mo. App. LEXIS 530
| Mo. Ct. App. | 2011Background
- Missouri AG filed Aug. 18, 2009 petition seeking injunctive relief, restitution, civil penalties, and other court orders against PDM for alleged MPA violations.
- Petition alleged deceptive and unfair debt-collection practices, including debts not owed, misrepresentations about actions against debtors, unethical conduct, and usury-related charges.
- Circuit court granted PDM's motion to dismiss, concluding MPA does not apply to post-sale debt collection by a third party.
- Trial court acknowledged broad MPA language but held it covers unfair practices connected with sale/advertisement of merchandise, not post-sale collection activities.
- State appealed, arguing MPA applies to unfair/deceptive post-sale debt collection as connected to the sale of merchandise, even by a non-party to the original transaction.
- Appellate court affirmed dismissal, concluding no relationship in fact between post-sale collection actions and the initial sale/advertisement required by the MPA.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Does the MPA apply to post-sale debt collection by a third party? | Koster: MPA covers unfair practices in connection with sale/advertisement, extending to post-sale collection. | PDM: No relationship in fact to initial sale; post-sale collection not in connection with sale; MPA not triggered. | No; post-sale collection by a third party is not in connection with the sale/advertisement of merchandise under the MPA. |
Key Cases Cited
- Gibbons v. Nuckolls, 216 S.W.3d 667 (Mo. banc 2007) (privity not required; liability for misrepresentation extends beyond purchaser)
- Ports Petroleum Co., Inc. of Ohio v. Nixon, 37 S.W.3d 237 (Mo. banc 2001) (unfair practices broadly construed; definition of 'unfair' and 'in connection with' language)
- Danforth v. Independence Dodge, Inc., 494 S.W.2d 362 (Mo. App. 1973) (MPA supplements common-law fraud; broad aim to preserve fair dealing)
- Fielder v. Credit Acceptance Corp., 19 F. Supp. 2d 966 (W.D. Mo. 1998) (MPA applicability to debt-collection-related services; distinguished from initial sale)