FDCPA Cases Revived by Appellate Court

The 11th Circuit Appellate Court revived threeJustice _scale
Fair Debt Collection Practices Act
cases in one decision the
other day.   In Zinni v. ER Solutions, 2012 WL 3641911
three cases were combined for an appeal where the trial court
dismissed each of the three cases for the same reason.  In
each case, the debt collector made an offer of $1,001 plus
reasonable attorneys fees to either be agreed upon by the parties
or decided by the court.  The Plaintiffs in each case did not
accept the offers. 

Defendant Debt Collectors Obtained Dismissal at Trial
Court Level:

Thereafter, the debt collectors moved to dismiss the case arguing
that they tendered everything that could be recovered under a case
under the FDCPA.  They claimed that since the
FDCPA
allows for a recovery of up to $1,000 plus attorneys’
fees, and the collectors tendered all of that plus a dollar, there
was no longer a controversy in question.  Article 3 of the
U.S. Constitution provides that the courts only hear a case where
there is some controversy at stake.  That is, the one suing
must be pursuing an actual harm that has occurred.  The
collectors argued that since they have complied with the law and
provided the complete amount of recovery, no controversy can exist
any longer, and the Plaintiff no longer has standing to sue. 
Their cases are moot because full payment has been offered. 
Following precedent from other cases where it had been found that a
full tender moots out any controversy of the case, the court agreed
and dismissed all three plaintiffs’ cases. 

Appellate Court Finds Controversy Still Exists without
Offer of Judgment:

Thankfully, the cases were taken up on appeal, and the appellate
court disagreed and reversed the decision.  The main reason is
that the debt collectors may have offered to settle for a payment
of the statutory maximum, but they did not offer to have a judgment
taken against them as each of the plaintiffs’ complaints
sought.  The plaintiffs each filed a lawsuit seeking a
judgment for $1,000 plus fees.  The defending debt collectors
offered only to pay the money as a settlement, but not have a
judgment taken against them (Federal Rule 68 allows a defending
party to offer to have a judgment taken against it for a specific
amount).  One main difference is that with a settlement
agreement the plaintiff receives a promise to pay .  However,
a judgment against a company is a legal right against a defendant
which can be immediately enforced by the courts.  It is the
plaintiff’s legal right to payment.  This distinction of
having a judgment versus a settlement agreement, the appellate
court held, is the difference between making a controversy moot or
not. 

Actual Damages Not Addressed:
The
FDCPA
allows for actual damages to be recovered (15 U.S.C.
§1692k(a)(1)).  The issue of actual damages was never
discussed in this opinion.  Perhaps the plaintiffs never made
a request for any or never demanded any.   Or perhaps the
plaintiffs never made the argument to the trial court in the motion
to dismiss.  Still, the FDCPA allows such damages.  It is
anticipated that debt collectors that want to get out from under FDCPA
lawsuits
will soon start tendering offers of judgment.  As
such, should plaintiffs desire to ignore those offers, it is best
that there be a strong, viable claim for actual damages. 

SmithMarco, P.C. has been protecting consumer
rights with combined experience of over 25 years.  If you are
being harassed by a debt collector, treated unfairly, or need
assistance in resolving debts, Contact
Us
for a free case review.