PHILADELPHIA – A federal judge has thrown out a lawsuit alleging an Ohio law firm violated the Fair Debt Collection Practices Act (FDCPA) when it attempted to collect a six-figure unpaid debt.

Judge Thomas N. O’Neill Jr. said Nov. 16 that plaintiff Crystal Stephens would have her complaint against Columbus, Ohio law firm Manley Deas Kochalski dismissed – one which alleged the firm violated the FDCPA in its actions to her during a home foreclosure action.

In 2009, Aurora Loan Services filed an action against Stephens in the Philadelphia County Court of Common Pleas to collect on an unpaid debt, and the Court entered a default judgment for $213,384.96 plus interests and costs against Stephens on June 11, 2010 – and issued a writ of execution of foreclosure on the collateral property.

The Court continued the sheriff’s sale of the property numerous times since 2010. The last scheduling order in the complaint listed the sale for Aug. 2, 2016. On July 14, 2015, Aurora replaced its original legal representation with Manley Deas Kochalski.

Stephens then sued the firm for violating the Fair Debt Collection Practices Act (FDCPA) for various communications it made to Stephens on behalf of Aurora during the state litigation. Although plaintiff does not describe the content of the communications in her complaint, her exhibits show that the communications correspond to notice that defendant gave plaintiff of its filings in the Philadelphia County Court of Common Pleas pursuant to the Pennsylvania Rules of Civil Procedure.

Beginning his analysis, O’Neill stated Section 1692c(a) of the FDCPA “prohibits a debt collector from communicating with a consumer in connection with the collection of a debt under certain circumstances unless the consumer gives consent or a court of competent jurisdiction gives express permission.”

“Plaintiff’s Count One alleges defendant violated this law by sending her notice for various filings in connection with the state court foreclosure action without her consent. However, state law requires litigants to send these notices pursuant to the Pennsylvania Rules of Civil Procedure, as plaintiff concedes in her responsive brief. Thus, defendant had ‘express permission of a court of competent jurisdiction’ within the meaning of section 1692c(a) and plaintiff’s Count I is without legal basis,” O’Neill said.

O’Neill explained Section 1692c(b) of the FDCPA prohibits a debt collector “from communicating with third parties except under certain circumstances”, one of which being to effectuate “post-judgment judicial remedy.”

“The communications that plaintiff describes in her complaint fall within the statute’s exception for post-judgment judicial remedies. Defendant made the alleged communications after the 2010 judgment and as part of the litigation surrounding the potential foreclosure on plaintiff’s property. Thus, plaintiff’s Count Two is without legal basis,” O’Neill said.

O’Neill said Stephens’ Count III allegations of violations under parts three, ten, and eleven of section 1692(e) of the FDCPA are also precluded by the statute itself.

Part three of section 1692(e) prohibits “the false representation or implication that any individual is an attorney or that any communication is from an attorney”; Part ten of section 1692(e) prohibits “the use of any false representation or deceptive means to collect or attempt to collect any debt or to obtain information concerning a consumer”; and Part eleven of section 1692(e) prohibits failing to disclose “that the communication is from a debt collector, except that this paragraph shall not apply to a formal pleading made in connection with a legal action.”

“Plaintiff’s claims under this provision [part three] are unsupported because it is clear from the exhibits plaintiff attaches to her complaint that defendant is a law firm that represented Aurora in the foreclosure action,” O’Neill said. “Plaintiff alleges no facts showing that the firm was operating illegally or made any false representations about its authority.”

“Plaintiff alleges that defendant misrepresented that Aurora was the real party in interest in the foreclosure action, when in fact Aurora transferred its interest to another party. However, under Rule 2004 of the Pennsylvania Rules of Civil Procedure, the original plaintiff may continue to pursue an action even after transferring its interest to another party,” O’Neill continued.

“Although the communications that plaintiff alleges violated this provision – such as defendant’s Notice of Entry of Appearance on behalf of Aurora in the Philadelphia County Court of Common Pleas – are not initial pleadings or complaints, they are ‘pleadings’ within the broad meaning of that term as used in Section 1692e(11),” O’Neill said. 

O’Neill next addressed the issue of notice of written communication.

“Section 1692(g) of the FDCPA requires a debt collector to send the consumer a debt validation notice within five days of an ‘initial communication.’ 15 U.S.C. Section 1692g(a). However, under section 1692g(d), pleadings are not ‘initial communications.’ Therefore, plaintiff’s Count Four, which alleges defendant violated the FDCPA by not sending her a validation notice after sending her notice of its appearance as counsel for the opposing party in the state court foreclosure action, is excluded as a ‘pleading’ under 1692g(d),” O’Neill said.

“Because none of plaintiff’s four counts has a legal basis, amendment would be futile and I will dismiss her complaint without leave to amend,” O’Neill said.

The defendant was represented by Michael E. Carleton of Manley Deas Kochalski, in Philadelphia.

U.S. District Court for the Eastern District of Pennsylvania 2:16-cv-03845

From the Pennsylvania Record: Reach Courts Reporter Nicholas Malfitano at

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