PHILADELPHIA – A lawsuit dismissed last month which alleged an Ohio law firm violated the Fair Debt Collection Practices Act (FDCPA) when it attempted to collect a six-figure unpaid debt, is now on its way to a federal appeals court.
On Nov. 16, U.S. District Court for the Eastern District of Pennsylvania Judge Thomas N. O’Neill Jr. dismissed a lawsuit from plaintiff Crystal Stephens against Columbus, Ohio law firm Manley Deas Kochalski; one which alleged the firm violated the FDCPA in its actions to her during a home foreclosure action.
However, Stephens filed to appeal the matter to the U.S. Court of Appeals for the Third Circuit – claiming O’Neill erred in not recognizing she stated a claim for which relief could be granted: that being "mandatory judicial notice of the Consumer Financial Protection Bureau authoritative interpretation of the Fair Debt Collection Practices Act."
Stephens believes she should be able to proceed with claims under United States Code Title 15, Section 1692(e)(11) and 1692(g), further arguing that mortgage foreclosures are debt collection activity and notices filed in judicial proceedings are not formal pleadings.
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 MDK for violating the Fair Debt Collection Practices Act (FDCPA) for various communications MDK made to Stephens on behalf of Aurora during the state litigation.
Although plaintiff did not describe the content of the communications in her complaint, her exhibits showed 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.
Ultimately, O’Neill found none of Stephens’ counts in her lawsuit (communications to debtor without consumer’s consent, communications to third parties, false representations and lack of written notice within five days of initial communications) had a legal basis, and dismissed the case without leave to amend last month.
The appeal was officially docketed with the Third Circuit on Dec. 20.
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 nickpennrecord@gmail.com