Simpson v. Cavalry SPV I, LLC (Majority)Annotate this Case
Cavalry SPV I, LLC (Cavalry) purchased Patty Simpson’s delinquent credit card account and retained the McHughes Law Firm (McHughes) to collect on the delinquent account. McHughes, on behalf of Cavalry, commenced an action seeking to collect the debt, and a default judgment was entered against Simpson. Simpson then sued Cavalry, alleging state and federal claims. As grounds for her claims Simpson asserted that Cavalry was not licensed in Arkansas as a debt collector. The action was removed to federal court. Cavalry moved for summary judgment, asserting that it was not required to be licensed because it did not attempt to collect delinquent accounts or bills but, rather, hired a licensed Arkansas lawyer to collect on delinquent accounts and file lawsuits on its behalf. The Supreme Court accepted certification of two questions of law and answered (1) an entity that purchases delinquent accounts and then retains a licensed Arkansas lawyer to collect on the delinquent accounts and file lawsuits on its behalf meets the definition of “collection agency” pursuant to Ark. Code Ann. 17-24-101; and (2) an entity, such as Cavalry, that purchases and attempts to collect delinquent accounts must be licensed by the Arkansas State Board of Collection Agencies.