Reygadas v. DNF Associates, LLC, No. 19-3167 (8th Cir. 2020)
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DNF purchased a debt that plaintiff owed to a retailer, hired a law firm, and brought a collection action in state court. Plaintiff hired her own lawyer and moved to dismiss for insufficient process and service of process. The state court dismissed the claim after DNF did not respond. DNF then hired RGS, a licensed debt collection agency, and RGS sent plaintiff a letter offering to settle.
Plaintiff then filed this action alleging, inter alia, that DNF violated the federal Fair Debt Collection Practices Act (FDCPA), and the Arkansas Fair Debt Collection Practices Act (AFDCPA). Plaintiff claimed that RGS contacted her directly without consent of her attorney. The district court denied DNF's motion for summary judgment and granted partial summary judgment in favor of plaintiff on the question of DNF's liability. Plaintiff then accepted a $4,000 offer of judgment and final judgment was entered in her favor.
Having considered the plain meaning of the statute's text, together with the structure of the FDCPA, the Eighth Circuit held that the district court did not err in ruling as a matter of law that DNF is a "debt collector" under 15 U.S.C. 1692a(6). The court does not hold that any purchaser of defaulted consumer debt qualifies as a "debt collector" under the "principal purpose" definition. The court also does not hold that any debt buyer that hires an independent debt collector thereby becomes a debt collector under section 1692a(6).
The court held that plaintiff cannot recover from DNF based on a theory of vicarious liability for RGS's action because it is undisputed that RGS did not have knowledge plaintiff was represented by an attorney. Furthermore, RGS's acts cannot be imputed to DNF to establish direct liability. Accordingly, the court vacated and remanded for further proceedings.
Court Description: [Loken, Author, with Grasz, Circuit Judge, and Clark, District Judge] Civil case - Fair Debt Collection Practices Act. On this summary judgment record, having considered the plain meaning of the statute's text, together with the structure of Fair Debt Collection Practices Act, the court concludes the district court did not err in ruling as a matter of law that defendant DNF is a debt collector under Sec. 1692a(6); the court does not hold that any debt buyer that hires an independent debt collection thereby becomes a debt collector itself under Sec. 1692a(6); while DNF knew that plaintiff had been represented by counsel in a state court action it brought, it was its agent RGS that sent a letter directly to plaintiff in violation of the Act; plaintiff could not recover from DNF on a theory of vicarious liability as it is undisputed that RGS did not have knowledge that plaintiff was represented and RGS did not violate the Act; the record was insufficient to show RGS's acts could be imputed to DNF to establish direct liability, and the district court erred in granting partial summary judgment in favor of plaintiff sua sponte; vacated and remanded for further proceedings.
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