ROSELAND, N.J./May 19, 2011 -- Connell Foley LLP attorneys Karen P. Randall, Andrew C. Sayles, Thomas S. Cosma, Thomas J. O'Leary, Trevor Lyons, and Meghan K. Musso filed a Petition for a Writ of Certiorari to the United States Supreme Court. The Petition seeks the Court’s intervention to resolve a split among four Circuit Courts of Appeal involving the application of the Fair Debt Collection Practices Act, 15 U.S.C. § 1692 et seq., (“FDCPA”) to communications issued to a debtor’s attorney from a debt collecting attorney.
The submission to the nation’s highest court stems from a case involving a residential mortgage foreclosure. A homeowner/debtor defaulted on her note and mortgage resulting in the commencement for foreclosure proceedings. The debtor retained counsel, who then contacted the foreclosing attorney to request payoff information to resolve the foreclosure action. The debtor’s attorney was provided with the payoff information, but was cautioned that it was subject to audit and verification. Three weeks later, the debtor, through her attorney, filed a class action lawsuit under the FDCPA based upon alleged inaccuracies within the payoff information provided to her attorney. Although the debtor never made any payments in response to the payoff information, she proceeded with her lawsuit against the foreclosing attorneys, the mortgage holder and the mortgage servicer.
The District Court for the District of New Jersey ruled that any alleged inaccuracies within the payoff information would have been recognized by any competent attorney and, consistent with the Seventh Circuit Court of Appeals, dismissed the Complaint. The Third Circuit, in a matter of first impression, rejected the holdings of the Seventh and Ninth Circuits and reversed the District Court. Specifically, the Third Circuit sided with the Fourth Circuit and found that a communication to a debtor’s attorney warranted the same treatment as a communication issued directly to the consumer and remanded the matter to the District Court for determination as to whether the fees and costs identified were appropriate. Under the Third Circuit ruling, communications among attorneys seeking to settle a pending litigation can now result in liability for the debt collecting attorney under the FDCPA.
If the Cert Petition is granted, various industry and professional groups have expressed an interest in filing amicus briefs.
According to Connell Foley’s Managing Partner Michael X. McBride, “A resolution relating to communications between debtor’s attorney and debt collecting attorneys under the FDCPA holds tremendous value to an array of parties and groups including the legal, insurance, and banking industries. This issue duly merits the attention of the Supreme Court.”