Owens v. LVNV Funding, LLC

Citation:
Owens v. LNVN Funding, LLC, Case Nos. 15-2044, 15-2082, 15-2109 (7th Cir. Aug. 10, 2016)
Tag(s):
Ruling:
Majority: The filing of a proof of claim, by a debt collector, on a "stale debt" is not, in and of itself, a false, deceptive, or misleading practice prohibited by the Fair Debt Collection Practices Act. Dissent: The filing of a proof of claim, by a debt collector, on a "stale debt" is, in and of itself, a false, deceptive, or misleading practice prohibited by the Fair Debt Collection Practices Act. The primary distinction between the majority and the dissent is the majority's determination that "claim" as defined in the Bankruptcy Code includes and contemplates the filings of claims that are not "legally cognizable" under state law, whereas, the dissent contends that the application of Rule 9011 to the filing of proof of claims requires that "claims" be "legally cognizable."
Procedural context:
A consolidated appeal from three district court decisions, each of which dismissed the claim of the debtors pursuant to Fed. R. Civ. P. 12(b)(6) for failure to state a claim (Owens v. LVNV Funding, LLC, Case No. 1:14-cv-02083 (N.D. Ind.)) (Robinson v. eCast Settlement Corp., Case No. 1:14-cv-08277 (N.D. Ill.)) (Birtchman v. LVNV Funding, LLC, Case No. 1:14-cv-00713 (S.D. Ind.).
Facts:
In each of the consolidated cases, a debtor filed for bankruptcy under Chapter 13 of the Bankruptcy Code and was represented by counsel throughout the proceeding. During each bankruptcy, a debt collector, who had purchased the debts from the actual creditor, filed a proof of claim on debts that were time-barred under state law. The proofs of claim were otherwise proper and identified the age of the debts. In each case, the debtor successfully objected to the proof of claim and, thereafter, filed separate actions in the applicable district courts against the debt collectors for violating the FCDPA.
Judge(s):
Flaum & Bauer, with Wood dissenting.

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