Coverage under the FDCPA Continues to be Hot Topic

Whether a debt is a consumer debt continues to be a hot topic under the FDCPA.  In Benbrooks v. Voigt, Rode & Boxeth, LLC, the plaintiff sued a law firm over collection letters directed to the plaintiff.  Benbrooks v. Voigt, Rode & Boxeth, LLC, C.A. No. 15-1896, 2015 U.S. Dist. LEXIS 99294 (D. Minn. Jul. 30, 2015).  The plaintiff’s father was a resident in a senior housing and nursing facility and when the father did not pay for his care, both the father and son received letters demanding payment.  The letter to plaintiff maintained plaintiff was personally liable for his father’s debt.  Plaintiff sent a cease and desist to the law firm and the law firm wrote back reiterating that Plaintiff’s “purposeful actions and inaction while acting as your father’s POA support…claims that you have violated Minnesota law and are personally liable…for payment…”  Plaintiff filed suit alleging that the firm’s second letter violated the cease and desist and that the law firm’s letter contained false, deceptive and misleading representations.

The law firm moved to dismiss the FDCPA litigation for lack of subject matter jurisdiction and the court agreed.  The court determined that the debt was not a consumer debt in that it did not arise from a transaction that is primarily for personal, family or household purposes.  The plaintiff’s debt instead arose from a statutory obligation.  Minnesota’s power of attorney statute provided that as the father’s attorney in fact, plaintiff agreed to apply his father’s assets and income toward his care.  The court determined that the third party liability provided by the statute is not a debt that arises out of a consumer transaction and that plaintiff was likewise not a “consumer” under the FDCPA.