Virginia District Court finds that communication is not an attempt to collect a debt under the FDPCA where Plaintiff was aware that debt had been discharged.

A federal court in Virginia held in Lovegrove v. Brock & Scott, PLLC, No. 2:16CV418 (E.D. Va. Jan. 17, 2017) that a Plaintiff’s knowledge of his bankruptcy discharge was critical in determining whether a communication from a debt collector was an attempt to collect a debt under the FDCPA.

In Lovegrove v. Brock & Scott, PLLC, the law firm representing the mortgagee sent a referral for foreclosure letter (“Foreclosure Letter”) to the mortgagor which set forth the steps needed to dispute the debt, a right to dispute the debt, and a bold bankruptcy disclaimer advising the mortgagor that she is not personally liable on the debt. The mortgagor contended that he had a reasonable basis for disputing the debt and advised the law firm of this, but the firm proceeded with foreclosure anyway.

Plaintiff filed a class action alleging violations of the FDCPA and fraud. The court dismissed the complaint relying chiefly on a recent Fourth Circuit decision brought by the same person, Lovegrove v. Ocwen, No. 15–2158. In that case, it was found that the defendant’s contacts with the mortgagor were not attempts to collect a debt under the FDCPA because the debt had been undisputedly discharged in the mortgagor’s prior bankruptcy proceedings.

The court considered it critically important in the instant case that the mortgagor was aware that the debt had been discharged. Citing to Lovegrove v. Ocwen, the mortgagor was presumed to have read the defendant’s debt collection disclaimers with “a basic level of understanding and willingness to read with care” and “should have known that [defendant] was not attempting to collect a debt from him” because his debt had been discharged in bankruptcy.

The Fourth Circuit affirmed the entry of summary judgment for the defendant because its several communications to the mortgagor were nonthreatening, purely informational, and “generally request[ed] payments” alongside “clear and unequivocal disclaimers” to establish they were not in connection with the collection of a debt under mortgagor’s circumstances. The court also concluded that the law firm was not attempting to collect a debt though the Foreclosure Letter listed the amount of debt and the creditor, but it contained no payment demand or threatening language. Furthermore, it contained the bold bankruptcy disclaimer. “A ‘commonsense’ analysis of the mortgagor’s knowledge of his debt discharge and the few direct communications reveals that he was not subject to “debt” collection and the law firm was not acting as a “debt collector” under the FDCPA.