[hannah]

From Lawyers USA:

A debt collector may be liable under the Fair Debt Collection Practices Act for filing suit against a debtor on a collection claim that was time-barred by state law, a U.S. District Court in Illinois has ruled in denying summary judgment for the debt collector. The New Jersey-based debt collector purchased closed-out, past-due credit card accounts and then enforced payment where possible.

The Illinois debtor's past due credit card account was purchased and the debt collector sued her in Illinois. The complaint attached only an affidavit from an employee of the debt collector regarding the debt owed. No written agreement signed by the debtor was attached.

An Illinois state statute provided a 10-year statute of limitations for claims based on written contracts and a five-year statute of limitations for claims based on unwritten contracts.

The debtor argued the debt collector's claim was barred by the five-year statute of limitations applicable to unwritten contracts, and that filing suit on a time-barred claim violated the Act.

The court agreed.

"[b]ecause a written contract was not attached to the debt-collection complaint and no evidence has been proffered that a written contract exists, the contract must be considered 'unwritten' under Illinois law," the court said.

"A central purpose of the [Act] is 'to eliminate abusive debt collection practices by debt collectors. ' ... Courts view [claims under the Act] 'through the eyes of an "unsophisticated debtor. ' ... Accordingly, a debt collector may not file time-barred lawsuits against a debtor where it knows or reasonably should have known it was time-barred. "

The court said more fact finding was needed to determine whether the debt collector could assert the defense of bona fide error, which is available under the Act.

The case is U.S. District Court for the Northern District of Illinois. Ramirez v. Palisades Collection, LLC, No. 07 C 3840. June 23, 2008.

Note: Palisades is a JDB.

[tickedoff]

that's great. wouldnt it be great if all the people who have lost a default judgement on a time barred JDB suit got a class action together.

[hannah]

Originally Posted by tickedoff

that's great. wouldnt it be great if all the people who have lost a default judgement on a time barred JDB suit got a class action together.

Well, since this is an IL case and therefore only binding in IL, other courts might not rule the same way so it could very well be an exercise in futility. But yes, it would be great.

[hannah]

Here's the actual case. Pretty interesting read. Note how they differentiate between a written contract and an unwritten one.

[hannah]

Geez, Pam...least thing you could do is give me credit for your find. Glad to help though.

[tickedoff]

thanks again Hannah. A great read indeed. While I know this particular opinion is not binding in Kentucky courts, it does support the cause of those of us fighting the SOL issue here. Most notable in my mind is the discussion about parol evidence. Clearly no JDB can establish that a written contract exists absent parol evidence. Although they are focusing on Illinois law, they are citing a 7th Circuit case in this discussion as well- Kordewick v. Indiana Harbor Belt R. Co., 157 F.2d 753,
755 (7th Cir. 1946).
Thoughts? Anyone know of similar cases in the 6th Circuit?

[Enigma]

This case is a REAL important read. Read it closely:

Palisades' assertion that the 10-year limitations period should apply is further undermined because parol evidence would
be necessary to determine its right to sue Ramirez. Even if a written contract existed between Ramirez and Household
Bank, parol evidence would be required to determine whether that contract was enforceable by Palisades, whether the
assignment of that contract to Palisades was lawful, and whether the terms of the original agreement were altered. Palisades was not a named party to the contract that purportedly bound Ramirez. See, e.g., Brown, 147 Ill. App. 3d at 939 (parol evidence necessary to ascertain contractual relationship between plaintiff and defendant); Peterson v. Superior Bank FSB, 242 Ill. App. 3d 1090, 1097, 611 N.E.2d 1139, 183 Ill. Dec. 491 (Ill. App. Ct. 1993) (parol evidence required to
show nexus between defendant and underlying transaction); cf. Kordewick v. Indiana Harbor Belt R. Co., 157 F.2d 753,
755 (7th Cir. 1946) (parol evidence required to show existence of contractual relationship between plaintiff and defendant).
Indeed, Palisades' affidavit attached to the Ramirez collection complaint constitutes parol evidence.

[tickedoff]

I just found this case from the 6th District, which I believe supports those of us in Kentucky who are fighting against the JDB who are arguing a 15 year SOL as a written contract. Coupled with this ruling from the 7th District that spells out that parol evidence is required for a JDB to establish a contract, this seems like a very convincing argument.

Gray v. Heat Workers Local 51,, 447 F.2d 1118 (6th Cir. 1971) Full case is here : Gray v. Heat Workers Local 51, - AltLaw

Similarly, we find no merit in appellant's contention that the instant action is barred by Kentucky's five year statute of limitations governing contracts not in writing. KRS 413.120(1). We hold that the Kentucky fifteen year statute of limitations on written contracts, KRS 413.090(2), is applicable here. Contracts that are partly oral and partly in writing, or a written contract so indefinite as to require parole evidence of its terms are generally not 'contracts in writing' within the meaning of the statute. Mills v. McGaffee, 254 S.W.2d 716 (Ky.1953). The contract involved here, however, is made up of the union constitution and its bylaws. These are completely in writing and require only identifying appellee's deceased husband as a party thereto.