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Attorney Kohlmyer wins federal debt collection case by excluding subrogation debt collection activities under the FCCPA

Attorney Kohlmyer wins federal debt collection case by excluding subrogation debt collection activities und the FCCPA

The case of Schaefer v. Seattle Service Bureau, Inc. d/b/a National Service Bureau’s et al, 2015 WL 9031511 (M.D. Fla. 2015) presented an issue of first impression within the United States District Court for the Middle District of Florida. Attorney Ernest H. Kohlmyer, III of Urban, Their & Federer, P.A. representing Defendant, Seattle Service Bureau d/b/a National Service Bureau (NSB) obtained an order dismissing the Plaintiff’s class action allegations by arguing that the collection attempts of a subrogation debt obligation was not subject to the Florida Consumer Collection Practices Act (FCCPA) since the debt was not a “transaction” as defined by the FCCPA as a “consumer debt.”

NSB argued that the federal Fair Debt Collection Practices Act (“FDCPA”) similarly defines “consumer debt” as “any obligation or alleged obligation of a consumer to pay money arising out of a transaction in which the money, property, insurance or services which are the subject of the transaction are primarily for personal, family or household purposes.” See: 15 U.S.C. § 1692a(5); Fla. Stat. §559.55(1).

NSB relied on Hawthorne v. MAC Adjustment, Inc. 140 F.3d 1367 (11th Cir. 1998) and argued a debt arising from a subrogation debt obligation should have a similar holding under the FCCPA. In Hawthorne, the court held that the “FDCPA may be triggered only when an obligation to pay arises out of a specified ‘transaction.’” Id. The court then looked to other federal courts and determined that it is clear that a “mere obligation to pay does not constitute ‘debt’ under the FDCPA.” (citing Oppenheim, 627 F.3d 14 837).

The district court agreed with Mr. Kohlmyer’s arguments and dismissed this case with prejudice, resulting in a clear victory for the client. We would like to thank our client Seattle Service Bureau, Inc. for the opportunity to represent them in this matter. We are very pleased to obtain victory for our client.

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