FDCPA Claims Related to Venue of State Court Collection and Garnishment Action Barred by Statute of Limitations and Rooker-Feldman Doctrine

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Michael Marienthal v. Asset Acceptance, LLC and Wright, Lerch, & Litow, LLP, No. 1:14-1636, 2016WL795902 (SD. Ind.)

The U.S. District Court for the Southern District of Indiana granted debt collector and law firm’s motions to dismiss in a Fair Debt Collection Practices Act (FDCPA) case alleging violations based on state court collection activity. In Michael Marienthal v. Asset Acceptance, LLC and Wright, Lerch, & Litow, LLP, the courtheld that the debtor’s claims were barred by the statute of limitations and the Rooker-Feldman doctrine.

On May 23, 2011, the law firm filed a small claims collection action in Perry Township small claims court in Marion County, Indiana on behalf of the debt collector related to an unpaid credit card debt. The debtor did not reside in Perry Township or sign a contract there that formed the basis for the debt. An agreed judgment was entered on August 3, 2011, and thereafter the law firm filed a motion for proceedings supplemental on May 21, 2012. The Perry Township's small claims court entered a final order of garnishment on October 18, 2013. On November 25, 2014, Marienthal filed a motion to set aside and revoke the final order of garnishment and later withdrew the motion after filing this federal suit on October 7, 2014.

The debtor filed a three count complaint alleging several violations of the FDCPA and a state law conversion claim against the collection firm and the owner of the debt. The debtor claims a violation of the FDCPA's venue provision, §1692i.  The collector and law firm moved to dismiss the §1692i claim arguing that the FDCPA's one year statute of limitations barred the §1692i claim. They moved for dismissal on the remaining claims based on the Rooker-Feldman doctrine.

As to his §1692i claim, plaintiff responded that the discovery rule and equitable tolling saved his claim from the applicable statute of limitations. He claimed that he was not aware that he had a cause of action based on the venue issue until the U.S. Court of Appeal for the Seventh Circuit decided Suesz v. Med-1 Solutions case in 2014 . 757 F.3d 636 (7th Cir. 2014).

The court rejected the debtor’s arguments because he knew of the arguable FDCPA claim on May 23, 2011, when the small claims suit was filed in a township other than the one in which he resided or signed the contract giving rise to the debt. Because his federal complaint was not filed until October 7, 2014, more than two years after the statute of limitations ran, his claim was barred.

As to the remaining FDCPA claims, the court followed Harold v. Steele, 773 F.3d 884 (7th Cir. 2014), and held that the debtor alleged no extra judicial injury that would provide an exception to the Rooker-Feldman doctrine. The court also declined to exercise supplemental jurisdiction over a related state law conversion claim, dismissing the entire case. Plaintiff debtor has appealed.

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