On November 29, the Third Circuit Court of Appeals reversed a district court’s grant of summary judgment to Drexel University in a Fair Debt Collection Practices Act case brought by a former student.
In Tiene v. Law Office of J. Scott Watson PC, No. 18-1221 (3d Cir. Nov. 29, 2018), Philip Tiene, a former Drexel University student, argued that the district court erred in granting summary judgment to the University on his FDCPA claims.
After Tiene failed to pay $7,881.73 in tuition and fees, Drexel University sent a series of collection letters to Tiene through its attorney—Law Office of J. Scott Watson PC—and a collection agency. When Tiene did not respond to the letters, Drexel filed suit in Philadelphia Municipal Court to seek recovery of the debt. Although Tiene provided an updated billing address to Drexel at the start of its collection efforts, the letters and court filings were served at Tiene’s previous billing address.
After a default judgment was entered against Tiene for failing to appear at a hearing on the complaint, he filed a motion to vacate the default on the grounds that Drexel “knowingly served process at the wrong, out of state address, where [Tiene] does not reside.” Although the Municipal Court judge found that Drexel did not engage in intentional misconduct when it served Tiene at an incorrect address, it nonetheless vacated the default judgment. It later entered judgment for Drexel in full.
In his federal lawsuit, Tiene alleged that Drexel violated the FDCPA by its false and deceptive service of the Municipal Court complaint and by making false and deceptive statements in a letter notifying Tiene of the default judgment and attempting to collect on the judgment. The District Court granted summary judgment to Drexel on Tiene’s FDCPA claims, finding that his service of process allegations were precluded by the vacatur of the default judgment by the Municipal Court and the collection letter did not misrepresent the amount of the judgment.
The Third Circuit reversed the District Court’s grant of summary judgment on both of Tiene’s FDCPA claims. In particular, the Third Circuit held that Tiene’s deceptive service of process claim was not barred by collateral estoppel because the District Court’s determination that Drexel did not intentionally serve Tiene at the wrong address was not essential to the vacatur of the default judgment.
In addition, the Third Circuit held that the District Court failed to consider all of Tiene’s collection letter allegations – although it addressed Tiene’s claim that that the collection letter misrepresented the amount of the judgment against Tiene, the District Court failed to consider Tiene’s claim that the letter contained erroneous information about the Municipal Court’s default judgment.
Troutman Sanders will continue to monitor and report on developments in this area of the law.