In Reddick v. Capouano, Beckman, Russell & Burnett LLC, the Court of Appeals for the Eleventh Circuit recently affirmed defendant law firm Capouano, Beckman, Russell & Burnett LLC’s (Firm) motion for summary judgment involving an alleged violation of the Fair Debt Collection Practices Act (FDCPA). In its holding, the Eleventh Circuit found no violation of the FDCPA when the defendant law firm moved to collect a debt within the applicable statute of limitations period.

In Reddick, husband Keith Reddick signed a “financial agreement” with dental practice Zelda Court Dental Care LLC, while operating a joint family account for himself and his wife, Adriana Reddick. In the agreement, the husband agreed “to pay for services not covered by [his] insurance as well as any legal and/or collection fees necessary for the collection of this debt.” The dental practice considered the husband to be responsible for the account.

Later, the husband and wife divorced. In the divorce settlement, the husband agreed to be responsible for any debts or liabilities. Years after, the Firm sued the husband for collection after the dental practice was unable to contact the husband for collection. The husband then claimed that his ex-wife incurred the debt after they separated.

The husband sued the Firm, accusing it of violating Sections 1692e(2), 1692e(5), 1692e(10), and 1692f(1) of the FDCPA for taking action to collect a debt for which the Firm knew the husband was not responsible and because the statute of limitations had expired. The husband argued that the six-year statute of limitations under Alabama contract law did not apply because his account was still open. Ala. Code § 6-2-34(9) (requiring “[a]ctions upon any simple contract or speciality not specifically enumerated in this section” to be commenced “within six years). He argued that if it did, the Firm’s collection action on September 18, 2018 fell outside of the six-year period because the applicable period began 90 days prior July 27, 2012 — the day the dental practice issued a notice to the husband that money was owed on his account, and he was 90 days past due — rather than September 18, 2012, the date of the demand letter.

The magistrate judge granted summary judgment in favor of the defendant law firm, finding (1) the husband was responsible for the debt, and (2) the Firm had sought collection of the debt within the applicable six-year period. The husband appealed to the Eleventh Circuit.

The appeals court affirmed the lower court’s ruling that the husband was ultimately responsible for his ex-wife’s debt. The appeals court then considered whether there was a genuine dispute of material fact on the issue of the statute of limitations. The husband argued the wrong statute of limitations was applied, and even if the original six-year statute was applied, it was applied incorrectly.

The Eleventh Circuit disagreed. It found that the applicable limitations period did not begin to run until the demand letter from the dental practice because earlier activity merely advised the husband as to the status of the account.

The appeals court noted:

Even viewing the record in light most favorable to [the plaintiff], there is no evidence demonstrating that the small claims lawsuit for collection of the [underlying] debt was filed outside of the six-year limitations period — either as an action to recover money upon an account stated or as an action to recover money upon [the plaintiff’s] breach of contract when he failed to pay following [the original creditor’s] September 2012 demand for payment — and therefore time-barred in violation of the FDCPA.

Reddick is instructive on how courts look at communications with the borrower and when any applicable statute of limitations period will begin to run based on those correspondence.

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