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  • WisBar News
    August 21, 2019

    Federal Appeals Court Sides with Wisconsin Law Firm in Debt Collection Case

    Joe Forward

    WI Supreme Court

    Aug. 21, 2019 – A three-judge panel for the U.S. Court of Appeals for the Seventh Circuit recently ruled that a plaintiff’s debt collection claims against a Wisconsin law firm were properly dismissed since he did not show money owed was consumer debt.

    On behalf of its client, Unifund CCR, the Kohn Law Firm filed a lawsuit against John H. Burton in Brown County. Unifund is a debt collection agency that was seeking to collect a debt on a CitiBank credit card account held under the name of John H. Burton.

    The defendant, John H. Burton, claimed that he was not the account holder and was likely the target of identity theft. Thus, circuit court dismissed the case against Burton.

    But Burton filed a federal lawsuit, alleging Kohn (and Unifund) violated his rights under the federal Fair Debt Collection Practices Act (FDCPA) and the Wisconsin Consumer Act (WCA) by filing the lawsuit without giving him notice of a right to cure the default.

    The FDCPA and WCA notice provisions Burton asserted are applicable to debt collection of “consumer” debts incurred for “personal, family, or household purposes.”

    The law firm moved for summary judgment, arguing that Burton did not have sufficient evidence to show the debt was a consumer debt. Burton still argued the debt was not his, but he also argued that the notice applied because it was a consumer debt.

    Burton submitted the credit card billing statements and an email from a CitiBank employee referencing the account as a “consumer account.”

    He also noted that the debt collection letters he received included FDCPA disclaimers and Kohn and Unifund included “consumer” debt collection among the services listed on their websites. But the U.S. District Court for the Eastern District of Wisconsin in Milwaukee found that evidence insufficient to surmount a motion for summary judgment.

    In Burton v. Kohn Law Firm S.C. et al., No. 18-2059 (Aug. 9, 2019), the Seventh Circuit Appeals Court affirmed the district court’s decision in favor of the Kohn Law Firm.

    The three-judge panel noted that Burton repeatedly claimed that he did not incur the debt in the state court action, but asserted that it was a consumer debt in this action.

    “This latter allegation cannot be reconciled with his total disavowals in the state court action,” wrote Judge Kenneth Ripple. “Nor has Mr. Burton submitted an affidavit or any other sworn testimony in this litigation to support his position. [T]he bald assertion in his complaint is hardly affirmative evidence that the debt was a consumer debt.”

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