Access Group Tertiary, a private student loan guarantor sued our client
through their local New York attorneys, Kazlow and Kazlow, a firm we defend
consumers against often. We immediately drafted an answer with all the
necessary affirmative defenses, but this case had a few interesting factors
to point out. First, the complaint stated that the amount being sued for
was approximately $28,000, and later on, it stated that it was $28,000
along with interest which really equated to about $43,000. Our opinion
was that this was deceptive and could be a potential FDCPA issue. The
second issue was that our client was sued approximately five years after
the alleged default. Based on
Portfolio Recovery Associates v. King
2010 NY Int. 68
, the Statute of Limitations should be based on which jurisdiction the
Plaintiff’s principal place of business resides. In this case that
would make it a 3 year statute and the suit would be past the SOL. After
making this argument, Kazlow and Kazlow stated that there was also a forum
selection clause in the agreement which listed Ohio law to be used in
litigation. Ohio law has a six year SOL as does New York.
As the case law on the second issue of forum selection vs. principal place
of business has not been decided by the New York Court of Appeals, we
decided to use this issue as leverage in our negotiations. We told Kazlow
and Kazlow that that we believed there to be multiple FDCPA violations
of a deceptive nature including but not limited to the fact that this
action was past the SOL and that there were differing amounts in the complaint
that would confuse the average consumer. Due to these issues, Kazlow and
Kazlow offered an out of court settlement that totaled a reduction of
about 67% off of the total balance of the student loan and gave our client
a long repayment period to complete the payments at no interest. To mitigate
the risk, our client accepted the offer and resolved the issue.
