Debt buyers usually can NOT document the debt and have NO personal knowledge about the debt. Here’s attorney Dan Edelman’s thoughts:
© Daniel Edelman
Filing false affidavits in state court collection litigation is actionable. Delawder v.
Platinum Financial, 1:04-cv-680 (S.D.Ohio March 1, 2005); Griffith v. Javitch, Block & Rathbone,
LLP, 1:04cv238 (S.D.Ohio, July 8, 2004); Gionis v. Javitch, Block & Rathbone, 2:04cv1119, 2005
U.S.Dist. LEXIS 30147 (S.D.Ohio., Nov. 30, 2005); Stolicker v. Muller, Muller, Richmond,
Harms, Meyers & Sgroi, P.C., 1:04cv733 (W.D.Mich., Sept. 8, 2005). This is commonly alleged to
be done by bad debt buyers, whose employees have no knowledge of the underlying debt and
usually no records, in order to obtain default judgments.
Courts have divided on whether filing unprovable collection cases is actionable.
Harvey v. Great Seneca Financial Corp., C-1-05-047, 2005 U.S.Dist. LEXIS 37002 (S.D.Ohio July
18, 2005), and Kelly v. Great Seneca Financial Corp., 04-615 (S.D.Ohio June 16, 2005), suggests
that it is not, without further conduct such as that outlined above.
The party initiating the state court litigation cannot claim ?witness immunity? as a
defense. Todd v. Weltman, Weinberg & Reis Co., L.P.A., No. 04-4109 , 2006 U.S. App. LEXIS
808 (6th Cir., January 13, 2006). That case involved allegations that exempt Social Security income
had been seized because a collection attorney filed a false affdavit stating that he had reason to
believe a bank account held nonexempt assets. The court thought that an independent witness
would have immunity, but not a complaining witness:
Defendant’s actions could properly be characterized as malicious prosecution. As a
result, it is a complaining witness without absolute immunity. The fact that Plaintiff
is suing under the FDCPA and not the common law claim does not affect the
immunity status of Defendant. As the Supreme Court stated in Kalina, “in
determining immunity, we examine the nature of the function performed.” 522 U.S.
at 127 (internal quotations and citation omitted). In this case, Defendant functioned
as a complaining witness, so it may not assert absolute immunity against any claim
in connection with this role.
From a practical perspective, treating Defendant as a complaining witness without
immunity simply makes sense. The Court reserves absolute immunity for individuals
when they functionally serve as “integral parts of the judicial process,” such as
judges, advocates, and witnesses in their ordinary judicial roles. Briscoe, 460 U.S. at
335. The purpose of this immunity is to preserve the integrity of our judicial system,
not to assist a self-interested party who allegedly lies in an affidavit to initiate a
garnishment proceeding. (*40-41)
Also see on p. 55:
D. WITNESS IMMUNITY
In several recent cases, FDCPA defendants have claimed that ?common law witness immunity? insulates them against liability for false statements in pleadings, affidavits, etc., filed in state courts. If the allegedly false statement was essential to a judgment adverse to the consumer, it cannot be challenged in federal court under Rooker-Feldman and collateral estoppel. If it was not (e.g., the state court case was dismissed), most recent decisions reject the ?witness immunity? claim. Blevins v. Hudson & Keyse, Inc., 1:03-cv-241, 2004 U.S. Dist. LEXIS 24843 (S.D. Ohio Sept. 29, 2004), and 2004 U.S. Dist. LEXIS 24844 (S.D. Ohio Sept. 29, 2004); Hartman v. Asset Acceptance Corp., 1:03-cv-113, 2004 U.S. Dist. LEXIS 14845 (S.D. Ohio Sept. 29. 2004); Todd v. Weltman, Weinberg, C-1-03-171, 2004 U.S. Dist. LEXIS 24886 (S.D. Ohio, Aug. 3, 2004). As pointed out in these decisions, the Seventh Circuit has imposed liability for a false statement in a complaint. Gearing v. Check Brokerage Corp., 233 F.3d 469 (7th Cir. 2000) (false statement that plaintiff was ?subrogated? to rights of creditor). Contra, Beck v. Codilis & Stawiarski, 4:99cv485, 2000 U.S. Dist. LEXIS 22440 (N.D. Fla. Dec. 27, 2000).