A Baltimore jury has awarded more than $38.6 million to debtors who had paid less than a tenth of that amount to LVNV Funding LLC, a then-unlicensed debt-collection company.
The award will be divided among the 1,589 people in the class of debtors who sued LVNV in Baltimore City Circuit Court after having paid the company either in court judgments later deemed void or in out-of-court settlements the company had was not legally allowed to reach.
The jury’s verdict reflects the $3.6 million in debt LVNV improperly collected and the money the company made by reinvesting the improperly gotten gains, said Scott C. Borison and Phillip Robinson, attorneys for the class.
Borison said Wednesday that the jury’s decision reaffirms that victims of unlawful debt collection “can get justice by going to court.”
LVNV’s attorney, Ronald S. Canter, said in a statement Wednesday the company will appeal.
“This case was completely without merit and as such, the company is determined to receive a fair and impartial hearing,” said Canter, of The Law Offices of Ronald S. Canter LLC in Rockville. “In the end, we believe the court will absolve LVNV and find that it has always operated within the letter and the spirit of the law and with the upmost transparency with our clients.”
LVNV had acquired the debts, usually from consumer credit cards, for pennies on the dollar and then went to court to obtain judgments against the debtors, the lawyers said. In 2013, thousands of LVNV’s cases were dismissed because the company had not been properly licensed in Maryland.
The class of debtors, as certified in August by Baltimore City Circuit Judge Althea M. Handy, included those LVNV sued and won judgments against between Oct. 30, 2007, and Feb. 17, 2010, as well as those who settled out of court. Handy added that LVNV’s liability was established and that a jury trial would determine damages.
The damages were sought under the Maryland Consumer Debt Collection Act and the common-law theory of unjust enrichment.
Contempt motions pending
Testimony at trial last week included the amount paid by the debtors as well as LVNV’s investment of the funds, which yielded a 1,000 percent profit, Borison and Robinson said. The jury awarded $38,630,344 in damages on Friday.
“Under the restitution theory presented to the jury, the defendant was not entitled to keep that which it wrongfully took and it was not entitled to keep the profits it made off the money,” Robinson said in a statement announcing the jury’s verdict. “The evidence at trial showed LVNV acquires debts for pennies on the dollar and reinvested the funds it unjustly collected to acquire substantially more profits which under the law it is not entitled to keep.”
Borison and Robinson said they have contempt motions pending against the company, alleging it continued to seek outstanding debts despite the court orders of dismissal. At least 50 debtors paid LVNV after the cases were dismissed by court order, the attorneys added.
“LVNV makes its living suing people, but when it came time for LVNV to stop what they were doing, they basically ignored the court and continued to collect,” Borison said.
Borison is with the Legg Law Firm LLP in Frederick; Robinson is a Silver Spring solo practitioner who calls his firm the Consumer Law Center LLC.
The lawsuit was initially dismissed in 2012 as an impermissible collateral attack on judgements in Maryland District Court. However, the Court of Special Appeals revived the lawsuit in 2013, having voided the district-court judgments because LVNV was unlicensed.
The Court of Appeals, declined to hear LVNV’s appeal and the case went back to Baltimore City Circuit Court.
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Larry Finch et al. v. LVNV Funding LLC
Court: Baltimore City Circuit
Case No.: 24C11007101
Judge: Alfred Nance
Outcome: Verdict for the plaintiffs of $38,630,344
Event: Oct. 30, 2007 to Feb. 17, 2010
Suit filed: Nov. 9, 2011
Verdict: May 20, 2016
Plaintiffs’ Attorneys: Scott C. Borison of Legg Law Firm LLP in Frederick and Phillip Robinson of Consumer Law Center LLC in Silver Spring
Defendant’s attorneys: Ronald S. Canter of The Law Offices of Ronald S. Canter LLC in Rockville.
Counts: Maryland Consumer Debt Collection Act and unjust enrichment