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DeMaio v. Karmin

A-1033-10T3 (N.J. Super. App. Div. 2011) (Unpublished)

CONTRACTS; FDCPA — The Fair Debt Collection Practices Act does not limit a provider of services or goods to only seeking collection from a customer if it actually signed the contract, even when another party may have agreed to be responsible for the claimed charges.

A 19 year old patient underwent an emergency dental procedure. The patient’s father signed forms designating himself as the responsible party for his son’s bills. The treatment was necessary and the amount charged was reasonable. Partial payments against the bill were made to a point where a small amount remained owing. At that time, the dentist referred the unpaid balance to a collection agency. In response to the suit that was filed, the patient wrote “to the court in lieu of an answer asking it to dismiss [the] entire complaint and [to] order [the dentist] to accept a payment plan of fifty dollars per month for the next 18 months to satisfy the outstanding debt.” Nonetheless, a default judgment was entered and a notice of the default judgment was sent to the patient. The notice advised “him of the opportunity to negotiate a payment plan with [the dentist].” The patient did not avail himself of this opportunity.

About a year later, the patient “purportedly filed a motion to vacate the default judgment,” and nearly a year after that, he filed a second motion in which he “asserted that his father was the ‘responsible party of record’ and as such, [the dentist] and his attorney were ‘actually committing an act of wrongful prosecution’ against him.” The lower court denied both motions, as it did a motion for reconsideration. The young patient appealed. In his appeal, he argued that federal law only gives a debt collector standing against the consumer who had actually signed the contract. Similarly, he argued that the Uniform Commercial Code allowed “pursuit only against [a] party that has signed the contract.” Further, he argued that his parents were legally obligated to pay his medical bills.

The Appellate Division was not persuaded by the arguments. On procedural grounds, the Court held that the patient had failed to make these arguments before the lower court and had not met the requirements under the Court Rules governing relief from final judgments and orders. Nor, had he demonstrated that the lower court abused its discretion when considering his motion for reconsideration.

On a substantive level, the Court pointed out that the young patient’s arguments based upon federal law were fashioned from the venue provisions of the Federal Fair Debt Collection Practices Act. Those provisions state that venue is either where the consumer signs the contract or where the consumer resides at commencement of the action. Here, the dentist brought the action in the county where the young man resided. Similarly, it rejected any arguments based on the Uniform Commercial Code because the Uniform Commercial Code governs contracts for the sale of goods, not service contracts. Lastly, the Court pointed out that even though the patient’s father might also be liable for the debt, that did not release the young patient from liability. On top of that, the Court noted that the young man had cited “no authority for the proposition that [the father’s agreement to pay the debt] served as a release or waiver of liability to [him,] the one who actually received the dental services.” The Court specifically rejected the argument that the man’s father was “solely obligated on the debt by virtue of the writing that he signed on the day of the emergency procedure.” While it “axiomatic that parents have a legal duty to support their minor children, ... [b]y definition, a minor is a person under eighteen years of age.” Here, the patient was nineteen years of age.

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