<body><div><img src="https://img.particlenews.com/image.php?type=thumbnail_580x000&amp;url=2BX9oc_0vlyfa4U00" alt="https://img.particlenews.com/image.php?url=2BX9oc_0vlyfa4U00" width="900" height="463" >A Minnesota law firm will continue to face a Fair Debt Collection Practices Act (FDCPA) lawsuit. The United States District Court for the District of Minnesota held that there were genuine issues of material fact regarding whether the firm held itself out as having debt collection expertise. Jellum Law is a Woodbury law firm that has a website advertising it as a banking and business law firm. While plaintiff and defendant disputed whether Jellum is a debt collector subject to liability under the FDCPA, Jellum represented landlords in 349 non-expunged eviction proceedings for the non-payment of rent in Minnesota state district courts. While the pandemic years were outliers, the firm generally represented landlord clients in around 100 eviction actions each year. Samuel Kowouto signed a Renewal Residential Rental Agreement with landlord IH3 Property Minnesota L.P. on Sept. 8, 2021. The lease included an attorneys’ fees provision, which stated:“In any legal action brought by either party to enforce the terms of this Lease, the prevailing party is entitled [sic] costs incurred in connection with such action, including reasonable attorneys’ fees, expenses, and other costs of collection; provided, however, that such amount shall not exceed Five Hundred Dollars ($500).” Kowouto was served with the eviction complaint on May 23, 2022, because Kowouto and his co-tenants allegedly were behind on two months of rent, owed late fees, rental insurance premiums, and had unpaid utilities. The final paragraph of the eviction complaint stated that “Landlord, pursuant to the terms of the Lease, is also entitled to payment of all attorneys’ fees incurred by Landlord.” Kowouto called attorney Ryan Peterson and retained him in the eviction matter. On Kowouto’s behalf, Peterson contacted Linsday Cremona, an attorney at Jellum Law. In an email, Peterson asked about a discrepancy between the Lease and Conviction Complaint regarding attorney’s fees:“My clients are currently considering an offer, but I’m hoping you can clarify something for me as it may help in their deliberations: In paragraph 15 of your complaint, it states that your client is ‘entitled to payment of all attorney’s fees incurred.’ However, paragraph 47 of the lease seems to cap those fees at $500.00. These seems to be in conflict. Is there something I’m missing?” Cremona replied that “Invitation Homes would assess $500 of legal fees plus costs against the ledger.” Again, Peterson tried to clarify, “Okay, but just to be clear: if Plaintiff prevails, my clients will not be responsible for all your client’s attorney fees, correct?” Cremona replied that the tenants would be responsible for all legal fees that would be assessed against the ledger. “Per the lease, the ledger would only be charged $500 plus costs,” Cremona explained. The parties settled the eviction matter out of court on June 1, 2022. But Kowouto filed a putative class action against Jellum Law in state court, alleging violations of the Fair Debt Collection Practices Act. He stated that the statement in the eviction complaint that the landlord was entitled to all attorneys’ fees that were incurred was false and misleading, and sought an amount allowed by neither law nor contract. Jellum moved for summary judgment, claiming that it was not a “debt collector” under the FDCPA. Kowouto collected public records reflecting hundreds of eviction actions commenced by Jellum Law over a five-year period. The record also showed that the firm had a specific policy in place to facilitate eviction actions. “This evidence supports a finding that the firm regularly engages in this practice area,” asserted Judge Susan Nelson. However, Jellum argued that no reasonable trier of fact could find the eviction actions to be one of its regular practice areas since there was no evidence about what percentage of its overall practice is made up of eviction matters. The court was not convinced, with the court citing the fact that employees are trained on FDCPA compliance when they join the firm suggested that the collection practice was significant. Nor did the court find the argument that it never advertises itself as a firm specializing in debt collection activity to be persuasive. “Ms. Cremona testified that it advertises itself as a firm with expertise in financial institution law, and is able to handle situations that may arise when a loan goes south, including helping with collection matters,” wrote Nelson. Jellum also argued that a competent, non-specialist attorney would have not been deceived by the alleged error. However, the court disagreed, finding that a reasonable trier of fact could find that a competent, non-specialist attorney could be misled by a false statement in a court filing. “Here, the record makes clear that Mr. Peterson—who Jellum Law agrees competently represented Mr. Kowouto—was in fact confused by the discrepancy between the Eviction Complaint and the Lease, and had to seek clarification from Ms. Cremona twice before the parties entered settlement negotiations,” Nelson stated. The motion for summary judgment was denied. Jellum will continue to face the suit. Minnesota Lawyer reached out to Jellum, Jellum’s counsel, and Peterson for comment. </div></body>

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Firm must face suit under debt statute

A Minnesota law firm will continue to face a Fair Debt Collection Practices Act (FDCPA) lawsuit. The United States District Court for the District of Minnesota held that there were genuine issues of material fact regarding whether the firm held itself out as having debt collection expertise. Jellum Law is...