Antitrust Law Daily Wrap Up, PRIVACY—D. Mass.: Settlement agreement required dismissal of TCPA action, (Aug 21, 2013)

By Jody Coultas, J.D.

A cell phone user could not state a Telephone Consumer Protection Act (TCPA) claim against debt collection company Monterey Financial Services, Inc. because the cell phone user agreed to dismiss the claim in a valid settlement agreement, the federal district court in Worcester, Massachusetts has held (Cadrin v. Monterey Financial Services, Inc., August 19, 2013, Hillman, T.).

After the cell phone user filed the TCPA against Monterey, Monterey filed suit to recoup a debt from a jewelry purchase. The cell phone user spoke with Monterey President Christopher Hughes by telephone. Without the assistance of counsel for either party, Hughes drafted and faxed the settlement agreement to the cell phone. Both parties agreed to the settlement agreement. Although the cell phone user agreed to dismiss the TCPA action, she did not.

Monterey’s request for summary judgment was based on the settlement agreement, while the cell phone user countered that the agreement invalid based on Monterey’s fraudulent actions and executed while the cell phone user was under duress.

The settlement agreement was valid and enforceable, according to the court. A party alleging that a contract is void because it was executed under duress must prove that: (1) she was the victim of some unlawful or wrongful act or threat; (2) the act or threat deprived her of her free will; and (3) she was compelled to make a disproportionate exchange of values. Both parties understood and assented to the terms. The cell phone user was not under duress when she executed the settlement agreement. Monterey neither threatened nor acted unlawfully in negotiating the settlement. The cell phone user had time to think about the agreement and the ramifications of signing it as well as call her attorney before faxing it back to Monterey. Her actions were a product of free will.

The cell phone user’s argument that Monterey violated the law preventing a first-party debt collector from contacting a debtor once the debtor’s attorney informs the collector that all future communications regarding said debt should be brought to the attorney first was without merit because the cell phone user initiated contact with Monterey.

The case is No. 12-40112-TSH.

Attorneys: Sergei Lemberg (Lemberg & Associates) for Lindsay Cadrin. Brendan Little (Lippes Mathias Wexler Friedman LLP) for Monterey Financial Services, Inc.

Companies: Monterey Financial Services, Inc.

Cases: Privacy MassachusettsNews