In round two of dispositive motions in this adversary proceeding, Midland Funding, LLC (“Midland”) filed a motion to dismiss the plaintiffs' amended complaint pursuant to Federal Rule of Civil Procedure 12(b)(6) or in the alternative to compel arbitration and strike class allegations. The debtors claimed that Midland violated the Fair Debt Collection Practices Act and Federal Rule of Bankruptcy Procedure 3001 due to its business practice of knowingly filing proofs of claim that purposely contain inaccurate amounts owed, and only amending the proofs of claim after the debtors file an adversary proceeding. The Court denied Midland’s motion to dismiss and further found that this alleged violation was not an appropriate question for arbitration and therefore denied the motion to compel arbitration.
Friday, September 28, 2018
Chapter 13 Issues