Fourth Department — Debt Collection: LHR, Inc. v. T-Mobile USA Inc., et al.

Appellate Division, Fourth Department

Debt Collection

Personal Jurisdiction — Duty to Preserve Documents

LHR, Inc. v. T-Mobile USA Inc., et al.
CA 11-00535
Appealed from Supreme Court, Erie County

Background: The plaintiff, a debt collection agency, commenced an action seeking damages resulting from the defendants’ alleged breach of contract and negligence with respect to the sales by the defendant of delinquent customer accounts to the plaintiff. The defendant, SunCom, was a Delaware corporation with retail stores throughout New York. The defendants moved to dismiss the complaint against SunCom on the ground that the court lacked personal jurisdiction. The defendants also moved to dismiss the negligence complaint against T-Mobile for failure to state claim.

Ruling: The appellate division found that SunCom’s sales to the plaintiff of delinquent customer accounts render it subject to the court’s jurisdiction. Specifically, there were 28 purchase agreements executed by the plaintiff that contemplated delivery of the goods into New York. Further, the appellate division found that the Fair Debt Collection Practices Act did not impose a duty upon the defendant to preserve and retain the necessary documentation to verify its debt. Such duty springs from the purchase agreements.

B. Kevin Burke Jr. of Jaeckle Fleischmann & Mugel LLP for the defendants-appellants; Linda H. Joseph of Schroder, Joseph & Associates LLP for the plaintiff-respondent