The West Virginia Supreme Court has overturned a $75,000 verdict against collection firm Green Tree Servicing, ruling that Circuit Court Judge Robert Burnside should have sent the lawsuit to arbitration.

Aimee Neeley Figgatt alleged in her lawsuit against Green Tree that the firm violated the West Virginia Consumer Credit and Protection Act (WVCCPA) by attempting to contact her after it was notified she was represented by counsel.

Figgatt and her husband at the time took out a loan for a home in 2000 with Greenpoint Credit. The servicing rights and duties later were transferred to Green Tree. Figgatt was “almost continuously delinquent” on her payments, Burnside wrote, and Green Tree called her 615 times over the course of 44 months from 2007-10 and called third parties 20 times, the West Virginia Record reported.

Figgatt told Green Tree in December 2009 that she was represented by attorney Ralph Young of Hamilton, Burgess, Young & Pollard. Green Tree called her directly 28 times after that date. Burnside ruled in August 2012 that Green Tree was in violation of the WVCCPA, and that the additional 28 calls and the 20 calls to third parties deserved the maximum statutory penalty.

The total statutory penalty would have equaled $222,974. But Figgatt stipulated that she would not seek more than $75,000 when she filed her complaint. That figure represents an amount that could trigger federal jurisdiction over the case.

Burnside had ruled that since the American Arbitration Association (AAA) wouldn’t accept a claim by Green Tree for “debt collection arbitration,” an arbitration provision would be unenforceable.

The Supreme Court stated that an "AAA moratorium does not apply to (Figgatt's) claims against Green Tree" and therefore is an available forum in which to arbitrate the claims. “Therefore, the circuit court was in error in concluding that the arbitration provision at issue was unenforceable because the AAA would not also accept a claim by Green Tree against the respondent.”

Subscribe Now

Access to authoritative analysis and perspective and our data-driven report series.

14-Day Free Trial

No credit card required. Complete access to articles, breaking news and industry data.