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Eviction firm lawsuit survives dismissal attempt

A class-action lawsuit brought on behalf of Virginia tenants by local housing justice advocates will continue following an attempt to dismiss it by Senex Law, a firm accused of being an eviction mill.

Last year, the Legal Aid Justice Center, Charlottesville law firm MichieHamlett and the Legal Aid Society of Roanoke Valley filed the federal lawsuit on behalf of tenants throughout the commonwealth against the Hampton-based Senex, alleging abusive and unfair debt collection practices in violation of federal law.

According to the complaint, Senex Law is a debt collection mill representing landlords across Virginia and had a starring role in mass evictions across the state prior to the pandemic.

Landlords throughout Virginia use Senex Law to prepare and send notices to tenants when they’re late on rent payment. Per a news release that accompanied the lawsuit, Senex charges the tenant for attorney fees with each notice, “raking big profits off the backs of those most in need.”

“The amounts being charged as attorney’s fees are not reasonable, and the notices greatly overstate the level of attorney involvement,” the complaint reads. “Upon information and belief, Senex churns out hundreds or thousands of these notices each month in a window of just a few days, with a representation of attorney involvement when in fact there has been no meaningful attorney review of the underlying claims.”

Because Senex is functioning as a debt collector, the lawsuit argues it must provide specific information required by federal law to prevent abusive and unfair debt collection practices, including information that tenants have the right to have 30 days to verify that the amount billed is accurate. The lawsuit alleges that Senex ignores the law by “attempting to hide behind landlords, disguising its true role in the profit scheme, and eagerly collecting their fees.”

Specifically, the lawsuit alleges that Senex sends notices to tenants on behalf of landlords informing them that the landlord has retained Senex, who “already drafted this notice and provided legal advice due to [the plaintiff’s] noncompliance.” The notices also “still purport to come from the Landlord, despite the fact that they were prepared and sent by Senex,” and in each notice at issue, the plaintiffs claim they were charged $30 in attorney fees.

Not long after the lawsuit was filed, counsel for Senex filed a motion to dismiss the lawsuit for failure to state a claim, arguing in part that the firm is not a debt collector and therefore not subject to the Fair Debt Collection Practices Act.

In a memorandum opinion dated Aug. 12, Chief U.S. District Judge Michael F. Urbanski granted the motion to dismiss on several counts and denied the rest of the motion. Most of the claims Urbanski denied were based on precedents set in a similar and recent case against Senex, Crawford v. Senex.

Among Senex’s arguments that Urbanski did not find persuasive was the claim that the firm was not a debt collector. Senex contended that notices it sends on behalf of its landlord clients are, as a matter of law, the landlords’ notices and not Senex’s, and by sending them it performs only ministerial tasks on behalf of the landlords.

Urbanski wrote that the court sees little material difference between the present case and the Crawford case, and in both, the plaintiffs allege that Senex drafts, prepares, prints and sends the notices directly to the tenants.

“Here, the court again finds that more factors suggest Senex acts as a debt collector when it transmits the notices,” Urbanski wrote. “As in Crawford, the notices instruct the tenants to contact the landlord concerning the unpaid rent, and the complaint does not allege that Senex has the authority to settle disputes on behalf of the landlord. However, the complaint alleges — and the notices themselves state — that Senex drafts the Notices, meaning that Senex was certainly ‘substantially involved in the drafting of the [notices.]’”

However, Urbanski also wrote that he was unpersuaded by the plaintiffs’ argument that Senex’s use of landlord letterhead and landlord signatures was false or misleading given the other text and instructions included on the notice.

“Given that the notices come ‘under the guise of [the] landlord’ and expressly state that Senex, a law firm, has both drafted the notices and ‘provided legal advice,’ the court sees no possible false implication in the notices, as alleged in the complaint, that an individual is an attorney or that a communication is from an attorney,” Urbanski wrote. “Moreover, the complaint fails to allege that the notices simulate or represent to be official documents approved by a court or a federal or state agency.”

Altogether, Urbanski granted Senex’s motion for dismissal of four of the claims made under a U.S. code section intended to prevent a debt collector from using false or misleading representation or means in connection with the collection of any debt. All other claims made by the plaintiffs survived the motion to dismiss.

No future hearings are currently scheduled for the lawsuit.


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