Pennsylvania Court Says Jury Must Decide FDCPA Debt Collector Status

Case Snapshot

• Court: U.S. District Court for the Middle District of Pennsylvania
• Case: Sokolowski v. Falling Creek Builders, No. 3:23-CV-00150
• Decision Date: Sept. 16, 2026
• Core Issue: Whether the defendants qualify as debt collectors under the FDCPA, including through the statute’s false-name exception
• Key Allegation: The plaintiffs alleged that related Falling Creek entities used different names while attempting to collect construction costs, homeowners association dues, and late fees
• Court Holding: Genuine factual disputes remain over the FDCPA’s statutory exclusions and whether the names used would cause the least sophisticated consumer to believe a third party was collecting the debts
• Outcome: Plaintiffs’ motion for partial summary judgment denied
• Notable Detail: The court found a jury could view the Falling Creek names as related entities or interpret the communications as indicating that the creditor and collector were separate entities.

A Pennsylvania federal court has denied consumers’ motion for partial summary judgment in a Fair Debt Collection Practices Act lawsuit, finding that a jury must resolve whether related Falling Creek entities qualify as debt collectors and whether the FDCPA’s false-name exception applies.

In Sokolowski v. Falling Creek, U.S. Magistrate Judge Leo A. Latella of the Middle District of Pennsylvania ruled Sept. 16 that factual disputes remain over how consumers would understand collection communications sent using several variations of the Falling Creek name.

Collection Letters Used Different Falling Creek Names

Benedict and Lynda Sokolowski contracted with Falling Creek, LLC in 2014 for construction of a Pennsylvania residence. The parties later disputed responsibility for construction stopping and whether money remained due.

Beginning in January 2021, Falling Creek entities sent communications seeking construction costs, HOA dues, and late fees. The communications used variations including “Falling Creek Builders, LLC” and “Falling Creek Builders,” while identifying “Falling Creek, LLC” or “Falling Creek” as the original creditor.

A third communication was sent in August 2022 to a prospective buyer of the plaintiffs’ property. The plaintiffs said they ultimately paid the amounts demanded so they could complete the property sale.

The plaintiffs later sued under the FDCPA, Pennsylvania Fair Credit Extension Uniformity Act, and Pennsylvania Unfair Trade Practices and Consumer Protection Law.

Court Finds Debt Collector Status Unresolved

The court focused on whether the defendants qualify as “debt collectors,” a threshold requirement for the plaintiffs’ FDCPA claims.

The FDCPA excludes certain officers and employees collecting debts for a creditor in the creditor’s name. It also contains an exclusion involving entities related through common ownership or corporate control when specified statutory requirements are satisfied.

The court found the plaintiffs had not established that those exclusions were inapplicable as a matter of law. The opinion noted that they did not address the exclusions in their initial summary judgment argument and did not conduct discovery into the defendants’ corporate structure.

The defendants presented an affidavit stating that one individual was the sole shareholder and officer of Falling Creek Builders, Inc. and held a 50% interest in Falling Creek, LLC. Along with assertions concerning common ownership among the entities, the evidence was sufficient to create factual disputes that could not be resolved on summary judgment.

False-Name Exception Presents Jury Question

The plaintiffs alternatively argued that the FDCPA’s false-name exception applied.

Under the exception, a creditor collecting its own debt can qualify as a debt collector when it uses another name in a way that would indicate a third party is attempting to collect the debt.

The court said the key question was whether the least sophisticated consumer would perceive third-party involvement.

The Falling Creek names were substantially similar, which could support a conclusion that a consumer would understand them to represent the same or related entities. The plaintiffs’ original contract also involved construction, potentially reinforcing the connection between “Falling Creek, LLC” and “Falling Creek Builders, LLC.”

However, the collection letters expressly identified a differently styled Falling Creek entity as the “original creditor.” The court found that wording could lead a consumer to believe the sender and creditor were separate entities.

Because a reasonable juror could reach either conclusion, the court found a genuine dispute of material fact and denied partial summary judgment. The court did not reach the merits of the plaintiffs’ specific FDCPA claims under Sections 1692f(1) and 1692c(b).