On December 3, the U.S. Court of Appeals for the Sixth Circuit affirmed a district court ruling that a collection agency did not violate the FDCPA by collecting medical debts within the state’s statute of limitations. The court found the debts were based on written contracts, subject to a 15-year statute of limitations under Kentucky law, rather than the 5-year limit for oral contracts.

The plaintiff argued that the hospital’s authorization forms she signed did not constitute written contracts because they lacked essential elements to be considered written contracts. The appellate court disagreed, noting that the forms identified the parties, third-party beneficiaries, price, contained a definite promise to pay, and reasonably described the performance to be rendered. The court emphasized that Kentucky law does not require naming third-party beneficiaries in the contract or specifying an exact price, as long as there is a definite promise to pay all incurred charges.

The district court’s decision to award summary judgment was affirmed by the appellate court’s clarification that the collection agency’s actions were lawful under the longer 15-year statute of limitations for written agreements.