A Columbia-based law firm accused of illegally collecting debts from Maryland residents has agreed to a class action settlement in U.S. District Civil Court resulting in the total distribution of $300,000 to approximately 4,000 state residents.
The class action suit claims the law firm, Nagle & Zaller P.C., did not have a proper license to collect debts in the state and conducted "other misleading or improper conduct in the collection of debts."
The settlement agreement, which was filed on Feb. 4, received preliminary approval from U.S. District Court Judge William Quarles Jr. on Feb. 20. A final approval hearing, where the court will hear the two objections to the settlements filed by class members, is scheduled for July 25.
This suit was brought by Elissha Castillo, of Germantown, who claims she is one of approximately 4,000 state residents Nagle and Zaller attempted to illegally collect debts from between 2009 and 2012.
All class members are automatically included in the settlement unless they opt out through written notice.
While Castillo's original class action complaint sought damages in excess of $5 million, both parties agreed in February — following mediation in December — that the firm would place $300,000 in a trust fund to be distributed on a pro-rata basis to the class action members, according to court records.
In the suit, class members are defined as state residents Nagle & Zaller collected debts or attempted to collect a debt from between Aug. 7, 2009 and Aug. 7, 2012.
According to Scott Borison, Castillo's attorney, the settlement must receive final approval before the funds can be distributed.
Phone calls to Nagle & Zaller seeking comment earlier this week went unreturned.
According to Castillo's complaint, filed in August of 2012, the law firm filed a debt collection suit against Castillo in Frederick County District Court on behalf of Avington Park Condominium, Inc., in October 2011.
Nagle & Zaller did not hold a collection agency license in the state at the time the complaint was filed, according to the state Department of Labor, Licensing and Regulation. The law firm obtained its license, which is required by the Maryland Collection Agency Licensing Act, on Sept. 28, 2012.
Although the law firm has agreed to the terms of the settlement, they still deny any wrongdoing, according to court documents.