Plant v. Blazer Financial Services
United States Court of Appeals for the Fifth Circuit
598 F.2d 1357 (5th Cir. 1979)
Theresa Plant (plaintiff) sued Blazer Financial Services (defendant) in federal court for failing to make required Truth in Lending Act disclosures on a $2,520 note she had signed; Blazer counterclaimed under state law to collect the unpaid balance on that same note, and the district court found the counterclaim compulsory, exercised jurisdiction over it, and ruled for Plant on the disclosure claim while ruling for Blazer on the counterclaim, offsetting the two awards. Plant appealed, arguing the court lacked jurisdiction to hear Blazer's counterclaim.
Whether a claim on an underlying debt in default is a compulsory counterclaim that must be asserted in a Truth in Lending Act action brought by the debtor.