Donahue v. Probasco & Assocs., P.A.

SUSAN DONAHUE, Plaintiff, v. PROBASCO & ASSOCIATES, P.A. Defendant.

Case No. 18-2344-EFM

UNITED STATES DISTRICT COURT FOR THE DISTRICT OF KANSAS

October 30, 2020

MEMORANDUM AND ORDER

Plaintiff Susan Donahue incurred several debts for medical services. An action on debts like Donahue's, under Kansas law, ordinarily must be brought within five years.¹ But that five-year limitation period restarts whenever the debtor pays any part of the debt.² A timely lawsuit resulting in a judgment against Donahue occurred as to one of her debts, dating from 2002. Not so, however, as to her other three debts, including one dating from 2006. In November 2017, Donahue reached out to the law firm retained to collect her four debts, Defendant Probasco & Associates, P.A. ("P&A"). A few calls later, Donahue sent P&A a partial payment. That partial payment led to additional calls, a garnishment attempt on her 2002 debt, and a lawsuit on the 2006 debt that P&A filed but quickly dismissed. Donahue now claims that P&A violated the Fair Debt Collection Practices Act ("FDCPA").³ Specifically, she claims that P&A, hoping to revive and enforce her 2006 debt, made a series of false statements and misleading omissions throughout theirseveral phone conversations. Both Donahue and P&A now move for summary judgment in their respective favor. Donahue also moves to strike certain exhibits used by P&A in support of its summary judgment position. And P&A also moves to strike certain factual arguments made in Donahue's summary judgment-supporting reply brief. For the reasons that follow, the Court:

• Denies in part and grants in part Donahue's Motion to Strike Defendant's Exhibits (Doc. 105);

• Denies P&A's Motion to Strike Plaintiff's Reply in Support of Her Motion for Summary Judgment (Doc. 109);

• Denies in part and grants in part P&A's Motion for Summary Judgment (Doc. 95); and

• Denies in part and grants in part Donahue's Motion for Summary Judgment (Doc. 97).

I. Background

A. Donahue's Motion to Strike P&A's Exhibits

Initially, the parties dispute which exhibits the Court may consider in resolving their summary judgment motions. Specifically, Donahue moves to strike various of P&A's exhibits on either admissibility-based or discovery-based grounds.

1. Probasco's and Rockwell's Affidavits

On admissibility-based grounds, Donahue seeks to narrow the summary judgment record under Federal Rule of Civil Procedure 56(c)(4). Rule 56(c)(4) directs that an affidavit used to support or oppose a summary judgment motion must be made on personal knowledge, set out facts that would be admissible in evidence, and show the affiant's competency to testify to the matter stated.⁴ Under this rule, Donahue moves to strike various statements and supporting exhibits contained within affidavits sworn by Lou Probasco, a licensed attorney who acts as P&A's solemanager, and Marlene Rockwell, a private investigator used by P&A to inquire into matters surrounding service affidavits executed earlier in this case.

Instead of "striking" an affidavit or its supporting exhibits, as requested by Donahue, the "'better approach is for the court to consider each [objected-to piece of evidence] and, to the extent it may assert a fact which is not admissible evidence, simply exclude the requested fact from the court's ultimate findings.'"⁵ Having reviewed the parties' arguments and the relevant law, the Court, for this Order's purposes, rules as follows:

• Donahue's lack-of-personal-knowledge objections to paragraphs 9 and 13 of Probasco's affidavit are overruled. Probasco has sufficient personal knowledge, as P&A's sole manager, to testify to P&A's understanding of Donahue's residential history.

• Donahue's improper-opinion-testimony objections to any implied legal conclusions contained in paragraphs 13, 40, and 42 of Probasco's affidavit are sustained. Whether Donahue evaded service, whether her debts were enforceable under a tolled statute of limitations, and whether any FDCPA-violating representations made by P&A were unintentional, are among the many ultimate issues in this case to be decided under the facts and law. As such, the Court disregards any conclusion on those issues implied in Probasco's statements.

• Donahue's hearsay objections to paragraph 53 of Probasco's affidavit, paragraphs 6 and 10⁶ of Rockwell's affidavit, and P&A's file notes and spreadsheets are overruled. The Court considers the file notes and spreadsheets, not as proof that Donahue actually lived at the addresses listed, but instead as proof of P&A's efforts to both locate and attempt service on Donahue. Debi Higgins' and A.J. Jensen's statements contained within Probasco's and Rockwell's affidavits, however, are hearsay. Nevertheless, as P&A uses the evidence to support a service-of-process argument that ultimately amounts to an unavailing motion to reconsider its original motion to dismiss, the Court provisionally considers the proffered evidence for that sole purpose.⁷

• Donahue's best-evidence-rule objection to P&A's transcriptions of particular recorded telephone calls between Donahue and P&A is overruled. As Donahue has put original recordings of certain calls in evidence, the best-evidence rule permits consideration of P&A's transcripts of those same recorded calls.⁸ As to those remaining calls for which P&A produces transcripts but no recording, the Court notes that, at this stage, P&A's evidence need only be admissible in "content or substance" not "in . . . form."⁹ And Donahue has specified no substantive inaccuracies with P&A's transcripts.

2. November 25, 2017 Handwritten Note

Donahue also argues, under Federal Rule of Civil Procedure 37(c), that the Court should disregard a previously undisclosed document P&A now uses to oppose her summary judgment motion. As part of her FDCPA claims, Donahue maintains that, despite her intent to pay down only her 2002 debt, P&A enticed her to apportion a $75.00 payment among her various debts in order to restart the statute of limitations period on her 2006 debt. In her affidavit, she states that she included with her payment "a note that [she] wanted the payment to be applied only to the 2002 [debt]."¹⁰ Just after the close of written discovery and just before filing its response to Donahue's summary judgment motion, P&A disclosed a handwritten note, dated November 25, 2017, which Donahue purportedly authored and sent to P&A along with a $75.00 payment. At the top right corner, the note lists, without further annotation, four numbers corresponding to the P&A accounts for Donahue's four debts. Below those unannotated account numbers, the note, in relevant part, reads "Please apply to accts for Susan Donahue for Nov[.] payment."¹¹ P&A offers the note to contradict Donahue's claim that she intended her $75.00 payment to go towards only the 2002 debt. Pointing to the note's November 25, 2017 date, Donahue argues that P&Apossessed but failed to timely produce this evidence, leaving her now "[un]able to test the veracity of the document."¹² P&A responds that it "was previously unaware that a copy of this note still existed as it was not contained within [Donahue's] collection file," but that it timely produced the note once a statement about the note in Donahue's affidavit led it to "re-search[] its records . . . and . . . locate a copy within the bookkeeping records regarding debtor's past payments."¹³ P&A further argues that Donahue's claim of surprise and prejudice is undermined by the fact that Donahue is the note's author.

At issue in this discovery dispute are Federal Rules of Civil Procedure 26 and 37. Rule 26(a)(1)(A)(ii) generally requires initial disclosures of any document in a party's "possession, custody, or control" that it "may use to support is claims or defenses."¹⁴ Rule 26(e)(1)(A) then obligates a party to "supplement or correct . . . in a timely manner" any "incomplete or incorrect" disclosure.¹⁵ If a party has failed to provide information required under these rules, Rule 37(c)(1) directs that the party "is not allowed to use that information . . . to supply evidence on a motion . . . , unless the failure was substantially justified or is harmless."¹⁶

P&A's May 21, 2020 production of the November 25, 2017 note was neither timely nor substantially justified. P&A does not dispute that the note is a discoverable document used to support its defense. P&A does not dispute that, throughout this case, it has had "possession, custody, or control" over the note. Yet, despite Donahue's requests for document production, P&A failed to search its own records to discover and produce the note until over two months after this case's March 16, 2020 discovery deadline. P&A had a duty "to understand [its] discoveryobligations (and whether there [were] responsive documents to an issued [discovery request]) before discovery closes."¹⁷ This duty was not, as P&A implies, dependent on Donahue "put[ting the note] at issue."¹⁸ As such, P&A's belated discovery and attempt to supplement are improper.

Any harm caused by P&A's untimely production, however, does not rise to level required to justify excluding the note from the summary judgment record. In assessing the harm caused by P&A's discovery violation, four factors guide the Court's discretion: (1) the prejudice or surprise to Donahue; (2) the ability to cure any prejudice; (3) the extent to which using the evidence would disrupt the trial; and (4) P&A's bad faith or willfulness.¹⁹ Here, on balance, these factors weigh too lightly in favor of exclusion to grant Donahue's request.

Initially, no argument or evidence before the Court shows that P&A willfully or in bad faith withheld the note's existence, leaving the Court to conclude that negligence alone accounts for P&A's untimely effort to discover and produce the note.

More importantly, Donahue can claim no surprise and only minimal, if any, prejudice; that prejudice, moreover, is ultimately curable without disrupting this case's litigation. Prior to the note's...