Goodman v. Asset Acceptance LLC

428 F.Supp.3d 526

Aaron GOODMAN, Plaintiff,

v.ASSET ACCEPTANCE LLC and Encore Capital Group, Inc., Defendants.

Civil Action No. 18-cv-01667-RM-KMT

United States District Court, D. Colorado.

Signed December 20, 2019

James Constantine Vlahakis, Mohammed Omar Badwan, Omar Tayseer Sulaiman, Sulaiman Law Group, Ltd., Lombard, IL, for Plaintiff.

Jamie N. Cotter, Spencer Fane LLP, Denver, CO, Joshua Caine Dickinson, Spencer Fane LLP, Omaha, NE, for Defendants.

ORDER

RAYMOND P. MOORE, United States District Judge

Plaintiff brings this action under the Fair Debt Collection Practices Act ("FDCPA"), 15 U.S.C. § 1692 et seq. , asserting Defendants violated the act when they sent a letter seeking to collect an alleged debt which was time-barred. The matter is now before the Court on Defendants' Motion for Summary Judgment (the "Motion") (ECF No. 41) seeking an order in their favor on this action. The Motion is now fully brief. Upon consideration of the Motion, the relevant court records, and the applicable law, and being otherwise fully advised, the Court finds and orders as follows.

I. BACKGROUND

Plaintiff Aaron Goodman is in the masonry business and has been for more than 22 years. In 2001, Plaintiff obtained a Gordon's Jewelers Citibank credit card and purchased something in that store (the "Loan").¹ At some point in time, the Loan was sold to Defendants.

In January 2012, Defendants entered into a Consent Decree with the Federal Trade Commission ("FTC") where, among other things, Defendants agreed to make the following disclosure when collecting on debt where the debt is past the date for obsolescence under the Fair Credit Reporting Act, 15 U.S.C. § 1681c : "The law limits how long you can be sued on a debt. Because of the age of your debt, we will not sue you for it, and we will not report it to any credit reporting agency." U.S. v. Asset Acceptance, LLC , Consent Decree, No. 8:12-cv-00812-T-27EAJ (M.D. Fla. Jan. 31, 2012), ECF No. 5, p. 13.

In March 2013 Defendants sent Plaintiff a collection letter. In the letter, as required by the Consent Decree, the following disclosure was made: "The law limits how long you can be sued on a debt. Because of the age of your debt, we will not sue you for it, and we will not report it to any credit reporting agency." (ECF No. 41-5.) Plaintiff took no action on the letter. He put it in his desk and essentially forgot about it until after he filed this lawsuit. This letter is not the one complained of in this case.

In September 2015, Defendants entered into a Consent Order with the Consumer Financial Protection Bureau ("CFPB"). In the Matter of Encore Capital Group, Inc. , Administrative Proceeding No. 2015-CFPB-0022, found at https://www.consumerfinance.gov/ policy-compliance/enforcement/actions/encore/ (last visited December 13, 2019) ("Consent Order"). Pursuant to the Consent Order, Defendants agreed to include the following statement for consumer accounts where the debt is time-barred and generally cannot be included in a consumer report: "The law limits how long you can be sued on a debt and how long debt can appear on your credit report. Due to the age of this debt, we will not sue you for it or report payment or non-payment of it to a credit bureau." (Consent Order, pp. 38-39.)

In June 2018, Defendants sent Plaintiff the collection letter (the "Letter") at issue. In that Letter, as required by the Consent Order, Defendants made the following disclosure (the "Disclosure"): "The law limits how long you can be sued on a debt and how long debt can appear on your credit report. Due to the age of this debt, we will not sue you for it or report payment or non-payment of it to a credit bureau. " (ECF No. 41-6 (italics in original).) When Plaintiff received this letter, he was upset by its age, looked up the statute of limitations, believed the statute had run, and contacted a lawyer. Plaintiff made no payment nor did he make any promise to make any payment. Plaintiff does not contend, nor could he, that Defendants sued him or threatened to sue him if he did not pay the Loan.

Based on the Letter, Plaintiff filed this lawsuit asserting two claims under Section 1692e of the FDCPA. The second claim is identified as a class action claim but no motion has ever been filed to certify any class. Defendants have moved for summary judgment alleging Plaintiff cannot show they violated the FDCPA.

II. LEGAL STANDARD

Summary judgment is appropriate only if there is no genuine dispute of material fact and the moving party is entitled to judgment as a matter of law. Fed. R. Civ. P. 56(a) ; Celotex Corp. v. Catrett , 477 U.S. 317, 322, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986) ; Henderson v. Inter-Chem Coal Co., Inc. , 41 F.3d 567, 569– 70 (10th Cir. 1994). Whether there is a genuine dispute as to a material fact depends upon whether the evidence presents a sufficient disagreement to require submission to a jury or is so one-sided that one party must prevail as a matter of law. Anderson v. Liberty Lobby, Inc. , 477 U.S. 242, 251–52, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986) ; Stone v. Autoliv ASP, Inc. , 210 F.3d 1132, 1136 (10th Cir. 2000) ; Carey v. United States Postal Serv. , 812 F.2d 621, 623 (10th Cir. 1987). Once the moving party meets its initial burden of demonstrating an absence of a genuine dispute of material fact, the burden then shifts to the nonmoving party to demonstrate the existence of a genuine dispute of material fact to be resolved at trial. See 1-800-Contacts, Inc. v. Lens.com, Inc. , 722 F.3d 1229, 1242 (10th Cir. 2013) (citation omitted). "The mere existence of some alleged factual dispute between the parties will not defeat an otherwise properly supported motion for summary judgment; the requirement is that there be no genuine issue of material fact." Scott v. Harris , 550 U.S. 372, 380, 127 S.Ct. 1769, 167 L.Ed.2d 686 (2007) (citation omitted). The facts, however, must be considered in the light most favorable to the nonmoving party. Cillo v. City of Greenwood Vill. , 739 F.3d 451, 461 (10th Cir. 2013) (citations omitted).

III. ANALYSIS

A. Elements of the FDCPA Claim

Congress enacted the FDCPA "to eliminate abusive debt collection practices by debt collectors." 15 U.S.C. § 1692(d). In order to establish his claim under the FDCPA, Plaintiff must prove the following:

(1) Plaintiff is a "consumer" under 15 U.S.C. § 1692a(3) ;

(2) The "debt" arises out of a transaction entered into primarily for personal, family, or household purposes, 15 U.S.C. § 1692a(5) ;

(3) Defendants are "debt collectors" within the meaning of 15 U.S.C. § 1692a(6) ; and (4) Defendants violated a provision of 15 U.S.C. § 1692e.

See Rhodes v. Olson Associates, P.C. , 83 F. Supp. 3d 1096, 1103 (D. Colo. 2015) (citation omitted). In this case, Defendants contend Plaintiff cannot establish the second and fourth requirements, i.e., that the Loan was entered "primarily for personal, family, or household purposes" or that the Disclosure violated Section 1692e.

B. "Primarily for personal, family, or household purposes"

The FDCPA requires that the "debt" in question be entered "primarily for personal, family, or household purposes." Plaintiff essentially raises two arguments as to why summary judgment should not be granted on this issue.

First, Plaintiff argues the FDCPA encompasses claims brought by individuals who are falsely alleged to owe a debt and Loja v. Main St. Acquisition Corp. , 906 F.3d 680 (7th Cir. 2018) "requires" courts to adopt a liberal interpretation of what is a "consumer debt." This argument is a nonstarter. The first part of Plaintiff's argument is self-evident, but irrelevant, because under § 1692a(3) a "consumer" is "a natural person obligated or allegedly obligated to pay any debt." (Emphasis added.) The second part of Plaintiff's argument is also inapposite. A decision by the Seventh Circuit imposes no requirements on this Court and, further, Loja addressed the sufficiency of pleading whether plaintiff was a "consumer," not consumer debt. Thus, this argument fails.

Second, Plaintiff asserts that whether a financial transaction is commercial or personal is fact-specific and the facts are to be examined as a whole, citing to Bloom v. I.C. System, Inc. , 972 F.2d 1067 (9th Cir. 1992). The Court agrees and, as the cases Plaintiff cites indicate, a court should consider factors such as the borrower's purpose in obtaining the loan or credit; the borrower's use of the funds or of the item purchased; whether the credit was incurred in the consumer's personal capacity with his home address where the consumer did not use his personal credit cards for business expenses because he had a company issued credit card; and whether the obligation was paid from personal funds. See, e.g., Bloom , 972 F.2d at 1068 ; Hepsen v. J.C. Christensen & Assocs., Inc. , No. 8:07-cv-1935-T-EAJ, 2009 WL 3064865, at *3-4 (M.D. Fla. Sept. 22, 2009) ; Hansen v. Ticket Track, Inc. , 280 F. Supp. 2d 1196, 1203-04 (W.D. Wash. 2003). The question presented is whether Plaintiff's evidence is sufficient to create a triable issue of fact.²

Here, the evidence shows the Loan was for a purchase from a jewelry store, Gordon's Jewelers; the borrower is stated to be "Aaron Goodman," Plaintiff; Plaintiff works in the masonry business; and Plaintiff has no recollection of buying any jewelry. Considering the evidence in a light most favorable to the nonmovant, the Court could not say that no reasonable jury could infer that any purchase was for a consumer as opposed to commercial purchase.³ Accordingly, Defendants' motion for summary judgment on the basis that the Loan in question was not a "debt" under the FDCPA is denied.

C. "Will not" versus "Cannot" and Revival Disclosure

1. Standards by which to evaluate the claims

Under 15 U.S.C. § 1692e, "[a] debt collector may not use any false, deceptive, or misleading representation or means in connection with the collection of any debt." The majority of courts evaluate FDCPA claims under an objective "least-sophisticated-consu...