Medley v. Dish Network, LLC, No. 18-13841

958 F.3d 1063

Linda MEDLEY, Plaintiff-Appellee,

v.DISH NETWORK, LLC, Defendant-Appellant.

No. 18-13841

United States Court of Appeals, Eleventh Circuit.

May 1, 2020

Ian Richard Leavengood, Gregory Harrison Lercher, Sean Edward McEleney, Sara Weiss Severini, LeavenLaw, Aaron M. Swift, Swift Law, PA, St Petersburg, FL, Charles Michael Schropp, Law Office of Charles P. Schropp, Tampa, FL, for Plaintiff - Appellant.

Benjamen E. Kern, Benesch Friedlander Coplan & Aronoff, LLP, Columbus, OH, Roy S. Kobert, GrayRobinson, PA, Orlando, FL, Laura E. Kogan, David M. Krueger, Benesch Friedlander Coplan & Aronoff, LLP, Cleveland, OH, Josef Yitzchak Rosen, GrayRobinson, PA, TAMPA, FL, Anthony C. Sallah, Barnes & Thornburg LLP, Grand Rapids, MI, for Defendant - Appellee.

Before JILL PRYOR and GRANT, Circuit Judges, and ROYAL,^* District Judge.

ROYAL, District Judge:

This appeal raises issues related to consumer debt collection practices on debt Appellant Linda Medley contends was discharged in a voluntary Chapter 7 bankruptcy. Medley filed suit alleging Appellee DISH Network, LLC violated the Florida Consumer Collection Practices Act ("FCCPA") in its attempts to collect debt it knew had been discharged in bankruptcy and in its direct contacts with Medley knowing she was represented by counsel. In addition, Medley alleged DISH violated the Telephone Consumer Practices Act ("TCPA") by contacting Medley about the debt with an automated dialing system after she revoked her consent to receive such calls. The district court granted summary judgment in favor of DISH on all claims, and Medley appeals. After careful review and with the benefit of oral argument, we AFFIRM the district court on the TCPA claim and REVERSE and REMAND on the FCCPA claims.

I. BACKGROUND

Appellant Linda Medley entered into a 24-month Digital Home Advantage Plan Agreement (the "Agreement") with DISH to receive satellite television services in exchange for monthly payments. The Agreement included an option to participate in the DISH Pause program. For a $5.00 monthly fee, the Pause program allowed customers to temporarily suspend their satellite services and the charges for those services, for up to nine months during the term of the Agreement. Upon participation in the Pause program, a customer's 24-month term commitment would be extended by the number of days she suspended her service.

As part of the Agreement, Medley provided her cellular telephone number and expressly authorized DISH "to contact [her] regarding [her] DISH Network account or to recover any unpaid portion of [her] obligation to DISH, through an automated or predictive dialing system or prerecorded messaging system."

Approximately eleven months into the two-year term of her contract, Medley called DISH to cancel her services. Upon learning the amount of early termination fees such cancellation incurred under the Agreement, however, she instead elected to participate in the DISH Pause program.

Approximately two months later, Medley, through her attorneys, filed a voluntary Chapter 7 bankruptcy petition in the United States Bankruptcy Court for the Middle District of Florida. Medley listed DISH TV and an amount of $831.74 on Schedule F, the schedule requiring petitioners to list outstanding debt to unsecured creditors. Medley did not list the Agreement on Schedule G, the schedule requiring petitioners to list all executory contracts and unexpired leases of real or personal property. Instead, she checked the box signifying she had no executory contracts and unexpired leases and signed the schedules.

Thereafter, the bankruptcy court entered its discharge order and discharged Medley's listed debts, including the $831.74 DISH amount that Medley listed on Schedule F. DISH wrote off the $831.74 amount but continued to bill Medley the monthly $5.00 fee for the DISH Pause program. Medley did not pay these Pause fees.

Over a month after Medley's debts were discharged, DISH sent an email directly to Medley to collect the Pause fees. In response, Medley's counsel sent DISH the first of three facsimiles identifying Medley's DISH account and specifically notified DISH that the law firm of Leavengood, Dauval & Boyle represented Medley "with regard to her debts generally (i.e. for the purpose of settling ALL of her debts for filing a bankruptcy), including the above listed account and any other accounts of debts which you or your agency is attempting to collect from our client(s)." Subsequently, DISH sent four more emails directly to Medley seeking payment of the monthly Pause charges DISH continued to bill. In response, Medley's attorneys twice re-sent the same facsimile.

The facsimiles from Medley's attorneys also noted the TCPA's prohibition against making any call to their client using an automatic telephone dialing system ("ATDS") or an artificial or pre-recorded voice to a cellular phone without prior consent. The facsimiles expressly stated that "[t]o the extent any such prior express consent existed, if any, to call the above person using an ATDS, such consent is hereby forever revoked consistent with the Florida and federal law." DISH made six automated calls to Medley's cell phone after receiving the first fax.

When the DISH Pause feature expired, DISH removed it from Medley's account, restored her television services, and immediately disconnected her account for nonpayment of her DISH Pause charges. DISH then adjusted the new post-discharge charges to zero.

Medley filed suit in the Middle District of Florida raising claims under the FCCPA and the TCPA. Medley claimed DISH violated the FCCPA because DISH continued to contact her directly knowing she was represented by counsel about a debt it knew had been discharged in bankruptcy.¹ In addition, Medley claimed DISH violated the TCPA by using an ATDS or prerecorded voice to call Medley on her cell phone after Medley revoked her consent to receive such calls. The district court granted summary judgment in DISH's favor on all claims.

The district court characterized the Pause debt and the satellite services debt as separate debts, ultimately finding that the services debt was discharged, but the Pause debt was not. The court reasoned that the Agreement was an executory contract that was not deemed rejected under bankruptcy law because Medley failed to specifically list it on Schedule G of her bankruptcy schedules. Because the Agreement was not deemed rejected, the Pause charges that accrued after the petition was filed were post-petition debt that was not discharged in the bankruptcy.

The district court relied on this threshold finding to grant DISH summary judgment on Medley's FCCPA claims. The court first found that DISH did not attempt to collect an illegitimate in debt in violation of FCCPA § 559.72(9) because DISH's alleged unlawful contact with Plaintiff concerned only the Pause debt that was not discharged. Likewise, the communications to DISH from Medley's attorneys stated that they represented Medley concerning the discharged services debt; DISH directly contacted Medley only about the non-discharged Pause debt; thus DISH did not violate FCCPA § 559.72(18) ’s prohibition on directly contacting a debtor it knows to be represented by counsel. Finally, the district court found DISH's automated telephone calls did not violate the TCPA because the TCPA does not authorize unilateral revocation of consent to receive automated calls when such consent is given in a bargained-for contractual provision. Medley appeals.

II. ANALYSIS

We review a district court's grant of summary judgment de novo , "viewing all facts and reasonable inferences in the light most favorable to the nonmoving party." Jurich v. Compass Marine, Inc. , 764 F.3d 1302, 1304 (11th Cir. 2014).

A. EFFECT OF THE BANKRUPTCY

Before addressing the FCCPA and TCPA claims on appeal, we must determine whether the district court erred in finding the Pause debt was not discharged in Medley's bankruptcy. We find it did. As explained herein, the Agreement was deemed rejected as a matter of law under the Bankruptcy Code during Medley's bankruptcy; as a result, DISH had a prepetition breach of contract claim for the debt as a general unsecured creditor; that claim was discharged when the bankruptcy court entered the discharge order.

A fundamental objective of the Bankruptcy Code "is to provide a procedure by which certain insolvent debtors can reorder their affairs, make peace with their creditors, and enjoy a new opportunity in life with a clear field for future effort." In re St. Laurent, 991 F.2d 672, 680 (11th Cir. 1993) (internal quotations omitted). To accomplish this fresh start policy, the "Bankruptcy Code contains broad provisions for the discharge of debts, subject to" certain limited exceptions enumerated under 11 U.S.C. § 523(a). Lamar, Archer & Cofrin v. Appling , ––– U.S. ––––, 138 S.Ct. 1752, 1758, 201 L.Ed.2d 102 (2018).

When a Chapter 7 debtor receives a discharge, she is discharged from all debts and "any liability on a claim" that arose, or are determined to arise, before the bankruptcy is filed. 11 U.S.C. § 727(b) ; In re Mitchell , 633 F.3d 1319, 1326 (11th Cir. 2011) (A discharge in bankruptcy discharges only those debts which are in existence at the time the petition in bankruptcy is filed.). A Chapter 7 discharge relieves the debtor of personal liability; it does not nullify a prepetition agreement or render any agreement unenforceable. See e.g., Johnson v. Home State Bank , 501 U.S. 78, 83, 111 S.Ct. 2150, 115 L.Ed.2d 66 (1991) (stating that a Chapter 7 discharge "extinguishes only ‘the personal liability of the debtor’ " and rejecting the argument that the underlying lien disappears with a discharge) (emphasis in original).

DISH's claim for the Pause debt is derived from the Agreement. The Agreement provides:

Suspension of Service: If you participate in DISH Pause or any other program that allows you to temporarily suspend your DISH service at any time during your term commitment, your term

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