Roper v. Portfolio Recovery Assocs., LLC

AYLETTE ROPER, Plaintiff, v. PORTFOLIO RECOVERY ASSOCIATES, LLC,and LORI WITHROW, individually and d/b/aALLEN & WITHROW, ATTORNEYS AT LAW,and d/b/a LAW OFFICES OF ALLEN & WITHROW, Defendants.

No. 4:14-cv-00729-SWW

UNITED STATES DISTRICT COURT EASTERN DISTRICT OF ARKANSAS WESTERN DIVISION

October 5, 2015

OPINION AND ORDER

Aylette Roper brings this action against Portfolio Recovery Associates, LLC (Portfolio), and Lori Withrow, individually and d/b/a Allen & Withrow, Attorneys at Law, and d/b/a Law Offices of Allen & Withrow (Withrow), alleging violations of the Fair Debt Collection Practices Act (FDCPA), 15 U.S.C. § 1692 et seq, and the Arkansas Deceptive Trade Practices Act (ADTPA), Ark. Code Ann. § 4-88-101 et seq. Roper alleges defendants violated the FDCPA and the ADTPA by filing a debt collection action in state court that they knew was meritless.

The matter is before the Court on motion of Roper for partial summary judgment [doc.#16]. Defendants have responded in opposition to Roper's motion, Roper has replied to defendants' responses, and Portfolio has filed a sur-reply. For the reasons that follow, the Court denies Roper's motion for partial summary judgment.

I.

This action relates to a credit card account, no. XXXX-XXXX-XXXX-3250 (a GM Flexible Earnings Card), that was issued by HSBC Bank Nevada, N.A. to Roper. At all times relevant to this action, there was a balance due on the account.

Roper's credit card statement covering the period from June 8, 2010, to July 9, 2010, reflects that on June 15, 2010, Roper made a payment on the account in the amount of $78.00. Roper's credit card statements covering the period from July 9, 2010, to January 9, 2011, reflect that no further payments on the account were made and that at the end of that period there was a balance due on the account of $2,187.05.¹

On July 22, 2011, David Nauman, Vice President of HSBC Bank Nevada, N.A. and HSBC Bank USA, N.A. (collectively "HSBC"), executed an Assignment and Bill of Sale ("Bill of Sale") by which HSBC sold, assigned and transferred to Portfolio all of HSBC's rights, title, and interest in and to certain accounts, including the Roper account no. XXXX-XXXX-XXXX-3250, that were identified in an electronic exhibit attached to the Bill of Sale. The Bill of Sale states Roper's account had a balance of $2,187.05 and the exhibit attached to the Bill of Sale states the account was delinquent as of January 31, 2011.²

On July 7, 2014, Withrow, on behalf of Portfolio, filed an action against Roper in the District Court of Pulaski County, Arkansas (Case No. PCCV-14-1963) to collect the credit card debt Roper allegedly owed to Portfolio on account no. XXXX-XXXX-XXXX-3250. Attached to the complaint was the sworn affidavit of Michael La Douceur, Custodian of Records for Portfolio, indicating that no payment had been made on the account for more than three years. La Douceur Aff. ¶ 4. Specifically, La Doucer states that "[a]ccording to the records transferred to the Account Assignee from Account Seller ... there was due and payable from Aylette Roper ... to the Account Seller the sum of $2,187.05 with the [sic] respect to account number ending in (redacted) as of the date of 01/31/2011...." Id. No other instrument or document upon which the claim is based was attached to the complaint.

On February 4, 2015, the Pulaski County District Court, upon motion of Portfolio, dismissed the action without prejudice pursuant to Ark.R.Civ.P. 41(a).

II.

Roper moves for partial summary judgment on grounds that defendants pursued litigation against her (1) on a facially time-barred debt, (2) with knowledge of defendants' own inability to offer any proof of the validity of the underlying debt or defendants'entitlement to collect the alleged debt, (3) without complying with Ark.R.Civ.P. 10(d), (4) with the supporting affidavit of an individual who lacked personal knowledge of any transactions, business records, or record-keeping practices as alleged by the affiant, and (5) otherwise knowing that the action was improper and untenable. Roper argues it is undisputed that these actions violated both the FDCPA and the ADTPA and that the only issue remaining for trial is damages.

A.

Summary judgment is appropriate "if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to a judgment as a matter of law." Fed.R.Civ.P. 56(a). To support an assertion that a fact cannot be or is genuinely disputed, a party must cite "to particular parts of materials in the record," or show "that the materials cited do not establish the absence or presence of a genuine dispute," or "that an adverse party cannot produce admissible evidence to support the fact." Fed.R.Civ.P. 56(c)(1)(A)-(B). "The court need consider only the cited materials, but it may consider other materials in the record." Fed.R.Civ.P. 56(c)(3). The inferences to be drawn from the underlying facts must be viewed in the light most favorable to the party opposing the motion. Matsushita Elec. Indus. Co. v. Zenith Radio, 475 U.S. 574, 587 (1986) (citations omitted). Credibility determinations, the weighing of the evidence, and the drawing of legitimate inferences from the facts are jury functions, not those of a judge. Reeves v. Sanderson Plumbing Prods., Inc., 530 U.S. 133, 150 (2000) (citation and quotation marks omitted). However, "[w]here the record taken as a whole could not lead a rational trier offact to find for the nonmoving party, there is no 'genuine issue for trial.'" Matsushita, 475 U.S. at 587 (citation omitted). "Only disputes over facts that might affect the outcome of the suit under the governing law will properly preclude the entry of summary judgment." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). "Factual disputes that are irrelevant or unnecessary will not be counted." Id.

B.FDCPA

"The purpose of the FDCPA is to 'eliminate abusive debt collection practices by debt collectors,' ... and debt collectors are liable for failure to comply with 'any provision' of the Act." Richmond v. Higgins, 435 F.3d 825, 828 (8^th Cir. 2006) (quoting 15 U.S.C. §§ 1692(e), 1692k(a)). "According to § 1692e, '[a] debt collector may not use any false, deceptive, or misleading representation or means in connection with the collection of any debt.'" Id.³

The Court will address in turn the alleged instances of conduct that Roper claims constitutes a violation of the FDCPA.

1. Pursuit of Time-Barred Debt

In arguing that defendants pursued the underlying action on a time-barred debt, Roper points to the La Douceur affidavit attached to the underlying complaint that states there was due from Roper the sum of $2,187.05 on the relevant account as of the date of January 31, 2011. La Douceur Aff. ¶ 4. Roper argues that the underlying action filed by Withrow on behalf of Portfolio on July 7, 2014, was thus well beyond the three-year statute of limitations applicable to open accounts and that pursuing an action on a time-barred debt violates the FDCPA. See Fryermuth v. Credit Bureau Services, Inc., 248 F.3d 767, 771 (8^th Cir. 2001) (holding "that, in the absence of a threat of litigation or actual litigation, no violation of the FDCPA has occurred when a debt collector attempts to collect on a potentially time-barred debt that is otherwise valid.") (emphasis added)). See also Phillips v. Asset Acceptance, LLC, 736 F.3d 1076, 1079 (7^th Cir. 2013 (explaining that a debt collector's filing of a time-barred suit to recover a debt violates the FDCPA); Crawford v. LVNV Funding, LLC, 758 F.3d 1254, 1259 (11^th Cir. 2014) ("Federal Circuit and district courts have uniformly held that a debt collector's threatening to sue on a time-barred debt and/or filing a time-barred suit in state court to recover that debt violates §§ 1692e and 1692f.") (collecting cases, includingFreyermuth⁴)).

It is true that the three-year statute of limitations in Ark. Code Ann. § 16-56-105(1) applies to actions on open accounts. See In Re Pettingill, 403 B.R. 624, 627 (Bkrtcy. E.D. Ark. 2009).⁵ However, debts that arise from a credit card agreement are subject to the five-year statute of limitations in Ark. Code Ann. § 16-56-111 for written obligations. Born v. Hosto & Buchan, PLLC, 2010 Ark. 292, at *18-19, 372 S.W.3d 324, 336 (citing In re Pettingill, 403 B.R. 624). Defendants have submitted evidence that Roper's credit card account at issue was used to make purchases, that payments were made on the account, that there is due the sum of $2,187.05 on the account as of January 31, 2011 (with the last payment on the account being made on June 15, 2010), and that Portfolio owns that debt. The filing date of the underlying action-July 7, 2014-was well within the five-year statute of limitations applicable to a credit card agreement.

Roper, however, argues that defendants failed to produce the written credit card agreement underlying their argument that a five-year statute of limitations applies and that "the mere usage of the credit card is insufficient to create a genuine issue of material fact regarding whether a written agreement existed." While Roper is correct that defendants have not produced the written credit card agreement, the Court may nevertheless take judicial notice that credit cards are issued in conjunction with a written agreement. See, e.g., In re Kendall, 380 B.R. 37, 45 (Bankr. N.D. Okla. 2007) (taking "judicial notice that the terms of an agreement between a credit card holder and a credit card issuer are set forth in writing," and stating that "[t]he complexity of the relationship between a cardholder and card issuer requires that all of these variables be agreed to in a writing or writings, and federal law requires that consumer cardholders be given written disclosure of these terms."); In re Star, No. 07-13440DWS, 2008 WL 324125, at *6 (Bankr. E.D. Pa. Feb. 01, 2008) (taking judicial notice that the terms of an agreement between a credit card holder and a credit card issuer are set forth...