Marx v. Gen. Revenue Corp., 10–1363.

Citation668 F.3d 1174
Decision Date21 December 2011
Docket NumberNo. 10–1363.,10–1363.
PartiesOlivea MARX, Plaintiff–Appellant, v. GENERAL REVENUE CORPORATION, an Ohio corporation, Defendant–Appellee,Kevin Cobb, Defendant.
CourtUnited States Courts of Appeals. United States Court of Appeals (10th Circuit)

OPINION TEXT STARTS HERE

David M. Larson, Colorado Springs, CO, for PlaintiffAppellant.

Steven Wienczkowski (and Adam L. Plotkin of Adam L. Plotkin, P.C., with him on the brief), Denver, CO, for DefendantAppellee.

Before KELLY, LUCERO, and GILMAN *, Circuit Judges.KELLY, Circuit Judge.

PlaintiffAppellant Olivea Marx appeals from the district court's judgment in favor of DefendantAppellee General Revenue Corporation (GRC). After a bench trial, the district court found no violation of the Fair Debt Collection Practices Act (“FDCPA”) and awarded costs to GRC in the amount of $4,543. We have jurisdiction under 28 U.S.C. § 1291, and we affirm.

Background

Ms. Marx defaulted on her student loan. In September 2008, her guarantor, EdFund, a division of the California Student Aid Commission, hired GRC to collect on the account. In October 2008, Ms. Marx sued GRC, alleging abusive and threatening phone calls in violation of the FDCPA. Aplt.App. 11–16. GRC then made an offer of judgment, which Ms. Marx did not accept. Aplt.App. 114–116. She amended her complaint in March 2009 to add a claim that GRC violated the FDCPA by sending a facsimile to her workplace that requested information about her employment status. Aplt.App. 23–31. The district court, after a one-day trial in May 2010, found that the challenged collection practices were not abusive and threatening given its view of what actually occurred. Aplt.App. 352–357. She does not appeal these findings. Instead, she contests the court's conclusion that the facsimile did not violate the FDCPA's provision against debt-collector communications with third parties.

The facsimile was sent in September 2008 to Ms. Marx's employer as part of GRC's inquiry into Marx's eligibility for wage garnishment. When a GRC agent called Ms. Marx's employer to verify her employment status, the agent was told to make the request in writing. Aplt.App. 217–18. GRC sent its standard employment verification form. This form displays GRC's name, logo, address, and phone number, and bears an “ID” number representing GRC's internal account number for Ms. Marx. The form indicates that its purpose is to “verify [e]mployment” and to [request] employment information”; blanks are left for the employer to fill in the individual's employment status, date of hire, corporate payroll address, and position, and to note whether the individual works full- or part-time. Aplt.App. 113.

On appeal, Ms. Marx argues that GRC violated the FDCPA by sending the facsimile and claims that the district court erred in: (1) finding that a facsimile sent by GRC did not constitute a “communication” under the FDCPA; (2) awarding GRC costs pursuant to Fed.R.Civ.P. 54(d); and (3) permitting (in the alternative) an award of costs following GRC's offer of judgment pursuant to Fed.R.Civ.P. 68.

Discussion

A. Whether the Facsimile Constitutes a “Communication”

Our review of the district court's factual findings is for clear error; legal conclusions are reviewed de novo. Keys Youth Servs., Inc. v. City of Olathe, 248 F.3d 1267, 1274 (10th Cir.2001). We view the record in its entirety in the light most favorable to the district court's findings, accepting those findings, if plausible, even though we might have weighed the evidence differently. Anderson v. City of Bessemer, 470 U.S. 564, 573–74, 105 S.Ct. 1504, 84 L.Ed.2d 518 (1985).

The FDCPA was enacted “to eliminate abusive debt collection practices by debt collectors, to insure that those debt collectors who refrain from using abusive debt collection practices are not competitively disadvantaged, and to promote consistent State action to protect consumers against debt collection abuses.” 15 U.S.C. § 1692(e). The law provides, among other things, that a “debt collector may not communicate, in connection with the collection of any debt, with any person other than the consumer.” 15 U.S.C. § 1692c(b). A “communication” is defined as the “conveying of information regarding a debt directly or indirectly to any person through any medium.” 15 U.S.C. § 1692a(2).

The facsimile in question is not a “communication” under the FDCPA. A third-party “communication,” to be such, must indicate to the recipient that the message relates to the collection of a debt; this is simply built into the statutory definition of “communication.” This fax cannot be construed as “conveying” information “regarding a debt.” Nowhere does it expressly reference debt; it speaks only of “verify[ing] [e]mployment.” Nor could it reasonably be construed to imply a debt. In order to substantiate the claim that the facsimile “conveys” information “regarding a debt,” either “directly or indirectly,” Ms. Marx had the burden of proving such a conveyance; the standard is not whether the facsimile could have had such an implication. No testimony shows that Ms. Marx suffered any actual harm (such as embarrassment or a denial of promotion) or that her employer was aware that the facsimile in any way concerned a default on a student loan. Aplt.App. 180–185; 199–200. Ms. Marx did not call any witnesses from her employer's office to testify as to what they inferred from the facsimile. Aplt.App. 355.

Instead, she argues that the existence of a debt was implied by the ID or account number that appeared on the facsimile; this, she claims, makes it a “communication.” Aplt. Br. at 4–5. GRC, however, designed the form precisely to avoid such an implication. When asked at trial why the faxed form contained an ID number, the agent who sent it testified: “One of the first things we're taught in training is you can never imply debt to a third party. ID could be a—just an identification number to an application, or whatever. We don't ever say account when we're speaking with an authorized third party.” Aplt.App. 221. GRC conceded at oral argument that if its corporate name had somehow disclosed the nature of its business, the case would different. But absent any evidentiary showing that Ms. Marx's employer either knew or inferred that the facsimile involved a debt, the facsimile does not satisfy the statutory definition of a “communication.” A party may seek to verify employment status (without hinting at a debt) for any number of reasons, including as part of processing a mortgage, conducting a background check before hiring, or determining eligibility for an extension of credit.

Because we find that the facsimile did not constitute a “communication” within the ambit of the FDCPA, we need not consider whether GRC violated § 1692c(b)'s prohibition against debt-collector “communicat[ions] with third parties.

B. Costs

The district court awarded costs pursuant to Federal Rules of Civil Procedure 54(d)(1) and 68(d). We review an award of costs for an abuse of discretion. Rodriguez v. Whiting Farms, Inc., 360 F.3d 1180, 1190 (10th Cir.2004). Whether costs provisions even apply is a legal question reviewed de novo. Scottsdale Ins. Co. v. Tolliver, 636 F.3d 1273, 1276 (10th Cir.2011).

1. Costs under Rule 54(d)

Rule 54(d)(1) provides that [u]nless a federal statute, these rules, or a court order provides otherwise, costs—other than attorney's fees—should be allowed to the prevailing party.” Fed.R.Civ.P. 54(d)(1). The FDCPA also contains a costs provision:

[I]n the case of any successful action to enforce the foregoing liability, [the defendant is liable for] the costs of the action, together with a reasonable attorney's fee as determined by the court. On a finding by the court that an action under this section was brought in bad faith and for the purpose of harassment, the court may award to the defendant attorney's fees reasonable in relation to the work expended and costs. 15 U.S.C. § 1692k(a)(3).

Ms. Marx argues that the “plain language of the FDCPA is clear” that “costs may only be awarded to a Defendant upon a finding that the Plaintiff brought the case in bad faith and for the purpose of harassment.” Aplt. Br. at 10. We are told this is so because (1) a statute of specific effect should supersede a general one, Aplt. Br. at 10; (2) the FDCPA costs provision postdates Rule 54, Aplt. Br. at 10; and (3) the FDCPA is a “remedial” statute that ought to be construed liberally in favor of the plaintiff, a conclusion allegedly supported by passages in the Act's legislative history, Aplt. Br. at 11.

We disagree. After careful review, we hold that § 1692k(a)(3), properly construed, unambiguously provides for two cost-shifting scenarios: one for a prevailing plaintiff and the other for a prevailing defendant. When a plaintiff prevails, he or she recovers costs and reasonable attorney's fees. Anchondo v. Anderson, Crenshaw & Assocs., 616 F.3d 1098, 1107 (10th Cir.2010). When a defendant prevails and the court finds that the suit was brought in bad faith and for the purpose of harassment, then (in the court's discretion) that defendant may also recover attorney's fees. Smith v. Argent Mortg. Co., 331 Fed.Appx. 549, 559 (10th Cir.2009). This much is undisputed. The issue here is whether a prevailing defendant can be awarded costs in a FDCPA suit without a finding that the plaintiff brought the action in bad faith and for the purpose of harassment. This requires us to consider whether § 1692k(a)(3) supersedes Rule 54(d). We hold that it does not, and that this Defendant is entitled to a recovery of costs pursuant to Rule 54(d).

In “ascertaining the plain meaning of [a] statute, the court must look to the particular statutory language at issue, as well as the language and design of the statute as a whole.” K Mart Corp. v. Cartier, Inc., 486 U.S. 281, 291, 108 S.Ct. 1811, 100 L.Ed.2d 313 (1988). We read the bad-faith-and-harassment provision of § 1692k(a)(3) to indicate two separate pecuniary awards for a defendant who prevails against a suit...

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