Campos v. Brooksbank

• Decision Date: 19 April 2000
• Docket Number: No. Civ. 98-1574 JP/LFG.,Civ. 98-1574 JP/LFG.
• Parties: Leroy and Debbie CAMPOS, Plaintiffs, v. Thomas BROOKSBANK, Defendant.
• Court: U.S. District Court — District of New Mexico

120 F.Supp.2d 1271

Leroy and Debbie CAMPOS, Plaintiffs, v. Thomas BROOKSBANK, Defendant.

No. Civ. 98-1574 JP/LFG.

United States District Court, D. New Mexico.

April 19, 2000.

Richard N. Feferman, Albuquerque, NM, for Leroy Campos, plaintiff.

Daniel W. Lewis, Farrell Matthew Smith, Hatch, Allen & Shepherd, Albuquerque, NM, for Thomas Brooksbank, defendant.

MEMORANDUM OPINION AND ORDER

PARKER, District Judge.

On January 20, 2000 Defendant filed a motion to dismiss (Doc. No. 38) under Fed.R.Civ.P. 12(b)(6). For the reasons discussed herein the motion will be denied.

I. Background

The factual allegations as taken from the complaint and the pleadings are as follows: Plaintiffs Leroy Campos and Debbie Giron Campos purchased a used car which they ultimately returned to the seller. Plaintiffs' finance company treated the return as a repossession, resold the car, and then sought a deficiency against Plaintiffs. To aid in collection of the alleged debt, the finance company hired Defendant, an attorney. On September 27, 1997 or October 2, 1997¹ Defendant, on behalf of his client, filed suit against Plaintiffs in New Mexico state court. Plaintiffs claim that they were never personally served. Defendant contends that on October 2, 1997 he served Eva Campos. Eva Campos is the sister of Plaintiff Leroy Campos and was not a named defendant.

Plaintiffs claim that on January 23, 1998, in support of a default judgment, Defendant executed an affidavit in which he misrepresented the services he rendered and the compensation he could receive for the collection of the debt. Plaintiffs also take the position that on January 27, 1998, Defendant's "office prepared ... an affidavit of James Fox" in which Fox falsely stated that Plaintiffs were personally served. (Compl.¶ 13.) On April 2, 1998, Defendant filed his and Fox's affidavits. The state court then entered default judgment. Plaintiffs claim that these alleged misrepresentations to the state court constitute violations of the Fair Debt Collection Practices Act, 15 U.S.C. § 1692 et seq. ("FDCPA") and the New Mexico Unfair Practices Act. N.M.Stat.Ann. §§ 57-12-1 through -22 ("UPA").

Sometime on or after April 2, 1998 Plaintiffs learned of the default when their wages were garnished. Plaintiffs then hired an attorney who helped set aside the judgment. After the reinstatement of the debt collection suit, Defendant noticed the deposition of Zia Credit Union. Plaintiffs claim that the credit union had no information relevant to liability or damages. Plaintiffs allege that Defendant only sought to obtain information about Plaintiffs' assets, which was improper at that stage of the case. Plaintiffs claim that the deposition notice also violated the FDCPA and the UPA.

Plaintiffs filed this suit on December 28, 1998.

II. Standard

In considering a motion under Fed. R.Civ.P. 12(b)(6) to dismiss for failure to state a claim, the court must liberally construe the pleadings, accept as true all factual allegations in the complaint and draw all reasonable inferences in the plaintiffs favor. See Swanson v. Bixler, 750 F.2d 810, 813 (10th Cir.1984). The issue before a court considering a motion to dismiss is not "whether a plaintiff will ultimately prevail but whether the claimant is entitled to offer evidence to support the claims." Scheuer v. Rhodes, 416 U.S. 232, 236, 94 S.Ct. 1683, 40 L.Ed.2d 90 (1974). A complaint may be dismissed only if it appears to a certainty that the plaintiff can prove no set of facts in support of his claim which would entitle him to relief. See Conley v. Gibson, 355 U.S. 41, 45-46, 78 S.Ct. 99, 2 L.Ed.2d 80 (1957).

III. Discussion

Defendant moves to dismiss on two grounds. First, Defendant moves to dismiss the FDCPA claim, on the ground that the one-year limitation for FDCPA actions bars Plaintiffs' claims under that act. See 15 U.S.C. § 1692k(d). Second, Defendant moves to dismiss the UPA claim, on the ground that Defendant is an attorney licensed to practice in New Mexico and is permitted to file affidavits and notice depositions in the course of a debt collection suit.

A. FDCPA claim

The FDCPA states that actions to enforce it must be brought "within one year from the date on which the violation occurs." 15 U.S.C. § 1692k(d). Plaintiffs filed this action on December 28, 1998. Defendant argues that because the service, to which Plaintiffs object, on Eva Campos in the state court debt collection suit and the filing of the suit itself occurred more than one year before December 28, 1998, the present suit is time-barred. Plaintiffs claim that they object under the FDCPA to only three actions: the execution and filing of two affidavits and the notice of deposition, all of which occurred within one year of December 28, 1998.

Defendant relies heavily on two distinguishable cases, Sierra v. Foster & Garbus, 48 F.Supp.2d 393 (S.D.N.Y.1999) and Calka v. Kucker, Kraus & Bruh, No. 98 Civ. 0990(RWS), 1998 WL 437151 (S.D.N.Y. Aug.3, 1998). Defendant claims that these cases lead to the conclusion that because the objectionable actions took place within the context of, or arose out of, the underlying collection suit filed over a year prior to the filing of this suit, the statute of limitations bars Plaintiffs' FDCPA claims. Defendant further argues that to adopt Plaintiffs' argument "would unfairly burden attorneys with the threat of FDCPA claims at every turn throughout the litigation" and that "[s]tretching the statute of limitations out indefinitely with the filing of each related pleading, motion or affidavit is unwarranted." (Def's Reply at 2.)

In Sierra, during the spring of 1997, the creditor's counsel defendant sent several demand letters to the debtor plaintiff. See Sierra, 48 F.Supp.2d at 394. The parties reached a settlement agreement on June 5, 1997 which the plaintiff breached by the end of the year. See id. On January 21, 1998 the defendant served the plaintiff with a summons and complaint, noticing a state court to enforce the agreement. See id. In the fall of 1998 the plaintiff sued the defendant alleging that the June 5, 1997 agreement authorized attorneys' fees which violated the FDCPA. See id. at 395. The federal district court found that the plaintiff could not avoid the one-year time bar by arguing that his claim was part of a continuing violation. See id. Although the plaintiff filed his federal suit within a year of the filing in state court of defendant's debt collection action, the court rejected the plaintiff's argument. See id. New communications (the January 21, 1998 summons and complaint) concerning an old claim (the 1997 settlement agreement and collection letters) did not start a new period of limitations. See id.

In Calka, the debtor/renter plaintiff stated that one defendant (her creditor) took assignment of a claim for back rent and then incorporated that assignment into a suit filed by another defendant (her creditor's counsel) on July 16, 1996 in state court for use and occupancy. See Calka 1998 WL 437151, at *1-2. The plaintiff claimed that the creditor defendant used the assigned back rent claim to file the state suit and inflated that claim, in violation of the FDCPA. See id. at *1-4. The plaintiff, however, waited until February 11, 1998 to file her federal FDCPA suit. See id. at *3. The plaintiff argued that her suit was not time barred because the defendant filed an amended complaint in state court, containing the same objectionable back rent claim, and a motion for summary judgment on the same claim within a year of her FDCPA suit. See id. The court rejected the plaintiff's continuing violation argument. See id. It found that the plaintiff was on notice of the facts which formed the basis of her FDCPA claim when the defendant filed its state court action, at which time the plaintiff's cause of action therefore accrued. See id.

In contrast, Plaintiffs in this case do not make any continuing violation argument or attempt to stretch out the statute of limitations indefinitely. Instead, they point to actions (the execution and filing of two allegedly false affidavits and the notice of intent to depose the credit union) taken in 1998 by Defendant within a year of the filing of this case. While those acts occurred during the course of litigation initiated more than a year before the FDCPA suit, that fact does not shield Defendant from EDCPA scrutiny. Lawyers engaged in litigation are subject to the FDCPA. See Heintz v. Jenkins, 514 U.S. 291, 294, 115 S.Ct. 1489, 131 L.Ed.2d 395 (1995). Thus, Defendant's motion to dismiss on statute of limitations grounds will be denied.

Alternately, even if the FDCPA claims would ordinarily have accrued in the fall of 1997, on either the date Defendant filed his debt collection suit or the date Defendant served Eva Campos, Plaintiffs did not have notice of those acts at that time. (See Compl. ¶ 12.) Plaintiffs allege that they did not receive actual notice of the debt collection suit, or even of the allegedly false affidavits, until Defendant successfully had their wages garnished. The state court entered default against Plaintiffs on or after April 2, 1998. The garnishment, which ultimately led to actual notice (and a subsequent decision by the state court to set aside the default), must have occurred still later.² Plaintiff was therefore not "on notice of the misrepresentation and unconscionable debt collection means when the state action was filed," in contrast with the plaintiff in Calka. Calka, 1998 WL 437151 at *3. Under this view, the violation did not accrue until after April 2, 1998 and was thus well within the one year statute of limitations. Accordingly, Defendant's motion to dismiss under Rule 12(b)(6) for failure to comply with the limitations provision found at 15 U.S.C. § 1692k(d) will be denied.

B. UPA claim

The New Mexico UPA states that, "Nothing in [this Act] shall apply to actions or transactions permitted under laws administered by a regulatory body of the ...