Etapa v. Asset Acceptance Corp.
| Decision Date | 29 April 2004 |
| Docket Number | No. CIV.A. 03-86-KSF.,CIV.A. 03-86-KSF. |
| Citation | 373 F.Supp.2d 687 |
| Parties | Barbara ETAPA Plaintiff v. ASSET ACCEPTANCE CORPORATION and Greene & Cooper, P.S.C. Defendants. |
| Court | U.S. District Court — Eastern District of Kentucky |
Edward A. Icove, Smith & Condeni Co., LPA, Cleveland, OH, Steven C. Shane, Bellevue, KY, for Plaintiff.
Casey Cavanaugh Stansbury, Guy R. Colson, Fowler, Measle & Bell, L.L.P., Todd S. Page, Stoll, Keenon & Park, LLP, Lexington, KY, for Defendants.
This matter is before the Court upon the following motions: Asset Acceptance Corporation's motion for judgment on the pleadings [DE # 23] and motion for summary judgment [DE # 42]; Greene & Cooper, P.S.C.'s motion for judgment on the pleadings [DE # 15] and motion for summary judgment [DE # 41]; and Barbara Etapa's motion to file her first amended complaint [DE # 24]. Having been fully briefed, these motions are ripe for review.
The Plaintiff, Barbara Etapa ("Etapa") obtained a credit card from CitiBank with a $500 credit limit. Etapa made her last payment on the credit card in February of 1997. By April of 1997, the balance due on the credit card had grown to $729.55, exceeding the $500 limit because of over the limit fees, fees for late payments, and accruing interest charges.
CitiBank ultimately sold its interest in Etapa's outstanding debt to the Defendant, Asset Acceptance Corporation ("Asset Acceptance"). In April of 2001, Asset Acceptance contacted Etapa in an effort to collect the outstanding debt. Etapa refused to pay the outstanding debt. Etapa subsequently sent Asset Acceptance a cease communication letter that, under the Fair Debt Collection Practices Act ("FDCPA"), required Asset Acceptance to discontinue all communications unless the communications were for the purpose of notifying her that it intended to file suit to collect the outstanding debt. At the time that Etapa sent the cease communication letter to Asset Acceptance, her outstanding debt on the credit card had grown to $1,595.99. Upon receipt of the cease communication letter, Asset Acceptance referred the matter to its attorney, the Defendant Greene & Cooper, P.S.C. ("Greene & Cooper").
On April 11, 2002, Greene & Cooper sent Etapa a demand letter indicating that if Etapa failed to pay the outstanding debt on the credit card it would have no choice but to institute legal proceedings. At that time, the outstanding debt on the credit card had grown to $1,636.15. Etapa, however, again refused to pay the outstanding debt. On November 15, 2002, Greene & Cooper, on behalf of Asset Acceptance, filed suit against Etapa in the Fayette County, Kentucky, District Court (the "Fayette District Court collection action"). The complaint simply alleged the following: (1) Etapa received a credit card from CitiBank; (2) Asset Acceptance purchased Etapa's account from CitiBank; and (3) Etapa failed to pay the $1653.27 balance due plus interest.
Greene & Cooper attached two exhibits to the complaint. Exhibit A was a statement of Etapa's account that provided a detailed summary of the amounts that Etapa owed Asset Acceptance, the origination of the debt, the date on which Etapa opened the account, and the manner in which Asset Acceptance calculated Etapa's outstanding debt. Greene & Cooper incorporated this exhibit by reference into the complaint. Exhibit B was an affidavit executed by Sarah Hinkle ("Hinkle"), an Asset Acceptance employee. The affidavit represented that Asset Acceptance was a "holder in due course" of Etapa's account. Greene & Cooper did not, however, incorporate this exhibit by reference into the complaint.
On February 20, 2003, Etapa instituted the instant action against Asset Acceptance and Greene & Cooper, claiming that Asset Acceptance and Greene & Cooper violated various sections of the FDCPA by using false, misleading or deceptive representations in connection with the collection of the outstanding debt. Specifically, Etapa claims that Asset Acceptance violated the FDCPA by executing the affidavit that included the allegedly false claim that Asset Acceptance was a holder in due course of Etapa's account. Etapa claims that Greene & Cooper violated the FDCPA by attaching the affidavit to the complaint in the Fayette District Court collection action.
Both Asset Acceptance and Greene & Cooper have filed motions for judgment on the pleadings and motions for summary judgment, asserting a number of grounds. Etapa has filed a motion to file her first amended complaint. The Court will address all of these motions.
Federal Rule of Civil Procedure 12(c) permits a party to move for judgment on the pleadings after the pleadings are closed but within such time as not to delay the trial. In deciding a motion for judgment on the pleadings, the Court applies the same standard as it applies when deciding a motion to dismiss for failure to state a claim under Federal Rule of Civil Procedure 12(b)(6). Morgan v. Church's Fried Chicken, 829 F.2d 10, 11 (6th Cir.1987).
It is well established that "a complaint should not be dismissed for failure to state a claim unless it appears beyond doubt that the plaintiff can prove no set of facts in support of [his] claim which would entitle [him] to relief." Conley v. Gibson, 355 U.S. 41, 45-46, 78 S.Ct. 99, 2 L.Ed.2d 80 (1957). "All factual allegations are deemed true and any ambiguities must be resolved in plaintiff's favor." Persian Galleries, Inc. v. Transcontinental Ins. Co., 38 F.3d 253, 258 (6th Cir.1994). The Plaintiff must assert more than bare legal conclusions. In re DeLorean Motor Co., 991 F.2d 1236, 1240 (6th Cir.1993). "In practice, `a ... complaint must contain either direct or inferential allegations respecting all the material elements to sustain a recovery under some viable legal theory.'" Id. (quoting Scheid v. Fanny Farmer Candy Shops, Inc., 859 F.2d 434, 436 (6th Cir.1988)). In short, the issue when considering either a motion for judgment on the pleadings or a motion to dismiss for failure to state a claim is not whether the Plaintiff will ultimately prevail, but rather, whether the Plaintiff is entitled to offer evidence in support of his claims.
Etapa's claims in the instant case are founded solely upon the allegedly false, "holder in due course," statement made by Hinkle in the affidavit attached to the complaint filed in the Fayette District Court collection action. Asset Acceptance claims that the doctrine of absolute witness immunity precludes Etapa's claim because Hinkle made the statement under oath in the Fayette District Court collection action.
The doctrine of absolute witness immunity generally bars claims based upon allegedly false testimony. In Briscoe v. LaHue, 460 U.S. 325, 328, 103 S.Ct. 1108, 75 L.Ed.2d 96 (1983), the United States Supreme Court held that "all witnesses ... are absolutely immune from liability based upon their testimony in judicial proceedings." The issue before the Supreme Court in Briscoe was whether Congress, in enacting 42 U.S.C. § 1983, had abrogated a witnesses' right to immunity from suit for false statements made in a judicial proceeding. The Supreme Court noted that, at common law, witnesses had traditionally been absolutely immune from liability based on their testimony. Id. at 331, 103 S.Ct. 1108. The Supreme Court further articulated several substantial reasons for this immunity. Id. at 332-33, 103 S.Ct. 1108. In analyzing the effect that the enactment of 42 U.S.C. § 1983 had on the longstanding common law doctrine of absolute witness immunity, the Supreme Court determined that "the common law's protection for witnesses is `a tradition so well grounded in history and reason' that we cannot believe that Congress impinged on it by covert inclusion." Id. at 334, 103 S.Ct. 1108 (internal citation omitted). In reaching that decision, the Supreme Court made it clear that a federal remedial statute should not be interpreted to abrogate the longstanding doctrine of absolute witness immunity unless such an intent is clear on the face of the statute. The United States Court of Appeals for the Sixth Circuit reached the same conclusion when presented with this issue. Spurlock v. Satterfield, 167 F.3d 995, 1001 (6th Cir.1999).
In examining whether the doctrine of absolute witness immunity should apply in the instant action, the Court must address two issues. First, the Court must determine whether Asset Acceptance's statement constitutes testimony in a legal proceeding. Asset Acceptance made the allegedly false statement regarding its holder in due course statement in an affidavit executed under oath in the Fayette District Court collection action. Other jurisdictions have recognized that testimony proffered by a witness in an affidavit is an important part of the judicial process and it should enjoy the same protection as testimony provided in court. See Collins v. Walden, 613 F.Supp. 1306, 1314 (N.D.Ga.1985). The Court agrees with this approach and finds that Asset Acceptance's statement qualifies for protection under the doctrine of absolute witness immunity. Second, the Court must determine whether the FDCPA abrogates the doctrine of absolute witness immunity. There is nothing on the face of the FDCPA that suggests that Congress intended for it to abrogate the doctrine. Accordingly, the Court finds that the FDCPA does not abrogate the doctrine of absolute witness immunity.1
In opposing Asset Acceptance's motion for judgment on the pleadings, Etapa first argues that the United States Supreme Court approved of liability for litigation activities in Heintz v. Jenkins, 514 U.S. 291, 115 S.Ct. 1489, 131 L.Ed.2d 395 (1995). In Heintz, the Supreme Court did articulate the general rule that attorneys that engage in debt collection activities are required to comply with the FDCPA even when they engage in litigation activities. Id. at...
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