Gaisser v. Portfolio Recovery Associates, LLC

• Decision Date: 12 January 2009
• Docket Number: Case No. 08-60177-CIV.
• Citation: 593 F.Supp.2d 1297
• Parties: Matthew K. GAISSER, Plaintiff, v. PORTFOLIO RECOVERY ASSOCIATES, LLC, et al., Defendants.
• Court: U.S. District Court — Southern District of Florida

593 F.Supp.2d 1297

Matthew K. GAISSER, Plaintiff, v. PORTFOLIO RECOVERY ASSOCIATES, LLC, et al., Defendants.

Case No. 08-60177-CIV.

United States District Court, S.D. Florida, Miami Division.

January 12, 2009.

Craig M. Shapiro, Horwitz Horwitz & Associates, Chicago, IL, Donald A. Yarbrough, Fort Lauderdale, FL, for Plaintiff.

David Palmer Hartnett, Monica Theresa Cronin, Hinshaw & Culbertson, Robert Jay Orovitz, Hayt Hayt & Landau, Miami, FL, Michelle Tamara Bell, Craig S. Hudson, Marshall Dennehey Warner Coleman Goggin, Fort Lauderdale, FL, for Defendants.

ORDER

CECILIA M. ALTONAGA, District Judge.

THIS CAUSE came before the Court upon Defendants, Robert J. Orovitz and Robert J. Orovitz, P.A.'s Motion for Summary Judgment [D.E. 80], filed on November 3, 2008. The Court has carefully considered the parties' written submissions, the record, and applicable law.

I. BACKGROUND

On June 5, 2008, Plaintiff, Matthew K. Gaisser, filed an Amended Class Action Complaint [D.E. 53] alleging violations of the federal Fair Debt Collection Practices Act ("FDCPA") and the Florida Consumer Collection Practices Act ("FCCPA") against Defendants, Robert J. Orovitz individually and Robert J. Orovitz, P.A. (collectively "Orovitz"), and Portfolio Recovery Associates, LLC ("PRA").

Plaintiff obtained a consumer credit card from Providian National Bank, and due to Plaintiffs financial difficulties, the account fell into arrears. (See Def. Statement of Mat. Facts [D.E. 80] at ¶¶ 1, 3; Pl. Statement of Mat. Facts [D.E. 100] at ¶¶ 1, 3). The last payment Plaintiff made on the Providian account occurred on April 10, 2003. (See Def. Mat. Facts at ¶ 4; Pl. Mat Facts at ¶ 4). PRA obtained the debt from Providian after the debt had fallen into default and subsequently retained Orovitz to collect on the account. (See Def. Mat. Facts at ¶¶ 5, 7-8; Pl. Mat. Facts at ¶¶ 5, 7-8). Orovitz, in turn, filed an action on behalf of PRA against Plaintiff on February 8, 2007, in the Broward County Court. (See PRA Compl. [D.E. 53-2]).

Plaintiff contends the terms of the Providian account are governed by the laws of New Hampshire because the credit agreement contains a clause stating the account shall be governed by the law of New Hampshire and federal law. (See Am. Compl. at ¶¶ 18, 20; Providian Account Terms [D.E. 53-4] at 2; Def. Mat. Facts at ¶ 2). Due to the application of New Hampshire's three-year statute of limitations to the debt, Plaintiff alleges in the Amended Complaint the state collection action was untimely filed in violation of the FDCPA. (See Am. Compl. at ¶ 20).¹ Plaintiff asserts Defendants' practices ran afoul of the FDCPA because they "used false or misleading representations to collect or attempt to collect a debt in violation of 15 U.S.C. § 1692e," and "used unfair or unconscionable means to collect or attempt to collect a debt in violation of 15 U.S.C. § 1692f." (Id. at ¶¶ 35-36).

On June 16, 2008, PRA and Orovitz filed motions to dismiss the Amended Complaint for failure to state a claim pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure [D.E. 56, 59]. Both PRA and Orovitz moved to dismiss the FDCPA claim arguing the underlying suit was timely filed, and therefore Plaintiff failed to state a claim. Specifically, PRA argued that even if New Hampshire law applied to the debt, the state suit was not filed outside the applicable three-year statute of limitations, because that period was tolled under New Hampshire law. Orovitz contended both the FCCPA and the FDCPA claims should be dismissed, because even assuming the debt is governed by New Hampshire law, as the forum state, the Florida five-year statute of limitations applied to the state action. In the alternative, Orovitz joined PRA's argument that the three-year New Hampshire statute of limitations was tolled. Orovitz also asserted Plaintiffs FCCPA claim against it was barred by the Florida litigation privilege.

On August 5, 2008, the undersigned entered an Order, 571 F.Supp.2d 1273 (S.D.Fla.2008), granting in part and denying in part Defendants' motions. The undersigned found the three-year New Hampshire statute of limitations applied to the debt, and the period was not tolled. Because the underlying suit was not timely filed, the motions were denied to the extent Defendants argued the FDCPA claim failed. Plaintiff's claim regarding Orovitz's attorney's fees and Plaintiff's FCCPA claim were dismissed.

Orovitz now moves for summary judgment arguing it unintentionally filed the time-barred collection action against Plaintiff, and therefore Orovitz is protected by the bona fide error defense contained in the FDCPA. See 15 U.S.C. § 1692k(c).

II. LEGAL STANDARD

Summary judgment shall be rendered "if the pleadings, the discovery and disclosure materials on file, and any affidavits show that there is no genuine issue as to any material fact and that the movant is entitled to judgment as a matter of law." Fed.R.Civ.P. 56(c). In making this assessment, the Court "must view all the evidence and all factual inferences reasonably drawn from the evidence in the light most favorable to the nonmoving party," Stewart v. Happy Herman's Cheshire Bridge, Inc., 117 F.3d 1278, 1285 (11th Cir.1997) (citation omitted), and "must resolve all reasonable doubts about the facts in favor of the non-movant," United of Omaha Life Ins. Co. v. Sun Life Ins. Co. of America, 894 F.2d 1555, 1558 (11th Cir.1990) (citation omitted).

"By its very terms, this standard provides that the mere existence of some alleged factual dispute between the parties will not defeat an otherwise properly supported motion for summary judgment; the requirement is that there be no genuine issue of material fact." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247-48, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986) (emphasis in original). "As to materiality, the substantive law will identify which facts are material. Only disputes over facts that might affect the outcome of the suit under the governing law will properly preclude the entry of summary judgment. Factual disputes that are irrelevant or unnecessary will not be counted." Id. at 248, 106 S.Ct. 2505. Likewise, a dispute about a material fact is a "genuine" issue "if the evidence is such that a reasonable jury could return a verdict for the nonmoving party." Id.

The moving party "always bears the initial responsibility of informing the district court of the basis for its motion, and identifying those portions of `the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any,' which it believes demonstrate the absence of a genuine issue of material fact." Celotex Corp. v. Catrett, 477 U.S. 317, 323, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986). Summary judgment is proper "against a party who fails to make a showing sufficient to establish the existence of an element essential to that party's case, and on which that party will bear the burden of proof at trial." Id. at 322, 106 S.Ct. 2548. In those cases, there is no genuine issue of material fact "since a complete failure of proof concerning an essential element of the nonmoving party's case necessarily renders all other facts immaterial." Id. at 323, 106 S.Ct. 2548.

III. ANALYSIS

As stated, Orovitz argues it is entitled to a summary judgment because the filing of the state collection action after expiration of the New Hampshire statute of limitations was a bona fide error, and it is protected by the "bona fide" error defense of the FDCPA. The FDCPA provides:

A debt collector may not be held liable in any action brought under this subchapter if the debt collector shows by a preponderance of evidence that the violation was not intentional and resulted from a bona fide error notwithstanding the maintenance of procedures reasonably adapted to avoid any such error.

15 U.S.C. § 1692k(c). To establish this defense, Orovitz must show by a preponderance of the evidence the filing of the time-barred action was (1) unintentional, (2) a bona fide error, and (3) made despite the maintenance of procedures reasonably adapted to avoid the error. See Sparks v. Phillips & Cohen Assocs., Ltd., Case No. 07-cv-0477, 2008 WL 2540679, at *10 (S.D.Ala. Jun. 20, 2008) (citing Johnson v. Riddle, 443 F.3d 723, 727-28 (10th Cir. 2006)); Valencia v. Affiliated Group, Inc., Case No. 07-cv-61381, 2008 WL 4372895, at *4 (S.D.Fla. Sept. 24, 2008) ("the Court must evaluate whether Defendant's procedures were `reasonably adapted' to avoid the specific error at issue.") (citation omitted) (emphasis in original).

The question of whether the defendant had the specific intent to violate the FDCPA is a subjective inquiry that "can often only be shown by inferential evidence. Thus, the extent to which [the defendant] should have objectively realized that his actions were in violation of law may be inferentially probative of the subjective intentional nature of that violation." Johnson, 443 F.3d at 728-29 (footnote omitted). The bona fide error and reasonable procedure prongs require an objective analysis, and "in effect, the bona fide component serves to impose an objective standard of reasonableness upon the asserted unintentional violation." Id. at 729. (citation and quotation marks omitted). Ultimately, where

the case involves a mistake of law, whether the debt collector's mistake was bona fide will often turn on the debt collector's due diligence practices. As a result, the bona fide prong and the procedures prong will often merge; here, one inquiry drives the other. We therefore focus our analysis on whether [the defendant's] procedures were reasonable based on the facts of this case.

Id.

Orovitz argues it has met its burden in establishing the bona fide error defense. Orovitz cites McCorriston v. L.W.T. Inc., 536 F.Supp.2d 1268 (M.D.Fla.2008), and Pescatrice v. Orovitz, 539 F.Supp.2d 1375 (S.D.Fla.2008), in support of its argument. In McCorriston, the defendants filed a collection action...