Garcia-contreras v. Scott

• Decision Date: 30 November 2010
• Docket Number: No.1:09CV761,1:09CV761
• Parties: CRYSTAL GARCIA-CONTRERAS, Plaintiff, v. BROCK & SCOTT, PLLC, and BULLHEAD INVESTMENTS, LLC, Defendants.
• Court: U.S. District Court — Middle District of North Carolina

CRYSTAL GARCIA-CONTRERAS, Plaintiff,

v.BROCK & SCOTT, PLLC, and BULLHEAD INVESTMENTS, LLC, Defendants.

No.1:09CV761

UNITED STATES DISTRICT COURT FOR THE MIDDLE DISTRICT OF NORTH CAROLINA

Dated: November 30, 2010

MEMORANDUM OPINION, ORDER, AND RECOMMENDATION

OF UNITED STATES MAGISTRATE JUDGE

This matter comes before the Court on: (A) the motion to dismiss (Docket Entry 4) filed by Brock & Scott, PLLC ("Brock & Scott") and Bullhead Investments, LLC ("Bullhead," or collectively with Brock & Scott, "Defendants"); (B) the "Motion For Judgment As A Matter Of Law" (Docket Entry 9) filed by Plaintiff Crystal Garcia-Contreras; (C) Garcia-Contreras's motion for summary judgment (Docket Entry 25); (D) Defendants' "Motion To Dismiss And/Or For Summary Judgment" (Docket Entry 26); and (E) the parties' "Consent Motion to Stay Mediation" (Docket Entry 30).

For the reasons set forth herein: (A) Defendants' motion to dismiss (Docket Entry 4) should be granted in part and denied in part; (B) Garcia-Contreras's "Motion For Judgment As A Matter Of Law" (Docket Entry 9) should be denied; (C) Garcia-Contreras's motion for summary judgment (Docket Entry 25) should be granted in part and denied in part; (D) Defendants' "Motion To Dismiss And/Or For Summary Judgment" (Docket Entry 26) should be denied; and (E) the parties' "Consent Motion To Stay Mediation" (Docket Entry 30) is denied as moot.

I. FAIR DEBT COLLECTION PRACTICES ACT

Garcia-Contreras's lawsuit seeks relief on claims brought under the Fair Debt Collection Practices Act ("FDCPA"), 15 U.S.C. § 1692, et seq. (See Docket Entry 1, ¶ 13.) Congress promulgated the FDCPA "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 FDCPA applies only to 'debt collectors' seeking satisfaction of 'debts' from 'consumers'; it does not apply to 'creditors.'" McKinney v. Cadleway Properties, Inc., 548 F.3d 496, 500 (7th Cir. 2008). It defines a "debt collector" as:

any person who uses any instrumentality of interstate commerce or the mails in any business the principal purpose of which is the collection of any debts, or who regularly collects or attempts to collect, directly or indirectly, debts owed or due or asserted to be owed or due another.

15 U.S.C. § 1692a(6). "The term 'consumer' means any natural person obligated or allegedly obligated to pay any debt." 15 U.S.C. § 1692a(3). A "debt" is defined as "any obligation or alleged obligation of a consumer to pay money arising out of a transaction in which the money, property, insurance, or services which are the subject of the transaction are primarily for personal, family, or household purposes, whether or not such obligation has been reduced to judgment." 15 U.S.C. § 1692a(5). The parties do not dispute that Defendants qualify as "debt collectors," Garcia-Contreras constitutes a "consumer," and the underlying money sought represents a "debt," within the meaning of the FDCPA. (Docket Entry 1, ¶¶ 4 & 5; Docket Entry 4, at 8, 5 5; Docket Entry 25, Ex. 2 at 1; Docket Entry 25, Ex. 3 at 1)¹

The FDCPA imposes a number of limitations on the conduct of debt collectors. For example, "[a] debt collector may not use any false, deceptive, or misleading means in connection with the collection of any debt." 15 U.S.C. § 1692e (emphasis added).² The FDCPA also provides that "[a] debt collector may not use unfair or unconscionable means to collect or attempt to collect any debt." 15 U.S.C. § 1692f.³

Two of Garcia-Contreras's FDCPA claims are based on 15 U.S.C. § 1692g. (Docket Entry 1, ¶ 13.) That section contains two subparts. Subpart (a) states:

Within five days after the initial communication with a consumer in connection with the collection of any debt, a debt collector shall, unless the following information is contained in the initial communication or the consumerhas paid the debt, send the consumer a written notice containing

(1) the amount of the debt;

(2) the name of the creditor to whom the debt is owed;

(3) a statement that unless the consumer, within thirty days after receipt of the notice, disputes the validity of the debt, or any portion thereof, the debt will be assumed to be valid by the debt collector;

(4) a statement that if the consumer notifies the debt collector in writing within the thirty-day period that the debt, or any portion thereof, is disputed, the debt collector will obtain verification of the debt or a copy of a judgment against the consumer and a copy of such verification or judgment will be mailed to the consumer by the debt collector; and

(5) a statement that, upon the consumer's written request within the thirty-day period, the debt collector will provide the consumer with the name and address of the original creditor, if different from the current creditor.

Subpart (b) provides that a debt collector's failure to cease collection activities during the period after a consumer has made a verification request, but before the debt collector provides the requested verification, violates the FDCPA:

If the consumer notifies the debt collector in writing within the thirty-day period described in subsection (a) of this section that the debt, or any portion thereof, is disputed, or that the consumer requests the name and address of the original creditor, the debt collector shall cease collection of the debt, or any disputed portion thereof, until the debt collector obtains verification of the debt or a copy of a judgment, or the name and address of the original creditor, and a copy of such verification or judgment, or name and address of the original creditor, is mailed to the consumer by the debt collector.

15 U.S.C. § 1692g(b) (emphasis added).

In 2006, Congress amended 15 U.S.C. § 1692g(b) by making two additions. Financial Services Regulatory Relief Act of 2006, Pub. L. No. 109-351, § 802(c), 120 Stat. 1966, 2006-2007 (2006). First, it clarified that:

Collection activities and communications that do not otherwise violate this subchapter may continue during the 30-day period referred to in subsection (a) unless the consumer has notified the debt collector in writing that the debt, or any portion of the debt, is disputed or that the consumer requests the name and address of the original creditor.

15 U.S.C. § 1692g(b). Second, the amendment prohibited acts by a debt collector "during" the thirty-day period that "overshadow" the consumer's right to dispute the debt or request verification information:

Any collection activities and communication during the 30-day period may not overshadow or be inconsistent with the disclosure of the consumer's right to dispute the debt or request the name and address of the original creditor.

Id. (emphasis added).

A separate section of the FDCPA imposes civil liability upon a debt collector "who fails to comply with any provision of this title[.]" 15 U.S.C. § 1692k(a) (emphasis added). Plaintiffs may obtain "actual damage[s]" and "costs of the action, together with a reasonable attorney's fee as determined by the court." Id. Moreover, a plaintiff may receive "additional damages" up to a statutory limit of $1,000. Id. If a court finds that a plaintiff brought an FDCPA action "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." Id.

II. PROCEDURAL BACKGROUND

Garcia-Contreras filed her Complaint on October 1, 2009. (Docket Entry 1.) The Complaint alleges that, "[o]n or about April 15, 2009, Brock & Scott, acting as the attorney and authorized agents of Bullhead, mailed a letter to Plaintiff in an attempt to collect the aforementioned alleged debt." (Id., ¶ 8.) In the April 15th letter, Brock & Scott wrote:

Re: Your CITIFINANCIAL-ASSOCIATES Account, Now Owned By BULLHEAD INVESTMENTS, LLC

Account number: 09080135912

Our file number: BUL32123

Amount Owed $3,132.17, with interest at 0% per annum

August 15, 2009

Dear CRYSTAL G GARCIA,

This law firm has been retained by the above referenced creditor to file a lawsuit against you immediately for the collection of the debt referenced above. However, you can make arrangements to satisfy the balance shown above by contacting our office. If you do not make payment upon this debt in an amount acceptable to our client, we will instruct the Sheriff of your county to serve you with a Court-issued summons at your home, your work, or wherever else you may be found by him. We will then apply to the Court for a Judgment against you, and if Judgment is granted, we may request that the Sheriff enforce the Judgment by levying an execution upon your property not exempt from Judgment.

You may contact our office at BROCK & SCOTT PLLC, Attn: Collections, at 1315 Westbrook Plaza Dr, Winston-Salem, NC 27103, or by telephone at either (336) 354-0110 or (888) 461-7908. We will assume this debt is valid unless you dispute the validity of all or part within 30 days of receipt of this letter. If you notify us in writing that you dispute all or a portion of this debt, we will send you verification of the debt or a copy of the judgment against you. Upon written request within 30 days after receipt of this notice we will provide you with the name and address of the original creditor if different from the creditor named above. For further information onthis urgent matter, please contact our office at 336-354-0110 or 888-461-7908 x3114.

(Docket Entry 1, Ex. 1 at 1 (emphasis in original).)

According to the Complaint, "[o]n or about April 21, 2009, [Garcia-Contreras] sent a letter to Brock & Scott explaining the basis upon which she was disputing the alleged debt and requesting that Brock & Scott provide verification of the debt to [her]." (Docket Entry 1, ¶ 10.) In that letter, she wrote:

Dear Brock & Scott:

I am writing this letter to...