Hipps v. LVNV Funding, LLC
| Decision Date | 13 December 2013 |
| Docket Number | Case No. 4:12 CV 1297 DDN |
| Parties | JOYCE HIPPS, Plaintiff, v. LVNV FUNDING, LLC, Defendant. |
| Court | U.S. District Court — Eastern District of Missouri |
This action is before the court on motion of defendant LVNV Funding, LLC, for summary judgment against plaintiff Joyce Hipps. The parties have consented to the exercise of plenary authority by the undersigned United States Magistrate Judge pursuant to 28 U.S.C. § 636(c). The court heard oral argument on October 28, 2013.
On July 20, 2012, plaintiff Joyce Hipps commenced this action against defendant LVNV Funding, LLC. In her complaint, plaintiff alleges violations of the Fair Debt Collection Practices Act (FDCPA), 15 U.S.C. § 1692, et seq., and the Missouri state law claim of malicious prosecution.
Regarding the Count 1 FDCPA allegations, plaintiff specifically alleges that defendant violated the FDCPA in the following ways:
(Doc. 1 at 3-4.) Plaintiff requests actual damages, statutory damages, punitive damages, attorney fees, and costs.
In Count 2, plaintiff invokes the common law of Missouri for malicious prosecution. She alleges that the underlying state collection was decided in her favor when defendant abandoned its case and voluntarily dismissed it after plaintiff requested from defendant documents related to her debt. Plaintiff also alleges that defendant had no probable cause for it suit, because it did not have sufficient documents, necessary to verify the account or to prove its case in court, nor the ability or the intention of obtaining such documents. Plaintiff alleges that the collection suit was time barred. Further, plaintiff alleges that defendant "acted with malice and an improper and wrongful motive when it filed its prior lawsuit against Plaintiff, knowing that it could not recover for the alleged debt." (Id. at 4.)
Defendant moves for summary judgment, arguing that it had a good faith belief, based upon "ample evidence and documentation" when it filed the collection action against plaintiff that the debt was collectible, that defendant filed the collection action within the statute of limitations, "that defendant had the ability to present this and other evidence gathered during discovery, in a court of law to support a judgment." (Doc. 35 at 2.) Defendant also argues that it sought only the statutory rate of interest. (Id. at 10.) Defendant also argues that plaintiff cannot establish that defendant lacked probable cause to file the debt collection action or that malice motivated its filing of the collection action against her. (Id.)
In her memorandum filed in opposition to defendant's motion for summary judgment, plaintiff characterized her FDCPA allegations as two claims: (1) defendant used a false representation or deceptive means to collect a debt by bringing the collection action against her with insufficient documents indicating the debt, and without the ability or intention of obtaining such documents; and (2) by filing a time-barred collection action against plaintiff. (Doc. 39 at 1.) Plaintiff's counsel reaffirmed this characterization of her claims at oral argument. The court construes plaintiff's FDCPA allegations accordingly.
The record establishes that the following facts are without genuine dispute. Sherman Originator, LLC, is an affiliate of defendant that purchases delinquent credit accounts and transfers them to defendant. (Doc. 34-1 at 4.) Resurgent Capital Services is the master servicer and agent for defendant. (Id.)
On or around April 6, 2006, Sherman Originator purchased certain accounts from Citibank, USA, N.A. (Id. at 5.) A bill of sale memorialized the purchase and included a receivables file that identified the accounts. (Doc. 34-2 at 5, 7-19.) The purchase and sales agreement included a subsection, entitled "Retrieval of Account Documents":
After the Closing Date, the Bank will furnish Buyer at no charge with Account Documents that Buyer reasonably requests within 180 days of the Closing Date, up to a maximum number of Accounts Documents equal to [omitted dollar amount] of the Accounts purchased. The Bank will charge [omitted dollar amount] for each Account Document furnished on Accounts in excess of the [omitted dollar amount] threshold, or requested after 180 days of the ClosingDate, but prior to three years after the Closing Date. Except in instances of litigation unrelated to collection activity or accounts that are within the statute of limitations at the time requested, the Bank will have no obligation to provide Buyer with Account Documents after three years after the Closing Date.
(Doc. 45 at 10.) Thereafter, Sherman Originator transferred the account and the receivables file to defendant, as memorialized in a document captioned, "Declaration of Account Transfer." (Doc. 34-2 at 2-6.)
The Declaration of Account Transfer included a "Receivable File" which contained electronically stored documents generated by Citibank, identified as Exhibit A to the Account Transfer. Exhibit A contained electronic records of many account debtors, including the account of plaintiff Joyce Hipps, listing her as the debtor.4 The information in this document stated the account number, plaintiff's street address, her social security number, the date the account was opened (April 18, 1999), and the date the creditor charged the account off (September 10, 2005). ( Doc. 32 at 16; Doc. 34-2 at 2, 7-19.)
The card at issue was a Sears credit card that belonged to plaintiff's husband James St. John opened in 1984, before they married. After plaintiff and he married, he added her to the card as an authorized user. (Doc. 34-3 at 8, 12.) Plaintiff‘s husband used the account to purchase goods, including a riding lawnmower, a weed trimmer, a washing machine, and a drying machine. (Id. at 13.) In November 2000, he died. (Doc. 34-3 at 2.) The receivables file indicated a charge off date of September 10, 2005. (Doc. 32 at 16.)
Defendant engaged NAFS, a third-party agency, to collect from plaintiff. (Doc. 34-2 at 3.) According to Resurgent Capital Services' records, plaintiff made 9 monthly payments on the account from June 29, 2006 to February 27, 2007, totaling about half the principal debt.5 (Doc. 32 at 7, Doc. 34-3 at 19-20.) She testified she made these payments because she felt morally obligated to fulfill Mr. St. John's wishes. (Doc. 34-3 at 20.)
There are several March 7, 2008, entries on the Account Event History of the Sears card account which indicate several facts: (1) "Verbal Validation Added" was entered by K. Carswell. (2) A conversation occurred on that date between the debtor and K. Carswell. In that conversation, among the facts stated were the debtor's current last name being indicated as "Hipps." The debt balance was $1060.85. Debtor shared the card with her husband. He passed away and she said she should not have to pay the entire account. She said is not paying the amount because she does not even have most of the purchased items anymore. That entry further indicates that Ms. Carswell advised Ms. Hipps about the dispute process. (Doc. 34-1 at 6; Doc. 31 at 3.) Two other March 7, 2008 entries in the Account Event History indicate a dispute over the Sears account debt. (Doc. 31 at 8, 10, filed under seal.)
On February 21, 2012, defendant filed a collection action against plaintiff in the Circuit Court of Franklin County, Missouri, in two counts. Count 1 was for account stated and Count 2 for breach of contract. Count 1 alleged that Citibank and plaintiff Hipps had prior credit card transactions on a card issued to her at her request; Citibank sent her monthly statements to which she did not object; pursuant to the terms and conditions sent to plaintiff, by using the credit card, she made an unconditional promise to pay the amount due on the card; the balance on plaintiff's credit card is $999.50; and defendant failed to pay the balance after a demand. (Doc. 34-5; Doc. 38-4 at 1.) Count 2 alleged Citibank and plaintiff Hipps entered a credit card agreement whereby, in exchange for credit she agreed to pay what was due for using the credit card; Citibank abided by the terms of the agreement; plaintiff failed to make all payments and is default; defendant LVNV Funding holds a valid assignment of plaintiff's agreement with Citibank. LVNV demanded payment before February 27, 2007, but plaintiff failed to pay. (Doc. 38-4 at 1-2.)
When it filed the collection action, the only documents defendant LVNV had were the bill of sale, the purchase and sale agreement by which defendant purchased many accounts, including the Account Event History with oral statements attributed to plaintiff regarding the topic of dispute. (Doc. 34-1 at 5-7.) The record is unclear when, but there is deposition testimony that defendant requested original documents specifically from Citibank on plaintiff's credit account, such as an application for the account, a card member agreement, or a statement, before the collection suit...
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