Hubbard v. National Bond & Collection Associates
| Decision Date | 02 April 1991 |
| Docket Number | Civ. A. No. 90-275-JLL. |
| Parties | Cassie A. HUBBARD, f/k/a Cassie Wickes, Plaintiff, v. NATIONAL BOND AND COLLECTION ASSOCIATES, INC., Defendant. |
| Court | U.S. District Court — District of Delaware |
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Sandra E. Messick of UAW Legal Services Plan, Newark, Del., for plaintiff.
Phebe S. Young of Bayard, Handelman & Murdoch, Wilmington, Del., for defendant.
This is an action brought pursuant to the Fair Debt Collection Practices Act ("FDCPA"), 15 U.S.C. §§ 1692 et seq., by Cassie A. Hubbard, f/k/a Cassie Wickes, the plaintiff, against the defendant National Bond and Collection Associates. . Discovery was completed on January 14, 1991 (D.I. 6), and the case is presently before the Court on the parties' cross-motions for summary judgment on the issue of liability. (D.I. 20 & 22). All briefs have been submitted by the parties (D.I. 21, 21A, 23, 26 & 27); therefore, the Court will now address the cross-motions for summary judgment.
Below, the Court has recited the relevant undisputed facts.
On October 24, 1988 the plaintiff Cassie Hubbard filed for bankruptcy under chapter 13 of the Bankruptcy Code. (D.I. 21A at A-18 & A-24). She filed with the assistance of Barbara James, Esq. of the UAW Legal Services Plan ("UAW"). (Id. at A-8 & A-21A). As of that date, Cassie Hubbard was protected by the Bankruptcy Code's automatic stay which forbids "any act to collect, assess, or recover a claim against the debtor that arose before the commencement of the case." 11 U.S.C. § 362(a)(6). One of the debts listed in her bankruptcy petition was $957.15 owed to "G.C. Services" for items purchased at "Lowe's." (D.I. 23 at Defendant's Exhibit "DX" B). Apparently, the creditor should have been listed as "G.E. Capital Corp." Despite the automatic stay, on December 11, 1989 G.E. Capital referred the unpaid account of $957.15 to the defendant for collection. (D.I. 23 at 3). On the same date, the defendant mailed a computer generated collection letter to the plaintiff which appeared as follows:
(D.I. 1; D.I. 23 at DX A). The defendant is concededly a debt collector within the meaning of § 1692a(6) of the FDCPA. (D.I. 21A at A-7). According to the defendant's business records, on December 15, 1989 the plaintiff contacted the defendant by telephone and notified it that she had filed for bankruptcy. (D.I. 23 at 4). The plaintiff does not deny that she made this phone call. At that point, the defendant ceased to communicate with the plaintiff and no further collection efforts were made. The only contacts between the parties were the original letter of December 11 and the telephone contact initiated by Cassie Hubbard on December 15. Subsequently, on January 3, 1990 Sandra E. Messick, Esq., a UAW attorney who was not involved with Cassie Hubbard's bankruptcy,1 sent the defendant a letter directing the defendant to cease communications with the plaintiff, provide verification of the debt, and provide the original debtor's name and address. (D.I. 21A at A-6). Ms. Messick further advised the defendant that the debt was disputed, but did not mention the bankruptcy. (Id.). On June 4, 1990 the plaintiff filed the present suit against National Bond and Collection Associates, Inc. (D.I. 1).
It is undisputed that prior to December 15, when Cassie Hubbard telephoned the defendant, the defendant did not know that Cassie Hubbard had filed for bankruptcy. It is disputed whether G.E. Capital, the creditor who referred the debt to the defendant, received notice of the bankruptcy.2
By reason of the above facts, Cassie Hubbard claims that the defendant violated the FDCPA in four separate respects and that she is therefore entitled to statutory and actual damages under the statute. The four sections of the FDCPA allegedly violated by the defendant are:
1. § 1692c.
2. (2) The false representation of — (A) the character, amount, or legal status of any debt;
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3. (5) The threat to take any action that cannot legally be taken or that is not intended to be taken.
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4. (10) The use of any false representation or deceptive means to collect or attempt to collect any debt or to obtain information concerning a consumer.
15 U.S.C. §§ 1692c(a)(2), 1692e(2)(A), (5) & (10). The Court will address these claims below.
Whether Cassie Hubbard is entitled to recover under § 1692c(a)(2) of the FDCPA depends upon whether she can establish two facts. First, Ms. Hubbard must prove that prior to National Bond's mailing of the single collection letter, she was represented by an attorney with respect to the debt owed to G.E. Capital. Second, Ms. Hubbard must prove that prior to the defendant's sending of the collection letter, the defendant had "actual knowledge" that Ms. Hubbard was represented by an attorney with respect to the G.E. Capital debt. See Pearce v. Rapid Check Collection, Inc., 738 F.Supp. 334, 338 (D.S.D.1990); Bieber v. Associated Collection Services, Inc., 631 F.Supp. 1410, 1417 (D.Kan.1986); Harvey v. United Adjusters, 509 F.Supp. 1218, 1220-21 (D.Or.1981); FTC Official Staff Commentary § 805(a)(2), 53 Fed.Reg. 50,097 (1988), hereinafter, FTC Commentary. The plaintiff has failed to submit sufficient facts to meet her burden on summary judgment.
The plaintiff has done no more than show that a UAW attorney represented the plaintiff during the filing of her bankruptcy petition. (D.I. 21 at 5). It is undisputed that National Bond was unaware of the plaintiff's bankruptcy, and at the very least, did not have a copy of the bankruptcy petition from which to discover the name of Cassie Hubbard's attorney. The plaintiff's argument is that the defendant should have discovered the bankruptcy and then sought a copy of the petition from which to discover the name of the attorney that represented Ms. Hubbard. This argument appears to suggest that some kind of "constructive knowledge" existed on the part of the defendant, and that "constructive knowledge" is sufficient for § 1692c(a)(2) purposes. The Court rejects this argument. Accord, FTC Commentary ("The creditor's knowledge that the consumer has an attorney is not automatically imputed to the debt collector.") Section 1692c(a)(2) requires "actual knowledge" and the plaintiff has not provided any facts that suggest the defendant actually knew Ms. Hubbard was represented by the UAW Legal Services Plan before the collection letter was sent.
Even if National Bond knew that the UAW had represented Cassie Hubbard during the filing of her bankruptcy, the Court doubts that this previous representation would have satisfied the requirement of § 1692c(a)(2) that the plaintiff be represented with respect to the debt in dispute. Barbara James, Esq. of the UAW assisted Cassie Hubbard in the filing of a bankruptcy petition more than one year before the events giving rise to the present cause of action. The fact that a debtor retained an attorney more than a year previously, for the specific task of filling out a bankruptcy petition, does not suggest that the same attorney has been continuously retained to represent the debtor in all matters with her creditors. The Court's conclusion that Ms. Hubbard's bankruptcy and her FDCPA suit are distinguishable and involve separate legal representations, is supported by the fact that different UAW attorneys represented Cassie Hubbard with respect to each matter. From the evidence provided by the plaintiff, it cannot be established that the UAW was retained by Cassie Hubbard with respect to the G.E. Capital debt, prior to the December 11 communication.
Cassie Hubbard's § 1692e claims arise from essentially one fact: the defendant's attempt to collect a debt that was subject to the bankruptcy court's automatic stay. The Court however, for reasons discussed below, concludes that § 1692e of the...
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