Jenkins v. General Collection Co.

• Decision Date: 15 February 2008
• Docket Number: No. 8:06CV743.,8:06CV743.
• Citation: 538 F.Supp.2d 1165
• Parties: Cynthia L. JENKINS, on behalf of herself and all others similarly situated, Ada Howard, and Sandra Logue, Plaintiffs, v. GENERAL COLLECTION CO., Mark D. Stelk and Richard E. Gee, Defendants.
• Court: U.S. District Court — District of Nebraska

538 F.Supp.2d 1165

Cynthia L. JENKINS, on behalf of herself and all others similarly situated, Ada Howard, and Sandra Logue, Plaintiffs, v. GENERAL COLLECTION CO., Mark D. Stelk and Richard E. Gee, Defendants.

No. 8:06CV743.

United States District Court, D. Nebraska.

February 15, 2008.

COPYRIGHT MATERIAL OMITTED

William L. Reinbrecht, Pamela A. Car, Car & Reinbrecht, P.C., LLO, Omaha, NE, O. Randolph Bragg, Craig Shapiro, Horwitz, Horwitz & Associates, Chicago, IL, Charles M. Delbaum, National Consumer Law Center, Boston, MA, for Plaintiffs.

Michael A. Klutho, Christopher Morris, Bassford Remele, Minneapolis, MN, for Defendants.

MEMORANDUM AND ORDER ON MOTION FOR SUMMARY JUDGMENT

LAURIE SMITH CAMP, District Judge.

This Matter is before the Court on the Motion for Summary Judgment of Defendants General Collection Co. ("GCC") and Mark D. Stelk ("Stelk") (Filing No 103), in which Defendant Richard E. Gee ("Gee") has joined (Filing No. 119). For the reasons that follow, the Motions will be denied.

FACTUAL AND PROCEDURAL HISTORY

The following facts, properly presented by the Defendants with pinpoint citations to the evidentiary record (Defendants' Brief, Filing No. 104, pp. 3-8), are not disputed by the Plaintiffs (Plaintiffs' Brief, Filing No. 112, pp. 13-15).

Plaintiff Cynthia Jenkins ("Jenkins") obtained a credit card account with First USA, and used the credit card to purchase merchandise. She became delinquent in her payments on the First USA account and, ultimately, the account was "charged off" by the creditor. The account was assigned and sold to a debt purchaser known as Unifund, who in turn assigned and sold the account to Collins Financial, who in turn assigned and sold the account to GCC. Through its counsel, Gee, GCC commenced suit against Jenkins in Douglas County, Nebraska, on or about November 1, 2004, seeking $5,795.54¹ plus prejudgment interest at a rate of six percent. In response, Jenkins wrote a letter to the Douglas County Clerk of Court claiming that her credit card account was closed as of February 1, 2001; that the account had become "seriously delinquent" as of September 2000; and that the statute of limitations had expired. Jenkins later obtained lawyers to defend the collection action, and they filed an affidavit signed by Jenkins alleging that she did not make any payments on the account with First USA "since before September of 2000." The Douglas County Court granted Jenkins a summary judgment and dismissed the action. GCC has obtained documents, which Jenkins cannot rebut, demonstrating that Jenkins in fact made six payments on the subject debt in 2001-02, with one check dated February 3, 2002. Accordingly, GCC has moved to reopen the county court collection action.

Plaintiff Sandra Logue ("Logue") obtained a credit card from BankFirst; used the card to make purchases; and failed to make payments on the account.² The account was assigned and sold by BankFirst's successor to Shekinah, Inc., who in turn assigned and sold the account to GCC. GCC, again through counsel, Gee, filed suit against Logue in Douglas County, Nebraska, on or about April 3, 2006, seeking $1,418.99 plus interest at the rate of 12 percent. The Douglas County Court entered a judgment against Logue; Logue did not appeal from the judgment; and Logue has made some payment toward the judgment.

Plaintiff Ada Howard obtained a Providian Visa Card and a First Consumer Card and failed to make payments on those accounts when due. The Providian account was assigned and sold to Arrow Financial Services, L.L.C., who in turn assigned and sold the account to Collins Financial Services, Inc., who in turn assigned and sold the account to GCC. The First Consumers account was assigned and sold to MRC Receivables Corporation, who in turn assigned and sold the account to Collins Financial Services, Inc., who in turn assigned the account to GCC. GCC, again through counsel, Gee, brought suit against Howard in Douglas County, Nebraska, on or about October 31, 2005, and obtained a judgment³ against Howard for amounts due on both accounts, including prejudgment interest at a rate of 12 percent. Howard did not appeal from the judgment and has made some payment toward the judgment.

On December 5, 2006, the Plaintiffs brought this action against GCC, GCC's President, Stelk; and Gee, alleging violations of the Fair Debt Collection Practices Act, 15 U.S.C. § 1692 et seq. ("FDCPA"), and the Nebraska Consumer Protection Act, Neb.Rev.Stat. § 59-1601 et seq. ("NCPA"). In summary, the Plaintiffs have alleged that the Defendants engaged in routine practices of filing lawsuits and attempting to collect judgments on time-barred debts, and misrepresenting the nature and character of the debts by pleading that the consumers are indebted for "materials and services" when attempting to collect unauthorized charges.⁴

The Plaintiffs seek actual damages, injunctive relief, declaratory judgment, statutory damages and other relief on their own behalf, and also ask this Court to certify two classes and two subclasses of consumers that they seek to represent: (1)(a) Nebraska residents who have been sued by GCC on time-barred consumer debts one year before the filing of the Complaint up to the date of class certification; (1)(b) Nebraska residents who have been sued by GCC on time-barred consumer debts four years before the filing of the Complaint up to the date of the class certification; (2)(a) Nebraska residents who have been sued by GCC on consumer debts including amounts in excess of the original principal debt, e.g., attorney fees, late fees, finance charges, or prejudgment interest, one year before the filing of the Complaint through the date of class certification; and (2)(b) Nebraska residents who have been sued by GCC on consumer debt including amounts in excess of the original principal debt, e.g., attorney fees, late fees, finance charges, or prejudgment interest, four years before the filing of the Complaint through the date of class certification. The Plaintiffs' request for class certification was denied without prejudice to reassertion following the Court's ruling on the pending Motion for Summary Judgment. (See Filing Nos. 67, 109, 111).

Defendants contend that summary judgment should be granted in their favor because (1) Logue's and Howard's claims are a collateral attack on state court judgments and barred by the doctrine of res judicata, (2) Logue's and Howard's claims are barred by the Rooker-Feldman Doctrine, (3) statements made by the Defendants in the collection actions are protected by the litigation privilege and the Defendants are absolutely immune from suit, (4) the collection actions were based on written contracts with five-year statutes of limitations and were not time-barred, (5) GCC was entitled to seek prejudgment interest and fees in the collection actions under Nebraska law, and (6) the NCPA does not govern the content of state court pleadings, such as collection actions.

STANDARD OF REVIEW

Summary judgment is proper if the evidence, viewed in the light most favorable to the nonmoving party, demonstrates no genuine issue of material fact exists and the moving party is entitled to judgment as a matter of law. Fed.R.Civ.P. 56(c); Cordry v. Vanderbilt Mortg. & Fin., Inc., 445 F.3d 1106, 1109 (8th Cir.2006) (quoting Bockelman v. MCI Worldcom, Inc., 403 F.3d 528, 531 (8th Cir.2005)). The proponent of a motion for summary judgment "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) (quoting Fed. R.Civ.P. 56(c)). The proponent need not, however, negate the opponent's claims or defenses. Id. at 324-25, 106 S.Ct. 2548.

In response to the proponent's showing, the opponent's burden is to "come forward with `specific facts showing that there is a genuine issue for trial.'" Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986) (quoting Fed.R.Civ.P. 56(e)). A "genuine" issue of material fact is more than "some metaphysical doubt as to the material facts." Id. at 586, 106 S.Ct. 1348.

"[T]here is no issue for trial unless there is sufficient evidence favoring the nonmoving party for a jury to return a verdict for that party." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 249, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). "If the evidence is merely colorable ... or is not significantly probative ... summary judgment may be granted." Id. at 249-50, 106 S.Ct. 2505 (citations omitted).

Summary judgment is "properly regarded not as a disfavored procedural shortcut, but rather as an integral part of the Federal Rules as a whole, which are designed `to secure the just, speedy and inexpensive determination of every action.'" Celotex Corp., 477 U.S. at 327, 106 S.Ct. 2548.

THE FAIR DEBT COLLECTION PRACTICES ACT ("FDCPA") AND THE NEBRASKA CONSUMER PROTECTION ACT ("NCPA")

"The Fair Debt Collection Practice Act (FDCPA) makes it unlawful for debt collectors to use `any false, deceptive, or misleading representation or means in connection with the collection of any debt.'" Freyermuth v. Credit Bureau Services, Inc., 248 F.3d 767, 770 (8th Cir.2001), quoting 15 U.S.C. § 1692e. "The Act prohibits a debt collector from collecting any service charge `unless such amount is expressly authorized by the agreement creating the debt or permitted by law'" Id., quoting 15 U.S.C. § 1692f(1). "In addition, it is a violation of the Act to threaten to take `any action that cannot legally be taken.'" Id., quoting 15 U.S.C. § 1692e(5). It is also a violation of the FDCPA for a debt collector to misrepresent "the character, amount, or legal status of any...