Muir v. Navy Federal Credit Union

• Decision Date: 20 June 2008
• Docket Number: No. 07-7066.,07-7066.
• Citation: 529 F.3d 1100
• Parties: Krishna MUIR, Appellant v. NAVY FEDERAL CREDIT UNION and Patricia L. Dearing, L.L.C., Appellees.
• Court: U.S. Court of Appeals — District of Columbia Circuit

529 F.3d 1100

Krishna MUIR, Appellant v. NAVY FEDERAL CREDIT UNION and Patricia L. Dearing, L.L.C., Appellees.

No. 07-7066.

United States Court of Appeals, District of Columbia Circuit.

Argued February 14, 2008.

Decided June 20, 2008.

Appeal from the United States District Court for the District of Columbia (No. 03cv01193).

C. Sukari Hardnett argued the cause and filed the briefs for appellant.

Justin M. Flint argued the cause for appellee Patricia L. Dearing, L.L.C. With him on the brief was Aaron L. Handleman.

Kirsten E. Keating argued the cause for appellee Navy Federal Credit Union. With her on the brief was F. Joseph Nealon.

Before: ROGERS and GARLAND, Circuit Judges, and SILBERMAN, Senior Circuit Judge.

Opinion for the Court filed by Circuit Judge GARLAND.

GARLAND, Circuit Judge:

Appellant Krishna Muir deposited $29,019.55 into a joint account that he held with his father at the Navy Federal Credit Union. The Credit Union refused to return the funds, using them instead to satisfy a debt owed to it by Muir's father. Muir then sued the Credit Union and a debt collection firm, Patricia L. Dearing, LLC, seeking return of his deposit and additional damages. The district court held the Credit Union liable for tortious conversion in the amount of the deposit but denied Muir's other claims.

Muir now appeals. We affirm the district court's grant of summary judgment for the Credit Union on Muir's breach of fiduciary duty claim, as well as its denial of his request for punitive damages. We reverse the court's dismissal of Muir's claim against the Credit Union for tortious interference with a business expectancy, and its dismissal of his claims against Dearing under the Fair Debt Collection Practices Act. We also reverse the court's summary denial of Muir's claims for interest and lost profits with respect to the tortious conversion.

I

In November 1986, Krishna Muir's father opened a joint share account at the Navy Federal Credit Union with Krishna, who at the time was a minor. Ten years later, Muir's father obtained a consolidation loan of $28,705.47 from the Credit Union, with his joint share account as collateral. He stopped making payments on the loan after a year, at which point the principal balance was $25,125.42 and accrued interest approximately $12,000.

On October 2, 2002, Krishna Muir deposited $29,019.55 into the joint share account. According to his complaint, Muir needed those funds to pursue a business opportunity, and he so advised the Credit Union agent who accepted his deposit. When Muir later contacted the Credit Union to withdraw his funds, however, he learned that the Credit Union had removed $27,022.90 from the account, without notice, in order to satisfy his father's debt.¹ Despite Muir's repeated requests, the Credit Union refused to return the money, and a Credit Union employee informed him that Patricia L. Dearing, LLC, a debt collection firm, was counseling and directing the Credit Union in the matter.

Muir filed a complaint in the United States District Court for the District of Columbia against the Credit Union for tortious conversion, tortious interference with a business expectancy, and breach of fiduciary duty; and against Dearing for tortious conversion, tortious interference with a business expectancy, and violation of the Fair Debt Collection Practices Act (FDCPA), 15 U.S.C. § 1692 et seq. For each of his tort claims, Muir sought return of his deposit, interest, lost profits, and punitive damages. He demanded a jury trial on all issues.

After the Credit Union moved for summary judgment on tortious conversion and breach of fiduciary duty, and Muir filed a cross-motion on the former, the district court granted summary judgment for Muir on his tortious conversion claim. The court noted the Credit Union's argument that, because its Joint Account Agreement provides that all deposits are owned jointly by the account owners, Muir's father was beneficially entitled to the funds Muir deposited and the Credit Union was entitled to set them off to satisfy his father's debt. But the court further noted that the Account Agreement, which was not signed by Muir, also states: "[T]his agreement not valid without signature of member-owner." Muir v. Navy Fed. Credit Union, 2005 WL 486034, at *1 n. 3 (D.D.C. Mar.1, 2005) (quoting Credit Union Ex. B). Because the Agreement was thus "not enforceable against Mr. Muir," the court held that the Credit Union had wrongfully set off his deposit and entered judgment against it in the amount of the set-off. Id. at * 1.

Although the court entered judgment for Muir on his tortious conversion claim, it granted summary judgment for the Credit Union on his claim of breach of fiduciary duty, concluding that there was no fiduciary relationship between the parties. Id. at *2. The Credit Union then moved to dismiss Muir's remaining claim-for tortious interference with a business expectancy-and the district court granted that motion as well, finding that Muir had not alleged sufficient facts regarding the business expectancy and his probability of realizing it. Muir v. Navy Fed. Credit Union, 2005 WL 3276281, at *1 (D.D.C. Aug.22, 2005).

Meanwhile, Dearing, the debt collection firm, moved to dismiss all of Muir's claims against it for lack of standing. Without addressing Muir's tort claims, the district court held that Muir lacked standing to pursue his FDCPA claims. Muir v. Navy Fed. Credit Union, 366 F.Supp.2d 1 (D.D.C. Mar.1, 2005). Although the court found that Muir had suffered an injury when he was deprived of his deposit, it ruled that Muir lacked constitutional standing because the injury could not "be fairly traced to Defendant Dearing's conduct." Id. at 3. The court further held that Muir lacked prudential standing under the FDCPA because he did not fall within the zone of interests the statute protects. Id.

Muir then appealed, and this court remanded the case to the district court for three reasons. Muir v. Navy Fed. Credit Union, 204 Fed.Appx. 896 (D.C.Cir.2006). First, the court observed that there was no final judgment with respect to Muir's tortious conversion claim against the Credit Union because the district court had not considered Muir's requests for additional damages, each of which constituted a distinct claim. Id. at 897. Second, the court noted that the district court had not considered Muir's tort claims against Dearing for conversion and interference with a business expectancy. Id. Finally, the court found that the judgment did not comply with Federal Rule of Civil Procedure 58(a), which requires that each judgment be set forth in a separate document. Id. Accordingly, the court held that it lacked jurisdiction over the appeal and instructed the district court to issue a final judgment.

On remand, the district court dismissed all of Muir's claims against Dearing, holding that Muir lacked standing to pursue his tort claims as well as his statutory claims. Muir v. Navy Fed. Credit Union, 2007 WL 81962, at *1 (D.D.C. Jan.8, 2007). In the same order, the court vacated its earlier judgment against the Credit Union for $27,022.90 and indicated that it would "hold a hearing to establish the damages and fees owed to plaintiff." Id. The court set a hearing date and ordered each party to "submit a proposed schedule of damages" in advance. Id. In response, Muir submitted a schedule setting out the amounts of actual damages, interest, lost profits, and punitive damages that he was seeking. At the hearing, Muir proffered his damages evidence and requested a jury trial on the issue. Following the hearing, the court again entered judgment against the Credit Union for $27,022.90 in actual damages, but it denied Muir's claims for interest, lost profits, and punitive damages. Muir v. Navy Fed. Credit Union, 484 F.Supp.2d 3 (D.D.C. Mar.20, 2007).

Muir now appeals several of the district court's rulings. With respect to Dearing, Muir challenges the court's ruling that he lacked standing to bring his statutory claims under the FDCPA; he does not appeal the court's decision that he lacked standing to bring his tort claims. With respect to the Credit Union, Muir challenges the court's adverse rulings on his claims for breach of fiduciary duty, tortious interference with a business expectancy, and additional damages for the tortious conversion in the form of interest, lost profits, and punitive damages. The Credit Union does not appeal the district court's entry of judgment for Muir on his tortious conversion claim or the award of actual damages.

II

Muir brought claims against Dearing under four sections of the FDCPA. He alleged that Dearing: engaged in conduct that was harassing, oppressive, and abusive, in violation of 15 U.S.C. § 1692d; used false and deceptive means to collect a debt, in violation of § 1692e; used unfair and unconscionable means to collect a debt, in violation of § 1692f; and failed to provide Muir the notice required by § 1692g. Based on the allegations of the complaint alone, the district court dismissed all of Muir's FDCPA claims for lack of both constitutional and prudential standing, pursuant to Federal Rule of Civil Procedure 12(b)(1). Muir, 366 F.Supp.2d at 3. We review a dismissal for lack of standing de novo, Information Handling Servs., Inc. v. Defense Automated Printing Servs., 338 F.3d 1024, 1029 (D.C.Cir.2003).

1. To establish constitutional standing, a plaintiff must show an injury in fact that is fairly traceable to the challenged conduct and that will likely be redressed by a favorable decision on the merits. See, e.g., Lujan v. Defenders of Wildlife, 504 U.S. 555, 560-61, 112 S.Ct. 2130, 119 L.Ed.2d 351 (1992). In "reviewing the standing question, the court must be careful not to decide the questions on the merits for or against the plaintiff, and must therefore assume that on the merits the plaintiffs would be successful in their claims." City of Waukesha v. EPA, 320 F.3d 228, 235 (D.C.Cir.2003); see ...