Ruiz v. Equifax Info. Servs.

• Docket Number: CIVIL H-21-3851
• Decision Date: 31 July 2023
• Parties: KARLA RUIZ and ROLANDO GONZALEZ, Plaintiffs, v. EQUIFAX INFORMATION SERVICES, LLC, TRANS UNION, LLC, EXPERIAN INFORMATION SOLUTIONS, INC., and PROCOLLECT, INC., Defendants.
• Court: U.S. District Court — Southern District of Texas

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KARLA RUIZ and ROLANDO GONZALEZ, Plaintiffs, v. EQUIFAX INFORMATION SERVICES, LLC, TRANS UNION, LLC, EXPERIAN INFORMATION SOLUTIONS, INC., and PROCOLLECT, INC., Defendants.

CIVIL No. H-21-3851

United States District Court, S.D. Texas, Houston Division

July 31, 2023

MEMORANDUM AND OPINION

LEE H ROSENTHAL, UNITED STATES DISTRICT JUDGE

Karla Ruiz and Rolando Gonzalez sued three credit reporting agencies and a debt collector for violations of the Fair Credit Reporting Act, 15 U.S.C. § 1681 et seq. and the Fair Debt Collection Practices Act, 15 U.S.C §§ 1692-1692p. The plaintiffs settled their claims against the credit reporting agencies, and those defendants have been dismissed. (Docket Entry Nos. 61, 62). The plaintiffs and the debt collector, ProCollect, have cross-moved for summary judgment on the remaining claims. (Docket Entry Nos. 67, 70). Based on the parties' briefs, the record, and the relevant law, the court grants the motions in part and denies them in part. The reasons are set out below.

I. Background

This case involves a purported debt arising from two lease agreements for a trailer home and its lot in Lake Charles, Louisiana. Each lease ran from May 2019 through April 30, 2020. The Home Lease provided:

Lessee shall have the right to elect to extend the lease term for an additional 12 month term at the current rental rate. Lessee may exercise the right to extend the term of the Lease by providing Lessor with written notice of the election at least 30 days prior to the termination of the lease term. Should Lessee not provide Lessor with such notice, the Lease shall be automatically extended on a month-to-month basis; which may be terminated by either party upon 30 days written notice to the other party.

(Docket Entry No. 67-1 ¶ 2). The Lot Lease contained nearly identical language:

Lessee shall have the right to elect to extend the lease term for an additional 6 month term at the current rental rate. Lessee may exercise the right to extend the term of the Lease by providing Lessor with written notice of the election at least 30 days prior to the termination of the lease term. Should Lessee not provide Lessor with such notice, the Lease shall be automatically extended on a month-to-month basis; which may be terminated by either party upon 30 days written notice to the other party.

(Docket Entry No. 67-2 ¶ 2).

In March 2020, the plaintiffs notified the landlord's property manager that they would vacate the property at the end of the lease term, April 30, 2020. (Docket Entry No. 67-3). Rolando Gonzalez testified that he personally gave the termination notice to an employee at the management office, Diana Boerama. (Docket Entry No. 67-4 at 30:19-24).

A few days later, the property manager emailed the plaintiffs and other tenants that the management offices would be closed because of the Covid-19 pandemic. (Docket Entry No. 675 at 1).

Gonzalez testified that the plaintiffs called the property manager and asked how to return the house key while the offices were closed. The plaintiffs were told to put the key in the office drop box in an envelope labeled with their names and unit numbers. (Docket Entry No. 67-4 at 165:12-166:4). Gonzalez testified that the plaintiffs rented a moving truck, moved out, and returned the keys on April 23, 2020. (Docket Entry No. 67-4 at 24:13-25, 166:12-16; see also Docket Entry Nos. 67-7 (a copy of the U-Haul equipment contract with a “rental out date” of April 22, 2020), 67-6 (a screenshot showing storage unit rentals made by Ruiz with move-in dates of April 21, 2020)).

The landlord's files show a move-out date of May 31, 2020. (Docket Entry No. 71 at App. 34-36). The landlord charged rent and related charges for both May and June based on a holdover tenancy. These charges resulted in total purported indebtedness of $2,072.80. (See Docket Entry No. 71 at App. 38, 41, 45).

In July 2020, the property manager engaged ProCollect to collect the plaintiffs' debt. The property manager provided ProCollect with the home lease, the lot lease, and the general ledgers for both leases.

In August, Karla Ruiz, through counsel, sent a letter to Trans Union and Experian disputing the debt reported by ProCollect. In September, Gonzalez sent a letter to all three credit reporting agencies disputing the debt. The plaintiffs' letters stated that they timely moved out of the home. The plaintiffs attached the lease termination notice to each letter.

In October 2020, Gonzalez contacted ProCollect to dispute the amount of the debt. ProCollect noted that the amount was disputed and informed the credit reporting agencies of the dispute at the beginning of the following month, when ProCollect customarily provided information to credit reporting agencies.

In November, Gonzalez emailed the leases and lease termination notice to ProCollect to show that the plaintiffs did not owe outstanding unpaid debt. ProCollect responded by sending the ledgers to the plaintiffs and requesting again the $2,072.80 amount.

II. The Rule 56 Legal Standard

“Summary judgment is appropriate where ‘the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.'” Springboards to Educ., Inc. v. Pharr-San Juan-Alamo Indep. Sch. Dist., 33 F.4th 747, 749 (5th Cir. 2022) (quoting FED. R. CIV. P. 56(A)). “A FACT IS MATERIAL IF IT MIGHT AFFECT THE OUTCOME OF THE SUIT AND A FACTUAL DISPUTE IS GENUINE IF THE EVIDENCE IS SUCH THAT A REASONABLE JURY COULD RETURN A verdict for the nonmoving party.” Thompson v. Microsoft Corp., 2 F.4th 460, 467 (5th Cir. 2021) (quoting reference omitted). The moving party “always bears the initial responsibility of informing the district court of the basis for its motion[] and identifying” the record evidence “which it believes demonstrate[s] the absence of a genuine issue of material fact.” Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986).

“When ‘the non-movant bears the burden of proof at trial,' a party moving for summary judgment ‘may merely point to the absence of evidence and thereby shift to the non-movant the burden of demonstrating by competent summary judgment proof that there is [a dispute] of material fact warranting trial.” MDK S.R.L. v. Proplant Inc., 25 F.4th 360, 368 (5th Cir. 2022) (alteration in original) (quoting reference omitted). “However[,] the movant ‘need not negate the elements of the nonmovant's case.'” Terral River Serv., Inc. v. SCF Marine Inc., 20 F.4th 1015, 1018 (5th Cir. 2021) (quoting Little v. Liquid Air Corp., 37 F.3d 1069, 1075 (5th Cir. 1994) (en banc) (per curiam)). “If ‘reasonable minds could differ' on ‘the import of the evidence,' a court must deny the motion.” Sanchez v. Young County, 956 F.3d 785, 791 (5th Cir. 2020) (quoting Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 250-51 (1986)).

After the movant meets its Rule 56(c) burden, “the non-movant must come forward with ‘specific facts' showing a genuine factual issue for trial.” Houston v. Tex. Dep't of Agric., 17 F.4th 576, 581 (5th Cir. 2021) (quoting references omitted). The nonmovant “must identify specific evidence in the record and articulate the ‘precise manner' in which the evidence” aids their case. Shah v. VHS San Antonio Partners, L.L.C., 985 F.3d 450, 453 (5th Cir. 2021) (quoting reference omitted). Of course, all reasonable inferences are drawn in the nonmovant's favor. Loftin v. City of Prentiss, 33 F.4th 774, 779 (5th Cir. 2022). But a nonmovant “cannot defeat summary judgment with ‘conclusory allegations, unsubstantiated assertions, or only a scintilla of evidence.'” Jones v. Gulf Coast Rest. Grp., Inc., 8 F.4th 363, 369 (5th Cir. 2021) (quoting reference omitted).

III. Analysis

1. The Fair Debt Collection Practices Act

The Fair Debt Collection Practices Act forbids debt collectors from using “any false, deceptive, or misleading representation or means in connection with the collection of any debt.” 15 U.S.C. § 1692e. Specifically, the Act proscribes:

(2) The false representation of-

(A) the character, amount, or legal status of any debt; or

(B) any services rendered or compensation which may be lawfully received by any debt collector for the collection of a debt.

...

(8) Communicating or threatening to communicate to any person credit information which is known or which should be known to be false, including the failure to communicate that a disputed debt is disputed.

Id.

In general, a plaintiff does not need to show intentional or negligent conduct on the part of the debt collector. See, e.g., Douglas v. Select Portfolio Servicing, Inc., No. CIV.A. 4:14-1329, 2015 WL 1064623, at *4 (S.D. Tex. Mar. 11, 2015) (“To state a claim under the FDCPA, Plaintiff must show (1) that he was the object of collection activity arising from a consumer debt; (2) that Defendant is a debt collector as defined by the FDCPA; and (3) that Defendant engaged in an act or omission prohibited by the FDCPA.”). Some courts have described the FDCPA as a “strict liability” statute. Manuel v. Merchants & Prof'l Credit Bureau, Inc., 402 F.Supp.3d 361, 368 (W.D. Tex. 2019) (collecting cases), aff'd, 956 F.3d 822 (5th Cir. 2020). The court evaluates the debt collector's conduct from the perspective of an “unsophisticated or least sophisticated consumer.” McMurray v. ProCollect, Inc., 687 F.3d 665, 669 (5th Cir. 2012) (quoting Goswami v. Am. Collections Enter., 377 F.3d 488, 495 (5th Cir. 2004)).

The plaintiffs argue that the termination notice given to the landlord “prevented the lease from continuing on a month to month basis.” (Docket Entry No. 67 at 16). Had the plaintiffs not moved out by the end of April, they would have been considered “tenants at sufferance” under Texas law. (Id. at 17). In such a tenancy lease...