Situated v. Bureau Of Collection Recovery Inc.

• Decision Date: 06 May 2010
• Docket Number: No. CIV 09-0532 JB/WDS.,CIV 09-0532 JB/WDS.
• Citation: 716 F.Supp.2d 1085
• Parties: Richard LUCERO, On behalf of himself and All others similarly situated, Plaintiff, v. BUREAU OF COLLECTION RECOVERY, INC., Defendant.
• Court: U.S. District Court — District of New Mexico

716 F.Supp.2d 1085

Richard LUCERO, On behalf of himself and All others similarly situated, Plaintiff,

v.BUREAU OF COLLECTION RECOVERY, INC., Defendant.

No. CIV 09-0532 JB/WDS.

United States District Court,D. New Mexico.

May 6, 2010.

Alfred M. Sanchez, Law Offices of Alfred M. Sanchez, John M. Wells, Law Offices of John M. Wells, P.A., Albuquerque, NM, for Plaintiffs.

Erin Langenwalter, Jennifer G. Anderson, Zachary R. Cormier, Modrall Sperling Roehl Harris & Sisk, P.A., Albuquerque, NM, for Defendant.

AMENDED MEMORANDUM OPINION AND ORDER ¹

JAMES O. BROWNING, District Judge.

THIS MATTER comes before the Court on Defendant Bureau of Collection Recovery Inc.'s Motion to Dismiss and Memorandum Brief in Support of its Motion to Dismiss Or, Alternatively, Motion for Summary Judgment, filed December 21, 2009 (Doc. 34). The Court held a hearing on May 7, 2010. The primary issues are: (i) whether the Court has subject-matter jurisdiction over the case, given that Defendant Bureau of Collection Recovery, Inc. (“BCR”) made an offer of judgment under rule 68 of the Federal Rules of Civil Procedure for more than Plaintiff Richard Lucero's maximum possible recovery before a class was certified; (ii) if the Court does not have subject matter-jurisdiction, whether the Court should enter judgment against BCR in accordance with its offer of judgment and dismiss the Complaint; (iii) if the Court has subject-matter jurisdiction, whether Lucero has stated a claim for which relief may be granted for BCR's alleged violations of the Collection Agency Act, NMSA 1978, §§ 61-18A-1 through 61-18A-32; and (iv) if the Court has subject-matter jurisdiction, whether Lucero has demonstrated that there are genuine issues of material fact for trial as to whether BCR substantially complied with the requirements of the Collection Agency Act and the Fair Debt Collection Practices Act, 15 U.S.C. §§ 1692a through 1692p. Because BCR has offered to satisfy Lucero's entire claim, the Court finds that Lucero no longer has a dispute over which to litigate and no longer has a remaining stake in the present action, and therefore the Court will grant BCR's motion to dismiss for lack of subject-matter jurisdiction pursuant to rule 12(b)(1). Because the Court does not have subject-matter jurisdiction, the Court will not reach the merits of BCR's motion to dismiss pursuant to rule 12(b)(6) or, in the alternative, its motion for summary judgment. Because Lucero rejected BCR's offer of judgment, the Court will not compel Lucero to accept the judgment and will not enter a judgment against BCR.

FACTUAL BACKGROUND

BCR is in the business of debt collection and is considered a “debt collector” under 15 U.S.C. § 1692(6). Class Action Complaint for Damages for Violation of the Fair Debt Collection Practices Act and the New Mexico Collection Agency Regulatory Act ¶ 4, at 2 (filed in state court on April 30, 2009), filed June 1, 2009 (Doc. 1-1); Defendant's Answer to Plaintiff's Complaint ¶ 4, at 1-2, filed June 2, 2009 (Doc. 2). BCR's principal place of business and state of incorporation is Minnesota. BCR conducts business in New Mexico, and is registered with the New Mexico Regulation and Licensing Department as a collection agency. See Complaint ¶ 2, at 1; Answer ¶ 2, at 1. Lucero incurred a financial obligation to Verizon Wireless, Inc. and received two collection letters from BCR. See Complaint Exhibits A and B. BCR contends that, at all times relevant to Lucero's Complaint, BCR was a licensed collection agency in the state of New Mexico. See Complaint ¶ 11, at 3; Complaint Exhibit C, Licensee Details Page for BCR from New Mexico Regulation and Licensing Department website; Affidavit of Bobbi J. Dunn ¶ 6, at 2 (executed December 4, 2009), filed December 21, 2009 (Doc. 34-2); BCR's New Mexico Collection Agency License (executed August 6, 2009), filed December 21, 2009 (Doc. 34-3). Since 1999, Bobbi Dunn has served as BCR's licensed manager in New Mexico. See Dunn Aff. ¶ 4, at 1; New Mexico Collection Agency Manager's License (executed August 6, 2009), filed December 21, 2009 (Doc. 34-4).

Lucero disputes that, at all times relevant, BCR established and maintained “a full time bona fide collection agency” in the state of New Mexico, as NMSA 1978 § 61-18A-14 requires, and that Dunn maintained such “bona fide office” for BCR's collection activities from her home office. Lucero also disputes that Dunn was “actively in charge of the collection agency for which the license was sought,” as NMSA 1978 § 61-18A-8 requires.

PROCEDURAL BACKGROUND

On April 30, 2009, Lucero, on behalf of himself and others similarly situated, filed a Class Action Complaint for Damages for Violation of the Fair Debt Collection Practices Act and the New Mexico Collection Agency Regulatory Act in the Second Judicial District Court, County of Bernalillo, State of New Mexico. The Complaint alleges that BCR is in violation of the requirements for a foreign collection agency, set forth in the New Mexico Collection Agency Act, NMSA 1978, §§ 61-18A-1 through 61-18A-32 (“Collection Agency Act”) and in violation of the Fair Debt Collection Practices Act, 15 U.S.C. §§ 1692a through 1692p (“FDCPA”). Lucero contends that BCR engaged in “false, deceptive or misleading” collection activities by misrepresenting that it was authorized to collect debts from Lucero and from the members of the Class in violation of 15 U.S.C. § 1692e.

On June 1, 2009, BCR removed the case to federal court. See Defendant's Notice of Removal (Doc. 1). On June 2, 2009, BCR made an offer of judgment to Lucero pursuant to rule 68. See Certificate of Service, filed June 2, 2009 (Doc. 3). The offer of judgment offered compensation of $3001.00 plus payment of Lucero's reasonable costs and attorneys' fees that had accrued up until that date. See Defendant Bureau of Collection Recovery Inc.'s Reply in Support of Its Motion to Dismiss, or Alternatively, Motion for Summary Judgment at 8, filed March 26, 2010 (Doc. 53). On August 13, 2009, the parties filed a Joint Status Report and Provisional Discovery Plan, in which the parties stipulated and agreed that discovery would be divided into two phases: (i) discovery only regarding class issues and certification, to end February 13, 2010; and (ii) discovery regarding claims and defenses of the parties. See Joint Status Report and Provisional Discovery Plan at 1-2, filed August 13, 2009 (Doc. 10). The Court adopted the parties' plan and the provisional discovery plan deadlines in its scheduling order. See Scheduling Order Setting Case Deadlines, filed September 17, 2009 (Doc. 16); Order Adopting Joint Status Report and Provisional Discovery Plan, filed September 17, 2009 (Doc. 17). On November 30, 2009, Lucero made an offer of settlement to BCR, and BCR made a counter-offer of settlement to Lucero on December 2, 2009 for a monetary amount greater than the maximum statutory recoverable amount under the FDCPA. See Affidavit of Jennifer Anderson ¶ 3, at 1 (executed December 18, 2009), filed December 18, 2009 (Doc. 33). The offer included that (i) the parties would enter into a mutual release; (ii) Lucero would dismiss his claims against BCR and all class claims and allegations; (iii) the parties would agree to a confidentiality provision; (iv) the parties would agree that BCR admitted no liability; and (v) BCR would pay Lucero $3001.00. See Letter from Jennifer Anderson to Alfred Sanchez (dated December 2, 2009), filed March 12, 2010 (Doc. 50-5). BCR represents that the compensation offer in its offer of settlement was identical to its earlier compensation offer in its June 2, 2009 offer of judgment. See Reply at 8.

BCR argues that Lucero's claims have been rendered moot by his rejection of BCR's settlement offer and offer of judgment. In an interrogatory requesting Lucero to itemize each expense and each element of damage that he alleges he is entitled to recover or claim from BCR, Lucero responded: “Statutory damages as to be determined by the Judge.” Lucero's Answers to Bureau of Collection Recovery, Inc.'s First Set of Interrogatories and Responses to Requests for Production of Documents, Interrogatory Answer No. 4, at 2, filed December 21, 2009 (Doc. 34-10). Lucero also indicated that he is not making a claim for emotional damages. See id., Interrogatory Answer No. 8, at 3. Because the maximum statutory amount provided under FDCPA is $1,000.00, plus costs and reasonable attorneys' fees, see 15 U.S.C. § 1692k(a), (c), and because BCR offered $3,001.00 plus costs and attorneys' fees, it contends that Lucero no longer has a cognizable legal interest in the outcome of the case, as he was offered more than what he can recover, see Motion at 15. BCR argues that the Court should follow the holding of the United States Court of Appeals for the Tenth Circuit, which has held that a class action must be dismissed as moot when the named plaintiff's claims have been satisfied before the certification of the class. See Motion at 15 (citing Reed v. Heckler, 756 F.2d 779, 785 (10th Cir.1985)). Thus, BCR argues the Court should dismiss the case pursuant to rule 12(b)(1).

In response, Lucero argues that the Court cannot rely on BCR's offer of settlement as a basis for dismissal of his claims or the class action because it is outside the scope of rule 68. Lucero argues that the Court should adopt the United States Court of Appeals for the Third Circuit's approach in Weiss v. Regal Collections, 385 F.3d 337 (3d Cir.2004), which found that mooting a class representative's claim does not moot the entire action because the class acquires a legal status separate from the interest asserted by the plaintiff. See id. at 340. The Third Circuit applied the relation-back doctrine to treat the class-certification motion as filed when the complaint was filed, and thus found an offer of judgment before the class-certification motion was made did not moot the plaintiff's claim. See id. at 348. Here,...