Thompson v. Midland Funding, LLC

• Decision Date: 25 March 2019
• Docket Number: CIVIL ACTION NO. 13-96-HRW-CJS
• Citation: 375 F.Supp.3d 774
• Parties: Quentin J. THOMPSON, Plaintiff v. MIDLAND FUNDING, LLC, Defendant
• Court: U.S. District Court — Eastern District of Kentucky

375 F.Supp.3d 774

Quentin J. THOMPSON, Plaintiff

v.MIDLAND FUNDING, LLC, Defendant

CIVIL ACTION NO. 13-96-HRW-CJS

United States District Court, E.D. Kentucky, Northern Division. at Ashland.

Signed March 25, 2019

James Hays Lawson, Lawson at Law, PLLC, James R. McKenzie, James R. McKenzie Attorney, PLLC, Louisville, KY, for Plaintiff.

Barry Goheen, John Anthony Love, Keasha Ann Broussard, King & Spaulding, Atlanta, GA, Chase Tristian Espy, Jason B. Tompkins, Balch & Bingham LLP, Birmingham, AL, Gregory L. Monge, Leigh Gross Latherow, VanAntwerp Attorneys, LLP, Ashland, KY, John M. Williams, Williams, Kilpatrick & True, PLLC, Lexington, KY, for Defendant.

MEMORANDUM OPINION AND ORDER

Henry R. Wilhoit, Jr., United States District Judge

This matter is before the Court on Defendant Midland Funding, LLC's ("Midland") Motion for Summary Judgment [Docket No. 69] and Plaintiff Quentin Thompson's Cross Motion for Summary Judgment [Docket No. 71].¹ Thompson claims that Midland violated two provisions of the Fair Debt Collection Practices Act ("FDCPA"), 15 U.S.C. §§ 1692f(1) and 1692e(5), by suing him in state court to collect credit card debt after the statute of limitations had lapsed under Kentucky law. [See Docket No. 59]. All briefing is complete, and both Motions for Summary Judgment are ripe for adjudication. For the reasons set forth herein, Midland's Motion for Summary Judgment will be denied and Thompson's Motion for Summary Judgment will be granted.

I. PROCEDURAL HISTORY

In Thompson's First Amended Class Action Complaint filed on June 6, 2017, he asserts that Midland violated § 1692f(1) of the FDCPA "by bringing suit and/or sending a dunning communications on a claim that is barred by the applicable statute of limitations" and that Midland violated 15 U.S.C. § 1692e(5) based on the nearly identical conduct of "filing suit on a debt and/or sending a dunning letter on a claim that is barred by the applicable statute of limitations, or threatening to take legal action on a debt that is barred by the applicable statute of limitations." [Docket No. 59 at ¶ 45(a)-(b) ]. The First Amended Class Action Complaint also alleges generally that "Midland Funding, LLC violated multiple sections of the FDCPA by filing suit and sending dunning letters on debt on which it had no documents that supported its claims." [Id. at ¶ 45(c) ].²

Midland filed a Motion for Summary Judgment on April 2, 2018. [Docket No. 69]. Thompson filed a combined Response and Cross Motion for Summary Judgment as to Defendant's Liability on the Merits on April 25, 2018. [Docket No. 71]. Midland filed a combined Reply in Support of its Motion for Summary Judgment and Response to Plaintiff's Cross Motion for Summary Judgment on May 21, 2018. [Docket No. 78]. Thompson filed a Reply in Support of his Cross Motion on May 31, 2018. [Docket No. 83]. Finally, Midland filed a Motion for Leave to File Sur-Reply on June 14, 2018 [Docket No. 85] to which Thompson filed objections [Docket No. 86].³ Thompson filed his Complaint individually and as a class action on behalf of all others similarly situated; however, Thompson has not yet renewed his motion for class certification following the Court's March 31, 2015 Order denying Plaintiff's Motion for Class Certification without prejudice. [Docket No. 38; see also Docket No. 58]. The Sixth Circuit has consistently held that a district court may consider motions for summary judgment prior to class certification when doing so may prevent needless litigation. Miami Univ. Wrestling Club v. Miami Univ. , 302 F.3d 608, 616 (6th Cir. 2002) (citing Sprague v. GMC , 133 F.3d 388, 397 (6th Cir. 1998) ); see also Jibson v. Mich. Educ. Ass'n-NEA , 30 F.3d 723, 734 (6th Cir. 1994) (citing Marx v. Centran Corp. , 747 F.2d 1536, 1552 (6th Cir.), cert denied , 471 U.S. 1125, 105 S.Ct. 2656, 86 L.Ed.2d 273 (1984) ).

As an initial matter, Midland suggests that Thompson's Cross Motion for Summary Judgment should be denied as untimely. [See Docket No. 78 at 15 n.4]. Midland correctly points out that the deadline for dispositive motions was extended to April 2, 2018 [Docket No. 68], on which date Midland filed its Motion for Summary Judgment [Docket No. 69]. Thompson did not file his Cross Motion for Summary Judgment until April 25, 2018, in conjunction with Plaintiff's Response to Defendant's Motion for Summary Judgment. [Docket No. 71]. Although Thompson's Motion for Summary Judgment was not filed by the dispositive motions deadline, the Court will nevertheless consider the motion, because there is no evidence Thompson acted in bad faith or that Midland was prejudiced by the delay. See Great Am. Ins. Co. v. United States , 552 F.Supp.2d 703, 706 (S.D. Ohio 2008) ; Jones v. L & G Trucking, LLC , No. 15-40-DLB-HAI, 2017 WL 1173937, at *2 (E.D. Ky. Mar. 29, 2017). The arguments raised in Thompson's Cross Motion overlap significantly with the substance of Thompson's Response to Midland's Motion for Summary Judgment. In addition, an Agreed Order granted Midland an extension of time in which to file its consolidated Reply and Response to Plaintiff's Cross Motion. [Docket No. 77].

II. FACTUAL BACKGROUND

The relevant facts are undisputed. Prior to 2002, Thompson obtained a credit card from Spiegel Inc., operated through Spiegel's wholly-owned subsidiary, First Consumers National Bank ("FCNB"). [Docket No. 59 at 2]. The credit card could only be used at Spiegel's Newport News stores and websites. [Id. ]. The last payment made on the account was made on June 30, 2002. [Docket No. 71 at 5]. A debt was incurred on the account, which FNCB "charged off" on or around February 9, 2003. [Id. at 5-6]. Defendant Midland then purchased the debt from Spiegel on or around December 4, 2007. [Id. at 6]. Thereafter, Midland Credit Management ("MCM") serviced Plaintiff's account for Midland. [Docket No. 69 at 9].⁴

Between January 2008 and December 2011, MCM sent nine letters to Thompson, attempting to collect the debt. [Docket No. 71 at 6]. On or around March 11, 2012, MCM sent the account to the law firm Morgan & Pottinger, P.S.C. for review and consideration of a potential lawsuit. [Id. ; Docket No. 69 at 11]. Midland filed a collection action in the Lawrence County, Kentucky District Court on August 7, 2012. [Docket No. 71 at 6].⁵ Thompson moved for judgment on the pleadings, arguing that the lawsuit was time-barred under Kentucky's five-year statute of limitations for contracts not in writing pursuant to Kentucky Revised Statute ("KRS") § 413.90(2). [Id. ]. At some point in the litigation, Midland moved for voluntary dismissal without prejudice. [R. 69 at 106]. The Lawrence District Court granted Thompson's motion for judgment on the pleadings and dismissed the case with prejudice on May 21, 2013. [Id. ; Docket No. 69 at 112].

III. ANALYSIS

A. Standard of Review

Summary judgment is appropriate when "the movant shows that there is no dispute as to any material fact and the movant is entitled to judgment as a matter of law." Fed. R. Civ. P. 56(1). A court must look to the substantive law to identify which facts are material. Anderson v. Liberty Lobby, Inc. , 477 U.S. 242, 248, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). When evaluating cross motions for summary judgment, courts should "evaluate each motion on its own merits and view all facts and inferences in the light more favorable to the nonmoving party." Bakery & Confectionery Union & Indus. Int'l Health Benefits & Pension Funds v. New Bakery Co. of Ohio , 133 F.3d 955, 958 (6th Cir. 1998) (quoting Wiley v. United States , 20 F.3d 222, 224 (6th Cir. 1994) ). Summary judgment is appropriate if the moving party demonstrates there is "no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." Fed. R. Civ. P. 56(a). While the initial burden of showing there is no genuine issue of material fact is on the moving party, once the moving party has met its burden, the opposing party must demonstrate that there is sufficient evidence on which the jury could find for the nonmoving party. Dominguez v. Corr. Med. Servs. , 555 F.3d 543, 549 (6th Cir. 2009). Summary judgment should be granted unless a court finds "there is sufficient evidence favoring the nonmoving party for a jury to return a verdict for that party." Brown v. Chapman , 814 F.3d 447, 464 (6th Cir. 2016). Based on the undisputed facts cited above and the fact that Midland does not dispute the state court's finding that its collections action against Thompson was time-barred, the Court finds no material facts in dispute and rules on the motions for summary judgment as a matter of law. [Docket No. 69 at 7; Id. n.3 ].

B. The FDCPA

Congress passed the FDCPA "to eliminate abusive debt collection practices by debt collectors, to insure that those debt collectors who refrain from using abusive debt collection practices are not competitively disadvantaged, and to promote consistent State action to protect consumers against debt collection abuses." 15 U.S.C. § 1692(e). Because the FDCPA is a strict liability statute, a plaintiff need not prove knowledge or intent, nor does a plaintiff have to have suffered actual damages. Stratton v. Portfolio Recovery Assocs., LLC , 770 F.3d 443, 448-49 (6th Cir. 2014). "Strict liability places the risk of penalties on the debt collector that engages in activities which are not entirely lawful, rather than exposing consumers to unlawful debt-collector behavior without a possibility for relief." Id. at 449. When determining whether a debt collector's conduct has violated the FDCPA, courts consider the alleged conduct "through the lens of the ‘least sophisticated consumer’—the usual objective legal standard in consumer protection cases." Id. at 450 (quoting Gionis v. Javitch, Block, Rathbone, LLP , 238 F. App'x 24, 28 (6th Cir. 2007) ). The least sophisticated consumer standard operates as follows:

‘The basic purpose of the least-sophisticated-consumer standard is to ensure that the FDCPA protects all

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