Towles v. E. Account Sys. of Conn.
| Decision Date | 12 January 2023 |
| Docket Number | 3:22-CV-204-RAH [WO] |
| Parties | WILLIE TOWLES, Plaintiff, v. EASTERN ACCOUNT SYSTEM OF CONNECTICUT, INC., Defendant. |
| Court | U.S. District Court — Middle District of Alabama |
This matter comes before the Court on Plaintiff Willie Towles's Motion for Default Judgment against Defendant Eastern Account System of Connecticut, Inc. (EASC). For the following reasons, Towles's motion is due to be GRANTED and a judgment entered against EASC in the amount of $10,014.80.
On April 27, 2022, Towles filed this civil action against EASC alleging violations of the Fair Debt Collection Practices Act (FDCPA), 15 U.S.C. §1692 et seq. Towles's Complaint alleges EASC violated the FDCPA in connection with collecting a debt by furnishing inaccurate information to a consumer reporting agency. Specifically, Towles contends that EASC is erroneously reporting a WOW Cable account as disputed on his TransUnion credit report when he previously had contacted EASC in November 2021 through counsel and instructed EASC to remove the designation that the debt was disputed. He claims that this false reporting is impacting his ability to obtain and refinance a mortgage and that he has suffered from anxiety, embarrassment, humiliation, and stress from EASC's actions. Due to EASC's alleged violations of 15 U.S.C. § 1692e, Towles claims he is entitled to actual damages, statutory damages in the amount of $1,000, and his reasonable attorney's fees and costs.
When EASC failed to file a timely answer, Towles filed a Request for Entry of Clerk's Default pursuant to Fed.R.Civ.P. 55(a). (Doc. 6.) In the proof of service referenced in the motion, the process server declared that on June 29, 2022, she served the summons and complaint on EASC's registered agent for service in Alabama, CT Corporation. (Doc. 6.) The Clerk of Court granted the entry of default against EASC on August 28, 2022, and Towles later filed a Motion for Default Judgment against EASC. (Docs. 10, 13.) On December 1, 2022, Towles supplemented his motion with additional evidence concerning his damages. (Doc. 17.) To date, EASC has failed to respond in any form to the Complaint or Towles's motion.
For a default judgment to be valid, the court must have personal and subject matter jurisdiction over the defendant. Rash v. Rash, 173 F.3d 1376, 1380-81 (11th Cir. 1999).
Thus, “[w]hen entry of default is sought against a party who has failed to plead or otherwise defend, the district court has an affirmative duty to look into its jurisdiction both over the subject matter and the parties.” Sys. Pipe & Supply, Inc. v. M/V Viktor Kurnatovskiy, 242 F.3d 322, 324 (5th Cir. 2001) (internal citation omitted); see also Osborn v. Whites & Assocs. Inc., No. 120CV02528TWTAJB, 2021 WL 3493164, at *2 . In this action, the Court clearly has subject matter jurisdiction over Towles's FDCPA claim because it is a federal claim. 15 U.S.C. § 1692k(d); 28 U.S.C. § 1331.
The Court also must determine whether it retains personal jurisdiction over EASC. See Sys. Pipe, 242 F.3d at 324 (). “A plaintiff seeking the exercise of personal jurisdiction over a nonresident defendant bears the initial burden of alleging in the complaint sufficient facts to make out a prima facie case of jurisdiction.” United Techs. Corp. v. Mazer, 556 F.3d 1260, 1274 (11th Cir. 2009) (internal citation omitted). A federal court's exercise of personal jurisdiction over a defendant requires (1) a finding that the procedural requirements of service of summons have been met and (2) a determination of whether the relationship between the defendant and the forum is constitutionally sufficient. Brink's Mat Ltd. v. Diamond, 906 F.2d 1519, 1521 (11th Cir. 1990).
Here, Towles served the summons and complaint on the CT Corporation, which is EASC's registered agent for service in Alabama. This is sufficient service upon EASC under Fed.R.Civ.P. 4(h)(1)(B).
The relationship between EASC and the forum state must also be constitutionally sufficient to establish personal jurisdiction. See Brink's Mat., 906 F.2d at 1521. The due process clause of the Fourteenth Amendment requires that the defendant have certain “minimum contacts” with the forum state, such that the maintenance of this suit does not offend “traditional notions of fair play and substantial justice.” Int'l Shoe Co. v. Washington, 326 U.S. 310, 316 (1945); Licciardello v. Lovelady, 544 F.3d 1280, 1284 (11th Cir. 2008). A court may exercise specific jurisdiction over a defendant when a claim arises from or relates to conduct purposely directed at a forum state, or a court may exercise general jurisdiction over a defendant when the defendant has maintained systematic and continuous contacts with the forum state. Borg-Warner Acceptance Corp. v. Lovett & Tharpe, Inc., 786 F.2d 1055, 1057 (11th Cir. 1986).
When determining whether to exercise specific jurisdiction over a defendant, a court must find that the defendant's contacts with the forum relate to the underlying cause of action or the facts giving rise to it, “involve some act by which the defendant purposefully avails itself of the privilege of conducting activities within the forum, thus invoking the benefits and protections of its laws,” and are such “that the defendant should reasonably anticipate being [hailed] into court in the forum.” Bank of Am. v. Patel, 764 F.Supp.2d 1285, 1289 (M.D. Ala. 2010) (citing Vermeulen v. Renault, U.S.A., Inc., 985 F.2d 1534, 1546 (11th Cir. 1993)). Jurisdiction does not necessarily require that a defendant physically enter the state, as “it is an inescapable fact of modern commercial life that a substantial amount of business is transacted solely by mail and wire communications across state lines.” Burger King Corp. v. Rudzewicz, 471 U.S. 462, 476 (1985).
The Court finds that EASC's contacts with Alabama warrant the exercise of specific jurisdiction over EASC. In his Complaint, Towles, an Alabama resident, alleges that EASC is a debt collector, has reported to credit bureau TransUnion inaccurate information concerning a consumer cable debt owed by Towles to WOW Cable, has refused to remove or investigate and correct the inaccurate information, and has continued to furnish the disputed information to a consumer reporting agency. These actions show direct contact with an Alabama resident and his debt and purposeful availment of Alabama's laws through engaging in debt collection in the state. Furthermore, by refusing to remove the erroneous information from Towles's credit despite being informed of the error, EASC allegedly (1) engaged in conduct the natural consequence of which was to embarrass, annoy, and humiliate Towles in connection with the collection of a debt, and (2) engaged in false, deceptive, or misleading representations in connection with the collection of this debt by reporting credit information which EASC knew or should have known to be false. The Court also notes that EASC maintains a registered agent in Alabama. These actions show that EASC should reasonably anticipate being summoned to court in the state.
The facts alleged in the Complaint and those discussed supra establish that EASC purposefully availed itself of the privilege of conducting activities in Alabama and there is a sufficient nexus between those contacts and this litigation. Because this showing has been made, the “defendant must make a ‘compelling case' that the exercise of jurisdiction would violate traditional notions of fair play and substantial justice.” Diamond Crystal Brands, Inc. v. Food Movers Int'l, Inc., 593 F.3d 1249, 1267 (11th Cir. 2010) (citing Burger King, 471 U.S. at 477; Cable/Home Commc'n Corp. v. Network Prods., Inc., 902 F.2d 829, 858-59 (11th Cir. 1990)). Given the fact that EASC has not responded in any way to this lawsuit, it is apparent that EASC has not offered any compelling reasons for finding that personal jurisdiction in Alabama would be unreasonable. For all these reasons, the Court finds that the exercise of personal jurisdiction comports with due process requirements.
The entry of a default judgment is appropriate when a party against whom a judgment for affirmative relief is sought has failed to plead or otherwise defend and that fact is made to appear by affidavit or otherwise. Fed.R.Civ.P. 55(a). A party's failure to appear and the clerk's subsequent entry of default does not in itself warrant the court's entry of a default judgment. A default judgment may only be entered “when there is ‘a sufficient basis in the pleadings for the judgment entered'”-that is, whether it could “survive a motion to dismiss for failure to state a claim.” Surtain v. Hamlin Terrace Found., 789 F.3d 1239, 1245 (11th Cir. 2015) (quoting Nishimatsu Constr. Co. Ltd. v. Hous. Nat'l Bank, 515 F.2d 1200, 1206 (5th Cir. 1975)). In deciding whether the allegations in the complaint are well pleaded, the “plaintiff's obligation to provide the grounds of his entitlement to relief requires more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007) (quotations omitted). Instead, the “factual allegations must be enough to raise a right to relief above the speculative level.” Id. A defaulted defendant is deemed to admit “the plaintiff's well-pleaded allegations of fact,” but not facts that are not well-pleaded or conclusions of law. Nishimatsu, 515 F.2d at 1206. Once a court finds entry of...
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