Villanueva v. Account Discovery Sys., LLC.
| Decision Date | 12 December 2014 |
| Docket Number | Civil Action No. 14-cv-00395-WYD-KLM |
| Parties | JOSEPH VILLANUEVA, Plaintiff, v. ACCOUNT DISCOVERY SYSTEMS, LLC., Defendant. |
| Court | U.S. District Court — District of Colorado |
RECOMMENDATION OF UNITED STATES MAGISTRATE JUDGE
ENTERED BY MAGISTRATE JUDGE KRISTEN L. MIX
This matter is before the Court on Plaintiff's Motion for Default Judgment [#11]1 (the "Motion"). Pursuant to 28 U.S.C. § 636(b)(1)(A) and D.C.Colo.LivCivR 72.1(c), the Motion has been referred to the undersigned for a recommendation regarding disposition [#5]. In the Motion, Plaintiff asks the Court to enter default judgment against Defendant pursuant to Fed. R. Civ. P. 55(b)(2). Motion [#11] at 2. Defendant has not responded to the Motion. The Court has reviewed the pleadings, the entire case file, and the applicable law, and is sufficiently advised in the premises. For the reasons set forth below, the Court respectfully RECOMMENDS that the Motion [#11] be GRANTED in part and DENIED in part.
Plaintiff filed this suit on February 13, 2014 alleging that Defendant violated theFair Debt Collection Practices Act ("FDCPA"), 15 U.S.C. § 1692, through its attempts to collect the debt that Plaintiff allegedly owed to a third party. Compl. [#1] ¶ 29. Specifically, Plaintiff alleges that Defendant violated the FDCPA in one or more of the following ways: (1) by using unfair or unconscionable means to collect or attempt to collect a debt in violation of 15 U.S.C. § 1692f; and (2) was otherwise deceptive and failed to comply with the provisions of the FDCPA. Id.
Plaintiff is an individual who resides in Denver, Colorado. Id. ¶ 4. Defendant allegedly is a business entity registered as a limited liability company in New York and engaged in the collection of debt in Colorado. Id. ¶ 8. Plaintiff alleges that he owed a debt for credit card charges, id. ¶¶ 5-6, and that he and Defendant entered into a payment arrangement regarding the credit card debt in January 2013. Id. ¶ 14. Plaintiff alleges that, under the payment arrangement, he agreed that Defendant could withdraw a payment of $64.50 from Plaintiff's debit card account each month until the debt was paid in full. Id. ¶¶ 15-16.
According to Plaintiff, the parties adhered to this arrangement through approximately September 2013. Id. ¶ 17. Plaintiff alleges that in November 2013, he lost his employment. Id. ¶ 18. Plaintiff further alleges that after losing his employment, he telephoned and informed Defendant that he could no longer adhere to the payment arrangement, and that the maximum he could afford to pay was $25 per month. Id. ¶¶ 19-21. Defendant allegedly refused to accept Plaintiff's offer to pay $25 per month. Id. ¶ 22. Plaintiff alleges that on November 26, 2013, he telephoned and informed Defendant that Defendant did not have his consent to withdraw $64.50 from his debit card account under the previous payment arrangement. Id. ¶ 23. Plaintiff further maintains that he instructedDefendant not to withdraw any money from his account without his permission. Id. ¶ 24. Plaintiff alleges that, despite his instructions, Defendant withdrew $115 from his debit card account on or about November 29, 2013. Id. ¶ 27. Plaintiff further alleges that, as a result of Defendant's withdrawal of these funds, he has suffered, and continues to suffer, personal humiliation, embarrassment, mental anguish, and emotional distress. Id. ¶ 30.
Plaintiff served Defendant with the Complaint on February 28, 2014, thereby making Defendant's answer or other response due by March 21, 2014 [#7]. Defendant failed to file an answer or any other response and, pursuant to Fed. R. Civ. P. 55(a), the Clerk of the Court entered default against Defendant on May 29, 2014 [#9]. Plaintiff subsequently filed the present Motion [#11], in which he seeks entry of default judgment against Defendant. Plaintiff requests actual damages, statutory damages, attorneys' fees, and costs.
Pursuant to Fed. R. Civ. P. 55(a), default may enter against a party who fails to appear or otherwise defend the case brought against it. However, even after entry of default, the Court must decide "whether the unchallenged facts create a legitimate basis for the entry of a judgment." See Greenwich Ins. Co. v. Daniel Law Firm, No. 07-cv-2445-LTB-MJW, 2008 WL 793606, at *1 (D. Colo. Mar. 22, 2008) (citations omitted). "[A] party is not entitled to a default judgment as of right; rather the entry of a default judgment is entrusted to the 'sound judicial discretion' of the court." Id. at *2 (quoting Cablevision of S. Conn., Ltd. P'ship v. Smith, 141 F. Supp. 2d 277, 281 (D. Conn. 2001)).
Pursuant to Fed. R. Civ. P. 55(b), in considering the Motion, the decision to enter default judgment is "committed to the district court's sound discretion . . . ." Olcott v. Del. Flood Co., 327 F.3d 1115, 1124 (10th Cir. 2003) (quotation omitted). When exercising thatdiscretion, the Court considers that "[s]trong policies favor resolution of disputes on their merits." Ruplinger v. Rains, 946 F.2d 731, 732 (10th Cir. 1991) (internal quotation and citation omitted). Further, "[t]he default judgment must normally be viewed as available only when the adversary process has been halted because of an essentially unresponsive party." Id. It serves to protect a plaintiff against "interminable delay and continued uncertainty as to his rights." Id. at 733.
In determining whether the entry of default judgment is warranted, the Court must first consider whether the Court has subject matter and personal jurisdiction. Dennis Garberg & Assocs. v. Pack-Tech Int'l Corp., 115 F.3d 767, 772 (10th Cir. 1997); Williams v. Life Sav. & Loan, 802 F.2d 1200, 1202-03 (10th Cir. 1986). The Court must do so in consideration of the well-established law that "a judgment is void if the court that enters it lacks jurisdiction over either the subject matter of the action or the parties to the action." Williams, 802 F.2d at 1203.
Plaintiff asserts that the Court has subject matter jurisdiction over this lawsuit based on federal question jurisdiction in accordance with his claim brought pursuant to the FDCPA. See Compl. [#1] ¶ 2. Federal question jurisdiction is governed by 28 U.S.C. § 1331, which provides that "[t]he district courts shall have original jurisdiction of all civil actions arising under the Constitution, laws, or treaties of the United States." 28 U.S.C. § 1331. Plaintiff's cause of action arises under the FDCPA, 15 U.S.C. § 1692, et. seq., a federal statute. Id. Therefore, the action arises under the laws of the United States, and the Court may exercise subject matter jurisdiction over this dispute pursuant to 28 U.S.C.§ 1331. Furthermore, as set forth in the FDCPA, 15 U.S.C. § 1692k(d), a plaintiff may pursue a civil cause of action "in any appropriate United States district court without regard to the amount in controversy . . . within one year from the date on which the violation occurs." Plaintiff filed this action on February 13, 2014, which is less than one year after Defendant allegedly withdrew $115 from Plaintiff's account without authorization. See Compl. [#1] ¶ 27. The action is therefore timely under 15 U.S.C. § 1692k(d), and as Plaintiff brings the lawsuit under the FDCPA, the action arises pursuant to a federal statute. Accordingly, the Court recommends finding that the Court has subject matter jurisdiction over this dispute pursuant to 28 U.S.C. § 1331.
Plaintiff also asserts that the Court has jurisdiction pursuant to 28 U.S.C. § 1337. Compl. [#1] ¶ 2. Under 28 U.S.C. § 1337, "[t]he district courts shall have original jurisdiction of any civil action or proceeding arising under any Act of Congress regulating commerce . . . ." 28 U.S.C. § 1337(a). However, "this statute provides no additional grant of jurisdiction beyond that provided in 28 U.S.C. § 1331." Dutcher v. Matheson, 733 F.3d 980, 985 n.4 (10th Cir. 2013). Because jurisdiction over the subject matter has already been established through 28 U.S.C. § 1331, establishing subject matter jurisdiction through 28 U.S.C. § 1337 is "superfluous." See id. ().
Before analyzing personal jurisdiction, the Court must first address the adequacy of service of process. See United States v. Elsberg, No. 08-cv-00522-MSK-KLM, 2010 WL 5177439, at *2 (D. Colo. Aug. 17, 2010). In the Complaint, Plaintiff asserts that Defendant is a business entity registered as a limited liability company in New York and engaged inthe collection of debt within Colorado. Compl. [#1] ¶ 8. Rule 4(h) of the Federal Rules of Civil Procedure applies to service of process on a corporation, partnership, or association.2 Rule 4(h) states that a corporation may be served "by delivering a copy of the summons and of the complaint to an officer, a managing or general agent, or any other agent authorized by appointment or by law to receive service of process . . . ." Fed. R. Civ. P. 4(h)(1)(B). On May 28, 2014, Plaintiff filed a Return of Service demonstrating that on February 28, 2014, a private process server personally served "David Segal, Service Representative," who stated he was authorized to accept service on behalf of "Account Discovery Systems LLC at 495 Commerce Drive, Suite 2, Amherst, New York 14228 . . . ." See Return of Service [#7]. The Court is satisfied that Plaintiff has used due diligence in serving Defendant. Therefore, the Court finds that Plaintiff has obtained adequate service here and satisfied Fed. R. Civ. P. 4(h).
Regarding personal jurisdiction, "[P]laintiff need only make a prima facie showing [of personal jurisdiction] if the motion [for default judgment] is decided only on the basis of the parties' affidavits and other written materials." Dennis Garberg & Assocs., Inc., 115 F.3d at 773. The Court may only exercise...
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