Prince v. LVNV Funding LLC
MEMORANDUM OPINION AND ORDER directing that: (1) Ms. Prince's 16 MOTION to Strike certain affidavit testimonies, as amended 25 is DENIED; the motion is treated as an objection to the admission of certain affidavits as evidence; the objection s raised in Ms. Prince's motion are OVERRULED; (2) LVNV's 29 MOTION to Strike the Affidavit of William Azar is likewise DENIED, and the motion is treated as an objection to the admission of the affidavit; LVNV's objections rais ed in the motion are OVERRULED as moot because the court has not relied on Mr. Azar's affidavit in deciding Defendant's motion for summary judgment; (3) Defendant's 15 MOTION for Summary Judgment is DENIED. Signed by Chief Judge William Keith Watkins on 6/24/14. (Attachments: # 1 civil appeals checklist)(djy, )
IN THE UNITED STATES DISTRICT COURT
FOR THE MIDDLE DISTRICT OF ALABAMA
LVNV FUNDING, LLC,
CASE NO. 2:13-CV-462-WKW
MEMORANDUM OPINION AND ORDER
This action arises primarily under the Fair Debt Collection Practices Act
(“FDCPA”), which Congress enacted “to eliminate abusive debt collection
practices by debt collectors.” 15 U.S.C. § 1692(e). Before the court are Defendant
LVNV Funding, LLC’s motion for summary judgment (Doc. # 15), which has
been fully briefed (Docs. # 26, 31), Plaintiff Fermer Prince’s motion to strike
certain affidavit testimony submitted by LVNV, as amended (Docs. # 16, 25),
which has been briefed (Docs. # 17, 19, 24, 30), and LVNV’s motion to strike the
Affidavit of William Azar (Doc. # 29), also with complete briefing (Doc. # 35, 38).
Upon consideration of the parties’ arguments, the evidence, and the relevant law,
the court finds that the motions are due to be denied.
I. JURISDICTION AND VENUE
The court has subject-matter jurisdiction over Ms. Prince’s claims pursuant
to 28 U.S.C. §§ 1331 and 1367 and 15 U.S.C § 1692k(d). Personal jurisdiction and
venue are uncontested.
II. STANDARDS OF REVIEW
Motions to Strike
Ms. Prince’s original motion to strike certain affidavit testimony (Doc. # 16)
does not identify the rule authorizing the relief that she seeks. Thus, the court will
consider the motion to strike as a notice of Ms. Prince’s objection to the testimony.
See Norman v. S. Guar. Ins. Co., 191 F. Supp. 2d 1321, 1328 (M.D. Ala. 2002)
(taking same approach); see also Fed. R. Civ. P 56(c)(2) (“A party may object that
the material cited to support or dispute a fact cannot be presented in a form that
would be admissible in evidence.”). The objections will be entertained prior to
consideration of LVNV’s motion for summary judgment, which relies on the
In Ms. Prince’s amended motion to strike (Doc. # 25), Ms. Prince complains
that untimely disclosed expert opinions are offered in the affidavits. Federal Rule
of Civil Procedure 37(c) “provides the consequences for a party’s failure to
disclose, pursuant to the requirements of Rule 26.” Nance v. Ricoh Elecs, Inc., 381
F. App’x 919, 922 (11th Cir. 2010). “If a party fails to provide information or
identify a witness as required by Rule 26(a) or (e), the party is not allowed to use
that information or witness to supply evidence on a motion, at a hearing, or at a
trial, unless the failure was substantially justified or is harmless.” Id. (citing Fed.
R. Civ. P. 37(c)(1)).
In LVNV’s motion to strike (Doc. # 29), it objects to Mr. Azar’s testimony
on the grounds that it is not based on his personal knowledge, it invades the court’s
province of making legal conclusions, and is disallowed by the Alabama Rules of
Professional Conduct. Like Ms. Prince’s motion to strike, LVNV’s motion to
strike will be treated as an objection. See Norman, 191 F. Supp. 2d at 1328.
Motion for Summary Judgment
To succeed on summary judgment, the movant must demonstrate “that 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). The court must view the evidence and
the inferences from that evidence in the light most favorable to the nonmovant.
Jean-Baptiste v. Gutierrez, 627 F.3d 816, 820 (11th Cir. 2010).
The party moving for summary judgment “always bears the initial
responsibility of informing the district court of the basis for its motion.” Celotex
Corp. v. Catrett, 477 U.S. 317, 323 (1986).
This responsibility includes
identifying the portions of the record illustrating the absence of a genuine dispute
of material fact. Id. Or a movant who does not have a trial burden of production
can assert, without citing the record, that the nonmoving party “cannot produce
admissible evidence to support” a material fact. Fed. R. Civ. P. 56(c)(1)(B); see
also Fed. R. Civ. P. 56 advisory committee’s note (“Subdivision (c)(1)(B)
recognizes that a party need not always point to specific record materials. . . . [A]
party who does not have the trial burden of production may rely on a showing that
a party who does have the trial burden cannot produce admissible evidence to carry
its burden as to the fact.”). If the movant meets its burden, the burden shifts to the
nonmoving party to establish – with evidence beyond the pleadings – that a
genuine dispute material to each of its claims for relief exists. Celotex, 477 U.S.
A genuine dispute of material fact exists when the nonmoving party
produces evidence allowing a reasonable fact finder to return a verdict in its favor.
Waddell v. Valley Forge Dental Assocs., 276 F.3d 1275, 1279 (11th Cir. 2001).
Ms. Prince alleges that LVNV is a debt collector within the meaning of the
FDCPA. (Compl., at ¶ 25.) LVNV denies that it is a debt collector. (Ans.,
at ¶ 25.) It maintains that it holds debts purchased from original creditors, but it
does not directly collect on the debts or contact debtors. (See Aff. LVNV Funding,
LLC (Doc. # 15-1).) LVNV’s dispute of its status as a debt collector is not a
contention asserted in support of its motion for summary judgment.1
Ms. Prince’s alleged debt originated with Citibank in 1996 as a Sears
MasterCard account. Years later, the account went into default, and Citibank sold
the debt in August 2010 to Sherman Originator III, LLC. (See Doc. # 26-3.)
LVNV subsequently acquired ownership of the debt.
On July 16, 2012, LVNV employed Zarzaur & Schwartz, a Birmingham law
firm, to sue Ms. Prince in Montgomery County District Court2 to collect $2,465.85,
plus costs of $126.00. LVNV furnished Zarzaur & Schwartz with an account
number from Citibank, the date that the account was opened (September 1, 1996),
the charge-off date, the amount outstanding, and Fermer I. Prince’s name, phone
number, and home address. (Aff. Ben Zarzaur (Doc. # 15-2).) LVNV says that it
also furnished an affidavit to Zarzaur & Schwartz attesting to its ownership of the
While it does not appear that the Eleventh Circuit has addressed the issue, other courts
have held that “one attempting to collect a debt is a ‘debt collector,’” as opposed to a creditor, “if
the debt in question was in default when acquired.” F.T.C. v. Check Investors, Inc., 502 F.3d
159, 173 (3d Cir. 2007) (citing 15 U.S.C. § 1692a); see also Kuria v. Palisades Acquisition XVI,
LLC, 752 F. Supp. 2d 1293, 1301 (N.D. Ga. 2010) (reaching the same conclusion). Hence, “debt
buyers” like LVNV are considered debt collectors rather than creditors even though they own the
Montgomery County District Court is often called “small claims court” in the parties’
briefing. Small claims court is a function of the state district court in Alabama. See Ala. Code
debt and to the amount due,3 as well as several Sears MasterCard account
statements bearing Ms. Prince’s name and address from 2009 and 2010. Ms.
Prince alleges that this information was legally insufficient to entitle LVNV to a
judgment, and she alleges that LVNV brought the suit with knowledge that its
evidence was lacking and with knowledge that she disputed the debt.
Ms. Prince says that she communicated with LVNV, after receiving a letter
and prior to the initiation of the collection suit, to deny her obligation for the debt.
(See Doc. # 15-3, at ¶ 13 (Pl.’s Resp. to Def.’s First Set of Interrogatories).) She
represents that she never opened the account, but rather, her husband opened the
account in her name without her knowledge. (Doc. # 15-3, at ¶¶ 4–8 (Pl.’s Resp. to
Def.’s First Set of Interrogatories).)4 LVNV maintains that Ms. Prince never
responded to mail or telephone calls from Zarzaur & Schwartz during the months
of May, June, and July of 2012. (Aff. Ben Zarzaur, at 4.)
The Affidavit, dated May 21, 2012, and signed by Tobie Griffin, an “Authorized
Representative” of LVNV, states that Griffin has personal knowledge of LVNV’s maintenance
of its business records and accounts receivable. (Doc. # 15-2, at 7.) Griffin states that in the
ordinary course of LVNV’s business, it acquires credit accounts. On any given account, the
original creditor provides LVNV with the debtor’s name, social security number, account
balance, original creditor name, and account number. The Affidavit represents that LVNV
acquired an a credit account in the name of Fermer I. Prince, opened on September 1, 1996, first
owned by Citibank, sold in a portfolio of debts to LVNV’s assignor on August 19, 2010, and
later assigned to LVNV. The amount owed is stated as $2,465.85. The Affidavit does not
indicate when or from whom LVNV acquired the debt. There is also no indication in LVNV’s
affidavit that LVNV possessed any signed statement obligating Ms. Prince to repay the debt to
Citibank or any other creditor.
It does not appear that LVNV deposed Ms. Prince in this action, and the only record
evidence of her positions on these issues are her responses to LVNV’s interrogatories.
After LVNV filed the suit, Ms. Prince filed a pro se answer denying
liability. By the time the case came before the Montgomery County District Court
on February 15, 2013, Ms. Prince retained counsel, Mr. William Azar, to dispute
the suit. Ms. Prince claims that LVNV offered no evidence to support its claim
against her at trial, so judgment was entered in her favor. Thus, she deduces,
LVNV initiated the collection suit only to obtain either a default judgment or an
agreement to pay a smaller sum of money because it lacked evidence to obtain a
judgment against her for the amount sought. Ms. Prince also alleges that LVNV
lacks evidence that it even owns the debt, thereby affecting LVNV’s standing to
bring a collection action.
LVNV counters that it always had adequate evidence to win a judgment
against Ms. Prince.
It explains that Zarzaur & Schwartz associated a local
attorney, Mr. Richard Moxley, to appear at trial. Mr. Moxley says that he knew
that under the Alabama Rules governing Small Claims Courts, the Montgomery
County District Court had discretion to accept LVNV’s affidavit affirming its
ownership of Ms. Prince’s debt. (Aff. Richard Moxley (citing Alabama Small
Claims Rule J) (Doc. # 15-6, at ¶ 3).)5
Mr. Moxley further testifies that he
expected to be able to cross-examine Ms. Prince as a trial witness with the account
Rule J, which governs trials in Alabama’s small claims courts, provides that “[t]he court
may in its discretion receive sworn or written or recorded statements of witnesses or parties not
present at trial.” Ala. Small Claims. R. J. Ms. Prince’s position is that LVNV could not prove
its standing unless it brought a witness to trial to testify to LVNV’s right to collect the debt.
information and account statements bearing her name and address. Mr. Moxley
expected the questioning to be fruitful because he and other attorneys are
frequently able to get debtors to recognize and affirm a debt once presented with
account statements in court. (Aff. Richard Moxley (Doc. # 15-6, at ¶ 4); see also
Doc. # 30, at 19–20 (Reply) (explaining LVNV’s intent to maintain a claim for an
“account stated”.) Mr. Moxley expected Ms. Prince’s attendance at trial because
she had been representing herself prior to trial. But to Mr. Moxley’s surprise, Mr.
Azar appeared in the case minutes before trial and without Ms. Prince. Mr.
Moxley says he was therefore unable to elicit her testimony. LVNV suggests that
this tactic is the primary reason Ms. Prince won.
Ms. Prince counters that Mr. Moxley could have asked for, but did not ask
for, a continuance so as to ensure Ms. Prince’s attendance at a future trial hearing.
She points out that while Mr. Moxley could have presented the LVNV affidavit to
support its ownership, Mr. Moxley did not offer it. She suggests that this is
because even if the district court had accepted the affidavit as evidence of LVNV’s
ownership of a debt owed by Ms. Prince, Ms. Prince could have appealed a
judgment in favor of LVNV to circuit court, where the court would have conducted
the trial de novo and rejected the affidavit.
Ms. Prince filed this suit in federal court on June 28, 2013. Her complaint
alleges FDCPA violations for (1) making false, deceptive, or misleading
representations in connection with collection of a debt in violation of 15 U.S.C.
§ 1692e; (2) using an unfair or unconscionable means to attempt to collect a debt in
violation of 15 U.S.C. § 1692f; (3) misrepresenting the amount owed, in violation
of 15 U.S.C. §§ 1692e(2)(A), § 1692e(10), and § 1692f; (4) threatening to collect
and attempting to collect any amount which is not expressly authorized by an
agreement creating the debt, in violation of §1692f(1); and (5) failing to verify that
Ms. Prince owed the debt. (Compl. at ¶ 26.) The complaint also alleges that
LVNV is liable for wanton or willful misconduct under state law.
at ¶¶ 28–30.) Ms. Prince seeks compensatory damages for the cost of defending
the suit in state court and for her emotional injuries, FDCPA statutory damages of
$1,000, punitive damages, and an award of her costs and attorney’s fees. (Compl.
at ¶ 27, 30.)
Ms. Prince’s Motion to Strike
Objections to Affidavits as Hearsay for Lack of Personal Knowledge
Ms. Prince moves to strike affidavits and evidentiary materials from
LVNV’s motion for summary judgment, specifically: (1) the Affidavit of LVNV,
prepared and submitted by Tonya Henderson, (2) the Affidavit of Ben Zarzaur, (3)
the Affidavit of Richard Moxley, and (4) the exhibits referenced by and attached to
each of the Affidavits. (Doc. # 16.)6 Ms. Prince argues that each affidavit is based
on hearsay in violation of the Rules of Evidence and that LVNV is attempting to
use the affidavits to prove that Ms. Prince owes the debt. With respect to Ms.
Henderson’s testimony on behalf of LVNV, Ms. Prince argues that the affidavit
offends Federal Rule of Civil Procedure 56, which requires that affidavits be based
upon personal knowledge.7
LVNV responds that the court need not analyze whether the affidavits and
attached records pose a hearsay problem or fit a hearsay exception because none of
the contested evidence or testimony is being offered for the truth of the matter
asserted (i.e., to prove that Fermer Prince owes a debt owned by LVNV). (Doc.
# 17, at 3.)
Rather, says LVNV, it offers the affidavit testimony and billing
statements to establish LVNV’s mindset and good faith belief in its right to sue
Ms. Prince on the debt. (See Doc. # 17 (citing Krawczyk v. Centurion Capital
Corp., No. 06-C-6273, 2009 WL 395458, at *4 (N.D. Ill. Feb. 18, 2009) (holding
These three affidavits are Exhibits A, B, and F, respectively, attached to LVNV’s
motion for summary judgment. (See Docs. # 15-1, 15-2, 15-6.)
Ms. Prince cites Rule 56(e). Alabama’s Rule of Civil Procedure 56(e) provides that
“[a]ffidavits shall be made on personal knowledge, shall set forth such facts as would be
admissible in evidence, and shall show affirmatively that the affiant is competent to testify to the
matters stated therein.” The governing Federal Rule equivalent for which Ms. Prince is
searching is Fed. R. Civ. P. 56(c)(4). (“An affidavit or declaration used to support or oppose a
motion must be made on personal knowledge, set out facts that would be admissible in evidence,
and show that the affiant or declarant is competent to testify on the matters stated.”).
that hearsay in very similar FDCPA and malicious prosecution case was admissible
because it was not offered for its truth)).); see also Fed. R. Evid. 801(c) (defining
hearsay as an out-of-court statement that “a party offers in evidence to prove the
truth of the matter asserted in the statement”). LVNV responds to Ms. Prince’s
Rule 56(c)(4) objection by arguing that debt-holding businesses like LVNV are not
required to have personal knowledge of their assignors’ maintenance of business
records because such a requirement “would severely impair the ability of assignees
of debt to collect the debt due.” (Doc. # 17, at 5–6 n.1 (citing Krawczyk, 2009 WL
395458, at *4).)
In reply, Ms. Prince contends that if LVNV acknowledges that its evidence
of her debt is inadmissible hearsay, then “one can only conclude that LVNV
[knowingly] initiated the collection suit” against Ms. Prince with inadmissible
evidence. (Doc. # 19, at 1.) She further posits that the issue of whether she owed
the debt has been decided conclusively by the small claims court – and she
apparently believes that this precludes LVNV from defending that its collection
action against her had arguable legal and factual merit. (See Doc. # 19, at 2.)8
Upon consideration of the original motion to strike, which is treated as an
objection, the court finds that the objection is due to be overruled. The testimony
about the debt is not offered to support the conclusion that Ms. Prince owed the
LVNV was allowed to file a second response which reiterates its original arguments and
rebuts Ms. Prince’s positions. (See Doc. # 24.)
debt, but rather, to support each affiant’s knowledge and reasonable belief about
LVNV’s right to initiate a collection suit against Ms. Prince in state court. To the
extent that Ms. Prince objects that Ms. Henderson lacked personal knowledge
about Citibank’s maintenance of its records and accounts, see Fed. R. Civ. P.
56(c)(4), the objection is likewise due to be overruled. Ms. Henderson’s affidavit
testimony is based on her personal knowledge of what information LVNV acquired
from its assignor and why LVNV claims that it had no reason to doubt the veracity
of the information.
Motion to Strike Untimely Disclosed Expert Opinion Testimony
Additionally, with leave of the court (see Doc. # 23), Ms. Prince has
amended her motion to strike to include additional grounds for striking the
Affidavits of Mr. Zarzaur and Mr. Moxley, (Doc. # 25). Ms. Prince argues that the
affidavits offer expert opinion testimony about each attorney’s “professional
judgment” about initiating the collection suit and proceeding to trial. (See Docs.
# 15-2, at ¶ 13; # 15-6, at ¶¶ 3, 5–6.) She objects that LVNV did not disclose these
witnesses as experts pursuant to Federal Rule of Civil Procedure 26(a)(2).
LVNV responds that Mr. Zarzaur and Mr. Moxley are fact witnesses, not
expert witnesses. (Doc. # 30.) Additionally, LVNV emphasizes that Ms. Prince
has known from the outset of this litigation that Mr. Zarzaur and Mr. Moxley
would be witnesses, and she cannot claim that she has been unfairly surprised or
prejudiced by the affidavits.
Upon consideration of the parties’ positions, the court finds that both Mr.
Zarzaur and Mr. Moxley are testifying to their personal belief that LVNV had
legitimate, good faith bases both to file the collection suit and to proceed to trial.
Assuming arguendo that these are expert opinion testimonies within the ambit of
Rules 702 and 703, the court nevertheless concludes that Ms. Prince’s motion to
strike is due to be denied because Ms. Prince has not shown how any failure to
disclose expert opinion testimony has prejudiced her. See Fed. R. Civ. P. 37(c)(1)
(allowing a party to use undisclosed expert testimony if the failure to disclose was
“harmless”). Moreover, the parties are cautioned that by this ruling, the court does
not prejudge the admissibility of any of this evidence at trial if offered through
LVNV’s Motion to Strike Mr. Azar’s Affidavit
LVNV moves to strike Mr. Azar’s affidavit filed in support of Ms. Prince’s
opposition to summary judgment. (See Azar Aff. (Doc. # 26-2).) LVNV objects
that Mr. Azar’s testimony is not based on his personal knowledge and that it
includes legal conclusions. (Doc. # 29, at 2–6.) Additionally, LVNV asserts that
rules of ethics and professional responsibility counsel against permitting Mr. Azar
to offer testimony in his client’s favor, particularly at trial. (See Doc. # 29, at 7–9.)
Ms. Prince responds that his testimony is based upon personal knowledge and
experience. (See Doc. # 35.) Further, Ms. Prince does not believe any rule of
professional conduct bars her attorney from submitting an affidavit in opposition to
summary judgment, but she represents that if the court must grant LVNV’s motion
to strike, substitute counsel can appear without delaying the scheduled trial. (Doc.
# 35, at 4–5.)
LVNV is right that the much of Mr. Azar’s testimony is based on his
assignment of bad motives to LVNV, their attorneys, and others who participate in
collection suits like the one filed against Ms. Prince. His testimony also couches
occasional legal conclusions as personal knowledge. For these reasons, LVNV’s
objections normally would be due to be sustained to the extent that Mr. Azar’s
affidavit testimony is not based on personal knowledge or which invades the
court’s role of deciding the law. However, the court will overrule the objections as
moot because the court has not relied upon Mr. Azar’s affidavit in reaching its
decision to deny LVNV’s motion for summary judgment.9
Motion for Summary Judgment
LVNV requests the entry of summary judgment in its favor on Ms. Prince’s
FDCPA and state-law claims. (Doc. # 15.) It attacks Ms. Prince’s alleged inability
If Ms. Prince intends to call Mr. Azar as a witness at trial to testify to a contested issue,
see Ala. R. Prof. Cond. 3.7, LVNV may raise its objection again prior to trial. Again, the parties
are warned that the court makes no finding at this juncture whether this evidence, if offered
“live” at trial, is admissible.
to prove a state law tort before arguing that there is no evidence to support an
Wanton or Willful Misconduct
LVNV argues that “[r]egardless of the terms [Ms. Prince] uses, the legal
cause of action stated in Count II is one for malicious prosecution.” (Doc. # 15,
at 11.) According to LVNV, “Alabama law does not recognize a cause of action
for general willfulness and wantonness” under the circumstances of this case.
(Doc. # 15, at 13.) LVNV then proceeds to argue for summary judgment on a
malicious prosecution claim that Ms. Prince has not pleaded. (Doc. # 15, at 12–
23.) To preface its defense of any malicious prosecution claim, LVNV likens Ms.
Prince’s case to Cutts v. American United Life Insurance Company, 505 So. 2d
1211 (Ala. 1987).
In Cutts, the plaintiff sued its insurer for “intentionally,
willfully, and wantonly” providing incomplete or inaccurate information to state
investigators which led to the plaintiff’s wrongful indictment for theft of property
against the plaintiff’s employees. Id. at 1212–13. The Alabama Supreme Court
concluded that there was no precedent “which recognizes a cause of action for
negligently, or even intentionally, willfully, or wantonly, failing to produce
information in response to a district attorney’s request.” Id. at 1214. The Court
then reasoned that if the plaintiff’s complaint stated a claim at all, it was for
malicious prosecution. Id. The Court then analyzed the claim accordingly.
In the event that this court accepts LVNV’s argument, Ms. Prince counters
LVNV’s arguments on malicious prosecution. (See Doc. # 26, at 10.) But she
holds firm and contends that her wanton and willful misconduct claim “is not
simply a variation of a claim for malicious prosecution.” (Doc. # 26, at 9.) In
support of her position, Ms. Prince cites Alabama Code § 6-11-20(a)(3), a statute
setting out the circumstances under which punitive damages may be awarded in a
civil action generally, and the tortious conduct that constitutes “wantonness”
specifically.10 She also directs the court to Webb v. Midland Funding, LLC, No.
2:12-CV-2920-KOB, 2013 WL 360151 (N.D. Ala. Jan. 29, 2013). In Webb, the
Northern District of Alabama held that a plaintiff who sued a defendant for
bringing a debt collection action against her for a debt that the defendant allegedly
knew she did not owe stated a claim for “wanton and intentional harm” under
Alabama law. Id. at *4 (citing Roberts v. Brown, 384 So. 2d 1047, 1048 (Ala.
1980)). A claim for wantonness involves “the conscious doing of some act” with
knowledge that an “injury will likely or probably result.” Roberts, 384 So. 2d
at 1048.11 Thus, Ms. Prince asserts that LVNV must defend against her allegations
The statute, of course, only defines the sort of wanton conduct for which punitive
damages may be awarded. It does not define a claim for willful or wanton misconduct.
Wantonness may also consist of a defendant’s “inadvertent failure to act . . . with
knowledge that someone is probably imperiled” by the inaction. Joseph v. Staggs, 519 So. 2d
952, 954 (Ala. 1988). LVNV’s inaction is not at issue in this case.
that it willfully and wantonly sued her to collect a debt without sufficient evidence
and without regard to the harm the suit would cause her.
The court agrees with Ms. Prince that she has pleaded a cognizable tort for
wanton and willful misconduct under Alabama law. See Webb, 2013 WL 360151,
at *4. Ms. Prince’s case is distinguishable from the facts underlying the Cutts
opinion cited by LVNV.12 Furthermore, it is significant that there is no malicious
prosecution claim articulated in Ms. Prince’s Complaint. LVNV may not recast
the wanton and willful misconduct claim into one for malicious prosecution, which
is admittedly more difficult for the plaintiff to prove and “disfavored in the law.”
Cutts, 505 So. 2d at 1214.
In its reply brief, LVNV argues that Ms. Prince has not offered admissible
evidence to support a claim for wantonness.
(Doc. # 31, at 23.)
disagrees. Plaintiff has shown, and LVNV does not dispute, that LVNV lacks a
written agreement obligating Ms. Prince to pay it a debt, and it lacks documentary
evidence beyond its own affidavits proving its ownership of a debt owed by Ms.
Prince. While the affidavit might have sufficed in small claims court, it appears
that it would not have sufficed in circuit court. Further, LVNV failed to present
Cutts involved a civil defendant’s failure to completely and accurately respond to a
state investigation so as to exculpate the civil plaintiff and relieve him from further criminal
investigation and indictment. The civil defendant did not instigate the state investigation; rather,
it was approached by the district attorney upon complaints by third parties. That scenario is
distinct from the facts of this case, where the LVNV undertook to bring a civil action against Ms.
Prince when it arguably lacked admissible evidence to support a judgment in its favor.
any testimony or evidence in support of its collection suit at trial, and judgment
was entered in Ms. Prince’s favor. LVNV has not credibly contested these facts.
There is a significant disputed fact as to whether LVNV consciously initiated the
debt collection suit in bad faith with knowledge that the suit would injure Ms.
A jury could infer from the facts detailed above that LVNV acted
wantonly. Therefore, LVNV’s motion for summary judgment is due to be denied
as to Ms. Prince’s state-law claim for wanton and willful misconduct.
LVNV also argues that it is entitled to summary judgment because Ms.
Prince cannot prove a violation of the FDCPA. LVNV disputes that if the facts
alleged were proven true, that they would constitute FDCPA violations.
instead of attacking the allegations as being inadequate to support a claim, LVNV
defends itself on the grounds that Ms. Prince’s allegations are “demonstrably
false.” (Doc. # 15, at 24.) Even though LVNV’s frames its summary judgment
argument on the veracity of the facts, the court first will discuss whether Ms.
Prince’s claims are legally cognizable before considering LVNV’s assertions about
the insufficiency of the facts.
§ 1692e: False, Deceptive, and Misleading Representations
The FDCPA prohibits debt collectors from using “any false, deceptive, or
misleading representation[s] or means in connection with the collection of any
debt.” 15 U.S.C. § 1692e. “Without limiting the general application” of that
general rule,13 the FDCPA also sets out sixteen specific instances of debt collection
conduct that violates the principle. See id. at § 1692e(1)–16. Ms. Prince alleges
that LVNV violated § 1692e’s general principle, quoted above, as well as
§ 1692e’s specific provisions against misrepresenting the amount of the debt owed,
in violation of §§ 1692e(2)(A) and 1692e(10).14
§ 1692f: Use of Unfair or Unconscionable Means
Section 1692f of the FDCPA prohibits debt collectors from “us[ing] unfair
or unconscionable means to collect or attempt to collect any debt.” Id. at §1692f.
It has been described by some courts as “a catchall for conduct that is recognizably
unfair, but not explicitly enumerated in other sections of the FDCPA.” Hoover v.
Monarch Recovery Mgmt., Inc., 888 F. Supp. 2d 589, 601 (E.D. Pa. 2012). Like
Section 1692e, the statute sets out specific instances of conduct that violate the
general principle without making the list an exclusive set of circumstances
constituting FDCPA violations.
See id. at §1692f(1)–(8) (setting out specific
“Congress recognized that it would be impossible to foresee every type of deceptive
collection misbehavior and expressly provided this general standard to give courts the flexibility
to proscribe improper conduct not specifically anticipated and addressed in the Act.” Robert J.
Hobbs, et al. 1 Fair Debt Collection § 220.127.116.11 p. 216 (7th ed. 2011) (citing S. Rep. No. 382, 95th
Cong., 1st Sess. 4, at 4, reprinted in 1977 U.S.C.C.A.N. 1695, 1698).
It is not clear whether Ms. Prince invokes §§ 1692e(2)(A) and 1692e(10) because she
believes that the amount owed is actually $0, or because she believes that the amount” owed
should be less than what LVNV sought in state court ($2,465.85, plus costs). Because she says
she is not liable for any debt, the court presumes that Ms. Prince is alleging that LVNV violated
the FDCPA by falsely representing that she owed any debt.
conduct constituting unfair and unconscionable means); S. Rep. No. 382, 95th
Cong., 1st Sess. 4, at 4, reprinted in 1977 U.S.C.C.A.N. 1695, 1698 (“[T]his bill
prohibits in general terms any harassing, unfair, or deceptive collection practice.
This will enable the courts, where appropriate, to proscribe other improper conduct
which is not specifically addressed.”). Ms. Prince claims that LVNV violated the
general spirit of § 1692f, as well as § 1692f(1) specifically, which provides that a
debt collector may not collect any amount from a debtor “unless such amount is
expressly authorized by the agreement creating the debt or permitted by law.”15
Similar Cases Brought Pursuant to §§ 1692e & 1692f
In recent years, federal district courts across the country, including some in
the Eleventh Circuit, have been willing to allow plaintiffs to bring suits for
violations of § 1692e under circumstances similar to this case. See, e.g., Hinten v.
Midland Funding, LLC, No. 2:13 CV 54 DDN, 2013 WL 5739035, at *7 (E.D.
Mo. Oct. 22, 2013) (assuming truth of allegation that “defendant could not have
legally prevailed in these lawsuits from the time of their commencement,”
plaintiffs stated a claim for violation of § 1692e); Samuels v. Midland Funding,
LLC, 921 F. Supp. 2d 1321, 1331 (S.D. Ala. 2013) (assuming without deciding
that FDCPA’s § 1692e or § 1692f supported the plaintiff’s FDCPA cause of action
where the plaintiff alleged that the defendant filed suit “with full knowledge it
Ms. Prince appears to assert that LVNV lacks evidence of Ms. Prince’s agreement
creating the debt, and thereby supporting the amount she allegedly owes.
would not (and therefore could not) prove its claim”); Simmons v. Portfolio
Recovery Assocs., LLC, No. 3:11-CV-280, 2012 WL 222935, at *5 (E.D. Tenn.
Jan. 25, 2012) (denying motion to dismiss FDCPA claims arising under § 1692e or
§ 1692f where plaintiff alleged that defendant “supported [a collection suit with]
an affidavit that contained false or deceptive representations about the status or
character of the underlying debt” and engaged in “a pattern and practice of filing
similar lawsuits”); Kuria v. Palisades Acquisition XVI, LLC, 752 F. Supp. 2d 1293,
1302–03 (N.D. Ga. 2010) (allowing claims to proceed under §§ 1692e and 1692f
based on allegations that defendant engaged in pattern of abusive litigation by
bringing collection suits with no intention of proceeding to a trial on the merits);
Williams v. Javitch, Block & Rathbone, LLP, 480 F. Supp. 2d 1016, 1021–24 (S.D.
Ohio 2007) (denying motion to dismiss and finding cognizable claim under
§ 1692e or § 1692f where law firm-defendant allegedly sued plaintiff without
documents to verify the truth of its client’s affidavit that was not based on personal
knowledge); see also Kimber v. Fed. Fin. Corp., 668 F. Supp. 1480, 1488–89
(M.D. Ala. 1987) (granting plaintiff’s motion for summary judgment on § 1692e
and § 1692f where debt collector sued plaintiff on stale claims which were clearly
barred by the statute of limitations).16
LVNV attempts to distinguish the instant case from each of these opinions in its reply
brief. (See Doc. # 31, at 34–43.)
Although there is no Eleventh Circuit precedent available that is directly on
point, these district court decisions are consonant with the Supreme Court’s
holding in Heintz v. Jenkins, 514 U.S. 291, 299 (1995), that “the [FDCPA] applies
to . . . consumer-debt-collection activity, even when that activity consists of
litigation.” See also LeBlanc v. Unifund CCR Partners, 601 F.3d 1185, 1193 n.15
(11th Cir. 2010) (acknowledging Heintz’s holding that “initiation of legal
proceedings by a creditor can constitute a debt collection activity”). The decisions
also align with Congress’s express intent to proscribe abusive debt collection
activities and its stated assumption that federal courts would use the FDCPA’s
more general provisions to prohibit abusive tactics not specifically enumerated in
Unfortunately, with the exception of Kimber, each of the district court cases
cited supra discusses the sufficiency of pleadings rather than the sufficiency of
evidence at summary judgment. But assuming that Ms. Prince can meet her
evidentiary burden, her claims are actionable under the FDCPA, notwithstanding
LVNV’s contention that they are not.
Whether LVNV’s Good Faith is a Defense
Before addressing the facts in dispute, the court will confront an issue that
begs for clarity.
The FDCPA contemplates strict liability for offending debt
collectors. See Kaplan v. Assetcare, Inc., 88 F. Supp. 2d 1355, 1362 (S.D. Fla.
2000) (“Nowhere in the language of the statute . . . [including §§ 1692e and 1692f]
. . . is there any mention of an element of knowledge or intent.”); LeBlanc, 601
F.3d at 1190 (“The FDCPA does not ordinarily require proof of intentional
violation and, as a result, is described by some as a strict liability statute.”).17
LVNV points out the strict liability nature of the FDCPA for the first time in its
reply brief. (See Doc. # 31, at 19, 44.) The briefing from both parties suggests that
they agree that a defendant debt collector may avoid liability under §§ 1692e or
1692f if the defendant can demonstrate that it brought a collection suit in good
faith. LVNV seems to suggest that Ms. Prince must prove that LVNV sued her
with knowledge that it lacked evidence to procure a judgment, but if such a good
faith defense is in play in this case, it would appear that LVNV must prove that it
proceeded in good faith. Cf. 15 U.S.C. § 1692k(c) (requiring a debt collector
which advances a “bona fide error” defense to show by a preponderance of
evidence that the violation was not intentional).
Because collection suits are not intrinsically unlawful under the FDCPA or
otherwise, the court is inclined to agree that a “good faith” defense is viable. But
the court finds that LVNV must prove, .i.e., bear the burden of proof, that it
initiated suit against Ms. Prince in good faith.
Assuming that the plaintiff shows a violation of the FDCPA, he must then show that
the “least sophisticated consumer” would have been deceived or misled by the defendant’s
representations or actions. LeBlanc, 601 F.3d at 1103–04, 1200–01; see also Jeter v. Credit
Bureau, Inc., 760 F.2d 1168, 1175 (11th Cir. 1985). This standard is not discussed by either
Whether LVNV Satisfies Its Burden Under Rule 56(a)
LVNV asserts that the evidence that it provided to Zarzaur & Schwartz
before the collection suit was filed – namely, its May 21, 2012 affidavit affirming
its ownership of a debt owed by Fermer Prince, and several months’ worth of
credit card account statements bearing Ms. Prince’s name and address – was
adequate to support its collection action. LVNV further claims that its counsel,
Mr. Zarzaur and Mr. Moxley, both subjectively believed that this evidence,
supplemented by an admission or affirmation of the debt by Ms. Prince at trial,
would suffice to sustain a judgment in small claims court. Hence, LVNV argues
that Ms. Prince cannot show how its collection action against her violates either
§ 1692e or § 1692f.
Ms. Prince counters by highlighting the evidence that LVNV lacked when it
sued her – for instance, a bill of sale showing its ownership of Ms. Prince’s
account (see Doc. # 26-3 (incomplete bill of sale between Citibank and Sherman
Originator III LLC)),18 any document signed by Ms. Prince applying for credit
through Citibank, or any document signed by Ms. Prince obligating her to pay a
debt. She emphasizes that when push came to shove, LVNV did not produce the
evidence it needed to support a judgment against her, and therefore, the small
See Gigli v. Palisades Collection, L.L.C., No. 3:CV-06-1428, 2008 WL 3853295,
at *10 (M.D. Pa. Aug. 14, 2008) (finding that a reasonable jury could conclude an account was
not assigned pursuant to a purchase agreement or bill of sale where the list of accounts
transferred was “conspicuously absent from the record”).
claims court entered judgment in her favor.
(See Doc. # 26-5 (Order of
Montgomery County District Court).)
In its reply brief, LVNV pretends that a fact finder could not view the
evidence in Ms. Prince’s favor and forgets the court’s obligation to resolve
questions of fact in favor of the non-moving party at summary judgment. It
accuses Ms. Prince of resting on her allegations rather than producing any rebuttal
evidence. (Doc. # 31, at 30.) However, LVNV fails to acknowledge that its
evidence has not credibly contradicted the essence of Ms. Prince’s allegations
against it, most of which are not difficult to discover or prove, such as what
evidence LVNV lacked from the outset to succeed on its collection suit, whether it
presented evidence at trial when it had the opportunity to prove its case, and
whether Ms. Prince ultimately prevailed.
In view of the evidence and the parties’ competing theories of whether
LVNV initiated suit and proceeded to trial in bad faith, the issue of LVNV’s intent
is a question of fact that needs to be resolved at trial because a reasonable jury
could infer bad faith from the evidence. Similarly, the issues of whether LVNV
misrepresented, intentionally or unintentionally, the amount owed in violation of
§ 1692e(2) and whether LVNV attempted to collect an amount not “authorized by
the agreement creating the debt” in violation of § 1692f(1) remain in dispute.
Hence, LVNV fails to meet its burden under Rule 56 of showing its entitlement to
judgment as a matter of law. For these reasons, the court finds that the motion for
summary judgment is due to be denied with respect to the FDCPA claims.
In accordance with the foregoing findings, it is ORDERED that:
Ms. Prince’s motion to strike certain affidavit testimonies (Doc. # 16),
as amended (Doc. # 25), is DENIED. The motion is treated as an
objection to the admission of certain affidavits as evidence. The
objections raised in Ms. Prince’s motion are OVERRULED.
LVNV’s motion to strike the Affidavit of William Azar (Doc. # 29) is
likewise DENIED, and the motion is treated as an objection to the
admission of the affidavit. LVNV’s objections raised in the motion
are OVERRULED as moot because the court has not relied on Mr.
Azar’s affidavit in deciding Defendant’s motion for summary
Defendant’s motion for summary judgment (Doc. # 15) is DENIED.
DONE this 24th day of June, 2014.
/s/ W. Keith Watkins
CHIEF UNITED STATES DISTRICT JUDGE
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