Johnson et al v. Redstone Federal Credit Union et al

Filing 85

MEMORANDUM OPINION - For the reasons discussed above, the Court grants Mr. Emerson's and Mr. Adcock's motion for summary judgment, (Doc. 65 ), and denies the Johnsons' motion for partial summary judgment, (Doc. 78 ). The Court will enter a separate order closing the case. Signed by Judge Madeline Hughes Haikala on 7/6/2020. (KEK)

FILED
2020 Jul-06 PM 03:15
U.S. DISTRICT COURT
N.D. OF ALABAMA

UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF ALABAMA
NORTHEASTERN DIVISION

GEORGE H. JOHNSON, III, and
GLORIA J. JOHNSON,
Plaintiffs,
v.
REDSTONE FEDERAL CREDIT
UNION, et al.,
Defendants.

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Case No.: 5:14-cv-02378-MHH

MEMORANDUM OPINION
Defendants Heath Emerson and Danny Adcock have asked the Court to enter
judgment for them on the plaintiffs’ Fair Debt Collection Practices Act claim against
them. (Doc. 65). The motion for summary judgment presents a narrow issue: are
Mr. Emerson and Mr. Adcock “debt collectors” under the FDCPA? For the reasons
discussed below, the Court concludes that Mr. Emerson and Mr. Adcock are not
“debt collectors” under the FDCPA, so the Court will enter judgment for Mr.
Emerson and Mr. Adcock on the Johnsons’ claim.
I.

SUMMARY JUDGMENT STANDARD
“The court shall grant summary judgment if the movant shows 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). To demonstrate that a genuine dispute as to a
material fact precludes summary judgment, a party opposing a motion for summary
judgment must cite “to particular parts of materials in the record, including
depositions, documents, electronically stored information, affidavits or declarations,
stipulations (including those made for purposes of the motion only), admissions,
interrogatory answers, or other materials.” Fed. R. Civ. P. 56(c)(1)(A). When
considering a summary judgment motion, a district court must view the evidence in
the record and draw reasonable inferences in the light most favorable to the nonmoving party. Asalde v. First Class Parking Sys. LLC, 898 F.3d 1136, 1138 (11th
Cir. 2018). Accordingly, the Court views the evidence in the light most favorable
to Mr. and Mrs. Johnson.
II.

FACTUAL AND PROCEDURAL BACKGROUND
From 1990 to 1994, George and Gloria Johnson entered into several credit

agreements with Redstone Federal Credit Union for personal, family, or household
purchases. (Doc. 71-1, p. 2).1 In 1997, the Johnsons defaulted on these loans, and
Redstone sued the Johnsons in the Circuit Court of Limestone County, Alabama.
(Doc. 71-4, p. 2; see also Redstone Federal Credit Union v. Johnson, et al., CV-97-

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Initially, the Johnsons asserted claims against several defendants. The Johnsons’ FDCPA claim
against Mr. Adcock and Mr. Emerson are the only claims remaining in this action. For more
detailed information about the factual background of this case and the Johnsons’ initial claims,
please see Doc. 48.
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134).2 On June 9, 1997, the Limestone County Circuit Court entered a consent
judgment in favor of Redstone and against the Johnsons in the amount of $27,715.08.
(Doc. 1, p. 3 in CV-97-134). When the judgment was recorded on June 26, 1997, it
became a lien on all property that the Johnsons owned in Limestone County. (See
Doc. 71-3, p. 2; see also Doc. 1, p. 14 in CV-97-134).
On May 3, 2007, pursuant to Alabama Code Sections 6-9-190 through 192,
Redstone filed in Limestone County Circuit Court a motion for revival of the June
9, 1997 judgment. (Doc. 71-3, pp. 2–4; Doc. 1, p. 12 in CV-97-134). Redstone
stated that it filed the motion “for the purpose of lien continuity on real estate” that
the Johnsons owned. (Doc. 1, p. 12 in CV-97-134). In its motion, Redstone
acknowledged that the Johnsons had filed and had been discharged from bankruptcy,
but Redstone asserted that “the lien passed through the bankruptcy unaffected.”
(Doc. 71-3, p. 2) (citing Dewsnup v. Timm, 502 U.S. 410 (1993), and In re Wrenn,
40 F.3d 1162 (11th Cir. 1994)). In its motion, Redstone stated that the Johnsons had
not paid the judgment and “that the judgment lien is still fully valid.” (Doc. 71-3, p.
2). Redstone asked the state court to revive the judgment for another 10 years. (Doc.

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The record for the state court action is available on the Alacourt website. The Court takes judicial
notice of that record. See Horne v. Potter, 392 Fed. Appx. 800, 802 (11th Cir. 2010) (district court
properly took judicial notice of documents related to the plaintiff’s previous civil action because
the documents “were public records that were ‘not subject to reasonable dispute’ because they
were ‘capable of accurate and ready determination by resort to sources whose accuracy could not
reasonably be questioned.’”) (quoting Fed. R. Evid. 201(b); other internal citations omitted).
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71-3, p. 2). Without hearing testimony regarding the facts underlying Redstone’s
motion, on May 9, 2007, the Limestone County Circuit Court entered an order
granting Redstone’s motion and reviving the June 9, 1997 judgment. (Doc. 71-3, p.
4; see Doc. 1, p. 12 in CV-97-134).
On July 25, 2013, Redstone sold the judgment debt and the judgment lien to
Heath Emerson and Danny Adcock. (Doc. 72-4, pp. 2–3; Doc. 6 in CV-97-134).
After the transfer, Redstone did not participate in the Limestone County state court
action. (See Doc. 14, ¶ 24). As a result of the transfer, Mr. Emerson and Mr. Adcock
“asserted control” over the Johnsons’ real and personal property and “impaired the
Johnsons’ rights and ownership to their property.” (Doc. 14, p. 6, ¶ 23; see Doc. 651, p. 1; Doc. 65-2, p. 1).
On July 29, 2013, Mr. Emerson and Mr. Adcock filed an application for writ
of execution in Limestone County Circuit Court. (Doc. 72-5, p. 2; Doc. 5 in CV-97134). The application stated that Mr. Emerson and Mr. Adcock seek “a writ of
execution against the real property which the Lien Holders retain a perfected
judgment in rem . . . .” (Doc. 72-5, p. 2; Doc. 5 in CV-97-134). The application
describes the property upon which law enforcement should execute. (Doc. 72-5, pp.
2–3; Doc. 5 in CV-97-134).
On August 5, 2013, the Limestone County Circuit Court granted the
application for writ of execution. (Doc. 72-6, p. 2; Doc. 13, p. 4 in CV-97-134).
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The state court instructed the clerk of court to “issue a writ of execution against the
real property described in the application for writ of execution[.]” (Doc. 72-6, p. 2;
Doc. 13, p. 4 in CV-97-134). The state court authorized the Sheriff of Limestone
County to “levy said real property and execute the judgment . . . against said real
property[.]” (Doc. 72-6, p. 2; Doc. 13, p. 4 in CV-97-134). The state court also
instructed the clerk of court to designate Mr. Emerson and Mr. Adcock “as those
parties who now hold the judgment . . . .” (Doc. 72-6, p. 2; Doc. 13, p. 4 in CV-97134).
On August 6, 2013, the Limestone County Circuit Clerk issued a writ of
execution of judgment. (Doc. 72-6, p. 3; Doc. 13, pp. 1–2 in CV-97-134). The writ
stated that the Johnsons owed $74,457.11 which included the original judgment
amount, interest, fees, and costs. (Doc. 72-6, p. 3; Doc. 13, p. 1 in CV-97-134). The
writ ordered any law enforcement officer in the State of Alabama “immediately to
levy” the property described in the application for writ of execution. (Doc. 72-6, p.
3; Doc. 13, pp. 1–2 in CV-97-134). On August 7, 2013, a Limestone County
sheriff’s deputy levied the real property described in the writ of execution by serving
notice of the writ of execution on the Johnsons. (Doc. 16, p. 1 in cv-97-134).
According to the Johnsons, Mr. Emerson and Mr. Adcock’s effort to execute
on the judgment lien violated the FDCPA. (Doc. 79, p. 10; Doc. 14, p. 12, ¶ 53). In
another opinion, the Court found that the Johnsons had “not adequately allege[d]
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that Mr. Emerson and Mr. Adcock [we]re debt collectors within the meaning of the
FDCPA,” (Doc. 48, p. 23), but that Mr. Emerson and Mr. Adcock had not moved to
dismiss the Johnsons’ FDCPA claim. (Doc. 48, p. 25). As a result, the Court ordered
the Johnsons to show cause why the Court should not dismiss the FDCPA claim for
failure to state a claim. (Doc. 48, p. 25). The Johnsons answered, (Doc. 49), and
Mr. Emerson and Mr. Adcock moved for summary judgment, (Doc. 65). 3
III.

ANALYSIS
Under the FDCPA, a “debt collector” is “any person who uses any

instrumentality of interstate commerce or the mails in any business the principal
purpose of which is the collection of any debts, or who regularly collects or attempts
to collect, directly or indirectly, debts owed or due or asserted to be owed or due
another.” 15 U.S.C. § 1692a(6).
In Henson v. Santander Consumer USA, Inc., the Supreme Court held that a
third-party buyer of debt that seeks to collect that debt does not fall under the
“regularly collects” prong of § 1652a(6).

137 S. Ct. 1718, 1720 (2017).

Accordingly, Mr. Emerson and Mr. Adcock are not “debt collectors” under the
“regularly collects” definition.

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The Johnsons also moved for partial summary judgment, (Doc. 78), arguing that Mr. Emerson
and Mr. Adcock violated the FDCPA, (Doc. 79, p. 10). Because they are not “debt collectors”
under the statute, Mr. Emerson and Mr. Adcock could not have violated the FDCPA.
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To determine whether Mr. Emerson and Mr. Adcock are debt collectors under
the “principal purpose” prong of § 1652a(6), the Court considers the plain meaning
of the FDCPA’s text: “The term ‘debt collector’ means any person who uses any
instrumentality of interstate commerce or the mails in any business the principal
purpose of which is the collection of any debts[.]” 15 U.S.C. § 1692a(6). The
Johnsons focus on the word “business,” which they define as “‘a special task, duty,
or function.’” (Doc. 72, pp. 5–6 (quoting Webster’s New World College Dictionary
198 (4th ed. 2001)). And relying on this definition, the Johnsons conclude that “the
principal purpose of Defendants’ actions was to collect the debt, not obtain the sliver
of land.” (Doc. 72, p. 7).
The FDCPA does not define the term “business,” a word which can refer to
“[c]ommercial enterprises” or individual “[c]ommercial transactions.” See Black’s
Law Dictionary 211 (8th ed. 2004). But if the term “business” focused, as the
Johnsons urge, on the purpose of individual actions of persons or entities attempting
to collect debts, then virtually any action relating to any delinquent debt would fall
under the ambit of the FDCPA. There is no indication that Congress intended such
a sweeping definition of “debt collector.” What’s more, the Johnsons’ reading of
the “principal purpose” prong would, in most cases, make redundant the “regularly
collects” prong of § 1692a(6)—a result courts typically avoid, see, e.g., Marx v. Gen.
Revenue Corp., 568 U.S. 371, 386 (2013).
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As a result, the Court concludes that the term “business” in § 1692a(6) refers
to the totality of a defendant’s commercial dealings. See McAdory v. M.N.S. &
Assocs., LLC, 952 F.3d 1089, 1093 (9th Cir. 2020) (“Determining a business’s
principal purpose . . . involves comparing and prioritizing its objectives[.]”); Barbato
v. Greystone Alliance, LLC, 916 F.3d 260, 267 (3d Cir. 2019) (“As long as a
business’s raison d’etre is obtaining payment on the debts that it acquires, it is a debt
collector.”).
Applying that interpretation here, the Johnsons have not presented evidence
that would allow reasonable jurors to conclude that Mr. Emerson and Mr. Adcock
engage in “business the principal purpose of which is the collection of any debts[.]”
Per their affidavits, Mr. Emerson and Mr. Adcock “occasionally buy property to
repair and sell.” (Doc. 65-1, p. 1). House “flipping” generally is not predicated on
collecting delinquent debt. And other than the alleged debt collection in this case,
the Johnsons have not presented evidence that Mr. Emerson and Mr. Adcock
previously have collected a debt as part of their house-flipping business, let alone
that debt collection is the “primary purpose” of that business. Even in this instance,
Mr. Emerson and Mr. Adcock were not interested in the nearly $75,000 debt; they
wanted the property that was subject to the judgment lien. (Docs. 65-1, 65-2).
Moreover, unlike FDCPA “debt collectors,” Mr. Emerson and Mr. Adcock did not
use interstate commerce or the mail to collect a debt; they used the local sheriff to
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levy the Johnsons’ property in Limestone County, the county in which Mr. Emerson
resides, to resolve a property line dispute. (Docs. 65-1, 65-2). This is not debt
collection within the meaning of the FDCPA.
IV.

CONCLUSION
For the reasons discussed above, the Court grants Mr. Emerson’s and Mr.

Adcock’s motion for summary judgment, (Doc. 65), and denies the Johnsons’
motion for partial summary judgment, (Doc. 78). The Court will enter a separate
order closing the case.
DONE and ORDERED this July 6, 2020.

_________________________________
MADELINE HUGHES HAIKALA
UNITED STATES DISTRICT JUDGE

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