Hayes et al v. American Credit Acceptance, LLC et al
Filing
84
MEMORANDUM AND ORDER granting in part and denying in part as set forth in the Memorandum and Order 58 defendant, Find Track Locate, Inc.'s Motion to Dismiss Party. Signed by District Judge Richard D. Rogers on 10/9/14. (meh)
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF KANSAS
GINGER A. HAYES,
RICHARD W. HAYES, and
RICHARD L HAYES,
)
)
)
)
)
)
)
)
)
)
)
)
)
Plaintiffs,
v.
FIND TRACK LOCATE, INC.; and
MARLENE NEELEY,
Defendants.
Case No. 13-2413-RDR
MEMORANDUM AND ORDER
This matter is presently before the court upon defendant
Find Track Locate (FTL), Inc.=s
motion to dismiss or, in the
alternative, for summary judgment.
Having carefully reviewed
the arguments of the parties, the court is now prepared to rule.
I.
Plaintiffs= second amended complaint contains two causes of
action
against
defendants
FTL,
Marlene
Neeley
and
American
Credit Acceptance (ACA), LLC: (a) a claim for damages under the
Kansas Consumer Protection Act (KCPA), K.S.A. ' 50-623 et seq.;
and
(b)
a
claim
for
damages
under
the
Fair
Debt
Practices Act (FDCPA), 15 U.S.C. ' 1692 et seq.
Collection
In Count 1,
plaintiffs allege that ACA, FTL and Neeley engaged in deceptive
acts and practices and unconscionable acts and practices under
the
KCPA
when
Neeley,
who
was
1
employed
by
FTL,
repeatedly
telephoned
Richard
whereabouts
financed
of
by
a
W.
Hayes
truck
ACA.
and
Ginger
purchased
In
Count
by
2,
Hayes
concerning
Richard
L.
Hayes
plaintiffs
allege
the
and
the
aforementioned conduct also violated the FDCPA.
The
procedural
background
shows
that
Ginger
Hayes
and
Richard W. Hayes, mother and son, filed suit against ACA and FTL
in
Johnson
County,
Thereafter,
on
Kansas
August
8,
District
2013,
Court
Ginger
on
Hayes
June
and
26,
2013.
Richard
L.
Hayes, husband and wife, filed a Chapter 13 bankruptcy petition
with the United States Bankruptcy Court for the District of
Kansas.
The petition made no mention of Ginger=s lawsuit against
ACA and FTL.
The lawsuit of Ginger Hayes and Richard W. Hayes
was removed to this court on October 16, 2013, and designated as
Case No. 13-2413.
County,
Kansas
Richard L. Hayes filed suit in Johnson
District
Court
on
October
16,
2013,
claims similar to those raised by his wife and son.
raising
This case
was removed to this court on November 15, 2013, and designated
as Case No. 13-2590.
ACA then sought to either consolidate the
cases or join Richard L. Hayes as a party plaintiff to the case
filed by his wife and son.
granted
ACA=s
plaintiff
to
motion
this
to
On January 15, 2014, the court
join
action.
Richard
As
a
L.
result,
Hayes
as
Richard
a
party
L.
Hayes=
separate action was dismissed without prejudice on February 25,
2014.
The bankruptcy petition was amended in February 2014 to
2
include the plaintiffs= claims against the defendants.
On August
22, 2014, plaintiffs dismissed their claims against ACA.
In the motion for dismissal, FTL contends that plaintiffs
have failed to state a claim in Count 1 under the KCPA because
they did not allege that Ginger Hayes or Richard W. Hayes were
Aconsumers@
as
required
by
the
KCPA.
FTL
also
argues
that
plaintiffs have failed to allege any facts showing that it is a
Asupplier@ under the KCPA.
In its motion for summary judgment,
FTL asserts that the uncontroverted facts show that Ginger Hayes
and Richard W. Hayes were not Aconsumers@ under the KCPA.
FTL
further argues that Ginger Hayes and Richard W. Hayes were not
part of a Aconsumer transaction@ under the KCPA because they
never bought or acquired the truck.
FTL also argues that there
is not a genuine issue of material fact that it is a tracking
and locating company that arranges for repossession and not a
Asupplier@ under the KCPA.
Finally, FTL contends that it is
entitled to summary judgment on any claims made by Richard L.
Smith under the KCPA because Richard L. Hayes never entered into
any transaction with it.
In
their
plaintiffs
motion
have
not
to
dismiss
adequately
collector@ under the FDCPA.
Count
alleged
2,
FTL
that
contends
it
is
a
that
Adebt
FTL also argues that plaintiffs have
not alleged sufficient facts showing that plaintiff Richard W.
Hayes is a Aconsumer@ under the FDCPA.
Finally, FTL asserts that
plaintiffs have failed to allege any set of facts under which
3
section 1692f of the FDCPA would afford them relief under the
alleged circumstances.
In it motion for summary judgment on Count 2, FTL contends
that the uncontroverted facts demonstrate that it was not a Adebt
collector@ and was not attempting to collect a debt.
FLT further
argues that there is no genuine issue of material fact that
Richard W. Hayes was not a Aconsumer@ under the FDCPA.
Finally,
the FTL contends that the only section of the FDCPA, 15 U.S.C.
1692f, that could apply to it does not apply here.
FTL has also contended that Richard L. Hayes and Ginger
Hayes are not the real parties in interest in this case and lack
standing
to
pursue
bankruptcy filing.
it
because
their
claims
precede
their
FTL suggests that these claims belong to the
bankruptcy trustee, not plaintiffs.
II.
The court shall begin with the final argument raised by FTL
concerning
the
filing
of
the
bankruptcy
petition
since
this
contention potentially has subject matter jurisdiction issues.
FTL contends that Richard L. Hayes and Ginger Hayes are not the
real
parties
standing
to
in
interest
pursue
this
to
this
action
because
their Chapter 13 bankruptcy filing.
failed
to
indicate
in
against ACA and FTL.
should
have
noted
the
lawsuit
and
their
do
not
claims
have
precede
FTL notes that Ginger Hayes
bankruptcy
schedules
her
action
FTL also contends that Richard L. Hayes
the
potential
4
lawsuit
in
the
bankruptcy
petition because the conduct giving rise to the lawsuit arose
before
the
filing
of
bankruptcy.
FTL
argues
that
only
the
bankruptcy trustee has standing to assert these claims because
they are part of the bankruptcy estate.
FTL asserts that the
court can consider matters outside the pleadings concerning the
bankruptcy
case
in
order
to
resolve
a
challenge
to
subject
matter jurisdiction under Fed.R.Civ.P. 12(b)(1).
Richard
bankruptcy
L.
in
Hayes
the
and
Ginger
Hayes
United
States
Bankruptcy
District of Kansas.
filed
a
Chapter
Court
for
13
the
The bankruptcy petition was filed after
Ginger Hayes filed her claims in this case in the Johnson County
District Court on June 28, 2013, but before Richard L. Hayes
filed his lawsuit on October 16, 2013.
The conduct of which
plaintiffs= complain in this action allegedly occurred in the
spring of 2013.
Based upon the nature of the argument raised by FTL, it
appears that they are contending that the court lacks subject
matter jurisdiction over the claims of Ginger Hayes and Richard
L. Hayes because they lack standing.
FTL confuses standing,
which may impact subject matter jurisdiction, with real party in
interest
principles,
jurisdiction.
which
do
not
impact
subject
matter
Smith v. United Parcel Service, ____ Fed.Appx.
___, 2014 WL 4377680 at * 2 (10th Cir. Sept. 5, 2014).
The
question raised by FTL is who is the real party in interest.
Id.
5
Neither
addressing
side
the
has
issue
provided
of
the
whether
a
court
with
Chapter
13
any
debtor
cases
or
the
bankruptcy trustee is the real party in interest to prosecute a
non-bankruptcy cause of action which was property of the estate.
FTL relies upon Shields v. U.S. Bank Nat. Ass=n ND, 2006 WL
3791320
(D.Kan.
Dec.
22,
2006)
for
support
that
Ginger
Richard L. Hayes are not the real parties in interest.
and
Shields,
however, is not applicable here because the debtor there had
filed a Chapter 7 bankruptcy petition.
Id. at *2.
The court finds that Ginger and Richard L. Hayes are the
real parties in interest here because a fundamental difference
exists between Chapter 7 and Chapter 13 bankruptcies.
13
debtor
can
pursue
pre-petition
non-bankruptcy
A Chapter
claims
on
behalf of the bankruptcy estate as the real party in interest
because
the
debtor
normally
property of the estate.
remains
in
possession
of
all
Smith v. Rockett, 522 F.3d 1080, 1081-
82 (10th Cir. 2008); Autos, Inc. v. Gowin, 244 Fed. Appx. 885,
889
(10th
Alabama,
Cir.
2007);
LLC,
330
2004)(AConsidering
the
see
also
Looney
F.Supp.2d
1289,
structural
v.
Hyundai
1299-1300
framework
of
Motor
Mfg
(M.D.Ala.
Chapter
13,
including the more limited role of the trustee in Chapter 13
than in Chapter 7, the debtor=s property rights under 11 U.S.C. '
1303, the debtor remaining in possession of property prior to
and except as provided for in the plan pursuant to 11 U.S.C.
6
1306(b), that the debtor is not expressly stripped of standing
under the Code, and the legislative history of 11 U.S.C. '' 323;
1303, the court concludes that Looney, a Chapter 13 debtor, does
have standing to pursue her claims.@).
Accordingly, the court
shall deny FTL=s motion to dismiss or for summary judgment based
upon the contention that Ginger and Richard L. Hayes are not the
real parties in interest for their claims under the KCPA and the
FDCPA.
FTL has also argued, although somewhat vaguely, that Ginger
Hayes= failure to disclose this case in her bankruptcy petition
deprives her of the capacity to sue here.
FTL points out that
Ginger Hayes has acknowledged that she told her counsel about
the case prior to the filing of the bankruptcy petition, and she
signed the bankruptcy petition knowing that it was not listed on
any schedule.
There is support for the contention that the failure to
disclose assets, including contingent claims, deprives a debtor
of the capacity to enforce any unscheduled legal claim.
See
Clark v. Trailiner Corp., 2000 WL 1694299 at **1-2 (10th Cir.
Nov.
13,
parties
2000).
have
However,
provided
on
given
this
the
issue,
limited
the
dismiss Ginger Hayes= claims on this basis.
before
the
court
indicates
that
Mrs.
look
court
that
declines
the
to
The only evidence
Hayes
did
inform
her
counsel of her case and the original petition failed to mention
it.
Once the defendants raised this issue in this case, Mrs.
7
Hayes
bankruptcy
include it.
counsel
amended
her
bankruptcy
petition
to
Under these circumstances, without any additional
information, the court believes that Mrs. Hayes can pursue these
claims.
III.
Although FTL=s motion is styled as a motion to dismiss or,
in the alternative, for summary judgment, the court will decide
it under the summary judgment standards because plaintiffs have
alleged enough facts to satisfy Iqbal=s and Twombly=s pleading
requirements.
See Ashcroft v. Iqbal, 556 U.S. 662 (2009); Bell
Atl. Corp. v. Twombly, 550 U.S. 544 (2007).
Where, as here, the movant expressly captions the motion Ain
the alternative,@ to dismiss or for summary judgment, and submits
materials outside the pleadings for the court's consideration,
the parties are deemed to be on notice that conversion under
Fed.R.Civ.P. 12(d) may occur.
Marquez v. Cable One, Inc., 463
F.3d 1118, 1121 (10th Cir. 2006)(plaintiff had Aexplicit notice@
where
the
motion=s
alternative
and
title
the
referenced
motion
summary
included
judgment
materials
in
the
outside
the
pleadings).
Summary
judgment
is
appropriate
if
the
moving
party
demonstrates that there is Ano genuine issue as to any material
fact@ and that it is Aentitled to judgment as a matter of law.@
Fed.R.Civ.P. 56(a). In applying this standard, the court views
the
evidence
and
all
reasonable
8
inferences
therefrom
in
the
light most favorable to the nonmoving party.
Stores,
Inc.,
144
F.3d
664,
(10th
670
Adler v. WalBMart
Cir.
1998)
(citing
Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574,
587
(1986)).
The
moving
party
bears
the
initial
burden
of
demonstrating an absence of a genuine issue of material fact and
entitlement to judgment as a matter of law.
Id. at 670B71.
In
attempting to meet that standard, a movant that does not bear
the ultimate burden of persuasion at trial need not negate the
other party's claim; rather, the movant need simply point out to
the court a lack of evidence for the other party on an essential
element of that party's claim. Id. at 671 (citing Celotex Corp.
v. Catrett, 477 U.S. 317, 325 (1986)).
Once the movant has met this initial burden, the burden
shifts
to
the
nonmoving
party
Aset
to
forth
specific
showing that there is a genuine issue for trial.@
facts
Anderson v.
Liberty Lobby, Inc., 477 U.S. 242, 256 (1986); see Adler, 144
F.3d
at
671
n.
1
(concerning
shifting
burdens
on
summary
judgment). ATo accomplish this, the facts must be identified by
reference
to
affidavits,
deposition
transcripts,
or
specific
exhibits incorporated therein.@ Adler, 144 F.3d at 671 (internal
citations and quotations omitted). The nonmoving party cannot
defeat
a
properly
supported
motion
for
summary
judgment
by
relying on conclusory allegations; rather, the opposing party
must come forward with significant admissible probative evidence
supporting that party=s allegations.
9
Anderson, 477 U.S. at 256.
The court deems the following facts uncontroverted based
upon the materials submitted by the parties.
Richard L. Hayes
acquired a truck from the Midwest Auto Group in December 2011.
The truck was ultimately financed by ACA.
Prior to the purchase of the truck by Richard L. Hayes, his
son Richard W. Hayes gave him $500.
father
as
a
gift.
Richard
W.
He gave this money to his
Hayes
has
indicated
that
he
believed that the $500 would be used as a down payment on the
truck, but his father could have used the money on something
else.
Richard W. Hayes did not accompany his father to the
dealer to purchase the truck.
Ginger
Hayes
signed
purchase of the truck.
any
Neither Richard W. Hayes nor
paperwork
in
connection
with
the
Neither of them is on the title to the
truck.
The only person on the title of the truck is Richard L.
Hayes.
Ginger Hayes and Richard W. Hayes do not owe any of the
debt on the truck or are they legally responsible for the debt.
Richard L. Hayes fell behind on his payments on the truck
within the first year that he owned the truck, and he never
caught up on his payments.
to
make
payment
He contacted ACA when he was behind
arrangements.
He
contacted
ACA
repossession of the truck was already being attempted.
after
He told
his wife and son that he was trying to work something out with
ACA so they would not repossess his truck.
He contacted ACA to
make another financial arrangement but they could not agree on
a payment and he was instructed to contact a supervisor.
10
He
could not get a hold of the right people to work out a payment
agreement, so he just did not make any of his payments.
After Richard L. Hayes fell behind on the payments, FTL,
through
an
individual
who
identified
herself
as
Investigator
Smith, began to make contacts with Ginger Hayes and Richard W.
Hayes about the truck and about the debt owed by Richard L.
Hayes.
Ginger
efforts
were
Hayes
being
and
made
to
Richard
W.
repossess
Hayes
the
understood
truck.
At
that
times,
Investigator Smith called Ginger Hayes and asked for Richard L.
Hayes.
threw
Ginger Hayes left messages for Richard L. Hayes, but he
away
the
notes
telephone number.
son
to
give
and
did
not
call
Investigator
Smith=s
Richard L. Hayes did not instruct his wife or
Investigator
Smith
his
cell
phone
number.
Subsequent efforts were made to repossess the truck, but Ginger
Hayes and Richard L. Hayes prevented those efforts.
FTL
is
not
an
independent
debt
collection
agency.
Investigator Smith had no authority to, or represented that she
had authority to, enter into a payment agreement with Richard L.
Hayes regarding the truck.
IV.
A.
KCPA
FTL begins by arguing that Ginger Hayes and Richard W.
Hayes are not consumers under the KCPA.
FTL points out that
Richard L. Hayes is the person that entered into the consumer
11
transaction with ACA.
FTL asserts that neither his wife nor his
son were involved in acquiring the financed vehicle.
The KCPA provides that no supplier shall engage in any
deceptive act or practice or unconscionable act or practice in
connection with a consumer transaction.
627.
K.S.A. '' 50-626 and 50-
A consumer is defined as Aan individual, husband and wife,
sole proprietor, or family partnership, who seeks or acquires
property or services for personal, family, household, business
or agricultural purposes.@
K.S.A. ' 50-624(b).
A Aconsumer
transaction@ is Aa sale, lease, assignment or other disposition
for value of property or services within this state . . .to a
consumer; or a solicitation by a supplier with respect to any of
these
dispositions.@
K.S.A.
'
50-624(c).
A[T]he
guiding
principle to be applied in interpreting the KCPA is that the act
is to be liberally construed in favor of the consumer.@ State ex
rel. Stephan v. Bhd. Bank & Trust Co., 8 Kan.App.2d 57, 649 P.2d
419, 422 (1982); K.S.A. ' 50-623.
To have standing to sue under the KCPA, Ginger Hayes and
Richard W. Hayes must be consumers.
In order to be a consumer
under the KCPA, one must have been a party to the contract for
purchase.
First Nat=l Bank of Anthony v. Dunning, 18 Kan.App.2d
518, 855 P.2d 493, 498, rev. denied, 253 Kan. 857 (1993). The
KCPA=s protection is limited to individuals who directly contract
with
suppliers
for
goods
or
services.
12
Ellibee
v.
Aramark
Correctional Servs., Inc., 37 Kan.App.2d 430, 154 P.2d 39, 41
(2007).
The facts in this case are clear that Richard L. Hayes is
the person who entered into the consumer transaction with ACA.
Plaintiffs
deemed
the
following
fact
asserted
by
FTL
as
uncontroverted: ARichard L. Hayes was the person who acquired the
vehicle.@
Thus, the uncontroverted facts show that only Richard
L. Hayes is a consumer under the KCPA.
Ginger Hayes and Richard
W. Hayes do not appear to be consumers under the KCPA because
they were not parties to any contract for purchase.
See, e.g.,
First Nat=l Bank of Anthony, 855 P.2d at 498(allowing surety to
sue under the KCPA would improperly extend KCPA to third parties
that did not benefit from contract).
Plaintiffs,
however,
attempt
to
avoid
the
obvious
by
asserting (1) Richard W. Hayes provided $500 to his father to
purchase
the
partnership.@
truck;
and
(2)
they
are
partners
in
a
Afamily
They contend that these Afacts@ demonstrate that
FTL is not entitled to summary judgment on their KCPA claim.
Plaintiffs have suggested that Richard W. Hayes was a part
of the transaction involving the acquisition of the truck either
because he gave his father $500 or because he directly delivered
the $500 to the seller.
FTL contends that neither of these
contentions make any difference, even if true, because they do
not make Richard W. Hayes a consumer under the KCPA.
13
The court is not persuaded that plaintiffs= contentions have
merit, either factually or legally.
In his deposition, Richard
W. Hayes initially indicated that he gave his father $500 to
help purchase the truck.
However, he subsequently made clear
that he gave the $500 to his father as a gift and that his
father could have spent it on something other than the truck.
Moreover, he indicated that he did not deliver the $500 to the
seller of the truck because he did not go with his father when
his father purchased the truck.
In an errata sheet to his
deposition, he indicated that the $500 was the down payment on
the truck.
In a declaration that was attached to plaintiffs=
response,
Richard
W.
Hayes
states:
AI
provided
my
father
Plaintiff Richard L. Hayes $500.00 to purchase the subject truck
by
delivering
vehicle.@
those
funds
directly
to
the
retailer
the
The court does not find that the errata sheet or the
declaration create a genuine issue of material fact.
sheet
of
does
nothing
to
controvert
the
The errata
statements
deposition that he was not at the dealership.
in
Hayes=
In addition, as
pointed out by FTL, Richard L. Hayes made a down payment of
$1000 on the truck, not $500 as suggested by Richard W. Hayes.
The statement contained in the declaration appears to be an
effort
by
plaintiffs
summary judgment.
to
create
a
Asham@
fact
issue
to
avoid
In determining whether an affidavit creates a
sham fact issue at the summary judgment stage, a court considers
whether:
(1)
affiant
was
cross-examined
14
during
his
earlier
testimony; (2) affiant had access to pertinent evidence at the
time of his earlier testimony or whether the affidavit was based
on newly discovered evidence; and (3) earlier testimony reflects
confusion which the affidavit attempts to explain.
Ralston v.
Smith & Nephew Richards, Inc., 275 F.3d 965, 973 (10th
2001).
Cir.
Richard W. Hayes= declaration came after his deposition
and it does not purport to clear up any confusion during the
deposition and it does not indicate that he was exposed to any
new evidence.
In any event, even if Richard W. Hayes did provide $500 for
the down payment, the court continues to conclude that he is not
a consumer under KCPA because he was not a party to the contract
for the purchase of the truck.
The source of the funds has no
bearing on who is a consumer under the KCPA.
Any transaction
that Richard L. Hayes had with his son concerning the $500 was
separate from his purchase of the truck.
The court also fails to find any support for plaintiffs=
contention that the truck was acquired by a Afamily partnership.@
There are several reasons why this contention lacks merit.
It
appears to be based upon the idea that the plaintiffs were a
Afamily partnership@ because they lived together as a family.
Plaintiffs contend that the definition of Afamily partnership@
under the KCPA does not mandate any formal requirements such as
articles or bylaws.
lacks
merit
under
The court finds that plaintiffs= contention
Kansas
law.
15
First,
there
is
no
factual
support that a Afamily partnership@ acquired the truck.
The
uncontroverted facts indicate that Richard L. Hayes purchased
the truck.
contention
Second, there is no legal or factual support for the
that
partnership.@
plaintiffs=
no
legal
constitutes
unit
constituted
Afamily
a
No facts show the three plaintiffs were partners
in a family partnership.
is
family
support
a
family
See K.S.A. ' 56a-202.
for
the
suggestion
partnership
under
Moreover, there
that
a
Kansas
family
law.
unit
Id.
A
Afamily partnership@ under the KCPA Ameans a partnership in which
all of the partners are natural persons related to each other,
all of whom have a common ancestor within the third degree of
relationship, by blood or by adoption, or the spouses or the
stepchildren
of
any
such
persons,
or
persons
fiduciary capacity for persons so related.@
acting
in
a
K.S.A. ' 50-624(d).
Plaintiffs fail to recognize that a Afamily partnership@ under
the KCPA requires a Apartnership@ under Kansas law.
If there was
no need for an actual partnership, this requirement would have
not have been included the definition.
The language of the
definition commands an actual Apartnership,@ not simply a family
unit.
Accordingly,
Ginger
Hayes
and
Richard
standing to bring their claims under the KCPA.
W.
Hayes
lack
FTL is entitled
to summary judgment on the claims asserted by Ginger Hayes and
Richard W. Hayes based upon the KCPA.
16
The court must next consider whether FTL is entitled to
summary judgment because it is not a supplier under the KCPA.
FTL asserts that the uncontroverted facts show it is Aa tracking
and locating company that arranges for repossession.@
As such,
FTL contends that it is not a debt collector and, therefore, not
a supplier under the KCPA.
A
Asupplier@
means
Aa
manufacturer,
distributor,
dealer,
seller, lessor, assignor, or other person who, in the ordinary
course of business, solicits, engages in or enforces consumer
transactions, whether or not dealing directly with the consumer.@
K.S.A. ' 50-624(j).
The Kansas Supreme Court has held that Aan
independent debt collection agency falls within the definition
of a >supplier= and is subject to the provisions of the KCPA@ if
three
conditions
are
satisfied:
(1)
the
debt
arose
from
a
consumer transaction; (2) the underlying consumer transaction
involved a Asupplier@ and a Aconsumer@ as defined in the KCPA; and
(3)
A[t]he
conduct
complained
of,
either
deceptive
or
unconscionable, occurred during the collection of, or an attempt
to collect, a debt which arose from the consumer transaction and
was owed by the consumer to the original supplier.@
State ex
rel. Miller v. Midwest Serv. Bur. of Topeka, Inc., 229 Kan. 322,
623 P.2d 1343, 1349 (1981).
FTL has argued that Miller is not applicable here because
it is not a debt collection agency.
The court agrees that
Miller does not directly apply here because the uncontroverted
17
facts show that FTL is not a debt collection agency.
the
court
must
still
determine
if
FTL,
as
a
However,
tracking
and
locating company that arranges for repossession, engages in or
enforces consumer transactions.
The court is persuaded that FTL
is a supplier under the KCPA.
Based on the plain language of
K.S.A. ' 50B624(j) coupled with the preference for a liberal
construction of the act, FTL falls within the definition of
supplier and is subject to the provisions of the KCPA.
The
court believes there is little question that FTL is attempting
to enforce a consumer transaction by locating the property in
question for repossession.
in
the
enforcement
of
Such a step is a natural progression
a
consumer
transaction.
This
determination is a logical extension of the decision reached in
Miller.
The court shall next proceed to FTL=s contention that it is
entitled to summary judgment because there is no evidence that
Richard L. Hayes entered into a consumer transaction with it.
FTL
points
out
that
Richard
L.
Hayes
bought
the
Midwest Auto Group and financed it through ACA.
truck
from
FTL argues
there is no genuine issue of material fact to suggest that Hayes
entered into the subject transaction, or any transaction, with
FTL.
The court finds there is no need under the KCPA for Richard
L. Hayes to have entered into a consumer transaction with FTL.
In
Miller,
the
Kansas
Supreme
18
Court
made
clear
that
a
debt
collection
agency
not
involved
in
the
original
transaction was potentially liable under the KCPA.
consumer
Richard L.
Hayes did not have to enter into a transaction with FTL to
assert a claim under the KCPA.
The only requirements for the
application of the KCPA were set forth in Miller and the facts
before the court meet those requirements.
With these decisions, the court need not consider the other
arguments raised by the parties.
The court finds that FTL is
entitled to summary judgment on the KCPA claims of Ginger Hayes
and Richard W. Hayes.
The court, however, shall deny FTL=s
motion for summary judgment on Richard L. Hayes= KCPA claims.
B.
FDCPA
In its motion for summary judgment, FTL contends that the
uncontroverted
facts
demonstrate
that
it
was
not
collector@ and was not attempting to collect a debt.
a
Adebt
FLT further
argues that there is no genuine issue of material fact that
Richard W. Hayes was not a Aconsumer@ under the FDCPA.
Finally,
the FTL contends that the only section of the FDCPA, 15 U.S.C. '
1692f, that could apply to it does not apply here.
Congress
enacted
the
FDCPA
Ato
eliminate
abusive
debt
collection practices by debt collectors,@ 15 U.S.C. ' 1692(e),
and its provisions apply almost exclusively to debt collectors,
which
the
statute
defines
as
19
Aany
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).
To prevail on a claim under the FDCPA, a plaintiff must
prove that a Adebt collector['s]@ effort to collect a Adebt@ from
a Aconsumer@ violated some provision of the FDCPA.
Cannon, 401 Fed.Appx. 389, 393 (10th Cir. 2010).
Maynard v.
Courts have
consistently found that enforcers of security interests, such as
repossession agencies, may not be held liable under the general
provisions of the FDCPA because they are not considered Adebt
collectors.@
Montgomery v. Huntington Bank, 346 F.3d 693, 699-
700 (6th Cir. 2003); Jordan v. Kent Recovery Services, Inc., 731
F.Supp. 652, 656-56 (D.Del. 1990).
For purposes of section
1692f(6) of the FDCPA, however, the statute employs a broader
definition of the term Adebt collector,@ and includes Aany person
who uses any instrumentality of interstate commerce or the mails
in
any
business
the
principal
enforcement of security interests.@
purpose
of
which
is
the
15 U.S.C. ' 1692a(6).
Section 1692f(6) prohibits debt collectors from using
unfair or unconscionable means to collect or attempt to
collect any debt, specifically: taking or threatening to
take any nonjudicial action to effect dispossession or
20
disablement of property if (a) there is no present right to
possession of the property claimed as collateral through an
enforceable security interest; (b) there is no present
intention to take possession of the property; or (c) the
property is exempt by law from such dispossession or
disablement.
15 U.S.C. ' 1692f(6)(A)-(C).
This
Aapplies
provision
to
repossession
agencies,
those
businesses which are employed by the owner of collateral to
dispossess the debtor of the collateral and return it to the
owner.@
Ghartey v. Chrysler Credit Corp., 1992 WL 373479 at *4
(E.D.N.Y. Nov.23, 1992)(citing Jordan, 731 F.Supp. 652, 657B59
(D.Del.1990)).
Thus, a company that aids in repossession may be
held liable for violations of section 1692f(6), but only if they
engage in repossession in violation of one or more of its three
provisions.
Plaintiffs argue that FTL is indeed a debt collector.
This
argument is based primarily upon the following language from
FTL=s
AFTL
website:
directly
with
Inc.
financial
is
an
investigation
institutions,
to
ratios on problematic and overdue accounts.@
firm
maximize
working
recovery
They also suggest
that FTL is a debt collector under the FDCPA because they sent
text
messages
and
made
telephone
Richard W. Hayes.
21
calls
to
Ginger
Hayes
and
The uncontroverted facts before the court show that FTL is
not a debt collector as that term is defined in the FDCPA.
Rather, the facts show that FTL is a company that finds, tracks
and locates property for purposes of repossession.
The language
from FTL=s website does not support or indicate that FTL is an
independent debt collection agency.
There is no evidence before
the court that FTL sought to collect on the debt owed by Richard
L. Hayes to ACA.
that
FTL
was
Rather, the entirety of the evidence shows
seeking
to
locate
the
truck
for
repossession
purposes.
FTL also contends that the undisputed facts show that 15
U.S.C. ' 1692f(6) is not applicable here because it did not
violate any of the required provisions.
The court agrees.
The
facts show that plaintiffs were aware that the truck was subject
to repossession and that FTL was seeking to locate the truck for
purposes of repossession.
The facts further show that FTL had a
present right to repossess the truck because Richard L. Smith
had defaulted on the finance agreement with ACA.
is
no
evidence
dispossession.
that
the
truck
was
exempt
Finally, there
by
law
from
Plaintiffs have failed to present any evidence
that FTL engaged in repossession efforts in violation of 15
U.S.C.
'
1692f(6).
Accordingly,
FTL
judgment on plaintiffs= FDCPA claims.
22
is
entitled
to
summary
With this decision, the
court
need
not
consider
the
other
arguments
raised
by
FTL
concerning plaintiffs= FDCPA claims.
V.
In sum, FTL=s motion shall be granted in part and denied in
part.
The court shall grant summary judgment to FTL on the KCPA
claims asserted by Ginger Hayes and Richard W. Hayes.
The court
shall also grant summary judgment to FTL on plaintiffs= claims
asserted under the FDCPA.
The remainder of the motion shall be
denied.
IT IS THEREFORE ORDERED that defendant Find Track Locate,
Inc.=s motion to dismiss or, in the alternative, for summary
judgment (Doc. # 58) be hereby granted in part and denied in
part as set forth in the foregoing memorandum and order.
IT IS SO ORDERED.
Dated this 9th day of October, 2014, at Topeka, Kansas.
s/RICHARD D. ROGERS
Richard D. Rogers
United States District Judge
23
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