Reyes v. Julia Place Condominiums Homeowners Association, Inc. et al
ORDER & REASONS. It is ORDERED that Steeg Law's Motion for Summary Judgment (R. Doc. 679 ) is GRANTED. Specifically, the Court holds that (1) Steeg Law is not a "debt collector" as defined by the Fair Debt Collection Practices Act, (2) Plaintiff's usury claims against Steeg Law are DISMISSED WITH PREJUDICE, and (3) Plaintiff's negligence claims against Steeg Law are DISMISSED WITH PREJUDICE. Signed by Judge Carl Barbier. (Reference: 12-2043)(gec)
UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF LOUISIANA
NICOLE REYES, ET AL.
JULIA PLACE CONDOMINIUM
INC., ET AL.
ORDER & REASONS
Before the Court are cross-motions for summary judgment filed
by Defendant, Steeg Law (R. Doc. 679), and Plaintiff, Nicole Reyes
(R. Doc. 670). 1 The parties ask the Court to determine, inter alia,
whether Steeg Law is a “debt collector” for purposes of the Fair
Debt Collection Practices Act (“FDCPA”). Having considered the
motions and legal memoranda, the record, and the applicable law,
the Court finds that Steeg Law’s motion (R. Doc. 679) should be
GRANTED, and Plaintiff’s motion (R. Doc. 670) should be DENIED.
FACTS AND PROCEDURAL BACKGROUND
This case has a long history, as evidenced by more than eighthundred docket entries. Recently, on October 12, 2016, Magistrate
reported that a partial settlement was reached. (R. Doc. 785.) The
Shortly after Plaintiff filed her motion for summary judgment Steeg Law filed
its own motion for summary judgment (R. Doc. 679) on its status as a debt
collector. Steeg Law also filed an opposition (R. Doc. 708) to Plaintiff’s
motion for summary judgment raising essentially the same arguments as its own
motion for summary judgment (R. Doc. 679). Plaintiff also filed an opposition
to Steeg Law’s motion for summary judgment (R. Doc. 711) raising essentially
the same arguments raised in its original motion for summary judgment (R. Doc.
670). Steeg Law filed a reply to Plaintiff’s opposition. (R. Doc. 746.)
settlement resolved Plaintiffs’ claims against all Defendants,
Association, Inc. (“Julia Place”). Id. Thereafter, this Court
decertified Plaintiffs’ FDCPA class and usury class. (R. Doc. 804.)
The present cross-motions for summary judgment relate mainly to
the FDCPA and whether Steeg Law is a “debt collector.” In short,
Plaintiff argues that Steeg Law is a “debt collector” as defined
under the FDCPA, and Steeg Law argues to the contrary. The motions
are now before the Court on the briefs and without oral argument.
1. Plaintiff’s Arguments
Plaintiff argues that “Steeg has engaged in debt collection
activity every month from February of 2008 through the filing of
this lawsuit in August of 2012, and beyond.” (R. Doc. 670-1 at 12.) In support of her motion for summary judgment, Plaintiff
submitted three exhibits— documents relied upon for the summary
exhibit produced, a summary exhibit created by plaintiff of all
documents, and a summary of redacted billing records—that she
argues prove Steeg Law is “debt collector” as defined by the FDCPA.
Id. at 3. Plaintiff argues that the exhibits demonstrate 1,049
activities that are “directly related to collection of condominium
assessments from unit owners between January 4, 2010 and December
5, 2012,” thus making Steeg Law a “debt collector.” Id. Plaintiff
further argues that Steeg Law is a debt collector because its
associations. Id. at 3.
2. Steeg Law’s Arguments
Steeg Law argues that (1) it is not a “debt collector” under
the FDCPA, (2) Plaintiff lacks a cause of action against it under
Louisiana usury law, (3) Plaintiff may not claim Steeg Law was
negligent because it did not owe her a duty under the law, and (4)
that Plaintiff’s class-wide damages are limited under the FDCPA.
(R. Doc. 679-3 at 1.) As to Plaintiff’s “debt collector” argument,
Steeg Law asserts that Plaintiff’s argument lacks evidentiary
support. See (R. Doc. 708.) Specifically, Steeg Law argues that
the exhibits produced by Plaintiff are based on assumptions from
redacted invoices and privilege logs, and that the information
produced is not proper summary judgment evidence. Id. at 1. Steeg
Law further asserts that it is not a “debt collector” under the
FDCPA because it does not regularly engage in debt collection, and
debt collection is not its principal business. Id. at 6-18; see
also (R. Doc. 708.) Steeg Law argues that its billable hours for
debt collection for the two years prior to the filing of this suit
constitute less than 1.5% of its annual revenue. (R. Doc. 679-3 at
7.) Further, Steeg Law argues that its collection work amounted to
less than 1% of its case load in 2010, 2011, and 2012. Id. at 8.
Steeg Law also argues that it sent less than thirty lien letters
on behalf of its condominium association clients during the time
period prescribed by this Court, and that many of those letters
sought debts that were not “consumer debts” under the FDCPA. Id.
at 13. Finally, Steeg Law argues that its alleged collection
activities constituted less than 1.3% of its revenue in 2012, less
than 1.1% in 2011, and less than 1.0% in 2010. Id. at 15. For these
reasons, Steeg Law argues that it is not a debt collector under
the FDCPA. Steeg Law also argues that it is not liable for any
violation of Louisiana usury law, because it has not charged any
allegedly usurious interest or late fees. (R. Doc. 679-3 at 18.)
against it should be dismissed because it did not owe Plaintiff a
duty under Louisiana law. Id. at 19. Finally, Steeg Law argues
that Plaintiff’s class-wide damages are limited under the FDCPA to
1% of Steeg Law’s net worth. Id. at 21.
Summary judgment is appropriate when “the pleadings, the
discovery and disclosure materials on file, and any affidavits
show that there is no genuine issue as to any material fact and
that the movant is entitled to judgment as a matter of law.”
Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986) (citing Fed. R.
Civ. P. 56(c)); Little v. Liquid Air Corp., 37 F.3d 1069, 1075
(5th Cir. 1994). When assessing whether a dispute as to any
material fact exists, a court considers “all of the evidence in
the record but refrains from making credibility determinations or
Agribusiness Ins. Co., 530 F.3d 395, 398 (5th Cir. 2008). All
reasonable inferences are drawn in favor of the nonmoving party,
allegations or unsubstantiated assertions. Little, 37 F.3d at
1075. A court ultimately must be satisfied that “a reasonable jury
could not return a verdict for the nonmoving party.” Delta, 530
F.3d at 399.
If the dispositive issue is one on which the moving party
will bear the burden of proof at trial, the moving party “must
come forward with evidence which would ‘entitle it to a directed
verdict if the evidence went uncontroverted at trial.’” Int’l
Shortstop, Inc. v. Rally’s, Inc., 939 F.2d 1257, 1264-65 (5th Cir.
1991). The nonmoving party can then defeat the motion by either
countering with sufficient evidence of its own, or “showing that
the moving party’s evidence is so sheer that it may not persuade
the reasonable fact-finder to return a verdict in favor of the
moving party.” Id. at 1265.
If the dispositive issue is one on which the nonmoving party
will bear the burden of proof at trial, the moving party may
satisfy its burden by merely pointing out that the evidence in the
record is insufficient with respect to an essential element of the
nonmoving party’s claim. See Celotex, 477 U.S. at 325. The burden
then shifts to the nonmoving party, who must, by submitting or
referring to evidence, set out specific facts showing that a
genuine issue exists. See id. at 324. The nonmovant may not rest
upon the pleadings, but must identify specific facts that establish
a genuine issue for trial. See, e.g., id. at 325; Little, 37 F.3d
1. Steeg Law is not a “Debt Collector” as Defined by the FDCPA
The Fair Debt Collection Practices Act seeks to eliminate
“abusive, deceptive, and unfair debt collection practices” by
regulating the type and number of contacts a “debt collector” can
make with a debtor. See 15 U.S.C. § 1692. “In order to prevail on
an FDCPA claim, plaintiff must prove that:
(1) [she] has been the
object of collection activity arising from consumer debt, (2) the
defendant is a debt collector as defined by the FDCPA, and (3) the
defendant has engaged in an act or omission prohibited by the
FDCPA.” Matter of Mayer, 199 B.R. 616, 619 (E.D. La. 1996); see
also Sibley v. Firstcollect, Inc., 913 F. Supp. 469, 471 (M.D. La.
1995). The statute defines “debt collector” to include “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). Lawyers engaged in consumer
debt collection litigation may be considered “debt collectors” and
held liable for violating the FDCPA. Heintz v. Jenkins, 514 U.S.
291, 294 (1995); Addison v. Braud, 105 F.3d 223, 224 n.1 (5th Cir.
1997). In determining whether a law firm is a debt collector, the
focus is on whether debt collection activity is the “principal
purpose” of the firm or whether the firm “regularly” engages in
debt collection activity. See Kirkpatrick v. Dover & Fox, P.C.,
No. 13-0123, 2013 WL 5723077, at *5 (S.D. Tex. Oct. 21, 2013).
collection is not the principal purpose of his business.” Id.
(citing Hester v. Graham, Bright & Smith, P.C., 289 F. App’x 35,
41 (5th Cir. 2008)). “Whether a party ‘regularly’ attempts to
collect debts is determined, of course, by the volume or frequency
of its debt-collection activities.” Brown v. Morris, 243 F. App’x
31, 35 (5th Cir. 2007). Indeed, “if the volume of a person’s debt
collection services is great enough, it is irrelevant that these
services only amount to a small fraction of his total business
activity; the person still renders them ‘regularly.’” Garrett, 110
F.3d at 318. Thus, in the Fifth Circuit, “no bright-line rule
identifies when an attorney or law firm ‘regularly’ collects or
attempts to collect debts, so courts must make this determination
on a case-by-case basis.” Hester, 289 F. App’x at 41 (citing
Goldstein v. Hutton, Ingram, Yuzek, Gainen, Carroll & Bertolotti,
374 F.3d 56, 62 (2d Cir. 2004)).
The parties appear to agree that debt collection is not Steeg
Law’s principal purpose. See (R. Doc. 670; R. Doc. 679-3.) However,
the parties dispute whether Steeg Law “regularly” engages in debt
collection activity. Courts within the Fifth Circuit look to a
variety of factors to determine whether a law firm “regularly”
engages in debt collection activity. For example, courts within
this circuit examine “the number of lawsuits filed and collection
letters mailed, the percentage of time debt collection activities
consume, the share of total lawsuits filed that were dedicated to
debt collection, the number of creditor clients and the length of
the firm’s relationship with them, the frequency and nature of the
non-collection work in which the firm engages, and the number of
firm attorneys and other employees dedicated to debt collection
Plaintiff has produced exhibits it purports demonstrates that
Steeg Law regularly engages in debt collection activities. (R.
Doc. 670-7.) However, Plaintiff relies on redacted billing logs
and assumes that every act between Steeg Law and a condominium
association constitutes “debt collection” in violation of the
FDCPA. See (R. Doc. 670 at 65-246.) Plaintiff has not provided any
evidence to substantiate her argument, and the Court is unwilling
to accept Plaintiff’s assumption that every act between Steeg Law
judgment evidence. Ragas v. Tenn. Gas Pipeline Co., 136 F.3d 455,
458 (5th Cir. 1998) (citing Celotex, 477 U.S. at 324). Accordingly,
Plaintiff has not produced any competent summary judgment evidence
to support her argument that Steeg Law is a “debt collector” under
Steeg Law argues that it does not regularly engage in debt
collection activities. (R. Doc 679-3.) Again, “[w]hether a party
‘regularly’ attempts to collect debts is determined . . . by the
volume or frequency of its debt collection activities.” Hester,
289 F. App’x at 35 (quoting Brown v. Morris, 243 F. App’x 31, 35
(5th Cir. 2007)). Steeg Law argues that its collection activity is
merely incidental to its general representation of condominium
association clients and is limited to sending lien letters. (R.
Doc. 679-3 at 7.) Steeg Law further argues, and Plaintiff agrees,
that between 2010 and 2012 that Steeg Law sent only fifty-nine
letters seeking to collect consumer debts. (Id. at 13-14; R. Doc.
670-1 at 3 n.7) Steeg Law produced the affidavits of Nicolle A.
Jené, a Steeg Law paralegal, and Randy Opotowsky, a partner with
Steeg Law. (R. Doc. 679-4, R. Doc. 679-5.) Ms. Jené has performed
2 It should also be noted that Steeg Law submitted the affidavit of Randy
Opotowsky who affirmed that the legal services performed on behalf of its
condominium association clients did not exclusively consist of debt collection
services. (R. Doc. 679-6 at 2.)
matters on behalf of Steeg Law’s condominium association clients,
and she compared Steeg Law’s revenue from all files on which it
charged for legal services from 2010 through 2012 to Steeg Law’s
revenue from files relating to collection of debts. (R. Doc. 6794 at 1-2.) Ms. Jené affirmed that the percentage of Steeg Law’s
revenue attributable to fees accrued through the representation of
condominium associations in perfecting and enforcing liens and
recovering delinquent balances on behalf of those associations for
the years 2010, 2011, and 2012 was less than 1.3% of Steeg Law’s
revenue during those time periods. Id. at 2-3. Ms. Jené further
declared that Steeg Law does not employ any full-time employees to
collect debts. Id. at 3.
Similarly, Mr. Opotowsky affirmed that Steeg Law does not
market to obtain debt collection files with any of its clients,
consumer debts, and debt collection is not the principal purpose
of Steeg Law’s business. (R. Doc. 679-5.) Mr. Opotowsky also
declared that Steeg Law’s total billable hours billed toward
condominium association files between 2010 and 2012 was less than
1.5% of all of Steeg Law’s billable hours during that time period.
Id. at 4. Even beyond sending lien letters, Mr. Opotowsky affirms
that less than 3.5% of the total hours billed to the condominium
association files between 2010 and 2012 was for debt collection
activity. Id. at 5. Mr. Opotowsky also notes that Steeg Law
performs various tasks for its condominium association clients.
Id. at 2-4. 3
collection activity is trivial when compared to the rest of its
collection activity, that Steeg Law performs numerous tasks other
than debt collection for its condominium association clients, and
collection. Courts must determine whether a law firm regularly
collects debt on a case-by-case basis.
Hester, 289 F. App’x at
41. Therefore, in light of all of the evidence presented, the Court
finds that Steeg Law is not a “debt collector” as defined under
the FDCPA. See Franco v. Maraldo, No. 99-3265, 2000 WL 288378, at
*2-3 (E.D. La. Mar. 16, 2000) (finding a lawyer was not a debt
collector where less than one percent of his practice involved
debt collection activity, and where attorney handled a variety of
matters on behalf of his clients). 4
Mr. Opotowsky’s affidavit states, among other things, that Steeg Law advises
condominium associations on building construction requirements, building
appearance requirements, building safety and operation, short-term rental
regulations, compliance with the condominiums’ rules, and issues that arise
from resident complaints.
4 Plaintiff also argues that Steeg Law markets itself as a debt collector, and
that this is evidence of its status as a debt collector. However, as explained
in Franco v. Maraldo, “[t]his argument is meritless. . . . [T]he appropriate
inquiry into whether defendant is a debt collector within the definition of the
FDCPA is whether the principal purpose of his business is debt collection or
Louisiana Usury Law are Dismissed
Steeg Law’s motion for summary judgment asserts that it is
not liable for violations of Louisiana usury law. (R. Doc. 679-3
at 19.) Plaintiff argues that “Steeg Law’s argument that it is not
inconsequential.” (R. Doc. 711 at 3.) Plaintiff argues that if
Steeg Law violated the FDCPA, which in turn led to payment of
illegal, excessive, and usurious interest or late fees, then those
damages are recoverable from Steeg Law under the FDCPA. Id. Steeg
Law argues that it has never charged any party an allegedly
usurious fee or interest. Further, Steeg Law argues that even if
this Court were to find that Julia Place violated Louisiana usury
law there is no support for Plaintiff’s contention that Steeg Law
can be held liable for Julia Place’s alleged violation. Plaintiff
has not provided any support for her position—nor was the Court
able to locate any—that Steeg Law may be held liable for Julia
Place’s alleged usury violations. Accordingly, Plaintiff’s claims
against Steeg Law for violations of Louisiana’s usury laws are
dismissed. See Munson v. Comm’r of Soc. Sec. Admin., No. 12-369,
2014 WL 1165837, at *3 (M.D. La. Mar. 21, 2014) (“Because Plaintiff
has not adequately developed [his] argument, the Court does not
whether he is regularly engaged in that activity. His statements in the letter
and in his client’s complaint do not supersede the statute definition of a debt
collector. . . .” 2000 WL 288378, at *3.
address it.”); see also Riecke v. Barnhart, 184 F. App’x 454, 456
n.3 (5th Cir. 2006) (refusing to consider plaintiff’s “vague,
“authority” to support and only referenced once in his brief).
3. Plaintiff’s Negligence Claims against Steeg Law are Dismissed
Steeg Law argues that Plaintiff’s negligence claim should be
dismissed because Steeg Law does not owe Plaintiff a duty under
Louisiana law. (R. Doc. 679-3 at 19.) In response, Plaintiff argues
that she is not asserting a negligence claim “rather, [she alleges]
that Steeg engaged in intentional conduct to harm the Plaintiffs
as a debt collector. . . .” (R. Doc. 711 at 3.) However, as noted
by Steeg Law, Plaintiff has alleged that Steeg Law was negligent.
(R. Doc. 40 at 12-13.) Because Plaintiff admits that she does not
have a negligence claim against Steeg Law, Plaintiff’s negligence
claim against Steeg Law is dismissed. Further, to the extent
emotional distress against Steeg Law, this claim has already been
dismissed by this Court. (R. Doc. 380.)
4. Steeg Law’s Argument as to FDCPA Damages is Moot
Steeg Law’s motion sought a declaration that its liability in
this case is limited to one percent of its net worth. (R. Doc.
679-3 at 20.) Specifically, Steeg Law argued that in FDCPA class
actions 15 U.S.C. § 1692k(a)(2)(B)(ii) limits the amount class
members may collect to the lesser of $500,000 or one percent of
the net worth of the debt collector. Id. at 21. However, in light
of the Court decertifying Plaintiff’s FDCPA class and determining
that Steeg Law is not a “debt collector,” Steeg Law’s argument is
IT IS HEREBY ORDERED that Steeg Law’s Motion for Summary
Judgment (R. Doc. 679) is GRANTED. Specifically, the Court holds
that (1) Steeg Law is not a “debt collector” as defined by the
Fair Debt Collection Practices Act, (2) Plaintiff’s usury claims
against Steeg Law are DISMISSED WITH PREJUDICE, and (3) Plaintiff’s
negligence claims against Steeg Law are DISMISSED WITH PREJUDICE.
New Orleans, Louisiana this 1st day of February, 2017.
CARL J. BARBIER
UNITED STATES DISTRICT JUDGE
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