Mateti et al v. Activus Financial, LLC et al

Filing 64

MEMORANDUM OPINION. Signed by Judge Deborah K. Chasanow on 10/27/09. (sat, Chambers)

IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF MARYLAND JAYA PRAKASH MATETI, ET AL. v. ACTIVUS FINANCIAL, LLC, et al. : : : : : MEMORANDUM OPINION Presently pending and ready for resolution in this debt collection case are: (1) a motion for reconsideration of the court's August 14, 2009 order filed by Plaintiffs (Paper 57), (2) a motion for reconsideration of the court's August 14, 2009 order filed by Defendants (Paper 58), and (3) a motion to strike Defendants' (Paper 63). motion for reconsideration filed by Plaintiffs Civil Action No. DKC 2008-0540

The issues are briefed and the court now rules

pursuant to Local Rule 105.6, no hearing being deemed necessary. For the reasons will that be follow, denied, Plaintiffs' Defendants' motion motion for for

reconsideration

reconsideration will be denied, and Plaintiffs' motion to strike Defendants' motion for reconsideration will be denied. I. Background This dispute arises from the debt collection activities and subsequent lawsuit filed against Plaintiff Mateti in conjunction with his default on an AT&T Universal credit card. Plaintiffs

in this action are Mr. Mateti and his wife, Chaitanya Chekkilla. Defendants are Activus, a company that purchases defaulted

customer loans and collects the debts, PSC, a law firm engaged in debt collection, Phillip Collins and Neal Markowitz,

attorneys for PSC, and Ernest Faska, a PSC employee. The following facts are undisputed unless otherwise noted. In or around July 2001, Jaya Prakash Mateti opened an AT&T

Universal credit card account.

After using the credit card to

purchase various goods and services, Mr. Mateti fell behind on the payments. The account eventually went into default status Mr. Mateti made his last Until November 2003,

and was subsequently charged off.

payment on the account in April 2003.

monthly statements were sent to his address in Lanham, Maryland. In December 2003, for one month only, the monthly statement was sent to Mr. Mateti's address in Springdale, Maryland. Mr.

Mateti did not receive any more credit card statements after December 2003. Maryland in Plaintiffs allege that they permanently left December 2003 and from June 2004­July 2007

maintained a permanent residence in Lexington, Kentucky.

2

Citibank referred Mr. Mateti's defaulted account to Academy Collection Service, Inc. ("Academy") for collection.1 sent Mr. Mateti 2004 to two collection address letters in in October Academy 2004 and to

December

his

Kentucky.

According

Defendants, Citibank sold Mr. Mateti's account to Unifund on May 27, 2005.2 off credit Activus purchased from Unifund a portfolio of charged card accounts on August 11, 2005. Mr. Mateti's

credit card account was part of that portfolio. Charles Berry, the managing member of

In August 2005, contacted

Activus,

Defendant Collins of PSC to pursue legal action against Mr. Mateti. August The law firm sent a demand letter to Mr. Mateti on 22, 2005 at his address in Springdale, Maryland.

According to Plaintiffs, Mr. Mateti had not lived in Springdale, Maryland since 2003. the District on Court October Activus filed suit against Mr. Mateti in of 3, Maryland 2005, for Prince George's in County, unpaid

Maryland

seeking

$4,492.62

principal and $3,889.35 in interest (29.74%) for the defaulted credit card.
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Citibank purchased AT&T Universal in January 2002 and continues to issue credit card products under the AT&T brand name. (Paper 34, Ex. 2, Richter Aff. ¶ 3). Defendants assert that Citibank claimed the account was accruing interest at 29.74%. The credit card agreement provided for a maximum default rate which, at the time of sale, was prime plus 23.99%, which equaled 29.75%. (Paper 34, Ex. 2, Richter Aff. ¶ 5). 3
2

A

summons

was

issued

for

service

on

Mr.

Mateti

at

his

Springdale, Maryland address.

The court mailed the summons and

complaint back to PSC for service by a private process server. Katie Dodson, a paralegal with PSC, used Protrack Process

Service, Inc. ("Protrack") to effectuate service on Mr. Mateti. Protrack assigned the task Steve of serving Mr. Mateti to an was

independent

contractor,

Nixon.

Substitute

service

purportedly completed on "Panta Matetti," on December 2, 2005. Mr. Nixon executed an affidavit of service, filed it with the district court, and provided a copy to PSC. Plaintiffs allege

that the service affidavit executed by Mr. Nixon was undoubtedly false because, at the time Mr. Nixon purportedly effectuated service, Mr. Mateti was living in Kentucky, and the process server misspelled his last name. Mr. Activus. Mateti never responded Activus to filed the a complaint request filed by

Subsequently,

for

default

judgment which was denied by the state court on January 13, 2006. Mr. On March 24, 2006, affidavit judgment was entered against in the amount and of $8,887.79 costs). ($4,492.62 principal, that

Mateti

$4,398.17

interest,

$50

Plaintiffs

allege

Activus was awarded interest in the judgment to which it was not entitled by law. Springdale, PSC sent a letter on April 24, 2006 to the address to 4 inform Mr. Mateti of the

Maryland

judgment. 2006. 2006. Process

PSC filed a request for oral examination on May 10,

The court scheduled the oral examination for July 7, Barbara Servers Crawford, a paralegal Process") at to PSC, used Priority the oral

("Priority

serve

examination request on Mr. Mateti.

Priority Process assigned On

service of the oral examination papers to Jimmy Chidester. July 28, 2006, Mr. Chidester filed an affidavit of

service

stating that he could not serve the oral examination papers because he never received a response from Mr. Mateti. Mr.

Mateti asserts that he never received the letter from PSC or the notice of the oral examination because both were sent to the wrong address. On September 7, 2006, PSC filed a reissue of the request for oral examination. Lisa Annadale, another paralegal at PSC,

assigned the oral examination papers to ESQ Process Servers who, in turn, assigned the task of serving Mr. Mateti to Scott Miles, an independent contractor of ESQ. Mr. Miles filed an affidavit

of service on October 31, 2006 stating that service of the oral examination Mateti at papers the was made by substitute service on The Nivai oral

Springdale,

Maryland

address.

examination was set for November 17, 2006. appear.

Mr. Mateti failed to

5

On December 27, 2006, PSC filed a request for show cause order for contempt. The court issued the order to show cause on

December 29, 2006 and sent the papers back to PSC for service of process. Ms. Annandale gave the papers to Protrack for service.

Protrack again assigned the task of serving Mr. Mateti to Mr. Nixon. Mr. Nixon filed a proof of service on January 26, 2007

indicating that he personally served Mr. Mateti in Greenbelt, Maryland. The purported service affidavit incorrectly describes

Mr. Mateti as a five foot six inch caucasian male, weighing over 180 pounds. The show cause hearing was scheduled for April 6, 2007. Mr. Mateti did not attend the hearing. On April 9, 2007, PSC A

filed a request for garnishment of Mr. Mateti's property.

writ of garnishment was issued on April 16, 2007 and placed on Mr. Mateti's Bank of America account. on April 25, 2007 and spoke to Mr. Mateti contacted PSC Ernest Fasca about the

garnishment.

On May 8, 2007, Mr. Mateti filed a motion to A hearing was held on September 7, 2007 on The court vacated the judgment, quashed

vacate the judgment. the motion to vacate.

service of process and the garnishments, and ordered all money to be released to Mr. Mateti. collection proceedings against Activus voluntarily dismissed the Mr. Mateti on July 25, 2008.

Plaintiffs allege that despite the court order and requests by 6

Mr. Mateti's counsel to remove the garnishment from the bank account, the money has never been released. On November 2, 2007, Plaintiffs filed a complaint in the Circuit Court for Prince George's County against Activus, Counts

Phillip Collins, PSC, Neal Markowitz, and Ernest Fasca.

1-11 allege violations of the Fair Debt Collection Practices Act ("FDCPA"), violations ("MCDCA"), 15 of Md. U.S.C. the Code § 1692 et seq., counts Debt 12-14 allege Act 15

Maryland Ann.,

Consumer Law §

Collection and count

Com.

14-202,

alleges negligence.

Defendants properly removed the case to

this court on February 28, 2008 (Paper 1) and filed an answer on May 5, 2008. (Paper 10). The same day, the court entered a

scheduling order, pursuant to which discovery would close on September 17, 2008. On September 16, 2008, Defendants filed a

motion for leave to file an amended answer to include a bona fide error affirmative deadline. motion 2008 for and defense, (Papers leave granted and 16, to a 18). an motion The to extend the

discovery Defendants' October

court

denied on

file

amended motion

answer to

22,

Defendants'

extend

discovery.

(Paper 30).

Thereafter, Defendants filed a motion

for reconsideration related to their request to file an amended answer (Paper 31). Plaintiffs filed a motion for extension of (Paper

time to file motion to compel regarding depositions. 7

33).

Defendants and Plaintiffs subsequently filed motions for (Papers 34, 40). judgment, In response to Defendants' voluntarily withdrew

summary judgment. motion for

summary

Plaintiffs

count 6 of the complaint alleging a violation of § 1692e(2)(B) of the FDCPA. On August 14, 2009, the court issued a memorandum opinion and order that: (1) denied Defendants' motion for

reconsideration, Plaintiffs' motion for extension of time, and Plaintiffs' motion to strike, (2) dismissed the complaint filed by Plaintiff Chekkilla, (3) granted in part Defendants' motion for summary judgment, entering judgment in favor of Defendants Markowitz and Faska on all counts and entering judgment in favor of Defendants on counts 1-4, 6-8, and 11-15, and (4) denied Plaintiffs' motion for summary judgment. Plaintiffs court's August filed 14th a motion on for (Papers 55 and 56). reconsideration 24, 2009. of the 57).

order

August

(Paper

Defendants responded on September 4, 2009, and also asked the court to reconsider its decision to deny Defendants summary (Paper

judgment on counts 5 and 10 of Plaintiffs' complaint. 58).

On October 6, 2009, Plaintiffs filed a motion to strike (Paper 63).

Defendants' motion for reconsideration.

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II.

Motions for Reconsideration A. Standard of Review Rule of Civil Procedure 54(b) governs

Federal

reconsideration of orders that do not constitute final judgments in a case. Rule 54(b) provides that "any order or other

decision, however designated, that adjudicates fewer than all the claims or the rights and liabilities of fewer than all the parties . . . may be revised at any time before the entry of judgment adjudicating all the claims and all the parties' rights and liabilities." Fed.R.Civ.P. 54(b). Local Rule 105.10

provides that, except as otherwise provided in Fed.R.Civ.P. 60, any motion for reconsideration of an order shall be filed no later than 10 days after entry of the order. The court's

memorandum opinion and order were entered on August 14, 2009. Thus, any motion for reconsideration was due no later than

August 28, 2009. In the Fourth Circuit, the precise standard that should govern a motion for reconsideration of an interlocutory order is unclear. Fayetteville Investors v. Commercial Builders, Inc., In determining whether it order, a district court's

936 F.2d 1462, 1472 (4th Cir. 1991). should reconsider an interlocutory

consideration is not bound by the Rule 60(b) standard, though the court may at least reference 9 parts of the Rule 60(b)

standard.

Id. at 1470; Am. Canoe Ass'n v. Murphy Farms, Inc.,

326 F.3d 505, 514 (4th Cir. 2003) ("Motions for reconsideration of interlocutory orders are not subject to the strict standards applicable judgment."). to motions for reconsideration of a final

Thus, the court's analysis is guided by Rule 60(b)

but is not bound by its strictures. Under Rule 60(b), a party may obtain relief from a judgment or final order based upon (1) mistake, inadvertence, surprise, or excusable neglect; (2) newly discovered evidence that, with reasonable diligence, could not have been discovered in time to move for a new trial under Rule 59(b); (3) fraud . . . misrepresentation, or misconduct by an opposing party; (4) the judgment is void; (5) the judgment has been satisfied, released or discharged; it is based on an earlier judgment that has been reversed or vacated; or applying it prospectively is no longer equitable; or (6) any other reason that justifies relief. Fed.R.Civ.P. 60(b). B. 1. Analysis Plaintiff's motion

Plaintiffs ask the court to reconsider five parts of its August 14th decision to grant summary judgment: "(1) against

Plaintiff Chekkilla and dismissing all of her claims, (2) in favor of collection attorney and defendant Neal Markowitz, (3) in favor of defendants for Count 7 which alleged violations of 10

15 U.S.C. § 1693e(5) . . . , (4) in favor of defendants on Count 8 which alleged violations of 15 U.S.C. § 1692e(8) . . . , and (5) in favor of defendants on Count 14 for alleged violations of Maryland Commercial Law Article § 14-202(8) . . . ." at 1). Plaintiffs' motion for reconsideration will be denied. (Paper 57,

Plaintiffs do not point to any relevant case law or evidence that was unavailable at the time of the court's order. With

regard to Plaintiff Chekkilla's standing to sue and Defendant Markowitz's inclusion in the case, Plaintiffs argue facts that were already considered. On Count 7, Plaintiffs argue that

Defendants violated 15 U.S.C. § 1692(e) by violating Maryland CJP § 11-603, were yet Plaintiffs fail to show the that Defendants' law. were

actions

actually on Count

illegal 8,

under

Maryland facts that

Additionally,

Plaintiffs

argue

already considered and again fail to establish that Plaintiff Mateti ever disputed the debt. Finally, on Count 14, Plaintiffs

have still not established that Defendants violated Md. Comm. Law Code Ann. § 14-202(8) because Plaintiffs have not shown that Defendants had knowledge of any wrongdoing and because

Plaintiffs misinterpret Md. Ann. Code, Cts. & Jud. Proc. § 11603(a).

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2.

Defendants' Motion ask the court to reconsider the denial of

Defendants

summary judgment as to Counts 5 and 10 because those counts were allegedly barred by the statute of limitations. 2). (Paper 58, at

Plaintiffs move to strike Defendants' motion because it was

filed more than 10 days after entry of the order. Defendants respond that, as with motions under in Rule 60, to the court may

reconsider justice."

earlier

decisions

order

"do

substantial

Defendants' motion for reconsideration will also be denied. Defendants correctly note that, due to the FDCPA's statute of limitations, the court will limit its analysis of the

Plaintiffs' FDCPA claims to events that occurred on or after November 2, 2006. Defendants argue that counts 5 and 10 only (Paper and 10

relate to events that occurred before November 2, 2006. 58, at 7-8). Because Plaintiffs presented counts 5

without tying the law to the facts, however, it is not clear that counts 5 and 10 are unrelated to any activity that occurred on or after November 2, 2006. As such, counts 5 and 10 are not

clearly barred by the statute of limitations and Defendants' untimely motion for reconsideration will be denied.

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III. Conclusion For the foregoing will be reasons, denied, Plaintiffs' Defendants' motion motion for for

reconsideration

reconsideration will be denied, and Plaintiffs' motion to strike Defendants' motion for reconsideration will be denied. A

separate Order will follow. /s/ DEBORAH K. CHASANOW United States District Judge

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