Williams v. National Credit Adjusters, LLC. et al

Filing 93

MEMORANDUM AND ORDER - IT IS HEREBY ORDERED that defendant National Credit Association, LLC's Motion for Summary Judgment [ECF #81] is denied. IT IS FURTHER ORDERED that defendant National Credit Association, LLC's Motion Requesting Oral Argument on the motion [ECF #84] is denied. Signed by District Judge Catherine D. Perry on November 16, 2015. (MCB)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF MISSOURI
EASTERN DIVISION
CALVIN WILLIAMS,
Plaintiff,
v.
NATIONAL CREDIT ADJUSTERS,
LLC,
Defendant.

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No. 4:14CV267 CDP

MEMORANDUM AND ORDER
Calvin Williams obtained a $500 personal loan from Castle Payday Loans in
April 2013. In August 2013, National Credit Adjusters, LLC (“NCA”), contacted
Williams to collect on the debt. During the course of this collection effort,
Williams and NCA set up a modified repayment plan, and NCA thereafter
attempted to collect on the modified plan. In this action, Williams claims that the
tactics used by NCA in its attempt to collect the debt violated the Missouri
Merchandising Practices Act (MMPA) and the Federal Debt Collection Practices
Act (FDCPA). NCA now moves for summary judgment on the claims. I will deny
the motion.
The FDCPA prohibits debt collectors from engaging “in any conduct the
natural consequence of which is to harass, oppress, or abuse any person in
connection with the collection of a debt.” 15 U.S.C. § 1692d. The FDCPA also

prohibits a debt collector from using “any false, deceptive, or misleading
representation or means in connection with the collection of any debt,” 15 U.S.C. §
1692e; as well as the use of “unfair or unconscionable means” to collect a debt, 15
U.S.C. § 1692f. The MMPA makes unlawful “[t]he act, use or employment . . . of
any deception, fraud, false pretense, false promise, misrepresentation, unfair
practice or the concealment, suppression, or omission of any material fact in
connection with the sale or advertisement of any merchandise in trade or
commerce.” Mo. Rev. Stat. § 407.020.1. Under the MMPA, “[m]erchandise”
includes “any objects, wares, goods, commodities, intangibles, real estate or
services.” Mo. Rev. Stat. § 407.010.4. The protections of the MMPA apply to
loan collection practices inasmuch as such practices are “in connection with” the
“sale” of a loan. Conway v. CitiMortgage, Inc., 438 S.W.3d 410, 415-16 (Mo.
banc 2014).
In this action, Williams claims that NCA violated the MMPA and FDCPA
by misrepresenting its authority to resolve or collect on the original debt; engaging
in threatening and harassing conduct in its communications regarding debt
collection; continuing to contact him at work despite his request that such calls
stop; attempting to directly contact him despite its knowledge that Williams was
represented by legal counsel in relation to NCA’s debt collection efforts; and
failing to meaningfully disclose its identity when calling him after he filed this
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lawsuit. NCA concedes that these acts would violate the law if they were true. It
argues, however, that Williams fabricated the circumstances giving rise to these
claims and that no reasonable jury could believe Williams’ stories. Arguing that
the issues of fact in this case are therefore not “genuine,” NCA contends that it is
entitled to judgment as a matter of law on Williams’ claims. I am not convinced.
SUMMARY JUDGMENT STANDARD
When considering a motion for summary judgment, I must view the facts
and inferences from the facts in the light most favorable to the nonmoving party.
Matsushita Elec. Indus. Co., Ltd. v. Zenith Radio Corp., 475 U.S. 574, 587 (1986).
As the moving party, defendant must establish that there is no genuine issue of
material fact and that it is entitled to judgment as a matter of law. Fed. R. Civ. P.
56(c); Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247 (1986); Celotex Corp. v.
Catrett, 477 U.S. 317, 322 (1986). Once the moving party has met this burden, the
nonmoving party may not rest on the allegations in his pleadings, but by affidavit
or other evidence must set forth specific facts showing that a genuine issue of
material fact exists. Fed. R. Civ. P. 56(e).
At the summary judgment stage, courts do not weigh the evidence and
decide the truth of the matter, but rather determine if there is a genuine issue for
trial. Anderson, 477 U.S. at 249. However, summary judgment may be
appropriate “[w]hen opposing parties tell two different stories, one of which is
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blatantly contradicted by the record, so that no reasonable jury could believe it[.]”
Scott v. Harris, 550 U.S. 372, 380 (2007). In such circumstances, the mere
existence of some alleged factual dispute will not serve to defeat summary
judgment; instead, the factual dispute must be “genuine.” Id.
BACKGROUND1
Plaintiff Calvin Williams obtained a personal loan from Castle Payday
Loans in April 2013. NCA began collection efforts on the loan in August 2013.2
Victor Perez, an NCA collection agent, spoke with Williams on August 7,
2013, and explained that, given Williams’ failure to pay on the loan, Castle Payday
wanted to take a more aggressive approach to collect on the debt and sold
Williams’ account for collection.3 Perez told Williams that $705 was owed on the
loan.4 Through a series of telephone calls between Williams and Perez that same
date, arrangements were made for Williams to make installment payments totaling
1

The facts set out herein are for purposes of summary judgment only. Nothing in this
Memorandum and Order relieves any party of its burden of presenting evidence at trial.
2
The record is unclear regarding the source of NCA’s authority in August 2013 to collect on the
debt. During a telephone call on August 7, NCA collection agent Victor Perez informed
Williams that Castle Payday sold Williams’ account for collection, and a letter dated August 8
informed Williams that NCA purchased the account and was now collecting on it. Deft. Exh. B6 (disc), NCA 0087, Call 1; Exh. B.5. NCA’s Compliance Officer (“CO”) declares, however,
that NCA did not purchase the account until January 2014; and, further, that at the time NCA
began its collection efforts against Williams, it had leased the account from Castle Payday. Deft.
Exh. B, Patnode Decl. at paras. 22, 24. None of the business records attached to the CO’s
Declaration identify Williams’ Payday loan as one of the accounts either leased or sold to NCA.
3
Deft. Exh. B-6 (disc), NCA 0087, Call 1. See also Exh. A, C. Wms. Depo. at 77.
4
Deft. Exh. B-6 (disc), NCA 0089, Call 3. See also Exh. A, C. Wms. Depo. at 86-87. Williams
contends that Perez informed him in an earlier unrecorded telephone conversation that there was
an additional $200 fee associated with NCA taking over the collection efforts. NCA denies this
contention.
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a discounted amount of $605, which Perez represented would take care of the debt.
Perez advised Williams that he would need to set up a new payment plan with
NCA immediately in order to obtain the $100 discount.5
Perez and Williams exchanged numerous telephone calls regarding the status
of the debt and setting up arrangements for Williams to pay it off.6 Perez called
Williams on his cell phone and on his workplace phone. Williams likewise called
Perez from both his cell phone and from his workplace phone. On August 24,
Perez informed Williams that a recent payment failed to go through and that he
(Perez) would “unfortunately” have to make a “recommendation to proceed further
with collection activity.”7 Perez advised Williams to provide updated debit/credit
card information “real quick . . . in order to make sure we stop recourse.”8
Williams thereafter requested from “Mike,” an NCA manager, that he be permitted
to work with another collection agent given Perez’s “pushy” nature of calling
multiple times every day. Mike set up a new payment plan for Williams, but Perez
continued as the agent on Williams’ account.9 Telephone calls thereafter continued
between Williams and Perez. Williams successfully made a payment on his
account in September 2013.10 He did not make his scheduled payment in October

5

Deft. Exh. B-6 (disc), NCA 0089, Call 3. See also Exh. A, C. Wms. Depo. at 88-92.
Changes to Williams’ payment plan were repeatedly made.
7
Deft. Exh. B-6 (disc), NCA 0095, Call 9. See also Exh. A, C. Wms. Depo. at 113.
8
See supra n.7.
9
Deft. Exh. B-6 (disc), NCA 0096, Call 10. See also Exh. A, C. Wms. Depo. at 120-35.
10
Deft. Exh. B-6 (disc), NCA 0115, Call 18. See also Exh. A, C. Wms. Depo at 203-10.
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2013, and he continues to owe money related to the loan.11
Williams has presented evidence that beginning in October 2013 and
continuing through February 2014, he received voicemail messages on his cell
phone from persons identifying themselves as representatives of NCA, including
calls from a person identifying himself as Victor Perez.12 The caller ID on
Williams’ phone showed that the calls were from an “unknown” number.13 Some
of these calls were laced with profanity, racial slurs, threats of arrest and
imprisonment for failure to pay on the debt, and threats in response to litigation.
Beginning again in June 2014, Williams received voicemail messages on his cell
phone from an unknown number. The messages were again profane and included
vile racial slurs, but did not refer to Williams’ debt.14 Williams received other calls
on his cell phone in June 2014 from telephone numbers identified through caller ID
as being associated with NCA, but there were no voicemail messages from these
calls.15
Williams contends that, following his receipt of the first inappropriate
voicemail message, he instructed NCA during a telephone conversation to no
longer call him at work. NCA denies that Williams gave any such oral instruction.

11

Deft. Exh. A, C. Wms. Depo. at 28, 212.
Deft. Exh. F (disc), “CalvinMessages.”
13
Id. See also Exhs. 9 & 10 to C. Wms. Depo. (Deft. Exh. E).
14
Deft. Exh. F (disc), “CalvinMessages.” See also Exhs. 9, 11-12 to C. Wms. Depo. (Deft. Exh.
E).
15
Exhs. 11-12 to C. Wms. Depo. (Deft. Exh. E).
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Williams later instructed NCA by letter dated December 11, 2013, to not contact
him at work.16 Williams claims that he nevertheless continued to receive calls
from NCA, and specifically, the calls described above.
NCA argues that the harassing and threatening voicemail messages were
fabricated and orchestrated by Williams and were not originated by NCA or any of
its employees, agents, or associates. As evidence, NCA points to audio recordings
of three calls made in December 2013 and January 2014 that it contends originated
from Williams’ workplace and were directed to NCA during which unidentified
persons requested or obtained the name of the NCA representative who answered
the call.17 NCA further contends that some of the offensive messages received by
Williams occurred within minutes of these calls and were received on his cell
phone from an unknown number.18 The person(s) leaving these offensive
messages identified themselves by the name of the NCA representative given in
response to earlier calls from Williams’ workplace.19
To the extent the caller who left some of these offensive messages identified
himself as Victor Perez, NCA points to noticeable differences regarding the tone
16

Pltf. Exh. 5.
Deft. Exh. B-6 (disc), NCA 0110, NCA 0112, NCA 0113.
18
Compare Exh. 10 to C. Wms. Depo. (Deft. Exh. E) with Deft. Exh. B, Patnode Decl. at paras.
56, 57. While NCA relies on its CO’s September 2015 Declaration for the specific dates and
times it received these calls from Williams’ workplace, I note that the CO does not identify the
records or other information from which she has this knowledge. I have reviewed the other
records submitted by NCA for purposes of this motion and do not find any specific reference to
the dates or times of these calls.
19
Deft. Exh. F (disc), “CalvinMessages.”
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and quality of Perez’s actual voice when compared to the voice attributed to him in
these calls. NCA raises this same contention in relation to another NCA
representative as well, Rachel Wilson-Banks. In addition to arguing that the voices
are “obviously” dissimilar, NCA presents the reports of audio and voice
comparison experts who have concluded there to be “probable elimination”
between the voices – that is, that the voices attributed to Perez and Wilson-Banks
in the offensive calls are not their true voices.20
To the extent that the caller ID feature on Williams’ cell phone showed the
offensive calls to originate from unknown numbers or from numbers associated
with NCA, NCA contends that Williams was familiar with “spoofing” whereupon
calling data is manipulated by a user to show a telephone call coming from a
number other than the actual telephone number assigned to the device making the
call. NCA also contends that Williams was familiar with other technology that
permits a user to disguise his/her voice on telephone calls.21 Finally, NCA has
employed another expert who submitted a report regarding the unconventional
method by which the offensive messages were stored on Williams’ cell phone.22
NCA argues that the timing of the offensive calls, the dissimilarities between
the known and unknown voices, the “unknown” numbers from which these calls

20

Deft. Exhs. N & W, Koenig Decl.; Exh. N.1, Lab Report.
Deft. Exh. G, A. Wms. Depo.
22
Deft. Exh. R, Opata Decl.
-821

originated, and Williams’ knowledge regarding manipulating calling data shows
that Williams fabricated the circumstances underlying his claims and that the
offensive conduct cannot be attributed to NCA. NCA argues that the objective
evidence of record – including telephone records from NCA’s service provider,
calls recorded by NCA, and expert reports – is contradicted only by Williams’
stories, which lack evidentiary support. It is not for me, however, to decide these
issues of fact on summary judgment.
DISCUSSION
“Genuine” Issues of Fact
A “judge's function” at summary judgment is not “to weigh the evidence and
determine the truth of the matter but to determine whether there is a genuine issue
for trial.” Tolan v. Cotton, 134 S. Ct. 1861, 1866 (2014) (per curiam). Where
witnesses on both sides come with their own perceptions, recollections, and even
potential biases, genuine disputes are generally resolved by juries in our
adversarial system. If I were to weigh the evidence and reach factual inferences
contrary to Williams’ evidence, I would neglect to adhere to the fundamental
principle that at the summary judgment stage: reasonable inferences should be
drawn in favor of the nonmoving party. Id. at 1868.
NCA urges me to apply the Supreme Court’s reasoning in Scott v. Harris to
the situation here. In Scott, the Supreme Court found that video footage of a police
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chase conclusively demonstrated, contrary to the plaintiff's account of the event,
that police had acted reasonably under the circumstances and had not committed a
constitutional violation, thus entitling them to qualified immunity. 550 U.S. at
380-81. Indeed, the Supreme Court found the plaintiff's version of the facts to be
“so utterly discredited” by the facts depicted on the videotape “that no reasonable
jury could have believed” his claims. Id. at 380. As a result, the Supreme Court
reversed the denial of summary judgment, holding that the lower court should not
have relied on the plaintiff's “fiction[al]” statements, but instead, “it should have
viewed the facts in the light depicted by the videotape.” Id. at 380-81. This case
does not present a situation similar to Scott.
“When opposing parties tell two different stories, one of which is blatantly
contradicted by the record, so that no reasonable jury could believe it, a court
should not adopt that version of the facts for purposes of ruling on a motion for
summary judgment.” Scott, 550 U.S. at 380. Although NCA argues here that
audio recordings and expert reports conclusively disprove Williams’ account of the
incidents in question, the evidence in this case is simply not as conclusive as the
video in Scott. For instance, NCA has submitted various audio recordings in
support of this motion, averring that all calls between handlers and debtors are
recorded.23 Other evidence shows, however, that recordings of calls lasting less

23

See Memo. in Supp. of Mot., ECF #82 at p.11.
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than forty-five seconds are automatically deleted after thirty days “[a]bsent orders
to the contrary.”24 The calls of which Williams complains are all less than fortyfive seconds. In addition, NCA asks me to credit their expert reports that the
voices on some of the challenged calls are not the true voices of the identified
NCA representatives, and further, that the authenticity of the offensive voicemails
is questionable given the methods by which Williams saved them on his phone.
Williams challenges the bases for these opinions. Factual disputes that may serve
to discredit expert opinions prevent parties from obtaining summary judgment.
These disputes are to be brought out at trial. See Maze v. Regions Bank, Inc., 265
F.R.D. 465, 473 (E.D. Mo. 2009). See also Gunning v. Cooley, 281 U.S. 90, 94
(1930) (well settled that issues that depend upon the credibility of witnesses and
the effect or weight of the evidence are to be decided by a jury); Milprint, Inc. v.
Donaldson Chocolate Co., 222 F.2d 898, 901-02 (8th Cir. 1955) (same); Skrovig v.
BNSF Ry. Co., 916 F. Supp. 2d 945, 973 (D.S.D. 2013) (same).
Simply put, while the evidence submitted to me raises questions about the
validity and authenticity of the calls at issue, that is precisely the issue to be
resolved. I am prohibited from making credibility judgments on a motion for
summary judgment. Mershon v. St. Louis Univ., 442 F.3d 1069, 1075 (8th Cir.
2006) (citing Yates v. Rexton, Inc., 267 F.3d 793, 800 (8th Cir. 2001)). The

24

See Deft. Exh. B, Patnode Decl. at para. 15.
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evidence before the Court does not “blatantly contradict” Williams’ version of the
events so completely that no reasonable jury could believe it. I conclude that the
decision in Scott does not preclude Williams from pursuing his claims against
NCA. See Edwards v. Byrd, 750 F.3d 728, 733 (8th Cir. 2014).
Applicability of MMPA
NCA also argues that, regardless of the factual disputes in the case, it is
entitled to summary judgment on Williams’ MMPA claim inasmuch as NCA’s
calls to Williams were made for the purpose of modifying the debt rather than
collecting on the original Castle Payday loan. In his complaint – as well as in
response to NCA’s motion – Williams claims that the modified loan itself
constituted a new sale to which the MMPA applies. NCA does not address this
aspect of Williams’ claim.
For purposes of the MMPA, “a loan is an agreed upon bundle of services
being ‘sold’ by the lender to the borrower, and the ‘sale’ of a loan lasts until the
last service is performed or the loan is repaid.” Conway, 438 S.W.3d at 412.
Allegations of deception in the course of those services are “in connection with”
the “sale,” even where the party committing the alleged deception is not the seller.
Id. “As long as the plaintiff alleges that the misconduct occurred in connection
with the services that comprise the ‘sale’ of a loan, the actor can be liable under the
MMPA.” Id. “Because a loan is an ongoing transaction, loan collection
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procedures . . . are done ‘in connection with’ the original procurement of the loan.”
Id. at 416. To the extent Williams challenges NCA’s conduct in its attempt to
collect on the underlying Payday loan, including its authority to collect on the loan,
Conway squarely places the claim under the MMPA.
Where parties negotiate for loan modification, however, the creation of a
new agreement is contemplated rather than enforcement of the terms of the original
loan. As such, actions related to loan modifications are not “in connection with”
the sale of the original loan, and the MMPA does not apply to those actions – at
least where a party bases its claim on the original loan. Watson v. Wells Fargo
Home Mortg., Inc., 438 S.W.3d 404, 408 (Mo. banc 2014). See also Wivell v.
Wells Fargo Bank, N.A., 773 F.3d 887, 899 (8th Cir. 2014). Here, the repayment
terms of the Payday loan were modified through repeated negotiations between
NCA and Williams. The renegotiation of these terms was not a service Castle
Payday agreed to sell or Williams agreed to buy when they entered into the April
2013 loan agreement. As such, NCA was not enforcing the terms of the April
2013 loan when it modified the terms of repayment and the payment schedule.
Therefore, its negotiations to modify the terms of the loan were not “in connection
with” the April 2013 loan. Wivell, 773 F.3d at 899 n.2; Geran v. Xerox Edu.
Servs., Inc., ___ S.W.3d ___, No. WD 77507, 2015 WL 2392375, at *5 (Mo. Ct.
App. May 19, 2015).
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The story does not end there, however. NCA was successful in its
negotiations with Williams to modify the terms of the loan, which resulted in
substantial changes to the repayment plan, the schedule by which payments were to
be made, the amounts to be paid incrementally, and the total amount required to
satisfy the debt. Williams agreed to these modifications as demonstrated by his
recorded statements – prompted by Perez – that he “agreed[d] to the payments and
[would] make sure the money is available.”25 Williams claims that NCA’s sale of
this restructuring service was a separate sale under the MMPA, thereby bringing
NCA’s collection practices on this modified agreement within the purview of the
MMPA. NCA does not challenge this contention. I may not grant summary
judgment on an issue not raised in a movant’s motion for summary judgment.
American Red Cross v. Community Blood Ctr. of the Ozarks, 257 F.3d 859, 863
(8th Cir. 2001).26
“The use of an unlawful practice is a violation of the MMPA ‘whether
committed before, during or after the sale,’ so long as it was made ‘in connection
25

See Deft. Exh. B-6 (disc), NCA 0089, Call 3; NCA 0099, Call 13; Exh. A, C. Wms. Depo. at
99, 154. Perez told Williams that these recorded statements were required for the file.
26
No Missouri appellate court has had the opportunity to expressly address whether a modified
loan agreement is a separate sale under the MMPA and thus whether conduct surrounding such
an agreement is actionable. Although related arguments have been raised on appeal, the courts
have not addressed them because of the claim’s failure to be properly pled at the trial court level.
See, e.g., Watson, 438 S.W.3d at 407 n.2 (“This Court offers no opinion as to whether these
claims are actionable under the MMPA.”); Geran, 2015 WL 2392375, at *6 (“appellate counsel
did an excellent job arguing the claim on appeal,” but the “petition did not allege that
[defendant’s] conduct occurred in connection with a new sale.”). I do note, however, that in
Watson, the Missouri Supreme Court suggested that plaintiffs amend their petition on remand to
include these claims. Watson, 438 S.W.3d at 407 n.2.
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with’ the sale.” Conway, 438 S.W.3d at 414 (quoting Mo. Rev. Stat. § 407.020.1).
Williams claims that NCA engaged in unlawful conduct in connection with an
independent sale, that is, the loan modification agreement; and that such unlawful
conduct occurred during its negotiations with Williams to enter into the agreement
and through its collection efforts thereon. As noted earlier, NCA does not
challenge the applicability of the MMPA to the loan modification agreement to the
extent Williams claims it is a new sale.
NCA’s motion for summary judgment will be denied as to Williams’
MMPA claims.
CONCLUSION
On the information before the Court, and viewing all facts and inferences in
the light most favorable to Williams, Matsushita Elec. Indus. Co., 475 U.S. at 587,
I cannot say that NCA has established its right to judgment with such clarity as to
leave no room for controversy and that Williams is not entitled to prevail under
any discernable circumstances. Vette Co. v. Aetna Cas. & Sur. Co., 612 F.2d 1076,
1077 (8th Cir. 1980).
Accordingly,
IT IS HEREBY ORDERED that defendant National Credit Association,
LLC’s Motion for Summary Judgment [ECF #81] is denied.
IT IS FURTHER ORDERED that defendant National Credit Association,
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LLC’s Motion Requesting Oral Argument on the motion [ECF #84] is denied.

_________________________________
CATHERINE D. PERRY
UNITED STATES DISTRICT JUDGE
Dated this 16th day of November, 2015.

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