McKinley v. Cavalry Portfolio Services, LLC

Filing 16

MEMORANDUM AND ORDER: IT IS HEREBY ORDERED that the motion of defendant Cavalry Portfolio Services, LLC for summary judgment [Doc. #13] is granted. A separate judgment in accordance with this Memorandum and Order will be entered this same date. Signed by District Judge Carol E. Jackson on 1/25/2016. (KMS)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF MISSOURI
EASTERN DIVISION
TIERA C. McKINLEY,
Plaintiff,
vs.
CAVALRY PORTFOLIO SERVICES, LLC,
Defendant.

)
)
)
)
)
)
)
)
)

Case No. 4:15-CV-780-CEJ

MEMORANDUM AND ORDER
This matter is before the Court on defendant’s motion for summary
judgment, pursuant to Fed. R. Civ. P. 56(a). Plaintiff has not responded, and the
time allowed for doing so has expired.
I. Background
Plaintiff Tiera C. McKinley was indebted to Capital One Bank USA, N.A., in the
$339.00 and $1,415.00 for two separate accounts (hereinafter, “the accounts”).
On December 9, 2014, plaintiff filed a voluntary petition for relief under Chapter 13
of the Bankruptcy Code. She listed the accounts in her bankruptcy plan.1 The plan
was approved on February 12, 2015. In exchange for relief from the obligations
listed in the bankruptcy plan, plaintiff agreed to pay $200.00 per month for fortysix months, after which her remaining debt would be forgiven. Plaintiff has not yet
completed the bankruptcy plan; her debts remain extant.
Also in February 2015, Capital One transferred, assigned, and sold the
accounts to defendant Cavalry Portfolio Services, LLC.

In April 2015, defendant

reported the accounts to one or more credit reporting agencies as “open collection
1

The accounts were identified by the correct account numbers in the bankruptcy plan but listed with
respective balances of $338.00 and $1,449.00.

accounts.” That was an accurate statement of the accounts’ status because plaintiff
had not by then completed the forty-six month bankruptcy plan. Plaintiff alleges,
however, that by making those reports defendant “furnish[ed] derogatory,
negative, and inaccurate information to the[] credit reporting agencies.”
In the complaint, plaintiff additionally alleges that in April 2015 she received
“dunning letters” from defendant in which defendant “attempt[ed] to collect” on the
accounts. Defendant’s uncontested records show that no such letters were sent to
plaintiff. It was defendant’s policy not to send collection letters to debtors whose
accounts are coded as, “filed a petition for Chapter 13 Bankruptcy,” as the plaintiff’s
accounts were coded.

Further, plaintiff has not produced the letters in question,

nor has she provided the requisite disclosures, pursuant to Fed. R. Civ. P.
26(a)(1)(A)(ii), attesting to the letters’ existence.
The plaintiff claims that making those reports to the credit reporting agencies
and sending plaintiff the dunning letters constitute a violation of the Fair Debt
Collection Practices Act (FDCPA), 15 U.S.C. §§ 1692 et seq. The complaint raises
those two factual allegations without explaining precisely which of the FDCPA’s
provisions each of the defendant’s actions contravened.

However, the complaint

references two sections of the statute: § 1692d, which bars debt collectors from
engaging “in any conduct the natural consequence of which is to harass, oppress,
or abuse” a debtor and § 1692e, which prohibits debt collectors from using “any
false, deceptive, or misleading representations or means in connection with
collection of any debt.” In addition to referencing § 1692e generally, the complaint
specifically cites § 1692e(5), which forbids “threat[ening] to take any action that
cannot legally be taken or that is not intended to be taken”; § 1692e(8), which

2

prohibits “[c]ommunicating or threatening to communicate to any person credit
information which is known or which should be known to be false, including the
failure to communicate that a disputed debt is disputed”; and § 1692e(10), which
renders illegal using “any false representation or deceptive means to collect or
attempt to collect any debt or to obtain information concerning a consumer.”
II. Legal Standard
Rule 56(a) of the Federal Rules of Civil Procedure provides that summary
judgment shall be entered if the moving party shows “that there is no genuine
dispute as to any material fact and the movant is entitled to a judgment as a
matter of law.” In ruling on a motion for summary judgment the court is required
to view the facts in the light most favorable to the non-moving party and must give
that party the benefit of all reasonable inferences to be drawn from the underlying
facts. AgriStor Leasing v. Farrow, 826 F.2d 732, 734 (8th Cir. 1987). The moving
party bears the burden of showing both the absence of a genuine issue of material
fact and its entitlement to judgment as a matter of law. Anderson v. Liberty Lobby,
Inc., 477 U.S. 242 (1986); Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475
U.S. 574, 586–87 (1986).

Once the moving party has met its burden, the non-

moving party may not rest on the allegations of his pleadings but “must set forth
specific facts,” by affidavit or other evidence, showing that a genuine issue of
material fact exists. United of Omaha Life Ins. Co. v. Honea, 458 F.3d 788, 791
(8th Cir. 2006) (quoting Fed. R. Civ. P. 56(e)).

Rule 56 “mandates the entry of

summary judgment, after adequate time for discovery and upon motion, against a
party who fails to make a showing sufficient to establish the existence of an
element essential to that party’s case, and on which that party will bear the burden

3

of proof at trial.” Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986).
III. Discussion
“In order to establish a violation of the FDCPA, a plaintiff must demonstrate
that 1) plaintiff has been the object of collection activity arising from a consumer
debt; 2) the defendant attempting to collect the debt qualifies as a debt collector
under the Act; and 3) the defendant has engaged in a prohibited act or has failed to
perform a requirement imposed by the FDCPA.” O’Connor v. Credit Prot. Ass’n LP,
No. 4:11-CV-2187-SNLJ, 2013 WL 5340927, at *6 (E.D. Mo. Sept. 23, 2013)
(citations omitted). The Court assumes arguendo that plaintiff has been the object
of collection activity and that defendant qualifies as a debt collector.

Even so,

plaintiff has failed to demonstrate a genuine dispute of material fact that defendant
violated any provision of the FDCPA.
First, because it is uncontroverted that defendant did not send the alleged
letters to plaintiff, no genuine dispute of material fact exists that plaintiff’s
§§ 1692d and 1692e claims premised on those purported communications fail as a
matter of law. See Conseco Life Ins. Co. v. Williams, 620 F.3d 902, 909 (8th Cir.
2010).
Second, it is undisputed that defendant accurately reported the status of the
accounts to the credit reporting agencies. A Chapter 13 “bankruptcy plan becomes
effective upon confirmation . . . and will result in a discharge of the debts listed in
the plan if the debtor completes the payments the plan requires . . . .”

United

Student Aid Funds, Inc. v. Espinosa, 559 U.S. 260, 264, 268 (2010) (citing 11
U.S.C. §§ 1324, 1325, 1328(a)).

In April 2015, plaintiff had not completed the

bankruptcy plan, and the accounts remained open, non-discharged debts.

4

To the extent plaintiff raises a § 1692d claim premised on defendant’s true
statements to the credit reporting agencies, she has adduced no facts from which a
reasonable factfinder could conclude that accurately reporting the status of her
debts to a third party was harassing, oppressive, or abusive to her. See Celotex,
477 U.S. at 322; In re Dunaway, 531 B.R. 267, 272 (Bankr. W.D. Mo. 2015)
(granting summary judgment to a debt collector on a plaintiff’s § 1692d claim
because, “there is no ‘threat’ in a proof of claim that accurately reflects information
about an unsecured debt the debtor has listed on his own schedules”). Therefore,
plaintiff’s § 1692d claim based on those communications fails as a matter of law.
“While liability under § 1692e is not confined to statements by collectors to
consumers, the challenged statement must have the potential to mislead, deceive,
or otherwise dupe someone in order to be actionable.”

McIvor v. Credit Control

Servs., Inc., 773 F.3d 909, 913 (8th Cir. 2014) (quotation marks, citation, and
bracketing omitted). “Even a literally false statement does not violate § 1692e if it
would not mislead the recipient.”

Id. (citation omitted).

“[A] factual, true

statement about the existence of a debt and the amount, which is recognized in the
debtor’s own bankruptcy schedules, is neither false nor deceptive.” In re Dunaway,
531 B.R. at 272 (quotation marks and citation omitted).

Further, “for a

communication to be in connection with the collection of a debt, an animating
purpose of the communication must be to induce payment by the debtor.” McIvor,
773 F.3d at 914 (quotation marks and citation omitted).
It is undisputed defendant’s statements to the credit reporting agencies were
true, and plaintiff has not produced any facts from which a reasonable juror could
conclude those statements were deceptive or misleading, or that it was illegal to

5

make such statements.

Moreover, plaintiff has proffered no evidence that those

statements were intended to induce plaintiff to pay the debt she was already paying
under

the

bankruptcy

plan.

For

those

reasons,

claims

regarding

those

communications fail as a matter of law.
Accordingly,
IT IS HEREBY ORDERED that the motion of defendant Cavalry Portfolio
Services, LLC for summary judgment [Doc. #13] is granted.
A separate judgment in accordance with this Memorandum and Order will be
entered this same date.
___________________________
CAROL E. JACKSON
UNITED STATES DISTRICT JUDGE
Dated this 25th day of January, 2016.

6