Wade v. Account Resolution Corporation et al

Filing 60

MEMORANDUM AND ORDER - IT IS HEREBY ORDERED that Plaintiffs Motion for Summary Judgment Against Defendants Dennis Barton III and the Barton Law Group, LLC 34 is DENIED. IT IS FURTHER ORDERED that Defendants' Motion for Summary Judgment 50 isDENIED. This matter is currently set for a jury trial on June 5, 2017. Due to the Court's scheduling conflict, the trial setting must be continued. The Court directs the parties to confer and submit three alternate trial dates no later th an Monday, May 15, 2017. Counsel are reminded of the protective measures set forth in the Court's January 4, 2017 Order (Doc. No. 48). In particular, all communication between the parties shall be in writing, and any communication from Mr. Eason to Defendant Barton shall be directed to Defendant's counsel. ( Response to Court due by 5/15/2017.). Signed by District Judge John A. Ross on 5/10/17. (KKS)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF MISSOURI
EASTERN DIVISION

THOMAS WADE,
Plaintiff,
v.
ACCOUNT RESOLUTION
CORPORATION, et al.,
Defendants.

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No. 4:15-CV-1354 JAR

MEMORANDUM AND ORDER
This matter is before the Court on competing motions for summary judgment. Plaintiff
Thomas Wade brings this action against Defendants Dennis J. Barton, and the Barton Law
Group, LLC (“Defendants”) 1, for alleged violations of the Fair Debt Collection Practices Act, 15
U.S.C. § 1692, et seq. (“FDCPA”). The motions are fully briefed and ready for disposition.
Facts
The relevant facts are not disputed. On July 24, 2014, ARC sued Plaintiff in the Associate
Circuit Court for St. Charles County, Missouri to recover an outstanding balance on Plaintiff’s
SLUCare account. ARC was the assignee of the debt. Defendants are regularly engaged in the
collection of consumer debts and represented ARC in the state court action. Plaintiff received
service of the summons and complaint in the state court action, but did not answer or otherwise
respond. On September 16, 2014, Defendants appeared in state court on behalf of ARC and
presented a proposed default judgment seeking judgment against Plaintiff in the amount of the

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Plaintiff and Defendant Account Resolution Corporation (ARC) reached a settlement on Plaintiff’s
claims and ARC was dismissed from this action. (Doc. Nos. 25, 30)

outstanding principal account balance of $1,203.00 and $190.14 in interest. The state court
granted ARC’s motion for default judgment, and entered the proposed judgment.
Legal standard
Summary judgment is appropriate when no genuine issue of material fact exists in the
case and the movant is entitled to judgment as a matter of law. See Celotex Corp. v. Catrett, 477
U.S. 317, 322–23 (1986). The initial burden is placed on the moving party. City of Mt. Pleasant,
Iowa v. Associated Elec. Co-op., Inc., 838 F.2d 268, 273 (8th Cir. 1988). If the record
demonstrates that no genuine issue of fact is in dispute, the burden then shifts to the non-moving
party, who must set forth affirmative evidence and specific facts showing a genuine dispute on
that issue. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 249 (1986). In determining whether
summary judgment is appropriate in a particular case, the evidence must be viewed in the light
most favorable to the nonmoving party. Osborn v. E.F. Hutton & Co., Inc., 853 F.2d 616, 619
(8th Cir. 1988). When both parties move for summary judgment, the Court must analyze each
motion individually and on its own merits. Wermager v. Cormorant Township Bd., 716 F.2d
1211, 1214 (8th Cir. 1983).
FDCPA
The FDCPA is designed “to eliminate abusive debt collection practices by debt
collectors” and “to promote consistent state action to protect consumers against debt collection
abuses.” 15 U.S.C. § 1692. Section 1692e prohibits the use of “any false, deceptive, or
misleading representation or means in connection with the collection of any debt” including,
“[t]he false representation of the character, amount, or legal status of any debt.” §§ 1692e, e(10).
Section 1692f prohibits a debt collector from employing any “unfair or unconscionable means to
collect or attempt to collect any debt,” with § 1692f(1) specifically prohibiting “[t]he collection

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of any amount (including any interest, fee, charge, or expense incidental to the principal
obligation) unless such amount is expressly authorized by the agreement creating the debt or
permitted by law.”
The FDCPA is liberally construed to protect consumers. Layton v. CACH, LLC, No.
4:15CV00752 AGF, 2015 WL 6736121, at *4 (E.D. Mo. Nov. 4, 2015). The Act’s prohibitions
apply to collection efforts through litigation, but at the same time, the Act seeks to preserve the
judicial remedies of creditors. Id. (citation omitted). The Eighth Circuit applies the
“unsophisticated consumer” test in evaluating whether a debt collector’s practices are false,
misleading, or deceptive. Id. (citation omitted). The test “is designed to protect consumers of
below average sophistication or intelligence,” but also contains an “objective element of
reasonableness.” Id. (citation omitted). The determination of whether a plaintiff states a claim
under the FDCPA based on litigation conduct is best decided on a case-by-case basis. Id. at 819.
Defendants’ motion for summary judgment
As a threshold matter, Defendants have moved for summary judgment on the grounds
that Plaintiff’s complaint is time-barred because it was filed on August 31, 2015, one year and
eighteen days after Plaintiff was served, on August 13, 2014, with the petition and affidavit in
the state court collection action (Doc. No. 52 at 2-5). Defendants previously raised this same
argument in a motion to dismiss (Doc. No. 11). The Court denied Defendants’ motion,
explaining that the one-year statute of limitations under the FDCPA is triggered when the debt
collector has had its last opportunity to comply with the FDCPA, which in this case was when
they obtained default judgment against Plaintiff on September 16, 2014. (Doc. No. 27 at 3, citing
Coble v. Cohen & Slamowitz, LLP, 824 F. Supp. 2d 568, 570 (S.D.N.Y. 2011) (holding that the
debtors’ FDCPA claims accrued, and the one-year limitations period began to run, when the

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consumer collection law firm obtained default judgments against them in state-court debt
collection actions).
Defendants state they have “collected more evidence” that now supports summary
judgment (Doc. No. 52 at 2 n.2); however, upon review, the Court finds nothing new in the
evidence submitted by Defendants on the record that is relevant to the timeliness issue.
Moreover, the Court is not persuaded by Defendants’ attempts to distinguish Coble from the
instant case. Defendants’ cross motion for summary judgment will, therefore, be denied.
Plaintiff’s motion for summary judgment
Plaintiff argues summary judgment is appropriate in this case because Defendants had no
authority to collect prejudgment interest on his SLUCare account. He notes that the Affidavit of
Account attached to the state court action was silent as to prejudgment interest, and asserts that
Defendants did not consult ARC prior to collecting prejudgment interest (Doc. No. 34 at 4). The
Court notes that Plaintiff does not dispute Defendants’ calculation of prejudgment interest.
In response, Defendants assert that the actions taken to collect the debt owed by Plaintiff
followed the usual and customary course of their business relationship with ARC and its
principal, Jim Hill, which included “standing authority” to seek prejudgment interest in
connection with collection actions (Doc. No. 53 at 4-5; Affidavit of Dennis J. Barton III (“Barton
Aff.”), Doc. No. 53-4 at ¶¶ 6, 8, 9, 11). Defendants further argue that prejudgment interest is
permitted under Missouri law, which allows creditors to collect “interest at the rate of nine
percent per annum, when no other rate is agreed upon, for all moneys after they become due and
payable, on written contracts, and on accounts after they become due and demand of payment is
made.” Mo. Rev. Stat. § 408.020 (2000). (Doc. No. 53 at 5)

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It is a violation of the FDCPA to collect or attempt to collect any amount, including
interest, unless “expressly authorized by the agreement creating the debt or permitted by law.” 15
U.S.C. § 1692f(1). Because no written agreement between Plaintiff and SLUCare, the original
creditor, has been submitted on the record, the Court is unable to determine whether Plaintiff had
an agreement with SLUCare which allowed Defendants to recover prejudgment interest.
Nevertheless, a debt collector is allowed to collect prejudgment interest as permitted by
law. Diaz v. Kubler, 785 F.3d 1326 (9th Cir. 2015). Missouri law requires a demand be made
before prejudgment interest on a liquidated claim can start to accrue. Mo. Rev. Stat. § 408.020;
Mueller v. Barton, No. 4:13CV2523 CAS, 2014 WL 4546061, at *7 (E.D. Mo. Sept. 12, 2014).
“To be liquidated, the claim must be fixed and determined or readily ascertainable by
computation or a recognized standard.” Labrier v. State Farm Fire and Casualty Company, 147
F. Supp. 3d 839, 852 (W.D. Mo. 2015) (quoting Miller v. Gammon & Sons, Inc., 67 S.W.3d 613,
624 (Mo. Ct. App. 2001)). Interest is allowed from the time of demand, or if no demand is made,
from the date a lawsuit is filed. Id. The demand need not be in any certain form or specifically
request prejudgment interest; however, it must be definite as to amount and time. Haney v.
Portfolio Recovery Associates, LLC, 837 F.3d 918, 929-30 (8th Cir. 2016) (internal citations and
quotation marks omitted). Further, an express allegation in a petition seeking prejudgment
interest is not a prerequisite to an award of such interest; a prayer for “such other relief as may be
proper” is sufficient. Dierker Associates, D.C., P.C. v. Gillis, 859 S.W.2d 737, 746 (Mo. Ct.
App. 1993); Holtmeier v. Dayani, 862 S.W.2d 391, 406 (Mo. Ct. App. 1993). Section 408.020 is
applicable to the parties.
In the state court action, ARC stated that SLUCare had demanded payment and that
Plaintiff had failed and/or refused to tender payment. (See Doc. No. 54-1 at ¶¶ 6, 7) ARC did not

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indicate when demand was made by SLUCare, although Plaintiff does not argue that Defendants
attempted to collect prejudgment interest for a period of time prior to demand being made. ARC
further stated that after all offsets and credits due, the total balance remaining on Plaintiff’s
SLUCare account was $1,203.00 plus interest (Doc. No. 54-1 at ¶ 8). ARC also prayed for
judgment in its favor “in the sum of $1,203.00, together with interest, costs of court and for all
other relief this Court deems just and proper.” Because there is no evidence of record
establishing when SLUCare demanded payment, the filing of the state court action substitutes for
a demand and starts the interest bearing period, to be computed as of the date of the judgment.
See A.G. Edwards & Sons, Inc. v. Drew, 978 S.W.2d 386, 397 (Mo. Ct. App. 1998). In addition,
the claim was fixed and determinable and therefore liquidated. Id. Thus, based on the record
before the Court, Plaintiff has not established that Defendants’ collection of prejudgment interest
violated the FDCPA as a matter of law. Plaintiff’s motion for summary judgment will be denied.
Accordingly,
IT IS HEREBY ORDERED that Plaintiff’s Motion for Summary Judgment Against
Defendants Dennis Barton III and the Barton Law Group, LLC [34] is DENIED.
IT IS FURTHER ORDERED that Defendants’ Motion for Summary Judgment [50] is
DENIED.
This matter is currently set for a jury trial on June 5, 2017. Due to the Court’s scheduling
conflict, the trial setting must be continued. The Court directs the parties to confer and
submit three alternate trial dates no later than Monday, May 15, 2017. Counsel are reminded
of the protective measures set forth in the Court’s January 4, 2017 Order (Doc. No. 48). In
particular, all communication between the parties shall be in writing, and any
communication from Mr. Eason to Defendant Barton shall be directed to Defendant’s counsel.

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Dated this 10th day of May, 2017.

JOHN A. ROSS
UNITED STATES DISTRICT JUDGE

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