Keeler et al v. Diversified Collection Services, Inc.
Filing
63
DECISION AND ORDER DENYING Plaintiff Timothy L. Keeler's 36 Motion for Partial Summary Judgment. Signed by William M. Skretny, Chief Judge on 5/20/2011. (MEAL)
UNITED STATES DISTRICT COURT
WESTERN DISTRICT OF NEW YORK
TIMOTHY L. KEELER and
PEGGY J. KEELER,
Plaintiffs,
v.
DECISION AND ORDER
09-CV-254S
DIVERSIFIED COLLECTION SERVICES, INC.,
Defendant.
I. INTRODUCTION
In this action, Plaintiffs Timothy L. Keeler and Peggy J. Keeler allege that Defendant
Diversified Collection Services, Inc. engaged in unlawful debt collection practices in
violation of the Fair Debt Collection Practices Act (“FDCPA”), 15 U.S.C. § 1692 et seq.
Presently before this Court is Plaintiff Timothy L. Keeler’s1 Motion for Partial Summary
Judgment. Plaintiff seeks summary judgment on one of his claims for liability.2 For the
reasons that follow, this motion will be denied.
1
2
Plaintiff Peggy J. Keeler does not take part in bringing this m otion.
In support of his m otion, Plaintiff filed a Notice of Motion with exhibits, a m em orandum of law, a
Statem ent of Facts Pursuant to Local Rule 56, an Appendix, the Declaration of Plaintiff Tim othy L. Keeler,
the Declaration of Kenneth R. Hiller, Esq., and a reply m em orandum . (Docket Nos. 36, 47.) In opposition,
Defendant filed a Response to Plaintiff’s Statem ent of Facts Pursuant to Local Rule 56 and a
m em orandum of law. (Docket Nos. 43, 44.)
II. BACKGROUND
A.
Facts
The following relevant and undisputed facts are limited to the claim at issue in
Plaintiff’s instant motion. Familiarity with the general facts and arguments is presumed.
Plaintiff Timothy L. Keeler incurred a debt in the form of a student loan from HSBC
Bank, USA (“HSBC”). (Plaintiff’s Statement, ¶ 5;3 Defendant’s Statement, ¶ 1.4) After
Plaintiff stopped making payments, HSBC assigned the loan to the United States
Department of Education, which then referred it to Defendant to collect. (Plaintiff’s
Statement, ¶¶ 5, 8; Defendant’s Statement, ¶ 1.) Defendant is a debt collector, as defined
by section 1692a(6) of the FDCPA. (Plaintiff’s Statement, ¶ 7; Defendant’s Statement, ¶
1.) Defendant assigned the task of collecting the debt to Clifford Martin, one of its
collectors. (Plaintiff’s Statement, ¶¶ 4, 11; Defendant’s Statement, ¶ 1.)
Several weeks into Martin’s pursuit of collecting Plaintiff’s debt, on August 22, 2008,
Martin and Plaintiff spoke by telephone.
(Plaintiff’s Statement, ¶ 11; Defendant’s
Statement, ¶ 1.) Martin called Plaintiff at the contact phone number that Plaintiff had
provided to Defendant earlier the same day, but reached Plaintiff’s answering machine.
(Clifford Martin Dep., pp. 47–48.5) A few minutes later, Plaintiff returned Martin’s call and
they discussed, inter alia, collection of Plaintiff’s debt. (Clifford Martin Dep., pp. 48–49;
Plaintiff’s Statement, ¶ 11; Defendant’s Statement, ¶ 1.)
Defendant has a policy of keeping a written record of communication efforts with
3
Referring to Plaintiff’s Statem ent of Facts Pursuant to Local Rule 56. (Docket No. 36-1.)
4
Referring to Defendant’s Response to Plaintiff’s Statem ent of Facts. (Docket No. 43.)
5
Referring to the transcript of Clifford Martin’s deposition. (Docket No. 36-9.)
2
respect to each debt collection account.
(Plaintiff’s Statement, ¶ 10; Defendant’s
Statement, ¶ 1.) The record of Martin’s notes regarding his August 22, 2008 conversation
with Plaintiff reflects the following abbreviated comments:
06:41 Debtor. First Demand Contact: Refuses to Pay (CallIn). [D]btr said has mental dis, and he is bi polar and is gonna
have surgery soon said he is getting dis, told him rams of not
paying said whatever and hu . . Contacted DCS
(Defendant’s Transaction History, p. 5.6)
With respect to these notes, Martin explained at his deposition that Plaintiff had said
that (1) “he had a mental disability,” (2) “he was bipolar,” (3) “he’s going to have surgery
soon,” and (4) “he’s getting disability.” (Clifford Martin Dep., p. 49.) Further, Martin had
told Plaintiff “the ramifications of not paying” his debt, to which Plaintiff replied, “whatever”
and hung up the telephone. (Id.) Also during this August 22, 2008 conversation with
Plaintiff, Martin “advised Mr. Keeler of the possibility of the initiation of administrative
garnishment procedures to collect the student loan debt.” (Plaintiff’s Statement, ¶ 11;
Defendant’s Statement, ¶ 1.)
At the time of this conversation, Plaintiff was receiving $724.00 in monthly
Supplemental Security Income (“SSI”) benefits. (Plaintiff’s Statement, ¶ 15; Defendant’s
Statement, ¶ 5.)
6
Referring to Plaintiff’s exhibit of Defendant’s Transaction History of com m unications with respect
to Plaintiff Tim othy L. Keeler’s account. (Docket No. 36-11.)
3
B.
Procedural History
Plaintiffs Timothy L. Keeler and Peggy J. Keeler commenced this action on March
19, 2009, by filing a Complaint in the United States District Court for the Western District
of New York. (Docket No. 1.) Defendant filed an Answer on April 30, 2009. (Docket No.
3.) After the conclusion of discovery and mediation efforts, Plaintiff Timothy L. Keeler
moved for Partial Summary Judgment on March 28, 2011. (Docket No. 36.) After full
briefing, this Court took the motion under advisement on April 22, 2011, without oral
argument.
III. DISCUSSION AND ANALYSIS
A.
Summary Judgment Standard
Rule 56 of the Federal Rules of Civil Procedure provides that “[t]he court shall grant
summary judgment if the movant shows that there is no genuine dispute as to any material
fact and the movant is entitled to judgment as a matter of law." FED . R. CIV. P. 56(a). A
fact is "material" only if it "might affect the outcome of the suit under governing law."
Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S. Ct. 2505, 2510, 91 L. Ed. 2d
202 (1986). A "genuine” dispute exists "if the evidence is such that a reasonable jury could
return a verdict for the non-moving party." Id.
In determining whether a genuine dispute regarding a material fact exists, the
evidence and the inferences drawn from the evidence “must be viewed in the light most
favorable to the party opposing the motion." Adickes v. S. H. Kress & Co., 398 U.S. 144,
158–59, 90 S. Ct.1598, 1609, 26 L. Ed. 2d 142 (1970) (internal quotations and citation
omitted); see also FED . R. CIV. P. 56(c). "Only when reasonable minds could not differ as
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to the import of evidence is summary judgment proper." Bryant v. Maffucci, 923 F.2d 979,
982 (2d Cir. 1991) (citation omitted). Indeed, “[i]f, as to the issue on which summary
judgment is sought, there is any evidence in the record from which a reasonable inference
could be drawn in favor of the opposing party, summary judgment is improper.” Sec. Ins.
Co. of Hartford v. Old Dominion Freight Line, Inc., 391 F.3d 77, 82–83 (2d Cir. 2004)
(citations omitted). The function of the court is not “to weigh the evidence and determine
the truth of the matter but to determine whether there is a genuine issue for trial."
Anderson, 477 U.S. at 249.
B.
Plaintiff’s Motion for Partial Summary Judgment
The FDCPA is a consumer-protection statute enacted by Congress “to eliminate
abusive debt collection practices by debt collectors, to insure that those debt collectors who
refrain from using abusive debt collection practices are not competitively disadvantaged,
and to promote consistent State action to protect consumers against debt collection
abuses.” Alibrandi v. Fin. Outsourcing Servs., Inc., 333 F.3d 82, 85 (2d Cir. 2003) (quoting
15 U.S.C. § 1692(e)). The statute “establishes certain rights for consumers whose debts
are placed in the hands of professional debt collectors for collection, and requires that such
debt collectors advise the consumers whose debts they seek to collect of specified rights.”
DeSantis v. Computer Credit, Inc. 269 F.3d 159, 161 (2d Cir. 2001). For example, debt
collectors are prohibited from using false, deceptive, or misleading representations to
collect a debt. See 15 U.S.C. § 1692e.
Plaintiff seeks summary judgment on liability for his claim that Defendant violated
15 U.S.C. § 1692e(4), (5), and (10) by deceptively representing to him that his Social
Security benefits could be garnished for repayment of his debt. Section 1692e specifically
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prohibits the “representation or implication that nonpayment of any debt will result in . . .
the seizure, garnishment, attachment, or sale of any property or wages of any person
unless such action is lawful and the debt collector or creditor intends to take such action,”
15 U.S.C. § 1692e(4), and further specifies that a “threat to take any action that cannot
legally be taken or that is not intended to be taken” is a violation of the FDCPA, 15 U.S.C.
§ 1692e(5). The statute also prohibits the “use of any false representation or deceptive
means to collect or attempt to collect any debt or to obtain information concerning a
consumer.” 15 U.S.C. § 1692e(10).
Plaintiff argues that he is entitled to summary judgment because although his
monthly SSI benefits were exempt from garnishment in 2008, Martin informed him during
their August 22, 2008 conversation that fifteen percent of his SSI benefits could be
garnished to collect Plaintiff’s student loan debt, constituting a threat of action that could
not legally be performed, in violation of 15 U.S.C. § 1692e(4) and (5). Plaintiff also asserts
that Martin’s statements regarding potential garnishment in the absence of further
explanation that Plaintiff’s own benefits could or would be exempt were deceptive and
misleading and thus in violation of 15 U.S.C. § 1692e(10).
Defendant opposes Plaintiff’s motion and contends that disputed issues of material
fact exist as to what Martin actually communicated to Plaintiff regarding garnishment during
their August 22, 2008 telephone conversation and, specifically, as to whether Martin
mentioned garnishment of Plaintiff’s SSI benefits. Defendant further argues that any
statements that Martin made during the conversation were to inform Plaintiff of the
possibility of an administrative offset, rather than to mislead him to believe that such offset
would necessarily occur.
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Having reviewed the evidence presented, particularly the provided transcription of
Plaintiff’s deposition of Martin, it is not clear, as Plaintiff contends, that a misleading
representation or threat was made during the August 22, 2008 conversation that violated
15 U.S.C. § 1692e(4),7 (5), and (10) as a matter of law. Indeed, nowhere in the provided
transcription is there testimony from Martin that he specifically advised Plaintiff that his SSI
benefits could or would be subjected to administrative garnishment, nor is there any
evidence whatsoever that Martin specifically discussed Plaintiff’s SSI benefits in any
respect. (Clifford Martin Dep., pp. 47–51.) Rather, the transcript reflects that when asked
whether he recalled what he told Plaintiff with respect to “the ramifications” of not paying
the debt, Martin testified that:
[w]ell, we would have told him about the administrative wage
garnishment procedures.
(Clifford Martin Dep., p. 49.)
In response to counsel’s follow-up question of “[t]hat’s what you generally say to
that?” and without providing any insight as to his specific conversation with Plaintiff, Martin
testified only that it would have been customary to tell debtors about administrative wage
garnishment procedures because “[i]t’s all scripted.”8 (Clifford Martin Dep., p. 50.) Indeed,
Martin apparently never responded to Plaintiff’s counsel’s question, “[b]ut you don’t actually
7
Plaintiffs did not allege a violation of 15 U.S.C. § 1692e(4) in their Com plaint, however, Tim othy
L. Keeler now alleges a violation of this statute and seeks sum m ary judgm ent as to his claim . (Docket No.
1, ¶ 26.) In its opposition to the instant m otion, Defendant does not claim to have been prejudiced by
Plaintiff’s failure to pursue this claim in his Com plaint. Further, Plaintiffs alleged sufficient facts in their
Com plaint to put Defendant on notice that a claim would be brought under this section. (Docket No. 1, ¶¶
21, 22, and 26(E).) Thus, although just raised for the first tim e, Plaintiff’s claim for violation of 15 U.S.C. §
1692e(4) will be considered.
8
The script has not been provided to this Court.
7
specifically recall speaking to Mr. Keeler about [the administrative wage garnishment
procedures]?” (Clifford Martin Dep., p. 50.) In sum, the deposition transcript is unedifying
as to whether Martin made a misleading statement—or any statement for that matter—
during the August 22, 2008 conversation with respect to garnishment of Plaintiff’s exempt
SSI benefits.
It is undisputed only that Martin “advised Mr. Keeler of the possibility of the initiation
of administrative garnishment procedures to collect the student loan debt.” (Plaintiff’s
Statement, ¶ 11; Defendant’s Statement, ¶ 1.) Because the parties dispute whether
Martin’s statements were specifically made with respect to garnishment of Plaintiff’s
exempt SSI benefits, or included scripted statements having to do only with general
administrative garnishment, this Court finds that an issue of fact for the jury exists as to
whether Martin made a false, deceptive, or misleading representation in violation of 15
U.S.C. § 1692e during the August 22, 2008 conversation. Without more, and drawing all
inferences from the general statements elicited at Martin’s deposition in Defendant’s favor,
this Court finds a genuine dispute of material fact as to Plaintiff’s claims. Summary
judgment is therefore precluded.
IV. CONCLUSION
For the reasons stated above, Plaintiff’s Motion for Partial Summary Judgment is
denied.
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V. ORDERS
IT HEREBY IS ORDERED, that Plaintiff’s Motion for Partial Summary Judgment
(Docket No. 36) is DENIED.
SO ORDERED.
Dated:
May 20, 2011
Buffalo, New York
/s/William M. Skretny
WILLIAM M. SKRETNY
Chief Judge
United States District Court
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