Evenson v. Palisades Collection, LLC et al
Filing
49
OPINION AND ORDER granting 40 Motion for Summary Judgment. Signed by Judge James L Graham on 6/1/2015. (ds)
IN THE UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF OHIO
EASTERN DIVISION
Christine Evenson,
Plaintiff,
v.
Case No. 2:13-cv-1226
Palisades Collection, LLC,
et al.,
Defendants.
OPINION AND ORDER
This is an action filed by plaintiff Christine Evenson
against Palisades Collection, LLC (“Palisades”); Levy & Associates,
LLC, Yale R. Levy and Abbe Lee Simmons (collectively “the Levy
defendants”).
In her complaint, plaintiff asserted claims under
the Fair Debt Collection Practices Act, 15 U.S.C. §1692, et seq.
(“FDCPA”), alleging that the defendants violated the FDCPA by
making false and misleading representations in violation of 15
U.S.C. §1692e(2), and by using unfair and unconscionable means to
collect a putative debt in violation of 15 U.S.C. §1692f(1).
Plaintiff also alleged that defendants, acting as suppliers in
connection with a consumer transaction, violated the Ohio Consumer
Sales Practices Act, Ohio Rev. Code §1345.01, et seq. (“OCSPA”) by
engaging in deceptive and unconscionable acts.
Finally, she
advanced a claim for abuse of process under Ohio law.
According to the complaint, Palisades, a debt collector,
purchased delinquent telephone accounts from AT & T, including an
account in the name of Christine Stevenson, with the address of
1399 E. Long Street, Columbus, Ohio, 43203.
On October 24, 2006,
Palisades filed a complaint in the Municipal Court of Franklin
County, Ohio, seeking to collect the sum of $1,386.05 allegedly due
on the AT & T account, naming as the defendant “Christine Stevenson
AKA Christine A. Evenson” at the Long Street address.
After
Palisades obtained service on Christine Stevenson at the Long
Street address, Palisades’ motion for default judgment was granted,
and default judgment was rendered in favor of Palisades in the
amount of $1,386.05, plus interest.
Although the caption of the
judgment entry only refers to Christine Stevenson, the entry states
that
“default
judgment
is
hereby
rendered
against
the
Defendants[.]”
Plaintiff further alleged that Palisades later retained the
Levy defendants to collect the debt. On October 22, 2012, the Levy
defendants filed a motion to revive the dormant judgment, which was
granted by the municipal court. The Levy defendants unsuccessfully
attempted to serve Christine Stevenson with a summons by certified
and regular mail sent to 5000 Red Bank Road, Galena, Ohio, which
was plaintiff’s address. Plaintiff learned of the existence of the
municipal court case and wrote a letter to the defendants informing
them that Stevenson did not reside at her address and that she had
never used that name.
The Levy defendants thereafter filed a
motion with the municipal court to substitute plaintiff’s name for
that of the judgment debtor, which was granted.
Plaintiff also
alleged that on July 12, 2013, she received a voice mail message
from the Levy defendants stating that she owed a debt of over
$2,800 which they were attempting to collect from her.
Plaintiff
retained counsel, and on November 26, 2013, an order was entered in
the municipal court case vacating the judgment against plaintiff
and directing that plaintiff’s name be removed from the case.
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This matter is now before the court on defendants’ motion for
summary judgment.
I. Summary Judgment Standards
“The 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.”
P. 56(a).
Fed. R. Civ.
The central issue is “whether the evidence presents a
sufficient disagreement to require submission to a jury or whether
it is so one-sided that one party must prevail as a matter of law.”
Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 251-52 (1986).
A
party asserting that a fact cannot be or is genuinely disputed must
support the assertion by citing to particular parts of materials in
the record, by showing that the materials cited do not establish
the absence or presence of a genuine dispute, or by demonstrating
that an adverse party cannot produce admissible evidence to support
the fact.
Fed. R. Civ. P. 56(c)(1)(A) and (B).
In considering a
motion for summary judgment, this court must draw all reasonable
inferences and view all evidence in favor of the nonmoving party.
See Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S.
574, 587 (1986); Am. Express Travel Related Servs. Co. v. Kentucky,
641 F.3d 685, 688 (6th Cir. 2011).
The moving party has the burden of proving the absence of a
genuine dispute and its entitlement to summary judgment as a matter
of law.
See Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986).
The moving party’s burden of showing the lack of a genuine dispute
can be discharged by showing that the nonmoving party has failed to
establish an essential element of his case, for which he bears the
ultimate burden of proof at trial.
3
Id.
Once the moving party
meets its initial burden, the nonmovant must set forth specific
facts showing that there is a genuine dispute for trial.
322 n. 3.
Id. at
“A dispute is ‘genuine’ only if based on evidence upon
which a reasonable jury could return a verdict in favor of the nonmoving party.”
Niemi v. NHK Spring Co., Ltd., 543 F.3d 294, 298
(6th Cir. 2008).
A fact is “material” only when it might affect
the outcome of the suit under the governing law. Id; Anderson, 477
U.S. at 248.
The nonmovant must “do more than simply show that there is
some metaphysical doubt as to the material facts[.]”
475 U.S. at 586.
Matsuchita,
A mere scintilla of evidence is not enough.
Anderson, 477 U.S. at 252; Ciminillo v. Streicher, 434 F.3d 461,
464
(6th
Cir.
2006).
Further,
the
nonmoving
party
has
an
affirmative duty to direct the court's attention to those specific
portions of the record upon which it seeks to rely to create a
genuine
issue
of
material
fact.
See
Fed.
R.
Civ.
P.
56(c)(3)(noting that the court “need consider only the cited
materials”).
II. FDCPA Claim
Defendants contend that they are entitled to summary judgment
on plaintiff’s FDCPA claim.
In order to establish a claim under
the FDCPA, plaintiff must show that: 1) she is a “consumer” as
defined by the FDCPA; 2) the “debt” arose out of a transaction
which was “primarily for personal, family or household purposes,”
see 15 U.S.C. §1692a(5); 3) the defendant was a “debt collector” as
defined by the FDCPA; and 4) the defendant violated one or more of
the FDCPA’s prohibitions.
Estep v. Manly Deas Kochalski, LLC, 942
F.Supp.2d 758, 766 (S.D.Ohio 2013)(citing Wallace v. Washington
4
Mutual Bank, F.A., 683 F.3d 323, 326 (6th Cir. 2012), and Whittiker
v. Deutsche Bank National Trust Co., 605 F.Supp.2d 914, 926
(N.D.Ohio 2009)).
“A threshold requirement for application of the FDCPA is that
the prohibited practices are used in an attempt to collect a
‘debt,’” as that term is defined by §1692a(5).
Zimmerman v. HBO
Affiliate Group, 834 F.2d 1163, 1167 (3d Cir. 1987); Matin v.
Fulton, Friedman & Gullace LLP, 826 F.Supp.2d 808, 812 (E.D.Pa.
2011).
The FDCPA does not apply to business debts.
Horton v.
Trans Union, LLC, No. 12-2072, 2015 WL 1055776 at *5 (E.D.Pa. March
10,
2015).
It
is
the
plaintiff’s
burden
to
show
that
the
obligation at issue was a consumer debt, that is, one that was
incurred “primarily for personal, family or household purposes.”
Id.; Hunter v. Washington Mutual Bank, No. 2:08-CV-069, 2012 WL
715270 at *2 (E.D.Tenn. March 1, 2012).
Defendants argue that plaintiff’s FDCPA claim fails because
she failed to allege in her complaint that the debt in question was
a
consumer
debt
incurred
primarily
for
personal,
family
or
household purposes. Defendants further argue that summary judgment
is warranted because plaintiff has not produced evidence sufficient
to establish the existence of a genuine dispute regarding the debt
being a consumer debt, a necessary component of the second and
fourth elements of her FDCPA claim.
They note that there is no
evidence in plaintiff’s deposition testimony that the AT &
T
telephone services resulting in the debt at issue were obtained
primarily for personal, family, or household purposes.
Rather,
plaintiff testified that the AT & T account was not her account;
that she did not know Christine Stevenson; and that she did not
5
know where the account was used, or how the charges were incurred.
Doc. 40-3, pp. 6-8.
In fact, there is evidence that plaintiff
called the Levy firm on September 24, 2012, claiming that she was
the victim of identity theft.
This
court
has
held
Doc. 43-11, pp. 2-3.
that
the
lack
of
allegations
in
a
complaint that the debt in question arose out of a transaction
which was primarily for personal, family or household purposes was
fatal to the plaintiffs’ FDCPA claim.
See Estep, 942 F.Supp.2d at
766-767; see also Whittiker, 605 F.Supp.2d at 928.
However, even
if this court were to grant plaintiff’s request to amend her
complaint to rectify this deficiency, plaintiff’s FDCPA claim
cannot
survive
defendants’
motion
for
summary
judgment,
as
discussed below.
Plaintiff
first argues that because she was the victim of
identity theft, this court should apply a rebuttable presumption
that the account was opened primarily for personal, family or
household purposes.
However, this court has found no authority
sanctioning such an approach, which would essentially shift the
burden
of
proving
an
element
of
plaintiff’s
claim
to
the
defendants, and the court declines to apply such a presumption.
The determination of whether a debt is a consumer debt is a factdriven one to be decided on a case-by-case basis, considering all
relevant factors.
Boosahda v. Providence Dane LLC, 462 F.App’x
331, 336 n. 7 (4th Cir. 2012).
Courts have held that the plaintiff
bears the burden of proving this element of the FDCPA claim even in
cases of identity theft.
(“Notwithstanding
any
See Horton, 2015 WL 1055776 at *7
allegations
of—or
even
the
existence
of—identity theft, Plaintiff must show that the Accounts at issue
6
involved a consumer debt in order to succeed on her FDCPA claim.”);
Toroussian v. Asset Acceptance, LLC, No. CV 12-03519 DDP (AGRx),
2013 WL 5524831 at *6 (C.D.Cal. Oct. 4, 2013)(granting summary
judgment on FDCPA claim where victim of identity theft did not
produce evidence concerning the nature of the charges made with the
credit card opened in her name); Anderson v. AFNI, Inc., NO. 104064, 2011 WL 1808779 at *1, 12-14 (E.D.Pa. May 11, 2011)(granting
summary judgment on FDCPA claim where plaintiff was victim of
identity theft and could not show that the delinquent fraudulent
Verizon phone accounts constituted consumer debts).
Plaintiff also observes that defendants did not report to the
credit reporting agencies that the debt was a business debt, citing
Morgovsky v. Creditors’ Collection Service of San Francisco,, No.
92-16563, 1994 WL 47153 (9th Cir. Feb. 15, 1994).
Morgovsky is distinguishable.
However,
In that case, plaintiffs alleged
that the defendants violated the FDCPA by falsely reporting to the
credit reporting agencies that plaintiffs’ debt was a consumer
debt, when the parties agreed that the debt was in fact a business
debt.
The Ninth Circuit held that because the FDCPA also applies
to “alleged” consumer obligations, see §1692a(5), plaintiffs stated
a claim under the FDCPA for false reporting.
*1-2.
Id., 1994 WL 47153 at
Here, there is no evidence that defendants identified the
delinquent account as being either a business debt or a consumer
debt in reporting it to the credit reporting agencies.
Plaintiff
cites no authority which would require defendants to make that
distinction.
Plaintiff’s argument is essentially that defendants
should have identified the account as a business account in order
to avoid FDCPA liability.
This constitutes an impermissible
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attempt to shift the burden of proof regarding the nature of the
account to the defendants.
No.
12-6096,
2013
WL
See Ross v. Panteris & Panteris, LLP,
5739145
at
*11
(D.N.J.
Oct.
22,
2013)(rejecting plaintiffs’ arguments that defendants should be
required to produce evidence in summary judgment proceedings that
the account was a business account, as this would improperly shift
the burden of proof to defendants).
Plaintiff next notes a prelitigation report possessed by the
Levy defendants which listed the address of “1399 E. Long Street
Apt. B” as a probable current address for Christine Stevenson.
Plaintiff argues that the naming of an individual, rather than a
business, as the account holder and the use of this residential
address indicates that the account was for personal and not
business purposes.
First, there is no evidence in the record that
this address was used as a residence.
Second, even if it were
possible to infer, solely from the address, that it was used as a
residence, neither that fact nor the fact that the account holder
is an individual is sufficient to show that the debt was a consumer
debt.
This is because individuals often carry on commercial
activities from residential settings. Id., 2011 WL 1808779 at *14;
see also Matin, 826 F.Supp.2d at 812.
Likewise, a person can be
sued in his individual capacity for business debts.
Boosahda, 462
F.App’x at 335.
Plaintiff argues that the nature and amount of the debt permit
an inference that the account was a personal account. However, the
account
in
question
was
a
telephone
account
with
AT
&
T.
Telephones are used by individuals both for business and personal
reasons.
The amount of the debt is also not sufficient to
8
establish that the account was a personal account.
the
debt
when
it
was
assigned
to
Palisades
was
The amount of
$1,386.05.
Deposition of Stephen Braun, Vice President of Operations for
Palisades, p. 18.
The account was opened on January 12, 2002.
Braun Dep., p. 15.
Because the delinquency date was not provided
by AT & T, Palisades used January 14, 2002, as the first date of
delinquency, that being 120 days prior to May 4, 2002, when AT & T
closed the account and charged the account off its books.
Dep., pp. 15-16, 18.
Braun
Since there is no evidence as to how long the
account was open, or that it was open for any significant period of
time, the fact that the amount of the delinquency was $1,386.05
says nothing about whether the account was opened for personal
reasons or by an individual small business owner.
Plaintiff notes that the credit reports obtained by the Levy
defendants indicate that plaintiff worked as an educator, and that
these reports fail to show that she ever engaged in commercial or
business activity.
However, this is irrelevant, as plaintiff
claims that she was the victim of identity theft and did not open
the account.
in
the
name
The issue in this case is whether the account opened
of
Christine
Stevenson
using
plaintiff’s
social
security number was opened for personal, family or household
purposes.
Likewise, the fact that plaintiff called the Levy firm
on September 24, 2012, to tell them that the account was not hers
and that she was the victim of identity theft says nothing about
the purpose for which the account was opened.
Plaintiff also refers to the use of validation requirements by
the defendants.
The record contains no evidence as to whether the
defendants provided the information regarding the debt required for
9
validation under the FDCPA, 15 U.S.C. §1592g, in its debtor
communications.
However, even assuming that defendants provided
validation information concerning the debt in their collection
communications
to
Stevenson
and/or
plaintiff,
this
also
insufficient to show that the debt was a consumer debt.
is
Courts
have held that the debt collector’s treatment of an obligation as
one under the FDCPA is irrelevant to an inquiry regarding the
nature of the obligation itself.
See Slenk v. Transworld Systems,
Inc., 236 F.3d 1072, 1076 (9th Cir. 2001); Horton, 2015 WL 1055776
at *7;
Matin, 826 F.Supp.2d at 812.
The use of an FDCPA
disclaimer does not automatically trigger the protections of the
FDCPA.
Boosahda, 462 F.App’x at 334-35 (rejecting argument that
debtor should be estopped from denying that debt was a consumer
debt due to use of FDCPA disclaimer).
This is because the debt
collector could have treated the obligation as a consumer debt in
an abundance of caution to protect itself from FDCPA liability.
Id.; Matin, 826 F.Supp.2d at 813; Anderson, 2011 WL 1808779 at *14.
Likewise, the fact that plaintiff claims that she asked defendants
to validate the debt under the FDCPA says nothing about the nature
of the account in light of plaintiff’s deposition testimony that
she had no knowledge concerning the account.
Finally, plaintiff argues that defendants’ failure to provide
an itemized statement of the transactions in the delinquent account
deprived her of the ability to establish that the account was
opened for personal reasons, citing Haddad v. Alexander, Zelmanski,
Danner & Fioritto, PLLC, 758 F.3d 777 (6th Cir. 2014).
That case
addressed 15 U.S.C. §1692g(b), which requires a debt collector,
upon timely dispute of the debt by the consumer, to verify the debt
10
by obtaining a copy of a judgment or the name and address of the
original creditor and sending this information to the debtor.
The
purpose of the verification requirement is to enable the consumer
to sufficiently dispute the payment obligation.
Id. at 785.
The court notes that plaintiff did not allege a violation of
§1692g(b) by the defendants in her complaint, and she cannot do so
now for the first time in opposing defendants’ motion for summary
judgment.
See
Joostberns v. United Parcel Services, Inc., 166
F.App’x 783, 788 (6th Cir. 2006)(holding that district court
properly dismissed a claim made for the first time in response to
defendant’s motion for summary judgment).
In any event, whatever
information defendants provided to plaintiff was sufficient for her
to dispute the debt by allowing her to ascertain that the account
was not hers and that she was the victim of identity theft.
Thus,
the issue here is not one of lack of adequate verification under
Haddad.
Rather, plaintiff argues that Palisades should have requested
more detailed information concerning the delinquent account from AT
& T when it acquired the account.
There is no evidence that
defendants possessed information concerning the account which was
not disclosed to plaintiff in discovery.
Braun testified that
Palisades obtained certain generic information concerning the
account and the debtor from AT & T, but did not receive any kind of
account statements. Braun Dep., pp. 10-11. Essentially, plaintiff
is contending that Palisades should have gathered this information
so that it could then be provided to her in discovery, thereby
assisting her in proving that the debt was a consumer debt.
She
does not explain why she could not have obtained this information
11
from AT & T herself.
Plaintiff is again seeking to shift the
burden of proof to defendants.
The court concludes that plaintiff’s arguments concerning the
nature of Stevenson’s debt “amount to nothing more than conjecture
or speculation” and that “[n]o reasonable jury could find, based on
the evidence” that the obligation at issue here was consumer debt.
Anderson, 2011 WL 1808779 at *14.
weighing the evidence.
In so holding, this court is not
Even drawing all reasonable inferences and
viewing all the evidence in favor of plaintiff, see Matsushita, 475
U.S. at 587, plaintiff has not produced evidence sufficient to show
the existence of a genuine dispute of fact, that is, one “based on
evidence upon which a reasonable jury could return a verdict in
favor
of
the
non-moving
party[,]”
Niemi,
543
regarding an essential element of her FDCPA claim.
F.3d
at
298,
Defendants are
entitled to summary judgment on plaintiff’s FDCPA claim.
III. State Law Claims
Defendants argue that they are entitled to summary judgment on
plaintiff’s OCSPA and abuse of process claims.
Plaintiff did not
oppose defendants’ arguments regarding these claims in her response
to the defendants’ motion for summary judgment.
See Brown v. VHS
of Michigan, Inc., 545 F.App’x 368, 372 (6th Cir. 2013)(plaintiff
is deemed to have abandoned a claim when plaintiff fails to address
it in response to a motion for summary judgment).
Rather, in her
memorandum contra, plaintiff stated that “Defendants correctly
inform this Court that there is no state cause of action that would
provide a remedy for Mrs. Evenson[.]” Doc. 47, pp. 11-12 (emphasis
in original).
Therefore, plaintiff has effectively conceded that
summary judgment is appropriate on those claims.
12
The court also
agrees with defendants’ arguments in regard to those claims, and
finds that defendants’ motion for summary judgment on the Ohio law
claims is well taken.
IV. Conclusion
In accordance with the foregoing, defendants’ motion for
summary judgment (Doc. 40) is granted.
The clerk shall enter
judgment in favor of the defendants on plaintiff’s claims.
Date: June 1, 2015
s/James L. Graham
James L. Graham
United States District Judge
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