Lyon et al v. Chase Bank USA, N.A.

Filing 59

OPINION AND ORDER - ADOPTING the magistrate judge's Amended Findings and Recommendation 53 in its entirety. Plaintiffs' motion 29 for partial summary judgment is DENIED. Defendant Chase's motion 14 for partial summary judgmen t is GRANTED IN PART and DENIED IN PART as follows: Defendant's motion is GRANTED as to plaintiff Kruse's lack of standing, DENIED as to plaintiff's defamation claim, GRANTED as to plaintiffs' IIED claim, and GRANTED as to plaintiffs' UDCPA claim. IT IS SO ORDERED. Signed on 7/17/09 by Judge Garr M. King. (peg)

IN THE UNITED STATES D I S T R I C T COURT FOR THE D I S T R I C T OF OREGON BARBEE B . LYON a n d JOAN KRUSE, Plaintiffs,
v.

CV 0 7 - 1 7 7 9 - A C O P I N I O N AND ORDER

CHASE BANK USA, N . A . , Defendants. BARBEE B . LYON T o n k o n T o r p LLP 1600 Pioneer Tower 888 S.W. F i f t h Ave. P o r t l a n d , OR 9 7 2 0 4 - 2 C 9 9 [phone] Attorneys for Plaintiffs JOHN L . LANGSLET MICHAEL J . FARRELL M a r t i n B i s c h o f f T e m p l e t o n L a n g s l e t & H o f f m a n LLP 8 8 8 S.W. 5 th A v e . , S u i t e 9 0 0 P o r t l a n d , OR 9 7 2 0 4 [phone] Attorneys for Defendant 1 - O P I N I O N AND ORDER

MARSH, J u d g e : On A p r i l 2 7 , 2 0 0 9 , M a g i s t r a t e J u d g e A c o s t a i s s u e d a n A m e n d e d F i n d i n g s a n d R e c o m m e n d a t i o n (F&R) ( d o c . 5 3 ) d e n y i n g p l a i n t i f f s ' Motion for P a r t i a l Summary Judgment (doc. 29) and granting i n p a r t a n d d e n y i n g i n p a r t d e f e n d a n t C h a s e B a n k USA, N . A . ' s M o t i o n f o r P a r t i a l Summary Judgment (doc. 14). Plaintiffs filed timely

objections (doc. 56) to some but not a l l of the magistrate judge's findings, legal conclusions, and ultimate recommendations. When a n y p a r t y o b j e c t s t o a n y p o r t i o n o f t h e m a g i s t r a t e judge's Findings and Recommendation on a dispositive motion, the d i s t r i c t court must make a de novo determination of t h a t portion of the magistrate judge's report. 28 U . S . C .
§

636(b) (1).

The

d i s t r i c t court may accept, r e j e c t , or modify t h e recommended disposition, receive further evidence, or return the matter to the magistrate judge with instructions. F e d . R. C i v . P . 7 2 ( b ) .

U n i t e d S t a t e s v . B e r n h a r d t , 8 4 0 F . 2 d 1 4 4 1 , 1 4 4 4 (9 th C i r . 1 9 8 8 ) . A s t o a n y p o r t i o n o f t h e F&R t o w h i c h n o o b j e c t i o n i s m a d e , t h e d i s t r i c t court must review de novo only the legal principles applied by the magistrate judge. School D i s t . , 708 F.2d 452, 454 Britt v. Simi Valley Unified (9 t h C i r . 1 9 8 3 ) .

For the following reasons, I adopt the magistrate judge's Findings and Recommendation in i t s entirety.

2 - OPINION AND ORDER

BACKGROUND

P l a i n t i f f s Lyon and Kruse are husband and wife.

They

b r o u g h t t h i s a c t i o n a g a i n s t d e f e n d a n t C h a s e B a n k USA, N . A . (Chase) alleging statutory claims under the Fair Credit Billing Act (FCBA), 15 U . S . C .
§

1566 e t seq., and the Oregon Unfair Debt

C o l l e c t i o n P r a c t i c e s A c t (UDCPA), O r e . R e v . S t a t . 6 4 6 . 6 3 9 e t
~.,

a n d common l a w c l a i m s f o r d e f a m a t i o n a n d i n t e n t i o n a l

infliction of emotional distress (lIED). The claims arose from a b i l l i n g dispute between the p a r t i e s relating to defendant's efforts to collect payment on a $645.00 credit card charge. The card was issued to p l a i n t i f f Lyon.

P l a i n t i f f Kruse was an authorized user on the card. The p a r t i e s f i l e d cross-motions for p a r t i a l summary judgment. Plaintiffs sought a declaratory ruling that a

prevailing party is entitled to recover a statutory penalty for e a c h s e p a r a t e v i o l a t i o n o f t h e FCBA. Defendant sought partial

summary judgment t h a t (a) p l a i n t i f f Kruse lacks standing to a s s e r t a claim, or in the a l t e r n a t i v e , can prove no s e t of facts t h a t w o u l d a l l o w h e r a r e c o v e r y u n d e r t h e FCBA, (b) defendant i s

entitled to a judgment as a matter of law as to p l a i n t i f f s ' defamation claim, (c) defendant i s e n t i t l e d to a judgment as a

matter of law as t o p l a i n t i f f s ' lIED claim, and (d) p l a i n t i f f s f a i l e d t o s t a t e a c l a i m u n d e r O r e g o n ' s UDCPA.

3 - OPINION AND ORDER

The m a g i s t r a t e j u d g e r e c o m m e n d e d t h a t p l a i n t i f f s ' m o t i o n should be denied, and defendant's motion should be granted as to plaintiff Kruse's lack of standing, denied as to plaintiffs' defamation claim, granted as to p l a i n t i f f s ' lIED claim, and g r a n t e d a s t o p l a i n t i f f s ' UDCPA c l a i m .
DISCUSSION 1. P l a i n t i f f s ' M o t i o n f o r P a r t i a l Summary J u d g m e n t .

Plaintiffs seek a ruling that, as a matter of law, a p r e v a i l i n g claimant may be awarded s t a t u t o r y damages between $ 1 0 0 a n d $ 1 0 0 0 u n d e r t h e FCBA f o r e a c h s e p a r a t e v i o l a t i o n . magistrate judge deferred ruling on the issue because i t i s premature and i s more appropriately determined in the context of instructing the jury as to the available damages and formulating an appropriate verdict form. I agree. The

"A c o u r t , i n i t s d i s c r e t i o n i n shaping the case f o r t r i a l , may deny summary judgment as t o p o r t i o n s of t h e case t h a t are ripe therefor, for purposes of achieving a more orderly or expeditious handling of the entire litigation." Powell v.

R a d k i n s , 5 0 6 F . 2 d 7 6 3 , 7 6 5 (5 t h C i r . 1 9 7 5 ) , c e r t . d e n i e d , 4 2 3 U.S. 873 (1975) (even when there are no material disputed issues o f f a c t a s t o some i s s u e s o r c l a i m s , a t r i a l c o u r t may deny summary judgment as to portions of the case t h a t are ripe for summary judgment) .

4 - OPINION AND ORDER

Accordingly, I a d o p t t h e m a g i s t r a t e j u d g e ' s r u l i n g a n d d e n y p l a i n t i f f s ' Motion f o r P a r t i a l Summary Judgment.
2. D e f e n d a n t ' s M o t i o n s f o r P a r t i a l Summary J u d g m e n t .

a.

P l a i n t i f f K r u s e ' s S t a n d i n g u n d e r t h e FCBA.

The record on p a r t i a l summary judgment unequivocally e s t a b l i s h e s t h a t Kruse was an authorized user of the c r e d i t card defendant issued to p l a i n t i f f Lyon but was not an obligor as to any charges made on t h a t c r e d i t card. The magist.rate judge s e t

out the relevant statutory language and Federal Reserve Board R e g u l a t i o n s ( R e g u l a t i o n Z) t h a t m a k e c l e a r F C B A ' s p r o t e c t i o n s e x t e n d o n l y t o t h o s e c o n s u m e r s who a r e o b l i g o r s , n o t t h o s e who are merely authorized users. See 15 U.S.C.
§ §§

1666 and 1666a;

12 C.F.R. 226.2, Subpt. E, App. 1,

(2) (a) (8) (1).

Nevertheless, plaintiffs contend the magistrate judge did not address Belmont v. Assoc. Nat. Bank, 119 F. Supp.2d 149, 159 (E.D.N.Y.), in which the court held a c r e d i t o r ' s demand for p a y m e n t o n a c h a r g e a c c o u n t f r o m s o m e o n e who i s n o t a n o b l i g o r qualifies as a "billing error" under the "wrong-person error" p r o v i s i o n s o f t h e FCBA. That case, however, i s distinguishable

because i t addresses a different credit issue, i . e . , a credit charge made against the wrong person. Plaintiffs also contend the magistrate judge erred in failing to construe the statutory language liberally to include

5 - OPINION AND ORDER

authorized u s e r s a s p r o t e c t e d p e r s o n s u n d e r t h e FCBA i n l i g h t of the fact that the statute, as part of the Truth-in-Lending Act, 15 U.S.C.
§

1601 e t seq, i s a consumer protection s t a t u t e .

A liberal construction, however, does not justify including persons within the protection of the statute in the absence of some i n d i c a t i o n i n the s t a t u t e t h a t Congress intended such persons to be protected. Accordingly, I adopt the magistrate judge's recommendation and qrant defendant's motion for p a r t i a l summary judgment as to p l a i n t i f f K r u s e ' s c l a i m u n d e r t h e FCBA. b. Plaintiffs' Defamation Claim.

The magistrate judge found genuine issues of material f a c t existed as to whether defendant acted maliciously or with willful intent to injure plaintiffs by furnishing false information to credit reporting agencies. Accordingly, the magistrate judge

concluded p l a i n t i f f s ' defamation claim was not preempted by the Fair Credit Reporting Act, 15 U.S.C.
§

1681h(e) (barring a claim

for defamation based on furnishing false information about a consumer to a consumer reporting agency. . except as to false

information furnished with malice or willful intent to injure the consumer. ") (emphasis added). Defendant has not objected to this ruling. I have reviewed

the legal principles applied by the magistrate judge de novo and

6 - OPINION AND ORDER

find n o e r r o r .

Accordingly I adopt the magistrate judge's

Finding and Recommendation and deny d e f e n d a n t ' s motion f o r p a r t i a l summary judgment as to p l a i n t i f f s ' defamation claim.
c.

P l a i n t i f f s ' lIED Claim.

Plaintiffs allege they presented sufficient evidence to create a genuine issue of material fact and thereby preclude summary judgment in defendant's favor on p l a i n t i f f s ' lIED claim. The evidence purports to show defendants continued to attempt to collect the disputed credit charge and ignored p l a i n t i f f s ' requests for responses to plaintiffs' complaints. The magistrate judge concluded the conduct alleged by p l a i n t i f f s did not support an lIED claim because the conduct, as a matter of Oregon law, was not outrageous i n the extreme, and did not amount to an extraordinary transgression of the bounds of socially tolerable conduct. Or. 220, 236 (1989). I agree. See Sheets v. Knight, 308

Similar lIED cases decided in Oregon state courts and t h i s court require conduct that i s far more egregious than defendant's conduct in t h i s case to support an lIED claim.
v. Central Billing Bureau,
See~,

Turman

I n c . , 279 Or. 443, 446-47

(1977) (a

debt collection agent's conduct in calling the alleged debtors "deadbeats" and "scum" and threatening the husband with the loss o f h i s job and the wife with t h e l o s s o f her home c o n s t i t u t e d lIED). B u t s e e , M a t h i s v . Omnium W o r l d w i d e , 0 6 - C V - 1 6 1 4 - A A , 2 0 0 6

7 - OPINION AND ORDER

WL 1 5 8 2 3 0 1 (D. O r . 2 0 0 6 ) ( s i x - e i g h t " p r e s s u r e - t a c t i c " t e l e p h o n e calls over a 14-month period did not constitute lIED as a matter of law). Accordingly, I adopt the magistrate judge's recommendation and grant defendant's motion for p a r t i a l summary judgment as to plaintiffs' claim for intentional infliction of emotional distress. d. P l a i n t i f f s ' UDCPA C l a i m .

Plaintiffs allege in their Complaint that "Defendant v i o l a t e d [ t h e UDCPA] b y a t t e m p t i n g t o c o l l e c t a d e b t w h e n i t k n e w o r h a d r e a s o n t o know t h a t i t s r i g h t t o do s o d i d n o t e x i s t . " Defendant and the magistrate judge interpreted this claim to a s s e r t t h a t defendant was attempting to c o l l e c t a debt t h a t did not exist. O r e g o n ' s UDCPA p r o h i b i t s d e b t c o l l e c t o r s f r o m u s i n g c e r t a i n abusive and coercive methods to pressure debtors to pay debts that exist. 92 (1992). Ore. Rev. Stat. (2) (k); P o r t e r v. H i l l , 314 Or. 86,

I t does not, however, prohibit "the practice of Id. at 93.

trying to collect a debt that does not exist."

P l a i n t i f f s now c o n t e n d i n t h e i r o b j e c t i o n s t o t h e F i n d i n g s and Recommendation that the magistrate judge and defendant misinterpreted this claim and that, in fact, p l a i n t i f f s ' Complaint "alleges that [defendant] attempted to collect the debt when i t knew o r had r e a s o n t o know t h a t i t s r i g h t t o a t t e m p t t o

8 - OPINION AND ORDER

collect t h e d e b t d i d n o t e x i s t . " added).

P I s ' Am. O b j . a t 5 .

(Emphasis

In explicating this point, however, p l a i n t i f f s further

m u d d y t h e w a t e r s a s t o w h a t t h e i r UDCPA c l a i m i s b y a r g u i n g t h a t the magistrate judge "overlooked" that defendant "dislaim[ed] any r i g h t to c o l l e c t from p l a i n t i f f Joan Kruse" because she was not an obligor on the credit card, and, therefore, defendant " n e c e s s a r i l y v i o l a t e d t h e UDCPA b y a t t e m p t i n g t o c o l l e c t f r o m her." I n o t h e r w o r d s , d e f e n d a n t v i o l a t e d t h e UDCPA b y a t t e m p t i n g

to collect a debt that did not exist as to her. On t h i s r e c o r d , I c o n c l u d e t h a t , e v e n i f i t w o u l d m a k e a difference, p l a i n t i f f s ' efforts to add language into their C o m p l a i n t t o e x p l i c a t e t h e i r UDCPA c l a i m i s f a r t o o l a t e . Accordingly, I adopt the magistrate judge's recommendation and
grant defendant's motion for p a r t i a l summary judgment as to

p l a i n t i f f s ' claim under Oregon's Unlawful Debt Collection Practices Act.
CONCLUSION

For the reasons stated above, p l a i n t i f f s ' Motion for Partial Summary Judgment (doc. 29) i s denied. D e f e n d a n t C h a s e B a n k USA,

N.A.'s (Chase) Motion f o r P a r t i a l Summary Judgment (doc. 14) i s
granted in part and denied in part as follows:

Defendant's

motion is granted as to plaintiff Kruse's lack of standing,
denied as to plaintiffs' defamation claim, granted as to

9 - OPINION AND ORDER

plaintiffs' l I E D c l a i m , a n d g r a n t e d a s t o p l a i n t i f f s ' UDCPA claim. I T I S SO ORDERED. DATED t h i s

~ day

of July, 2009 .

.t"n L/ . \

MALCOLM F . MARSH United States District Judge

1 0 - OPINION AND ORDER