Scales v. Midland Funding, LLC et al

Filing 64

MEMORANDUM re. REPORT AND RECOMMENDATIONS 54 and mtns for summary judgment 46 and 52 (Order to follow as separate docket entry) Signed by Honorable Sylvia H. Rambo on 3/31/21. (ma)

IN THE UNITED STATES DISTRICT COURT
FOR THE MIDDLE DISTRICT OF PENNSYLVANIA
WILLIAM D. SCALES,
Plaintiff,
v.
MIDLAND FUNDING, LLC, AND
DANIEL J. SANTUCCI, ESQ.,
Defendants.

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Civil No. 1:18-cv-1514

Judge Sylvia H. Rambo

MEMORANDUM
Before the court is the Report & Recommendation (“R&R”) (Doc. 54)
submitted by Magistrate Judge Martin C. Carlson concerning the Motions for
Summary Judgment filed by Plaintiff William D. Scales (Doc. 46) and Defendants
Midland Funding, LLC and Daniel J. Santucci, Esq. (Doc. 52). For the reasons set
forth below, the court will adopt the R&R.
I.

Background
Magistrate Judge Carlson thoroughly reviewed the background of this case in

his R&R (Doc. 54, pp. 1-7), and therefore, the court will only provide an abbreviated
overview of the record. This is a Fair Debt Collection Practice Act (“FDCPA”)
dispute. Plaintiff is an individual consumer appearing pro se, while Defendants are
a debt-collection company and an attorney representing the company. Plaintiff
asserts numerous causes of action that essentially boil down two alleged FDCPA
violations by Defendants: (1) sending Plaintiff fraudulent debt collection letters that
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failed to accurately disclose his rights as a debtor; and (2) litigating a bad-faith debtcollection lawsuit against him in state court. Both parties cross-moved for summary
judgment. (Docs. 46, 52.) On October 28th, 2020, Magistrate Judge Carlson
submitted an R&R to the court recommending that the court deny Plaintiff’s motion
while granting and denying in part Defendants’ motion. (Doc. 54.) On November
9, 2020, Plaintiff filed his objections to the R&R. (Doc. 57.) Two days later,
Defendants filed their objections.

(Doc. 59.)

Both parties have filed timely

responses to each other’s objections. (Docs. 61, 62.) This matter is thus ripe for
resolution.
II.

Legal Standard
A.

Review of a Magistrate Judge’s Report & Recommendation

When a party objects to a magistrate judge’s report and recommendation, the
district court undertakes de novo review of the contested portions of the report. See
E.E.O.C. v. City of Long Branch, 866 F.3d 93, 99 (3d Cir. 2017) (quoting 28 U.S.C.
§ 636(b)(1)); see also FED. R. CIV. P. 72(b)(3). In this regard, Local Rule of Court
72.3 requires written objections to “specifically identify the portions of the proposed
findings, recommendations or report to which objection is made and the basis for
such objections.” LOCAL RULE 72.3. The court must afford at least “reasoned
consideration” to uncontested portions of the report before adopting it as the decision

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of the court. City of Long Branch, 866 F.3d at 100 (quoting Henderson v. Carlson,
812 F.2d 874, 878 (3d Cir. 1987)).
B.

Summary Judgment

Under Rule 56(a) of the Federal Rules of Civil Procedure, 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 summary judgment as a matter of
law.” See Celotex Corp. v. Catrett, 477 U.S. 317, 322-23 (1986). A factual dispute
is “material” if it might affect the outcome of the suit under the applicable
substantive law and is “genuine” only if there is a sufficient evidentiary basis for a
reasonable factfinder to return a verdict for the non-moving party. Anderson v.
Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). When evaluating a motion for
summary judgment, a court “must view the facts in the light most favorable to the
non-moving party” and draw all reasonable inferences in favor of the same. Hugh v.
Butler Cnty. Family YMCA, 418 F.3d 265, 267 (3d Cir. 2005). The moving party
bears the initial burden of demonstrating the absence of a disputed issue of material
fact. See Celotex, 477 U.S. at 324. “Once the moving party points to evidence
demonstrating no issue of material fact exists, the non-moving party has the duty to
set forth specific facts showing that a genuine issue of material fact exists and that a
reasonable factfinder could rule in its favor.” Azur v. Chase Bank, USA, Nat’l Ass’n,
601 F.3d 212, 216 (3d Cir. 2010).
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III.

Discussion
In his objections to the R&R, Plaintiff identifies five points of purported error.

(See Docs. 57, 58.) Specifically, he contends that Magistrate Judge Carlson erred in
recommending that the court enter judgment in Defendants’ favor as to the debt
collection letters sent to Plaintiff, as well as by finding that Plaintiff was required to
file a Certificate of Merit as to any claims of professional negligence. For their part,
Defendants object to the R&R insofar as it recommends that summary judgment be
denied as to Plaintiff’s claim that Defendants violated the FDCPA by filing suit
against him to collect a debt.
A.

The Magistrate Judge Did Not Err in Calculating the Statute of
Limitations as to the August Letter or Finding that the Requirements of
§ 1692g Do Not Apply to the August Letter

Contrary to Plaintiff’s argument, while Magistrate Judge Carlson found that
the January 2017 claims are time-barred by the one-year statute of limitations that
applies to FDCPA claims (Doc. 54, pp. 14-15), he did not make the same finding
regarding the August 17, 2017 letter. Instead, he found that Plaintiff’s claims as to
the August 18, 2017 letter fail on the merits. (Id. at p. 16.) In doing so, Magistrate
Judge Carlson appropriately reasoned that the the August letter, which merely
provided Plaintiff an opportunity to resolve his debt while placing him on notice that
the matter would be referred to counsel if it could not be resolved, “was presented
in a fashion that cannot be deemed false, misleading, harassing, oppressive, unfair
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or unconscionable.” (Doc. 54. P. 16.) Further, he aptly noted that the strictures of 15
U.S.C. § 1692g do not apply to the August letter because it was not the initial
communication with Plaintiff. Likewise, Plaintiff’s right to obtain verification
pursuant to § 1692g expired before the August letter was sent, and therefore, by the
time he received the letter, there was nothing left to overshadow. (See 15 U.S.C §
1692g(a-b) (providing consumer with 30 days from the initial communication to
dispute the debt and stating that any collection activities and communication during
the 30-day period may not overshadow the consumer’s right to dispute the debt).
Accordingly, the court will overrule Plaintiff’s first four objections.
B.

The Magistrate Judge Did Not Err in Applying Pennsylvania Rule
1042.3 to Any Professional Negligence Claims

Plaintiff’s fifth objection to the R&R pertains to Magistrate Judge Carlson’s
determination that, to the extent Plaintiff is pursuing any state law professional
negligence claims against Defendants, he was required to file a Certificate of Merit
pursuant to Pennsylvania Rule of Civil Procedure 1042.3. Under that rule, a party
raising a claim for professional negligence must submit a certificate of merit, signed
by an expert, in conjunction with their complaint. Plaintiff argues that his claims
sound in ordinary negligence, rather than professional negligence, and therefore a
certificate of merit is not required. However, in the R&R, Magistrate Judge Carlson
does not attempt to specify which claims are barred by Rule 1042.3 but rather
generally states that, “to the extent” Plaintiff is pursuing such claims, they are barred.
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Because the court finds no plain error in the law as described by the R&R and agrees
that a certificate of merit would be required for any professional negligence claims,
the court will overrule Plaintiff’s objection.
C.

The Magistrate Judge Did Not Err Denying Defendants’ Motion for
Summary Judgment on Plaintiff’s

Defendants’ only objection to the R&R is that it inappropriately shifts the
burden of proof on Plaintiff’s abusive litigation claim to Defendants. The court
disagrees. Certainly, if this case goes to trial, Plaintiff will bear the burden of
demonstrating that the collection lawsuit violated the FDCPA. However, in moving
for summary judgment on this claim, Defendants, as the moving party, bear the
initial burden of demonstrating the absence of a disputed issue of material fact. See
Celotex, 477 U.S. at 324. “Once the moving party points to evidence demonstrating
no issue of material fact exists, the non-moving party has the duty to set forth specific
facts showing that a genuine issue of material fact exists and that a reasonable
factfinder could rule in its favor.” Azur, 601 F.3d at 216. As Magistrate Judge
Carlson noted, Defendants’ motion argues the law only in the abstract and without
pointing to any specific facts or evidence to show that no issue of material fact exists
on this claim. (Doc. 54, pp. 20-23.) As such, Judge Carlson recommended that the
court take a cautious approach to ruling on the motion by denying it without
prejudice and affording all parties the opportunity to renew their summary judgment

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motions on this issue based on a more fulsome record. The court agrees to this
approach and will adopt Magistrate Judge Carlson’s recommendation.
IV.

Conclusion
After a de novo review of the contested portions of the R&R and giving

reasoned consideration to its uncontested portions, the court finds that it contains no
clear error and will adopt it in its entirety.

s/Sylvia H. Rambo
Sylvia H. Rambo
United States District Judge
Dated: March 31, 2021

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