Hackler v. Tolteca Enterprises, Inc. D/b/a Phoenix Recovery Group

Western District of Texas, txwd-5:2018-cv-00911

MOTION for Partial Summary Judgment on Liability by Sadie Hackler.

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UNITED STATES DISTRICT COURT WESTERN DISTRICT OF TEXAS SAN ANTONIO DIVISION SADIE HACKLER, on behalf of herself § and all others similarly situated, § § Plaintiff, § § V. § Case No. 5:18-CV-00911-XR § TOLTECA ENTERPRISES, INC. d/b/a § PHOENIX RECOVERY GROUP, § § Defendant. § PLAINTIFF'S MOTION FOR SUMMARY JUDGMENT ON LIABILITY Class Representative Sadie Hackler1 ("Hackler") files this Motion for Summary Judgment on Liability 2 and shows: Introduction 1. In this case, Hackler has sued Defendant for violations of the Fair Debt Collection Practices Act ("FDCPA"). Below, based on undisputed facts, Hackler shows that she and the certified class are entitled to summary judgment on liability. 2. The FDCPA's purpose is to "eliminate abusive debt collection practices by debt collectors." 15 U.S.C. § 1692(e). Because Congress clearly intended the FDCPA to have a broad remedial scope, the FDCPA should therefore be construed broadly and in favor of the consumer. To state an FDCPA claim, a plaintiff must show: "(1) that he was 1 The Court certified the case for class action procedure on September 9, 2019, and appointed Plaintiff Sadie Hackler as the Class Representative. (Dckt # 36) 2 Before certification, on September 9, 2019, Plaintiff filed a Motion for Summary Judgment on Liability (Dckt # 18). Defendant did not file a response to the Motion. Plaintiff withdrew the Motion for Summary Judgement at the time she filed her Motion for Class Certification. (Dckt # 32). MOTION Page 1|8 the object of collection activity arising from a consumer debt; (2) that Defendant is a debt collector as defined by the FDCPA; and (3) that Defendant engaged in an act or omission prohibited by the FDCPA, and an FDCPA claim must be brought within one year of the alleged violation, Reynolds v. Medicredit, Inc., Civil Action No. 5:18-CV-99-XR, 2019 U.S. Dist. LEXIS 9046, at *8 (W.D. Tex. 2019) (internal citations and quotations omitted) 3. When deciding whether a debt collection letter violates § 1692e or § 1692f, the Court must view the correspondence from the perspective of an 'unsophisticated or least sophisticated consumer. The unsophisticated consumer is neither shrewd nor experienced in dealing with creditors but is not tied to the very last rung on the [intelligence or] sophistication ladder. The unsophisticated consumer is not illiterate and can be expected to read the entire collection letter with some care. Thus, debt collection letters must be considered as a whole when determining if they violate the FDCPA. Id. at *9. 4. Whether a letter is deceptive, misleading, or unfair to an unsophisticated consumer is generally a fact question. A court may decide this question as a matter of law only when 'reasonable minds cannot differ as to whether a letter would be deceptive, misleading, or unfair to the unsophisticated consumer. The unsophisticated consumer test is objective, meaning that it is unimportant whether the individual who actually received an allegedly violative letter was misled or deceived." This standard serves the dual purpose of protecting all consumers, including the inexperienced, the untrained and the credulous, from deceptive debt collection practices and protecting debt collectors against liability for bizarre or idiosyncratic consumer interpretations of collection materials. Id at *9-10 (internal citations and quotations omitted). MOTION Page 2|8 5. The FDCPA is a strict liability statute, in which a single violation is sufficient to establish liability. Alanis v. Nationstar Mortg. LLC, No. SA-18-CV-00138-OLG, 2018 U.S. Dist. LEXIS 220963, at *14 (W.D. Tex. 2018) (internal citations omitted). Undisputed Facts 6. Defendant admits in it Answer that Hackler is a "consumer" as defined by the FDCPA 15 U.S.C. 1692a (2), and that Defendant is a "debt collector" as that term is defined by the FDCPA 15 U.S.C. 1692a (6), and that the debt that Defendant is attempting to collect is a "consumer debt" as defined by the FDCPA, 15 U.S.C. 1692a (5). It is also undisputed that on or about June 5, 2018, as its initial communication with Hackler, Defendant sent to Hackler the letter attached as Exhibit 1 to the Hackler Declaration, submitted herewith. Applicable Law- the "in writing" requirement 7. The Fair Debt Collection Practices Act ("FDCPA"), 15 U.S.C. §§ 1692g(a)(4) & (5) requires a debt collector to provide a consumer with a notice that contains: "a statement that if the consumer notifies the debt collector in writing within [a] thirty-day period that the debt, or any portion thereof, is disputed, the debt collector will obtain verification of the debt or a copy of a judgment against the consumer and a copy of such verification or judgment will be mailed to the consumer by the debt collector;" and "a statement that, upon the consumer's written request within [a] thirty-day period, the debt collector will provide the consumer with the name and address of the original creditor, if different from the current creditor." 15 U.S.C. §§ 1692g(a)(4) & (5) (emphasis added). MOTION Page 3|8 If the consumer makes a written dispute, the debt collector "shall cease" collections efforts for 30 days while it verifies or validates the alleged debt. 15 U.S.C. §1692g(b). 8. Defendant's letter sent to Hackler fails to conform to the FDCPA's "in writing" requirement. By failing to notify Hackler and the class of their right to dispute in writing the alleged validity of the debt, Defendant has violated the FDCPA. Bishop v. Ross Earle & Bonan, P.A., 817 F.3d 1268, 1277 (11th Cir. 2016); Dickens v. GC Servs., 220 F. Supp. 3d 1312, 1320 (M.D. Fla. 2016) (summary judgment granted where defendant omitted "in writing" requirement of FDCPA) (remanded on other grounds Dickens v. GC Servs. Ltd. P'ship, 706 Fed. Appx. 529, 2017 U.S. App. LEXIS 16095 (11th Cir. Fla., Aug. 23, 2017)); Bland v. Alco Collections, Inc., 2018 U.S. Dist. LEXIS 593, at *6 (M.D. La. 2018); Osborn v. Ekpsz, LLC, 821 F. Supp. 2d 859 (S.D. Tex. 2011) ("Every district court to consider the issue has held that a debt collector violates §1692g(a) by failing to inform consumers that requests under subsections (a)(4) and (a)(5) must be made in writing); McCabe v. Crawford & Co., 272 F. Supp. 2d 736, 742-44 (N.D. Ill. 2003) (granting summary judgment in favor of plaintiff for violation of subsection 1692a (4) where defendant omitted the "in writing" requirement). 9. The "in writing" warning to consumers is mandatory; the FDCPA requires that debt collectors "shall" include the "in writing" advice in their initial communications with consumers. An oral inquiry or dispute of a debt's validity has different legal consequences than a written one, because with only an oral dispute, the debt collectors does not have to verify the debt or cease collection activities pending verification. Camacho v. Bridgeport Fin., Inc., 430 F.3d 1078, 1082 (9th Cir. 2005) (noting that Section 1692g "assigns lesser rights to debtors who orally dispute a debt and greater rights to MOTION Page 4|8 debtors who dispute it in writing"); Hooks v. Forman, Holt, Eliades & Ravin, LLC, 717 F.3d 282, 286 (2d Cir. 2013) ("Debtors can protect certain basic rights through an oral dispute, but can trigger a broader set of rights by disputing a debt in writing."). See also, Bishop v. Ross Earle & Bonan, P.A., 817 F.3d 1268 (11th Cir. 2016) ("We reject the notion that § 1692g gives debt collectors discretion to omit the 'in writing' requirement or cure improper notice by claiming waiver. The statute is clear. The debt collector 'shall' notify the consumer of her right to dispute the debt in writing."); Bicking v. Law Offices of Rubenstein & Cogan, 783 F. Supp. 2d 841, 844-46 (E.D. Va. 2011) ("As far as this Court can tell, all of them have held that a debt collector's failure to include the 'in writing' requirement violates subsections (a)(4) and (5) of Section 1692g."); Carroll v. United Compucred Collections, Inc., No. 1–99–0152, 2002 WL 31936511, at *8 (M.D. Tenn. Nov. 15, 2002) ("Whether this failure to inform the debtor of the writing requirement is a violation of section 1692g(a)(3) is not unequivocally clear, but it is clearly a violation of section 1692g(a)(4)."). Applicable Law – the "Amount of the Debt" Requirement 10. In addition to the §1692g violation, the letter states an "Total Due" amount, but also says that the "total due" "may include a one-time agency collection fee". The letter does not disclose whether the "one-time agency collection fee" is in fact included, nor does the letter state how much the "one-time agency collection fee" is, if it is included. Therefore, the letter violates the FDCPA's requirement to inform the consumer debtor of the "amount due" pursuant to 1692g(a)(1) and thus violates 1692e(2)(A). 11. By failing to disclose whether a "one-time agency collection fee" is part of the amount due, and the amount of the "one-time agency collection fee", Plaintiff and the MOTION Page 5|8 putative class are "impaired in their ability to knowledgeably assess the validity of the debt, and so would be misled by the debt letters. Hackler and the class are left without sufficient information to be able to make an intelligent, informed choice about their next step forward because the debt collector has concealed from them the individual components of their overall debt, the basis for which has also been withheld. Gomez v. Niemann & Heyer, L.L.P., No. 1:16-CV-119 RP, 2016 U.S. Dist. LEXIS 82443, at *25-27 (W.D. Tex. 2016) (internal citations omitted). 12. Several courts have concluded that even an unintentional misrepresentation of an amount of debt can violate § 1692e(2)(A). See Turner v. J.V.D.B. & Assocs., Inc, 330 F.3d 991, 995 (7th Cir. 2003); Russell v. Equifax A.R.S., 74 F.3d 30 (2d Cir. 1996) (same); Goins v. JBC & Assocs., P.C., 352 F. Supp. 2d 262 (D. Conn. 2005); Berndt v. Fairfield Resorts, Inc., 337 F. Supp. 2d 1120 (W.D. Wis. 2004); see also, Agueros v. Hudson & Keyse, LLC, No. 04-09-00449-CV, 2010 Tex. App. LEXIS 7082, 2010 WL 3418286 (Tex. App.—San Antonio Aug. 31, 2010) (representing debt was $8,700 instead of approximately $4,000 owed constituted violation of FDCPA); Lee v. Credit Mgmt., LP, 846 F. Supp. 2d 716, 723 (S.D. Tex. 2011). Summary Judgment Standards 13. 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. FED. R. CIV. P. 56(a). To establish that there is no genuine issue as to any material fact, the movant must either submit evidence that negates the existence of some material element of the non-moving party's claim or defense, or, if the crucial issue is one for which the non-moving party will bear the burden of proof at trial, merely point out that MOTION Page 6|8 the evidence in the record is insufficient to support an essential element of the non- movant's claim or defense. Once the movant carries its initial burden, the burden shifts to the non-movant to show that summary judgment is inappropriate. To conclude that there are no genuine issues of material fact, the court must be satisfied that no reasonable trier of fact could have found for the non-movant, or, in other words, that the evidence favoring the non-movant is insufficient to enable a reasonable jury to return a verdict for the non-movant. In making this determination, the court should review all the evidence in the record, giving credence to the evidence favoring the non-movant as well as the "evidence supporting the moving party that is uncontradicted and unimpeached, at least to the extent that evidence comes from disinterested witnesses. Alwais v. New Penn Fin., LLC, Civil Action No. SA-18-CV-604-XR, 2019 U.S. Dist. LEXIS 33401, at *3-4 (W.D. Tex. Mar. 1, 2019) (Internal citations and quotes omitted). Request for Relief Class Representative Sadie Hackler requests this Court grant summary judgment as to the liability of Defendant for violations of 15 U.S.C. 1692g (a) (4) and (5), and 1692e(2)(A). Hackler also seeks general relief. MOTION Page 7|8 Respectfully submitted, BINGHAM & LEA, P.C. 319 Maverick Street San Antonio, Texas 78212 (210) 224-1819 Telephone (210) 224-0141 Facsimile ben@binghamandlea.com By: /s/ Ben Bingham BENJAMIN R. BINGHAM State Bar No. 02322350 LAW OFFICE OF BILL CLANTON, P.C. 926 Chulie Dr. San Antonio, Texas 78216 210 226 0800 210 338 8660 fax bill@clantonlawoffice.com By: William M. Clanton WILLIAM M. CLANTON State Bar No. 24049436 ATTORNEYS FOR PLAINTIFF CERTIFICATE OF SERVICE I certify by my signature below that on September 30, 2019, a true and correct copy of the above and foregoing was served through the Court's Electronic Case Noticing System on all counsel of record. /s/ Ben Bingham BENJAMIN R. BINGHAM MOTION Page 8|8