White, Jr. et al v. Pulman, Cappuccio, & Pullen, LLP et al

Western District of Texas, txwd-5:2019-cv-00535

Defendants' Original ANSWER to {{1}} Complaint. Attorney Casey L. Dobson added to party Elliot Cappuccio(pty:dft), Attorney Casey L. Dobson added to party Pulman, Cappuccio, & Pullen, LLP(pty:dft) by Elliot Cappuccio, Pulman, Cappuccio, & Pullen, LLP.

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4 UNITED STATES DISTRICT COURT FOR THE WESTERN DISTRICT OF TEXAS SAN ANTONIO DIVISION ED WHITE, JR. and ELLA WHITE, on § behalf of themselves and all others similarly § situated, § § Plaintiffs, § § vs. § Civil Action No. 5:19-cv-00535 § PULMAN, CAPPUCCIO & PULLEN, LLP; § ELLIOTT CAPPUCCIO, ESQ.; and JOHN § AND JANE DOES 1-25, § § Defendants. § DEFENDANTS' ORIGINAL ANSWER Defendants Pulman, Cappuccio & Pullen, LLP and Elliott Cappuccio (collectively, "Defendants") file this answer to Plaintiffs Ed White, Jr. and Ella White's (collectively, "Plaintiffs") Class Action Complaint for Violations of the Fair Debt Collection Practices Act and Texas Debt Collection Act (the "Complaint"). I. RESPONSES TO ALLEGATIONS Except as expressly admitted in this answer, Defendants deny the allegations and characterizations in the Complaint, including the prayer for relief, and respond as follows: 1. Defendants deny the allegations in paragraph 1. 2. Defendants admit that the Fair Debt Collection Practices Act ("FDCPA") regulates "debt collectors," as that term is defined in 15 U.S.C.A. § 1692a(6). Defendants admit that FDCPA states "[t]here is abundant evidence of the use of abusive, deceptive, and unfair debt collection practices by many debt collectors. Abusive debt collection practices contribute to the number of personal bankruptcies, to marital instability, to the loss of jobs, and to invasions of individual privacy." 15 U.S.C.A. § 1692(a). Defendants admit that the FDCPA states its 4822-5173-8524 4 purpose is "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." 15 U.S.C.A. § 1692(e). Defendants otherwise deny the allegations in paragraph 2. 3. Defendants admit that courts within this federal judicial district have stated that the FDCPA is a strict liability statute. Defendants admit that the FDCPA provides that "any debt collector who fails to comply with any provision of this subchapter with respect to any person is liable to such person" for actual or statutory damages. 15 U.S.C.A. § 1692k(a). Defendants admit that in McMurray v. ProCollect, Inc., the Fifth Circuit stated: "We must evaluate any potential deception in the letter under an unsophisticated or least sophisticated consumer standard. We assume that the plaintiff-debtor is neither shrewd nor experienced in dealing with creditors." 687 F.3d 665, 669 (5th Cir. 2012) (internal citations and quotation marks omitted). Defendants otherwise deny the allegations in paragraph 3. 4. Defendants admit that 15 U.S.C.A. § 1692e states that "[a] debt collector may not use any false, deceptive, or misleading representation or means in connection with the collection of any debt." Defendants admit that 15 U.S.C.A. § 1692e provides a list of conduct that "is a violation of this section." Defendants admit that 15 U.S.C.A. § 1692e(2) states that "[t]he false representation of the character, amount, or legal status of any debt; or [the false representation of] any services rendered or compensation which may be lawfully received by any debt collector for the collection of a debt" is a violation of § 1692e. Defendants admit that 15 U.S.C.A. § 1692e(3) states that "[t]he false representation or implication that any individual is an attorney or that any communication is from an attorney" is a violation of § 1692e. Defendants admit that 15 2 4822-5173-8524 4 U.S.C.A. § 1692e(10) states that "[t]he use of any false representation or deceptive means to collect or attempt to collect any debt or to obtain information concerning a consumer" is a violation of § 1692e. Defendants admit that 15 U.S.C.A. § 1692f states: "A debt collector may not use unfair or unconscionable means to collect or attempt to collect any debt." Defendants admit that 15 U.S.C.A. § 1692f(1) states that "[t]he collection of any amount (including any interest, fee, charge, or expense incidental to the principal obligation) unless such amount is expressly authorized by the agreement creating the debt or permitted by law" is a violation of § 1692f. Defendants admit that 15 U.S.C.A. § 1692g(a)(1) and (a)(4) provide that "[w]ithin five days after the initial communication with a consumer in connection with the collection of any debt, a debt collector shall, unless the following information is contained in the initial communication or the consumer has paid the debt, send the consumer a written notice containing the amount of the debt. . . [and] a statement that if the consumer notifies the debt collector in writing within the 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." Defendants otherwise deny the allegations in paragraph 4. 5. Defendants admit that 15 U.S.C.A. § 1692f states: "A debt collector may not use unfair or unconscionable means to collect or attempt to collect any debt." Defendants admit that 15 U.S.C.A. § 1692f provides a list of conduct that "is a violation of this section." Defendants otherwise deny the allegations in paragraph 5. 6. Defendants admit that in Goswami v. Am. Collections Enter., Inc., the Fifth Circuit stated: "We must evaluate any potential deception in the letter under an unsophisticated or least sophisticated consumer standard. That is, in determining whether the defendant's 3 4822-5173-8524 4 actions are deceptive under the FDCPA we must assume that the plaintiff-debtor is neither shrewd nor experienced in dealing with creditors." 377 F.3d 488, 495 (5th Cir. 2004) (internal citation omitted). Defendants admit that in Taylor v. Perrin, Landry, deLaunay & Durand, the Fifth Circuit stated: "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." 103 F.3d 1232, 1236 (5th Cir. 1997). Defendants otherwise deny the allegations in paragraph 6. 7. Defendants admit that the Texas Debt Collection Act ("TDCA") regulates debt collection. Defendants admit that in Cushman v. GC Services, L.P., the Fifth Circuit stated that the TDCA "acknowledges that other Acts may provide a basis for action under the DTPA. The [TDCA] contains one of these 'tie-in' provisions to the DTPA, providing that any violation of the [TDCA] qualifies as a 'deceptive trade practice' that is actionable under the DTPA." 397 Fed. Appx. 24, 27 (5th Cir. 2010) (citing Tex. Bus. & Com. Code § 17.43; Tex. Bus. & Com. Code § 17.50(h); Tex. Fin. Code § 392.404). Defendants otherwise deny the allegations in paragraph 7. 8. Defendants deny that Plaintiffs are entitled to the relief requested in paragraph 8. 9. Defendants deny the allegations in paragraph 9. 10. Defendants admit the allegations in paragraph 10. 11. Defendants lack knowledge or information sufficient to form a belief about Mr. White's citizenship and residency "[a]t all times relevant to the factual allegations of this Complaint." Defendants admit that that they sent a letter to Mr. White at an address in Helotes, Texas on May 18, 2018. Defendants otherwise deny the allegations in paragraph 11. 4 4822-5173-8524 4 12. Defendants admit the allegations in paragraph 12. 13. Defendants lack knowledge or information sufficient to form a belief about Mrs. White's citizenship and residency "[a]t all times relevant to the factual allegations of this Complaint." Defendants admit that that they sent a letter to Mrs. White at an address in Helotes, Texas on May 18, 2018. Defendants otherwise deny the allegations in paragraph 13. 14. Defendants admit the allegations in paragraph 14. 15. Defendants admit the allegations in paragraph 15. 16. Defendants admit the allegations in paragraph 16. 17. Defendants admit the allegations in paragraph 17. 18. Paragraph 18 does not include any allegations that require a response. 19. Defendants deny that they or their employees have "violative policies and procedures" or have engaged in "illegal acts, policies, and practices" or any other "wrongdoing" alleged in the Complaint. Defendants lack knowledge or information sufficient to form a belief as to the remaining allegations in paragraph 19, and therefore can neither admit nor deny those allegations. 20. Defendants admit the allegations in paragraph 20. 21. Defendants admit the allegations in paragraph 21. 22. Defendants deny the allegations in paragraph 22. 23. Defendants admit that, to the extent the Court has jurisdiction, venue is proper in this Court under 28 U.S.C. § 1391. Defendants admit that the events alleged in the Complaint giving rise to the claims occurred within this federal district and that Defendants regularly transact business within this federal judicial district. Defendants otherwise deny the allegations in paragraph 23. 5 4822-5173-8524 4 24. Defendants admit that they regularly engage in the collection of assessments and assessment-related charges for property owner associations in the State of Texas. Defendants otherwise deny the allegations in paragraph 24. 25. Defendants admit that they regularly engage in the collection of assessments and assessment-related charges for property owner associations in the State of Texas. Defendants otherwise deny the allegations in paragraph 25. 26. Defendants admit they use the mail, telephone, internet, and other instruments of interstate commerce in attempting to collect assessments and assessment-related charges for property owner associations in the State of Texas. Defendants otherwise deny the allegations in paragraph 26. 27. Defendants admit they represent Fossil Springs Ranch Homeowners Association, Inc. with respect to collection of assessments and assessment-related charges owed by Plaintiffs pursuant to the Declaration of Covenants, Conditions and Restrictions for Fossil Springs Ranch Homeowners Association, Inc. Defendants otherwise deny the allegations in paragraph 27. 28. Defendants admit the allegations in paragraph 28. 29. Defendants lack knowledge or information sufficient to form a belief about who redacted Exhibit A to the Complaint, and therefore can neither admit nor deny the allegation regarding redaction in paragraph 29. Defendants otherwise admit the allegations in paragraph 29. 30. Defendants deny the allegations in paragraph 30 to the extent the letter does not contain the phrase "incurred and defaulted on a financial obligation." Defendants otherwise admit the allegations in paragraph 30. 6 4822-5173-8524 4 31. Defendants admit that Plaintiffs' debt arises from assessments and assessment- related charges owed by Plaintiffs pursuant to the Declaration of Covenants, Conditions and Restrictions for Fossil Springs Ranch Homeowners Association, Inc. Defendants otherwise deny the allegations in paragraph 31. 32. Defendants admit the allegations in paragraph 32. 33. Defendants admit they represent Fossil Springs Ranch Homeowners Association, Inc. with respect to collection of assessments and assessment-related charges owed by Plaintiffs' pursuant to the Declaration of Covenants, Conditions and Restrictions for Fossil Springs Ranch Homeowners Association, Inc. Defendants otherwise deny the allegations in paragraph 33. 34. Defendants admit the allegations in paragraph 34. 35. Defendants admit the allegations in paragraph 35. 36. Defendants deny the allegations in paragraph 36. 37. Defendants admit that the letter states the amount owed was $3,001.92 and also states that "[t]he amount owed may continue to increase by reason of expenses, future assessments, and other charges." Defendants otherwise deny the allegations in paragraph 37. 38. Defendants deny the allegations in paragraph 38. 39. Defendants deny that least sophisticated or unsophisticated consumers would understand the letter to mean that the only way to ascertain the amount of the debt was to call Defendants. Defendants lack knowledge or information sufficient to form a belief as to Plaintiffs' understanding of the letter and can therefore neither admit nor deny the allegations pertaining to Plaintiffs in paragraph 39. 7 4822-5173-8524 4 40. Defendants lack knowledge or information sufficient to form a belief as to Plaintiffs' understanding of the letter and can therefore neither admit nor deny the allegations in paragraph 40. 41. Defendants deny the allegations in paragraph 41. 42. Defendants deny the allegations in paragraph 42. 43. Defendants admit the allegations in paragraph 43. 44. Defendants admit the allegations in paragraph 44. 45. To the extent the term "Plaintiffs" is meant to refer only to Ed White, Jr. and Ella White, Defendants admit the allegations in paragraph 45. Otherwise, Defendants lack knowledge or information sufficient to confirm whether they have ever been engaged by unnamed potential class members for legal services and can therefore neither admit nor deny the allegations in paragraph 45. 46. Defendants deny the allegations in paragraph 46. 47. Defendants deny the allegations in paragraph 47. 48. Defendants deny the allegations in paragraph 48. 49. Defendants deny the allegations in paragraph 49. 50. Defendants deny the allegations in paragraph 50. 51. Defendants deny the allegations in paragraph 51. 52. Defendants admit the allegations in paragraph 52. 53. Defendants admit the letter does not state that Plaintiffs' dispute must be "in writing" in order for Defendants to be legally required to obtain verification of the debt pursuant to 15 U.S.C. § 1692g(a)(4), but deny that an oral dispute would have been insufficient to cause 8 4822-5173-8524 4 Defendants to obtain and provide Plaintiffs with verification of the debt. Defendants otherwise deny the allegations in paragraph 53. 54. Defendants lack knowledge or information sufficient to form a belief as to Plaintiffs' understanding of the letter and can therefore neither admit nor deny the allegations in paragraph 54. 55. Defendants deny the allegations in paragraph 55. 56. Defendants admit the allegations in paragraph 56. 57. Defendants admit the allegations in paragraph 57. 58. Defendants admit the allegations in paragraph 58. 59. Defendants deny the allegations in paragraph 59. 60. Defendants deny the allegations in paragraph 60. 61. Defendants deny the allegations in paragraph 61. 62. Defendants deny the allegations in paragraph 62. 63. Defendants deny the allegations in paragraph 63. 64. Defendants admit they have sent letters to other individuals in an attempt to collect assessments and assessment-related charges for other property owner associations in the State of Texas, but deny that those letters were "form letters" as defined in the Complaint. Defendants otherwise deny the allegations in paragraph 64. 65. Defendants admit that they regularly engage in the collection of assessments and assessment-related charges for property owner associations in the State of Texas. Defendants otherwise deny the allegations in paragraph 65. 66. Paragraph 66 does not include any allegations that require a response. 67. Paragraph 67 does not include any allegations that require a response. 9 4822-5173-8524 4 68. Defendants admit they could ascertain the identities of people they have sent letters to in an attempt to collect assessments and assessment-related charges for property owner associations in the State of Texas between May 17, 2018 and June 7, 2019. Defendants otherwise deny the allegations in paragraph 68. 69. Paragraph 69 does not include any allegations that require a response. 70. Defendants deny the allegations in paragraph 70. 71. Defendants deny the allegations in paragraph 71. 72. Defendants deny the allegations in paragraph 72. 73. Defendants deny the allegations in paragraph 73. 74. Defendants deny the allegations in paragraph 74. 75. Defendants deny the allegations in paragraph 75. 76. Paragraph 76 does not include any allegations that require a response. 77. Defendants incorporate their responses to the allegations in the preceding paragraphs. 78. Defendants deny the allegations in paragraph 78. 79. Defendants deny the allegations in paragraph 79. 80. Defendants deny the allegations in paragraph 80. 81. Defendants deny the allegations in paragraph 81. 82. Defendants deny the allegations in paragraph 82. 83. Defendants deny the allegations in paragraph 83. 84. Defendants deny the allegations in paragraph 84. 85. Defendants deny the allegations in paragraph 85. 10 4822-5173-8524 4 86. Defendants admit that that 15 U.S.C.A. § 1692k provides that "[e]xcept as otherwise provided by this section, any debt collector who fails to comply with any provision of this subchapter with respect to any person is liable to such person." Defendants otherwise deny the allegations in paragraph 86. 87. Defendants incorporate their responses to the allegations in the preceding paragraphs. 88. Defendants deny the allegations in paragraph 88. 89. Defendants deny the allegations in paragraph 89. 90. Defendants deny the allegations in paragraph 90. 91. Defendants deny the allegations in paragraph 91. 92. Defendants deny the allegations in paragraph 92. 93. Defendants deny the allegations in paragraph 93. 94. Defendants deny the allegations in paragraph 94. 95. Defendants deny that Plaintiffs are entitled to the relief requested in paragraphs 95 through 113. 96. Paragraph 114 does not include any allegations that require a response. II. AFFIRMATIVE AND OTHER DEFENSES 97. Plaintiffs' claims are barred, in whole or in part, by attorney immunity. 98. Plaintiffs' claims are barred, in whole or in part, by the bona fide error defense. 99. Plaintiffs' claims are barred, in whole or in part, because Defendants' attempt to provide a required notice in order to enforce a security interest on behalf of Fossil Springs Ranch Homeowners Association, Inc. is excluded from coverage of the FDCPA. 11 4822-5173-8524 4 100. Plaintiffs' claims are barred, in whole or in part, because assessments and assessment-related charges are not a consumer debt under the TDCA and therefore the statute does not apply. 101. Because the efforts of Defendants to provide notice as part of enforcement of a security interest are not covered by the FDCPA and because collection of assessments and assessment-related charges is not collection of consumer debt under the TDCA, Plaintiffs' Complaint fails to state a claim upon which relief can be granted pursuant to Federal Rule of Civil Procedure 12(b)(6). 102. Plaintiffs' claims are barred, in whole or in part, because Defendants informed Plaintiffs of their lawful rights. 103. Plaintiffs' claims are barred, in whole or in part, by the applicable statutes of limitations and by the doctrines of estoppel, waiver, and/or laches. 104. Defendants are not liable to Plaintiffs to the extent that Plaintiffs did not mitigate damages, if any. 105. Plaintiffs are not entitled to actual damages because they cannot meet the proof requirements for same. 106. Plaintiffs' damages, if any, are capped by federal and state statutes. 107. Plaintiffs' claims are barred, in whole or in part, because their alleged damages, if any, were caused by Plaintiffs' own actions or inactions. 108. Defendants assert all rights to proportionate responsibility under Chapter 33 of the Texas Civil Practice and Remedies Code. 109. Defendants reserve the right to assert any additional affirmative or other defenses, including without limitation those that may be developed through discovery in this case. 12 4822-5173-8524 4 III. PRAYER Defendants respectfully requests that the Court deny class certification and, upon final hearing of this case, render judgment that Plaintiffs take nothing on their claims against Defendants and grant Defendants all costs of suit and all other relief to which it is justly entitled. Dated: July 12, 2019 Respectfully submitted, SCOTT DOUGLASS & MCCONNICO LLP 303 Colorado Street, Suite 2400 Austin, TX 78701-3234 (512) 495-6300 – Telephone (512) 495-6399 – Facsimile By: /s/ Casey L. Dobson Casey L. Dobson State Bar No. 05927600 cdobson@scottdoug.com Mary W. Byars State Bar No. 24097443 mbyars@scottdoug.com Attorneys for Defendants Pulman, Cappuccio & Pullen, LLP and Elliott Cappuccio 13 4822-5173-8524 4 CERTIFICATE OF SERVICE I hereby certify that a true and correct copy of Defendants' Original Answer was served on the following counsel of record through electronic filing and e-mail on July 12, 2019: Andrew T. Thomasson andrew@sternthomasson.com Philip D. Stern philip@sternthomasson.com Francis R. Green francis@sternthomasson.com STERN THOMASSON LLP 150 Morris Avenue, 2nd Floor Springfield, NJ 07081-1329 William M. Clanton bill@clantonlawoffice.com LAW OFFICE OF BILL CLANTON, P.C. 926 Chulie Drive San Antonio TX 78216 Attorneys for Plaintiffs Ed White, Jr. and Ella White /s/ Casey L. Dobson Casey L. Dobson 14 4822-5173-8524