SCOTT W. SKAVDAHL, District Judge.
This matter comes before the Court on Defendants' Motion for Summary Judgment (ECF No. 15). The Court, having considered the briefs and materials submitted in support of the motion and Plaintiffs opposition thereto, and being otherwise fully advised, FINDS and ORDERS as follows:
1. Defendant Machol & Johannes, LLC ("Machol") is a collection law firm based out of Colorado with additional offices located in Washington State, Oregon, New Mexico, Wyoming, Utah and Oklahoma. Machol represents clients in the fields of collection, bankruptcy, and creditor rights. (Ruppert Aff. ¶ 3.)
2. Defendant Machol is a debt collector as defined under the Fair Debt Collection Practices Act ("FDCPA").
3. Defendant Janae E. Ruppert is a licensed attorney in the State of Wyoming and the State of Colorado employed by Machol. Ms. Ruppert is a debt collector as defined under the FDCPA. Id. ¶ 2.
4. Machol frequently represents its client, Capital One Bank (USA), N.A. ("Capital One") in the legal collection of outstanding credit card debts in Wyoming. Id. ¶ 4.
5. Plaintiff, proceeding pro se, is a consumer as defined under the FDCPA. There have been three civil legal actions brought against Plaintiff by Defendants' client Capital One. Id. ¶ 19.
6. On or about February 15, 2016, Capital One placed an account in Plaintiff's name with Machol for legal collections. Based on Plaintiff's residence in Laramie County, Wyoming, the account was assigned to the Wyoming satellite office. Id. ¶ 5.
7. As required by the FDCPA, on February 16, 2016, Machol sent Plaintiff the required notice of the debt pursuant to 15 U.S.C. § 1692g, which is commonly referred to in the collection industry as the initial demand letter. Id. ¶ 6.
8. In a letter dated March 7, 2016, Plaintiff responded to Machol requesting validation of the debt and further stating, "I refuse to pay this debt because of reasons." Id. ¶ 7; ECF No. 16 at 19. Once verification was completed and provided as required by federal law, collection efforts resumed with no further attempts to communicate with Plaintiff. Id. ¶¶ 9.
9. After reviewing Plaintiffs file and documentation provided by Capital One, Defendant Ruppert submitted a Complaint for Damages on behalf of Capital One against the Plaintiff which was filed in Laramie County Circuit Court, Docket No. CV-2016-00931 on April 25, 2016. Id. ¶ 110.
10. Defendants Machol and Ruppert, as litigants filing a civil court proceeding, are subject to the Servicemembers Civil Relief Act ("SCRA"), 50 U.S.C. App. § 512(b). The SCRA provides for the temporary suspension of judicial proceedings that may adversely affect the civil rights of personnel on active military duty and reservists who have received call-up orders (but not yet reported for duty). See id. § 502.
11. Capital One has specific policies which it requires of its attorneys in litigation with regard to the SCRA. As part of its requirements. Capital One prohibits its attorneys from filing suit against an Active Military Customer or spouse. (Ruppert Aff. ¶ 12.) In accordance with Capital One's requirements regarding compliance with the SCRA, Machol and its attorneys file a "Servicemembers Civil Relief Act Affidavit" once the suit has been filed indicating that a military verification has been conducted and that due diligence has been performed, evidencing that the Defendant is not covered under the Act. Id. ¶ 13.
12. Accordingly, a SCRA Affidavit was signed on May 5, 2016 by Ms. Ruppert and subsequently filed on May 10, 2016 in Laramie County Circuit Court (Case No. CV-2016-00931), verifying that the Plaintiff is not an active duty servicemember (or covered by the SCRA), Id. ¶ 14; ECF No. 16 at 21. A copy of the SCRA Affidavit was served on Plaintiff as the defendant in that action.
13. Defendants and their clients have adopted policies that go beyond the general requirements of the SCRA. Defendants conduct SCRA checks at multiple stages of account placement and as litigation progresses. For example, Defendants conduct SCRA checks when an account is placed for collections with the firm, prior to drafting the initial complaint, once the legal proceeding has been commenced and a complaint has been filed, when default judgments are requested by the Court, when other judgments are requested by the Court (i.e. Judgment on the Pleadings, Summary Judgment, etc.) and when collection activities continue after judgment. (Ruppert Aff. ¶ 18.)
Summary judgment is appropriate where a movant shows "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) (2010) (emphasis added). "A dispute is genuine if there is sufficient evidence so that a rational trier of fact could resolve the issue either way. A fact is material if under the substantive law it is essential to the proper disposition of the claim." Crowe v. ADT Sec. Servs., Inc., 649 F.3d 1189, 1194 (10th Cir. 2011) (internal quotations and citations omitted).
In reviewing a motion for summary judgment, the Court is to determine whether there is evidence to support a party's factual claim, Jarvis v. Potter, 500 F.3d 1113, 1120 (10th Cir. 2007), and, in doing so, must view the evidence and draw reasonable inferences therefrom in a light most favorable to the nonmoving party, E.E.O.C. v. C.R. England, Inc., 644 F.3d 1028, 1037 (10th Cir. 2011). "However, unsupported conclusory allegations do not create a genuine issue of fact." Id. (internal quotations and citations omitted). "[M]ere speculation unsupported by evidence is insufficient to resist summary judgment." Martinez v. C02 Serv., Inc., 12 F. App'x 689, 695 (10th Cir. 2001) (citations omitted). "Once the moving party has properly supported its motion for summary judgment, the burden shifts to the nonmoving party to go beyond the pleadings and set forth specific facts showing that there is a genuine issue for trial." Sally Beauty Co. v. Beautyco, Inc., 304 F.3d 964, 971 (10th Cir. 2002).
Plaintiffs Complaint alleges two causes of action against Defendants: (1) violation of the FDCPA, specifically 15 U.S.C. § 1692c(c); and (2) violation of "the Regulations." (Compl. ¶¶ 31, 36.)
The FDCPA provision under which Plaintiff brings his claim provides:
15 U.S.C. § 1692c (Communication in connection with debt collection). Plaintiff contends Ms. Ruppert's May 5, 2016 SCRA Affidavit filed in the state court action against him, which he erroneously characterizes as a "letter," constitutes a communication in violation of this provision because it was sent after he notified Defendants of his refusal to pay the debt.
The Court finds the SCRA Affidavit that was filed in the Laramie County Circuit Court by Defendants was not a communication governed by the FDCPA. See McKnight v. Benitez, 176 F.Supp.2d 1301, 1308 (M.D. Fla. 2001) ("the term `communication' as used in the [FDCPA] does not include a `legal action' or pleadings or orders connected therewith"). Rather, it was a representation to the court, served upon the opposing party as required by law,
Heintz v. Jenkins, 514 U.S. 291, 296-97 (1995).
Plaintiff references Ms. Ruppert's inclusion in the SCRA Affidavit that Capital One was seeking "to induce the Court to enter a Default Judgment against [Mr. James]," insisting this was a "tactic being used to try and solicit payment" and thus a communication in violation of the FDCPA. (Compl. ¶ 31.) The Affidavit was a court filing in a pending action establishing that Plaintiff is not subject to the protections of the SCRA. Accordingly, this filing was not a "communication with the consumer" (see § 1692c(c)), but rather a representation to the court. Even so, the Affidavit can be fairly characterized as notice to Plaintiff that Capital One intended to "invoke a specified remedy" — default judgment. See § 1692c(c)(3). In that regard, the filing of the Affidavit was consistent with, and required by, federal law and Capital One's policies. See 50 U.S.C. § 521(b) ("In any action or proceeding [in which the defendant does not make an appearance], the court, before entering judgment for the plaintiff, shall require the plaintiff to file with the court an affidavit . . . stating whether or not the defendant is in military service and showing necessary facts to support the affidavit.") Further, Plaintiff has not shown that the contents of the Affidavit are in any way misleading or unfair and unconscionable.
Plaintiff alleges a "per se violation" of "the Regulations." (Compl. ¶ 36.) Plaintiffs claim is apparently brought under the Wyoming Collection Agency Act, Chapter 4, Section 6 of the Rules and Regulations of the Collection Agency Board, which Plaintiff asserts creates a state cause of action and private right of action for damages for conduct that violates the provisions of the FDCPA. (See Compl. at 1.) As discussed above, there existing no violations of the FDCPA, Defendants are likewise entitled to summary judgment on Plaintiffs claim under the Wyoming Act.
Defendants request attorney's fees and costs pursuant to 15 U.S.C. § 1692k(a)(3) which provides: "On a finding by the court that an action under this section was brought in bad faith and for the purpose of harassment, the court may award to the defendant attorney's fees reasonable in relation to the work expended and costs." Based on the circumstances and history of this case, the Court so finds.
The account that forms the basis for the lawsuit (and Laramie County Circuit Court Case No. CV-2016-0931) is the third account that Plaintiff had with Capital One that was placed for legal collections with Defendants. (Ruppert Aff. ¶ 19.) The other two accounts were also filed in Laramie County Circuit Court for collection towards the end of 2015. Id. ¶ 20. Capital One filed Motions for Summary Judgment in both cases and the hearing was scheduled and held in Laramie County Circuit Court on June 6, 2016. Id. Plaintiff (who was the defendant in the state court cases) failed to appear at the motions hearing and judgment was entered. Id. On the same date, June 6, 2016, Plaintiff filed the present action before this Court.
During the litigation of these two matters, Plaintiff sent several inappropriate e-mails to Defendant Ruppert. (ECF No. 16 at 23-29.) Defendant Ruppert did not respond to any of these e-mails. Plaintiffs e-mail to Ms. Ruppert dated January 4, 2016 was sent after a hearing where Plaintiffs request to compel arbitration was denied. (Ruppert Aff. ¶ 21.) In that e-mail, Plaintiff threatens "[y]ou should get rid of me because all I'm going to do is cause you problems and headaches." (ECF No. 16 at 23.) Plaintiff followed that communication with a series of harassing and inappropriate e-mails regarding matters such as Ms. Ruppert's physical appearance and repeated requests to meet socially.
The record supports a finding that this lawsuit was filed by Plaintiff in an attempt to avoid potential liability on the underlying debts, to retaliate against the Defendants for obtaining judgments in the two earlier cases, and to further harass Defendants. The Court acknowledges one of the main purposes of the FDCPA is "to eliminate abusive debt collection practices." See 15 U.S.C. § 1692(e). However, courts have also become more cognizant of the potential misuse of the FDCPA by consumers, especially in light of the bargaining power it can create with the consumer's potential liability.
Fed. Home Loan Mortg. Corp. v. Lamar, 503 F.3d 504, 513-14 (6th Cir. 2007).
Defendants have provided several inappropriate and harassing e-mails from the Plaintiff to Defendant Ruppert, the first expressing Plaintiffs intent to cause "problems and headaches" for Defendants if they pursued the collection action. The evidence further shows that on the date Defendants obtain two judgments against Plaintiff in state court. Plaintiff, in retaliation, filed this lawsuit. These facts weighed together with the lack of merit in Plaintiffs allegation of an FDCPA violation clearly shows that Plaintiff has acted in bad faith in pursuing this matter and for the purpose of harassment.
For the reasons discussed above. Defendants are entitled to judgment as a matter of law. Defendants are further entitled to an award of attorney's fees and costs. THEREFORE, it is hereby
Failure to timely file the request for or an objection to the request shall constitute a waiver thereof unless the Court grants relief from the waiver upon good cause shown.
