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Knobbe v. Bank of America

September 26, 2007

KEVIN J. KNOBBE, PLAINTIFF,
v.
BANK OF AMERICA, N.A., BRUMBAUGH & QUANDAHL P.C.L.L.O., FREDERICK J. HANNA & ASSOCIATES AND JOHN DOES 1 - 10, DEFENDANTS.



The opinion of the court was delivered by: Richard G. Kopf United States District Judge

MEMORANDUM AND ORDER

The plaintiff is a state court judgment debtor, and has brought this action alleging that actions taken prior to and following a state court default judgment violate unspecified sections of the Fair Credit Reporting Act ("FCRA"), 15 U.S.C. §§ 1681-1681u; a provision of the Truth in Lending Act ("TILA"); several sections of the Fair Debt Collection Practices Act ("FDCPA"); and unspecified sections of the Nebraska Uniform Deceptive Trade Practices Act, Neb. Rev. Stat. Ann. §§ 87-301 et seq. The defendants are the bank to which the plaintiff was indebted for credit card debt and two law firms which represented the bank in collecting the indebtedness.*fn1 This matter is before the court upon Defendants' motion for summary judgment. (Filing 45.) I will grant the motion as to the federal claims. With limited exceptions inapplicable here, the FCRA imposes obligations only upon "consumer reporting agencies," and none of the defendants are consumer reporting agencies.*fn2 The TILA claim is time-barred. The FDCPA claims are either time-barred, or are claims over which this court lacks subject-matter jurisdiction under the Rooker-Feldman doctrine.*fn3 The FDCPA claims against Bank of America fail for the additional reason that it is not a "debt collector" within the meaning of that act. I will dismiss the pendent state claim as no federal claims remain.

I.

The undisputed facts are set forth below.*fn4

1. The "debt" which is the genesis of this action is an obligation owed by Knobbe to Bank of America pursuant to a Bank of America-issued credit card. (Amended Complaint ¶ 9; Filing 46 (Defs.' Br. in Supp. of Mot. for S.J. (hereinafter "Defs.' Br.") at 4).)

2. This obligation is a "debt" within the meaning of the FDCPA. (Amended Complaint ¶ 10; Filing 46, Defs.' Br. at 3.) Actions prior to October 24, 2004 (as I later explain, TILA and FDCPA claims based on these actions are time-barred)

3. Knobbe mailed a certified letter captioned "Actual Notice and Demand for Adequate Assurance of Due Performance" to the "Dispute Department" of Bank of America. The heading of the letter bears the typewritten date of "November 29, 2003" and the close of the letter contains the handwritten date "12-10-03" opposite Knobbe's handwritten signature. (Ex. 1 to Amended Complaint at CM/ECF pages 11-14 (letter).) Knobbe asserts that his certified letter "should have been construed as, amongst other disputes, a billing error notice as that term is defined under 15 U.S.C. § 1666(a) to a creditor," and that the letter "request[ed] additional clarification of some transactions and complain[ed] of omitted material disclosures that affect the finance charge, penalty rate, and annual percentage rate on multiple periodic statements." (Amended Complaint at ¶ 11.) There is no indication that Bank of America responded to this letter.

4. On January 30, 2004, Bank of America sent Knobbe a letter demanding payment on the credit card account, stating that his account had been cancelled because it was past due, and requesting that he destroy his Bank of America credit cards. The letter was on Bank of America letterhead and signed by a Bank of America employee. (Ex. 2 to Amended Complaint at CM/ECF page 15 (letter).)

5. Knobbe asserts that on or about February 5, 2004, Bank of America sold or otherwise transferred the debt to "an unknown third party debt buyer, which may be, Defendant Frederick J. Hanna & Associates for collection from Plaintiff." (Amended Complaint ¶ 13.) The record reflects that Frederick J. Hanna & Associates (hereinafter, "Hanna") is a law firm which represented Bank of America in collection efforts.

6. On behalf of Bank of America, an attorney with the Hanna law firm sent a February 6, 2004 letter to Knobbe seeking collection of the unpaid credit card debt. Among other things, the letter explicitly stated "[t]his is an attempt to collect a debt." (Ex. 3 to Amended Complaint at CM/ECF page 16 (letter).)

7. Knobbe asserts that on or about March 25, 2004, Bank of America sold, or Hanna consigned or transferred "the alleged debt to an unknown third party debt buyer, which may be, Defendant Brumbaugh & Quandahl, P.C., for collection from Plaintiff." (Amended Complaint ¶ 15.) There are no specific factual allegations regarding action by Hanna occurring after this March 25 "transfer" to Brumbaugh & Quandahl. The record reflects that Brumbaugh & Quandahl is a law firm which represented Bank of America in collection efforts. Other than the February 6, 2004 letter, no documents in the record reflect that they were prepared by Hanna. None of the documents in the certified transcript of state court records reflects service by or to Hanna.

8. On May 4, 2004, the law firm of Brumbaugh & Quandahl, P.C., LLO filed a complaint in the County Court of Cuming County, Nebraska on behalf of Bank of America for money owed by Kevin J. Knobbe on a credit card account. (Ex. 4 to Amended Complaint at CM/ECF pages 17-21 (Complaint in state court case no. CI 04-55); Filing 36*fn5 at CM/ECF pages 1 -2.)

9. Knobbe did not answer the May 4, 2004 state court complaint because he believed he was working with a debt consolidation company which had reached a near-settlement of this dispute and he was thus not required to answer, although he was mistaken and the company with which he believed he was working later stole his money. (Filing 46, Defs.' Br at 7; Filing 36 at CM/ECF page 9, ¶¶ 11, 14 (Knobbe's state court motion to vacate default judgment).)

10. After proper service, the County Court of Cuming County entered default judgment against Knobbe on June 29, 2004. The judgment included interest, court costs, and attorneys' fees. (Filing 36 at CM/ECF pages 5-6.)

11. On October 8, 2004, Knobbe filed a motion in the state court action seeking to have the default judgment vacated. The state court received evidence and heard arguments by the parties. Ultimately, on January 5, 2005, the state court denied Knobbe's motion to vacate. (Filing 36 at CM/ECF pages 7 - 9, 14.)

Actions taken after October 24, 2004

12. On February 7, 2005, Brumbaugh & Quandahl filed with the County Court of Cuming County documents seeking a summons and order of garnishment. (Filing 36 at CM/ECF pages 14-15.)

13. On February 14, 2005, Knobbe filed a document in the state court captioned "Refusal for Fraud," which challenged the default judgment. (Filing 36 at CM/ECF pages 16-17.) Knobbe did not perfect an appeal of the state court's denial of his motion to vacate the default judgment.

14. On February 14, 2005, a "Summons and Order of Garnishment and Interrogatories" was issued by the County Court of Cuming County, Nebraska. (Ex. 5 to Amended Complaint, at CM/ECF page 5 (interrogatories not included in exhibit); Filing 36 at CM/ECF page 16 (same).) The garnishee was Farmers & Merchants National Bank of West Point, Nebraska, and Knobbe was the judgment debtor. (Id.) On that same date, Knobbe's bank issued two "memo charges" reflecting that Knobbe's bank account had been charged $50.00 as a "fee for garnishment" and $8.80 pursuant to the garnishment order. (Ex. 5 to Amended Complaint at CM/ECF page 23.) Knobbe describes this action as follows: "Defendant froze Plaintiff's account at Farmers and Merchants National Bank and seized the funds." (Amended Complaint ¶ 17.)

15. On February 18, 2005, Knobbe requested a hearing on the garnishment proceeding. (Filing 36 at CM/ECF page 18.) He also filed documents with the Cuming County court indicating that his debt to Bank of America was "discharged with a note," as he had tendered a promissory note to Bank of America in payment of the judgment. (Filing 36 at CM/ECF pages 19-21.)

16. On March 10, 2005, Knobbe filed a "Motion to Compel Plaintiff to Enter Satisfaction of Judgment," supported by an affidavit, asserting that his obligations under the judgment were satisfied by tendering a promissory note to Bank of America, and continuing to assert that the state court had no jurisdiction in the state court suit and that a "fraud" had been perpetrated on the state court. (Filing 36 at CM/ECF pages 23-25.)

17. On March 16, 2005, the County Court of Cuming County held a hearing on the garnishment and Knobbe's March 10 motion to compel Bank of America to enter a satisfaction of judgment. (Filing 36 at CM/ECF page 25.) Brumbaugh & Quandahl, on behalf of Bank of America, filed an application for an order to Farmers & Merchants Bank to deliver nonexempt funds. (Filing 36 at CM/ECF page 26.) Following the hearing, the County Court of Cuming County issued an order directing Farmers & Merchants Bank, as garnishee, to deliver nonexempt funds in the amount of $8.80. (Filing 36 at CM/ECF page 27.)

18. On March 21, 2005, Knobbe filed another motion to compel Bank of America to file a satisfaction of judgment. (Filing 36 at CM/ECF pages 27-29.) He also filed a "Motion of Refusal for Fraud for Lack of Jurisdiction," which alleged that the state court has no jurisdiction, the default judgment was invalid because Knobbe never appeared, and that Knobbe owed no debt to Bank of America because the debt was never "validated." (Filing 36 at CM/ECF pages 30 - 32.)

19. On March 23, 2005, a Journal Entry documenting the rulings at the March 16 hearing was made. The entry reflects that on March 16, 2005, after a hearing on Knobbe's request for hearing regarding the garnishment and Knobbe's March 10 motion to compel Bank of America to enter satisfaction of judgment, the Cuming County Court found that Knobbe failed to prove that any exempt funds were being garnished and denied the motion to compel. (Filing 36 at CM/ECF pages 34-36.)

20. On April 4, 2005, Brumbaugh & Quandahl, on behalf of Bank of America, filed a motion for sanctions, attorney's fees and costs, asserting that Knobbe's March 21 motion to compel was frivolous, as an identical motion was denied by the court at the March 16 hearing. (Filing 36 at CM/ECF pages 37-42.)

21. An April 27, 2005 Journal Entry by the County Court of Cuming County reflects that on April 13, the court held a hearing on Bank of America's motion for sanctions and Knobbe's March 21 "Motion to Show Satisfaction of Judgment" and "Motion for Refusal for Fraud." All motions were denied. (Filing 36 at CM/ECF pages 58-59.)

22. Exactly one year after the state court complaint was filed, an "Execution" dated May 4, 2005 was directed by the clerk of the District Court of Cuming County to the Cuming County Sheriff. It indicated that judgment in the amount of $9,005.50, together with costs and interest from the date of execution, had been recovered by Bank of America against Knobbe, and directed the sheriff to execute on the judgment to collect the amount due. (Ex. 6 to Amended Complaint at CM/ECF page 24 .)

23. On May 13, 2005, Knobbe filed a "Refusal for Fraud of Journal Entry" with the County Court of Cuming County, reciting that "for fraud" Knobbe refused to accept the copy of the April 27, 2005 journal entry which was mailed to him. ...


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