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Clark v. Brumbaugh and Quandahl

August 12, 2010


The opinion of the court was delivered by: Lyle E. Strom, Senior Judge United States District Court



This matter is before the Court on plaintiff's summary judgment motion (Filing No. 29). In their opposition briefs, defendants have moved for summary judgment (Filing Nos. 42 and 45).

Plaintiff Mary Clark ("Clark") filed this action against defendants Capital One Bank, Inc. ("Capital One") and Brumbaugh & Quandahl, P.C. L.L.O., ("B&Q") for alleged violations of the Fair Debt Collections Practices Act (the "FDCPA"), 15 U.S.C. §§ 1692, et seq, and the Nebraska Consumer Protection Act (the "NCPA"), Neb. Rev. Stat. § 59-1601 et seq. Clark initially filed her motion for summary judgment on April 20, 2010. Thereafter, in separate opposition briefs to plaintiff's motion, B&Q and Capital One moved for summary judgment in their favor. Capital One and Clark have settled (see Filing No. 125), making Capital One's motion moot. For the following reasons, the Court finds Clark's motion should be denied and B&Q's motion should be granted.


A. Substantive History

Clark opened a small business credit card account (the "Account") with Capital One in November 2003 (Affidavit of Richard Napolitano, Filing No. 43-1, ¶ 6; Credit Card Application, Filing No. 46-1, Exhibit A). The Account application identified WHY USA Independent Brokers Realty ("WHY USA") as the business name for the account and identified Clark as the authorized signatory (Credit Card Application, Exhibit A). Although Clark maintains she used the Account credit card for several consumer purchases (Affidavit of Mary Clark, Filing No. 31-1, ¶ 6; Deposition of Mary Clark, Filing No. 97-2, Exhibit 1A, at 23:17-24:10, 100:8-13, 121:15-123:11) and that she made some payments on the Account from her personal checking account (Clark Affidavit ¶ 7; Clark Deposition at 102:2-5), the Account credit card was also used in business transactions related to WHY USA (Clark Deposition at 24:11-25:13; Deposition of Mary Clark -B&Q's Excerpts ("B&Q's Clark Deposition"), Filing No. 107-1, Exhibit A, at 25:7-23). For example, the Account was used to purchase advertising in a Council Bluffs, Iowa, newspaper (Clark Deposition 24:11-23), dues to the Omaha Board of Realtors (Id. at 24:24-25:13), and office supplies (B&Q's Clark Deposition at 25:16-19). Clark's husband, John Clark ("John"), was primarily in charge monitoring the Account and making payments (Clark Deposition at 25:14-26:5, 101:5-102:1). John sometimes made payments on the Account from WHY USA's business checking account (B&Q's Clark Deposition at 110:10-111:1).

On May 10, 2006, Clark and John made their last payment on the Account, which had an outstanding balance of $6503.09 (Napolitano Affidavit, ¶ 7). Thereafter, Capital One unsuccessfully attempted to collect on the account by hiring third-party debt collectors (Id. ¶ 8). Capital One first sent the Account to Northland Group for collection on January 25, 2007, but recalled the account on July 30, 2007, after Northland was unsuccessful in obtaining payment from Clark (Id. ¶¶ 8-9). Then, Capital One sent the account to NCO Financial for collection on August 23, 2007, but later recalled the account on February 27, 2008, after NCO Financial also failed to obtain payment from Clark (Id. ¶¶ 10-11). In March 2008, Capital One sent the Account, including various related documents, to B&Q for collection (Affidavit of Sara Miller, Filing No. 46-1, ¶¶ 5-7). It does not appear from the record that Capital One ever informed Clark of its movement of the Account between the various third-party debt collectors.

On May 6, 2008, Clark and John, filed for Chapter 7 bankruptcy protection (Copy of Voluntary Petition, Filing No. 43-2, Exhibit B, at 3). The Creditor Matrix attached to the voluntary petition for bankruptcy did not list Capital One, B&Q, Northland Group, or NCO as creditors (see generally id. at 10-14), and there is no evidence in the record that any of these entities had any knowledge of Clark's bankruptcy upon the initial filing of the voluntary petition. Soon after Clark filed her bankruptcy petition, on May 15, 2008, B&Q sent a demand letter to Clark in connection with the Account (Collection Letter, Filing No. 31-2, Exhibit 1C). On June 6, 2008, Clark and John filed a "Schedule F - Creditors Holding Unsecured Non-priority Claims" with the bankruptcy court (Schedule F, Filing No. 43-3, Exhibit C). Schedule F did contain an entry noting Northland Group as a creditor with regard to the Capital One Account (Id. at 12) and an entry noting NCO Financial as a creditor for an "Advertising" debt of $395.00 (Id. at 11), but did not list B&Q as a creditor on the Capital One debt. Also on June 6, 2008, Clark's bankruptcy counsel sent at least four*fn1 Suggestion of Bankruptcy notices to B&Q, advising B&Q of Clark's pending bankruptcy case (Suggestions of Bankruptcy, Filing No. 31-3, Exs. 2-5). However, the suggestions were sent in connection with debts Clark and John owed to GE Money Bank, Citibank South Dakota NA, Discover Bank, and American Express Travel Related Services (Id.). The suggestions did not relate to the Capital One Account (See id.). B&Q maintains a policy and procedure of closing its collection files when it receives a Suggestions of Bankruptcy or when it has actual knowledge that a specific debt has been included in a bankruptcy (Miller Affidavit, ¶ 24). B&Q ceased collecting on the non-Capital One accounts for which it received Suggestions of Bankruptcy from Clark's bankruptcy counsel.

On June 23, 2008, B&Q filed a complaint on behalf of Capital One with the County Court of Douglas County, Nebraska, alleging Clark owed $9,843.82, plus interest, on the Account (Complaint, Filing No. 31-2, Exhibit 1E). On September 4, 2008, the Bankruptcy Court entered an order granting a discharge to Clark under Chapter 7 (Discharge Order, Filing No. 46-1, Exhibit H). In an affidavit, Clark maintains that the bankruptcy court discharged her indebtedness to Capital One (Affidavit of Mary Clark, Filing No. 31-1, ¶ 10). However, according to filings with Bankruptcy Court, it appears the discharge order was not sent to Capital One, B&Q, Northland Group, or NCO Financial (See Certificate of Service, Filing No. 46-1, Exhibit H; In re Clark, No. 08-81155, Filing No. 17 (Bankr. D. Neb. Sept. 6, 2008)). On December 24, 2008, Capital One obtained a judgment against Clark in the Douglas County case (Napolitano Affidavit, Filing No. 43-1, ¶ 13).

On February 10, 2009, Clark's bankruptcy counsel filed a motion to reopen the case with the Bankruptcy Court (Motion to Reopen, Filing No. 27-6, Exhibit F). In this motion, Clark alleged, inter alia, that Capital One had notice of her bankruptcy, but had impermissibly continued to collect on the Account (Id.). The docket sheet in Clark's bankruptcy case, however, indicates the Bankruptcy Court took no action on these allegations, but did act on the other issues Clark identified for reopening the case (See CM/ECF Docket Sheet for In re Clark, Bankr. No. 08-81155 (Bankr. D. Neb.), available at (last visited July 26, 2010)). No party has provided any evidence as to why the Bankruptcy Court did not rule on whether Capital One's (or B&Q's) collection actions violated the discharge order.

B. Procedural History

Clark initially filed this action on September 6, 2009 (Filing No. 1), but later amended her complaint twice (Filing Nos. 22 and 27). In her second amended complaint, Clark alleged B&Q had violated the FDCPA through their collection actions on the Account, specifically violating: 15 U.S.C. § 1692e (making false or misleading statements in connection with collecting a debt), § 1692e(2)(A) (making false representations regarding the character, amount, or legal status of the debt), § 1692e(5) (threatening to take action that cannot legally be taken), § 1692e(8) (communicating credit information which is known to be false), § 1692e(10) (using false representations or deceptive means to collect a debt or obtain information about a consumer), and § 1692f (attempting to collect on an amount not due) ...

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