United States District Court, D. Nebraska
LAURA POWERS, on behalf of herself and all others similarly situated; NICHOLE PALMER, JASON PALMER, Plaintiffs,
CREDIT MANAGEMENT SERVICES, INC., DANA K. FRIES, TESSA HERMANSON, JESSICA L. V. PISKORSKI, BRADY W. KEITH, MICHAEL J. MORLEDGE, TESSA HERMANSON, Defendants
[Copyrighted Material Omitted]
Laura Powers, on behalf of herself and all others similarly
situated, Plaintiff: O. Randolph Bragg, HORWITZ, HORWITZ LAW
FIRM - CHICAGO, Chicago, IL; Pamela A. Car, William L.
Reinbrecht, CAR, REINBRECHT LAW FIRM, Omaha, NE.
Nichole Palmer, Jason Palmer, Plaintiffs: Pamela A. Car,
William L. Reinbrecht, CAR, REINBRECHT LAW FIRM, Omaha, NE.
Credit Management Services, Inc., Dana K. Fries, Jessica L.
V. Piskorski, Brady W. Keith, Michael J. Morledge, Tessa
Hermanson, Defendants: Christopher R. Morris, Jessica L.
Klander, Michael A. Klutho, BASSFORD, REMELE LAW FIRM,
Minneapolis, MN; John M. Guthery, Jr., PERRY, GUTHERY LAW
FIRM, Lincoln, NE.
F. Bataillon, Senior United States District Judge.
matter is before the court on the named plaintiffs'
second motion to certify a class, Filing No. 176. This is an
action for violations of the Fair Debt Collection Practices
Act, (FDCPA), 15 U.S.C. § 1692, et seq., and
the Nebraska Consumer Protection Act, (NCPA), Neb. Rev. Stat.
§ 59-1601, et seq.
to the class certification issue are the plaintiffs'
allegations that defendant CMS filed standardized collection
complaints that were misleading in that they included amounts
for recovery of prejudgment interest and attorneys' fees
that are not authorized under Nebraska law and included
misrepresentations concerning presenting a demand for
payment. Filing No. 17, Amended Complaint at 4-5, 7-8; Exs. A
and C. This court earlier certified a class action comprised
of debtors who had received standardized collection
complaints and standardized discovery materials from
CMS. Filing No. 105, Findings and
Recommendations of the Magistrate Judge; Filing No. 150,
Memorandum and Order. On interlocutory appeal, the Eighth
Circuit Court of Appeals (" Eighth Circuit" )
reversed this court's earlier class certification order
and remanded for proceedings consistent with its opinion.
See Filing No. 150, Memorandum and Order; Filing No.
169, Eighth Circuit Opinion; Powers v. Credit Management
Services, Inc., 776 F.3d 567 (8th Cir. 2015). The Eighth
Circuit found that the classes, as certified, did " not
meet the commonality, predominance, and superiority
requirements of Rule 23." Id. at 573. The
Eighth Circuit further stated that the classes, as certified,
would require individualized assessments of the purported
class-members state court collection actions. Id.
at 571, 573.
Appeals Court also suggested that the court should have ruled
on then-pending motions for summary judgment before
certifying the class. Id. at 571 n.1. The Court
noted two unresolved issues of law, which the court has now
resolved, generally in favor of the plaintiffs. Id.
at 571, 573. The Eighth Circuit also made other findings that
are no longer relevant in view of the changed posture of the
plaintiffs now seek certification of two classes: a §
25-1801 class and a § 45-104 class, with subclasses
created for the statute limitations period of one year under
the FDCPA and of four years under the NCPA. See
Filing No. 176, Motion. Plaintiffs propose certification as
The § 25-1801 class consists of:
(i) all persons with addresses in Nebraska against whom
Defendants filed a county court collection complaint in the
form of Exhibit C (ii) which sought to recover attorneys'
fees, prejudgment interest, and costs, pursuant to Neb. Rev.
Stat. § 25-1801 (iii) where CMS did not personally
provide the ninety-day presentation of the claim (iv) in an
attempt to collect an alleged debt which, as shown by the
nature of the alleged debt, defendants' records, or the
records of the original creditors,
was primarily for personal, family, or household purposes.
The § 45-104 class consists of:
(i) all persons with addresses in Nebraska upon whom
Defendants served a county court collection complaint in the
form of Exhibit A (ii) which sought to recover prejudgment
interest pursuant to Neb. Rev. Stat. § 45-104 (iii) in
an attempt to collect an alleged debt which, as shown by the
nature of the alleged debt, defendants' records, or the
records of the original creditors, was primarily for
personal, family, or household purposes.
Filing No. 176, Motion at 2. The class definitions proposed
in the plaintiffs' second motion apply to all defendants
and do not involve a breakdown by attorney.
oppose the motion for certification, arguing that the motion
is an improper attempt for reconsideration of the Eighth
Circuit's opinion and is barred by res judicata and law
of the case. Further, they contend the plaintiffs cannot
satisfy the requirements of Fed.R.Civ.P. 23.
facts are set forth in the court's order on the
parties' motions for summary judgment and will be
repeated only as necessary to the court's findings. The
record shows that in the Powers collection lawsuit,
Defendants sought to collect on " goods, services and/or
labor" in the amount of $454.00. Filing No. 17, Amended
Complaint, Ex. A, Powers collection complaint. The collection
complaint states in Paragraph 4 that " GIKK ORTHO
SPECIALISTS provided goods, services and/or labor to
Defendant(s) and/or family members of Defendant(s). The
reasonable value or agreed amount of these services is
$454.00 and such is a liquidated amount." The collection
complaint further provides that " [p]laintiff requests
prejudgment interest of $224.48 from 4/25/2007 to 6/7/11,
pursuant to Sec. 45-104 and accruing prejudgment interest and
attorney fees, as allowable by law." Id.
Further it states " More than 90 days have elapsed since
the presentation of this claim." Id.
Palmer collection complaint, CMS sought recovery of three
amounts: $24.51 for goods, services and/or labor of
Physicians of Ob/Gyn-Dr. Benjamin Ryder, stating the "
reasonable value or agreed amount of these services is $24.51
and such amount is a liquidated amount" ; $602.39 for
goods, services and/or labor of Physicians of Ob/Gyn-Dr. Mary
Kratoska, again stating $602.39 was the reasonable value of
the services and the amount was liquidated; and $229.48 for
services provided by Physicians of Ob/Gyn - Dr. Nancy Hicks,
also stating the amount was reasonable and liquidated.
Id., Ex. C, Palmer collection complaint. In the
Palmer collection complaint, CMS sought statutory attorney
fees pursuant to Neb. Rev. Stat. § 25-1801, and accruing
prejudgment interest. Id. Further, it stated more
than 90 days elapsed since the presentation of the claim.
evidence shows that the Palmer and Powers collection
complaints are examples of standard form pleading routinely
filed by CMS. Filing No. 85-2, Ex. 1A, Deposition of Tessa
Hermanson (" Hermanson Dep." ) at 52-54. CMS
in-house counsel Dana Fries testified in her deposition that
" if we were proceeding or asking for interest under
that Nebraska revised statute [25-1801], that we have to be
able to prove that more than 90 days has elapsed between the
presentation of the claim and the date that we filed the
claim" and that her understanding of "
presentation" was when the debtor was presented with the
underlying bill. Filing No. 178-4, Ex. 3A, Deposition of Dana
Fries (" Fries Dep." ) at 26. CMS has never sent a
notice to county court defendants by certified mail, return
receipt requested required for unliquidated claims under Neb.
Rev. Stat. § 45-103.02, nor did it present any claim 90
days in advance of filing the county court actions. Filing
No. 50-8, Ex. 7, Answers to Requests for Admission at 13.
Fries testified that every complaint contains the language
that the claim is liquidated, in order for defendants to
avail themselves of prejudgment interest under § 45-104.
Filing No. 182-3, Ex. 2A, Fries Dep. at 47. Fries testified
" liquidated means readily determinable or easily
record shows that allegation of the reasonable value of
services were determined by relying on the assignor, or
original creditor. Filing No. 178-6, Ex. 4A, Deposition of
Tessa Hermanson (" Hermanson Dep." ) at 58. CMS
in-house counsel Hermanson regarded the claim presented 90
days in advance of filing the county court actions to be
" the original creditor sending a bill."
Id. at 60. She also testified no one at CMS sends a
letter by certified mail on behalf of CMS prior to the filing
of a lawsuit. Id. at 63.
collects on a wide variety of debts, including medical,
utilities, banks, landlord-tenant matters, storage, and
doctors' offices. Filing No. 182-5, Ex. 3A, Hermanson
Dep. at 26. Dana Fries testified she could not give an
example of a single commercial client. Filing No. 182-3, Ex.
2A, Fries Dep. at 11.
acknowledged that the only difference between the Powers
complaint and the Palmer complaints was the statute CMS was
suing under. Filing No. 182-5, Ex. 3A, Hermanson Dep. at 52.
Ms. Hermanson admits that all of CMS's collection actions
fall into one of two causes of action which are the subject
of the present lawsuit, i.e., a suit under § 25-2801 and
a suit under § 45-104, as evidenced by Exhibits A and C.
Id. CMS in-house counsel Brady Keith testified that
the collection actions were for breach of contract. Filing
No. 85-8, Ex. 2B, Keith Dep. at 31. Dana Fries testified the
causes of action were " an implied contract of - quasi
contract, unjust enrichment type theory" and "
[c]ould also be a contract, a written contract theory."
Filing No. 109-1, Ex. 1A, Fries Dep. at 45. Hermanson also
testified that the Powers collection complaint is based on
" a contract for services provided" and the Palmer
collection complaint is based " on implied contract to
services provided, quasi contract theory." Id.
Ex. 1B, Hermanson Dep. at 61.
admits that the county court Complaints in the form of
Exhibits A and C have been in use since at least
2008. Filing No. 85-2, Ex.1A, Hermanson Dep.
at 53-54. The county court complaints are standard forms used
by its attorneys on a regular basis, with only the names and
amounts changed to suit the individual case. Id. CMS
attorney Brady Keith testified that these county court
complaints are standardized with ...