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Bassett v. Credit Bureau Services, Inc.

United States District Court, D. Nebraska

January 4, 2019

KELLY M. BASSETT, individually and as heir of James M. Bassett, on behalf of herself and all other similarly situated; Plaintiff,
v.
CREDIT BUREAU SERVICES, INC., and C. J. TIGHE, Defendants.

          MEMORANDUM AND ORDER

          Joseph F. Bataillon Senior United States District Judge.

         This matter is before the Court on the plaintiff's motion for partial summary judgment, Filing No. 63, and defendants' motion to dismiss and for summary judgment, Filing No. 70.[1] This is a putative class action for violations of the Fair Debt Collection Practices Act, (hereinafter referred to as the “FDCPA”) 15 U.S.C. § 1692 et seq., and the Nebraska Consumer Protection Act, Neb. Rev. Stat. § 59-1601 et seq. (hereinafter referred to as the “NCPA”).

         The plaintiff seeks summary judgment on the issue of liability-a determination that the defendants' collection complaints are false and misleading as a matter of law. The plaintiff challenges defendant CMS's routine practice of sending allegedly false and misleading collections letters in the form of Exhibit A attached to the complaint. Filing No. 1-1. The principal legal question is whether the defendants' use of letters in the form of Exhibit A violated 15 U.S.C. §§ 1692e (generally prohibiting the use of any false, deceptive, or misleading representation or means in connection with the collection of any debt), e(2)(A) (prohibiting the false representation of the character, amount, or legal status of any debt), and e(10) (prohibiting the use of any false representation or deceptive means to collect or attempt to collect any debt) and the NCPA, which prohibits deceptive acts and practices. She seeks statutory damages, declaratory relief, costs and attorney's fees.[2] She argues that the overall letter is false and misleading in several respects: setting an appointment, stating there will be further collection efforts, setting out two different addresses of the collection company, failing to date the dates of service or to identify the person who received the alleged services and asserting that interest, along with other charges, accrues daily. The plaintiff also alleges that defendant C. J. Tighe can be held personally liable for the violations.

         Defendants Credit Bureau Services, Inc. and C.J. Tighe (“Defendants”) move to dismiss for lack of subject matter jurisdiction under Federal Rule of Civil Procedure 12(b)(1), contending that the plaintiff lacks standing under Article III of the United States Constitution to pursue her claim and a claim on the decedent's behalf. Further, they move to dismiss any claims under § 1692(g) for failure to state a claim, arguing that the plaintiff did not allege violations of that subsection in her complaint. The defendants also move for summary judgment, arguing that undisputed evidence shows the plaintiff's claims fail as a matter of law because the challenged correspondence is not false or misleading.

         I. BACKGROUND

         Some facts are set out in the court's earlier order on the defendants' motion to dismiss and need not be repeated here. The collection letter at issue in this case is attached to the plaintiff's Complaint. Filing No. 1-1, Complaint Ex. A.[3] The record shows the letter is in substantial conformity with 9, 796 form collection letters sent by Credit Bureau Services during the relevant time period. Filing No. 51-8, Ex. 4B, Deposition of C.J. Tighe (“Tighe 30(b)(6) Dep.”) at 8-9, 48-52; Filing No. 52-2, Tighe Dep. Ex. 22, Spencer Fane letter. A collection letter strikingly similar to Exhibit A here was the subject of Reynolds v. Credit Bureau Servs., Inc., No. 8:15-cv-168, 2016 WL 2859604, at *1 (D. Neb. May 16, 2016) (“Defendants agree to change the form collection letter that is the subject of this litigation”); id., Filing No. 1-1, Letter. Defendants agreed to stop using the challenged letter going forward. See id., No. 8:15-cv-168, Filing No. 19-1, Settlement Agreement at 9-10. Comparison of the letter at issue herein and the letter involved in the Reynolds litigation shows only minor edits. Compare Reynolds, No. 8:15cv168, Filing No. 1-1, Ex. A with Filing No. 1-1, Ex. A.[4]

         In the letter at issue, immediately above the addressee's name, the letter states: “URGENT - DATED MATERIAL.” Id. The letter does not state the name of the patient or the dates of service for the alleged accounts. Filing No. 66-2, Ex. 6A, Tighe dep. at 5, 7; Filing No. 51-8, Ex. 4B, Tighe 30(b)(6) Dep. at 57, 61, 66. The original creditor provides that information to Credit Bureau Services. Filing No. 51-7, Ex. 4A, Deposition of Darcy Kreikemeier (“Kreikemeier Dep.”) at 22-23, 60.

         The record shows defendants Credit Bureau Services, Inc. and C.J. Tighe are debt collectors. Filing No. 51-8, Tighe 30(b)(6) Dep. at 17-19, 46. Defendant C.J. Tighe is the president and sole shareholder of Credit Bureau Services, and she manages and operates the business. Filing No. 66-2, Ex. 6A, Tighe Dep. at 2; Filing No. 51-4, Ex. 3A, Deposition of C. J. Tighe, (“Tighe Dep.”) at 2, 11-12. Tighe testified that she oversees everything that is done and establishes all procedures on the accounts. Filing No. 66-2, Ex. 6A, Tighe Dep.at 48. Mrs. Tighe drafted the version of Exhibit A at issue. Id., Tighe Dep. at 55; Filing No. 51-8, Tighe 30(b)(6) Dep. at 13. Tighe admits she: “created, approved, directed, and supervised the preparation and sending of letters in the form of Exhibit A to plaintiff and the [purported] class members Filing No. 51-9, defendants' responses to discovery (first set) at 9.

         Mr. Bassett passed away on August 7, 2016. Filing No. 59-4, Ex. B-1, Deposition of Kelly Bassett (“Bassett Dep.”) at 13. Plaintiff testified that she thought the defendants' letter was a threat to sue her if she did not pay. Id. at 56. Mrs. Bassett expressed confusion several times during her deposition. Id. at 48-57. She reiterates her confusion in her declaration. Filing No. 66-15, Ex. 8, Declaration of Kelly Bassett at 3.

         One of the creditors listed on the collection letter at issue was General Radiology. Filing No. 1-1, Ex. A. Its manager testified that General Radiology did not charge interest or add other charges on their accounts. Filing No. 51-7, Ex. 4A, Kreikemeier Dep. at 51. Defendant Tighe was unable to testify to a single “other charge” associated with the Bassett account. Filing No. 66-2, Tighe Dep. at 7; Filing No. 51-8, Tighe 30(b)(6) Dep. at 67; Filing No. 51-4, Tighe Dep. at 9, 114-115. There is evidence that one of the creditors listed in the letter to the Bassetts charges interest. Filing No. 59-4, Bassett Dep., Ex. 47, Statement of Responsibility.

         Defendants internally designated Exhibit A (the challenged letter) as “B-10.” Filing No. 51-8, Tighe 30(b)(6) Dep. at 2, 11-12. The defendants' computer system keeps track of different form letters used. Id. at 12. Defendants' computer keeps accessible records as to whom each form letter was sent and can identify class members. Id.The computer system can identify letters sent several years ago and can even identify the collector requesting said letters. Id.at 5-7, 36-37, 41-42. Tighe testified that the defendants' computer system inserts names, addresses and amounts allegedly due, and prints Exhibit A (Form letter B-10) when a debt collector requests a hard-copy letter for mailing. Id. at 5, 34. When Credit Bureau Services sends a letter, its computer system denotes it in each electronic consumer's profile. Id.at 39-41. Credit Bureau Services recorded the challenged letter (Filing 1-1, Exhibit A) as “B10” in Credit Bureau Services' electronic consumer profile for the Bassetts. Filing No. 52-1, Dep. Ex. 19, collection notes at Bates 0029.

         II. Law

         A. Standards

         1. Motions to Dismiss A motion to dismiss based on standing is properly brought under Rule 12(b)(1), because standing is a jurisdictional matter. Disability Support All. v. Heartwood Enterprises, LLC, 885 F.3d 543, 547 (8th Cir. 2018). A complaint can be challenged under Fed.R.Civ.P. 12(b)(1) either “on its face or on the factual truthfulness of its averments.” Titus v. Sullivan, 4 F.3d 590, 593 (8th Cir. 1993). “In a facial challenge to jurisdiction, all of the factual allegations concerning jurisdiction are presumed to be true and the motion is successful if the plaintiff fails to allege an element necessary for subject matter jurisdiction.” Id.In a factual attack on the jurisdictional allegations of the complaint, however, the court can consider competent evidence such as affidavits, deposition testimony, and the like in order to determine the factual dispute. Id. In reviewing a pleading, the court may generally consider documents attached to it. Brown v. Green Tree Servicing LLC, No. 15-1527, 2016 WL 1579022, at *1 (8th Cir. Apr. 20, 2016) (regarding mortgage and notice); Great Plains Trust Co. v. Union Pac. R.R., 492 F.3d 986, 990 (8th Cir. 2007) (stating the court may consider documents attached to the complaint and matters of public and administrative record referenced in the complaint); see also Fed. R. Civ. P. 10(c) (“A copy of a written instrument that is an exhibit to a pleading is a part of the pleading for all purposes.”).

         Under the Federal Rules, a complaint must contain “a short and plain statement of the claim showing that the pleader is entitled to relief.” Fed.R.Civ.P. 8(a)(2); Bell Atl. Corp. v. Twombly, 550 U.S. 544, 556 n.3 (2007). To survive a motion to dismiss for failure to state a claim under Federal Rule of Civil Procedure 12(b)(6), “the complaint must include sufficient factual allegations to provide the grounds on which the claim rests.” Drobnak v. Andersen Corp., 561 F.3d 778, 783 (8th Cir. 2009). The stated claim for relief must be “plausible on its face.” Twombly, 550 U.S. at 570. “A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). “Although a plaintiff need not allege facts in painstaking detail, the facts alleged ‘must be enough to raise a right to relief above the speculative level.'” Kulkay v. Roy, 847 F.3d 637, 642 (8th Cir. 2017) (quoting Twombly, 550 U.S. at 555).

         2. Summary Judgment

         Under Federal Rule of Civil Procedure 56, on a motion for summary judgment, the court “shall grant summary judgment if the movant shows that 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). The evidence must be viewed in the light most favorable to the nonmoving party, giving the nonmoving party the benefit of all reasonable inferences. Kenney v. Swift Transp., Inc., 347 F.3d 1041, 1044 (8th Cir. 2003). “In ruling on a motion for summary judgment, a court must not weigh evidence or make credibility determinations.” Id. “Where the unresolved issues are primarily legal rather than factual, summary judgment is particularly appropriate.” Koehn v. Indian Hills Cmty. Coll., 371 F.3d 394, 396 (8th Cir. 2004).

         A filing of cross-motions for summary judgment does not “necessarily indicate that there is not dispute as to a material fact, or have the effect of submitting the cause to a plenary determination on the merits.” Wermager v. Cormorant Twp. Bd., 716 F.2d 1211, 1214 (8th Cir. 1983). Consequently, “where conflicting inferences as to a material fact may reasonably be drawn from the materials before the court, the case is not appropriate for summary judgment.” Id.

         B. Standing

         Jurisdiction is a threshold issue for this Court. Arbaugh v. Y & H Corp., 546 U.S. 500, 507 (2006) (“The objection that a federal court lacks subject-matter jurisdiction . . . may be raised by a party, or by a court on its own initiative, at any stage in the litigation, even after trial and the entry of judgment.”). The party seeking to invoke federal jurisdiction ...


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