Opinion
CV NO. 03-00402 DAE BMK
January 23, 2004
ORDER DENYING DEFENDANT'S MOTION FOR RECONSIDERATION
Pursuant to Local Rule 7.2(d), the court finds this matter suitable for disposition without a hearing. After reviewing Defendant's Motion and the supporting and opposing memoranda, the court DENIES Defendant's Motion for Reconsideration of Order Granting in Part and Denying in Part Defendant's Motion To Dismiss; Order Granting in Part and Denying in Part Plaintiff's Counter Motion for Partial Summary Judgment Filed October 16, 2003, or, in the Alternative, for Certification Under 28 U.S.C. § 1292(B) and For Stay of Proceedings.
BACKGROUND
Plaintiff Jason Powell ("Plaintiff) entered into a contract with Nextel Partners, Inc., ("Nextel") for cell phone service for the calendar year 2001. See Plaintiff's Counter Motion, at 4. The last payment that Plaintiff made to Nextel was on February 2, 2002. See Defendant's Reply Memorandum in Support of Its Motion To Dismiss and Opposition to Plaintiff's Counter Motion ("Defendant's Reply"), at 25. Plaintiff claims that his service was cancelled due to his refusal to pay $60 in late charges, but argues that Nextel continued to bill him for the monthly charges nevertheless. See Declaration of Jason Powell, filed October 9, 2003 (Powell Decl."), ¶ 3-5.Defendant maintains that Plaintiff continued to use his Nextel account through June 2003 without making any additional payments. Defendant's Reply, at 25. As a result, Defendant asserts that Plaintiff owed Nextel a balance of $1052.70 as of July 13, 2002, that continued to accrue late charges and interest. Nextel assigned the account to Defendant in December 2002, which totaled $1158.34 in principal and 60 cents in interest. On December 24, 2002, Defendant sent a notice of collection to Plaintiff's previous address, where he had received his monthly Nextel bill. Plaintiff claims that he did not receive this notice until mid-January as a result of the forwarding delay. Defendant sent a second notice on January 14, 2003, which Plaintiff claims to have received at the end of January. Plaintiff states that he sent a fax to Defendant on February 4, 2003 to inform Defendant that 1) Defendant's prior collection attempts did not comply with the Fair Debt Collection Practices Act ("FDCPA"), codified at 15 U.S.C. § 1692, etseq.: 2) Defendant's notices were improper, confusing, and misleading; and 3) Plaintiff had obtained counsel. See Complaint, Ex. C. In this fax, Plaintiff also asked that Defendant provide debt verification and requested that future communication be made through his attorney. Defendant claims that it did not receive this fax, and states that the first fax Defendant received from Plaintiff's counsel was on March 5, 2003. Defendant asserts that it immediately responded to this fax, but admits that it never provided Plaintiff with the requested debt verification.
Plaintiff resided at 1669 S. Beretania Street, Apt. 4; Honolulu, HI, 96826 until December 1, 2002 when he moved to his present address at 47-283 C Hui Iwa Street; Kaneohe, HI, 96744.
On July 25, 2003, Plaintiff filed a Complaint against Defendant alleging violations of the Fair Debt Collection Practices Act ("FDCPA"). The Court found that Plaintiff intended to assert the following violations in Count I: (1) false or misleading misrepresentations under 15 U.S.C. § 1692e; (2) unfair practices under 15 U.S.C. § 1692f; and (3) improper notice and validation of debts under 15 U.S.C. § 1692g. Order Granting in Part and Denying in Part Defendant's Motion to Dismiss; Order Granting in Part and Denying in Part plaintiff's Counter Motion for Partial Summary Judgment, issued on October 16, 2003, ("Order"), at 6. In Count II, Plaintiff alleged state violations of Hawai'i Revised Statutes ("HRS") §§ 443B and 480, consisting of claims of unfair and deceptive practices, as well as immoral, unethical, oppressive, unscrupulous, and substantially injurious contracts, demands, and disclosures involving Defendant's collection efforts. Complaint, ¶¶ 19-20. Plaintiff sought to recover actual and statutory damages, as well as reasonable attorney's fees and costs of litigation.
On December 12, 2003, the court granted Plaintiff's Motion To Amend Complaint and requested that Plaintiff eliminate the matters already ruled on by the court in his Amended Complaint. Plaintiff filed its First Amended Complaint on December 19, 2003. ("Amended Complaint"). In Count I of the Amended Complaint, Plaintiff alleges that Defendant violated 15 U.S.C. § 1692e by using false, deceptive, and misleading representations in connection with the collection of Plaintiff's debt. Amended Complaint, ¶ 17. Plaintiff also asserts that Defendant used unfair means and practices to collect the debt in violation of 15 U.S.C. § 1692f and Defendant did not send Plaintiff proper verification in violation of 15 U.S.C. § 1692g, 1692e, 1692f, 1692j, 1692c, and 1692i Amended Complaint, ¶ 17. In Count II, Plaintiff again asserts that Defendant violated HRS §§ 443B and 480. Amended Complaint, ¶¶ 19-23.
Defendant filed a Motion To Dismiss plaintiff's Complaint for Failure To State a Claim on August 18, 2003. On September 25, 2003, Plaintiff filed a Counter Motion and Opposition to Defendant's Motion To Dismiss. On October 3, 2003, Defendant requested that the court treat its Motion To Dismiss as a Motion for Summary Judgment. On October 9, 2003, Plaintiff filed a Reply to Defendant's October 3, 2003 Motion.
On October 16, 2003, the district court issued an Order Granting in Part and Denying in Part Defendant's Motion To Dismiss and Granting in Part and Denying in Part plaintiff's Counter Motion for Partial Summary Judgment. The court decided that each side had presented sufficient evidence to "demonstrate the existence of genuine issues of material facts as to the precise dates of receipt of the correspondence and transmissions at issue, as well as to the significance of these dates." Order, at 19. The court found as a matter of law that, pursuant to Section 1692g(a)(4), Defendant was obligated to provide Plaintiff with verification of debt. Order, at 22. With respect to the amount of debt Plaintiff owed Defendant, the court found that genuine issues of material fact existed. Order, at 23. The court denied summary judgment under Section 1692f since Plaintiff provided evidence related to Defendant's April 2003 suit against Plaintiff to suggest that Defendant may have violated 1692f. Order, at 24. The court also denied summary judgment with respect to the state law claims, MRS §§ 480 and 443B. Order, at 26.
15 U.S.C. § 1692f prohibits the use of unfair practices in association with debt collection. Plaintiff argues that Defendant filed its lawsuit on April 25, 2003 with the improper purpose of attempting to intimidate Plaintiff and discourage him from bringing the instant lawsuit. The court dismissed Defendant's suit on July 22, 2003.
In the instant motion, Defendant requests that the court reconsider its decision to deny Defendant's request for dismissal with respect to plaintiff's claims that 1) Defendant's failure to verify plaintiff's debt violated 1692g(a)(4) and that 2) Defendant falsely represented the amount of debt in violation of 1692e(2)(a).
STANDARD OF REVIEW
"The disposition of a motion for reconsideration is within the discretion of the district court and will not be reversed absent an abuse of discretion." See Plotkin v. Pac. Tel. Tel. Co., 688 F.2d 1291, 1292 (9th Cir. 1982). There is a "compelling interest in the finality of judgments which should not be lightly disregarded."Rodgers v. Watt. 722 F.2d 456, 459 (9th Cir. 1983). NaMamo O'Aha `Ino. 60 F. Supp.2d 1058, 1059 (D. Haw. 1987).
The Ninth Circuit has held that a successful motion for reconsideration must 1) demonstrate reasons why the court should reconsider its prior decision and 2) set forth facts or law of a strongly convincing nature to induce the court to reverse its prior decision.Na Mamo O'Aha `Ino. 60 F. Supp.2d 1058, 1059 (D. Haw. 1999).
Local Rule 60.1 states that motions for reconsideration should be granted only on three grounds: "(a) Discovery of new material facts not previously available; (b) Intervening change in law; and (c) Manifest error in law or fact." LR 60.1.
DISCUSSION
In the instant motion, Defendant requests that the court reconsider its decision to deny Defendant's request for dismissal on the following issues: 1) the claim that Defendant's failure to verify plaintiff's debt violated 15 U.S.C. § 1692g(a)(4) and 2) plaintiff's allegation that Defendant falsely represented the amount of debt in violation of 15 U.S.C. § 1692e(2)(a). In the event that the court denies Defendant's motion, Defendant requests that the court certify the Order as an appealable interlocutory order pursuant to 28 U.S.C. § 1292(b), with regard to the issue of whether Defendant violated the FDCPA by failing to verify plaintiff's debt, and that the court stay these proceedings pending the outcome of the appeal.
In a footnote, Defendant also argues that J.J. Mac Intyre Co., of Nevada Inc., was the party named in plaintiff's complaint, not JJM, which is a California corporation. The court need not address this issue since it is not relevant to the instant motion and plaintiff's Amended Complaint sues both the Nevada and California Corporation. Amended Complaint.
Defendant contends that reconsideration is appropriate because there has been a manifest error in law or fact.
A. Debt Verification Requirement
According to Defendant's account summary, plaintiff's account was returned to Nextel on June 19 and 20, 2003, per client request, prior to the initiation of this lawsuit on July 25, 2003." It is undisputed, however, that as of March 5, 2003, Defendant was aware of Plaintiff s request for debt verification. Defendant was in possession of Plaintiff s records and was therefore capable of providing debt verification up until June 19 or 20, 2003.
Contrary to Defendant's argument, the fact scenario in the instant case is not analogous to Sambor v. Omnia Credit Services. Inc. 183 F. Supp.2d 1234 (D. Haw. 2002). In Sambor. the debt collection agency was not in a position to verify the debt because it had returned the files to the original creditor. This is not the situation in the instant case, however, since Defendant could have verified the debt for approximately three and one-half months before it returned the account. Furthermore, in its Order, the court found as a matter of law that debt verification is required regardless of whether an agency ceases debt collection. The court arrived at this conclusion after careful analysis and consideration of 15 U.S.C. § 1692g(a), 1692g(b), and recent case law.
In its Order, the court correctly noted that in Sambor the debt collection agency had returned the files to the original creditor and therefore the agency was not in a position to comply with the debt verification request. 183 F. Supp.2d at 1243. Order, at 22.
In its Order, the court reaffirmed the decision in DeCoito v. Unifund Corporation. Civil No. 01-00379 DAE-BMK (slip op. June 4, 2002). In that case, the court interpreted 15 U.S.C. § 1692g(a)(4) and § 1692g(b) to mean that "a collection agency must cease collection of debt `until' it verifies the debt," and therefore a collection agency does not escape its duty to verify the debt by ceasing to collect the debt. Order, at 21.
In the instant motion, the court affirms its earlier decision and holds as a matter of law that Defendant violated 15 U.S.C. § 1692g(a)(4) by failing to send Plaintiff verification of the amount of his debt. Defendant has not presented a valid reason in its motion for its failure to either verify the debt or return the account to the original creditor in a prompt manner. Consequently, the court finds that there has been no manifest error in law or fact, and the court thereby DENIES Defendant's motion for reconsideration.
While the parties disagree as to whether Defendant did in fact cease collection of the debt, this issue is irrelevant because the court holds that cessation of collection does not release Defendant from its duty to verify the debt.
B. False Representation of the Amount of Debt
Plaintiff claims that Defendant violated 15 U.S.C. § 1692e(2)(A) by falsely representing his debt. In its Order, the court found that Plaintiff met his burden of demonstrating that there was a genuine issue of material fact with respect to the amount of debt Plaintiff owed. The court found that the issue as to whether the charges were properly accrued had not yet been resolved. Order, at 23.
In the instant motion, Defendant argues that Nextel may have falsely represented the debt, but Defendant did not. In December 2002, Nextel assigned the account to Defendant in the amount of $1,134.58 in principal and 60 cents in interest. This is the exact amount that Defendant stated on the initial communication it sent to Plaintiff on December 24, 2002. Defendant makes a persuasive argument.
The court agrees that if Plaintiff's debt was in fact misrepresented, it seems it would have been due to a miscalculation by Nextel, not Defendant. Due to Defendant's failure to verify the debt, however, the court does not have sufficient evidence before it to determine as a matter of law that Defendant did not falsely represent the debt. Therefore, the court DENIES Defendant's request for reconsideration.
C. Appealable Interlocutory Order
Defendant requests that the court certify the portion of this Order in which the court determined that Defendant was in violation of the FDCPA by failing to verify plaintiff's debt as appealable pursuant to 28 U.S.C. § 1292(b) and that the court stay these proceedings pending the outcome of the appeal. Pursuant to 28 U.S.C. § 1292(b), when the district court finds that its order involves "1) a controlling question of law 2) as to which there is a substantial ground for difference of opinion and that 3) an immediate appeal from that order may materially advance the ultimate termination of the litigation, he shall so state in writing in such order." 28 U.S.C. § 1292(b).
Section 1292(b) has been strictly construed and courts generally only certify an interlocutory appeal in exceptional cases. See Wausau Business Insurance Co. v. Turner Construction Co., 151 F. Supp.2d 488, 491 (2d Cir. 2001); Oyster v. Johns-Manville Co., 568 F. Supp. 83, 86 (3d Cir. 1983); Seven-Up Co. v. O-So Grape Co., 179 F. Supp. 167, 170 (7th Cir. 1959). The court must carefully evaluate whether each of the three elements of the statute have been met. In determining whether the first element has been met, "the court may consider whether reversal could result in dismissal or could significantly affect the conduct of the action, or whether the certified issue has precedential value for a large number of cases." Wausau Business Insurance Co., 151 F. Supp.2d at 491 (citations omitted). In considering whether the second element has been met, courts have held that a claim that the district court's ruling is incorrect does not amount to a substantial ground for difference of opinion. Id. Finally, courts have found that the third element is met if the appeal would shorten the time required for trial. Id
Defendant fails to meet the three elements that would require the court certify an interlocutory appeal. With respect to the first element, the issue as to whether cessation of debt collection shields a debt collector from liability is not a controlling question of law that is essential to the outcome of this action. The structure of 15 U.S.C. § 1692g(a)(4) allows for courts to use some discretion to arrive at an equitable decision that is dependent on the facts of a particular case, and the court properly applied this statute to the facts in the instant case. Defendant also fails to meet the second element. While Defendant correctly points out that Ninth Circuit cases have yielded different opinions as to whether cessation of debt collection shields a debt collector from liability under 15 U.S.C. § 1692g(a)(4), this does not amount to a substantial ground for difference of opinion with respect to the fact scenario in the instant case. Finally, permitting an interlocutory appeal will not materially advance the ultimate termination of the litigation as required by the third element.
CONCLUSION
For the aforementioned reasons, the court DENIES Defendant's Motion for Reconsideration.
IT IS SO ORDERED.