Summary
In Derenick, the attorney attested that debt collection was a small part of his practice, but did not quantify to what extent.
Summary of this case from Gauntner v. DoyleOpinion
No. 1:04-cv-11.
August 10, 2004
MEMORANDUM AND ORDER
Defendant William A. Cohn ("Cohn") has moved for summary judgment. [Court File No. 16]. Cohn seeks to have the plaintiff's, Anita J. Luck Derenick's ("Derenick"), claims based on the Fair Debt Collection Practices Act ("FDCPA"), 15 U.S.C. §§ 1692- 1692o, dismissed. Cohn asserts that summary judgment is appropriate because he is not a debt collector within the meaning of the FDCPA. Derenick has filed a response [Court File No. 20], Cohn has filed a reply brief [Court File No. 25], and Derenick has filed an additional response [Court File No. 27].
I. Standard of Review
Summary judgment is appropriate where no genuine issue of material fact exists and the moving party is entitled to judgment as a matter of law. FED. R. CIV. P. 56(c). In ruling on a motion for summary judgment, the Court must view the facts contained in the record and all inferences that can be drawn from those facts in the light most favorable to the non-moving party. Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587 (1986); National Satellite Sports, Inc. v. Eliadis Inc., 253 F.3d 900, 907 (6th Cir. 2001). The Court cannot weigh the evidence or determine the truth of any matter in dispute. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 249 (1986).
The moving party bears the initial burden of demonstrating that no genuine issue of material fact exists. Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986). To refute such a showing, the non-moving party must present some significant, probative evidence indicating the necessity of a trial for resolving a material factual dispute. Celotex Corp., 477 U.S. at 322. A mere scintilla of evidence is not enough. Anderson, 477 U.S. at 252; McLean v. Ontario, Ltd., 224 F.3d 797, 800 (6th Cir. 2000). The Court's role is limited to determining whether the case contains sufficient evidence from which a jury could reasonably find for the non-moving party. Anderson, 477 U.S. at 248, 249; National Satellite Sports, 253 F.3d at 907.
II. Facts
On December 3, 2002, Derenick received a discharge in her Chapter 7 bankruptcy case. [Court File No. 8, Derenick Aff. at 2]. On January 2, 2003, Cohn, an attorney representing the interests of Capital One Financial Corporation ("Capital One"), caused a civil warrant to be issued against the debtor in the General Sessions Court of Hamilton County, Tennessee, seeking to collect the debtor's alleged indebtedness to Capital One. Derenick informed the process server that the debt was discharged in bankruptcy and he returned the warrant to the court marked "1-14-03 search made for Def. not found in Bankruptcy 02-15399."
On January 16, 2003, Capital One instructed Cohn to close his file on Derenick. On February 5, 2003, Cohn's office mailed to the debtor a letter dated January 11, 2003, which is the subject of the plaintiff's claims in this case. The letter requested that Derenick enter a Consent Judgment regarding her debt to Capital One.
Derenick brought a contempt claim in the bankruptcy court alleging that she had received the letter after discharge of her indebtedness to Capital One, in violation of 11 U.S.C. § 524(a)(2), as well as a claim asserting violations of the FDCPA. The bankruptcy court resolved the contempt proceedings and awarded the plaintiff $150, but dismissed the FDCPA claims for lack of subject matter jurisdiction. The plaintiff has now filed her FDCPA claims before this Court. Cohn seeks dismissal of these claims and asserts that he is not a debt collector within the meaning of the act.
III. Analysis
Under the FDCPA, a "debt collector" is defined as "any person who uses any instrumentality of interstate commerce or the mails in any business the principal purpose of which is collection of any debts, or who regularly collects or attempts to collect, directly or indirectly, debts owed or due, or asserted to be owed or due another." 15 U.S.C. 1692a(6). Cohn asserts that he does not fall within this definition, and is therefor not subject to the FDCPA.
Cohn's first contends that "an attorney engaged exclusively in litigation is not a debt collector." [Court File No. 17 at 3]. For this assertion he relies on the Sixth Circuit's decision in Green v. Hocking, 9 F.3d 18 (6th Cir. 1993). While Green does stand for this proposition, Cohn has failed to recognize that in Heintz v. Jenkins, 514 U.S. 291 (1995), the Supreme Court reached a different conclusion. In Heintz, the Supreme Court explained that a 1986 amendment to the FDCPA repealed and earlier exemption in the statute that prevented its application to attorneys. Heintz, 514 U.S. at 294-295. The Supreme Court reasoned that Congress's failure to replace the repealed exemption with a narrower exemption, would lead to the conclusion "that Congress intended that lawyers be subject to the Act whenever they meet the general 'debt collector' definition." Id. at 295.
The Sixth Circuit has expressly stated that its holding in " Green was subsequently repudiated by the Supreme Court in Heintz. . . ." Wadlington v. Credit Acceptance Corp., 76 F.3d 103, 106 (6th Cir. 1996). In this case, Cohn's argues that he is not subject to the FDCPA because "[t]here must be some acts by a lawyer which separates his act from acts of a regular lawyer and which at the very least resembles some act which a collection agency would undertake" in order to be regulated by the FDCPA. [Court File No. 17 at 3]. This argument must fail due to the reasoning set forth by the Supreme Court in Heintz.
Next, Cohn contends that he is not a debt collector within the meaning of the FDCPA because he does not practice sufficiently in the area of debt collection to fall within the statute. Cohn asserts that a "lawyer must principally be engaged in [the] filing of lawsuits to collect retail debts in his practice in order to be a debt collector." [Court File No. 17 at 3]. Although Cohn attributes this statement to the holding in Heintz, the actual language used by the Court explains "that the Act applies to attorneys who 'regularly' engage in consumer-debt-collection activity, even when that activity consists of litigation." Heintz, 514 U.S. at 299. The FDCPA definition of a debt collector makes the same distinction. The act provides that a person "in any business the principal purpose of is the collection of any debt" will fall under the first prong of the definition, while when someone "who regularly collects or attempts to collect, directly or indirectly, debts owed or due another" falls under the second prong. 15 U.S.C. 1692a(6); see also Schroyer v. Frankel, 197 F.3d 1170, 1174 (6th Cir. 1999).
It is evident from Cohn's supplemental affidavit in support of his motion for summary judgment [Court File No. 24] that Cohn practices in a number of areas of law, however, debt collection need not be the "principal purpose," of his law firm if it can be shown that Cohn "regularly collects or attempts to collect, directly or indirectly, debts owed or due, or asserted to be owed or due another." 15 U.S.C. 1692a(6). The Sixth Circuit has explained that "for a court to find that an attorney or law firm 'regularly' collects debts for the purposes of the FDCPA, a plaintiff must show that the attorney or law firm collects debts as a matter of course for its clients or for some clients, or collects debts as a substantial, but not principal part of his or its general law practice." Schroyer v. Frankel, 197 F.3d at 1176; see also Russell v. Standard Federal Bank, No. 02-70054, 2002 WL 1480808 (E.D. Mich. June 19, 2002). The court gave additional insight with the following explanation:
Such an interpretation actuates the apparent purpose of Congress in creating attorney liability under the FDCPA: "[w]hile attorneys who are considered competitors of traditional debt collection companies should be covered under the Act, a firm whose debt collection activity does not approximate that of a traditional collection agency should not be suable under the act." [ White v. Simonson Cohen P.C., 23 F.Supp.2d 273, 276 (E.D.N.Y. 1998)]. In identifying such attorneys, other courts have relied upon a variety of factors, including the volume of the attorney's collection activities, the frequent use of a particular debt collection document or letter, and whether there exists a steady relationship between the attorney and the collection agency or creditor he represented. See, e.g., Cacace v. Lucas, 775 F.Supp. 502, 504 (D.Conn. 1990). Courts have considered what portion of the overall caseload debt collection cases constitute, and what percentage of revenues derive from debt collection activities. See, e.g., Von Schmidt v. Kratter, 9 F.Supp.2d 100, 102 (D.Conn. 1997); [ Nance v. Petty, Livingston, Dawson, Devening, 881 F.Supp. 223 at 224 (W.D.Va. 1994)]. Some have maintained that even where debt collection takes up a minor portion of a law practice, "debt collector" liability may lie where the defendant has an "ongoing relationship" with a client whose activities substantially involve debt collection. See [ Stojanovski v. Strobl and Manoogian, P.C., 783 F.Supp. 319, 322 (E.D. Mich. 1992)].Id.
In support of his contention that he does not fall within the statute's definition, Cohn further states that he "does not have collecting of debts . . . [as] a priority of his practice; nor does he have the filing of debt collection lawsuits as a substantial percentage of his law practice; nor does he regularly have clients who file debt collection lawsuits." [Court File No. 17 at 3]. Cohn supports his contention only with his own affidavit. [Court File No. 18].
In response, the Derenick has submitted the affidavit of a deputy clerk for the Hamilton County Tennessee General Sessions Court. Attached to her affidavit is a docket list of all the cases in Hamilton County in which Capital One was a plaintiff. [Court File No. 21, Ex. 1 2]. The affidavit indicates that a handwritten "yes" was used by the deputy clerk to indicate that Mr. Cohn filed the case. The affidavit also explains that each case listed was a collection action. The "yes" mark appears 277 times in the docket list, and the list covers only Hamilton County, Tennessee, which is several hundred miles away from Shelby County, Tennessee, the location of Cohn's practice.
Cohn replies to Derenick's submission of the deputy clerk's affidavit and the docket sheets by suggesting that the clerk has "erroneously identifie[d] as 'collection' lawsuits," lawsuits which "themselves make no mention of the words 'debt' or 'collection'" and further asserts that "[e]ach and every lawsuit was filed for 'breach of contract.'" [Court File No. 25]. The mere semantics do not determine the nature of a lawsuit, and Cohn has failed to explain the nature of these multiple actions for "breach of contract" where he represents a well known consumer credit card issuer, Capital One, and the suits involve individual defendants.
In addition, the plaintiff has submitted a printout from The Cohn Law Firm's website which lists "Account Collection" as one of the law firm's twelve areas of practice and provides a detailed explanation of the services the firm provides to client creditors. [Court File No. 22, Ex. 5 6]. The explanation concludes with the statement that "William A Cohn has over 25 years of experience in creditor's rights." [Court File No. 22, Ex. 5 at 2]. At the very least, the evidence submitted by the plaintiff creates a genuine issue of material fact as to whether or not Cohn is a "debt collector" within the meaning of the FDCPA and prevents this Court from granting Cohn's motion for summary judgment.
IV. Conclusion
For the reasons stated above, Cohn's motion for summary judgment [Court File No. 16] is DENIED.
SO ORDERED.