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holding that the plaintiff's FDCPA claims were barred under the doctrine of res judicata when the plaintiff's two lawsuits concerned separate instances of the same course of conduct by the defendant—the defendant's failure to communicate the disputed nature of plaintiff's debt to the same credit reporting agency
Summary of this case from Horia v. Nationwide Credit & Collection, Inc.Opinion
Civil Action No. 12–cv–02082–MSK–KMT.
2013-09-10
Christina HERNANDEZ, Plaintiff, v. ASSET ACCEPTANCE, LLC, a Delaware limited liability company, Defendant.
David Michael Larson, David M. Larson, Attorney at Law, Englewood, CO, for Plaintiff. Joseph J. Lico, Steven J. Wienczkowski, Adam L. Plotkin, P.C., Denver, CO, for Defendant.
David Michael Larson, David M. Larson, Attorney at Law, Englewood, CO, for Plaintiff. Joseph J. Lico, Steven J. Wienczkowski, Adam L. Plotkin, P.C., Denver, CO, for Defendant.
OPINION AND ORDER ADOPTING RECOMMENDATION AND DISMISSING PLAINTIFF'S CLAIMS
MARCIA S. KRIEGER, Chief Judge.
THIS MATTER comes before the Court on the Recommendation (# 41) of United States Magistrate Judge Kathleen M. Tafoya that the Defendant Asset Acceptance's Motion to Dismiss (# 13) be granted. The Plaintiff Christina Hernandez timely filed Objections (# 45) to the Recommendation.
When a magistrate judge issues a recommendation on a dispositive motion, the parties may file specific, written objections within fourteen days after being served with a copy of the recommendation. 28 U.S.C. § 636(b)(1); Fed.R.Civ.P. 72(b). The district court shall make a de novo determination of those portions of the recommendation to which timely and specific objection is made. U.S. v. One Parcel of Real Prop. Known as 2121 E. 30th St., 73 F.3d 1057, 1060 (10th Cir.1996).
In her Amended Complaint (# 11), Ms. Hernandez claims that the Defendant, a debt collection agency, violated the Fair Debt Collection Practice Act (FDCPA), 15 U.S.C. § 1692e(2)(A), e(8), e(10), and § 1692f, when it failed to communicate to Experian, a credit reporting agency that she disputed a debt she had incurred. According to the Amended Complaint, Ms. Hernandez allegedly incurred a debt with Xcel Energy and defaulted on the debt. The account was transferred to the Defendant for collection. In May 2011, Ms. Hernandez reviewed a copy of her Experian credit report and saw the Defendant's entry for the Xcel account on the report. On May 5, 2011, she called the Defendant to dispute the account. In June, August, October, and November 2011, the Defendant allegedly failed to communicate to Experian that Ms. Hernandez's Xcel Energy account was disputed. Ms. Hernandez asserts that this “Complaint and Jury Demand only seeks relief for activity that occurred after August 7, 2011.” She seeks statutory damages available under the FDCPA, as well as attorney fees and costs.
By way of additional background, the Court notes that on July 1, 2011, Ms. Hernandez initiated Civil Action No. 11–cv–01729 ( Hernandez I ). In that case, Ms. Hernandez claimed that in June 2011, the Defendant violated the FDCPA by failing to report the Xcel Energy account as disputed between May 5, 2011 and July 1, 2011. She alleged violations of 15 U.S.C. § 1692e(2)(A), e(8), e(10) and § 1692f A two-day jury trial was held on September 10, 2012. The jury returned a verdict in favor of the Defendant. Final judgment was entered in Hernandez I on September 21, 2012.
In addition to being permitted to consider documents referred to and relief on in Ms. Hernandez's Amended Complaint, it is also appropriate for the Court to take judicial notice of the pleading and decision in a prior case involving the same parties. Merswin v. Williams Cos., Inc., 364 Fed.Appx. 438, 441 (10th Cir.2010).
As relevant here, the Defendant moved to dismiss (# 13) Ms. Hernandez's claims in this case under the doctrine of res judicata, also referred to as claim preclusion. The matter was referred to the Magistrate Judge, who recommends that the motion be granted. The Magistrate Judge found that Ms. Hernandez's claims must be dismissed because the claims asserted in this case arise from the same transaction, or series of transactions, as the claims asserted in Hernandez I.
Ms. Hernandez objects to the Magistrate Judge's factual conclusion that her claims in this case arise out of the same transaction as those asserted in Hernandez I. Specifically, she argues that her claims here can be proven with evidence of new facts that occurred after Hernandez I. She alleges that here, she can rely on pleadings filed in Hernandez I to establish that she disputed the account, rather than rely on evidence of the May 5, 2011 phone call. She argues that because Hernandez I occurred after the conduct she alleged in that action, her claims in this case rely on independent facts.
“Under res judicata, or claim preclusion, a final judgment on the merits of an action precludes the parties or their privies from relitigating issues that were or could have been raised in the prior action.” Wilkes v. Wyoming Dep't of Emp't, 314 F.3d 501, 504–05 (10th Cir.2002) (citing Satsky v. Paramount Commc'ns, Inc., 7 F.3d 1464 (10th Cir.1993)) (emphasis in original). Claim preclusion requires a judgment on the merits in an earlier action, identity of the parties in the two suits, and identity of the cause of action in both suits. Yapp v. Excel Corp., 186 F.3d 1222, 1226 (10th Cir.1999). To determine whether the claims in two suits are identical, it must be determined whether the claims arise out of the same transaction, or series of connected transactions. Id. at 1227. “[A] new action will be permitted only where it raises new and independent claims, not part of the previous transaction, based on the new facts.” Hatch v. Boulder Town Council, 471 F.3d 1142, 1150 (10th Cir.2006) (emphasis in original).
Upon de novo review of the Recommendation, the Court reaches the same conclusions articulated in the Recommendation for substantially the same reasons. Contrary to Ms. Hernandez's view, her claims in this action are not independent simply because they allege conduct that occurred after Hernandez I. Even if she were to rely on pleadings in that case to establish that she disputed the account, the pleadings depend on the fact of the May 5, 2011 phone call to establish the dispute. The claims here relate to the same disputed account, and they involve separate instances of the same course of conduct by the Defendant—that is, the Defendant's failure to report the account as disputed after the May 5, 2011 phone call. Thus, although the Defendant's conduct in August, October, and November 2011 could have amounted to additional violations of the FDCPA, those violations are not independent from the claims at issue in Hernandez I.
Finally, the Court sees no reason why Ms. Hernandez could not have moved to amend her complaint in Hernandez I to include allegations of the conduct that occurred in August, October, and November 2011. The trial in Hernandez I occurred over a year after she filed her complaint in that case. Had she amended her complaint in Hernandez I, the jury could have been called upon to determine whether the Defendant's additional communications with Experian constituted violations of the FDCPA. A plaintiff cannot “avoid supplementing his complaint with facts that are part of the same transaction asserted in the complaint, in the hope of bringing a new action arising out of the same transaction on some later occasion.” Hatch, 471 F.3d at 1150 (emphasis in original).
For the forgoing reasons, the Plaintiff's Objections (# 45) are OVERRULED and the Recommendation (# 41) is ADOPTED to the extent it recommends that the Plaintiff's claims be dismissed. The Defendant's Motion to Dismiss (# 13) is GRANTED and the Plaintiff's claims in this case are DISMISSED in their entirety, with prejudice. The Clerk of the Court shall close this case.
ORDER AND RECOMMENDATION OF UNITED STATES MAGISTRATE JUDGE
KATHLEEN M. TAFOYA, United States Magistrate Judge.
This matter comes before the court on “Defendant Asset Acceptance, LLC's Motion to Dismiss.” (Doc. No. 13, filed Oct. 4, 2012 [“Mot.”].) Additionally, the court considers “Plaintiff's Motion to Compel the Defendant's Responses to the Plaintiff's Written Discovery Requests Pursuant to Fed.R.Civ.P. 33, 34, and 37.” (Doc. No. 33, filed March 8, 2013.)
I. FACTUAL AND PROCEDURAL BACKGROUND
The following facts are taken from Plaintiff's Amended Complaint (Doc. No. 11 [“Am. Compl.”] ) and documents attached to or incorporated by reference therein. Plaintiff maintains that, on severaloccasions, Defendant violated the Fair Debt Collection Practices Act (“FDCPA”) by communicating to Experian, a credit reporting agency, information regarding a debt without also communicating that Plaintiff “disputed” the debt.
In deciding a Rule 12(b)(6) motion, the court may consider documents that the complaint incorporates by reference. See Tellabs, Inc. v. Makor Issues & Rights, Ltd., 551 U.S. 308, 322, 127 S.Ct. 2499, 168 L.Ed.2d 179 (2007); Oxendine v. Kaplan, 241 F.3d 1272, 1275 (10th Cir.2001) (documents attached as exhibits to the complaint).
Plaintiff allegedly incurred a financial obligation (“the Debt”) to Xcel Energy and defaulted on the Debt. (Am. Compl., ¶¶ 18, 20.) Defendant acquired the Debt for collection purposes. ( Id., ¶ 21.)
On May 5, 2011, Plaintiff placed a phone call to Defendant and stated to one of its employees that she disputed the Debt. ( Id., ¶¶ 34–43.) In June 2011, Defendant communicated information regarding the Debt to Experian, a credit reporting agency, but did not communicate the fact that Plaintiff disputed the Debt. (Ex. 4; see also Scheduling Order, Doc. No. 34 at 4–5, Hernandez v. Asset Acceptance, LLC, Case No. 11–cv–01729–PAB–MEH [hereinafter “ Hernandez I ”].)
On July 1, 2011, Plaintiff commenced a lawsuit, Hernandez I, against Defendant, alleging violations of 15 U.S.C. §§ 1692e(2)(A), e(8), e(10), and 1692f for Defendant's failure to report the Debt as disputed between May 5, 2011 and July 1, 2011. ( See Ex. A; Compl.; Doc. No. 1, Hernandez I.) In August 2011, approximately one month after filing her Complaint in Hernandez I, Defendant again communicated information to Experian about the Debt, but allegedly did not communicate that Plaintiff disputed the debt. (Am. Compl. ¶¶ 64, 69.) Defendant allegedly did so again in October and November 2011. (Am. Compl., ¶¶ 71, 76, 78, 83.)
In addition to being permitted to consider documents referred to and relied on in Plaintiff's Complaint, it is also appropriate for the court to take judicial notice of the pleading and decisions in a prior case involving the same parties. Merswin v. Williams Cos., Inc., 364 Fed.Appx. 438, 441 (10th Cir.2010) (citing Amphibious Partners, LLC, 534 F.3d 1357, 1361–62 (10th Cir.2008); St. Louis Baptist Temple, Inc. v. FDIC, 605 F.2d 1169, 1172 (10th Cir.1979)).
Just over four weeks prior to trial in Hernandez I, Plaintiff commenced this lawsuit in order to challenge Defendant's August, October, and November 2011 communications with Experian. ( See Compl., Doc. No. 1.) On August 10, 2012, Plaintiff filed a Notice of Case Association pursuant to Local Rule 7.5 to inform this court of Hernandez I. (Doc. No 4.)
Beginning on September 10, 2012, a jury trial was held in Hernandez I. ( See Courtroom Minutes, Doc. No. 61, Hernandez I.) On September 11, 2012, the jury rendered a verdict in favor of Defendant. ( See Courtroom Minutes, Doc. No. 62, Hernandez I.) Final judgment was entered in favor of Defendant on September 21, 2012. (Doc. No. 63, Hernandez I.)
On September 20, 2012, Plaintiff filed an Amended Complaint, which is now the operative pleading in this case. (Am. Compl.) Plaintiff's Amended Complaint asserts a claim for violations of 15 U.S.C. §§ 1692e(2)(A), e(8), e(10), and 1692f of the FDCPA for Defendant's failure to report the Debt as disputed during the months of August, October and November 2011. ( Id., ¶ 114.) Plaintiff seeks monetary damages pursuant to 15 U.S.C. § 1692k(a), and attorney's fees and costs pursuant to 15 U.S.C. § 1692k(a)(3). ( Id. at 17.)
Defendant filed its Motion to Dismiss on October 4, 2012. (Mot.) Plaintiff filed a Response on October 25, 2012. (Doc. No. 15 [“Resp.”] ). Defendant filed its Reply on November 8, 2012. (Doc. No. 20 [“Reply”] ). Accordingly, this matter is ripe for review and recommendation.
I. MOTION TO DISMISS
A. Legal Standard
Federal Rule of Civil Procedure 12(b)(6) provides that a defendant may move to dismiss a claim for “failure to state a claim upon which relief can be granted.” Fed.R.Civ.P. 12(b)(6) (2007). “The court's function on a Rule 12(b)(6) motion is not to weigh potential evidence that the parties might present at trial, but to assess whether the plaintiff's complaint alone is legally sufficient to state a claim for which relief may be granted.” Dubbs v. Head Start, Inc., 336 F.3d 1194, 1201 (10th Cir.2003) (citations and quotation marks omitted).
“A court reviewing the sufficiency of a complaint presumes all of plaintiff's factual allegations are true and construes them in the light most favorable to the plaintiff.” Hall v. Bellmon, 935 F.2d 1106, 1109 (10th Cir.1991). “To survive a motion to dismiss, a complaint must contain sufficient factual matter, accepted as true, to ‘state a claim to relief that is plausible on its face.’ ” Ashcroft v. Iqbal, 556 U.S. 662, 678, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009) (citing Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 570, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007)). Plausibility, in the context of a motion to dismiss, means that the plaintiff pleaded facts which allow “the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.” Id. The Iqbal evaluation requires two prongs of analysis. First, the court identifies “the allegations in the complaint that are not entitled to the assumption of truth,” that is, those allegations which are legal conclusion, bare assertions, or merely conclusory. Id. at 678–80, 129 S.Ct. 1937. Second, the Court considers the factual allegations “to determine if they plausibly suggest an entitlement to relief.” Id. at 681, 129 S.Ct. 1937. If the allegations state a plausible claim for relief, such claim survives the motion to dismiss. Id. at 679, 129 S.Ct. 1937.
Notwithstanding, the court need not accept conclusory allegations without supporting factual averments. Southern Disposal, Inc. v. Texas Waste, 161 F.3d 1259, 1262 (10th Cir.1998). “[T]he tenet that a court must accept as true all of the allegations contained in a complaint is inapplicable to legal conclusions. Threadbare recitals of the elements of a cause of action, supported by mere conclusory statements, do not suffice.” Iqbal, 556 U.S. at 678, 129 S.Ct. 1937. Moreover, “[a] pleading that offers ‘labels and conclusions' or ‘a formulaic recitation of the elements of a cause of action will not do.’ Nor does the complaint suffice if it tenders ‘naked assertion[s]’ devoid of ‘further factual enhancement.’ ” Id. (citation omitted). “Where a complaint pleads facts that are ‘merely consistent with’ a defendant's liability, it ‘stops short of the line between possibility and plausibility of ‘entitlement to relief’ ' ” Id. (citation omitted).
B. Analysis
1. Claim–Splitting
As a threshold matter, Defendant maintains, in the alternative to the claim preclusion argument discussed infra, that this suit is properly dismissed because Plaintiff has engaged in improper claim-splitting. (Mot. at 9–11.) The Tenth Circuit has recognized that claim-splitting is an aspect of res judicata, or claim preclusion. Hartsel Springs Ranch of Colo., Inc. v. Bluegreen Corp., 296 F.3d 982, 986 (10th Cir.2002) (collecting cases for the proposition that “more recent cases analyze claim-splitting as an aspect of res judicata ”); Katz v. Gerardi, 655 F.3d 1212, 1217 (10th Cir.2011). Although “claim splitting is more concerned with the district court's comprehensive management of its docket, whereas res judicata focuses on protecting the finality of judgments,” claim-splitting and claim preclusion both serve the same interests of promoting judicial economy and shielding parties from vexatious concurrent or duplicative litigation,” Katz, 655 F.3d at 1218.
For purposes of clarity, this court hereinafter employs the term “claim preclusion” instead of “ res judicata,” except when directly quoting from other cases. See Migra v. Warren City Sch. Dist., 465 U.S. 75, 76 n. 1, 104 S.Ct. 892, 79 L.Ed.2d 56 (1984); Yapp v. Excel Corp., 186 F.3d 1222, 1226 n. 1 (10th Cir.1999).
The primary distinction between claim splitting and claim preclusion is whether a final judgment has entered in the purportedly duplicative prior action. Id. In other words, a dismissal on claim-splitting grounds is appropriate where the two duplicative cases are both ongoing, whereas claim preclusion provides the appropriate basis for dismissal when a final judgment has been entered on the first suit. Id. (“[I]n the claim-splitting context, the appropriate inquiry is whether, assuming that the first suit were already final, the second suit could be precluded pursuant to claim preclusion.” Id. (quoting Hartsel, 296 F.3d at 987 n. 1) (emphasis in original)).
Here, final judgment has been entered in Hernandez I. Thus, at this juncture, Defendant's claim-splitting argument is inapposite. Instead, the appropriate inquiry is whether this suit is barred on claim preclusion grounds by the final judgment entered in Hernandez I.
2. Claim Preclusion
Defendant argues this suit is barred by the doctrine of claim preclusion based on the final judgment entered in Hernandez I. (Mot. at 4–11.) The court agrees.
“Under res judicata, or claim preclusion, a final judgment on the merits of an action precludes the parties or their privies from relitigating issues that were or could have been raised in the prior action.” Wilkes v. Wyoming Dep't of Emp't, 314 F.3d 501, 504–05 (10th Cir.2002) (citing Satsky v. Paramount Commc'ns, Inc., 7 F.3d 1464 (10th Cir.1993)) (emphasis in original). “Claim preclusion requires (1) a judgment on the merits in the earlier action; (2) identity of the parties or privies in the two suits; and (3) identity of the cause of action in both suits.” Yapp, 186 F.3d at 1226.
Defendant addresses a fourth element in its res judicata analysis, whether the plaintiff had a full and fair opportunity to litigate the claim in a prior suit. (Mot. at 6–9.) The Tenth Circuit has explained that the three elements noted above herein
are in most circumstances all that are necessary for a principled application of the doctrine of claim preclusion. Consequently, the absence of a full and fair opportunity to litigate should be treated as an exception to the application of claim preclusion when the three referenced requirements are otherwise present.
Yapp, 186 F.3d at 1227 n. 4.
The parties do not dispute that the first two elements of the claim preclusion inquiry are satisfied in this case. They dispute whether the “cause of action” in this case is identical to that in Hernandez I.
The Tenth Circuit employs the transactional approach of the Restatement (Second) of Judgments to determine what claims constitute identity of the causes of action. Yapp, 186 F.3d at 1227 (citing Petromanagement Corp. v. Acme–Thomas Joint Venture, 835 F.2d 1329, 1335–36 (10th Cir.1988)). Under this test, claims “arising out of the same ‘transaction, or series of connected transactions' as a previous suit” are precluded. Id. (quoting Restatement (Second) of Judgments § 24 (1982)).
What constitutes the same transaction or series of transactions is “to be determined pragmatically, giving weight to such considerations as whether the facts are related in time, space, origin, or motivation, whether they form a convenient trial unit, and whether their treatment as a unit conforms to the parties' expectations or business understanding or usage.”
Id. (quoting Restatement (Second) of Judgments § 24).
Plaintiff maintains that this suit is not precluded the final judgment entered in Hernandez I because it is based on facts that arose after Plaintiff filed suit in Hernandez I—namely the August, October, and November 2011 communications with Experian. (Resp. at 3.) Defendant acknowledges that those communications occurred after Plaintiff filed suit in Hernandez I, but argues that this action is nevertheless barred because it relates to the same course of conduct as Hernandez I. ( See Reply at 4.)
“Under the transactional test, a claim should not be precluded merely because it is based on facts that arose prior to the entry of judgment in the previous action.” Hatch v. Boulder Town Council, 471 F.3d 1142, 1149 (10th Cir.2006); see also Mitchell v. City of Moore, 218 F.3d 1190, 1202 (10th Cir.2000) (stating in dicta “we agree with those courts holding the doctrine of claim preclusion does not necessarily bar plaintiffs from litigating claims based on conduct that occurred after the initial complaint was filed” in the previous suit). As the Tenth Circuit stated in Hatch,
The filing of the plaintiff's complaint frames the scope of litigation, establishing a transactional nexus into which facts and claims are fitted or excluded for purposes of claim preclusion. “New” claims, arising after the complaint has been filed, but before judgment, may be excluded from this transactional nexus, and thus be litigated in a subsequent action. As the Second Circuit has explained:
For purposes of res judicata, the scope of litigation is framed by the complaint [in the prior action] at the time it is filed. The res judicata doctrine does not apply to new rights acquired during the action which might have been, but which were not, litigated. Although a plaintiff may seek leave to file a supplemental pleading [pursuant to Fed.R.Civ.P. 15(d) ] to assert a new claim based on actionable conduct which the defendant engaged in after a lawsuit is commenced, he is not required to do so.
471 F.3d at 1150 (quoting Computer Assocs. Int'l, Inc. v. Altai, Inc., 126 F.3d 365, 369–70 (2d Cir.1997)). See also Mitchell, 218 F.3d at 1202–03 (suggesting, in dicta, that the Tenth Circuit would follow the Second Circuit's approach; and collecting cases). See also, e.g., Rawe v. Liberty Mut. Fire Ins. Co., 462 F.3d 521, 530 (6th Cir.2006) (following majority rule that “the opportunity to file a supplemental complaint [to allege ongoing wrongdoing] is not an obligation.”); 18 Charles Alan Wright, Arthur R. Miller, & Edward H. Cooper, Federal Practice & Procedure § 4409, at 213 (2d ed.2002) (same).
“This does not mean, however, that a plaintiff can avoid supplementing his complaint with facts that are part of the same transaction asserted in the complaint, in the hope of bringing a new action arising out of the same transaction on some later occasion.” Hatch, 471 F.3d at 1150 (first emphasis added, second emphasis in original). Instead, “[u]nder the transactional test, a new action will be permitted only where it raises new and independent claims, not part of the previous transaction, based on the new facts.” Id. (quoting Storey v. Cello Holdings, LLC, 347 F.3d 370, 384 (2d Cir.2003)) (emphasis in original).
Plaintiff makes much of the fact that Defendant never moved to consolidate this case with Hernandez I. This portion of Hatch makes clear that Plaintiff may have had a duty to supplement her complaint in Hernandez I with the present claim.
Hatch thus makes clear that, even when the claims asserted in a second lawsuit arose after the filing date of the first lawsuit, the transactional approach still governs whether those claims are precluded. In other words, such claims may still be barred where they are part of the same transaction or series of transactions as the first lawsuit.
Under this view, the court has no doubt that Plaintiff's claim in this action is precluded. To be sure, the August, October, and November 2011 communications with Experian underlying Plaintiff's present claim may amount to separate and distinct alleged violations of the FDCPA. See, e.g., 15 U.S.C. §§ 1692e(2)(A) (prohibiting the false representation of the character, amount or legal status of any debt); 1692e(8) (a “failure to communicate that a disputed debt is disputed” constitutes a violation of the FDCPA), 1692e(10) (prohibiting the “use of any false representation or deceptive means to collect or attempt to collect any debt”). See also Goins v. JBC & Assocs., P.C., 352 F.Supp.2d 262, 266–67 (D.Conn.2005) (Even if a letter that allegedly violated the FDCPA were part of the same debt collection as a prior suit, that letter constitutes a separate event which may violate the FDCPA independently of prior communications from the defendants). Thus, in that sense, Plaintiff's present claim is arguably a “new” claim. Hatch, 471 F.3d at 1150.
However, the court finds that this “new” claim is not “ independent ” from the claims at issue in Hernandez I. Id. (emphasis added). The claims in both this action and Hernandez I challenge separate instances of the very same course of conduct—Defendant's failure to report the Debt to Experian as disputed after Plaintiff's May 5, 2011 telephone call. But see Goins, 352 F.Supp.2d at 266–67. Indeed, because Plaintiff must necessarily utilize the May 5, 2011 telephone call as evidence that she disputed the Debt, “the facts that have accumulated after the first action are [not] enough on their own ” to sustain this action. Storey, 347 F.3d at 384 (cited with approval in Hatch, 471 F.3d at 1150) (emphasis added).
A straightforward application of the transactional approach of the Restatement (Second) of Judgment further demonstrates why Plaintiff's present claim is precluded. First, Plaintiff's claim is closely related in time to the claims asserted in Hernandez. The August 2011 communication with Experian occurred only two months after the May 2011 communication at issue in Hernandez I and the October and November 2011 communications followed shortly thereafter. Second, Plaintiff's claim here and those asserted in Hernandez I all have a common origin—Plaintiff's May 5, 2011 telephone call disputing the Debt. Third, Plaintiff's motivation for filing both Hernandez I and this suit clearly are the same—to recover damages for Defendant's failure to report the Debt as disputed and prevent Defendant from doing the same in the future.
Fourth, Plaintiff's claim here also would have formed a convenient trial unit with the claims asserted in Hernandez I. Trial in Hernandez I did not commence until September 10, 2012, over a year subsequent to the August 2011 communication and over ten months subsequent to the last complained of report in November 2011. If Plaintiff would have supplemented her complaint in Hernandez I to add her present claims, the Hernandez I jury would have been called upon to determine only whether a few additional communications to Experian, which were essentially identical to the one it actually considered, constituted a violation of the FDCPA. Indeed, in this respect, Plaintiff's attempt to assert her present claim here, rather by way of a supplemental complaint in Hernandez I, amounts to a waste of scare judicial resources. Defendant also had, and Plaintiff should have had, a reasonable expectation that all challenges to Defendant's conduct would be conclusively resolved in a single action.
Ultimately, the court finds that, even though the alleged violations of the FDCPA at issue in this case occurred after Plaintiff filed suit in Hernandez I, those violations were part of the same transaction or series of transactions as the conduct challenged in Hernandez I. As such, pursuant to Hatch, the court finds that Plaintiff's claim in this action is precluded by the final judgment entered in Hernandez I.
Defendant also argues that Plaintiff chose to assert his present claim in this action rather than in Hernandez I in order to circumvent the statutory damages limit for each lawsuit. (Mot. at 8 (citing White v. Bruck, 927 F.Supp. 1168 (W.D.Wis.1996) for the proposition that statutory damages under the FDCPA are capped at a maximum of $1,000 per lawsuit, not per violation)). The court acknowledges the possibility that this was Plaintiff's motivation for filing this suit separately from Hernandez I. Nevertheless, the court need not address this argument to determine whether claim preclusion applies. See also Goins, 352 F.Supp.2d at 267 (There is no prohibition in the FDCPA against separate lawsuits for separate violations of the FDCPA by the same defendant).
II. MOTION TO COMPEL
Plaintiff has now propounded in this new case significantly burdensome discovery requests both including information she received in Hernandez I and additional far reaching requests. Fed.R.Civ.P. 26(b)(2)(C) provides:
(C) When Required. On motion or on its own, the court must limit the frequency or extent of discovery otherwise allowed by these rules or by local rule if it determines that:
(i) the discovery sought is unreasonably cumulative or duplicative, or can be obtained from some other source that is more convenient, less burdensome, or less expensive;
(ii) the party seeking discovery has had ample opportunity to obtain the information by discovery in the action; or
(iii) the burden or expense of the proposed discovery outweighs its likely benefit, considering the needs of the case, the amount in controversy, the parties' resources, the importance of the issues at stake in the action, and the importance of the discovery in resolving the issues.
Id. This court finds that the discovery sought in this matter is cumulative and duplicative of that received and deemed sufficient for a trial on the merits in Hernandez I. Further to allow such expansive extra discovery as sought by Plaintiff far exceeds the amount reasonable given the limited amounts which are at stake in the action and the importance of the discovery in resolving the issues. In fact, it is clear to this court that Plaintiff is simply attempting to drive the costs of litigation between these parties up to force future settlements in similar cases. There are at least eight cases in this district which have been brought by Plaintiff's attorney against this defendant and well over one hundred FDCPA cases represented by the same counsel as is present in this case on both sides of the litigation, albeit with different parties. Discovery is designed to afford the parties to litigation an opportunity to fully explore the factual basis for their claims and defenses in preparation for trial, not to cause “annoyance, embarrassment, oppression, or undue burden or expense....” Fed.R.Civ.P. 26(c)(1).
In addition, the power to stay proceedings is incidental to the power inherent in every court to control the disposition of the cases on its docket with economy of time and effort for itself, for counsel, and for litigants. How this can best be done calls for the exercise of judgment, which must weigh competing interests and maintain an even balance. Kansas City Southern Ry. Co. v. United States, 282 U.S. 760, 763, 51 S.Ct. 304, 75 L.Ed. 684 (1931).
The Federal Rules of Civil Procedure do not expressly provide for a stay of proceedings. See String Cheese Incident, LLC v. Stylus Shows, Inc., 02–cv–01934–LTB–PAC, 2006 WL 894955, *2 (D.Colo.2006) (unpublished). Fed.R.Civ.P. 26(c) does, however, provide
A party or any person from whom discovery is sought may move for a protective order in the court where the action is pending ... The court may, for good cause, issue an order to protect a party or person from annoyance, embarrassment, oppression, or undue burden or expense ...
Id. This court, when considering a stay of discovery, may consider and weigh: “(1) plaintiff's interests in proceeding expeditiously with the civil action and the potential prejudice to plaintiff of a delay; (2) the burden on the defendants; (3) the convenience to the court; (4) the interests of persons not parties to the civil litigation; and (5) the public interest.” Id.; See also FDIC v. Renda, No. 85–2216–0, 1987 WL 348635, *2 (D.Kan. Aug. 6, 1987) (unpublished). Indeed, “a court may decide that in a particular case it would be wise to stay discovery on the merits until [certain challenges] have been resolved.” 8 Charles Alan Wright et al., Federal Practice and Procedure § 2040, at 521–22 (2d ed. 1994) (“[W]hen one issue may be determinative of a case, the court has discretion to stay discovery on other issues until the critical issue has been decided.”); see also Vivid Techs., Inc. v. Am. Sci. & Eng'g, Inc., 200 F.3d 795, 804 (Fed.Cir.1999) (“When a particular issue may be dispositive, the court may stay discovery concerning other issues until the critical issue is resolved.”).
In weighing the factors for determination of the propriety of a stay, the court finds that a stay is appropriate here.
Therefore it is ORDERED
1. “Plaintiff's Motion to Compel the Defendant's Responses to the Plaintiff's Written Discovery Requests Pursuant to Fed.R.Civ.P. 33, 34, and 37” (Doc. No. 33) is DENIED and the Motion Hearing set for April 8, 2013 is VACATED.
2. Discovery in this case is STAYED pending ruling on this court's Recommendation as set forth herein.
Further, the court respectfully
RECOMMENDS that “Defendant Asset Acceptance, LLC's Motion to Dismiss” (Doc. No. 13) be GRANTED and that this action be dismissed with prejudice.
ADVISEMENT TO THE PARTIES
Within fourteen days after service of a copy of the Recommendation, any party may serve and file written objections to the Magistrate Judge's proposed findings and recommendations with the Clerk of the United States District Court for the District of Colorado. 28 U.S.C. § 636(b)(1); Fed.R.Civ.P. 72(b); In re Griego, 64 F.3d 580, 583 (10th Cir.1995). A general objection that does not put the district court on notice of the basis for the objection will not preserve the objection for de novo review. “[A] party's objections to the magistrate judge's report and recommendation must be both timely and specific to preserve an issue for de novo review by the district court or for appellate review.” United States v. One Parcel of Real Prop. Known As 2121 East 30th Street, Tulsa, Okla., 73 F.3d 1057, 1060 (10th Cir.1996). Failure to make timely objections may bar de novo review by the district judge of the magistrate judge's proposed findings and recommendations and will result in a waiver of the right to appeal from a judgment of the district court based on the proposed findings and recommendations of the magistrate judge. See Vega v. Suthers, 195 F.3d 573, 579–80 (10th Cir.1999) (a district court's decision to review a magistrate judge's recommendation de novo despite the lack of an objection does not preclude application of the “firm waiver rule”); One Parcel of Real Prop., 73 F.3d at 1059–60 (a party's objections to the magistrate judge's report and recommendation must be both timely and specific to preserve an issue for de novo review by the district court or for appellate review); Int'l Surplus Lines Ins. Co. v. Wyo. Coal Ref. Sys., Inc., 52 F.3d 901, 904 (10th Cir.1995) (by failing to object to certain portions of the magistrate judge's order, cross-claimant had waived its right to appeal those portions of the ruling); Ayala v. United States, 980 F.2d 1342, 1352 (10th Cir.1992) (by their failure to file objections, plaintiffs waived their right to appeal the magistrate judge's ruling); but see, Morales–Fernandez v. INS, 418 F.3d 1116, 1122 (10th Cir.2005) (firm waiver rule does not apply when the interests of justice require review).
Dated this 8th day of April, 2013.