Opinion
Civil Nos. 02-1072 (DWF/AJB), 02-1073 (DWF/AJB).
December 19, 2002
Steven T. Appelget, Esq., Appelget Law Office, 1102 Grand Avenue, St. Paul, MN 55105, counsel for Plaintiff and Counter-defendant pro se.
Michael L. Brutlag, Esq., and Ryan J. Trucke, Esq., Brutlag Hartmann Okoneski, 1100 Pillsbury Center, 200 Sixth Street South, Minneapolis, MN 55402, counsel for Defendants and Counter-claimants.
MEMORANDUM OPINION AND ORDER
Introduction
The above-entitled matters came on for hearing before the undersigned United States District Judge on December 13, 2002, pursuant to Plaintiff's Motion for Summary Judgment, Defendants' Motion for Summary Judgment, and Counter-defendant's Motion to Dismiss or for Summary Judgment. These cases involve claims arising out of Defendants' attempts to collect certain debts owed by Plaintiff. For the reasons set forth below, Plaintiff's motion for summary judgment is denied, Defendants' motion for summary judgment is granted, and Counter-defendant's motion to dismiss is granted.
Counter-claimants stipulated to dismissal of the counter-claim during oral argument. Accordingly, the Court will not spend any time analyzing the propriety of the counter-claim having been brought in the first instance and will, instead, simply dismiss the claim.
Background
In or around March of 2001, Plaintiff David Shaffer ("Shaffer") wrote three checks to McDonald's — checks numbered 1476, 1481, and 1486 — each for an amount under $20. All three checks were dishonored by Shaffer's bank. As a matter of course, McDonald's referred the checks to Defendant JNR Adjustment ("JNR") for collection. JNR retained Defendants Steven T. Rosso and Steven T. Rosso, P.A. (collectively, the Rosso Defendants).On May 22, 2001, the Rosso Defendants sent three letters to Shaffer. The letters were styled as settlement offers. The letters were identical except with respect to the file number referenced, the check number referenced, and the date and amount of the check at issue. Each settlement offer made a demand of the amount of the check, plus a $20 service charge, plus $100 (as the potential civil liability imposed by Minnesota statute).
On February 25, 2002, Shaffer's attorney sent a letter to both the Rosso Defendants and JNR. The letter referenced a particular file number and the "May 22, 2001 communication" from the Rosso Defendants to Shaffer. In the letter, Shaffer's attorney indicated that the nature of the demand for the full $100 potential civil penalty misrepresented the fact that the $100 amount is an upper limit to what a judge can impose and that the judge has discretion to award a significantly smaller penalty. The letter also indicated that the May 22 letter suggested that Shaffer could not discharge his debt simply by paying the amount of the check plus the $20 processing fee. Shaffer's attorney stated his belief that these misrepresentations were violations of the Fair Debt Collection Practices Act.
In the February 25 correspondence, Shaffer's attorney offered to settle the matter for $5,000 and a general mutual release. The February 25 letter included a copy of a draft complaint that would be filed on Shaffer's behalf. The draft complaint references a check for $5.52 written by Shaffer on March 13, 2001 (check number 1481).
Counsel for the Rosso Defendants agreed to enter into a settlement agreement with Shaffer. The Rosso Defendants paid Shaffer $1,500. The parties then entered into a release and confidentiality agreement. Under the terms of that agreement, Shaffer released "any and all claims . . . that Shaffer ever had or now has, against Released Parties by reason of any matter or thing arising out of or in connection with the transactions, allegations, claims and demands, whether asserted or unasserted, set forth in the Claim, or arising out of or in connection with the factual circumstances described in the claim."
Approximately a week later, Shaffer filed two separate civil complaints with this Court, one premised on check number 1476 and one premised on check number 1486. The complaints allege violations of the Fair Debt Collection Practices Act ("FDCPA") arising out of the May 22, 2001, correspondence sent by the Rosso Defendants to Shaffer.
Discussion
1. Standard of Review
Summary judgment is proper if there are no disputed issues of material fact and the moving party is entitled to judgment as a matter of law. Fed.R.Civ.P. 56(c). The court must view the evidence and the inferences which may be reasonably drawn from the evidence in the light most favorable to the nonmoving party. Enterprise Bank v. Magna Bank of Missouri, 92 F.3d 743, 747 (8th Cir. 1996). However, as the Supreme Court has stated, "[s]ummary judgment procedure is properly regarded not as a disfavored procedural shortcut, but rather as an integral part of the Federal Rules as a whole, which are designed 'to secure the just, speedy, and inexpensive determination of every action.'" Fed.R.Civ.P. 1. Celotex Corp. v. Catrett, 477 U.S. 317, 327 (1986).
The moving party bears the burden of showing that there is no genuine issue of material fact and that it is entitled to judgment as a matter of law. Enterprise Bank, 92 F.3d at 747. The nonmoving party must demonstrate the existence of specific facts in the record which create a genuine issue for trial. Krenik v. County of Le Sueur, 47 F.3d 953, 957 (8th Cir. 1995). A party opposing a properly supported motion for summary judgment may not rest upon mere allegations or denials, but must set forth specific facts showing that there is a genuine issue for trial. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 256 (1986); Krenik, 47 F.3d at 957.
2. Release
The Defendants assert that Shaffer's claims against the Rosso Defendants in both lawsuits are barred under the terms of the release and confidentiality agreement Shaffer signed. The Court agrees.
The release covers "any and all claims . . . that Shaffer ever had or now has, against [the Rosso Defendants] by reason of any matter or thing arising out of or in connection with the . . . allegations [and] claims . . . set forth in the Claim . . . ." The "claim" referenced was Shaffer's claim that certain language in the May 22, 2001, letter violated the FDCPA. Certainly Shaffer's current allegations — that identical language in two letters sent the very same day violates the very same statute — are connected to the allegations set forth in his February 2002, demand letter and draft complaint.
It is true that the draft complaint mentions only one check and that the February 2002, demand letter references only one file number. However, the release language is not limited to potential claims arising out of the specific factual predicate of the draft complaint or to the specific claims made in the demand letter. Rather, the release language specifically applies to any potential claims arising in connection with the legal claims made in the draft complaint. The claims raised in these two lawsuits clearly and unambiguously fall within the ambit of the release language.
The Court notes that Shaffer's tactics in these matters are disingenuous at best. Shaffer contends that he did not intend for either the $5,000 demand letter or the release to cover any claims related to the other checks. The Court notes that Shaffer has no evidence of actual damages and, thus, he could only expect to recover the $1,000 statutory penalty plus fees and costs; in that context, a demand for $5,000 relating to one check only seems patently unreasonable. Moreover, Shaffer did not send demand letters or offers of settlement on the other checks. If he was able to achieve a satisfactory resolution on one check, without resort to litigation, why not attempt to settle the identical claims arising out of the other checks? If, in fact, Shaffer meant the settlement to pertain only to the one check, the entire scenario smacks of tricky lawyering and misdirection. Although the Court finds that the claims in these suits fall within the scope of the plain language of the release, Shaffer's behavior — viewed in the best possible light — provides circumstantial evidence that the parties intended to release potential claims related to all three checks.
3. JNR's Liability
Shaffer asserts that JNR is liable for any statutory violations contained in the May 22 letter because the Rosso Defendants were agents of JNR and were acting within the scope of their agency in sending the offensive letter. In support of this proposition, Shaffer relies on his assertion that attorneys are, as a matter of law, always agents of their clients and on JNR's admission in its Answer that the Rosso Defendants were acting within the scope of their authority.
In Minnesota, "[t]he law is clear that an agency relationship does not exist unless there are facts showing that the alleged principal had the right to control the agent's conduct in performing the services." Vieths v. Ripley, 295 N.W.2d 659, 664 (Minn. 1980). Although the existence of an agency relationship is a question of fact, the party alleging the agency relationship bears the burden of proof. See White v. Boucher, 322 N.W.2d 560, 566 (Minn. 1982). The record before the Court is utterly devoid of any evidence that JNR retained the right to control the manner in which the Rosso Defendants performed collection services. Indeed, the uncontroverted evidence in the record indicates that the JNR had no contact with the Rosso Defendants about the collection efforts after the initial retention and that the only limit JNR imposed on the Rosso Defendants was that they proceed in a lawful manner.
In the absence of any evidence — even circumstantial — of one key element of an agency relationship, the Court must hold as a matter of law that there was no agency relationship between the Rosso Defendants and JNR. Accordingly, the Court never reaches the question of whether the Rosso Defendants were acting within the scope of their authority and, instead, grants summary judgment in favor of JNR.
For the reasons stated, IT IS HEREBY ORDERED:
1. Defendants' Motions for Summary Judgment (File No. 02-1072, Doc. No. 19 and File No. 02-1073, Doc. No. 21) are GRANTED and the COMPLAINTS are DISMISSED WITH PREJUDICE.
2. Plaintiff's Motions for Summary Judgment (File No. 01-1072, Doc. No. 16 and File No. 02-1073, Doc. No. 17) are DENIED.
3. Third-Party Defendant's Motions to Dismiss the Counter-claims (File No. 02-1072, Doc. No. 12 and File No. 02-1073, Doc. No. 13) are GRANTED and the COUNTER-CLAIMS are DISMISSED WITHOUT PREJUDICE.
LET JUDGMENT BE ENTERED ACCORDINGLY.