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Pearce v. Ethical Asset Management

March 10, 2010

ASHLEY PEARCE AND CINDY LOU PEARCE, PLAINTIFFS,
v.
ETHICAL ASSET MANAGEMENT, INC., DEFENDANT.



The opinion of the court was delivered by: William M. Skretny Chief Judge United States District Judge

DECISION AND ORDER

I. INTRODUCTION

On October 26, 2007, Plaintiffs filed a complaint alleging various violations of the Fair Debt Collection Practices Act ("FDCPA"), 15 U.S.C. §§ 1692, et seq. Defendant failed to appear and defend this action, which resulted in the Clerk of the Court entering default on March 25, 2008. Presently before this Court is Plaintiffs' Motion for Default Judgment pursuant to Rule 55(b)(2) of the Federal Rules of Civil Procedure.*fn1 For the following reasons, Plaintiffs' motion is granted.

II. BACKGROUND

Ashley Pearce is Cindy Lou Pearce's daughter. (Complaint, Docket No. 1, ¶¶ 4, 5.) Defendant Ethical Asset Management, Inc., is a "debt collector" within the meaning of the FDCPA. (Id. at ¶ 7.)

Ashley incurred a credit card debt to Clout Visa. (Id. at ¶ 11.) After Ashley failed to pay the debt, Clout Visa employed Defendant to collect it. (Id. at ¶ 14.) In July and August 2007, Defendant left multiple messages on Ashley's telephone answering machine requesting that she call "our law office" to discuss repayment of the debt. (Id. at ¶ 15.) One message threatened that Defendant would take Ashley to court if she did not return the call within 24 hours. (Id. at ¶ 16.) Cindy overheard many of these messages, including the disclosures in the messages that Ashley owed a debt. (Id. at ¶ 17.)

In August 2007, Defendant spoke with Cindy and disclosed that it was attempting to collect a debt from Ashley. (Id. at ¶ 18.) Defendant told Cindy that if Ashley did not pay the debt within 24 hours, it would take her to court and garnish her wages. (Id.) Because Cindy feared that Ashley could lose her job, she agreed to begin making monthly payments of $259. (Id. at ¶ 19.) To that end, Cindy authorized Defendant to take three draws of $259 from her checking account in September, October, and November, respectively. (Id.) Cindy then advised Ashley of this conversation. (Id. at ¶ 20.)

On August 14, 2007, Cindy called Defendant and spoke to Heather Jacobs, who identified herself as a debt collector. (Id. at ¶ 21.) Cindy advised Jacobs that she wanted to revoke the previous authorization to make monthly draws from her account, to which Jacobs responded that it was "too late to revoke." (Id.) Jacobs then asked to speak to Ashley, and advised her that Defendant was not going to take the monthly draws from Cindy's account, but instead, was going to take Ashley to Niagara County Court. (Id.) Jacobs screamed at Ashley, used profanity, and hung up on her. (Id.)

In September 2007, Defendant deducted $259 from Cindy's bank account, despite her revocation of the authorization to do so. (Id. at ¶ 22.) Cindy immediately called Defendant and requested that the payment be reversed and that no further deductions be processed. (Id. at ¶ 23.) Defendant refused Cindy's request and stated that it would make similar draws in October and November 2007.*fn2 (Id.) As a result of the draw September 2007 draw, Cindy's bank account lacked sufficient funds to cover other checks she had written, leaving her with incurred bank charges for bounced checks. (Id. at ¶ 24.)

Plaintiffs maintain that Defendant never sent them letters advising that it intended to submit Cindy's previously-authorized payment to her bank. (Id. at ¶ 25.) Moreover, at the time of Defendant's calls, neither Defendant nor the creditor had decided to file a lawsuit against Ashley to collect the debt, and they had no intention to do so at the time the calls were made. (Id. at ¶¶ 26, 27.)

As a result of Defendant's conduct, Plaintiffs each claim to have suffered actual damages, including becoming nervous, anxious, upset, and suffering from emotional distress. (Id. at ¶¶ 28, 31.)

III. DISCUSSION

A. Default Judgment Standard

Before obtaining default judgment, a party must first secure a Clerk's Entry of Default by demonstrating, by affidavit or otherwise, that the opposing party is in default. See FED. R. CIV. P. 55(a). Once default has been entered, the allegations of the Complaint that establish the defendant's liability are accepted as true, except for those relating to the amount of damages.Greyhound Exhibitgroup, Inc. v. E.L.U.L. Realty Corp., 973 F.2d 155, 158 (2d Cir. 1992).

In considering whether to enter default judgment, the court must determine whether the facts alleged in the Complaint are sufficient to state a claim for relief as to each cause of action for which the plaintiff seeks default judgment. Further, where the damages sought are not for a sum certain, the court must determine the propriety and amount of the default judgment. See FED. R. CIV. P. 55(b)(2). Damages must be established by proof, unless the damages are liquidated or "susceptible of mathematical computation." Flaks v. Koegel, 504 F.2d 702, 707 (2d Cir. 1974). All reasonable inferences from the evidence presented are drawn in the moving party's favor. See Au Bon Pain Corp. v. Artect, Inc., 653 F.2d 61, 65 (2d Cir. 1981).

B. Liability

1. Clams Under 15 U.S.C. §§ 1692e, 1692e (5), 1692e (10), 1692d, and 1692f

Section 1692e prohibits debt collectors from using false, deceptive, or misleading representations to collect a debt. ...


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