The opinion of the court was delivered by: Honorable Richard J. Arcara United States District Judge
Pending before the Court is one post-trial motion each by plaintiff Angela Clayson and defendant Rubin & Rothman, LLC.
In plaintiff's motion (Dkt. No. 51), plaintiff seeks vacation of the final judgment entered on June 9, 2010 (Dkt. No. 50) following a defense verdict on May 28, 2010. With respect to her claims under Sections 1692b(2) and 1692c(b) of the Fair Debt Collection Practices Act ("FDCPA"),*fn1 plaintiff seeks judgment as a matter of law under Rule 50(b)(3) of the Federal Rules of Civil Procedure ("FRCP") or, in the alternative, a new trial under FRCP 59(a)(1)(A). With respect to her claims under 15 U.S.C. §§ 1692e(4), 1692e(5), and 1692f, plaintiff seeks a new trial without requesting judgment as a matter of law.
Plaintiff seeks this relief on the grounds that defendant admitted at trial to communications that establish strict liability, and that the jury ignored this admission and other evidence favorable to her because of unfairly prejudicial comments that defense counsel made in front of the jury.
Meanwhile, defendant has made a motion (Dkt. No. 67) seeking costs and fees for what it considers abusive litigation maintained in bad faith. Defendant bases its request for costs and fees on three sources of legal authority: 15 U.S.C. § 1692k(a)(3); 28 U.S.C. § 1927; and the Court's "inherent power" to manage its cases, which includes the power to levy sanctions in response to improper attorney conduct. In short, defendant seeks costs and fees on the grounds that plaintiff's counsel failed to conduct a proper investigation of plaintiff's claims. According to defendant, an investigation at the beginning of the case would have exposed plaintiff's claims as false and would have spared its employee and principal trial witness, Barry Mack, extreme emotional distress and embarrassment.
The Court held oral argument for both motions on October 18, 2010. For the reasons below, the Court will grant plaintiff's motion in part and direct judgment as a matter of law with respect to her claims under 15 U.S.C. §§ 1692b(2) and 1692c(b). The Court will deny plaintiff's motion in all other respects. Further, the Court will deny defendant's motion in its entirety.
This case concerns plaintiff's allegations that defendant violated the FDCPA when it tried to collect a debt from her. The circumstances underlying the debt are not in dispute. After an electrocution injury in 2004 that left her unable to work, plaintiff fell behind in car payments that she owed to Ford Motor Credit Company ("FMCC"). FMCC eventually repossessed plaintiff's car and sold it at auction, but then asserted that plaintiff owed the difference between the auction sale price and the contractual value of the car to which plaintiff had agreed when she acquired it. This difference became the debt in question, an amount of approximately $4,000--4,500. After a period of time when plaintiff did not pay the debt, FMCC referred the debt to defendant for collection.
How defendant allegedly acted after the referral of the debt became the factual basis for this case. Defendant's employee, Mr. Mack, testified at trial that defendant's efforts to collect the debt included two messages that he left on the answering machine of plaintiff's mother, Lois Fancher. Mr. Mack left these messages for Ms. Fancher after he dialed a telephone number registered to Ms. Fancher at Ms. Fancher's residence. Mr. Mack left the first telephone message in January 2007, several months before plaintiff moved in with her mother from late May through July 5, 2007. Mr. Mack left the second telephone message at an unspecified later time in 2007. In these messages, Mr. Mack disclosed to Ms. Fancher that he was attempting to reach plaintiff in connection with a debt that she owed. In response to communications from Mr. Mack, Ms. Fancher sent Mr. Mack by fax several pages of plaintiff's medical records, to confirm plaintiff's recent surgeries and inability to pay the debt. At trial and at oral argument for the pending motions, defendant never asserted that plaintiff ever provided either FMCC or it with her mother's telephone number. At no time has defendant explained how it acquired Ms. Fancher's telephone number or how plaintiff might have authorized communication with her mother. In contrast, Mr. Mack testified at trial that defendant's telephone message system is designed in such a way that it can wind up leaving messages for non-debtor third parties disclosing that it is attempting to collect a debt against a specified debtor.
Plaintiff placed a second set of factual allegations in controversy as part of her claims. During the course of his communications with plaintiff, Mr. Mack allegedly made threats to the effect that defendant would access plaintiff's bank accounts as needed to satisfy the debt in question, even if the only funds in those bank accounts were Social Security Disability benefits.*fn2 Plaintiff has alleged that this threat caused her great distress and caused her to consider depositing her Social Security Disability benefits in the bank accounts of relatives to shield her from defendant's threatened actions. At trial, the parties sharply contested whether any sort of threat about Social Security Disability benefits occurred at all and how seriously plaintiff should have taken such a threat if it occurred.
Plaintiff commenced this case by filing her complaint on January 24, 2008. In her complaint, plaintiff accused defendant of violating the FDCPA by communicating with her mother, Ms. Fancher, without permission and by threatening to drain all of her bank accounts even if the only funds in those accounts were Social Security Disability benefits. As the case unfolded, plaintiff never made a motion for summary judgment, but defendant did make a motion for summary judgment that the Court denied. The Court presided over the trial on May 25--28, 2010 and orally denied FRCP 50 motions from each side. As indicated on the jury verdict form (Dkt. No. 49), the Court consolidated the alleged statutory violations in the complaint into two questions: 1) whether defendant communicated with plaintiff's mother in a way that violated Sections 1692b and 1692c of the FDCPA; and 2) whether defendant made a threat to plaintiff that violated Sections 1692e and 1692f of the FDCPA. The jury returned its verdict on May 28, 2010 and found for defendant on both questions.
Although the parties have not quite stated their positions this succinctly, both pending motions hinge on whether the jury's verdict can stand as a matter of law. Defendant argues that the jury verdict should stand because it reflected a reasoned decision that defendant, through Mr. Mack, was the more credible party. Defendant argues further that sanctions in the form of costs and fees are appropriate because the trial exposed testimony from plaintiff and her mother that was so conflicted or otherwise incredible that plaintiff's counsel never should have prosecuted this case. According to defendant, plaintiff's counsel's decision to press forward anyway could reflect only a bad-faith effort to smear the firm and to cause Mr. Mack great emotional distress. Plaintiff contends that defendant explicitly admitted to leaving unauthorized messages on her mother's answering machine, thereby requiring a verdict in her favor as to that claim because the FDCPA is a strict-liability statute. Plaintiff contends further that the jury ignored this evidence and evidence of a threat to ...