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Lyneisha Ford v. Principal Recovery Group

March 19, 2012

LYNEISHA FORD, PLAINTIFF,
v.
PRINCIPAL RECOVERY GROUP, INC. DEFENDANT .



The opinion of the court was delivered by: John T. Curtin United States District Judge

INTRODUCTION

Plaintiff Lyneisha Ford commenced this action against defendant Principal Recovery Group, Inc. on June 17, 2009, alleging that defendant's verbal and written attempts to collect overdue debts violated the Fair Debt Collection Practices Act ("FDCPA"), 15 U.S.C. §§ 1692e, e(4), e(5), e(10) and e(11). On November 26, 2010, defendant moved for summary judgment to dismiss these claims pursuant to Federal Rule of Civil Procedure 56, for attorney's fees pursuant to 15 U.S.C. § 1692k(a)(3), for costs pursuant to Federal Rule of Civil Procedure 37(c)(2), for costs and attorney's fees to be paid by plaintiff's counsel pursuant to 28 U.S.C. § 1927, and for sanctions pursuant to Federal Rule of Civil Procedure 11 (Items 29, 32). On November 29, 2010, plaintiff moved to stay defendant's summary judgment motion pending the deposition of Dr. Timothy Mahoney, plaintiff's dentist and creditor (Item 40). By order of the Hon. William M. Skretny, Chief United States District Judge, dated September 23, 2011 (Item 46), this matter was reassigned to the undersigned for all further proceedings. On September 29, 2011, this court denied plaintiff's motion for a stay and granted defendant's motions for summary judgment, for costs pursuant to Federal Rule of Civil Procedure 37(c)(2), and for sanctions pursuant to Federal Rule of Civil Procedure 11, but denied defendant's motion for FDCPA attorney's fees and for costs pursuant to 28 U.S.C. § 1927 (Item 47).

Plaintiff moved to vacate the summary judgment and sanctions order on October 27, 2010, stating that she did not file papers to oppose defendant's motions because she was awaiting this court's ruling on the stay motion (Item 52). On November 4, 2011, this court vacated the September 30, 2011 summary judgment and sanctions order to provide plaintiff with the opportunity to file responses to defendant's motions (Item 54). On December 5, 2011, plaintiff filed responses to defendant's motion for sanctions and summary judgment (Items 55, 56), and moved to strike the affidavit of Dr. Timothy Mahoney (Item 57).

Presently before the court are defendant's motions for summary judgment and for sanctions, and plaintiff's motion to strike Dr. Mahoney's affidavit accompanying defendant's summary judgment motion.

BACKGROUND and FACTS

Plaintiff Lyneisha Ford obtained dental services from Dr. Timothy Mahoney on or about January 3, 2007 and was charged $180.39 (Item 34, ¶¶ 3, 4). Plaintiff, by her own admission, did not pay her bill (Item 32, Exh. E, pp. 31-32). Subsequently, Dr. Mahoney referred his unpaid accounts to defendant Principal Recovery Group, Inc. for collection, including plaintiff's unpaid dental services bill (Item 34, ¶ 13).

Defendant made its initial attempt to collect plaintiff's unpaid debt by mailing a collection letter to her advising her of the unpaid status of her account on January 17, 2008 (Item 30, Exh. A). Plaintiff admitted receiving this letter, but did not respond to it (Item 32, Exh. E, pp. 33-34). Defendant sent another collection letter to plaintiff on March 19, 2009, again advising her of the unpaid status of her account (Item 30, Exh.

B). The letter stated that "[t]his is an attempt to collect a debt. Any information obtained will be used for that purpose." Id. Plaintiff telephoned defendant to discuss the debt on April 1, 2009 in an attempt to reach a settlement (Item 32, Exh E, p. 61). During the conversation with an employee of the defendant, plaintiff informed the debt collector that she would speak with Dr. Mahoney about the status of the debt and call defendant's office back. Id., p. 50-51.

Later that day, plaintiff called defendant again and spoke with Eva Toy, a debt collector employed by defendant. Plaintiff stated that she recorded the telephone call with a cellular telephone recording device (Item 32, Exh. E, p. 51-52). The recording device was unable to record plaintiff's voice, however, so only Ms. Toy's responses were recorded and transcribed. Id., p. 53. Below are the relevant statements made by Ms. Toy that plaintiff alleges violate the FDCPA:

Right, yeah if it is not collected he sends it to his attorney and then they file. And then if they, if they . yeah exactly, they give a judgment and then it gets taken out of your, if you're employed it gets taken out of your employment check. .

We are a collection agency. So, at this point we have thirty (30) days before it gets posted to your credit history. And then it goes back.

And they, I just received it in my office today. So, we usually give thirty days to see if the debtor is willing to pay. If not, then we post it to your, they don't post it, we post it to your credit report.

Usually they keep it in there (sic) office to see if you are willing to attempt to pay it. . However, if the patient is not willing to settle the matter then what they do is send it to collections and then after, you know, if the debtor is willing to pay great. If not, what they do is they just do a judgment and they send it to court. They get a judgment and they garnish your wages. . (Item 32, Exh. C).

Plaintiff commenced this action June 17, 2009, alleging that the aforementioned statements by Ms. Toy violated the FDCPA (Item 1, ¶ 22). Specifically, plaintiff alleged that defendant violated: 15 U.S.C. §§ 1692e and e(11) "by not stating in the initial oral communication with [p]laintiff that the communication was from a debt collector in an attempt to collect a debt"; 15 U.S.C. §§ 1692e and e(10) "by falsely and deceptively stating that the [overdue account] had just come into their office, when in fact [d]efendant had the account for over a year"; 15 U.S.C. §§ 1692e, e(4), and e(5) "by stating nonpayment of the debt will result in garnishment of her wages, an action [d]efendant d[id] not intend to pursue and cannot legally pursue." Id..

On August 27, 2010, after depositions of Ms. Toy and the collection agency owner were conducted, defendant wrote a letter to plaintiff's counsel demanding that plaintiff withdraw "this frivolous lawsuit," and warned that defendant would seek sanctions if plaintiff did not withdraw the action (Item 32-3, Exh. I). Plaintiff responded on September 9, 2010 by filing a motion to dismiss her claim for actual damages (Item 20).*fn1

On October 28, 2010, defendant served plaintiff with notice of its intent to file a motion for sanctions pursuant to Federal Rule of Civil Procedure 11, alleging that plaintiff and her counsel were well-versed in the FDCPA and knew from the inception of this action that her claims had no factual basis (See generally Item 29, pp. 8-15). Shortly thereafter, on November 4, 2010, plaintiff filed a motion to dismiss her 15 U.S.C. ยง 1692e(11) claim, in which she alleged that defendant's employee did not disclose to plaintiff that she was, ...


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