Lyon et al v. Chase Bank USA, N.A., No. 3:2007cv01779 - Document 59 (D. Or. 2009)

Court Description: OPINION AND ORDER - ADOPTING the magistrate judge's Amended Findings and Recommendation 53 in its entirety. Plaintiffs' motion 29 for partial summary judgment is DENIED. Defendant Chase's motion 14 for partial summary judgmen t is GRANTED IN PART and DENIED IN PART as follows: Defendant's motion is GRANTED as to plaintiff Kruse's lack of standing, DENIED as to plaintiff's defamation claim, GRANTED as to plaintiffs' IIED claim, and GRANTED as to plaintiffs' UDCPA claim. IT IS SO ORDERED. Signed on 7/17/09 by Judge Garr M. King. (peg)

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IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF OREGON BARBEE B. LYON and JOAN KRUSE, Plaintiffs, CV 07-1779-AC OPINION AND ORDER v. CHASE BANK USA, N.A., Defendants. BARBEE B. LYON Tonkon Torp LLP 1600 Pioneer Tower 888 S.W. Fifth Ave. Portland, OR 97204-2C99 (503) 802-2020 Attorneys for Plaintiffs JOHN L. LANGSLET MICHAEL J. FARRELL Martin Bischoff Templeton Langslet & Hoffman LLP 888 S.W. 5 th Ave., Suite 900 Portland, OR 97204 (503) 224-3113 Attorneys for Defendant 1 - OPINION AND ORDER MARSH, Judge: On April 27, 2009, Magistrate Judge Acosta issued an Amended Findings and Recommendation (F&R) (doc. 53) denying plaintiffs' Motion for Partial Summary Judgment (doc. 29) and granting in part and denying in part defendant Chase Bank USA, N.A.'s Motion for Partial Summary Judgment (doc. 14). Plaintiffs filed timely objections (doc. 56) to some but not all of the magistrate judge's findings, legal conclusions, and ultimate recommendations. When any party objects to any portion of the magistrate judge's Findings and Recommendation on a dispositive motion, the district court must make a de novo determination of that portion of the magistrate judge's report. 28 U.S.C. § 636(b) (1). The district court may accept, reject, or modify the recommended disposition, receive further evidence, or return the matter to the magistrate judge with instructions. Fed. R. Civ. P. 72(b). United States v. Bernhardt, 840 F.2d 1441, 1444 (9 th Cir. 1988). As to any portion of the F&R to which no objection is made, the district court must review de novo only the legal principles applied by the magistrate judge. School Dist., 708 F.2d 452, 454 Britt v. Simi Valley Unified (9 th Cir. 1983). For the following reasons, I adopt the magistrate judge's Findings and Recommendation in its entirety. 2 - OPINION AND ORDER BACKGROUND Plaintiffs Lyon and Kruse are husband and wife. They brought this action against defendant Chase Bank USA, N.A. (Chase) alleging statutory claims under the Fair Credit Billing Act (FCBA), 15 U.S.C. § 1566 et seq., and the Oregon Unfair Debt Collection Practices Act (UDCPA), Ore. Rev. Stat. 646.639 et ~., and common law claims for defamation and intentional infliction of emotional distress (lIED). The claims arose from a billing dispute between the parties relating to defendant's efforts to collect payment on a $645.00 credit card charge. The card was issued to plaintiff Lyon. Plaintiff Kruse was an authorized user on the card. The parties filed cross-motions for partial summary judgment. Plaintiffs sought a declaratory ruling that a prevailing party is entitled to recover a statutory penalty for each separate violation of the FCBA. Defendant sought partial summary judgment that (a) plaintiff Kruse lacks standing to assert a claim, or in the alternative, can prove no set of facts that would allow her a recovery under the FCBA, (b) defendant is entitled to a judgment as a matter of law as to plaintiffs' defamation claim, (c) defendant is entitled to a judgment as a matter of law as to plaintiffs' lIED claim, and (d) plaintiffs failed to state a claim under Oregon's UDCPA. 3 - OPINION AND ORDER The magistrate judge recommended that plaintiffs' motion should be denied, and defendant's motion should be granted as to plaintiff Kruse's lack of standing, denied as to plaintiffs' defamation claim, granted as to plaintiffs' lIED claim, and granted as to plaintiffs' UDCPA claim. DISCUSSION 1. Plaintiffs' Motion for Partial Summary Judgment. Plaintiffs seek a ruling that, as a matter of law, a prevailing claimant may be awarded statutory damages between $100 and $1000 under the FCBA for each separate violation. The magistrate judge deferred ruling on the issue because it is premature and is more appropriately determined in the context of instructing the jury as to the available damages and formulating an appropriate verdict form. I agree. "A court, in its discretion in shaping the case for trial, may deny summary judgment as to portions of the case that are ripe therefor, for purposes of achieving a more orderly or expeditious handling of the entire litigation." Powell v. Radkins, 506 F.2d 763, 765 (5 th Cir. 1975), cert. denied, 423 U.S. 873 (1975) (even when there are no material disputed issues of fact as to some issues or claims, a trial court may deny summary judgment as to portions of the case that are ripe for summary judgment) . 4 - OPINION AND ORDER Accordingly, I adopt the magistrate judge's ruling and deny plaintiffs' Motion for Partial Summary Judgment. 2. Defendant's Motions for Partial Summary Judgment. a. Plaintiff Kruse's Standing under the FCBA. The record on partial summary judgment unequivocally establishes that Kruse was an authorized user of the credit card defendant issued to plaintiff Lyon but was not an obligor as to any charges made on that credit card. The magist.rate judge set out the relevant statutory language and Federal Reserve Board Regulations (Regulation Z) that make clear FCBA's protections extend only to those consumers who are obligors, not those who are merely authorized users. See 15 U.S.C. 12 C.F.R. 226.2, Subpt. E, App. 1, § §§ 1666 and 1666a; (2) (a) (8) (1). Nevertheless, plaintiffs contend the magistrate judge did not address Belmont v. Assoc. Nat. Bank, 119 F. Supp.2d 149, 159 (E.D.N.Y.), in which the court held a creditor's demand for payment on a charge account from someone who is not an obligor qualifies as a "billing error" under the "wrong-person error" provisions of the FCBA. That case, however, is distinguishable because it addresses a different credit issue, i.e., a credit charge made against the wrong person. Plaintiffs also contend the magistrate judge erred in failing to construe the statutory language liberally to include 5 - OPINION AND ORDER authorized users as protected persons under the FCBA in light of the fact that the statute, as part of the Truth-in-Lending Act, 15 U.S.C. § 1601 et seq, is a consumer protection statute. A liberal construction, however, does not justify including persons within the protection of the statute in the absence of some indication in the statute that Congress intended such persons to be protected. Accordingly, I adopt the magistrate judge's recommendation and qrant defendant's motion for partial summary judgment as to plaintiff Kruse's claim under the FCBA. b. Plaintiffs' Defamation Claim. The magistrate judge found genuine issues of material fact existed as to whether defendant acted maliciously or with willful intent to injure plaintiffs by furnishing false information to credit reporting agencies. Accordingly, the magistrate judge concluded plaintiffs' defamation claim was not preempted by the Fair Credit Reporting Act, 15 U.S.C. § 1681h(e) (barring a claim for defamation based on furnishing false information about a consumer to a consumer reporting agency. . except as to false information furnished with malice or willful intent to injure the consumer. ") (emphasis added). Defendant has not objected to this ruling. I have reviewed the legal principles applied by the magistrate judge de novo and 6 - OPINION AND ORDER find no error. Accordingly I adopt the magistrate judge's Finding and Recommendation and deny defendant's motion for partial summary judgment as to plaintiffs' defamation claim. c. Plaintiffs' lIED Claim. Plaintiffs allege they presented sufficient evidence to create a genuine issue of material fact and thereby preclude summary judgment in defendant's favor on plaintiffs' lIED claim. The evidence purports to show defendants continued to attempt to collect the disputed credit charge and ignored plaintiffs' requests for responses to plaintiffs' complaints. The magistrate judge concluded the conduct alleged by plaintiffs did not support an lIED claim because the conduct, as a matter of Oregon law, was not outrageous in the extreme, and did not amount to an extraordinary transgression of the bounds of socially tolerable conduct. Or. 220, 236 (1989). See Sheets v. Knight, 308 I agree. Similar lIED cases decided in Oregon state courts and this court require conduct that is far more egregious than defendant's conduct in this case to support an lIED claim. v. Central Billing Bureau, See~, Inc., 279 Or. 443, 446-47 Turman (1977) (a debt collection agent's conduct in calling the alleged debtors "deadbeats" and "scum" and threatening the husband with the loss of his job and the wife with the loss of her home constituted lIED). But see, Mathis v. Omnium Worldwide, 06-CV-1614-AA, 2006 7 - OPINION AND ORDER WL 1582301 (D. Or. 2006) (six-eight "pressure-tactic" telephone calls over a 14-month period did not constitute lIED as a matter of law). Accordingly, I adopt the magistrate judge's recommendation and grant defendant's motion for partial summary judgment as to plaintiffs' claim for intentional infliction of emotional distress. d. Plaintiffs' UDCPA Claim. Plaintiffs allege in their Complaint that "Defendant violated [the UDCPA] by attempting to collect a debt when it knew or had reason to know that its right to do so did not exist." Defendant and the magistrate judge interpreted this claim to assert that defendant was attempting to collect a debt that did not exist. Oregon's UDCPA prohibits debt collectors from using certain abusive and coercive methods to pressure debtors to pay debts that exist. 92 (1992). Ore. Rev. Stat. (2) (k); Porter v. Hill, 314 Or. 86, It does not, however, prohibit "the practice of trying to collect a debt that does not exist." Id. at 93. Plaintiffs now contend in their objections to the Findings and Recommendation that the magistrate judge and defendant misinterpreted this claim and that, in fact, plaintiffs' Complaint "alleges that [defendant] attempted to collect the debt when it knew or had reason to know that its right to attempt to 8 - OPINION AND ORDER collect the debt did not exist." added). PIs' Am. Obj. at 5. (Emphasis In explicating this point, however, plaintiffs further muddy the waters as to what their UDCPA claim is by arguing that the magistrate judge "overlooked" that defendant "dislaim[ed] any right to collect from plaintiff Joan Kruse" because she was not an obligor on the credit card, and, therefore, defendant "necessarily violated the UDCPA by attempting to collect from her." In other words, defendant violated the UDCPA by attempting to collect a debt that did not exist as to her. On this record, I conclude that, even if it would make a difference, plaintiffs' efforts to add language into their Complaint to explicate their UDCPA claim is far too late. Accordingly, I adopt the magistrate judge's recommendation and grant defendant's motion for partial summary judgment as to plaintiffs' claim under Oregon's Unlawful Debt Collection Practices Act. CONCLUSION For the reasons stated above, plaintiffs' Motion for Partial Summary Judgment (doc. 29) is denied. Defendant Chase Bank USA, N.A.'s (Chase) Motion for Partial Summary Judgment (doc. 14) is granted in part and denied in part as follows: Defendant's motion is granted as to plaintiff Kruse's lack of standing, denied as to plaintiffs' defamation claim, granted as to 9 - OPINION AND ORDER plaintiffs' lIED claim, and granted as to plaintiffs' UDCPA claim. IT IS SO ORDERED. DATED this ~ day of July, 2009 . .t"n L/ . \ 10- OPINION AND ORDER MALCOLM F. MARSH United States District Judge

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