Andexler v. Clarke, No. 3:2010cv01019 - Document 39 (D. Or. 2011)
Court Description: MEMORANDUM OPINION AND ORDER ON DEFENDANT'S MOTION FOR SUMMARY JUDGMENT: Defendant's Motion for Summary Judgment 19 is GRANTED. Signed on 6/20/11 by Magistrate Judge Dennis J. Hubel. (kb)
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1 2 3 4 5 6 IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF OREGON PORTLAND DIVISION 7 8 9 MICHELLE ANDEXLER, 10 Plaintiff, 11 vs. 12 MICHAEL T. CLARKE, 13 14 Defendant. ) ) No. 03:10-cv-01019-HU ) ) ) MEMORANDUM OPINION AND ORDER ) ON DEFENDANT S MOTION ) FOR SUMMARY JUDGMENT ) ) ________________________________ 15 16 17 18 19 20 Joshua R. Trigsted TRIGSTED LAW GROUP, P.C. 5200 S.W. Meadows Road Suite 150 Lake Oswego, OR 97035 Attorney for Plaintiff 21 22 23 24 25 David A. Jacobs LUVAAS COBB RICHARDS & FRASER, P.C. 777 High Street Suite 300 Eugene, OR 97401 Attorney for Defendant 26 27 28 1 - 10-1019 MEMORANDUM OPINION AND ORDER 1 HUBEL, Magistrate Judge: 2 The plaintiff Michelle Andexler brings this action against the 3 defendant Michael T. Clarke for damages under the federal Fair Debt 4 Collection Practices Act ( FDCPA or the Act ), 15 U.S.C. § 1692 5 et seq.1 6 collect a judgment obtained against her by Fred Butcher. 7 judgment was obtained by default. Andexler claims a portion of the 8 judgment represented a lease buyout fee that Butcher was not 9 allowed to charge and was an unlawful penalty. In her Complaint, Andexler alleges Clarke attempted to The She claims 10 Clarke chose to pursue collection of the entire judgment amount, 11 even 12 portion, violating 15 U.S.C. § 1692f(1).2 though he could have refused to collect the unlawful 13 Andexler further claims Clarke filed a writ of garnishment 14 against her, and then failed to provide her with proper notice of 15 her right to object to the garnishment as required by Oregon 16 Revised Statutes § 18.845. 17 notice apparently designed for debtors who owe tax debts. 18 #1, ¶¶ 10 & 11, & Ex. A. 19 damages and attorney s fees under the FDCPA. 20 Instead, Clarke provided a form of Dkt. Andexler seeks actual and statutory Dkt. #1. The matter is before the court on Clarke s motion for summary 21 judgment. Dkt. #19. The motion is supported by a brief, Dkt. #20; 22 a statement of facts, Dkt. #21; and Declarations of Michael T. 23 Clarke, Erin A. Fennerty, and Scott Mollenhour, Dkt. ## 22, 23 and 24 25 26 27 28 1 The parties have consented to jurisdiction and the entry of final judgment by a United States Magistrate Judge, in accordance with Federal Rule of Civil Procedure 73(b). Dkt. #27. 2 A debt collector violates the FDCPA by collecting any amount that is not expressly authorized by the agreement creating the debt or permitted by law. 15 U.S.C.§ 1692f(1). 2 - 10-1019 MEMORANDUM OPINION AND ORDER 1 24, respectively. Andexler has responded with a brief, Dkt. #31, 2 accompanied by a copy of the Writ of Garnishment obtained against 3 her on Butcher s behalf. 4 reply, Dkt. #34; a Declaration of David A. Jacobs, Dkt. #35; and a 5 Supplemental Declaration of Michael T. Clarke, Dkt. #36. 6 motion came on for oral argument on June 15, 2011. 7 considered the parties summary judgment papers and counsels oral 8 arguments, and grants the motion for summary judgment. Dkt. #31 & 31-1. Clarke has filed a The The court has 9 DISCUSSION 10 11 Clarke s motion and Adexler s response bring a single issue 12 before the 13 collector for purposes of the FDCPA. 14 that the judgment Clarke attempted to collect constituted a debt 15 for purposes of the FDCPA (although Andexler disputes the validity 16 of a portion of the debt). The Act defines a debt collector as: 17 any person who uses any instrumentality of interstate commerce or the mails in any business the principal purpose of which is the collection of any debts or who regularly collects or attempts to collect, directly or indirectly, debts owed or due another. 18 19 court; i.e., whether Clarke qualifies as a debt The parties do not dispute 20 21 15 U.S.C. § 1692a(6). 22 [L]awyers who regularly collect debts through litigation are 23 included within the statutory definition of debt collector. 24 McCollough v. Johnson, Rodenburg & Lauinger, LLC, 637 F.3d 939, 948 25 (9th Cir. 2011) (citing Heintz v. Jenkins, 514 U.S. 291, 293-94, 26 115 S. Ct. 1489, 1490, 11 L. Ed. 2d 395 (1995); see id., 514 U.S. 27 at 299, 115 S. Ct. at 1493 (FDCPA applies to attorneys who 28 3 - 10-1019 MEMORANDUM OPINION AND ORDER 1 regularly engage in consumer-debt-collection activity, even when 2 that activity consists of litigation. ). 3 Clarke, however, argues he does not qualify as a debt 4 collector as defined by the statute because at the time of the 5 alleged violation, he had been practicing law for less than five 6 years during which time he had handled only ten consumer debt 7 collections for nine different clients, five of whom were his 8 family members or friends. 9 tionships with clients that have retained him specifically to 10 handle consumer debt collections, and he only occasionally handles 11 debt collection matters as part of his small, generalized law 12 practice. 13 He claims he has no ongoing rela- Dkt. #20; see Dkt. #22, Clarke Declr. Clearly, the principal purpose of Clarke s business is not the 14 collection of debts. 15 can 16 consumer debts. 17 Carroll & Bertolotti, 374 F.3d 56, 60-61 (2d Cir. 2004) (FDCPA 18 plaintiff 19 collector status ). 20 Andexler show Clarke bears Thus, the question turns on whether Andexler regularly collects or attempts to collect See Goldstein v. Hutton, Ingram, Yuzek, Gainen, the burden complains that of proving she had the no defendant s direct access debt to 21 [Clarke s] files and therefore has no opportunity to meaningfully 22 challenge the evidence provided by [Clarke] regarding the amount of 23 [his] practice devoted to collection activity. 24 Clarke takes issue with Andexler s representation. 25 early on in the case, with the court s encouragement, the parties 26 resolved a dispute over what information would be provided to 27 [Andexler] from [Clarke s] client files in such a way [as] to 28 protect attorney-client confidences. Dkt. #31, p. 1. He notes that Dkt. #34, p. 1; see Dkt. 4 - 10-1019 MEMORANDUM OPINION AND ORDER 1 #35, Declr. of David A. Jacobs (describing discussions with the 2 court at the parties Rule 16 conference and subsequent status 3 conference). 4 Fennerty conducted a comprehensive review of Clarke s client files 5 and email correspondence, and prepared a listing of the types of 6 work he had performed for each of his clients for calendar years 7 2006 through 2010. See Dkt. #23, Fennerty Declr. This information 8 was provided to Andexler, who then deposed Clarke. 9 Clarke, Andexler did not have his deposition transcribed; she 10 pursued no further discovery subsequent to his deposition; and, to 11 Clarke s knowledge, she did not depose, or subpoena documents from, 12 any of the clients for whom he has performed consumer collection 13 work. 14 Pursuant to the parties agreement, attorney Erin A. According to Dkt. #34. Andexler challenge[s] of [Clarke s] the accuracy, representation or that at he least the does not 15 materiality, 16 currently represent any of the clients for which he has done 17 collection work on an ongoing basis. 18 #21, ¶ 3). 19 performed ongoing collection activities for at least three clients; 20 i.e., Modern Appraisal, Northwest Plumbing, and Vilardi Electric. 21 Id. (referring to Dkt. #23, ¶ 9(i), (q), & (s)). 22 it is immaterial whether or not Clarke still represented any of 23 those three clients at the time of his Declaration; rather, [w]hat 24 would be material is information regarding the nature of [Clarke s] 25 arrangement with those parties as of the date that [he] performed 26 the collection actions that are the subject of this lawsuit. Id. Dkt. #31, p. 1 (citing Dkt. She argues Fennerty s file review suggests Clarke Andexler suggests 27 Concerning the three clients cited by Andexler, Fennerty s 28 review of Clarke s records shows he pursued three matters on behalf 5 - 10-1019 MEMORANDUM OPINION AND ORDER 1 of Vilardi Electric. One clearly was not a consumer matter, as it 2 involved a contract between Vilardi and another business. 3 other two matters were to collect payment due under contracts for 4 the performance of residential electrical work. 5 no lawsuit was filed. 6 of contract. 7 For The In one of those, In the other, a lawsuit was filed for breach See Dkt. #23, ¶ 9(i). Modern Appraisal, Clarke undertook seven collection 8 matters, only one of which involved a consumer defendant. 9 the matters involved collections from mortgage companies for the 10 performance of home appraisals. 11 commercial client, not a consumer. 12 For SRDH Plumbing, Inc. Five of The last action also involved a Id., ¶ 9(q). dba Northwest Plumbing, Clarke 13 undertook two consumer collection actions to recover payment due 14 under contracts for the performance of plumbing services. 15 ¶ 9(s). 16 Id., In Clarke s supplemental declaration, he makes it clear that 17 throughout 18 relationship with any client to handle consumer collection work, 19 nor 20 whenever they had the need. 21 has his any The legal client question career, ever here he agreed is has to never send him had any ongoing collection work Dkt. #36, ¶ 1. whether Clarke s debt collection 22 activities are sufficient to satisfy the regularity prong of the 23 definition 24 addressed the issue once. 25 Inc., the court held, with little analysis, that an attorney whose 26 practice during the period in question included 80 percent debt 27 collection work was a debt collector for purposes of the Act. 28 Id., 15 F.3d 1507, 1513 (9th Cir. 1994). of debt collector. The Ninth Circuit has only In Fox v. Citicorp Credit Services, 6 - 10-1019 MEMORANDUM OPINION AND ORDER 1 More instructive on the issue is the court s analysis in 2 Goldstein. 3 found that in determining whether an attorney qualifies as a debt 4 collector for purposes of the FDCPA, the court s focus cannot be 5 limited to the proportion of overall work or firm revenue, a 6 narrow view that blurs the distinction between the principal 7 purpose and regularity aspects of the statutory definition of 8 debt collector. 9 follows: 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 There, the court reviewed the issue thoroughly, and Goldstein, 374 F.3d at 61. The court observed as To the extent that some courts confronted with the task of articulating an analytical framework for the regularity prong of the definition have suggested that such proportionality factors may alone be determinative, the facts of the particular cases often belie the implication. Where debt collector status was found lacking based on revenue or workload figures, other indicia of regularity often were also lacking; where debt collector status was found, the regularity and/or principal purpose criteria would in some cases easily have been met in any event. Compare Schroyer v. Frankel, 197 F.3d 1170, 1173, 1177 (6th Cir. 1999) (where firm handled 50-75 collection cases annually, constituting less than 2% of overall practice, maintained no nonattorney staff or computer aids for debt collection, and debt collection activity came from non-collection business clients and was incidental to, and not relied upon or anticipated in, firm s practice of law, firm was not debt collector); White [v. Simonson & Cohen P.C.], 23 F. Supp. 2d [273,] 278 [(E.D.N.Y. 1998)] (lawyer who sent 35 collection letters once as favor to personal client and filed no follow-up litigation was not debt collector); Von Schmidt v. Kratter, 9 F. Supp. 2d 100, 103-04 (D. Conn. 1997) (law firm whose total three-year revenues from debt collection were less than $1,000 and had only one consumer credit client was not debt collector); and Nance v. Petty, Livingston, Dawson, & Devening, 881 F. Supp. 223, 225 (W.D. Va. 1994) (collection work that constituted .61% of lawyer s personal practice and represented 1.07% of firm s cases over 187 - 10-1019 MEMORANDUM OPINION AND ORDER 1 2 3 4 5 6 7 8 9 10 11 12 13 month period did not render defendant law firm debt collector, where plaintiff provided no evidence of debt collection activity other than that complained of in action); with Scott v. Jones, 964 F.2d 314, 316-18 (4th Cir. 1992) (principal purpose and regularity prongs satisfied where lawyer and firm had regular ongoing relationship with delinquent debt division of credit card issuer, 70-80% of revenues were generated by such work over relevant period and over 4,000 warrants had been issued annually in connection with such work over five-year period). See also Garrett [v. Derbes, 110 F.3d 317, 318 (5th Cir. 1997)], (rejecting district court finding that collection activity was not regular where 639 demand letters were mailed in nine-month period, although revenues from activity were less than 0.5% of firm s total for period). In light of Goldstein s proffer of specific evidence of debt collection activity in the form of 145 three-day notices issued in a oneyear period, the district court s analysis was too narrow to support its determination that Hutton had not regularly engaged in debt collection. 14 15 Goldstein, 374 F.3d at 61-62. 16 The court rejected Goldstein s assertion that if any attorney 17 engages in collection activities for clients more than a handful 18 of times per year, the attorney must comply with the FDCPA. 19 374 F.3d at 62 (citation omitted). 20 handful standard has no precedential basis and, standing alone, 21 lacks a meaningful nexus to the issue of regularity. Id. Instead, 22 the court held the determination must be made on a case-by-case 23 basis in light of factors bearing on the issue of regularity. 24 The court found the following factors to be illustrative rather 25 than exclusive : 26 27 28 Id., The court found, Goldstein s Most important in the analysis is the assessment of facts closely relating to ordinary concepts of regularity, including (1) the absolute number of debt collection communications issued, and/or collection-related 8 - 10-1019 MEMORANDUM OPINION AND ORDER Id. 1 litigation matters pursued, over the relevant period(s), (2) the frequency of such communications and/or litigation activity, including whether any patterns of such activity are discernable, (3) whether the entity has personnel specifically assigned to work on debt collection activity, (4) whether the entity has systems or contractors in place to facilitate such activity, and (5) whether the activity is undertaken in connection with ongoing client relationships with entities that have retained the lawyer or firm to assist in the collection of outstanding consumer debt obligations. {Footnote omitted.] Facts relating to the role debt collection work plays in the practice as a whole should also be considered to the extent they bear on the question of regularity of debt collection activity (debt collection constituting 1% of the overall work or revenues of a very large entity may, for instance, suggest regularity, whereas such work constituting 1% of an individual lawyer s practice might not). Whether the law practice seeks debt collection business by marketing itself as having debt collection expertise may also be an indicator of the regularity of collection as a part of the practice. 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 Goldstein, 374 F.3d at 62-63. 17 In the present case, Andexler asserts that Clarke derived 18 .97% of [his] revenue 19 defendant in Goldstein who was found to be a debt collector 20 derived only .05% of its overall revenue from collection activi- 21 ties. 22 based on more than just the percentage of revenue. 23 in the case was shown to have issued 145 debt collection notices in 24 a twelve-month period, with more than ten notices issued in each of 25 at least seven months and more than fifteen notices issued in three 26 months. 27 the repetitive pattern of issuance of multiple notices each month, 28 clearly could support a determination that [the defendant s] debt Dkt. #31, p. 9. from collection practices, while the However, the Goldstein court s holding was The defendant The court found that these numbers, taken together with 9 - 10-1019 MEMORANDUM OPINION AND ORDER 1 collection practices were regular. 2 addition, 3 relationship with apparently affiliated entities for which it 4 repeatedly sent collection notices within the one-year period under 5 scrutiny[.] 6 is no evidence in the record that Clarke engaged in a similar 7 magnitude of collection activities, or that he had an ongoing 8 relationship to collect debts for any particular client. the record Id. showed the Id., 374 F.3d at 63. defendant had an In ongoing The evidence here is not as compelling. There 9 Summary judgment should be rendered if the movant shows that 10 there is no genuine dispute as to any material fact and the movant 11 is entitled to judgment as a matter of law. 12 56(c)(2). 13 support 14 Andexler to designate specific facts demonstrating the existence 15 of genuine issues for trial. 16 Litigation, 627 F.3d 376, 387 (9th Cir. 2010) (citing Celotex Corp. 17 v. Catrett, 477 U.S. 317, 324, 106 S. Ct. 2548, 2553, 91 L. Ed. 2d 18 265 (1986)). 19 is not a light one : 20 21 22 23 24 25 26 27 Fed. R. Civ. P. Clarke has shown there is an absence of evidence to Andexler s case. Accordingly, the burden shifts to In re Oracle Corp. Securities The Ninth Circuit has explained that [t]his burden The non-moving party must show more than the mere existence of a scintilla of evidence. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 252, 106 S. Ct. 2505, 91 L. Ed. 2d 202 (1986). The non-moving party must do more than show there is some metaphysical doubt as to the material facts at issue. Matsushita Elec. Indus. Co., Ltd. v. Zenith Radio Corp., 475 U.S. 574, 586, 106 S. Ct. 1348, 89 L. Ed. 2d 528 (1986). In fact, the non-moving party must come forth with evidence from which a jury could reasonably render a verdict in the non-moving party s favor. Anderson, 477 U.S. at 252, 106 S. Ct. 2505. In determining whether a jury could reasonably render a verdict in the non-moving party s favor, all 28 10 - 10-1019 MEMORANDUM OPINION AND ORDER 1 justifiable inferences are to be drawn in its favor. Id. at 255, 106 S. Ct. 2505. 2 3 Id. 4 In the present case, a review of the factors identified by the 5 Goldstein court leads to the conclusion that Clarke is not a debt 6 collector for purposes of the FDCPA. 7 failed to make a showing sufficient to support a determination 8 that [Clarke] was a debt collector at the time he obtained the 9 writ of garnishment on Butcher s behalf. Moreover, Andexler has See Goldstein, 374 F.3d 10 at 60-61. She has offered no citations to materials in the record 11 that establish Clarke was (or is) a debt collector, nor has she 12 offered evidence to establish the existence of a material issue of 13 fact. 14 she has failed to come forth with evidence from which a jury could 15 reasonably render a verdict in [her] favor. 16 627 F.3d at 387 (citation omitted). 17 U.S. ___, 129 S. Ct. 1937, 1949 (2009) (noting Rule 8 s pleading 18 standard demands more than an unadorned, the-defendant-unlawfully- 19 harmed-me accusation ) (citing Bell Atlantic Corp. v. Twombly, 550 20 U.S. 544, 555, 127 S. Ct. 1955, 1964, 167 L. Ed. 2d 929 (2007)). 21 I find that Clarke was not a debt collector for purposes of 22 liability under the FDCPA. Even taking all justifiable inferences in Andexler s favor, In re Oracle Corp., Cf. Ashcroft v. Iqbal, 556 23 24 25 26 27 28 11 - 10-1019 MEMORANDUM OPINION AND ORDER CONCLUSION 1 2 3 4 For the reasons discussed above, Clarke s motion for summary judgment (Dkt. #19) is granted. IT IS SO ORDERED. 5 Dated this 20th day of June, 2011. 6 /s/ Dennis J. Hubel _____________________________________ Dennis James Hubel Unites States Magistrate Judge 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 12 - 10-1019 MEMORANDUM OPINION AND ORDER
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