Mateti et al v. Activus Financial, LLC et al, No. 8:2008cv00540 - Document 64 (D. Md. 2009)

Court Description: MEMORANDUM OPINION. Signed by Judge Deborah K. Chasanow on 10/27/09. (sat, Chambers)

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IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF MARYLAND : JAYA PRAKASH MATETI, ET AL. : v. : Civil Action No. DKC 2008-0540 : ACTIVUS FINANCIAL, LLC, et al. : MEMORANDUM OPINION Presently pending and ready for resolution in this debt collection case are: (1) a motion for reconsideration of the court s August 14, 2009 order filed by Plaintiffs (Paper 57), (2) a motion for reconsideration of the court s August 14, 2009 order filed by Defendants (Paper 58), and (3) a motion to strike Defendants (Paper 63). motion for reconsideration filed by Plaintiffs The issues are briefed and the court now rules pursuant to Local Rule 105.6, no hearing being deemed necessary. For the reasons reconsideration will that be follow, Plaintiffs motion for denied, Defendants motion for reconsideration will be denied, and Plaintiffs motion to strike Defendants motion for reconsideration will be denied. I. Background This dispute arises from the debt collection activities and subsequent lawsuit filed against Plaintiff Mateti in conjunction with his default on an AT&T Universal credit card. Plaintiffs in this action are Mr. Mateti and his wife, Chaitanya Chekkilla. Defendants are Activus, a company that purchases defaulted customer loans and collects the debts, PSC, a law firm engaged in debt collection, Phillip Collins and Neal Markowitz, attorneys for PSC, and Ernest Faska, a PSC employee. The following facts are undisputed unless otherwise noted. In or around July 2001, Jaya Universal credit card account. Prakash Mateti opened an AT&T After using the credit card to purchase various goods and services, Mr. Mateti fell behind on the payments. The account eventually went into default status and was subsequently charged off. Mr. Mateti made his last payment on the account in April 2003. Until November 2003, monthly statements were sent to his address in Lanham, Maryland. In December 2003, for one month only, the monthly statement was sent to Mr. Mateti s address in Springdale, Maryland. Mr. Mateti did not receive any more credit card statements after December 2003. Maryland in Plaintiffs allege that they permanently left December 2003 and from June 2004 July maintained a permanent residence in Lexington, Kentucky. 2 2007 Citibank referred Mr. Mateti s defaulted account to Academy Collection Service, Inc. ( Academy ) for collection.1 sent Mr. Mateti December 2004 two to collection his letters address in in Academy October Kentucky. 2004 According and to Defendants, Citibank sold Mr. Mateti s account to Unifund on May 27, 2005.2 off Activus purchased from Unifund a portfolio of charged credit card accounts on August 11, 2005. credit card account was part of that portfolio. Charles Berry, the managing member of Mr. Mateti s In August 2005, Activus, contacted Defendant Collins of PSC to pursue legal action against Mr. Mateti. August The law firm sent a demand letter to Mr. Mateti on 22, 2005 at his address in Springdale, Maryland. According to Plaintiffs, Mr. Mateti had not lived in Springdale, Maryland since 2003. the District Maryland on Court October Activus filed suit against Mr. Mateti in of 3, Maryland 2005, for Prince seeking George s $4,492.62 in County, unpaid principal and $3,889.35 in interest (29.74%) for the defaulted credit card. 1 Citibank purchased AT&T Universal in January 2002 and continues to issue credit card products under the AT&T brand name. (Paper 34, Ex. 2, Richter Aff. ¶ 3). 2 Defendants assert that Citibank claimed the account was accruing interest at 29.74%. The credit card agreement provided for a maximum default rate which, at the time of sale, was prime plus 23.99%, which equaled 29.75%. (Paper 34, Ex. 2, Richter Aff. ¶ 5). 3 A summons was issued for Springdale, Maryland address. service on Mr. Mateti at his The court mailed the summons and complaint back to PSC for service by a private process server. Katie Dodson, a paralegal with PSC, used Protrack Process Service, Inc. ( Protrack ) to effectuate service on Mr. Mateti. Protrack assigned independent the contractor, task of serving Steve Nixon. Mr. Mateti an service Substitute to was purportedly completed on Panta Matetti, on December 2, 2005. Mr. Nixon executed an affidavit of service, filed it with the district court, and provided a copy to PSC. Plaintiffs allege that the service affidavit executed by Mr. Nixon was undoubtedly false because, at the time Mr. Nixon purportedly effectuated service, Mr. Mateti was living in Kentucky, and the process server misspelled his last name. Mr. Mateti Activus. never responded Subsequently, to Activus the filed a complaint request filed for by default judgment which was denied by the state court on January 13, 2006. Mr. On March 24, 2006, affidavit judgment was entered against Mateti $4,398.17 in the amount interest, and of $50 $8,887.79 costs). ($4,492.62 Plaintiffs principal, allege that Activus was awarded interest in the judgment to which it was not entitled by law. Springdale, PSC sent a letter on April 24, 2006 to the Maryland address to inform 4 Mr. Mateti of the judgment. PSC filed a request for oral examination on May 10, 2006. The court scheduled the oral examination for July 7, 2006. Barbara Process Crawford, Servers a paralegal ( Priority at Process ) examination request on Mr. Mateti. PSC, to used serve Priority the oral Priority Process assigned service of the oral examination papers to Jimmy Chidester. July 28, 2006, Mr. Chidester filed an affidavit of On service stating that he could not serve the oral examination papers because he never received a response from Mr. Mateti. Mr. Mateti asserts that he never received the letter from PSC or the notice of the oral examination because both were sent to the wrong address. On September 7, 2006, PSC filed a reissue of the request for oral examination. Lisa Annadale, another paralegal at PSC, assigned the oral examination papers to ESQ Process Servers who, in turn, assigned the task of serving Mr. Mateti to Scott Miles, an independent contractor of ESQ. Mr. Miles filed an affidavit of service on October 31, 2006 stating that service of the oral examination papers Mateti the at was made Springdale, by substitute Maryland address. examination was set for November 17, 2006. appear. 5 service on Nivai The oral Mr. Mateti failed to On December 27, 2006, PSC filed a request for show cause order for contempt. The court issued the order to show cause on December 29, 2006 and sent the papers back to PSC for service of process. Ms. Annandale gave the papers to Protrack for service. Protrack again assigned the task of serving Mr. Mateti to Mr. Nixon. Mr. Nixon filed a proof of service on January 26, 2007 indicating that he personally served Mr. Mateti in Greenbelt, Maryland. The purported service affidavit incorrectly describes Mr. Mateti as a five foot six inch caucasian male, weighing over 180 pounds. The show cause hearing was scheduled for April 6, 2007. Mr. Mateti did not attend the hearing. On April 9, 2007, PSC filed a request for garnishment of Mr. Mateti s property. A writ of garnishment was issued on April 16, 2007 and placed on Mr. Mateti s Bank of America account. on April 25, garnishment. 2007 and spoke to Mr. Mateti contacted PSC Ernest Fasca about the On May 8, 2007, Mr. Mateti filed a motion to vacate the judgment. A hearing was held on September 7, 2007 on the motion to vacate. The court vacated the judgment, quashed service of process and the garnishments, and ordered all money to be released to Mr. Mateti. collection proceedings against Activus voluntarily dismissed the Mr. Mateti on July 25, 2008. Plaintiffs allege that despite the court order and requests by 6 Mr. Mateti s counsel to remove the garnishment from the bank account, the money has never been released. On November 2, 2007, Plaintiffs filed a complaint in the Circuit Court for Prince George s County against Activus, Phillip Collins, PSC, Neal Markowitz, and Ernest Fasca. Counts 1-11 allege violations of the Fair Debt Collection Practices Act ( FDCPA ), 15 U.S.C. violations of the Maryland ( MCDCA ), Md. Code Ann., alleges negligence. § 1692 et seq., counts Consumer Com. Law Debt § 12-14 allege Collection 14-202, and count Act 15 Defendants properly removed the case to this court on February 28, 2008 (Paper 1) and filed an answer on May 5, 2008. (Paper 10). The same day, the court entered a scheduling order, pursuant to which discovery would close on September 17, 2008. On September 16, 2008, Defendants filed a motion for leave to file an amended answer to include a bona fide error discovery affirmative deadline. Defendants October 22, discovery. motion 2008 defense, (Papers for and (Paper 30). leave granted and 16, to a motion 18). file an Defendants The to extend court amended motion denied answer to the on extend Thereafter, Defendants filed a motion for reconsideration related to their request to file an amended answer (Paper 31). Plaintiffs filed a motion for extension of time to file motion to compel regarding depositions. 7 (Paper 33). Defendants and Plaintiffs subsequently filed motions for summary judgment. motion for (Papers 34, 40). summary judgment, In response to Defendants Plaintiffs voluntarily withdrew count 6 of the complaint alleging a violation of § 1692e(2)(B) of the FDCPA. On August 14, 2009, the court issued a memorandum opinion and order that: (1) denied Defendants motion for reconsideration, Plaintiffs motion for extension of time, and Plaintiffs motion to strike, (2) dismissed the complaint filed by Plaintiff Chekkilla, (3) granted in part Defendants motion for summary judgment, entering judgment in favor of Defendants Markowitz and Faska on all counts and entering judgment in favor of Defendants on counts 1-4, 6-8, and 11-15, and (4) denied Plaintiffs motion for summary judgment. Plaintiffs court s August filed 14th a order motion on for August (Papers 55 and 56). reconsideration 24, 2009. of (Paper the 57). Defendants responded on September 4, 2009, and also asked the court Defendants summary judgment on counts 5 and 10 of Plaintiffs complaint. (Paper 58). to reconsider its decision to deny On October 6, 2009, Plaintiffs filed a motion to strike Defendants motion for reconsideration. 8 (Paper 63). II. Motions for Reconsideration A. Standard of Review Federal Rule of Civil Procedure 54(b) governs reconsideration of orders that do not constitute final judgments in a case. Rule 54(b) provides that any order or other decision, however designated, that adjudicates fewer than all the claims or the rights and liabilities of fewer than all the parties . . . may be revised at any time before the entry of judgment adjudicating all the claims and all the parties' rights and liabilities. Fed.R.Civ.P. 54(b). Local Rule 105.10 provides that, except as otherwise provided in Fed.R.Civ.P. 60, any motion for reconsideration of an order shall be filed no later than 10 days after entry of the order. The court s memorandum opinion and order were entered on August 14, 2009. Thus, any motion for reconsideration was due no later than August 28, 2009. In the Fourth Circuit, the precise standard that should govern a motion for reconsideration of an interlocutory order is unclear. Fayetteville Investors v. Commercial Builders, Inc., 936 F.2d 1462, 1472 (4th Cir. 1991). should reconsider an interlocutory In determining whether it order, a district court s consideration is not bound by the Rule 60(b) standard, though the court may at least reference 9 parts of the Rule 60(b) standard. Id. at 1470; Am. Canoe Ass'n v. Murphy Farms, Inc., 326 F.3d 505, 514 (4th Cir. 2003) ( Motions for reconsideration of interlocutory orders are not subject to the strict standards applicable to judgment. ). motions for reconsideration of a final Thus, the court s analysis is guided by Rule 60(b) but is not bound by its strictures. Under Rule 60(b), a party may obtain relief from a judgment or final order based upon (1) mistake, inadvertence, surprise, or excusable neglect; (2) newly discovered evidence that, with reasonable diligence, could not have been discovered in time to move for a new trial under Rule 59(b); (3) fraud . . . misrepresentation, or misconduct by an opposing party; (4) the judgment is void; (5) the judgment has been satisfied, released or discharged; it is based on an earlier judgment that has been reversed or vacated; or applying it prospectively is no longer equitable; or (6) any other reason that justifies relief. Fed.R.Civ.P. 60(b). B. Analysis 1. Plaintiff s motion Plaintiffs ask the court to reconsider five parts of its August 14th decision to grant summary judgment: (1) against Plaintiff Chekkilla and dismissing all of her claims, (2) in favor of collection attorney and defendant Neal Markowitz, (3) in favor of defendants for Count 7 which alleged violations of 10 15 U.S.C. § 1693e(5) . . . , (4) in favor of defendants on Count 8 which alleged violations of 15 U.S.C. § 1692e(8) . . . , and (5) in favor of defendants on Count 14 for alleged violations of Maryland Commercial Law Article § 14-202(8) . . . . (Paper 57, at 1). Plaintiffs motion for reconsideration will be denied. Plaintiffs do not point to any relevant case law or evidence that was unavailable at the time of the court s order. With regard to Plaintiff Chekkilla s standing to sue and Defendant Markowitz s inclusion in the case, Plaintiffs argue facts that were already considered. On Count 7, Plaintiffs argue that Defendants violated 15 U.S.C. § 1692(e) by violating Maryland CJP § actions 11-603, yet were Additionally, Plaintiffs actually on Count fail illegal 8, to show under Plaintiffs that the argue Defendants Maryland facts that law. were already considered and again fail to establish that Plaintiff Mateti ever disputed the debt. Finally, on Count 14, Plaintiffs have still not established that Defendants violated Md. Comm. Law Code Ann. § 14-202(8) because Plaintiffs have not shown that Defendants had knowledge of any wrongdoing and because Plaintiffs misinterpret Md. Ann. Code, Cts. & Jud. Proc. § 11603(a). 11 2. Defendants Motion Defendants ask the court to reconsider the denial of summary judgment as to Counts 5 and 10 because those counts were allegedly barred by the statute of limitations. 2). (Paper 58, at Plaintiffs move to strike Defendants motion because it was filed more than 10 days after entry of the order. Defendants respond that, reconsider as with earlier motions decisions under in Rule order 60, to the do court may substantial justice. Defendants motion for reconsideration will also be denied. Defendants correctly note that, due to the FDCPA s statute of limitations, the court will limit its analysis of the Plaintiffs FDCPA claims to events that occurred on or after November 2, 2006. Defendants argue that counts 5 and 10 only relate to events that occurred before November 2, 2006. 58, at 7-8). Because Plaintiffs presented counts 5 (Paper and 10 without tying the law to the facts, however, it is not clear that counts 5 and 10 are unrelated to any activity that occurred on or after November 2, 2006. As such, counts 5 and 10 are not clearly barred by the statute of limitations and Defendants untimely motion for reconsideration will be denied. 12 III. Conclusion For the reconsideration foregoing will reasons, be Plaintiffs motion for denied, Defendants motion for reconsideration will be denied, and Plaintiffs motion to strike Defendants motion for reconsideration will be denied. separate Order will follow. /s/ DEBORAH K. CHASANOW United States District Judge 13 A

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