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Stimpson v. Midland Credit Management, Inc.

United States District Court, D. Idaho

September 27, 2018

BARRY STIMPSON, on behalf of himself and other similarly situated, Plaintiff,
MIDLAND CREDIT MANAGEMENT, INC., a Kansas corporation, and MIDLAND FUNDING, LLC, a Delaware limited liability company, Defendant.




         Before the Court is Defendants' Motion for Summary Judgment and Plaintiff's Motion For Leave to File An Amended Complaint. See Dkts. 24, 35.

         Plaintiff Barry Stimpson filed this putative class action suit on behalf of himself and others similarly situated. He alleges that defendants violated the Fair Debt Collection Practices Act by sending deceptive or misleading letters seeking repayment of time-barred debts. After the Court heard oral argument on the motion for summary judgment, plaintiff moved to amend his complaint. For the reasons explained below, the Court will grant Defendants' motion for summary judgment and deny the motion to amend.

         II FACTS

         In March 2017, Midland Credit Management, Inc. sent a dunning letter to plaintiff. The first page of the letter (not including a clip-off payment coupon), is shown here:

(Image Omitted)

         The letter speaks for itself, but a few points are worth highlighting, given the parties' arguments. As shown, the letter informed Stimpson that “Midland Credit Management, Inc. (MCM)[1] is the debt collection company, which will be collecting on, and servicing your account.” Midland offered Stimpson three “Available Payment Options”: (1) He could immediately pay 60 percent of the balance; (2) he could pay 80 percent of the balance over six months; or (3) he could make “Monthly Payments As Low As $50 per month.” Midland touted the benefits of paying the debt as: (1) saving up to $458.24; (2) putting the debt behind him; (3) “No more communication on the account”; and (4) “Peace of mind.” Finally, the letter contains this disclaimer language, which is a central focus of this lawsuit: “The law limits how long you can be sued on a debt and how long a debt can appear on your credit report. Due to the age of this debt, we will not sue you for it or report payment or non-payment to a credit bureau.” The letter also state that the offer expires in 30 days, and that Midland is “not obligated to renew any offers provided.”

         In 2006, more than ten years before Midland sent this letter, Stimpson entered into a credit card agreement with HSBC Bank Nevada, N.A. Stimpson made purchases with the card but did not pay off his entire balance. In 2009, HSBC sold the account to a debt collector, Defendant Midland Credit Funding, LLC. As of March 2017, the balance on Stimpson's account was $1, 145.60, presumably including interest and other charges. Stimpson has not disputed the amount or the validity of this debt. When Midland sent Stimpson the dunning letter in March 2017, the statute of limitations had long since expired.

         Stimpson did not choose any of the payment options offered in the letter. Instead, he sued Midland for sending the letter. Stimpson alleges that Midland engaged in unfair and deceptive acts and practices in violation of Sections 1692e and 1692f of the FDCPA. See Compl., Dkt. 1-1, ¶ 42. He seeks actual and statutory damages for himself and for each member of a putative statewide class. Id. at 8. See generally 15 U.S.C. §1692k.


         The Court will first address defendants' motion for summary judgment and then turn to plaintiff's motion for leave to amend his complaint.

         A. The Governing Legal Standard

         Summary judgment is appropriate where a party can show that, as to any claim or defense, “there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.” Fed.R.Civ.P. 56(a). One of the principal purposes of the summary judgment “is to isolate and dispose of factually unsupported claims . . . .” Celotex Corp. v. Catrett, 477 U.S. 317, 323-24 (1986). It is “not a disfavored procedural shortcut, ” but is instead the “principal tool[ ] by which factually insufficient claims or defenses [can] be isolated and prevented from going to trial with the attendant unwarranted consumption of public and private resources.” Id. at 327. “[T]he mere existence of some alleged factual dispute between the parties will not defeat an otherwise properly supported motion for summary judgment.” Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247-48 (1986). There must be a genuine dispute as to any material fact - a fact “that may affect the outcome of the case.” Id. at 248.

         The evidence must be viewed in the light most favorable to the non-moving party, and the Court must not make credibility findings. Id. at 255. Direct testimony of the non-movant must be believed, however implausible. Leslie v. Grupo ICA, 198 F.3d 1152, 1159 (9th Cir. 1999). On the other hand, the Court is not required to adopt unreasonable inferences from circumstantial evidence. McLaughlin v. Liu, 849 F.2d 1205, 1208 (9th Cir. 1988).

         The moving party bears the initial burden of demonstrating the absence of a genuine dispute as to material fact. Devereaux v. Abbey, 263 F.3d 1070, 1076 (9th Cir. 2001)(en banc). To carry this burden, the moving party need not introduce any affirmative evidence (such as affidavits or deposition excerpts) but may simply point out the absence of evidence to support the nonmoving party's case. Fairbank v. Wunderman Cato Johnson, 212 F.3d 528, 532 (9th Cir.2000).

         This shifts the burden to the non-moving party to produce evidence sufficient to support a jury verdict in her favor. Deveraux, 263 F.3d at 1076. The non-moving party must go beyond the pleadings and show “by her [ ] affidavits, or by the depositions, answers to interrogatories, or admissions on file” that a genuine dispute of material fact exists. Celotex, 477 U.S. at 324.

         However, the Court is “not required to comb through the record to find some reason to deny a motion for summary judgment.” Carmen v. San Francisco Unified Sch. Dist., 237 F.3d 1026, 1029 (9th Cir. 2001) (quotation omitted). Instead, the “party opposing summary judgment must direct [the Court's] attention to specific triable facts.” Southern California Gas Co. v. City of Santa Ana, 336 F.3d 885, 889 (9th Cir. 2003).

         Only admissible evidence may be considered in ruling on a motion for summary judgment. Orr v. Bank of America, 285 F.3d 764, 773 (9th Cir. 2002); see also Fed. R. Civ. P. 56(e). In determining admissibility for summary judgment purposes, it is the contents of the evidence rather than its form that must be considered. Fraser v. Goodale, 342 F.3d 1032, 1036-37 (9th Cir. 2003). If the contents of the evidence could be presented in an admissible form at trial, those contents may be considered on summary judgment even if the evidence itself is hearsay. Id. (affirming consideration of hearsay contents of plaintiff's diary on summary judgment because at trial, plaintiff's testimony of contents would not be hearsay).

         In order to preserve a hearsay objection, “a party must either move to strike the affidavit or otherwise lodge an objection with the district court.” Pfingston v. Ronan Engineering Co., 284 F.3d 999, 1003 (9th Cir. 2002). In the absence of objection, the Court may consider hearsay evidence. Skillsky v. Lucky Stores, Inc., 893 F.2d 1088, 1094 (9th Cir. 1990).

         Statements in a brief, unsupported by the record, cannot be used to create a factual dispute. Barnes v. Independent Auto. Dealers, 64 F.3d 1389, 1396 n.3 (9th Cir. 1995). The Circuit has “repeatedly held that documents which have not had a proper foundation laid to authenticate them cannot support a motion for summary judgment.” Beyene v. Coleman Sec. Services, Inc., 854 F.2d 1179, 1182 (9th Cir. 1988). Authentication, required by Federal Rule of Evidence 901(a), is not satisfied simply by attaching a document to an affidavit. Id. The affidavit must contain testimony of a witness with personal knowledge of the facts who attests to the identity and due execution of the document. Id.

         B. Analysis

         Stimpson alleges a single claim under the Fair Debt Collection Practices Act (FDCPA). See 15 U.S.C. §§ 1692e, 1692f. Congress enacted the FDCPA in 1977 in response to the “abundant evidence of the use of abusive, deceptive, and unfair debt collection practices by many debt collectors.” 15 U.S.C. § 1692(a). The FDCPA prohibits a debt collector from asserting any “false, deceptive, or misleading representation, ” or using any “unfair or unconscionable means” to collect, or attempt to collect, a debt. §§ 1692e, 1692f. Section 1692e provides a nonexclusive list of prohibited practices, such as falsely representing the character or legal status of a debt or threatening to take legal action that cannot be taken. § 1692e(2)(A), (5). Because the FDCPA is a remedial statute, its language is construed broadly in order to effect its purpose. Clark v. Capital Credit & Collection Serv., Inc., 460 F.3d 1162, 1176 (9th Cir. 2006).

         It is not necessary for the debt collector's representation to have actually misled or deceived the plaintiff; instead, the inquiry depends on the “least sophisticated debtor” standard. Tourgeman v. Collins Fin. Servs., Inc, 755 F.3d 1109, 1119 (9th Cir. 2014) (quoting Donohue v. Quick Collect, Inc., 592 F.3d 1027, 1030 (9th Cir. 2010)). “The least sophisticated debtor standard is lower than simply examining whether particular language would deceive or mislead a reasonable debtor.” Id. (quoting Donohue, 592 F.3d at 1030) (internal quotations omitted). While most courts accept the least sophisticated debtor as “uninformed, naïve, and gullible, ” her interpretation of a collection notice still cannot be “bizarre or unreasonable.” Evon v. Law Offices of Sidney Mickell, 688 F.3d 1015, 1027 (9th Cir. 2012) (citing Wahl v. Midland Credit Mgmt., Inc., 556 F.3d 643, 645 (7th Cir. 2009)).

         In the Ninth Circuit, a debt collector's liability under § 1692e is an issue of law. Gonzales v. Arrow Fin. Servs., LLC, 660 F.3d 1055, 1061 (9th Cir. 2011); see also Tourgeman, 755 F.3d at 1118 (the “inquiry is objective and is undertaken as a matter of law”).

         1. Midland Did Not Mislead Stimpson By Failing to ...

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