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Taylor v. Weltman, Weinberg & Reis, Co., P.S.C.

United States District Court, W.D. Kentucky, Louisville Division

May 25, 2017

ZACHARY TAYLOR, Plaintiff,
v.
WELTMAN, WEINBERG & REIS, CO., P.S.C., et al. Defendants.

          MEMORANDUM OPINION AND ORDER

          David J. Hale, Judge United States District Court.

         Defendant Boston Portfolio Advisors, Inc. (BPA) claims that one of its clients' portfolios contained the defaulted loan of Plaintiff Zachary Taylor and that it placed the debt with Defendant Weltman, Weinberg & Reis, Co. (WWR) for servicing. (D.N. 11-1, PageID # 43; D.N. 11-2, PageID # 48; D.N. 13, PageID # 64; D.N. 15, PageID # 77) Taylor disputed the debt and claims that WWR contacted him in violation of the Fair Debt Collection Practices Act (FDCPA). (D.N. 1; D.N. 11-1, PageID # 43; D.N. 13, PageID # 64) BPA seeks summary judgment, arguing that it cannot be liable under the FDCPA because it is not a “debt collector.” (D.N. 11-1, PageID # 45-46) Because there is a genuine dispute of material fact with respect to whether BPA is a debt collector, the Court will deny BPA's motion for summary judgment.

         I. BACKGROUND

         Because this is a motion for summary judgment, the evidence is viewed in the light most favorable to Taylor. Taylor allegedly owed almost $7, 000 on a loan from creditor PNC Bank, N.A. (D.N. 1, PageID # 3) Defendant BPA is a financial consulting firm that provides “portfolio management, risk management, due diligence, litigation and asset valuation services, and various other credit and capital market solutions.” (D.N. 11-2, PageID # 48) According to an affidavit from a Senior Operations Administrator at BPA, “BPA placed Mr. Taylor's account with [WWR] for collection.” (D.N. 11-2, PageID # 48) WWR sent correspondence and made several phone calls to Taylor, seeking to collect on the alleged debt. Taylor disputed the validity of the debt but WWR continued to contact him. (D.N. 1, PageID # 3-4)

         Taylor filed suit against WWR and BPA, alleging that the phone calls violated the FDCPA. (D.N. 11-1, PageID # 43; D.N. 13, PageID # 64) In response, BPA filed a motion for summary judgment, arguing that it does not regularly collect or attempt to collect debts and thus is not a “debt collector” under the FDCPA. (D.N. 11-1, PageID # 45-46) BPA maintains that WWR placed the disputed calls and that BPA “made no attempts to collect” the debt. (Id., PageID # 46) Taylor acknowledges that BPA did not have “direct contact” with him. (D.N. 13, PageID # 65) Nevertheless, Taylor asserts that BPA is a “debt collector” because it “indirectly sought to collect the debt through the efforts of WWR.” (Id.) Alternatively, Taylor contends that BPA is vicariously liable for WWR's violations of the FDCPA. (D.N. 13)

         The Court requested supplemental briefing on the issue of the default status of Taylor's loan at the time it was assigned to BPA for servicing, which the parties have provided. (D.N. 19; D.N. 20) Both parties agree that Taylor's loan was in default when it was acquired by BPA. (D.N. 19, PageID # 116) However, BPA maintains that “the default status of Taylor's account is inconsequential.” (Id., PageID # 117)

         II. DISCUSSION

         A.

         To grant a motion for summary judgment, the Court must find that there is no genuine dispute as to any material fact and that the moving party is entitled to judgment as a matter of law. Fed.R.Civ.P. 56(a). The moving party bears the initial burden of identifying the basis for its motion and those portions of the record that “it believes demonstrate the absence of a genuine issue of material fact.” Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986). If the moving party satisfies this burden, the non-moving party must point to specific facts demonstrating a genuine issue of fact. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247-48 (1986).

         In considering a motion for summary judgment, the Court must review the evidence in the light most favorable to the non-moving party, Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 586 (1986), but “the judge's function is not himself to weigh the evidence and determine the truth of the matter but to determine whether there is a genuine issue for trial.” Anderson, 477 U.S. at 249. The non-moving party must present specific facts demonstrating that a genuine issue of fact exists by “citing to particular parts of materials in the record” or by “showing that the materials cited do not establish the absence . . . of a genuine dispute.” Fed.R.Civ.P. 56(c)(1).

         B.

         “The [FDCPA] imposes civil liability on ‘debt collectors' for certain prohibited debt collection practices.” Jerman v. Carlisle, McNellie, Rini, Kramer & Ulrich LPA, 559 U.S. 573, 576 (2010) (alterations omitted). In other words, if a party is not a “debt collector, ” it cannot be liable under the FDCPA. See id; see also Stamper v. Wilson & Assocs., P.L.L.C., No. 3:09-CV-270, 2010 WL 1408585, at *3 (E.D. Tenn. Mar. 31, 2010). Whether a party is a debt collector is a question of fact. See Schroyer v. Frankel, 197 F.3d 1170, 1173-77 (6th Cir. 1999).

The FDCPA, in relevant part, defines “debt collector” as
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, ...

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