Searching over 5,500,000 cases.

Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.

Thompson v. Midland Funding, LLC

United States District Court, E.D. Kentucky, Northern Division

March 25, 2019




         This matter is before the Court on Defendant Midland Funding, LLC's ("Midland") Motion for Summary Judgment [Docket No. 69] and Plaintiff Quentin Thompson's Cross Motion for Summary Judgment [Docket No. 71].[1] Thompson claims that Midland violated two provisions of the Fair Debt Collection Practices Act ("FDCPA"), 15 U.S.C. §§ 1692f(1) and 1692e(5), by suing him in state court to collect credit card debt after the statute of limitations had lapsed under Kentucky law. [See Docket No. 59]. All briefing is complete, and both Motions for Summary Judgment are ripe for adjudication. For the reasons set forth herein, Midland's Motion for Summary Judgment will be denied and Thompson's Motion for Summary Judgment will be granted.


         In Thompson's First Amended Class Action Complaint filed on June 6, 2017, he asserts that Midland violated § 1692f(1) of the FDCPA "by bringing suit and/or sending a dunning communications on a claim that is barred by the applicable statute of limitations" and that Midland violated 15 U.S.C. § 1692e(5) based on the nearly identical conduct of "filing suit on a debt and/or sending a dunning letter on a claim that is barred by the applicable statute of limitations, or threatening to take legal action on a debt that is barred by the applicable statute of limitations." [Docket No. 59 at ¶ 45(a)-(b)]. The First Amended Class Action Complaint also alleges generally that "Midland Funding, LLC violated multiple sections of the FDCPA by filing suit and sending dunning letters on debt on which it had no documents that supported its claims." [Id. at ¶ 45(c)].[2]

         Midland filed a Motion for Summary Judgment on April 2, 2018. [Docket No. 69]. Thompson filed a combined Response and Cross Motion for Summary Judgment as to Defendant's Liability on the Merits on April 25, 2018. [Docket No. 71]. Midland filed a combined Reply in Support of its Motion for Summary Judgment and Response to Plaintiffs Cross Motion for Summary Judgment on May 21, 2018. [Docket No. 78]. Thompson filed a Reply in Support of his Cross Motion on May 31, 2018. [Docket No. 83]. Finally, Midland filed a Motion for Leave to File Sur-Reply on June 14, 2018 [Docket No. 85] to which Thompson filed objections [Docket No. 86].[3] Thompson filed his Complaint individually and as a class action on behalf of all others similarly situated; however, Thompson has not yet renewed his motion for class certification following the Court's March 31, 2015 Order denying Plaintiffs Motion for Class Certification without prejudice. [Docket No. 38; see also Docket No. 58]. The Sixth Circuit has consistently held that a district court may consider motions for summary judgment prior to class certification when doing so may prevent needless litigation. Miami Univ. Wrestling Club v. Miami Univ., 302 F.3d 608, 616 (6th Cir. 2002) (citing Sprague v. GMC, 133 F.3d 388, 397 (6th Cir. 1998)); see also Jibson v. Mich. Educ. Ass 'n-NEA, 30 F.3d 723, 734 (6th Cir. 1994) (citing Marx v. Centran Corp., 747 F.2d 1536, 1552 (6th Cir.), cert denied, 471 U.S. 1125(1984)).

         As an initial matter, Midland suggests that Thompson's Cross Motion for Summary Judgment should be denied as untimely. [See Docket No. 78 at 15 n.4]. Midland correctly points out that the deadline for dispositive motions was extended to April 2, 2018 [Docket No. 68], on which date Midland filed its Motion for Summary Judgment [Docket No. 69]. Thompson did not file his Cross Motion for Summary Judgment until April 25, 2018, in conjunction with Plaintiffs Response to Defendant's Motion for Summary Judgment. [Docket No. 71]. Although Thompson's Motion for Summary Judgment was not filed by the dispositive motions deadline, the Court will nevertheless consider the motion, because there is no evidence Thompson acted in bad faith or that Midland was prejudiced by the delay. See Great Am. Ins. Co. v. United States, 552 F.Supp.2d 703, 706 (S.D. Ohio 2008); Jones v. L&G Trucking, LLC, No. 15-40-DLB-HAI, 2017 WL 1173937, at *2 (E.D. Ky. Mar. 29, 2017). The arguments raised in Thompson's Cross Motion overlap significantly with the substance of Thompson's Response to Midland's Motion for Summary Judgment. In addition, an Agreed Order granted Midland an extension of time in which to file its consolidated Reply and Response to Plaintiffs Cross Motion. [Docket No. 77].


         The relevant facts are undisputed. Prior to 2002, Thompson obtained a credit card from Spiegel Inc., operated through Spiegel's wholly-owned subsidiary, First Consumers National Bank ("FCNB"). [Docket No. 59 at 2]. The credit card could only be used at Spiegel's Newport News stores and websites. [Id.]. The last payment made on the account was made on June 30, 2002. [Docket No. 71 at 5]. A debt was incurred on the account, which FNCB "charged off' on or around February 9, 2003. [Id. at 5-6]. Defendant Midland then purchased the debt from Spiegel on or around December 4, 2007. [Id. at 6]. Thereafter, Midland Credit Management ("MCM") serviced Plaintiffs account for Midland. [Docket No. 69 at 9].[4]

         Between January 2008 and December 2011, MCM sent nine letters to Thompson, attempting to collect the debt. [Docket No. 71 at 6]. On or around March 11, 2012, MCM sent the account to the law firm Morgan & Pottinger, P.S.C. for review and consideration of a potential lawsuit. [Id.; Docket No. 69 at 11]. Midland filed a collection action in the Lawrence County, Kentucky District Court on August 7, 2012. [Docket No. 71 at 6].[5] Thompson moved for judgment on the pleadings, arguing that the lawsuit was time-barred under Kentucky's five-year statute of limitations for contracts not in writing pursuant to Kentucky Revised Statute ("KRS") § 413.90(2). [Id.]. At some point in the litigation, Midland moved for voluntary dismissal without prejudice. [R. 69 at 106]. The Lawrence District Court granted Thompson's motion for judgment on the pleadings and dismissed the case with prejudice on May 21, 2013. [M; Docket No. 69 at 112].

         III. ANALYSIS

         A. Standard of Review

         Summary judgment is appropriate when "the movant shows that there is no dispute as to any material fact and the movant is entitled to judgment as a matter of law." Fed.R.Civ.P. 56(1). A court must look to the substantive law to identify which facts are material. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). When evaluating cross motions for summary judgment, courts should "evaluate each motion on its own merits and view all facts and inferences in the light more favorable to the nonmoving party." Bakery & Confectionery Union & Indus. Int'l Health Benefits & Pension Funds v. New Bakery Co. of Ohio, 133 F.3d 955, 958 (6th Cir. 1998) (quoting Wiley v. United States, 20 F.3d 222, 224 (6th Cir. 1994)). Summary judgment is appropriate if the moving party demonstrates 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). While the initial burden of showing there is no genuine issue of material fact is on the moving party, once the moving party has met its burden, the opposing party must demonstrate that there is sufficient evidence on which the jury could find for the nonmoving party. Dominguez v. Corr. Med. Servs., 555 F.3d 543, 549 (6th Cir. 2009). Summary judgment should be granted unless a court finds "there is sufficient evidence favoring the nonmoving party for a jury to return a verdict for that party." Brown v. Chapman, 814 F.3d 447, 464 (6th Cir. 2016). Based on the undisputed facts cited above and the fact that Midland does not dispute the state court's finding that its collections action against Thompson was time-barred, the Court finds no material facts in dispute and rules on the motions for summary judgment as a matter of law. [Docket No. 69 at 7; Id. n.3].

         B. The FDCPA

         Congress passed the FDCPA "to eliminate abusive debt collection practices by debt collectors, to insure that those debt collectors who refrain from using abusive debt collection practices are not competitively disadvantaged, and to promote consistent State action to protect consumers against debt collection abuses." 15 U.S.C. § 1692(e). Because the FDCPA is a strict liability statute, a plaintiff need not prove knowledge or intent, nor does a plaintiff have to have suffered actual damages. Stratton v. Portfolio Recovery Assocs., LLC, 770 F.3d 443, 448-49 (6th Cir. 2014). "Strict liability places the risk of penalties on the debt collector that engages in activities which are not entirely lawful, rather than exposing consumers to unlawful debt-collector behavior without a possibility for relief." Id. at 449. When determining whether a debt collector's conduct has violated the FDCPA, courts consider the alleged conduct "through the lens of the 'least sophisticated consumer'-the usual objective legal standard in consumer protection cases." Id. at 450 (quoting Gionis v. Javitch, Block, Rathbone, LLP, 238 Fed.Appx. 24, 28 (6th Cir. 2007)). The least sophisticated consumer standard operates as follows:

'The basic purpose of the least-sophisticated-consumer standard is to ensure that the FDCPA protects all consumers, the gullible as well as the shrewd.' [Clomon v. Jackson, 988 F.2d 1314, 1318 (2d Cir. 1993).] 'This effort is grounded, quite sensibly, in the assumption that consumers of below-average sophistication or intelligence are especially vulnerable to fraudulent schemes.' Id. at 1319. The standard thus serves a dual purpose: 'it (1) ensures the protection of all consumers, even the naive and the trusting, against deceptive debt collection practices, and (2) protects debt collectors against liability for bizarre or idiosyncratic interpretations of collection notices.' Id. at 1320.

Id. at 450-51 (quoting Gionis, 238 Fed.Appx. at 28). In addition, only a single violation need be shown to recover under the FDCPA. Mann v. Acclaim Fin. Servs., 348 F.Supp.2d 923, 926 (S.D. Ohio 2004).

         Thompson has sufficiently alleged that he is a "consumer" within the meaning of the FDCPA, that the debt arose for personal, family, or household purposes, and that Midland is a "debt collector" under the Act; all of which Midland does not dispute. [Docket No. 71 at 25-28]. Thus, the alleged conduct falls within the scope of the FDCPA. See 15 U.S.C. §§ 1692(e), 1692a(3), 1692a(5)-(6). Thompson's First Amended Complaint specifically alleges that by filing a time-barred collection action in state court, Midland violated 15 U.S.C. §§ 1692f(1) and 1692e(5). [Docket No. 59 at 7]. The "general ban" under § 1692f prohibits debt collectors from using "unfair or unconscionable means to collect or attempt to collect any debt." Section 1692f goes on to provide a non-exhaustive list of specific conduct falling under this general prohibition. The subsection Plaintiff relies upon, 1692f(1), prohibits "[t]he collection of any amount (including any interest, fee, charge, or expense incidental to the principal obligation) unless such amount is expressly authorized by the agreement creating the debt or permitted by law." Section 1692e is structured in the same way, prohibiting generally the use of "any false, deceptive, or misleading representation or means in connection with the collection of any debt," with § 1692e(5) specifically prohibiting "[t]he threat to take any action that cannot legally be taken or that is not intended to be taken."

         C. Filing a time-barred lawsuit constitutes a violation of the FDCPA.

         Although the Sixth Circuit has not yet addressed the question of whether filing a collection lawsuit outside of the statute of limitations constitutes a violation of the FDCPA, several courts have found that a debt collector violates the FDCPA when it files a collection action that it knew or should have known was time-barred. See, e.g., Hall v. LVNV Funding, LLC, No. 3.13-CV-00399-H, 2013 WL 5550838, at *2 (W.D. Ky. Oct. 8, 2013) ("Generally, a violation is found when the debt collector knew or should have known the lawsuit was time barred."); see also Conway v. Portfolio Recovery Assocs., LLC, 13 F.Supp.3d 711, 714 (E.D. Ky. 2014); Duffeyv. Pope, No. 2:11-cv-16, 2012 WL 4442753, at *5 (S.D. Ohio Sept. 25, 2012); Jackson v. Midland Funding, LLC, 754 F.Supp.2d 711, 714-16 (D.N.J. 2010), aff'd, 468 Fed.Appx. 123 (3d Cir. 2012); Dudek v. Thomas & Thomas Attys. & Counselors at Law, LLC, 702 F.Supp.2d 826, 833 (N.D. Ohio 2010); Herkert v. MRC Receivables Corp., 655 F.Supp.2d 870, 873, 881 (N.D. Ill. 2009); Deere v. Javitch, 413 F.Supp.2d 886, 890-91 (S.D. Ohio 2006); Dunaway v. JBC Assocs., Inc., No. 03-7397, 2005 WL 1529574, at *4 (E.D. Mich. June 20, 2005); Kimber v. Fed. Fin. Corp., 668 F.Supp. 1480, 1487 (M.D. Ala. 1987).[6]

         Midland does not dispute that filing a time-barred lawsuit violates the FDCPA. Moreover, Midland does not seek to relitigate the Lawrence District Court's finding that Midland's collection action against Thompson was time-barred. [Docket No. 69 at 7; Id. n.3 (citing Hall, 2013 WL 5550838, at *3]. Instead, Midland seeks summary judgment on the grounds that the conduct alleged (filing a time-barred lawsuit) does not constitute a violation of the specific subsections of the FDCPA that Thompson relies upon in his Complaint, 15 U.S.C. §§ 1692f(1) and 1692e(5). [See Docket No. 69 at 5-6]. More specifically, Midland asserts that § 1692f(1), which prohibits the collection of an "amount" that is not "expressly authorized by the agreement creating the debt or permitted by law," does not apply in this case, as Thompson does not dispute the amount of the alleged debt at issue. [Id.]. Similarly, Midland argues that § 1692e(5), which prohibits "the threat to take any action that cannot legally be taken" is inapplicable because Midland did not threaten Thompson, but rather, took action by filing the collection lawsuit. [Id. at 6].

         In response, Thompson attempts to distance himself from having relied upon these two particular subsections, asserting generally that "there can be no doubt that Plaintiff has stated a cause of action under §§ 1692e and e(5), as well as § 1692f." [Docket No. 71 at 11; see also Docket No. 71 at 29 ("Filing a lawsuit to collect a debt against a consumer outside the applicable statute of limitations violates the FDCPA.")]. It is well-established that filing a time-barred lawsuit violates one or multiple provisions of §§ 1692e and 1692f. However, which particular section or sections this conduct violates is unclear. Of the many cases cited above in which courts have recognized an FDCPA violation based on the filing of a time-barred lawsuit, some rely on one or both of the general provisions §§ 1692f and 1692e. See, e.g., Kimber, 668 F.Supp. at 1488; Herkert, 655 F.Supp.2d at 873, 881. Others cite to a specific subsection, including §§ 1692e(2) and 1692e(5). See, e.g., Deere, 413 F.Supp.2d at 890-91 (finding that filing a time-barred lawsuit "clearly falls" under § 1692e(2) and possibly also under § 1692f); Jackson, 754 F.Supp.2d at 714, 174 n.6 (relying on §§ 1692f and 1692e(5)); Dudek, 702 F.Supp.2d at 833 (citing to ยงยง 1692e, ...

Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.