United States District Court, E.D. Kentucky, Northern Division
QUENTIN J. THOMPSON PLAINTIFF
MIDLAND FUNDING, LLC DEFENDANT
MEMORANDUM OPINION AND ORDER
R. WILHOIT UNITED STATES DISTRICT JUDGE.
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]. 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.
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 ¶
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]. 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)).
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].
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
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]. 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].
Standard of Review
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].
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
'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
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).
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."
Filing a time-barred lawsuit constitutes a violation of the
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).
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].
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 §§ 1692e, ...