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Reygadas v. DNF Associates LLC

United States District Court, W.D. Arkansas, Fort Smith Division

May 16, 2019

STEPHANIE REYGADAS PLAINTIFF
v.
DNF ASSOCIATES LLC DEFENDANT

          OPINION AND ORDER

          P.K. HOLMES, III U.S. DISTRICT JUDGE

         Before the Court is Defendant DNF Associates LLC (“DNF”)'s motion (Doc. 25) for summary judgment, brief (Doc. 27) in support, and statement of facts (Doc. 26). Plaintiff Stephanie Reygadas filed a response (Doc. 28) in opposition, and a statement of facts (Doc. 29). DNF then filed a reply (Doc. 30). The parties filed additional unsolicited briefing (Docs. 31-34), which the Court has not considered.

         In her amended complaint, Plaintiff alleges that DNF violated the Fair Debt Collection Practices Act, 15 U.S.C. § 1692, et seq. (“FDCPA”) and the Arkansas Fair Debt Collection Practices Act, Ark. Code Ann. § 17-24-501, et seq. (“AFDCPA”). DNF argues in its motion that summary judgment is appropriate because it does not meet the statutory definition of “debt collector” as required by the FDCPA and the AFDCPA for the statutory requirements to apply. (Doc. 27, p. 1). DNF alternatively argues that it cannot be vicariously liable for the actions of Radius Global Solutions (“RGS”) because RGS did not violate the FDCPA or AFDCPA. For the reasons stated below, DNF's motion for summary judgment will be DENIED and partial summary judgment will be entered in favor of Plaintiff.

         I. Background

         Plaintiff Stephanie Reygadas purchased a camera from Purchasing Power, an online retail catalog. (Doc. 11, p. 7, ¶ 44). A dispute arose between Reygadas and Purchasing Power regarding the camera and Reygadas refused to pay the outstanding debt. (Doc. 11, p. 7). Purchasing Power considered Reygadas's account in default and sold the account to DNF Associates LLC, a debt purchaser. (Doc. 29, p. 1). DNF then hired the Jacob Law Group, PLLC to collect on the account. (Doc. 29, p. 3). On December 6, 2016, the Jacob Law Group filed a lawsuit in the Circuit Court of Crawford County against Reygadas for her outstanding debt in the name of DNF, seeking judgment on the account. (Doc. 29-2, p. 2). On January 30, 2017, Reygadas's attorney Corey McGaha served the Jacob Law Firm with a Motion to Dismiss for Insufficient Process. (Doc. 29-2, p. 9). McGaha also electronically filed the motion with the court on that date, generating a notice of electronic filing. (Doc. 29-2, p. 32). On January 4, 2018, Crawford County Circuit Court dismissed DNF's action against Reygadas for insufficiency of process. (Doc. 29-2, p. 50). DNF then contracted with RGS to collect on Reygadas's account. (Doc. 29, p. 4). DNF provided RGS with Reygadas' personal information, original creditor, and account balance. Id. However, DNF did not notify RGS of the lawsuit filed against Reygadas in state court, nor did it share with RGS that Reygadas was represented by an attorney. Id. On July 4, 2018, RGS sent a letter via U.S. mail to Reygadas regarding the debt at issue in this case. Id. Reygadas had never consented to being contacted directly by a debt collector.

         II. Summary Judgment Standard

         When a party moves for summary judgment, it must establish both the absence of a genuine dispute of material fact and that it is entitled to judgment as a matter of law. See Fed. R. Civ. P. 56; Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 586-87 (1986); Nat'l Bank of Commerce of El Dorado, Ark. v. Dow Chem. Co., 165 F.3d 602 (8th Cir. 1999). In order for there to be a genuine issue of material fact, the nonmoving party must produce evidence “such that a reasonable jury could return a verdict for the nonmoving party.” Allison v. Flexway Trucking, Inc., 28 F.3d 64, 66-67 (8th Cir. 1994) (quoting Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986)). Only facts “that might affect the outcome of the suit under the governing law” need be considered. Anderson, 477 U.S. at 248. “[T]he non-movant must make a sufficient showing on every essential element of its claim on which it bears the burden of proof.” P.H. v. Sch. Dist. of Kan. City, Mo., 265 F.3d 653, 658 (8th Cir. 2001) (quotation omitted). Facts asserted by the nonmoving party “must be properly supported by the record, ” in which case those “facts and the inferences to be drawn from them [are viewed] in the light most favorable to the nonmoving party.” Id. at 656-57. A court may “enter summary judgment sua sponte, so long as the losing party was on notice that she had to come forward with all of her evidence.” Celotex Corp. v. Catrett, 477 U.S. 317, 326 (1986); Madewell v. Downs, 68 F.3d 1030, 1049 (8th Cir. 1995).[1]

         III. Analysis

         DNF argues in its motion for summary judgment that Reygadas's case should be dismissed for two reasons. DNF asserts that under the FDCPA and the AFDCPA, it cannot be held liable for a violation because it is not a “debt collector” as required by the statutes for their requirements to apply. Alternatively, DNF contends that even if it is considered a “debt collector” under the statutes, there was no violation of the statutes because RGS did not have “actual knowledge” that Reygadas was represented by counsel when RGS sent a letter on DNF's behalf, attempting to collect the outstanding debt. If RGS did not violate the statutes, DNF cannot be vicariously liable for a violation. Each of DNF's arguments will be addressed in turn.

         The purpose of the Fair Debt Collection Practices Act is to “eliminate abusive debt collection practices by debt collectors . . . .” 15 U.S.C. § 1692. The FDCPA provides a private right of action against “debt collector[s]” who violate the FDCPA. 15 U.S.C. § 1692(k). The FDCPA defines a “debt collector” as:

[A]ny 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, debts owed or due or asserted to be owed or due another.

15 U.S.C. § 1692(a)(6). The Arkansas Fair Debt Collection Act similarly defines a debt collector as:

[A] person who uses an instrumentality of interstate commerce or the mails in a business whose principal purpose is the collection of debts or who regularly collects or attempts to collect, directly or indirectly, debts owed or due or asserted to be owed or due another.

         Ark. Code Ann. § 17-24-502(5)(A). The AFDCPA definition is “materially identical to the federal FDCPA definition of ‘debt collector.'” Silberstein v. Fed. Nat'l Mortg. Ass'n, No. 5:16-CV-05331, 2017 WL 187165, at * 2 (W.D. Ark. Jan. 17, 2017). Thus, the analysis of whether DNF is a debt collector under the FDCPA and the AFDCPA are the same. The statutes identify two types of entities that may be classified as a “debt collector:” 1) “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 2) “any person who regularly collects or attempts to collect, directly or indirectly, debts owed or due or asserted to be owed or due another.” Henson v. Santander Consumer USA Inc., ___ U.S. ___, 137 S.Ct. 1718, 1721 (2017). Reygadas does not argue that DNF qualifies as a debt collector under the second definition. Rather, Reygadas argues that DNF qualifies because its principal business purpose is the ...


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