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Lundie v. Smith & Cohen, LLC

United States District Court, E.D. Virginia, Norfolk Division

January 26, 2016

HEATHER LUNDIE, Plaintiff,
v.
SMITH & COHEN, LLC, Defendant.

MAGISTRATE JUDGE"S REPORT AND RECOMMENDATION

DOUGLAS E. MILLER, Magistrate Judge.

This Fair Debt Collection Practices Act ("FDCPA") and Telephone Consumer Protection Act ("TCPA") case is before the court on Plaintiff Heather Lundie ("Lundie" or "Plaintiff")'s Motion for Default Judgment against Defendant Smith & Cohen, LLC, ("Smith & Cohen" or "Defendant"). (ECF No. 9). Plaintiff's Complaint alleges violations of the FDCPA and the TCPA based on Defendant's repeated telephone calls attempting to collect an alleged debt. Smith & Cohen failed to respond. This action was referred to the undersigned United States Magistrate Judge pursuant to the provisions of 28 U.S.C. § 636(b)(1)(B) and (C) and Rule 72(b) of the Federal Rules of Civil Procedure. For the reasons outlined below, the undersigned RECOMMENDS that the court GRANT Plaintiff's Motion for Default Judgment (ECF No. 9), and AWARD $10, 829.00 in damages and costs.

I. PROCEDURAL HISTORY AND FACTS

On June 29, 2015, Plaintiff filed her Complaint alleging violations of the FDCPA, 15 U.S.C. § 1692 et seq., and the TCPA, 45 U.S.C. § 227 et seq. (ECF No. 1). Defendant was served with process on August 20, 2015, by personal service on its registered agent, William Heydt, in Delaware pursuant to Va. Code § 13.1-928. See Aff. of Service (ECF No. 6). Smith & Cohen failed to respond or otherwise appear in this action, and on December 12, 2015, Lundie requested entry of default against Smith & Cohen. (ECF No. 7). The clerk of this court entered default on December 15, 2015. (ECF No. 8). Plaintiff's pending motion for default judgment followed on December 18, 2015.[1] (ECF No. 9).

In Lundie's Complaint, she alleges violations of the FDCPA and the TCPA, stemming from telephone calls Defendant placed to Plaintiff and her family members in an attempt to collect an alleged debt.[2] Compl. (ECF No. 1), Starting on November 11, 2014, Defendant through a representative, who identified himself as "Oliver Davis, " placed a call to Lundie's cellular telephone to collect the alleged debt. Id . ¶¶ 9-10. Lundie asked Davis to stop calling her cellular telephone and explained that the calls were causing her stress because her husband had recently passed away. Id . ¶ 10. From November 11 to November 16, 2014, Plaintiff received daily telephone calls regarding the alleged debt. Id . ¶¶ 9, 13-19. During one of these calls, Defendant, through its caller, stated that it "would place a lien on her home." Id . ¶ 11.

On November 17, 2014, Defendant contacted Plaintiff's father and mother-in-law and disclosed the alleged debt in another attempt to collect. Id . ¶¶ 19-23. Plaintiff left voicemails for Oliver Davis, Defendant's representative on November 14 and November 17, 2014, asking him to stop calling and informing him that she was represented by a debt settlement company. Id . ¶¶ 15-16, 23-24. Defendant again contacted Plaintiff on her cellular telephone on January 6, January 29, and January 30, 2015. Id . ¶¶ 25-27. The January 30, 2015, call included an automated greeting. Id . Defendant also left a voicemail on Plaintiff's cellular telephone on March 7, 2015, which did not disclose that the communication was from a debt collector. Id . ¶ 28. During this period, Lundie was "diagnosed with anxiety and ankylosing spondylitis, a form of arthritis that affects the spine and large joints, " and was prescribed medication for these conditions. Id . ¶¶ 29-30.

Plaintiff now asks the court to enter default judgment and award FDCPA actual damages of $2, 000.00, FDCPA statutory damages of $1, 000.00, attorney's fees of $2, 785.00, court costs of $400.00, service fees of $144.00, and TCPA statutory damages of $9, 000.00, for a total of $15, 329.00 in damages. Pl.'s Br. (ECF No. 9-1, at 3-4).

II. ANALYSIS

A. Default Judgment

i. The Legal Standard

Default judgment is appropriate when a defendant "has failed to plead or otherwise defend" against an action and that failure is demonstrated by an affidavit or other filing. Fed.R.Civ.P. 55(a); see also Chafin v. Chafin, 133 S.Ct. 1017, 1025 (2013). After securing entry of default, as Lundie has done here, a plaintiff may move for entry of default judgment. And, where a claim is not for a sum certain, the plaintiff must apply to the court, as opposed to the clerk, for entry of default judgment. Fed.R.Civ.P. 55(b)(2); EMI April Music, Inc. v. White, 618 F.Supp.2d 497, 505 (E.D. Va. 2009); S. Bank & Trust Co. v. Pride Grp., LLC, No. 2:14CV255, 2015 WL 410726, at *3 (E.D. Va. Jan. 28, 2015). Whether to grant default judgment lies within the sound discretion of the court. See Lolatchy v. Arthur Murray, Inc., 816 F.2d 951, 953-54 (4th Cir. 1987).

In this case, Smith & Cohen had twenty-one days from the date of service to answer the Complaint.[3] Fed.R.Civ.P. 12(a)(1)(A). By failing to answer or otherwise respond, Smith & Cohen has admitted "the plaintiff's well-pleaded allegations of fact" in the Complaint. Ryan v. Homecomings Fin. Network, 253 F.3d 778, 780 (4th Cir. 2001); see Fed.R.Civ.P. 8(b)(6). That is, Smith & Cohen has admitted the allegations in the Complaint to the extent that the Complaint "contain[s] sufficient factual matter, accepted as true, to state a claim to relief that is plausible on its face." Pride Grp., LLC, 2015 WL 410726, at *4 (quoting Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009)), Necessarily then, the court must evaluate the sufficiency of the Complaint to support the causes of action alleged. See, e.g., id.; Joe Hand Promotions, Inc. v. Citibars, Inc., 2:11cv58, 2012 WL 503212, at *3 (E.D. Va. Feb. 8, 2012) ("[T]he Court must nevertheless determine whether Plaintiff's complaint states a claim upon which relief can be granted.") (citing Anderson v. Found, for Advancement, Educ. & Emp't of Am. Indians, 155 F.3d 500, 506 (4th Cir. 1998)).

"Although well-pleaded factual allegations are accepted as true for default judgment purposes, a party who defaults does not admit the allegations in the claim as to the amount of damages." Pride Grp., LLC, 2015 WL 410725, at *4 (citing Fed.R.Civ.P. 8(b)(6)). Thus, where a court finds that entry of default judgment is appropriate as to liability, it must independently calculate the appropriate amount of damages, or other remedy, based on either an evidentiary hearing or affidavits and documents attached to the plaintiff's motion. Ryan, 253 F.3d at 780-81; Anderson, 155 F.3d at 507.

ii. Fair Debt Collection Practices Act ("FDCPA")

a. Liability Under the FDCPA

Lundie's Complaint alleges that Smith & Cohen violated the FDCPA, and accepting as true the well-pleaded factual allegations in her Complaint regarding liability, she establishes a prima facie case under the FDCPA. To succeed on a FDCPA claim, a plaintiff must prove that: "(1) the plaintiff has been the object of collection activity arising from consumer debt, (2) the defendant is a debtor collector as defined by the FDCPA, and (3) the defendant has engaged in an act or omission prohibited by the FDCPA." Diken v. Streich, 369 F.Supp.2d 781, 784-85 (E.D. Va. 2005) (quoting Fuller v. Becker & Poliakoff, 192 F.Supp.2d 1361 (M.D. Fla. 2002)).

For the first element, a "consumer debt" is defined as "an obligation or alleged obligation to pay money arising out of a transaction in which the money, property, insurance, or services which are the subject of the transaction are primarily for personal, family, or household purposes.'" Finney v. MIG Capital Mqmt., Inc., No. 2:13-2778, 2014 WL 1276159 (S.D. W.Va. Mar. 27, 2014) (quoting 15 U.S.C. § 1692(a)); see Dryden v. Accredited Collection Agency, Inc., No. 3:14-CV-255, 2015 WL 3646649, at *3 (E.D. Va. June 10, 2015). Here, Lundie's Complaint alleges that she is a "consumer" because she is "a natural person allegedly obligated to pay a debt" and "the subject of the transaction [was] primarily for personal, family and/or household purposes." Compl. ¶¶ 32, 34 (ECF No. 1). The second element under the FDCPA defines a "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, debts owed or due or asserted to be owed or due another." 15 U.S.C. § 1692a(6). Lundie's Complaint sufficiently alleges that Smith & Cohen is a debt collector because she states that a company representative repeatedly contacted her over the phone and held Smith & Cohen "out to be a company collecting a consumer debt." Compl. ¶¶ 17-30, 33 (ECF No. 1). For the third element, Lundie alleges that Smith & Cohen engaged in "act[s] or omissions[s] prohibited by the FDCPA" that resulted in ten violations of the Act. Id . ¶¶ 31-55. This report will briefly discuss each alleged violation.

First, Lundie alleges that Smith & Cohen violated 15 U.S.C. § 1692b(2) "by communicating with a person other than Plaintiff and stating to such person that Plaintiff owes an alleged debt." Id . ¶ 37. Second, she argues that Smith & Cohen violated § 1692c(b) of the FDCPA "by communicating with a person other than Plaintiff in connection with the collection of the alleged debt without a proper purpose." Id . ¶ 39. In support of Counts I and II, the Complaint alleges that on November 17, 2014, Smith & Cohen placed calls to Lundie's father and mother-in-law, disclosed that she owed an alleged debt, and attempted to collect the debt from them. Id . ¶¶ 19-22; see also Decl. of Heather Lundie ¶¶ 12-13 (ECF No. 9-3). Based on the factual allegations in Lundie's Complaint and supporting documents, Counts I and II state valid causes of action under the FDCPA.

Third, the Complaint alleges that Smith & Cohen violated § 1692d "by engaging in conduct the natural consequence of which was to harass, oppress and/or abuse Plaintiff in connection with the collection of the alleged debt." Compl. ¶ 41 (ECF No. 1). Fourth, Lundie argues that Defendant violated § 1692e "by using false, deceptive and/or misleading representation or means in connection with the collection of the alleged debt." Id . ¶ 43. To support this claim, Lundie relies on the totality of Defendant's conduct, including Defendant's repeated telephone calls attempting to collect ...


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