DITTY v. CHECKRITE, LTD., INC. Civil No. 2:95-CV-430C.
973 F.Supp. 1320 (1997)
Rebecca H. and Bryan J. DITTY, et al., Plaintiffs, v. CHECKRITE, LTD., INC., et al., Defendants.
United States District Court, D. Utah, Central Division.
August 11, 1997.
Lester A. Perry, Kesler & Rust, Salt Lake City, UT, for Petitioners.
Daniel P. Shapiro, Goldberg, Kohn, Bell, Black, Roosenbloom & Moritz, Ltd., Chicago, IL, Mark O. Morris, Snell & Wilmer LLP, Salt Lake City, UT, Paul C. Droz, Blackburn & Stoll LC, Salt Lake City, UT, for Respondents.
AMENDED MEMORANDUM DECISION AND ORDER
CAMPBELL, District Judge.
This matter is before the court on the parties' cross-motions for summary judgment. A hearing on the parties' motions was held on April 29, 1997. Lester Perry appeared on behalf of plaintiffs, Mark Morris and Julie Thomas appeared on behalf of CheckRite,
Plaintiffs are individuals who wrote bad checks for retail purchases in amounts ranging from $2.85 to $46.68. These checks were referred by various merchants to CheckRite for collection. CheckRite sent two collection letters to plaintiffs and subsequently relinquished collection efforts to DeLoney & Associates, the law firm representing CheckRite. DeLoney & Associates sent a third
Richard DeLoney established DeLoney & Associates in September 1994. From the date of its formation until February or March of 1996, DeLoney & Associates was organized as a limited liability company under Utah law. In approximately March 1996, DeLoney & Associates reorganized as a Utah professional corporation.
DeLoney & Associates collected dishonored checks for CheckRite pursuant to an oral agreement negotiated by Richard DeLoney and Neil Auerbach, CheckRite's Senior Vice-President. Under the agreement, when DeLoney & Associates settled an account, CheckRite was to receive the face amount of the dishonored check plus $20.00; DeLoney & Associates was entitled to the remainder of the settlement proceeds.
CheckRite's Salt Lake City offices and DeLoney & Associates occupied space in the same office building. Accounts were referred by CheckRite to the firm electronically, and once the referral was made, DeLoney & Associates was able to access CheckRite's computer system to review account information. Upon receiving an account referral, DeLoney & Associates' computer system automatically generated a collection letter addressed to the writer of the dishonored check.
II. STANDARD OF REVIEW
Summary judgment is proper "if the pleadings, depositions, answers to interrogatories and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law." Fed.R.Civ.P. 56(c). In applying this standard, the court must construe all facts and reasonable inferences in the light most favorable to the nonmoving party. Matsushita Elec. Indus. Co. v. Zenith Radio Corp.,
Once the moving party has carried its burden, Rule 56(e) "requires the nonmoving party to go beyond the pleadings and by ... affidavits, or by the `depositions, answers to interrogatories, and admissions on file,' designate `specific facts showing that there is a genuine issue for trial.'" Celotex Corp. v. Catrett,
The following issues are raised by the pending motions: (1) the scope of the FDCPA, that is, whether the obligation created by a dishonored check is a "debt" as defined by the Act; (2) if the Act does apply, whether defendants' conduct violated it; (3) whether defendants violated the FCRA; (4) whether CheckRite may be held liable for the actions of its attorney; (5) whether Richard DeLoney may be held personally liable for the collection activities of DeLoney & Associates; (6) whether plaintiffs are entitled to injunctive relief; and (7) whether the FDCPA claims of plaintiffs Crandall and Robison are cognizable under the Act.
A. Scope of the FDCPA
The FDCPA prohibits a debt collector from using certain abusive practices to collect a "debt;" therefore, the Act's scope is necessarily limited by its definition of this term. The Act defines a "debt" as:
15 U.S.C. § 1692a(5). Defendants maintain that the Act is not implicated here because a dishonored check does not involve an offer or extension of credit, a condition defendants argue must be read into the definition of "debt."
Three circuits have addressed the breadth of the FDCPA's definition of "debt:" the Third Circuit in Zimmerman v. HBO Affiliate Group,
In Bass, the Seventh Circuit confronted this issue and addressed many of the same arguments advanced by defendants. Beginning with the text of the FDCPA itself the court determined that the Act's definition of "debt" was clear, unambiguous, and devoid of any condition mandating that a "debt" involve an offer or extension of credit. Bass, 111 F.3d at 1325-26. Thus, "[a]s long as the transaction creates an obligation to pay, a debt is created." Id. at 1325. The court concluded that a check creates just such an obligation to pay, and should the check be dishonored, the obligation remains. Id. Looking beyond the Act's terms, the court determined that "the [FDCPA's] legislative history, provides an unequivocal statement of the drafters' intent on this issue: [T]he committee intends that the term `debt' include consumer obligations paid by check or other non-credit consumer obligations."' Id. at 1327 (quoting H.R.Rep. No. 95-131, 95th Cong. 1st Sess., 4 (March 29, 1977)), U.S. Code Cong. & Admin. News at 1695, 1698. In light of the Act's language and legislative history, the court rejected the notion that the Act's codification as an amendment to the Consumer Credit Protection Act ("CCPA"), 15 U.S.C. §§ 1601-1615, evidenced congressional intent to limit coverage of the Act to debts arising from credit transactions. Id. at 1328. The court found the statutory structure unpersuasive "in light of the continuing expansion of the CCPA's protective landscape," and observed that "[a]lthough the CCPA as originally enacted may have focused on consumer protection in credit-based financial transactions, amendments to the Act suggest an enlargement of the CCPA to include consumer protections in other financial arenas." Id. The location of these amendments, including the FDCPA, "as amendments to the CCPA evidence the nature of the CCPA as a set of functionally free-standing acts united not by their regulation of credit transactions, but by their goal of providing protection to consumers in a variety of potentially abusive financial situations." Id. Distinguishing Zimmerman, the court observed that the Third Circuit's sweeping conclusion was based solely on the Act's placement in the CCPA and considered neither the unambiguous language of the Act's definition of "debt" nor the Act's legislative history, factors that the Seventh Circuit found probative of Congress' intent. Id. at 1326.
Charles represents the most recent appellate examination of the FDCPA's coverage. Finding the Seventh Circuit's reasoning in Bass to be "sound," the Ninth Circuit concluded that "[a] dishonored check constitutes an FDCPA `debt,' and therefore the FDCPA prohibits check collectors from using abusive practices." Charles, 119 F.3d at 742.
This court joins the Seventh and Ninth Circuits in reaching the same conclusion. Accordingly, defendants' motions for summary judgment are denied on this issue.
B. FDCPA Claims
Plaintiffs allege that defendants violated the Act by: (1) attempting to collect excessive fees; (2) violating plaintiffs' debt validation rights; (3) making a variety of threats and misleading representations; (4) and improperly using CheckRite's check verification system (also claimed to be a violation of the FCRA).
1. Excessive Fees
Plaintiffs maintain that defendants' attempts, in some instances successful, to collect amounts significantly greater than the face amounts of plaintiffs' dishonored checks violated § 1692f(1) of the Act, which prohibits "[t]he collection of any amount ... unless such amount is expressly authorized by the agreement creating the debt or permitted by
Utah's dishonored instruments statute, Utah Code Ann. §§ 7-15-1 to -3 (1995), allows the holder of a dishonored check to "impose a service charge that may not exceed $15." § 7-15-1(2). The drawer of a dishonored check may be liable for a sum greater than the face amount of the check, plus the service charge, only if a civil collection action is filed. § 7-15-1(3). CheckRite never itself attempted to collect excessive fees. Its collection letters requested from each plaintiff only the face amount of the dishonored check plus a $15.00 service charge. However, as discussed more fully infra, Part III.D, CheckRite may incur vicarious liability under the Act for violations of § 1692f(1) committed by DeLoney & Associates.
It is undisputed that DeLoney & Associates attempted to collect fees greater than $15.00 through the "covenant not to sue" practice without first having filed suit. Indeed, the very goal of the letter sent by the firm to plaintiffs was to settle their accounts short of actual litigation. The dishonored instruments statute is clear: Until a civil action is filed, fees in excess of $15.00 may not be charged. Therefore, the fees DeLoney & Associates attempted to collect were not permitted by Utah law and, in fact, violated Utah law.
DeLoney & Associates argues that because it could have sued plaintiffs for civil conversion or shoplifting instead of proceeding under the dishonored instruments statute, the $15.00 limit of Utah Code Ann. § 7-15-1(2) does not apply. However, the firm's own conduct makes clear that it was proceeding under the dishonored instruments statute, for its collection letter, sent to each plaintiff, listed a "service charge" in the amount of $15.00. Richard DeLoney testified in his deposition that this figure was used because it was the specific amount allowed by Utah Code Ann. § 7-15-1(2). Further, to accept DeLoney & Associates' argument would permit holders of dishonored checks to easily avoid the provisions of the dishonored instruments statute. Such a result would undermine the effectiveness of the statute and would be inconsistent with Utah Legislature's intention that dishonored checks be governed by the specific procedures outlined in the statute.
Because the excessive fees charged by DeLoney & Associates were neither expressly authorized by the plaintiffs nor permitted by Utah law, they violated § 1692f(1) of the Act. Plaintiffs are entitled to summary judgment on this issue.
2. Thirty-Day Validation Period
Section 1692g requires a debt collector to inform a debtor of his or her right to dispute the validity of a debt. 15 U.S.C. § 1692g(a). This notice must be provided in the debt collector's initial communication with the debtor, or within five days following the initial communication, and must notify the debtor of the amount of the debt, the creditor to whom the debt is owed, and that unless the validity of the debt is disputed in writing within thirty days, the debt collector will assume that the debt is valid. Id. The
Section 1692g contains no express requirement that collection efforts be delayed until the thirty-day period has passed. Instead, the statute states that if the debtor disputes a debt, "the debt collector shall cease collection of the debt." 15 U.S.C. § 1692g(b) (emphasis added). To accept plaintiffs' reading of § 1692g would require the court to limit the provision in a manner directly contrary to its clear and unambiguous terms. This the court cannot do, for "absent any `indication that doing so would frustrate Congress's clear intention or yield patent absurdity, [the court's] obligation is to apply the statute as Congress wrote it.'" Hubbard v. United States,
Plaintiffs also claim that the collection letter sent by DeLoney & Associates to the Dittys violated § 1692g because the validation notice, which appeared on the reverse side of the letter, was "overshadowed" by language on the letter's front side.
Accordingly, defendants are granted summary judgment on plaintiffs' claims based on § 1692g.
3. Threats and Misleading Representations
Plaintiffs claim that defendants' use of the "covenant not to sue" practice violated various provisions of § 1692e which make unlawful the use of deceptive practices in the collection of debts. By representing that they were seeking funds as a "covenant not to sue" or "settlement offer," argue plaintiffs, defendants misrepresented the amounts they were lawfully permitted to collect under the dishonored instruments statute. Defendants contend that all they conveyed to plaintiffs were offers to settle legal disputes and that public policy favors the resolution of legal disputes short of actual litigation.
The court analyzes the challenged statements under the "least sophisticated consumer" standard. This standard "ensure[s] that the FDCPA protects all consumers, the gullible as well as the shrewd." Clomon v. Jackson,
The collection letters sent by CheckRite did not contain any false, misleading, or deceptive statements in violation of § 1692e. They simply informed the debtor of the amount due, listed a $15.00 service fee, and advised the debtor that he or she may incur additional liability in the form of attorney fees and court costs if CheckRite referred the dishonored check to outside counsel for litigation. The letter also estimated the debtor's potential liability.
The letters sent by DeLoney & Associates were not equally benign. Each letter purported to make a settlement offer comprised of the face amount of the check, a $15.00 service charge, and a figure listed as "Legal Consideration for Covenant Not to Sue." The letters failed to advise debtors that the dishonored instruments statute prohibited the collection of any amount greater than the face amount of the check, plus a $15.00 service fee, unless a lawsuit was filed. Given this omission and defendants' efforts to collect excessive fees under the guise of a covenant not to sue, the court finds that no reasonable juror could conclude that defendants' mailings did not falsely represent the amounts defendants could lawfully collect, in violation of §§ 1692e(2)(A) & (10).
The letter sent by DeLoney & Associates to the Dittys differed slightly from that sent to the other plaintiffs and must be considered separately. The letter warned the Dittys not only of the possibility of a civil action for the amount of the check but that "[o]ther actions, including fraud in the inducement, negligent misrepresentation, civil shoplifting, or theft by check may also be considered."
At the time DeLoney & Associates sent the letter to the Dittys, the firm had never prosecuted a claim for civil shoplifting or theft by check. However, Richard DeLoney testified in his deposition that at the time the Ditty letter was sent, his research led him to conclude that such actions could be maintained. Mr. DeLoney also testified that after the Ditty letter was sent, actions of this type were filed against certain other debtors.
Defendants maintain that the letter's statement that "other actions ... may be considered" did not threaten legal action, but rather advised the Ditty's, in good faith, of their potential liability. While the letter does not explicitly state that an action will be brought against the Dittys, a reasonable jury applying the least sophisticated consumer standard could conclude that the letter's warning that "other actions ... may be considered" threatened suit. See United States v. National Financial Services, Inc.,
Accordingly, because the letters sent to plaintiffs by DeLoney & Associates contained false, misleading, or deceptive statements in violation of § 1692e, plaintiffs are granted summary judgment on this issue. However, factual issues prevent the court from determining whether additional statements contained in DeLoney & Associates' letter to the
4. Check Verification System
Plaintiffs allege that by placing plaintiffs' names on CheckRite's check verification system, defendants: (1) made impermissible third party communications in violation of § 1692c(b) of the FDCPA, and (2) reported false information in violation of § 1681e(b) of the FCRA and § 1692e(8) of the FDCPA.
a. Third Party Communications
Section 1692c(b) prohibits a debt collector from communicating, "in connection with the collection of any debt, with any person other than the consumer, his attorney, a consumer reporting agency if otherwise permitted by law, the creditor, the attorney of the creditor, or the attorney of the debt collector." It is undisputed that CheckRite disseminated information regarding plaintiffs' dishonored checks to its merchant-subscribers via its nationwide verification network. The court concludes that these communications were undertaken, at least in part, "in connection with" CheckRite's efforts to collect on plaintiffs' dishonored checks. Indeed, CheckRite's first collection letter to plaintiffs warned that "[d]ata from this check has been entered into our computer. Certain data (in coded form) may be reported to our member merchants and may affect your check cashing privileges. This data will be cleared upon receipt of your prompt payment." (Emphasis added). While CheckRite may have had some legitimate business purpose for making such communications, it is clear that the practice was also designed to provide CheckRite with additional leverage in collecting the debts created by plaintiffs' dishonored checks. The court also concludes that CheckRite's subscribers were not within the class of third parties to whom such communications may be made under § 1692c(b).
Therefore, whether CheckRite is liable under § 1692c(b) turns on whether CheckRite itself is a "consumer reporting agency" for purposes of its check verification activities. If so, argues CheckRite, § 1692c(b) is not implicated by debt-related communications from CheckRite the "debt collector" to CheckRite the "consumer reporting agency." As discussed more fully infra, Part III.C, the record does not permit the court to determine whether CheckRite is or is not a "consumer reporting agency" as a matter of law.
Plaintiffs also argue that DeLoney & Associates is liable under § 1692c(b) for the placement of plaintiffs' names on the check verification system. In support of this contention, plaintiffs rely on the fact that DeLoney & Associates could accept a debtor's partial payment in full satisfaction of the covenant not to sue. Plaintiffs also point to CheckRite's practice of not removing a particular debtor's name from the verification system until being notified by DeLoney & Associates that the debtor's account had settled. The court does not find these facts compelling. The record is clear that CheckRite alone administered the verification system. CheckRite placed names on the system, and CheckRite, in its discretion, removed names from the system. DeLoney & Associates' role was simply to notify CheckRite that a particular account had settled; whether the name associated with that account was actually removed, however, was CheckRite's decision. In addition, even if the notifications given by DeLoney & Associates to CheckRite were considered "communications" for purposes of
That DeLoney & Associates incurs no direct liability from the check verification system does not end the inquiry, for if found to be engaged in a joint venture with CheckRite, the firm may be held liable for unlawful third party communications committed by CheckRite. "Joint venturers stand in the same relationship to each other as partners." Rogers v. M.O. Bitner Co.,
Holding DeLoney & Associates liable as CheckRite's joint venturer would require two predicate findings: (1) that CheckRite and DeLoney & Associates were engaged in a joint venture, and (2) that CheckRite violated § 1692c(b) by placing plaintiffs' names on its verification system. However, as discussed more fully supra, Part III.B.4.a, and infra, Parts III.C & III.D.1, factual issues preclude making either finding at the summary judgment stage.
Accordingly, because the court cannot determine, as a matter of law, whether CheckRite was a "consumer reporting agency" or whether DeLoney & Associates is liable for any alleged violations of § 1692c(b), summary judgment is denied on this issue.
b. False Information
Section 1692e(8) prohibits "[c]ommunicating or threatening to communicate to any person credit information which is known or which should be known to be false[.]" Plaintiffs allege that defendants violated this provision by failing to disclose to subscribes of CheckRite's verification system that defendants had demanded from plaintiffs a fee, in the form of a covenant not to sue, that exceeded the amount defendants were authorized to collect under Utah law. CheckRite argues that plaintiffs have not shown that any false information was disclosed. DeLoney & Associates maintains that it played no role in the administration of the verification system. The court finds that summary judgment is inappropriate on this issue because neither plaintiffs nor defendants have presented any admissible evidence regarding the substance of the communications allegedly made to CheckRite's subscribers. Without knowing what "credit information," if any, was communicated to the subscribers, the court cannot determine whether such communications were known or should have been known to be false, in violation of § 1692e(8).
Accordingly, summary judgment is denied on this issue.
C. FCRA Claims
FCRA liability attaches to "consumer reporting agencies" in their preparation and dissemination of "consumer reports" and to certain "users" of such reports. DiGianni v. Stern's,
15 U.S.C. § 1681a(f). "[T]he term refers to firms that are in the business of assembling and evaluating consumer credit information[,] `... a function which involves more than receipt and retransmission of information identifying a particular debt.'" Id. at 349 (quoting D'Angelo v. Wilmington Medical Ctr., Inc.,
The record does reveal, however, that DeLoney & Associates was not a "consumer reporting agency" under the FCRA. There is no evidence that the law firm was in the business of assembling or evaluating consumer credit information. Rather, the record indicates that the firm simply notified CheckRite that a particular account had been settled. Merely furnishing information about a particular debt does not draw DeLoney & Associates within the definition of a "consumer reporting agency" Id. at 348-49; Rush v. Macy's New York Inc.,
Because the record at this stage does not permit the court to determine, as a matter of law, whether CheckRite was a "consumer reporting agency," the court denies CheckRite's and plaintiffs' motions as they pertain to plaintiffs' FCRA claims. Because DeLoney & Associates was not a "consumer reporting agency" as defined by the FCRA, its motion for summary judgment is granted as to plaintiffs' FCRA claims.
D. CheckRite's Vicarious Liability
While the FDCPA itself is silent on the issue of vicarious liability, a debt collector may be held vicariously liable under the Act for the conduct of its attorney. Newman v. Checkrite California, Inc.,
1. Joint Venture
In Utah, a joint venture "is an agreement between two or more persons ordinarily but not necessarily limited to a single transaction for the purpose of making a profit." Bassett v. Baker,
Id. Whether a joint venture exists "depends primarily upon the facts of a particular case rather than upon adherence to specific formalities." Strand v. Cranney,
It is well established that the attorney-client relationship is one between an agent and his or her principal. McCarthy v. Recordex Service, Inc.,
To impose liability under a theory of actual authority, plaintiffs must demonstrate that CheckRite consented to the manner in which its attorney-agent collected the debts owed by plaintiffs. Newman, 912 F.Supp. at 1370 (citing Restatement (Second) of Agency § 7 (1958)). Actual authority can be either express or implied. Zions First National Bank, 762 P.2d at 1094.
Id. at 1094-95. Here, while the record indicates that CheckRite was well aware of the collection methods utilized by DeLoney and his law firm, there is no evidence that CheckRite expressly authorized DeLoney or DeLoney & Associates to utilize the "covenant not to sue" scheme. Thus, no express actual authority existed.
There was, however, implied actual authority. DeLoney & Associates and CheckRite entered into an oral contract which authorized the law firm to collect CheckRite's delinquent accounts. Under the terms of the contract, CheckRite and the firm shared in the proceeds of such collection efforts — CheckRite received the face value of the check plus $20.00, DeLoney & Associates retained the balance. Further, CheckRite knew of the collection methods employed by DeLoney & Associates. CheckRite's Senior Vice President, Neil Auerbach, testified in his deposition that prior to the commencement of this suit, he had seen collection letters generated by DeLoney & Associates containing the covenant not to sue language. In fact, Mr. Auerbach was aware that all of the attorneys retained by CheckRite for its collection activities, including DeLoney & Associates, utilized the "covenant not to sue" technique in their collection efforts. That CheckRite did not specifically manifest its consent to its attorney's use of the "covenant not to sue" scheme is not controlling, for "[t]he manifestation of the principal may consist of his failure to object to unauthorized conduct." Restatement (Second) of Agency § 26 cmt. d (1958); see also Lowder v. Holley,
CheckRite is also liable for its attorney's collection practices under the doctrine of apparent authority. "To be vicariously liable for the acts of [its agent] under a theory of apparent authority, [the principal] must conduct itself in such a way as to clothe its [agent] with apparent authority to perform the [acts] committed and there must be reasonable reliance on that apparent authority on the part of the injured party." Jackson v. Righter,
In an effort to avoid vicarious liability, CheckRite argues that DeLoney & Associates was an independent contractor rather than an agent. This may be so; however, it does not save CheckRite from liability under principles of agency because the terms "agent" and "independent contractor" are not mutually exclusive. To the contrary,
McCarthy, 80 F.3d at 853 (quoting Restatement (Second) of Agency § 14N cmt. a (1958)). DeLoney & Associates acted as CheckRite's agent. That the law firm might also have been an independent contractor does not relieve CheckRite of vicarious liability.
Accordingly, because CheckRite vested Richard H. DeLoney and DeLoney & Associates with both implied actual authority and apparent authority, the court finds that CheckRite may be held vicariously liable under the FDCPA for the acts of Mr. DeLoney and his law firm.
E. Richard H. DeLoney's Personal Liability
Plaintiffs advance two theories for finding Richard DeLoney personally liable for the collection activities of his firm: (1) that DeLoney & Associates was DeLoney's alter ego; and (2) that DeLoney was a "debt collector" under § 1692a(6) of the FDCPA.
1. Alter Ego
Limited liability companies are designed to receive special tax treatment and to offer their owners ("members") the type of limited liability enjoyed by shareholders of a corporation. See Utah Limited Liability Company Act, Utah Code Ann. §§ 48-2b-101, et seq. Just as shareholders are generally insulated from personal liability for the liabilities of a corporation, Colman v. Colman,
To pierce the corporate veil under the alter ego doctrine, it must be shown that:
Colman, 743 P.2d at 786. Significant factors in determining whether this test has been met include: undercapitalization of a close corporation; failure to observe corporate formalities; siphoning of corporate funds by the dominant shareholder; nonfunctioning of other officers or directors; and the use of the corporation as a facade for operations of the dominant shareholder. Id.
Plaintiffs have not produced evidence sufficient to permit a finding, as a matter of law, that the protective veil of DeLoney & Associates should be pierced to hold Richard DeLoney personally liable for the firm's unlawful collection practices. Citing portions of Mr. DeLoney's deposition, plaintiffs argue that the court should pierce the protective veil of DeLoney & Associates because DeLoney was the sole attorney, "sole shareholder, sole director and president of DeLoney and Associates [sic]," Plaintiffs' Memorandum in Support of Motion for Summary Judgment, at 49 (Docket No. 140), and because he designed the "covenant not to sue" scheme, trained the firm's employees, and supervised the firm's collection practices. The court disagrees. That DeLoney played an active role in the firm's business is, at best, only marginally probative of the factors considered when determining whether to pierce the corporate veil. Further, there is no evidence that DeLoney & Associates was improperly organized under the Utah Limited Liability Company Act.
2. "Debt Collector"
Liability under the FDCPA attaches only to a "debt collector," a term defined by the Act as:
15 U.S.C. § 1692a(6). Attorneys who regularly engage in consumer debt collection activities are included in this definition. Heintz v. Jenkins,
Mr. DeLoney maintains that simply satisfying the definition of a "debt collector" does not trigger personal liability under the FDCPA. Rather, argues Mr. DeLoney, personal liability attaches only if the court may also pierce the protective veil afforded DeLoney & Associates under Utah law. See Utah Code Ann. § 48-2b-109(1). The little case law cited by Mr. DeLoney does not support his argument. In West v. Costen,
Mr. DeLoney also maintains that even if he is a "debt collector" under the FDCPA, because he is an officer and director of a corporation,
Id. at 67. While it is generally true that a corporate officer or director may be held personally liable only for his or her tortious conduct, Teng makes clear that when that officer or director is also a "debt collector," he or she may be held personally liable for violations of the FDCPA. Second, Mr. DeLoney mischaracterizes the nature of his conduct: He is being sued not simply for "sending out settlement offers," but rather for sending out misleading and threatening settlement offers, conduct likely actionable under common law tort theories of misrepresentation and intentional infliction of emotional distress, if not others. Thus, even it were correct that Mr. DeLoney could be held
Accordingly, because the court finds that Mr. DeLoney may be held personally liable under the FDCPA as a "debt collector," plaintiffs' are granted summary judgment on this issue. Summary judgment is denied on the issue of whether Mr. DeLoney may incur personal liability under a veil piercing theory.
F. Injunctive Relief
Plaintiffs ask the court to enjoin CheckRite from disclosing plaintiffs' names, and those of other consumers, on CheckRite's nationwide check verification system. In response, CheckRite argues that injunctive relief is not available for a private litigant under either the FDCPA or the FCRA. Plaintiffs neither oppose CheckRite's argument nor provide legal authority in support of their request for injunctive relief. Because it appears that injunctive relief is not available to plaintiffs, CheckRite is granted summary judgment on this issue. See Sibley v. Fulton DeKalb Collection Serv.,
G. FDCPA Claims of Plaintiffs Crandall & Robison
The FDCPA covers debts arising from transactions entered into "primarily for personal, family, or household purposes." 15 U.S.C. § 1692a(5). See Mabe v. G.C. Services Limited Partnership,
CheckRite also seeks summary judgment on the Robisons' claims on the ground that these claims are time-barred by the Act's one-year statute of limitations. In support of its motion, CheckRite points to Barry Robison's deposition testimony that he and his wife were last contacted by defendants in November 1993. In response, plaintiffs argue that the statute of limitations was tolled because CheckRite and DeLoney & Associates concealed their conduct through various violations of the Utah's dishonored instruments statute. The court finds that summary judgment is not appropriate because neither the record nor the parties' memoranda adequately address the limitations issue. Accordingly, CheckRite's motion for summary judgment on the Robisons' claims is denied with leave, should the parties choose, to supplement the record and file another motion for summary judgment addressing those claims.
To summarize, the court finds as follows:
Accordingly, as set forth above and for the reasons stated, the parties' motions for summary judgment are hereby GRANTED in part and DENIED in part.
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