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Costilla v. Hall & Ludlam, PLLC

United States District Court, D. Colorado

June 15, 2017

HALL & LUDLAM, PLLC, Defendant.


          Craig B. Shaffer, U.S. Magistrate Judge

         Magistrate Judge Craig B. Shaffer This action comes before the court on Defendant Hall & Ludlam, PLLC's, Motion to Dismiss (doc. #9) filed on December 7, 2016. Plaintiff David Costilla filed a Response (doc. #13) on December 27, 2016, and Defendant submitted a Reply (doc. # 17) on January 10, 2017. The case was referred to this court on December 27, 2016 by Order of Reference (doc. #14) “for all purposes” pursuant to D.C.COLO.LCivR 72.2(d) and 28 U.S.C. § 636(c). The court has reviewed the motion and all related briefing and exhibits, the entire case file, and the applicable law, and is sufficiently advised in the premises.


         Plaintiff David Costilla is an individual who has lived in Colorado continuously since July 2011, and is currently residing in Colorado Springs, Colorado. He was previously, as far back as 2005, a resident of Oklahoma City, Oklahoma. Defendant Hall & Ludlam is a law firm which represents Tinker Federal Credit Union in debt collection efforts. Both Defendant Hall & Ludlam and Tinker Federal Credit Union are based in Oklahoma. Mr. Costilla, in Oklahoma and as an Oklahoma resident, entered into several loans with Tinker Federal Credit Union no fewer than five years prior to moving to Colorado. See District Court of Oklahoma County Petition, attached as Exhibit A to Defendant's Motion (doc. #9-1 at pages 10-14 of 14). Plaintiff's Complaint (doc. #1), filed on October 10, 2016, asserts a claim for violations of the Fair Debt Collection Practices Act (“FDCPA”) 15 U.S.C. § 1692(b). Mr. Costilla alleges that Hall & Ludlum's “efforts to compel Plaintiff to respond and appear for debtor's exam by compelling him to travel from Colorado to Oklahoma” were false, deceptive, misleading, unfair or unconscionable and had the natural consequence to harass, oppress, or abuse in violation of FDCPA §§1692d, 1692e, and 1692f.

         Specifically, Mr. Costilla asserts that Hall & Ludlam, representing Tinker Federal Credit Union in the collection of debt owed by Mr. Costilla, filed a lawsuit against him in the District Court of Oklahoma County (“Oklahoma Court”), on August 29, 2006. Hall & Ludlam then allegedly served Mr. Costilla via substitute service on September 16, 2006, and filed for a default judgement that was entered against him on November 3, 2006. On September 15, 2011, Hall & Ludlam purportedly filed a Notice of Renewal of Judgement with the Oklahoma Court but did not attempt to serve the Notice of Renewal upon Mr. Costilla. Plaintiff Costilla contends he was unaware of any action in the lawsuit after it was filed in 2006, and that Hall & Ludlam made no attempts to contact him prior to September 2016. On September 1, 2016, Hall & Ludlam allegedly filed a request with the Oklahoma Court for a Notice to Compel (“Notice”) Mr. Costilla to appear in the Oklahoma Court, and had that Notice served on Mr. Costilla in Colorado. Finally, Mr. Costilla contends that despite knowing he resided in Colorado and that any assets he may have to satisfy the judgement were in Colorado, Hall & Ludlam made no effort to domesticate the judgment in Colorado.

         Defendant's Motion to Dismiss (doc. #9), requests dismissal for lack of personal jurisdiction and failure to state a claim upon which relief can be granted. Defendant argues that Hall & Ludlam lacks the continuous and systematic contacts necessary to be “at home” in Colorado, that Hall & Ludlam lacks sufficient minimum contacts with Colorado, and that the exercise of personal jurisdiction would not comport with fair play and substantial justice. Additionally, Defendant asserts that Mr. Costilla fails to state a claim because the “mere service of the order was in no way deceptive or unfair, ” and not “an attempt to execute on assets.” In his Response (doc. #13), Plaintiff Costilla argues that Colorado's long-arm statute makes personal jurisdiction proper, and that FDCPA litigation in the state where the consumer received the communication is fair and reasonable under Due Process. Plaintiff also contends that the conduct at issue was not the mere service of an order but the collection of debt through deceptive statements intended to strike fear into Mr. Costilla.


         Where a defendant is moving to dismiss under Fed.R.Civ.P. 12(b)(2) for lack of personal jurisdiction and under Fed.R.Civ.P. 12(b)(6) for failure to state a claim upon which relief can be granted, the court should first address the challenge to personal jurisdiction. “The question of personal jurisdiction must be addressed before a court can reach the merits of a case, because ‘a court without jurisdiction over the parties cannot render a valid judgement.'” Doe v. May, No. 14-cv-01740-WJM-NYW, 2015 WL 8519519, at *3(D. Colo. Nov. 16, 2015)(quoting Omi Holdings, Inc. v. Royal Ins. Co. of Canada, 149 F.3d 1086, 1091 (10th Cir. 1998)), rec. adopted, 2015 WL 8479808 (D. Colo. Dec. 10, 2015). To defeat a motion to dismiss for lack of personal jurisdiction, the plaintiff bears the burden to show personal jurisdiction is present over the defendant. OMI Holdings, Inc. v. Royal Ins. Co. of Canada, 149 F.3d 1086, 1091 (10th Cir. 1998). When there is no evidentiary hearing, only a prima facie showing is needed to defeat the motion. Id. Well plead facts, distinguished from mere conclusory statements, must be accepted as true to the extent they are uncontested. Wenz v. Memery Crystal, 55 F.3d 1503, 1505 (10th Cir. 1995).[1]

         “To obtain personal jurisdiction over a nonresident defendant in a diversity action, a plaintiff must show both that jurisdiction is proper under the laws of the forum state and that the exercise of jurisdiction would not offend due process.” Intercon, Inc. v. Bell Atl. Internet Sols., 205 F.3d 1244, 1247 (10th Cir. 200) (citation omitted). “Colorado's long-arm statute…confers the maximum jurisdiction permissible consistent with the Due Process Clause, ” and thus the “inquiry effectively collapses” into the constitutional analysis. Dudnikov v. Chalk & Vermilion Fine Arts, Inc., 514 F.3d 1063, 1070 (10th Cir. 2008). To exercise personal jurisdiction over a party, there must be: 1) certain minimum contacts with the forum state, 2) such that allowing the suit would not offend “traditional notions of fair play and substantial justice.” Int'l Shoe Co. v. Washington, 326 U.S. 310, 316 (1945). Personal jurisdiction may be established through either general or specific jurisdiction. See OMI Holdings, Inc., 149 F.3d at 1091. A court has general jurisdiction when a party's contacts with the forum state are “so ‘continuous and systematic' as to render them essentially at home in the forum state.” Goodyear Dunlop Tires Operations. S.A. v. Brown, 564 U.S. 915, 919 (2011). Mr. Costilla is not relying upon general jurisdiction in this case.[2]

         A. Specific Jurisdiction

         For specific jurisdiction, conduct establishing minimum contacts must be both “purposefully directed” at the forum state, and the source from which the litigation arises. Burger King Corp. v. Rudzewicz, 471 U.S. 462, 473 (1985). An activity is purposefully directed when it involves an intentional action, expressly aimed at the forum state, and with the knowledge that the brunt of the injury would be felt in the forum state. Dudnikov, 514 F.3d at 1072 (citing Calder v. Jones, 465 U.S. 783 (2008). “The unilateral activity of those claiming some relationship with a nonresident defendant” is not enough to satisfy contact requirements for specific jurisdiction. Hanson v. Denckla, 357 U.S. 235, 253 (1958). The mere fact that conduct affected a plaintiff in the forum state does not establish minimum contacts. Walden v. Fiore, 134 S.Ct. 1115, 1126 (2014). A defendant is not to be “haled into a jurisdiction solely as a result of ‘random, ' ‘fortuitous, ' or ‘attenuated' contacts.” Burger King, 471 U.S. at 475. Rather, the defendant must have purposefully availed itself of the benefits and protections of the laws in the forum state. Hanson, 357 U.S. at 253.

         Defendant's Motion argues that that Hall & Ludlam did not purposefully create any relationship with Colorado sufficient for minimum contacts. Hall & Ludlam contends that its only contact with Colorado arises from Mr. Costilla's decision to move there from Oklahoma after defaulting on a debt proceeding in the Oklahoma Court. Additionally, Defendant argues that directing service of the Oklahoma Court's Notice was not debt collection activity, and that the substance of Plaintiff's claims is with the Oklahoma Court's Notice, not its service.

         Hall & Ludlam has represented Tinker Federal Credit Union against Plaintiff Costilla since 2006. See Affidavit of Joel Hall, attached as Exhibit F to Defendant's Motion (doc. #9-6 ¶ 10). In Oklahoma, on August 29, 2006, Hall & Ludlam filed a petition against Mr. Costilla related to a loan he had failed to pay. Id. ¶ 12. Mr. Costilla failed to respond and a default judgement was entered against him. Id. ¶ 13. The Oklahoma Court, following the default judgement, garnished Mr. Costilla's wages from November of 2006 to September of 2008. Id. ¶ 14. A balance on the judgement remains, and on August 23, 2016 the Oklahoma Court entered an order compelling Mr. Costilla to appear in Oklahoma and forbidding his transfer of property. Id. ¶¶ 14-15. The court's Order to Appear and Answer as to Assets And Forbidding a Transfer or Other Disposition of Property (“Notice”) included the following language in bold capital letters:


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