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Pirera v. The Sullivan Kline Group, LLC

United States District Court, D. Colorado

September 5, 2019




         This matter comes before the Court on Plaintiff's Motion for Default Judgment [Docket No. 14]. The Court has jurisdiction pursuant to 15 U.S.C. § 1692k(d) and 28 U.S.C. § 1337.

         I. BACKGROUND

         Because of the Clerk of Court's entry of default, Docket No. 10, the allegations in plaintiff's complaint, Docket No. 1, are deemed admitted. Olcott v. Del. Flood Co., 327 F.3d 1115, 1125 (10th Cir. 2003). Sometime before April 2009, plaintiff incurred a financial obligation for an overdrawn bank account that was primarily for plaintiff's personal use or for household expenditures. Docket No. 2 at 2-3, ¶¶ 6, 22. Plaintiff last made a payment toward the obligation in April 2009. Id. at 3, ¶ 22. On or about May 1, 2018, defendant called plaintiff in an attempt to collect plaintiff's debt. Id., ¶ 15. On or about May 3, 2018, defendant sent a letter to plaintiff in an attempt to collect plaintiff's debt. Id., ¶ 17; Docket No. 2-1. According to the letter, defendant sought to collect a debt of $594.71 on an account originally owned by “Wachovia/Wells Fargo.” Docket No. 2 at 3, ¶ 19. In the letter, defendant indicated that “a recommendation to file a lawsuit to collect this debt is being processed.” Docket No. 2 at 3, ¶ 21. The letter also stated that the debt could be reported to a company called ChexSystems, which could lead to a suspension of plaintiff's bank accounts and debit card privileges for up to five years. Id. According to plaintiff, defendant knew that it could not legally enforce the debt through litigation at the time the letter was sent because the applicable statute of limitations expired in April 2012. Id. at 4, ¶¶ 24-30. According to plaintiff, defendant also knew that it could not report the debt to ChexSystems because more than seven years had elapsed since plaintiff last made payment on the debt. Id. at 5-6, ¶¶ 36-42.

         Plaintiff brings a claim for relief for violation of the Fair Debt Collection Practices Act (“FDCPA”), 15 U.S.C. § 1692 et seq. Docket No. 2. Although served with the complaint and summons, defendant did not answer or otherwise respond to plaintiff's complaint. Accordingly, the Clerk of Court entered default on August 1, 2018. Docket No. 10.

         II. ANALYSIS

         A. Default Judgment

         In order to obtain a judgment by default, a party must follow the two-step process described in Fed.R.Civ.P. 55. First, the party must seek an entry of default from the Clerk of the Court under Rule 55(a). Second, after default has been entered by the Clerk, the party must seek judgment under the strictures of Rule 55(b). See Williams v. Smithson, 1995 WL 365988, at *1 (10th Cir. June 20, 1995) (citing Meehan v. Snow, 652 F.2d 274, 276 (2d Cir. 1981)).

         The decision to enter default judgment is “‘committed to the district court's sound discretion.” Olcott, 327 F.3d at 1124 (citation omitted). In exercising that discretion, the Court considers that “[s]trong policies favor resolution of disputes on their merits.” Ruplinger v. Rains, 946 F.2d 731, 732 (10th Cir. 1991) (quotation and citations omitted). “The default judgment must normally be viewed as available only when the adversary process has been halted because of an essentially unresponsive party.” Id. It serves to protect plaintiffs against “interminable delay and continued uncertainty as to his rights.” Id. at 733. When “ruling on a motion for default judgment, the court may rely on detailed affidavits or documentary evidence to determine the appropriate sum for the default judgment.” Seme v. E&H Prof'l Sec. Co., Inc., No. 08-cv-01569-RPM-KMT, 2010 WL 1553786, at *11 (D. Colo. Mar. 19, 2010).

         A party may not simply sit out the litigation without consequence. See Cessna Fin. Corp. v. Bielenberg Masonry Contracting, Inc., 715 F.2d 1442, 1444-45 (10th Cir. 1983) (“[A] workable system of justice requires that litigants not be free to appear at their pleasure. We therefore must hold parties and their attorneys to a reasonably high standard of diligence in observing the courts' rules of procedure. The threat of judgment by default serves as an incentive to meet this standard”). One such consequence is that, upon the entry of default against a defendant, the well-pleaded allegations in the complaint are deemed admitted. See Charles Wright, Arthur Miller & Mary Kane, Fed. Prac. & Proc. § 2688 (3d ed. 2010). “Even after default, however, it remains for the court to consider whether the unchallenged facts constitute a legitimate cause of action, since a party in default does not admit mere conclusions of law.” Id. at 63. A court need not accept conclusory allegations. Moffett v. Halliburton Energy Servs., Inc. 291 F.3d 1227, 1232 (10th Cir. 2002). Although “[s]pecific facts are not necessary” in order to state a claim, Erickson v. Pardus, 551 U.S. 89, 93 (2007) (per curiam) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007)), the well-pleaded facts must “permit the court to infer more than the mere possibility of misconduct.” Ashcroft v. Iqbal, 556 U.S. 662, 679 (2009) (internal quotation and alteration marks omitted). Thus, even though modern rules of pleading are somewhat forgiving, “a complaint still must contain either direct or inferential allegations respecting all the material elements necessary to sustain a recovery under some viable legal theory.” Bryson v. Gonzales, 534 F.3d 1282, 1286 (10th Cir. 2008) (quotation and citation omitted).

While the FDCPA forbids a variety of conduct,
The substantive heart of the FDCPA lies in three broad prohibitions. First, a ‘debt collector may not engage in any conduct the natural consequence of which is to harass, oppress, or abuse any person in connection with the collection of a debt.' § 1692d. Second, a ‘debt collector may not use any false, deceptive, or misleading representation or means in connection with the collection of any debt.' § 1692e. Third, a ‘debt collector may not use unfair or unconscionable means to collect or attempt to collect any debt.' § 1692f.

Johnson v. Riddle, 305 F.3d 1107, 1117 (10th Cir. 2002). To establish a violation of the FDCPA, plaintiff must show that (1) he is a “consumer” within the meaning of 15 U.S.C. § 1692a(3), [1] (2) his debt arises out of a transaction entered into primarily for personal, family, or household purposes, 15 U.S.C. § 1692a(5), (3) defendant is a “debt collector” within the meaning of 15 U.S.C. § 1692a(6), [2] and (4) defendant, through its acts or omissions, violated a provision of the FDCPA. See Nikkel v. Wakefield & Assoc., Inc., No. 10-cv-02411-PAB-CBS, 2012 WL 5571058 at *10 (D. Colo. Nov. 15, 2012). In analyzing FDCPA claims, debt collectors' communications are generally viewed from the perspective of how the least sophisticated consumer would interpret the notice received from the debt collector. Irvine v. I.C. Sys., Inc., 176 F.Supp.3d 1054, 1060 (D. Colo. 2016), reconsideration denied, 198 F.Supp.3d 1232 (D. Colo. 2016) (citing Clomon v. Jackson, 988 F.2d 1314, 1318 (2d Cir. 1993)).

         The Court finds that the complaint, deemed admitted for the purposes of this motion, sufficiently alleges a violation of the FDCPA. Plaintiff alleges that he is a consumer who incurred a debt for personal, family, or household purposes. See Docket No. 2 at 2, ¶¶ 6-7. Plaintiff further alleges that defendant is a “debt collector” as defined by the FDCPA. Id., ¶¶ 9-13. Moreover, plaintiff's allegations support a finding that defendant threatened to take action that cannot legally be taken in violation of 15 U.S.C. § 1692e(5). Plaintiff alleges that defendant could not take legal action to enforce the debt because it is barred by the statute of limitations. Plaintiff last made a payment on the debt, which was for an overdrawn bank account, in April 2009. See Docket No. 2 at 2-3, ¶¶ 6, 22. The statute of limitations on actions to recover a debt in Colorado is six years and begins to run on the date that the debt first becomes due. See Colo. Rev. Stat. § 13-80-103.5; Hassler v. Account Brokers of Larimer Cty., Inc., 274 P.3d 547, 549 (Colo. 2012).[3] Although plaintiff does not specifically allege that the debt became due at a certain point, it is a reasonable inference that ...

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