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Robinson v. Sherman Fin. Group, LLC

United States District Court, E.D. Tennessee

July 31, 2013


Page 817

For Ralph Robinson, Plaintiff: Alan C Lee, Alan C. Lee, Attorney, Talbott, TN.

For Sherman Financial Group, LLC, LVNV Funding LLC, Resurgent Capital Services L.P., Defendants: Matthew P Kostolnik, LEAD ATTORNEY, Sarah E Doerr, Moss & Barnett, P.A., Minneapolis, MN; Rocklan W King, III, Tricia Thor Olson, LEAD ATTORNEYS, Adams and Reese, LLP (Nashville), Nashville, TN.

For R. Scott Batson, Defendant: Matthew P Kostolnik, LEAD ATTORNEY, Sarah E Doerr, Moss & Barnett, P.A., Minneapolis, MN; Rocklan W King, III, LEAD ATTORNEY, Adams and Reese, LLP (Nashville), Nashville, TN.

For Hosto & Buchan, PLLC, Defendant: John Jay Clark, LEAD ATTORNEY, Law Office of John J. Clark, Nashville, TN.


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Before the Court are the following motions: (1) Defendant Hosto & Buchan, PLLC's (" Hosto" ) motion for partial summary judgment (Court File No. 40); (2) Defendants Sherman Financial Group, LLC (" Sherman" ), LVNV Funding, LLC (" LVNV" ), Resurgent Capital Services, LP (" Resurgent" ), and R. Scott Batson's (" Batson" ) (collectively, " LVNV Defendants" ) joint motion for summary judgment (Court File No. 42); and (3) Plaintiff Ralph Robinson's (" Plaintiff" or " Robinson" ) motion for partial summary judgment (Court File No. 49). For the following reasons, the Court will GRANT Hosto's motion for partial summary judgment (Court File No. 40); GRANT IN PART and DENY IN PART the LVNV Defendants' joint motion for summary judgment (Court File No. 42); and

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DENY Plaintiff's motion for partial summary judgment (Court File No. 49). Plaintiff's § 1692e claims brought against the LVNV Defendants and Hosto will remain in the case; all other claims are dismissed.


At issue is Plaintiff's credit card debt originally owed to and serviced by HSBC/Orchard Bank (" HSBC" ). On November 22, 2010, Hosto sent a letter to Plaintiff in an attempt to collect the debt originally owed to HSBC but now owed to LVNV (Court File No. 44-4). The current balance listed was $2,725.22 ( id. ). On January 23, 2011, Hosto sent another collection letter to Plaintiff, which indicated the current balance was $2,747 (Court File No. 15-1). Then, on March 8, 2011, Hosto filed a summons for civil warrant and an affidavit against Plaintiff in state court on behalf of LVNV (Court File No. 15-2 at 1). The demand in the summons stated Plaintiff owed " a money judgment of $3,201.06 plus cost from a suit filed on a sworn account with the principle [sic] sum of $2,208.59 accrued pre-judgment interest of $550.76 accruing at 6% until date of judgment, reasonable attorney's fees in the amount of $441.72, all of which shall bear post-judgment interest of 10% per annum beginning from judgment date" ( id. ).

The affidavit, which was filed in support of the summons, was authored by Batson (Court File No. 15-2 at 2). In the affidavit, Batson attested under penalty of perjury to being an authorized representative for LVNV and to having " personal knowledge regarding [LVNV's] creation and maintenance of its normal business books and records" ( id. ). In explaining the nature of the business records reviewed, Batson stated:

In the ordinary course of business, [LVNV] regularly acquires revolving credit accounts, installment accounts, service accounts and/or other credit lines. The records provided to Plaintiff have been represented to include information provided by the original creditor or its successors in interest. Such information includes the debtor's name, social security number, account balance, the identity of the original creditor and the account number.

( id. ). Batson further attested to the following regarding Plaintiff's account:

the Account is the result of the extension of credit to Ralph Robinson by HSBC/Orchard Bank on or about 01/10/2005 (the " Date of Origination" ). Said business records further indicate that Account was then owned by IDT Carmel, Inc, that IDT Carmel, Inc later sold and/or assigned Portfolio 12546 to Plaintiff's assignor which included the Defendant's Account on 01/30/2009 (the " Date of Assignment" ) and on the Date of Assignment, all ownership rights were assigned to, transferred to, and became vested in Plaintiff, including the right to collect the purchased balance owing of $2,208.59 plus any additional accrued interest.

( id. ). On April 21, 2011, Plaintiff filed a sworn denial stating he had not entered into any agreement with LVNV " for the repayment of debt or otherwise" (Court File No. 15-3). The state court action was voluntarily dismissed.

On January 23, 2012, Plaintiff filed a complaint in this Court against the LVNV Defendants and Hosto (collectively, " Defendants" ) alleging various violations of the Fair Debt Collection Practices Act (" FDCPA" ), 15 U.S.C. § § 1692 et seq. (Court File No. 1). Plaintiff filed an amended complaint on May 13, 2012, again alleging violations of the FDCPA (Court

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File No. 15). Specifically, Plaintiff alleges some or all of the Defendants (1) falsely represented the character, amount, and legal status of the debt and the compensation that may be lawfully received by the debt collector for the collection of the debt, § § 1692e(2)(A) and (B); (2) used false, deceptive, and misleading representations or means in connection with the collection of Plaintiff's debt or the attempt to collect the debt, § § 1692e and e(10); (3) used unfair or unconscionable means to collect or attempt to collect Plaintiff's debt, § 1692f; (4) communicated credit information to the state court, the general public, and Plaintiff that they knew or should have known was false, § 1692e(8); (5) threatened to take action that could not legally be taken, § 1692e(5); (6) attempted to collect amounts not expressly authorized by the agreement creating Plaintiff's debt or permitted by law, § 1692f(1); (7) failed to disclose the requisite information for initial and subsequent communications, § 1692e(11); and (8) failed to send a written notice to Plaintiff within five days of the initial communication, § 1692g(a)(3)-(5) ( see Am. Compl. ¶ ¶ 37-119). Plaintiff seeks actual damages, statutory damages, and attorney's fees and costs ( id. ¶ 120).

The LVNV Defendants subsequently filed a motion to dismiss, which this Court granted in part and denied in part (Court File Nos. 36, 37). The only claims dismissed pursuant to Fed.R.Civ.P. 12(b)(6) were Plaintiff's § 1692e(11) claims against Defendants LVNV, Sherman, and Resurgent.

Now pending before the Court are summary judgment motions filed by Hosto, the LVNV Defendants, and Plaintiff.


Summary judgment is proper when " the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." Fed.R.Civ.P. 56(a). The moving party bears the burden of demonstrating no genuine issue of material fact exists. Celotex Corp. v. Catrett, 477 U.S. 317, 323, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986); Leary v. Daeschner, 349 F.3d 888, 897 (6th Cir. 2003). The Court should view the evidence, including all reasonable inferences, in the light most favorable to the nonmoving party. Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986); Nat'l Satellite Sports, Inc. v. Eliadis, Inc., 253 F.3d 900, 907 (6th Cir. 2001).

To survive a motion for summary judgment, " the non-moving party must go beyond the pleadings and come forward with specific facts to demonstrate that there is a genuine issue for trial." Chao v. Hall Holding Co., 285 F.3d 415, 424 (6th Cir. 2002). Indeed, a " [plaintiff] is not entitled to a trial on the basis of mere allegations." Smith v. City of Chattanooga, No. 1:08-CV-63, 2009 WL 3762961, at *2-3 (E.D. Tenn. Nov. 4, 2009) (explaining the Court must determine whether " the record contains sufficient facts and admissible evidence from which a rational jury could reasonably find in favor of [the] plaintiff" ). In addition, should the non-moving party fail to provide evidence to support an essential element of its case, the movant can meet its burden of demonstrating no genuine issue of material fact exists by pointing out such failure to the court. Street v. J.C. Bradford & Co., 886 F.2d 1472, 1479 (6th Cir. 1989).

At summary judgment, the Court's role is limited to determining whether the case contains sufficient evidence from which a jury could reasonably find for the non-movant. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248-49, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). If the Court concludes a fair-minded jury could not return

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a verdict in favor of the non-movant based on the record, the Court should enter summary judgment. Id. at 251-52; Lansing Dairy, Inc. v. Espy, 39 F.3d 1339, 1347 (6th Cir. 1994).


The FDCPA was enacted " to eliminate abusive debt collection practices by debt collectors, to insure that those debts collectors who refrain from using abusive debt collection practices are not competitively disadvantaged, and to promote consistent State action to protect consumers against debt collection abuses." Miller v. Javitch, Block & Rathbone, 561 F.3d 588, 591 (6th Cir. 2009) (quoting 15 U.S.C. § 1692(e)). Courts should " begin with the language of the statute itself" when interpreting the FDCPA. Schroyer v. Frankel, 197 F.3d 1170, 1174 (6th Cir. 1999). Courts also should use the " 'least sophisticated consumer' standard, an objective test, when assessing whether particular conduct violates the FDCPA." Hartman v. Great Seneca Fin. Corp., 569 F.3d 606, 611-12 (6th Cir. 2009) (quoting Harvey v. Great Seneca Fin. Corp., 453 F.3d 324, 329 (6th Cir. 2006)). " The test is objective, and asks whether there is a reasonable likelihood that an unsophisticated consumer who is willing to consider carefully the contents of a communication might yet be misled by them." Grden v. Leikin Ingber & Winters PC, 643 F.3d 169, 172 (6th Cir. 2011). By using the " least sophisticated consumer" standard, courts can ensure " that the FDCPA protects all consumers, the gullible as well as the shrewd." Id. (quoting Kistner v. Law Offices of Michael P. Margelefsky, LLC., 518 F.3d 433, 438 (6th Cir. 2008) (quotation marks and citations omitted)).

Plaintiff brings an assortment of claims against Defendants, though those claims can be grouped into just a few categories. [1] The first set of claims is brought against all Defendants pursuant to various provisions of § 1692e and pertains to the collection lawsuit, particularly the use of the summons for civil warrant and sworn affidavit. The second set of claims is brought against Sherman, LVNV, and Hosto for their failure to obtain a license under the Tennessee Collection Service Act (" TCSA" ), Tenn. Code Ann. § § 62-20-101 et seq., in violation of § § 1692e(5), (f), and (f)(1) of the FDCPA. Finally, Plaintiff contends Sherman, ...

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