Martin v. Kansas Counselors, Inc.

REPLY to Response to Motion

D. Kan.March 7, 2014

UNITED STATES DISTRICT COURT DISTRICT OF KANSAS Michael J. Martin, Civil No. 13-2041 KHV-DJW Plaintiff, v. KCI’S REPLY MEMORANDUM IN SUPPORT OF MOTION FOR Kansas Counselors, Inc., SUMMARY JUDGMENT Defendant. INTRODUCTION Plaintiff’s claims are all premised on a mistaken allegation that KCI “falsely reported” information regarding Plaintiff to a credit bureau, Experian. (Plaintiff’ Petition at ¶¶ 9-14.) But Plaintiff fails to raise a genuine issue of material fact that KCI ever furnished Experian with any information regarding Plaintiff, much less false information. In fact, Plaintiff admits that KCI never furnished any of his information to Experian. Because there are no disputed material facts regarding Plaintiff’s claims, KCI is entitled to summary judgment and Plaintiff’s Petition should be dismissed in its entirety. 1 But this is not the end of the story in this saga. When confronted with this summary judgment motion, Plaintiff responded by attempting to raise a new issue for the first time claiming that KCI allegedly attempted to collect on other debts after allegedly being notified that Plaintiff did not owe them. 1 Plaintiff likewise does not dispute that he has abandoned his (1) claim of Defamation (Count Four); (2) claim under the Fair Credit Reporting Act (Count Five); and (3) claim for actual damages and therefore those claims should be dismissed. (Doc. # 29 at 7-8.) Case 2:13-cv-02041-TJJ Document 35 Filed 03/07/14 Page 1 of 13 2 Plaintiff’s contention is contrary to law and the facts of this case. Plaintiff’s Petition contains no factual allegations to support such a claim. Moreover, the deadline to amend pleadings has passed. Thus, Plaintiff’s newly attempted arguments in this regard should be ignored. In any event, even if considered, the undisputed facts do not support Plaintiff’s latest allegations. It is undisputed that Plaintiff never provided a written dispute to KCI; therefore under the FDCPA there was no obligation to cease collections and verify the debt. Moreover, Plaintiff’s recently filed sham affidavit does not give rise to a viable claim; much less create a genuine issue of material fact as set out below. Because Plaintiff’s allegations do not rise to the level of a genuine issue of material fact, KCI is entitled to summary judgment and Plaintiff’s Petition should be dismissed in its entirety. RESPONSE TO PLAINTIFF’S ADDITIONAL STATEMENT OF FACTS 19. Undisputed. 20. Undisputed. 21. Undisputed (except as to “insisted.” Instead, the KCI representative sought to collect a debt believed to be owed by Plaintiff). In any event, this allegation does not amount to a “material fact” or “genuine issue” of dispute so as to defeat summary judgment. Fed. R. Civ. P. 56. 22. Undisputed (based on current knowledge). 23. Disputed. Plaintiff could not recall whether he owed the debt. (Doc. # 33-1 at 18-19.) In any event, it is undisputed that KCI did not furnish information regarding Plaintiff to the credit bureaus and therefore this allegation does not amount to a “material fact” or “genuine issue” of dispute so as to defeat summary judgment. Fed. R. Civ. P. 56. 24. Disputed. Plaintiff could not recall whether he owed the debt. (Doc. # 33-1 at 18-19.) In any event, it is undisputed that KCI did not furnish information regarding Plaintiff to the credit bureaus and therefore this allegation does not amount to a “material Case 2:13-cv-02041-TJJ Document 35 Filed 03/07/14 Page 2 of 13 3 fact” or “genuine issue” of dispute so as to defeat summary judgment. Fed. R. Civ. P. 56. 25. Undisputed. 26. Undisputed. 27. Undisputed. 28. Undisputed. 29. Disputed. KCI investigated the dispute with Shawnee Mission after it received Plaintiff’s written dispute in October 2012. (Doc. # 33-2 at 59-63.) In any event, it is undisputed that KCI did not furnish any information regarding Plaintiff to the credit bureaus and therefore this allegation does not amount to a “material fact” or “genuine issue” of dispute so as to defeat summary judgment. Fed. R. Civ. P. 56. 30. Undisputed. 31. Disputed. KCI never received a written dispute from Plaintiff regarding the Emergency Department Physicians debt. (Klutho Dec., Ex. A, Karim Depo. at 73- 74; Doc. # 33-1 at 97-104.) In any event, it is undisputed that KCI did not furnish information regarding Plaintiff to the credit bureaus and the referenced debt is not the subject of this dispute. Thus, this allegation does not amount to a “material fact” or “genuine issue” of dispute so as to defeat summary judgment. Fed. R. Civ. P. 56. 32. Disputed. KCI never received a written dispute from Plaintiff regarding the Johnson County Wastewater debt. (Klutho Dec., Ex. A, Karim Depo. at 73-74; Doc. # 33-1 at 97-104.) In any event, it is undisputed that KCI did not furnish information regarding Plaintiff to the credit bureaus and the referenced debt is not the subject of this dispute. Thus, this allegation does not amount to a “material fact” or “genuine issue” of dispute so as to defeat summary judgment. Fed. R. Civ. P. 56. 33. Disputed. KCI never received a written dispute from Plaintiff regarding the Johnson County Wastewater debt. (Klutho Dec., Ex. A, Karim Depo. at 73-74; Doc. # 33-1 at 97-104.) In any event, it is undisputed that KCI did not furnish information regarding Plaintiff to the credit bureaus and the referenced debt is not the subject of this dispute. Thus, this allegation does not amount to a “material fact” or “genuine issue” of dispute so as to defeat summary judgment. Fed. R. Civ. P. 56. 34. Undisputed. Case 2:13-cv-02041-TJJ Document 35 Filed 03/07/14 Page 3 of 13 4 35. Undisputed. 36. Undisputed, in part. Plaintiff was told of the other accounts and that the Shawnee Mission account was owed by a Michael Martin. In any event, it is undisputed that KCI did not furnish information regarding Plaintiff to the credit bureaus and therefore this allegation does not amount to a “material fact” or “genuine issue” of dispute so as to defeat summary judgment. Fed. R. Civ. P. 56. 37. Disputed. KCI investigated the dispute with Shawnee Mission after it received Plaintiff’s written dispute in October 2012. (Doc. # 33-2 at 59-63.) In any event, it is undisputed that KCI did not furnish information regarding Plaintiff to the credit bureaus and therefore this allegation does not amount to a “material fact” or “genuine issue” of dispute so as to defeat summary judgment. Fed. R. Civ. P. 56. 38. Undisputed. 39. Undisputed. 40. Undisputed. 41. Disputed. KCI attempted to collect the Shawnee Mission debt from Michael Martin, which is Plaintiff’s name. KCI ceased attempting to collect the Shawnee Mission debt after it received Plaintiff’s written dispute in October 2012 and confirmed that it did not belong to Plaintiff. (Doc. # 33-2 at 59-63.) KCI never received a written dispute as to the other debts referenced by Plaintiff. (Klutho Dec., Ex. A, Karim Depo. at 73-74; Doc. # 33-1 at 97-104.) In any event, it is undisputed that KCI did not furnish information regarding Plaintiff to the credit bureaus and the other debts are not the subject of this dispute. Thus, this allegation does not amount to a “material fact” or “genuine issue” of dispute so as to defeat summary judgment. Fed. R. Civ. P. 56. 42. Undisputed. 43. Undisputed. 44. Disputed. In 2010, Plaintiff could not recall whether he owed the debt. (Doc. # 33-1 at 18-19.) KCI ceased attempting to collect the Shawnee Mission debt after it received Plaintiff’s written dispute in October 2012 and confirmed that it did not belong to Plaintiff. (Doc. # 33-2 at 59-63.) In any event, it is undisputed that KCI did not furnish information regarding Plaintiff to the credit bureaus and therefore this allegation does not amount to a “material fact” or “genuine issue” of dispute so as to defeat summary judgment. Fed. R. Civ. P. 56. Case 2:13-cv-02041-TJJ Document 35 Filed 03/07/14 Page 4 of 13 5 45. Disputed. KCI ceased attempting to collect the Shawnee Mission debt after it received Plaintiff’s written dispute in October 2012 and confirmed that it did not belong to Plaintiff. (Doc. # 33-2 at 59-63.) KCI never received any written disputes regarding the other debts referenced by Plaintiff. (Klutho Dec., Ex. A, Karim Depo. at 73-74; Doc. # 33-1 at 97-104.) In any event, it is undisputed that KCI did not furnish information regarding Plaintiff to the credit bureaus and therefore this allegation does not amount to a “material fact” or “genuine issue” of dispute so as to defeat summary judgment. Fed. R. Civ. P. 56. 46. Undisputed. Plus, KCI never received any written disputes regarding Johnson County Wastewater debt referenced by Plaintiff. (Klutho Dec., Ex. A, Karim Depo. at 73-74; Doc. # 33-1 at 97-104.) 47. Undisputed. Plus, KCI never received any written disputes regarding the Emergency Department Physicians debt referenced by Plaintiff. (Klutho Dec., Ex. A, Karim Depo. at 73-74; Doc. # 33-1 at 97-104.) 48. The allegation is a legal conclusion and not an admissible statement of fact and therefore no response is required. Local Rule 56.1(d). 49. Undisputed. ARGUMENT I. IT REMAINS UNDISPUTED THAT KCI NEVER FURNISHED ANY INFORMATION REGARDING PLAINTIFF TO A CREDIT REPORTING AGENCY 2 . Plaintiff fails to address or present any evidence to dispute the fact that KCI never provided any information regarding Plaintiff to any of the credit bureaus. 3 (Doc. # 34, Plaintiff’s Brief at ¶¶ 8, 13, 14, 17.) Because it remains undisputed that KCI never 2 KCI reports to all three major credit reporting agencies (Experian, Equifax, and Trans Union) yet the subject trade line only appeared on Plaintiff’s Experian credit report. Since KCI reported the same information to all three bureaus, this alone demonstrates that the error was on the part of Experian, not KCI. 3 Notably, Plaintiff likewise does not dispute that KCI has no control over the actions of Experian or that KCI informed Plaintiff of the process to dispute the alleged offending trade line directly with Experian. Plaintiff does concede and admit that he never initiated this process to directly dispute the trade line with Experian. (Plaintiff Brief at 4 ¶15.) Case 2:13-cv-02041-TJJ Document 35 Filed 03/07/14 Page 5 of 13 6 furnished any information regarding Plaintiff to any of the credit bureaus, KCI is entitled to summary judgment, for this reason alone. Curiously, Plaintiff chose to characterize his position as to the statement that KCI did not provide any information regarding Plaintiff to the credit bureaus -- as “controverted” -- but then failed to specifically address, much less present, any genuine issue of material fact in this regard. (Doc. # 34 at ¶¶ 8, 13.) Of course, “conclusory statements are insufficient to defeat a motion for summary judgment.” Cole v. Ruidoso Mun. Sch., 43 F.3d 1373, 1382 (10th Cir. 1994). Thus, KCI’s assertion must be deemed admitted. D. Kan. Rule 56.1(a) (“All material facts set forth in the statement of the movant will be deemed admitted for the purpose of summary judgment unless specifically controverted by the statement of the opposing party.”) (emphasis added). Instead, Plaintiff references nothing more than irrelevant background information in an effort to defeat summary judgment. Plaintiff’s efforts lack merit. Rule 56 provides that “[t]he court shall grant summary judgment if 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). “By its very terms, this standard provides that the mere existence of some alleged factual dispute between the parties will not defeat an otherwise properly supported motion for summary judgment; the requirement is that there be no genuine issue of material fact.” Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247-48, 106 S. Ct. 2505, 2509-10 (1986) (emphasis in original). “Only disputes over facts that might affect the outcome of the suit under the governing law will properly preclude the Case 2:13-cv-02041-TJJ Document 35 Filed 03/07/14 Page 6 of 13 7 entry of summary judgment. Factual disputes that are irrelevant or unnecessary will not be counted.” Id., 477 U.S. at 248, 106 S. Ct. at 2510. Because Plaintiff failed to submit any admissible facts or evidence that “might affect the outcome of the suit,” there is no genuine issue of material fact and therefore KCI is entitled to summary judgment. II. THE DEADLINE TO AMEND PLEADINGS HAS PASSED MAKING PLAINTIFF’S NEWLY SUBMITTED, BUT UNSUPPORTED ALLEGATIONS IRRELEVANT AND IMPROPER. Plaintiff’s actual Petition is premised on the sole allegation that KCI “falsely” furnished information regarding Plaintiff to Experian in connection with the Shawnee Mission debt. But the undisputed facts show that KCI never furnished any such information. Now, facing summary judgment, Plaintiff claims summary judgment is not warranted because he now alleges KCI attempted to collect other debts that he claims he did not owe. (Doc. # 34 at 13.) Plaintiff’s post-petition and belated argument lack merit. Plaintiff’s Petition contains no allegations to support his new claim involving “other debts” referenced by Plaintiff in his opposition submissions. To be sure, Plaintiff never moved to amend his Petition in this regard. The deadline to amend pleadings has passed. Fed. R. Civ. P. 15(a)(1), (2); see also Doc. #10 at ¶¶ 2, 7. Plaintiff would have no basis to amend in any event where, as here, “the moving party was aware of the facts on which the amendment was based for some time prior to the filing of the motion to amend.” Murray v. Sevier, 149 F.R.D. 638, 641 (D. Kan. 1993) (“Where the party seeking amendment knows or should have known of the facts upon which the proposed amendment is based but fails to include them in the original complaint, the motion to Case 2:13-cv-02041-TJJ Document 35 Filed 03/07/14 Page 7 of 13 8 amend is subject to denial.”) (citing State Distributors Inc., v. Glenmore Distilleries Co., 738 F.2d 405, 416 (10th Cir.1984) and Fed. Ins. Co. v. Gates Learjet Corp., 823 F.2d 383, 387 (10th Cir. 1987)). Plaintiff’s improperly-pled claims asserted for the first time in his opposition to KCI’s summary judgment motion should be ignored. Deghand v. Wal-Mart Stores, Inc., 926 F. Supp. 1002, 1015 (D. Kan. 1996) (ignoring facts and issues first alleged in a plaintiff’s response to summary judgment as improperly pled and offered “only in an effort to avoid summary judgment”) (citations omitted); see also Hanson v. Beloit Newspapers, Inc., No. 94–4023–SAC, 1995 WL 646808 at *11 n. 1 (D. Kan. Sept. 15, 1995) (a party may not amend its claims merely by arguing new facts and theories in opposition to the summary judgment motion); Hullman v. Board of Trustees of Pratt Community College, 732 F.Supp. 91, 93 (D. Kan. 1990) (a party cannot avoid the binding effect of the court’s order by arguing new issues in its response to summary judgment), aff'd, 950 F.2d 665 (10th Cir. 1991). To the extent that Plaintiff argues that his Petition somehow asserted a claim for collecting debts he claims he did not owe, this contention also fails. Other than a recitation of the elements of his cause of action, Plaintiff’s Petition contains no factual allegations to support such claims. (Petition at ¶¶ 19, 25, 31; see also Doc. # 34 at 16- 17, 20.) Plaintiff’s “formulaic recitation of the elements of a cause of action” and “conclusory statements” are insufficient to state a claim under Rule 12(b)(6), much less Rule 56. Ashcroft v. Iqbal, 556 U.S. 662, 663, 129 S. Ct. 1937, 1940, 173 L. Ed. 2d 868 (2009) (a court need not consider “threadbare recitals of a cause of action's elements, Case 2:13-cv-02041-TJJ Document 35 Filed 03/07/14 Page 8 of 13 9 supported by mere conclusory statements” on a motion to dismiss); Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555, 127 S. Ct. 1955, 1964-65, 167 L. Ed. 2d 929 (2007) (“[P]laintiff's obligation to provide the ‘grounds’ of his ‘entitle[ment] to relief’ requires more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do.”). Thus, even if considered, Plaintiff’s untimely assertions fail to provide any grounds for an entitlement to relief, so once again his claims must be dismissed. III. IN ANY EVENT, PLAINTIFF’S IMPROPERLY PLED CLAIMS AND SHAM AFFIDAVIT FAIL TO RAISE A GENUINE ISSUE OF MATERIAL FACT. Following 17 pages setting out a repetitious statement of supposed “facts” and boilerplate case law, Plaintiff concludes with just a three-page argument premised on the contention that “KCI has harassed Plaintiff for debts he does not owe[.]” (Doc. # 34 at 13.) In essence, Plaintiff argues that “[d]espite advising [KCI] that Michael J. Martin did not owe any debt”, KCI “asked Michael J. Martin to pay it anyway." (See, e.g., Doc. # 34 at ¶¶ 4, 6, 7, 8, 23, 43-45.) Plaintiff’s contention is misleading at best. Even if Plaintiff’s improperly-pled assertions were considered, the undisputed facts and law do not support Plaintiff’s newest argument. For example, Plaintiff testified at deposition that, when he originally spoke with KCI, he could not recall whether he owed the Shawnee Mission debt. (Doc. # 33-1 at 18- 19.) This is a far cry from saying he did not owe the debt as he now claims. Unsurprisingly, it is not uncommon for debtors to claim they do not recall (or even deny) owing a debt – even when the debt is in fact owed. Thus, pursuant to the FDCPA, a Case 2:13-cv-02041-TJJ Document 35 Filed 03/07/14 Page 9 of 13 10 written dispute by the consumer is required in order to affect a cease of collections, and thereafter, a verification of the debt. 15 U.S.C. § 1692g(b); Solomon v. Baer & Timberlake, P.C., 504 F. App'x 702, 705 (10th Cir. 2012) (affirming court’s ruling and dismissing the plaintiff’s claim because the plaintiff “did not dispute the debt in writing, [the collector] was not required to cease collection efforts.”). It is undisputed that Plaintiff failed to provide a written dispute regarding the Shawnee Mission debt until October 2012. (Doc. # 32 at ¶16; Doc. # 34 at ¶ 16.) It is also undisputed that once KCI did receive a written dispute from Plaintiff regarding the Shawnee Mission account, KCI did investigate the claim and confirmed that it was not owed by Plaintiff. KCI thereafter did cease collections of the Shawnee Mission account from Plaintiff and sent a request to Experian asking it to delete the trade line associated with the Shawnee Mission account. (Doc. # 32 at ¶¶ 16, 17; Doc. # 34 at ¶¶ 16, 17.) KCI complied in all respects with the FDCPA and is not liable for the conduct alleged. Finally, Plaintiff’s sham affidavit also does nothing to salvage his claim because it too fails to create a genuine issue of material fact. Franks v. Nimmo, 796 F.2d 1230, 1237 (10th Cir. 1986) (“[C]ourts will disregard a contrary affidavit when they conclude that it constitutes an attempt to create a sham fact issue.”). Plaintiff alleges that he “does not know who Ava Martin is and is not responsible for [the Emergency Department Physicians” debt. (Doc. # 34 at 18, 21; id., Ex. C at ¶¶ 12-13, 19.) In addition, Plaintiff Case 2:13-cv-02041-TJJ Document 35 Filed 03/07/14 Page 10 of 13 11 alleges that he “has never resided at [6118 El Monte Street] and does not owe a debt to Johnson County Wastewater either.” (Doc. # 34 at 18, 21; id., Ex. C at ¶¶ 14-15, 19.) 4 Rather than cite to his sworn deposition testimony to support his recently concocted claim, Plaintiff instead relies on his self-serving affidavit to contend that he properly disputed two other debts and therefore collection efforts should have ceased as to those accounts. 5 (See generally Doc. # 34 and Ex. C.) It is undisputed that if a consumer orally communicates a dispute of the debt, KCI requests that the consumer put the dispute in writing and once the consumer does so, KCI ceases collections and verifies the debt, pursuant to applicable law. 6 15 U.S.C. § 1692g(b); see also Klutho Dec., Ex. A, Karim Depo. at 39-40, 47-53; Doc. # 33-1 at 102:20-24.) Interestingly, Plaintiff does not even attempt to allege that he provided written disputes to KCI regarding the other two debts he recently claimed he does not owe. (Klutho Dec., Ex. A, Karim Depo. at 73-74; Doc. # 33-1 at 97-104.) 4 Plaintiff continuously references an “additional three or four other delinquent accounts”. (Doc. # 34 at ¶¶ 13, 15, 18, 30-33, 36, 46-47; see also id. at 18, 21; id., Ex. C at ¶¶ 12-15, 19.) But curiously Plaintiff then only addresses two of the additional accounts that he now denies owing. (Doc. #34 at ¶¶ 30-33, 36, 46-47; see also id. at 18, 21; id., Ex. C at ¶¶ 12-15, 19.) Plaintiff’s omission in this regard suggests that he acknowledges that he is responsible for the amounts owing on the other “additional” delinquent accounts. In any event, KCI has since ceased all collection attempts against Plaintiff. (Doc. # 33-2 at 72:7-12.) 5 Notably, Plaintiff does not assert that he provided a written dispute of these debts to KCI as required by the FDCPA. (Doc. # 34 at ¶¶ 13, 15, 18, 30-33, 36, 45-47; see also id. at 18, 21; id., Ex. C at ¶¶ 12-15, 19.) 6 For example, it is undisputed that upon receipt of Plaintiff’s written dispute regarding the Shawnee Mission account in October 2012, KCI did cease collections and did send a request to Experian to delete the subject trade line. (Doc. # 34 at 5 ¶¶ 16, 17.) Case 2:13-cv-02041-TJJ Document 35 Filed 03/07/14 Page 11 of 13 12 In sum, Plaintiff’s sham affidavit fails to establish any genuine issue of material fact sufficient to save his lawsuit. Such sham affidavits should never be considered in any event because “the utility of summary judgment as a procedure for screening out sham fact issues would be greatly undermined if a party could create an issue of fact merely by submitting an affidavit contradicting his own prior testimony.” Id. In short, Plaintiff has failed to create a genuine issue of material fact. KCI is entitled to summary judgment. CONCLUSION For the above reasons, KCI is entitled to summary judgment and Plaintiff’s Petition should be dismissed in its entirety. Respectfully submitted, FRANKE SCHULTZ & MULLEN, P.C. /s/ Pamela J. Welch PAMELA J. WELCH Ks. #21534 8900 Ward Parkway Kansas City, Missouri 64114 Phone: (816) 421-7100 Fax: (816) 421-7915 pwelch@fsmlawfirm.com and Michael A. Klutho Ks. #78069 BASSFORD REMELE, P.A. 33 South Sixth Street, Suite 3800 Minneapolis, Minnesota 55402-3707 (612) 333-3000/Fax: (612) 333-8829 mkluto@bassford.com ATTORNEYS FOR DEFENDANT Case 2:13-cv-02041-TJJ Document 35 Filed 03/07/14 Page 12 of 13 13 CERTIFICATE OF SERVICE I hereby certify that on the 7 th day of March, 2014, I electronically filed the foregoing with the Clerk of the Court by using the CM/ECF system which will send a notice of electronic filing to the following: A Scott Waddell #20955 Waddell Law Firm, LLC 2029 Wyandotte Street, Suite 100 Kansas City, Missouri 64108 Phone: (816) 221-2555 Fax: (816) 221-2508 scott@aswlawfirm.com ATTORNEY FOR PLAINTIFF /s/ Pamela J. Welch Attorney for Defendant Case 2:13-cv-02041-TJJ Document 35 Filed 03/07/14 Page 13 of 13