Ewers v. Rainmaker Recovery 3 Inc.

          OPINION AND ORDER DENYING CROSS-MOTIONS FOR SUMMARY JUDGMENT AND GRANTING LEAVE FOR PLAINTIFF TO FILE AN AMENDED COMPLAINT

          R. STEVEN WHALEN UNITED STATES MAGISTRATE JUDGE.

         On December 21, 2017, Plaintiff Scott Ewers filed a complaint in this Court asserting that Defendant Rainmaker Recovery 3 Inc. (“Rainmaker”) violated the Fair Debt Collection Practices Act (“FDCPA”), 15 U.S.C. § 1692, et seq. Before the Court are Rainmaker's Motion for Summary Judgment [Doc. #23] and Plaintiff's Motion for Partial Summary Judgment [Doc. #28]. For the reasons discussed below, both motions will be DENIED. In addition, the Court will grant Plaintiff leave to amend his complaint to specifically add a claim under 15 U.S.C. § 1692g(b).

         I. FACTS

         On or about August 14, 2017, Rainmaker sent Plaintiff a letter attempting to collect a debt allegedly owed to South Oakland Gastroenteroloty. Complaint [Doc. #1], ¶¶ 6-7. On or about September 5, 2017, Plaintiff received a telephone call from Rainmaker attempting to collect the debt. Id. ¶ 8.

         On September 13, 2017, Plaintiff sent Rainmaker a letter-which Rainmaker received on September 18, 2017-requesting validation of the debt and requesting that Rainmaker flag the debt as disputed. Id. ¶ 9. On December 2, 2017, Plaintiff obtained his Equifax credit report and noted that Rainmaker had reported the alleged debt without indicating that it was disputed. Id. ¶ 11. During the month of January, 2018, Rainmaker provided Plaintiff with validation of the debt.

         At the time of the events in question, Rainmaker was a relatively small collection agency with three employees and a non-employee owner. Defendant's Motion [Doc. #23], Exhibit 1, Affidavit of Victoria Targosz. Fred Geisler was a collector and the assistant collections manager. Id. Mr. Geisler testified that Rainmaker uses an account management software system know as “Debt$Net, ” which is used to track collection accounts and generate automated tasks based on data entry and status of accounts. Defendant's Exhibit 2, Geisler Deposition Transcript, at 11.

         Mr. Geisler testified that he received Plaintiff's validation request and dispute letter on September 18, 2017. Id. at 21, 69. Defendant's Exhibit 4 is a screen shot of the Debt$Net Change Audit Log, purporting to show that on that date, Plaintiff's account was changed to note that he had an attorney, and that the debt was disputed. However, Mr. Geisler testified that there was a “possibility” that he failed to check a box that would have prevented the account from being reported to Equifax as “disputed.” Geisler Deposition, 32-33. Mr. Geisler testified that when he audited his pending files on December 30, 2017, he first noticed that Plaintiff's file was reported “incorrectly, ” and saw that the “dispute” box had not been checked. Id. at 38. He saw that the account had been reported to Equifax on November 30, 2017 without being flagged as disputed, stating, “I don't know if it was an error on my end that the box was not checked as disputed.” Id. In any event, Mr. Geisler corrected the error, changed the status of the account to “disputed and cancelled, ” and deleted the debt from Plaintiff's credit report with Equifax. Id. at 36.

         Rainmaker delivered the debt verification documents to Plaintiff's attorney on January 30, 2018.

         II. STANDARD OF REVIEW

         Summary judgment is appropriate where “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 a judgment as a matter of law.” Fed. R.Civ.P. 56(c). To prevail on a motion for summary judgment, the non-moving party must show sufficient evidence to create a genuine issue of material fact. Klepper v. First American Bank, 916 F.2d 337, 341-42 (6^th Cir. 1990). Drawing all reasonable inferences in favor of the non-moving party, the Court must determine “whether the evidence presents a sufficient disagreement to require submission to a jury or whether it is so one-sided that one party must prevail as a matter of law.” Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 251-52 (1986). Entry of summary judgment is appropriate “against a party who fails to make a showing sufficient to establish the existence of an element essential to that party's case, and on which that party will bear the burden of proof at trial.” Celetox Corp. v. Catrett, 477 U.S. 317, 322 (1986). When the “record taken as a whole could not lead a rational trier of fact to find for the nonmoving party, ” there is no genuine issue of material fact, and summary judgment is appropriate. Simmons-Harris v. Zelman, 234 F.3d 945, 951 (6^th Cir. 2000).

         Once the moving party in a summary judgment motion identifies portions of the record which demonstrate the absence of a genuine dispute over material facts, the opposing party may not then “rely on the hope that the trier of fact will disbelieve the movant's denial of a disputed fact, ” but must make an affirmative evidentiary showing to defeat the motion. Street v. J.C. Bradford & Co., 886 F.2d 1472, 1479 (6^th Cir. 1989). The non-moving party must identify specific facts in affidavits, depositions or other factual material showing “evidence on which the jury could reasonably find for the plaintiff.” Anderson, 477 U.S. at 252 (emphasis added). If the non-moving party cannot meet that burden, summary judgment is proper. Celotex Corp., 477 U.S. at 322-23.

         III. DISCUSSION

         A.§ 1692e(8)

         It is undisputed that Rainmaker erroneously failed to report Plaintiff's account to Equifax as disputed. This is the basis of Plaintiff's claim under § 1692e(8).^[1] The salient question in these cross-motions for summary judgment centers on the bona fide error defense to an FDCPA claim, specifically whether there is a triable question of fact as ...