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Patterson v. Howe

United States District Court, S.D. Indiana, Indianapolis Division

March 30, 2018

HOWARD HOWE, Defendant.


          Debra McVicker Lynch, United States Magistrate Judge

         This case challenges as a violation of the Fair Debt Collection Practices Act a practice the defendant Mr. Howe (an attorney) uses in debt collection cases he files on behalf of creditor-clients in Indiana state court-or at least did in this case.[1]Mr. Howe serves with the summons and complaint a document titled “Requests to Admit, ” consisting of four statements to which his client seeks responses under Rule 36 of the Indiana Rules of Trial Procedure. This document does not advise of the consequences of failure to serve timely denials. Plaintiff Mark A. Patterson seeks relief for himself and on behalf of a class. Before the court are cross-motions for summary judgment on Mr. Patterson's individual claims. The parties seek resolution on summary judgment of the liability issues presented before addressing any class certification issues, and the court agrees that, under the circumstances here, it is appropriate to do so.

         As explained below, the court determines plaintiff Mark A. Patterson is entitled to summary judgment on his claim that Mr. Howe's use and service of requests for admission in the manner he followed when he sued Mr. Patterson in state court violated the FDCPA.[2] Other matters remain to be decided in this case, including the appropriateness of certifying a class, damages, and attorneys' fees. Plaintiff Mark Patterson's motion for summary judgment (Dkt. 25) is GRANTED. Defendant Howard Howe's motion for summary judgment (Dkt. 22) is DENIED.

         Summary judgment is appropriate when “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). Substantive law determines the facts that are material. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 251, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). Here, the parties agree that the material facts are not disputed and that the court can decide as a matter of law whether Mr. Howe violated the FDCPA.

         I. Undisputed Material Facts

         Based on the parties' submissions, the court considers the following undisputed facts. Additional undisputed facts pertinent to the resolution of particular legal issues are discussed in the sections that follow.

         On May 10, 2016, defendant Howard Howe filed a lawsuit on behalf of his client, Indiana Institute of Technology, against Mark A. Patterson, seeking to collect a debt Mr. Patterson allegedly owed to Indiana Institute of Technology (“IIT”) for tuition or fees. Attorney Howe was acting as a debt collector within the meaning of the FDCPA, and Mr. Patterson's alleged debt was a consumer debt, the collection of which is governed by the FDCPA. Mr. Howe arranged for service by a local sheriff's office on Mr. Patterson of a summons, the complaint, and a document titled “Requests to Admit.” Mr. Patterson was served with these documents on May 12, 2016. The Requests to Admit document reads in pertinent part as follows:

         Image Omitted

         None of the documents served on Mr. Patterson explained the consequence, set forth in Indiana Trial Rule 36(A), that requests not denied within 30 days would be deemed admitted.

         Mr. Patterson did file an answer to the complaint against him, [3] but he did not serve an answer to the Requests to Admit.

         In the debt collection lawsuit, a mediator was appointed by the court, and the parties settled the case. On April 17, 2017, they filed an Agreement of Settlement in which Mr. Patterson agreed to the entry of judgment against him for $7, 500.00 plus costs of $181.00, to be paid in installments, in exchange for IIT's promise to release his transcript on request. See Dkt. 23 at p. 9. The parties have designated no facts about whether the Requests to Admit had any effect on the disposition of the lawsuit.

         II. The Claims in this Lawsuit

          Mr. Patterson filed his complaint on December 14, 2016. He alleges that Mr. Howe's service of the Requests to Admit violated the FDCPA's proscription against the use of deceptive or misleading representations or means (15 U.S.C. § 1692e) or of unfair or unconscionable means (15 U.S.C. § 1692f) in the collection of a debt. He relies in particular on the fact that Mr. Howe's communications did not inform him of the consequences under Indiana law of failing to respond to the Requests to Admit within the 30 days requested in these particular Requests to Admit. Under Indiana Rule of Trial Procedure 36 (which is modeled on Fed.R.Civ.P. 36), a party may serve a written request for the admission of any matters within the scope of discovery and each matter “is admitted unless, within a period designated in the request, not less than thirty days after service . . ., the party to whom the request is directed serves upon the party requesting the admission a written answer or objection addressed to the matter, signed by the party or by his attorney.” A matter that is admitted “is conclusively established unless the court on motion permits withdrawal or amendment of the admission.” See Dkt. 23 at p. 12.

         III. Analysis

         The purposes of the Fair Debt Collection Practices Act are “to eliminate abusive debt collection practices by debt collectors, to insure that those debt 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.” 15 U.S.C. § 1692(e) (quoted in Pantoja v. Portfolio Recovery Assoc., LLC, 852 F.3d 679, 683 (7th Cir. 2017)). To those ends, the FDCPA prohibits the use of any “false, deceptive, or misleading representation or means in connection with the collection of any debt” and the use of “unfair or unconscionable means to collect . . . any debt.” 15 U.S.C. §§ 1692e and 1692f.

         Mr. Patterson maintains that he is entitled to judgment as a matter of law that Mr. Howe's communications served on him violated these provisions of the FDCPA. In particular, he maintains (1) that the requests were at bottom requests to admit “you win and I lose” and exceeded the scope of a proper request under Indiana Trial Rule 36; and (2) that an unsophisticated debtor would not know the consequences of a failure to deny in a timely manner, a problem exacerbated by the fact that the requests were served with the summons and complaint.

         Mr. Howe has advanced a number of arguments why judgment as a matter of law should be entered in his favor. Some of those arguments overlap and some are barely developed, but they are summarized here.[4] First, he argues that Indiana Trial Rule 36 authorized his service of the requests for admission with the complaint and summons, so his doing so couldn't have violated the FDCPA. Relatedly, he contends that he had no obligation under the FDCPA to give Mr. Patterson legal advice by explaining in his communications the consequences of a failure to serve timely responses to the request for admissions. Second, he says that the preclusive effect of deemed admissions never applied here because he had not served the requests in an electronic format as provided by Indiana Trial Rule 26(A.1). Third, Mr. Howe argues that Mr. Patterson has designated no evidence that an unsophisticated debtor would have found the communications misleading or deceptive. Fourth, he argues that Mr. Patterson has no evidence of injury, rendering his claims insufficient under Spokeo. Finally, he asserts that the claims are barred by the Rooker-Feldman doctrine.

         In the course of its discussion below, the court will address to the extent necessary all the arguments of the parties, though not necessarily in the order they were made.

         A. Use of a discovery device authorized by the Indiana Trial Rules does not immunize Mr. Howe from liability under the FDCPA regardless of the surrounding circumstances.

         Mr. Howe's principal argument, whether asserted under the label of due process (Dkt. 29 at p. 3), federalism (Dkt. 23 at p. 3), professional responsibility (id.), or an “attack on Rule 36” (Dkt. 29 at p.5), is that service of requests for admission with the summons and complaint is permitted by the law (in particular, Indiana Trial Rule 36) and thus could never violate the FDCPA. Mr. Howe cites no authority for that argument. And indeed, that argument cannot be squared with Supreme Court and Seventh Circuit precedent. The core of his argument is that in litigating against Mr. Patterson, he used means expressly authorized by the Indiana Trial Rules, in this case, a discovery device authorized by a trial rule. But the law is clear that the use of litigation tools-whether in issuing pleadings, filings, or discovery-can violate the FDCPA, even though those tools are specifically authorized by the trial rules.

         The Seventh Circuit, along with many other courts, has made clear that the litigation activities of lawyers-which are grounded in state rules of procedure-can violate the FDCPA. In Marquez v. Weinstein, Pinson & Riley, P.S., 836 F.3d 808, 810-11 (7th Cir. 2016), the Seventh Circuit expressly held that the FDCPA covers the process of litigation and that pleadings or filings can fall within the FDCPA. In doing so, our court of appeals cited the Supreme Court's decision in ...

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