IN THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF COLORADO

Civil Action No.: 11-cv-02430-WYD-KMT

LUCAS DEMAESTRI,

Plaintiff,

v.

VERIFACTS, INC.,

Defendant.

 

DEFENDANT’S REPLY IN SUPPORT OF MOTION FOR SUMMARY JUDGMENT

PURSUANT TO FED.R.CIV.P. 56(a)

COMES NOW, the Defendant, VeriFacts, Inc. (“Defendant” or “VeriFacts”), by and 

through its counsel of record, and for its Reply in Support of Motion for Summary Judgment 

Pursuant to Fed.R.Civ.P. 56(a), states as follows:

I. INTRODUCTION

On November 22, 2011, Defendant filed its Motion for Summary Judgment (VeriFacts’

“Motion”), setting forth that there are no genuine issues of material fact to rebut the fact that 

VeriFacts had a “permissible purpose” in making an inquiry into Plaintiff’s consumer credit 

history in order to obtain his location information, and therefore did not violate the Fair Credit 

Reporting Act, 15 U.S.C. § 1681, et. seq. (“FCRA”). Further, as set forth in VeriFacts Motion, 

as VeriFacts is not a “debt collector,” and did not act as a “debt collector” in this case, 

Plaintiff’s claim under the Fair Debt Collection Practices Act, 15 U.S.C. § 1692, et. seq.

(“FDCPA”) fails as a matter of law. 

On December 8, 2011, Plaintiff filed his “Motion in Opposition to VeriFact’s Motion for 

Summary Judgment” (Plaintiff’s “Response,” Docket No. 13). In his Response, Plaintiff fails to 

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articulate any genuine issues of material fact to support his contention that VeriFacts did not 

have a “permissible purpose” under the FCRA, or that it acted as a “debt collector” in this case 

such that the FDCPA would apply. Accordingly, summary judgment in favor of VeriFacts and 

against Plaintiff is warranted. 

II. REPLY CONCERNING UNDISPUTED MATERIAL FACTS

Pursuant to this Court’s Practice Standards, Rule III. B.6, VeriFacts replies to Plaintiff’s 

responses to VeriFacts’ Statement of Material Facts as follows:

1. In his Response, Plaintiff indicates that this fact is “disputed in part,” but fails to

provide any factual support for this contention; nor does Plaintiff specify which portion of the 

statement is not disputed. The uncontroverted fact is that VeriFacts is in the business of 

providing “skip tracing” information, as set forth in the un-rebutted Affidavit of Sheila Gabler, ¶ 

3, Exhibit A, attached to VeriFacts’ Motion. 

2. Plaintiff admits that “Skip tracing” is a term used in the collection industry to

describe the process of gathering location information relating to consumers.

3. In his Response, Plaintiff states that this fact is “disputed,” but fails to provide

any support for this contention. VeriFacts does not engage in the practice of collecting debts

owed or due, or asserted to be owed or due, to another as set forth in the un-rebutted Affidavit 

of Shelia Gabler, ¶ 4, Exhibit A, attached to VeriFacts’ Motion.

4. In his Response, Plaintiff indicates that this fact is “disputed in part,” but fails to

provide any factual support for this contention; nor does Plaintiff specify which portion of the 

statement is not disputed. The uncontroverted fact is that the principal purpose of VeriFacts’ 

business is to provide skip tracing information to its clients, as set forth in the Affidavit of 

Shelia Gabler, ¶ 4, Exhibit A, attached to VeriFacts’ Motion. 

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5. In his Response, Plaintiff states that this fact is “disputed,” but fails to provide

any support for this contention. The uncontroverted fact is that VeriFacts does not obtain any 

credit data from any of the credit bureaus, as set forth in the Affidavit of Shelia Gabler, ¶ 5, 

Exhibit A, attached to VeriFacts’ Motion. 

6. In his Response, Plaintiff states that this fact is “disputed,” but fails to provide

any support for this contention. In this case, the uncontroverted fact is that VeriFacts obtained 

location information regarding Mr. DeMaestri in order to provide this information to two of 

VeriFacts’ clients, which are both debt collection agencies, as supported by the in the unrebutted affidavit of Shelia Gabler, ¶ 5, Exhibit A attached to VeriFacts’ Motion. 

7. In his Response, Plaintiff states that this fact is “disputed,” but fails to provide

any support for this contention. Both of VeriFacts’ clients referenced in Paragraph No. 6

certified to VeriFacts that the information they obtained from VeriFacts would be used in 

connection with a credit transaction involving the consumer and involving the extension of 

credit, or in connection with the review or collection of an account of the consumer, as 

permitted by the FCRA, as set forth in in the un-rebutted affidavit of Shelia Gabler, ¶ 6, Exhibit 

A attached to VeriFacts’ Motion.

8. In his Response, Plaintiff states that this fact is “disputed,” but fails to provide

any support for this contention. Plaintiff provided no information to rebut the fact that the 

inquiries made by VeriFacts were for no other purpose than to provide its clients with Plaintiff’s 

location information pursuant to their certification that the information they obtained from 

VeriFacts would be used in connection with a credit transaction involving the consumer and 

involving the extension of credit, or in connection with the review or collection of an account of 

the consumer, as permitted by the FCRA, and as set forth in the in the un-rebutted affidavit of 

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Shelia Gabler, ¶ 7, Exhibit A attached to VeriFacts’ Motion. 

9. In his Response, Plaintiff states that this fact is “disputed,” but fails to provide

any support for this contention. Plaintiff failed to provide any information to rebut the 

statements that the consumer reporting agencies from whom VeriFacts obtained the information 

posted “soft” inquiries on Plaintiff’s consumer file, as set forth in the affidavit of Shelia Gabler, 

¶ 8, Exhibit A attached to VeriFacts’ Motion. 

III. ARGUMENT

Plaintiff’s appears to aver three main arguments in his Response: 1) VeriFacts

allegedly is disguising the “true nature” of its business and is in fact a “debt collector” because 

its clients are debt collectors; 2) that VeriFacts has allegedly failed to show the existence of any 

underlying account that is owed by Plaintiff; and 3) collection of a “debt” is not a “permissible 

purpose” under the FCRA. Plaintiff’s arguments must be rejected. 

A. Plaintiff Fails to Point to Any Competent Evidence that VeriFacts acted as a 

“Debt Collector” in this Case such that the FDCPA would Apply. 

As set forth in VeriFact’s Motion, a “debt collector” under the FDCPA is defined as: 

...any person who uses any instrumentality of interstate commerce or the 

mails in any business the principle purpose of which is the collection of 

any debts, or who regularly collects or attempts to collect, directly or 

indirectly, debts owed or due or asserted to be owed or due another.

15 U.S.C. §1692a(6). 

Plaintiff argues in his Response that “Defendant’s operations could fall within the

definition of a ‘debt collector’ as defined in the FDCPA and is a question that should be 

addressed case by case. Plaintiff’s Response, P. 4 (emphasis added). In support of this 

argument, Plaintiff cites Baker v. TransUnion, LLC, 2010 U.S. Dist. LEXIS 51425 (D. Ariz. 

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May 25, 2010), which was also cited by VeriFacts in its Motion. See, Plaintiff’s Response, p. 5. 

Plaintiff’s reliance upon Baker is misplaced. In Baker, the court unequivocally stated: 

“...because VeriFacts’ alleged conduct appears to be no more than ‘mere information 

gathering’... it is not a ‘debt collector’ for purposes of the FDCPA. At least two district courts 

have reached a similar conclusion.” Id., at * 24-25 (citations omitted). As clearly set forth in 

the affidavit attached to VeriFacts’ Motion, VeriFacts only obtained location information 

regarding Plaintiff, did not obtain any credit data from any of the credit bureaus, and inquired 

into Plaintiff’s credit history for no other purpose other than to provide VeriFacts’ clients with 

location information. See, Exhibit A, ¶¶ 5, 7, attached to VeriFacts’ Motion. 

Rule 56(c)(4) states an affidavit or declaration used to support a motion for summary 

judgment must be made on personal knowledge, based on facts that would be admissible in 

evidence, and show that the declarant is competent to testify on the matters stated. See, 

Fed.R.Civ.P. 56(c)(4). Ms. Gabler has personal knowledge as to the facts asserted in her 

affidavit; stated facts that would be admissible as evidence; and is competent to testify on the 

matters based on her knowledge and job duties. See, Exhibit A, attached to VeriFacts’ Motion; 

See also, Sperry v. Werholtz, 413 Fed. Appx. 31, 35 (10th Cir. 2011). 

In his Response, Plaintiff attached an affidavit which repeats over and over again that

Plaintiff is not in receipt of any information, and that there is nothing in the record establishing 

a relationship between Plaintiff, VeriFacts, and a delinquent account. See, Exhibit A attached to 

Plaintiff’s Response. It is well-established that “... a party opposing a well-supported motion for 

summary judgment must do more than make conclusory allegations, it ‘must set forth specific 

facts showing that there is a genuine issue for trial.’” Dart Indus., Inc. v. Plunkett Co., 704 F.2d 

496, 498 (10th Cir. 1983)(quoting Fed.R.Civ.P. 56(e); First Nat’l Bank v. Cities Service Co., 

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391 U.S. 253, 288-90 (1968)). Rather than rebut the undisputed material facts set forth in 

VeriFacts’ Motion, Plaintiff’s affidavit actually supports the fact that VeriFacts did not have a 

“debt collector” relationship with Plaintiff and, therefore, the FDCPA simply does not apply. 

Plaintiff’s Exhibit B attached to his Response equally fails to raise a genuine issue of 

material fact as to whether VeriFacts is a “debt collector” in this case. Plaintiff’s Exhibit B is a 

screen shot from a portion of VeriFacts’ website. Plaintiff argues that because this screen shot 

lists, among other regulations and statutes, the “FDCPA” under the tab “Compliance,” that it 

renders VeriFacts a debt collector in this case. Plaintiff’s Response, pp. 7-8. Plaintiff’s 

arguments in this regard must be rejected. First, even assuming, arguendo, that a reference to 

the FDCPA that is contained on a screen shot of a page of VeriFacts’ website were to establish 

that VeriFacts has “...taken steps to assure compliance with the FDCPA,” as Plaintiff argues

(Plaintiff’s Response, p. 8), a company’s compliance (or stated compliance) with the FDCPA 

does not render it a “debt collector.” See, Hawthorne v. MAC Adjustment, 140 F.3d 1367 (11th

Cir. 1998); Betts v. Equifax, 245 F. Supp. 2d 1130 (W.D. Wa. 2003)(use of “Mini-Miranda” 

does not necessarily make an agency a debt collector); Alexander v. Omega Mgmt., Inc., 67 F. 

Supp. 2d 1052, 1056 (D. Minn. 1999)(same). As stated by the U.S. Court of Appeals for the 

Eleventh Circuit in Hawthorne: 

...Hawthorne attempts to avoid our conclusion by contending that 

Mac Adjustment waived "any claim to be exempted from the 

FDCPA." Appellant's Brief at 5. Specifically, she claims that Mac 

Adjustment "voluntarily inclu[ded] ... FDCPA language in its 

dunning letter" and thus waived its ability to contend now that the 

FDCPA does not apply. Id. at 6. In support of her argument, 

Hawthorne relies upon Vasquez v. Allstate Insurance Co., 937 

F.Supp. 773 (N.D.Ill.1996).

Several problems with Hawthorne's argument exist. First, we note 

that the letter sent by Mac Adjustment does not refer to the FDCPA 

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at all. Second, federal jurisdiction in this case is predicated on the 

alleged existence of a federal question under the FDCPA. We have 

held, however, that the FDCPA does not apply in this case. Thus, to 

the extent that Mac Adjustment chooses to govern itself according 

to certain principles of the FDCPA without referring to them 

expressly in its dunning letters, it is well established that the parties 

cannot confer federal jurisdiction by "waiving" into applicability of 

the FDCPA. See Eagerton v. Valuations, Inc., 698 F.2d 1115, 1118 

(11th Cir.1983). Rather, federal jurisdiction may be created only by 

congressional grant. See Weinberger v. Bentex Pharmaceuticals,

412 U.S. 645, 652 , 93 S.Ct. 2488, 2493, 37 L.Ed.2d 235 (1973). 

Hawthorne v. MAC Adjustment, 140 F.3d 1367, 1370 (11th Cir. 1998)

Additionally, even if Plaintiff could establish that VeriFacts may sometimes be 

considered a “debt collector,” which VeriFacts emphatically disputes since it simply does not 

engage in the practice of collecting debt and its principle business purpose is “skip tracing” 

(See, Exhibit A, ¶ 4, attached to VerifFacts’ Motion), Plaintiff has pointed to no evidence 

whatsoever that VeriFacts attempted to collect a “debt” from him. Indeed, as noted above, 

Plaintiff states repeatedly in his affidavit that he has no “relationship” whatsoever to VeriFacts 

or any “account” with VeriFacts. See, Exhibit A attached to Plaintiff’s Response. 

It is Plaintiff’s burden to establish the threshold criteria as to whether the FDCPA even 

applies by establishing that: (i) the plaintiff has been the target of collection activity and is a 

“consumer” as defined under 15 U.S.C. §1692a(3); and (ii) the defendant collecting the debt is a 

“debt collector” as defined in 15 U.S.C. §1692a(6). See, Morgan v. Credit Adjustment Board, 

Inc., 999 F. Supp. 803, 805 (E.D. Va. 1998). Plaintiff’s repeated admissions in his Response 

that there is no established debt collection arrangement between Plaintiff and VeriFacts belies 

the argument that he is a “consumer” or that VeriFacts was attempting to collect a “debt” from 

him. Plaintiff simply fails to point to any genuine dispute of material fact as to these threshold 

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factual criteria (other than his conclusory statements that a single reference to the FDCPA on 

VeriFacts’ website regarding FDCPA compliance makes it a “debt collector”) to rebut the 

unequivocal statements made in the affidavit attached to VeriFacts’s Motion which establishes 

that it does not engage in “debt collection” in general, and more importantly, did not engage in 

any debt collection in this case.

B. VeriFacts has Established that VeriFacts Obtained Location Information 

Regarding Plaintiff’s Consumer Report for a Permissible Purpose under the 

FCRA. 

It is Plaintiff’s burden to show that the user had an impermissible purpose in obtaining 

the credit report. See, Kennedy v. Chase Manhattan Bank United States, NA, 369 F.3d 833, 

842 (5th Cir. 2004); See also, Korotki v. Attorney Services Corp. Inc., 931 F. Supp. 1269, 1276 

(D. Md. 1996). As set forth in VeriFacts’ Motion and the attached affidavit, as a skip tracer, 

VeriFacts had a “permissible purpose” as contemplated by the FCRA. The question of 

permissible purpose is a legal one and can be resolved on summary judgment. See, Zeller v. 

Samia, 758 F. Supp. 775, 781-82 (D. Mass. 1991).

 Section 1681b(a) of the FCRA provides a consumer reporting agency may furnish a 

consumer report under the following circumstances:

(3) To a person which [the consumer reporting agency] has reason to believe 

–

(A) intends to use the information in connection with a credit 

transaction involving the consumer on whom the information is to be 

furnished and involving the extension of credit to, or review or collection of 

an account of the consumer.

15 U.S.C. § 1681b(a)(3)(A). 

Plaintiff fails to point to any genuine factual issues to rebut the affidavit of Ms. Gabler 

which was attached to VeriFacts’ Motion, which specifically outlines that the only information 

VeriFacts obtained was location information that it provided to its clients. Instead, Plaintiff 

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argues that the collection of a debt does not constitute a “permissible purpose” under § 1681b(a) 

of the FCRA. Plaintiffs’ Response, pp. 8-14. Plaintiff attempts to draw a similarity between 

the word “account” in 15 U.S.C. § 1681b(a)(3)(A) and “account” under section 903 of the 

Electronic Fund Transfer Act. Plaintiff supplies no authority for this interpretation and 

comparison. As set forth in VeriFacts’ Motion, and the cases attached to VeriFacts’ Motion, 

businesses who provided “skip tracing” information, such as VeriFacts, fall within the scope of 

the exception set forth in § 1681b(a)(3)(A). See, Baker v. Trans Union LLC, et. al., 2010 U.S. 

Dist. LEXIS 51425, * 19-20 (D. Ariz. May 25, 2010); Wilson v. Sessoms, 1998 U.S. Dist. Lexis 

8154, * 13 (M.D.N.C. March 16, 1998). 

IV. CONCLUSION

As set forth in VeriFacts’ Motion and its attached affidavit, it is not a “debt collector” in 

general, nor did it act as a “debt collector” in this case. Plaintiff offers no evidence to the 

contrary, other than his conclusory allegation that a reference to FDCPA compliance on 

VeriFacts’ website somehow renders it a “debt collector” generally, or that it specifically acted

as a “debt collector” in this case. To the contrary, Plaintiff’s own affidavit attached to his 

Response supports the conclusion that VeriFacts did not act as a “debt collector,” as Plaintiff 

purports to be unaware of any relationship between VeriFacts and an alleged debt. Further, 

Plaintiff fails to offer any evidence to rebut the fact that VeriFacts’ principle business is skip 

tracing, that it only obtained location information of Plaintiff, and that such conduct has 

consistently been held to constitute a “permissible purpose” under the FCRA. 

Accordingly, VeriFacts respectfully requests that the Court enter judgment in favor of 

VeriFacts with respect to Plaintiff’s claims in this case. 

RESPECTFULLY SUBMITTED this 22nd day of December, 2011.

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ADAM L. PLOTKIN, P.C.

By: s/ Steven J. Wienczkowski, Esq.

Steven J. Wienczkowski, #33105

621 Seventeenth Street, Suite 1800

Denver, Colorado 80293

Telephone: (303) 296-3566

FAX: (303) 296-3544

E-mail: swienczkowski@alp-pc.com

Attorneys for Defendant 

CERTIFICATE OF SERVICE

I hereby certify that on December 22, 2011, I electronically filed the foregoing using the 

CM/ECF system and placed the same in the U.S. Mail postage prepaid addressed to:

Lucas DeMaestri

9901 E. Evans Ave., #23D

Denver, CO 80247

By: _s/Steven J. Wienczkowski, Esq.______

Steven J. Wienczkowski

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