Source: https://www.leagle.com/decision/19972293973fsupp132012142
Timestamp: 2017-08-22 01:35:35
Document Index: 338853740

Matched Legal Cases: ['§ 1692', '§ 1681', '§ 1692', '§ 1692', '§ 1692', '§ 1692', '§ 1692', '§ 1692', '§ 1692', '§ 1692', '§ 1692', '§ 1692', '§ 1692', '§ 1692', '§ 1692', '§ 1692', '§ 48', '§ 1681', '§ 200', '§ 1', '§ 26', '§ 48', '§ 48', '§ 1692', '§ 48', '§ 1692', '§ 1692', '§ 1692', '§ 1692', '§ 1692', '§ 1692', '§ 1692', '§ 1692', '§ 1692']

DITTY v. CHECKRITE, LTD., | 973 F.Supp. 1320 (1997) | Leagle.com
973 F.Supp.
973 F.Supp. 1320 (1997)
DITTY v. CHECKRITE, LTD., INC.
Civil No. 2:95-CV-430C.
Rebecca H. and Bryan J. DITTY, et al., Plaintiffs, v. CHECKRITE, LTD., INC., et al., Defendants.
Lester A. Perry, Kesler & Rust, Salt Lake City, UT, for Petitioners.
Daniel P. Shapiro, Goldberg, Kohn, Bell, Black, Roosenbloom & Moritz, Ltd., Chicago, IL, Mark O. Morris, Snell & Wilmer LLP, Salt Lake City, UT, Paul C. Droz, Blackburn & Stoll LC, Salt Lake City, UT, for Respondents.
Plaintiffs are individuals who wrote bad checks for retail purchases in amounts ranging from $2.85 to $46.68. These checks were referred by various merchants to CheckRite for collection. CheckRite sent two collection letters to plaintiffs and subsequently relinquished collection efforts to DeLoney & Associates, the law firm representing CheckRite. DeLoney & Associates sent a third letter, which informed each plaintiff that their dishonored check "ha[d] been referred by CheckRite to our law firm for litigation." The letter went on to state that the matter could be settled, out of court, for the sum of the face amount of the check, a $15.00 service charge, and an amount ranging from $73.00 to $83.00 listed as "Legal Consideration for Covenant not to Sue." The letter sent to the Dittys also warned of a potential civil action for the amount of the check and stated that other actions, "including fraud in the inducement, negligent misrepresentation, civil shoplifting, or theft by check may also be considered." This warning was not included in the letters sent to the other plaintiffs. In addition to providing check collection services, CheckRite maintains a nationwide check verification system that allows subscribers to access a database to determine whether a check writer has written bad checks in the past.
Plaintiffs'3 Third Amended Complaint asserts claims under the Fair Debt Collection Practices Act ("FDCPA" or "Act"), 15 U.S.C. §§ 1692-1692o (1982 & Supp.1997), claims under the Fair Credit Reporting Act ("FCRA"), 15 U.S.C. §§ 1681-1681u (1982 & Supp.1997), and various state law causes of action4 against CheckRite, DeLoney & Associates, and Richard H. DeLoney.5 Plaintiffs previously sought summary judgment against CheckRite, DeLoney & Associates, and Richard DeLoney; the latter two defendants previously moved to dismiss plaintiffs' initial complaint. These prior motions presented some of the issues now raised by the pending motions. On January 25, 1996, the court denied the prior motions on the ground that the record did not permit a legal finding that collection of dishonored checks falls outside the coverage of the FDCPA. Order, January 25, 1996 (Docket No. 76).
Summary judgment is proper "if 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 judgment as a matter of law." Fed.R.Civ.P. 56(c). In applying this standard, the court must construe all facts and 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, 1356, 89 L.Ed.2d 538 (1986): Pueblo of Santa Ana v. Kelly, 104 F.3d 1546, 1552 (10th Cir.1997). The fact that the parties have filed cross-motions for summary judgment does not affect the applicable standard. Heublein, Inc. v. United States, 996 F.2d 1455, 1461 (2d Cir.1993).
Once the moving party has carried its burden, Rule 56(e) "requires the nonmoving party to go beyond the pleadings and by ... affidavits, or by the `depositions, answers to interrogatories, and admissions on file,' designate `specific facts showing that there is a genuine issue for trial.'" Celotex Corp. v. Catrett, 477 U.S. 317, 324, 106 S.Ct. 2548, 2553, 91 L.Ed.2d 265 (1986) (quoting Fed. R.Civ.P. 56(e)). The non-moving party must "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." Id. at 322, 106 S.Ct. at 2552. The mere existence of a scintilla of evidence in support of the non-moving party's case is insufficient; there must be evidence on which the jury could reasonably find for the non-movant. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 252, 106 S.Ct. 2505, 2512, 91 L.Ed.2d 202 (1986).
Three circuits have addressed the breadth of the FDCPA's definition of "debt:" the Third Circuit in Zimmerman v. HBO Affiliate Group, 834 F.2d 1163 (3d Cir.1987), the Seventh Circuit in Bass v. Stolper, Koritzinsky, Brewster & Neider, 111 F.3d 1322 (7th Cir.1997), and the Ninth Circuit in Charles v. Lundgren & Assocs., P.C., 119 F.3d 739 (9th Cir.1997). In Zimmerman, the defendant cable television companies demanded that plaintiffs pay for allegedly pirated microwave television signals. Plaintiffs sued, arguing, inter alia, that the defendants' collection methods ran afoul of the FDCPA. Affirming the district court's dismissal of plaintiffs' FDCPA claims, the Third Circuit first determined that the term "transaction" in the Act's definition of "debt" did not include asserted tort liability, but rather included only contractual or consensual consumer exchanges. Zimmerman, 834 F.2d at 1168. Pirating cable television signals, reasoned the court, did not constitute such an exchange. Id. The court then added, without discussion or analysis, that a "debt" under the FDCPA arises from "the same type of transaction as is dealt with in all other subchapters of the Consumer Credit Protection Act, i.e., one involving the offer or extension of credit to a consumer." Id. However, Zimmerman did not address the issue here — whether the obligation created by a dishonored check constitutes a "debt" under the Act.
Plaintiffs maintain that defendants' attempts, in some instances successful, to collect amounts significantly greater than the face amounts of plaintiffs' dishonored checks violated § 1692f(1) of the Act, which prohibits "[t]he collection of any amount ... unless such amount is expressly authorized by the agreement creating the debt or permitted by law" and violated § 1692e, which prohibits "any false, deceptive, or misleading representation or means in connection with the collection of any debt."6 It is clear that plaintiffs never authorized defendants, by agreement or otherwise, to collect the fees they sought. Therefore, unless such fees are permitted by Utah law, defendants' collection efforts violated § 1692f(1). See Patzka v. Viterbo College, 917 F.Supp. 654, 659 (W.D.Wis.1996); Newman v. Checkrite, 912 F.Supp. 1354, 1367-68 (E.D.Cal.1995).
Section 1692g contains no express requirement that collection efforts be delayed until the thirty-day period has passed. Instead, the statute states that if the debtor disputes a debt, "the debt collector shall cease collection of the debt." 15 U.S.C. § 1692g(b) (emphasis added). To accept plaintiffs' reading of § 1692g would require the court to limit the provision in a manner directly contrary to its clear and unambiguous terms. This the court cannot do, for "absent any `indication that doing so would frustrate Congress's clear intention or yield patent absurdity, [the court's] obligation is to apply the statute as Congress wrote it.'" Hubbard v. United States, 514 U.S. 695, 703, 115 S.Ct. 1754, 1759, 131 L.Ed.2d 779 (1995) (quoting BFP v. Resolution Trust Corp., 511 U.S. 531, 570, 114 S.Ct. 1757, 1778, 128 L.Ed.2d 556 (1994) (Souter, J., dissenting)).
The court analyzes the challenged statements under the "least sophisticated consumer" standard. This standard "ensure[s] that the FDCPA protects all consumers, the gullible as well as the shrewd." Clomon v. Jackson, 988 F.2d 1314, 1318 (2d Cir.1993). Additionally, the least sophisticated consumer standard is the most widely accepted test used to determine whether a collection letter violates § 1692e. Id. (listing federal district and circuit courts that have adopted the standard).
Defendants maintain that the letter's statement that "other actions ... may be considered" did not threaten legal action, but rather advised the Ditty's, in good faith, of their potential liability. While the letter does not explicitly state that an action will be brought against the Dittys, a reasonable jury applying the least sophisticated consumer standard could conclude that the letter's warning that "other actions ... may be considered" threatened suit. See United States v. National Financial Services, Inc., 98 F.3d 131, 137-38 (4th Cir.1996) (affirming summary judgment for plaintiffs on claim that statements regarding possible legal action violated §§ 1692e(5) & (10), even when creditor did not intend to file suit), Bentley v. Great Lakes Collection Bureau, 6 F.3d 60, 62 (2d Cir.1993) (finding statement that creditors "have instructed us to proceed with whatever legal means is necessary" could be interpreted by least sophisticated consumer as threat of imminent suit). Nevertheless, because Richard DeLoney's research led him to conclude that the actions listed in the Ditty letter could be maintained and he did file such actions after mailing the letter, and because Utah law makes the passing of bad checks a criminal offense in some circumstances, the court concludes that there are disputed issues of fact regarding defendants' intent in warning the Dittys of their potential liability. The record also does not permit the court to determine as a matter of law how the least sophisticated consumer would interpret DeLoney & Associates' warning that other actions might be brought against plaintiffs.
Accordingly, because the letters sent to plaintiffs by DeLoney & Associates contained false, misleading, or deceptive statements in violation of § 1692e, plaintiffs are granted summary judgment on this issue. However, factual issues prevent the court from determining whether additional statements contained in DeLoney & Associates' letter to the Dittys also violated § 1692e. Letters sent by CheckRite to plaintiffs did not violate § 1692e; thus, CheckRite's motion for summary judgment is granted as to plaintiffs' claim that CheckRite violated § 1692e directly.10 As discussed more fully infra, Part III.D, CheckRite may be held vicariously liable for violations of § 1692e committed by DeLoney & Associates.
Plaintiffs also argue that DeLoney & Associates is liable under § 1692c(b) for the placement of plaintiffs' names on the check verification system. In support of this contention, plaintiffs rely on the fact that DeLoney & Associates could accept a debtor's partial payment in full satisfaction of the covenant not to sue. Plaintiffs also point to CheckRite's practice of not removing a particular debtor's name from the verification system until being notified by DeLoney & Associates that the debtor's account had settled. The court does not find these facts compelling. The record is clear that CheckRite alone administered the verification system. CheckRite placed names on the system, and CheckRite, in its discretion, removed names from the system. DeLoney & Associates' role was simply to notify CheckRite that a particular account had settled; whether the name associated with that account was actually removed, however, was CheckRite's decision. In addition, even if the notifications given by DeLoney & Associates to CheckRite were considered "communications" for purposes of § 1692c(b), such communications occurred not "in connection" with the collection of debts, but rather after the debts had been collected.
That DeLoney & Associates incurs no direct liability from the check verification system does not end the inquiry, for if found to be engaged in a joint venture with CheckRite, the firm may be held liable for unlawful third party communications committed by CheckRite. "Joint venturers stand in the same relationship to each other as partners." Rogers v. M.O. Bitner Co., 738 P.2d 1029, 1034 (Utah 1987) (citing Kemp v. Murray, 680 P.2d 758, 759 (Utah 1984)). Thus, principles governing liability among partners apply. Id. Utah Code Ann. § 48-1-10 provides:
FCRA liability attaches to "consumer reporting agencies" in their preparation and dissemination of "consumer reports" and to certain "users" of such reports. DiGianni v. Stern's, 26 F.3d 346, 348 (2d Cir.), cert. denied, 513 U.S. 897, 115 S.Ct. 252, 130 L.Ed.2d 173 (1994). Plaintiffs contend that defendants are "consumer reporting agencies" subject to the FCRA's regulations and obligations. As used in the FCRA, a "consumer reporting agency" is:
15 U.S.C. § 1681a(f). "[T]he term refers to firms that are in the business of assembling and evaluating consumer credit information[,] `... a function which involves more than receipt and retransmission of information identifying a particular debt.'" Id. at 349 (quoting D'Angelo v. Wilmington Medical Ctr., Inc., 515 F.Supp. 1250, 1253 (D.Del. 1981)).
The little evidence in the record regarding CheckRite's verification activities does not reveal whether CheckRite acted merely as a conduit for debt-related information or as something more. The parties' unsupported allegations that CheckRite was or was not a consumer reporting agency are not sufficient to meet their respective burdens on summary judgment.
The record does reveal, however, that DeLoney & Associates was not a "consumer reporting agency" under the FCRA. There is no evidence that the law firm was in the business of assembling or evaluating consumer credit information. Rather, the record indicates that the firm simply notified CheckRite that a particular account had been settled. Merely furnishing information about a particular debt does not draw DeLoney & Associates within the definition of a "consumer reporting agency" Id. at 348-49; Rush v. Macy's New York Inc., 775 F.2d 1554, 1557 (11th Cir.1985); D'Angelo, 515 F.Supp. at 1253.
While the FDCPA itself is silent on the issue of vicarious liability, a debt collector may be held vicariously liable under the Act for the conduct of its attorney. Newman v. Checkrite California, Inc., 912 F.Supp. 1354, 1370 (E.D.Cal.1995) (citing Fox v. Citicorp Credit Servs., Inc., 15 F.3d 1507, 1516 (9th Cir.1994)); see also Martinez v. Albuquerque Collection Servs., 867 F.Supp. 1495, 1502 (D.N.M.1994); Kimber v. Federal Financial Corp., 668 F.Supp. 1480, 1486 (M.D.Ala. 1987); 17 Am.Jur.2d, Consumer Protection § 200 (1990). Plaintiffs advance two theories for finding CheckRite vicariously liable for the collection practices of DeLoney and his law firm: (1) that CheckRite is liable as a joint venturer of DeLoney and DeLoney & Associates, and (2) that CheckRite is liable as the principal of its agents DeLoney and DeLoney & Associates.
In Utah, a joint venture "is an agreement between two or more persons ordinarily but not necessarily limited to a single transaction for the purpose of making a profit." Bassett v. Baker, 530 P.2d 1, 2 (Utah 1974). The joint venture relationship need not be created by a formal agreement and may be proved by the parties' conduct. Rogers, 738 P.2d at 1032.
Id. Whether a joint venture exists "depends primarily upon the facts of a particular case rather than upon adherence to specific formalities." Strand v. Cranney, 607 P.2d 295, 296 (Utah 1980), and is a question of fact. Rogers, 738 P.2d at 1032. Here, the record does not clearly reveal the nature of the relationship between CheckRite and DeLoney & Associates; therefore, the court cannot determine, as a matter of law, whether they were engaged in a joint venture.
It is well established that the attorney-client relationship is one between an agent and his or her principal. McCarthy v. Recordex Service, Inc., 80 F.3d 842, 852 (3d Cir.), cert. denied, ___ U.S. ___, 117 S.Ct. 86, 136 L.Ed.2d 42 (1996); see also United States v. 7108 West Grand Avenue, 15 F.3d 632, 634 (7th Cir.), cert. denied, 512 U.S. 1212, 114 S.Ct. 2691, 129 L.Ed.2d 822 (1994) ("[t]he clients are principals, the attorney is an agent, and under the law of agency the principal is bound by his chosen agent's deeds"); Von Hake v. Thomas, 858 P.2d 193, 195 n. 3 (Utah App.1993) (attorney is agent of client); Restatement (Second) of Agency § 1 cmt. e (1958) ("the attorney-at-law ... and other similar persons employed either for a single transaction or for a series of transactions, are agents"). Whether a principal is responsible for the actions of an agent, however, turns on whether the agent acted with either actual or apparent authority. Zions First National Bank v. Clark Clinic Corporation, 762 P.2d 1090, 1094 (Utah 1988); see also Jaeger v. Western Rivers Fly Fisher, 855 F.Supp. 1217, 1220 (D.Utah 1994). Plaintiffs contend that DeLoney and DeLoney & Associates acted with both actual and apparent authority.
There was, however, implied actual authority. DeLoney & Associates and CheckRite entered into an oral contract which authorized the law firm to collect CheckRite's delinquent accounts. Under the terms of the contract, CheckRite and the firm shared in the proceeds of such collection efforts — CheckRite received the face value of the check plus $20.00, DeLoney & Associates retained the balance. Further, CheckRite knew of the collection methods employed by DeLoney & Associates. CheckRite's Senior Vice President, Neil Auerbach, testified in his deposition that prior to the commencement of this suit, he had seen collection letters generated by DeLoney & Associates containing the covenant not to sue language. In fact, Mr. Auerbach was aware that all of the attorneys retained by CheckRite for its collection activities, including DeLoney & Associates, utilized the "covenant not to sue" technique in their collection efforts. That CheckRite did not specifically manifest its consent to its attorney's use of the "covenant not to sue" scheme is not controlling, for "[t]he manifestation of the principal may consist of his failure to object to unauthorized conduct." Restatement (Second) of Agency § 26 cmt. d (1958); see also Lowder v. Holley, 120 Utah. 231, 233 P.2d 350, 354 (1951) (manifestation of consent necessary to bind principal under theory of implied authority "may be proved by evidence of acquiescence with knowledge of the agent's acts" (quotations and citations omitted)). CheckRite authorized DeLoney & Associates to do its collection work and then knowingly stood by while the firm utilized the "covenant not to sue" scheme. By its acquiescence, CheckRite impliedly authorized the collection practices of DeLoney & Associates and thus is liable for any violations of law caused by the firm's use of those practices.
CheckRite is also liable for its attorney's collection practices under the doctrine of apparent authority. "To be vicariously liable for the acts of [its agent] under a theory of apparent authority, [the principal] must conduct itself in such a way as to clothe its [agent] with apparent authority to perform the [acts] committed and there must be reasonable reliance on that apparent authority on the part of the injured party." Jackson v. Righter, 891 P.2d 1387, 1392 (Utah 1995). CheckRite effectively "clothed" DeLoney & Associates with apparent authority to collect dishonored checks using the "covenant not to sue" scheme. The record indicates that CheckRite knowingly permitted DeLoney and his firm to employ the "covenant not to sue" practice in collecting dishonored checks on CheckRite's behalf. In addition, CheckRite manifested its consent to the collection practices of DeLoney and DeLoney & Associates. The second collection letter sent by CheckRite to each plaintiff warned that "it is [CheckRite's] practice to refer checks that remain unpaid to outside counsel for litigation" and listed "Attorney Fees and Court Costs," typically in the amount of $200.00, under the heading "POTENTIAL LIABILITY UNDER STATE LAW IF TOTAL DUE IS NOT PAID." On the heels of this letter, plaintiffs received a letter from DeLoney & Associates informing them that their dishonored checks had been referred to the firm by CheckRite. This letter also advised each plaintiff that the firm had CheckRite's authority to settle the matter in exchange for a covenant not to sue. While the acts and representations of DeLoney & Associates were insufficient to create apparent authority on behalf of CheckRite, see Zions First, 762 P.2d at 1095, the letters from DeLoney & Associates reinforced CheckRite's manifestation of consent, found in its letters, of the firm's collection practices. In short, "by allowing [DeLoney & Associates] to identify themselves to third parties as representatives of CheckRite, [CheckRite] has made itself responsible for the acts of the attorneys performed in the course of that representation." Newman, 912 F.Supp. at 1371. Acting in good faith, plaintiffs reasonably believed that DeLoney & Associates was authorized to collect dishonored checks on behalf of CheckRite using the "covenant not to sue" scheme.
Limited liability companies are designed to receive special tax treatment and to offer their owners ("members") the type of limited liability enjoyed by shareholders of a corporation. See Utah Limited Liability Company Act, Utah Code Ann. §§ 48-2b-101, et seq. Just as shareholders are generally insulated from personal liability for the liabilities of a corporation, Colman v. Colman, 743 P.2d 782, 786 (Utah App.1987), "neither the members, the managers, nor the employees of a limited liability company are personally liable under a judgment, decree, or order of a court, or in any other manner, for a debt, obligation, or liability of the limited liability company." Utah Code Ann. § 48-2b-109(1). In limited situations, however, Utah courts will look beyond the corporate form to find shareholders individually liable. Colman, 743 P.2d at 786. While there is little case law discussing veil piercing theories outside the corporate context, most commentators assume that the doctrine applies to limited liability companies. See Karin Schwindt, Comment, Limited Liability Companies: Issues in Member Liability, 44 UCLA L.Rev. 1541 (1997); Robert B. Thompson, The Limits of Liability in the New Limited Liability Entities, 32 Wake Forest L.Rev. 1 (1997); Rachel Maizes, Limited Liability Companies: A Critique, 70 St. John's L.Rev. 575 (1996); Eric Fox, Note, Piercing the Veil of Limited Liability Companies, 62 Geo. Wash. L.Rev. 1143 (1994); Wayne M. Gazur & Neil M. Goff, Assessing the Limited Liability Company, 41 Case W. Res. L.Rev. 387, 403 (1991); Robert R. Keatinge, et al. The Limited Liability Company: A Study of the Emerging Entity, 47 Bus. Law. 375, 445 (1992); Curtis J. Braukmann, Comment, Limited Liability Companies, 39 Kan. L.Rev. 967, 992 (1991); and Joseph P. Fonfara & Core, R. McCool, Comment, The Wyoming Limited Liability Company: A Viable Alternative to the § Corporation and the Limited Partnership 23 Land & Water L.Rev. 523, 525 n. 12 (1988); see also Robert G. Lang, Note, Utah's Limited Liability Company Act: Viable Alternative or Trap for the Unwary, 1993 Utah L.Rev. 941,966 (1993) (veil piercing doctrine likely to apply to Utah limited liability companies).
15 U.S.C. § 1692a(6). Attorneys who regularly engage in consumer debt collection activities are included in this definition. Heintz v. Jenkins, 514 U.S. 291, 299, 115 S.Ct. 1489, 1493, 131 L.Ed.2d 395 (1995); see also Fox v. Citicorp Credit Services, Inc., 15 F.3d 1507, 1513 (9th Cir.1994) (attorney is "debt collector" if regularly engaged in collection of consumer debts); Crossley v. Lieberman, 868 F.2d 566, 570 (3d Cir.1989) (same). Both DeLoney & Associates and Richard DeLoney were "debt collectors" under the FDCPA. Between July 1994 and May 1995, CheckRite referred to DeLoney & Associates more than nine thousand dishonored checks written by Utah residents, and collection work performed for CheckRite accounted for one-third to one-half of the firm's income. Further, as the firm's sole attorney, developer of the "covenant not to sue" practice, author of the generic letters utilized by the firm, and supervisor of all of the firm's collection activities, Mr. DeLoney was regularly engaged, directly and indirectly, in the collection of debts. Thus, he may be held personally liable under the FDCPA. See Blakemore v. Pekay, 895 F.Supp. 972, 977 (N.D.Ill.1995) (liability under FDCPA attaches to individual attorney and law firm where both met Act's definition of "debt collector"); Teng v. Metropolitan Retail Recovery Inc., 851 F.Supp. 61, (E.D.N.Y.1994) (employee of "debt collector" liable under FDCPA if he or she is a "debt collector" within the statutory definition).
Mr. DeLoney maintains that simply satisfying the definition of a "debt collector" does not trigger personal liability under the FDCPA. Rather, argues Mr. DeLoney, personal liability attaches only if the court may also pierce the protective veil afforded DeLoney & Associates under Utah law. See Utah Code Ann. § 48-2b-109(1). The little case law cited by Mr. DeLoney does not support his argument. In West v. Costen, 558 F.Supp. 564 (W.D.Va.1983), the court determined that the defendant, the president and majority shareholder of a collection agency, was a "debt collector" under the FDCPA. Id. at 585. However, because the plaintiffs made no allegation and presented no evidence that the defendant's own conduct violated the FDCPA, the court concluded that he could not be held personally liable under the Act unless the facts warranted disregarding the agency's corporate form. Id. The case stands for the well-established proposition that absent personal involvement with an employee's wrongful conduct, a corporate officer cannot be held personally liable for the employee's conduct unless the facts justify piercing the corporate veil. Id. United States v. ACB Sales & Service, Inc., 590 F.Supp. 561 (D.Ariz.1984), also relied upon by Mr. DeLoney, simply restates the principle articulated in West: "Generally, a corporate [director or officer] will not be held vicariously liable, merely by virtue of his office, for the torts of his corporation[; instead] [p]ersonal liability must be founded upon specific acts by the individual director or officer." Id. at 573 (internal quotations and citations omitted). Here, the record reveals that Mr. DeLoney was intimately involved with the unlawful collection practices of his firm. Therefore, West and ACB Sales are not on point.
Id. at 67. While it is generally true that a corporate officer or director may be held personally liable only for his or her tortious conduct, Teng makes clear that when that officer or director is also a "debt collector," he or she may be held personally liable for violations of the FDCPA. Second, Mr. DeLoney mischaracterizes the nature of his conduct: He is being sued not simply for "sending out settlement offers," but rather for sending out misleading and threatening settlement offers, conduct likely actionable under common law tort theories of misrepresentation and intentional infliction of emotional distress, if not others. Thus, even it were correct that Mr. DeLoney could be held personally liable only for FDCPA violations that are tortious in nature, individual liability would still attach.
Plaintiffs ask the court to enjoin CheckRite from disclosing plaintiffs' names, and those of other consumers, on CheckRite's nationwide check verification system. In response, CheckRite argues that injunctive relief is not available for a private litigant under either the FDCPA or the FCRA. Plaintiffs neither oppose CheckRite's argument nor provide legal authority in support of their request for injunctive relief. Because it appears that injunctive relief is not available to plaintiffs, CheckRite is granted summary judgment on this issue. See Sibley v. Fulton DeKalb Collection Serv., 677 F.2d 830, 834 (11th Cir.1982) (injunctive relief not available to individual under civil liability section of FDCPA); Mangio v. Equifax, Inc., 887 F.Supp. 283, 284-85 (S.D.Fla.1995) (private individuals may not sue for injunctive relief under FCRA).
The FDCPA covers debts arising from transactions entered into "primarily for personal, family, or household purposes." 15 U.S.C. § 1692a(5). See Mabe v. G.C. Services Limited Partnership, 32 F.3d 86, 88 (4th Cir.1994) (FDCPA covers only "debts" incurred to receive consumer goods or services); Bloom v. I.C. System, Inc., 972 F.2d 1067, 1069 (9th Cir.1992) (FDCPA covers "debts" arising out of consumer, not commercial, activities). CheckRite seeks summary judgment on three of the four claims asserted by Mark Crandall on the ground that the dishonored checks underlying these claims did not arise from "consumer" transactions, but instead were issued by Crandall in connection with his painting business. Plaintiffs oppose the motion simply by arguing that Crandall's fourth claim, predicated on a dishonored check written to purchase food for his family, arises out a consumer transaction and is within the Act's coverage. Because CheckRite's contentions appear to have merit, CheckRite is granted summary judgment on those of Crandall's claims not founded on consumer transactions.
(1) A dishonored check constitutes a "debt" under the FDCPA, and the Act's coverage extends to abusive check collection practices; (2) DeLoney & Associates attempted to collect excessive fees in violation of FDCPA § 1692f(l); (3) Defendants did not violate plaintiffs' debt validation rights under FDCPA § 1692g; (4) Collection letters sent to plaintiffs by CheckRite did not contain false, misleading, or deceptive statements in violation of FDCPA § 1692e; (5) The collection letter sent to plaintiffs by DeLoney & Associates contained false, misleading, or deceptive statements in violation of FDCPA § 1692e; (6) Factual issues prevent the court from determining, as a matter of law, whether warnings of possible legal action contained in DeLoney & Associates' letter to the Ditty plaintiffs violated § 1692e(5); (7) Factual issues prevent the court from determining, as a matter of law, whether CheckRite made third party communications in violation of FDCPA § 1692c(b); (8) DeLoney & Associates did not itself make third party communications in violation of FDCPA § 1692c(b); however, the firm may be held liable for unlawful third party communications by CheckRite if found to be CheckRite's joint venturer; (9) Factual issues prevent the court from determining, as a matter of law, whether defendants communicated false information in violation of FDCPA § 1692e(8). (10) Factual issues prevent the court from determining whether CheckRite was a "consumer reporting agency" subject to the FCRA; (11) DeLoney & Associates was not a "consumer reporting agency" and thus is not subject to liability under the FCRA; (12) Factual issues prevent the court from determining, as a matter of law, that CheckRite and DeLoney & Associates were engaged in a joint venture; (13) Under theories of implied actual authority and apparent authority, CheckRite may be held vicariously liable under the FDCPA for the abusive debt collection practices of DeLoney & Associates; (14) Factual issues prevent the court from determining, as a matter of law, whether it may pierce the veil of DeLoney & Associates, L.L.C. to hold Richard H. DeLoney personally liable for the firm's abusive debt collection practices; (15) Richard H. DeLoney was a "debt collector" as defined by the FDCPA and may be held personally liable for his violations of the Act; (16) Plaintiff's are not entitled to injunctive relief under either the FDCPA or the FCRA; (17) Plaintiff Crandall's claims not based on debts arising from consumer transactions are not cognizable under the FDCPA; (18) Factual issues prevent the court from determining, as a matter of law, whether the FDCPA claims asserted by the Robinson plaintiffs are time-barred.