Court Opinion

ID: 11346
Source: CourtListenerOpinion
Date Created: 2010-04-25 06:03:48+00
Date Added: 2024-06-11T15:04:25.903706
License: Public Domain

United States Court of Appeals,

                             Fifth Circuit.

                                No. 96-30493.

   Craig S. ADDISON;     Anita S. Addison, Plaintiffs-Appellants,

                                      v.

            Charles H. BRAUD, Jr., Defendant-Appellee.

                                Feb. 6, 1997.

Appeal from the United          States       District   Court   for   the   Middle
District of Louisiana.

Before WISDOM, DAVIS and DUHÉ, Circuit Judges.

      DUHÉ, Circuit Judge:

      Craig and Anita Addison sued Charles Braud for violating the

Fair Debt Collection Practices Act ("FDCPA"), January 17, 1997, 15

U.S.C. § 1601 et seq.    The district court granted summary judgment

for Braud and dismissed the action.             The Addisons now appeal.

                                 BACKGROUND

      The basis for the Addison's lawsuit for violations of the

FDCPA was an earlier lawsuit filed in Baton Rouge, Louisiana City

Court by Braud.    Acting as a collection attorney, Braud sued the

Addisons on behalf of his client, Guaranty Credit Plan, Inc., on an

overdue promissory note.         When a few months passed without the

Defendant's addressing the merits of the suit, Braud obtained a

default judgment against the Addisons. The Addisons later declared

bankruptcy, and had the underlying debt discharged.

       Several months after the state court judgment was entered,

the   Addisons   sued   Braud    in   federal      district     court   alleging

violations of the FDCPA.        The Addisons argued that Braud violated

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the venue provision of the FDCPA, § 1692i, by filing his state

court action in Baton Rouge City Court.           Section 1692i prohibits

debt collectors1 from bringing legal action to enforce a debt

anywhere but the judicial district or similar legal entity where

the consumer signed the contract sued upon or in which the consumer

resides when the action is commenced.

     The Addisons executed the promissory note for the stereo in

Baker, Louisiana.    When Braud sued them, the Addisons lived in

Baker.   Since Baker has its own city court, and since it is outside

the City of Baton Rouge, the Addisons argue Braud violated the

venue provision by not filing in the proper judicial district or

similar legal entity.

     The Addisons also claimed that Braud violated 15 U.S.C. §

1692e2 because his original complaint and the default judgment

sought interest on the underlying debt at a rate illegal under

Louisiana   law.    The   petition       filed   by   Braud   contained   the

statement: "A finance charge of 35.91% was charged on the original

amount of this loan and the same is due on this amount from August

3, 1994 until paid."      The default judgment against the Addisons,

drafted by Braud, also stated as due the underlying debt, "plus

interest thereon at the rate of 35.91% annum from August 3, 1994

    1
     As the Supreme Court recently held in Heintz v. Jenkins, the
FDCPA applies to attorneys who regularly engage in debt collection
litigation. --- U.S. ----, 115 S.Ct. 1489, 131 L.Ed.2d 395 (1995).

     2
      Section 1692e prohibits any "false, deceptive or misleading
representations or means in connection with the collection of any
debt," and its subsections contain a nonexclusive list of conduct
which violates the FDCPA.

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until paid."    La. R.S. 9:3522 permits post maturity interest on a

debt to be charged at the underlying contract rate for one year,

but prohibits interest thereafter at a rate higher than 18% per

annum. The Addisons argue that by obtaining a default judgment for

the contract rate of 35.91% "until paid," a non specific time

period, Braud violated the one year limit of La. R.S. 9:3522 and

thereby violated the FDCPA.

     Braud moved for summary judgment and the Addisons responded

with their own motion for partial summary judgment.     The district

court ruled in favor of Braud.

                              DISCUSSION

         While the parties did not focus on this issue, we find it

dispositive that under Louisiana law, Baton Rouge City Court did

not have jurisdiction over the Addisons.     La. R.S. 13:1952(4)(a)

makes clear that Baton Rouge City Court only has territorial

jurisdiction throughout the territorial area of the City of Baton

Rouge.    That does not include the town of Baker.   Its jurisdiction

is therefore limited to people who live in the City of Baton Rouge,

or cases arising in the City of Baton Rouge.    Baker is not within

the territory of the City of Baton Rouge.      The Addisons do not

reside in Baton Rouge, nor did the case arise in Baton Rouge.     For

those reasons, Baton Rouge City Court had no jurisdiction over the

Addisons.

         Section 1692i directs that debt collectors file collection

actions in one of two judicial districts or similar legal entities:

where the contract sued upon was signed, or where the consumer

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lives when the collection action is initiated.            Section 1692k of

the FDCPA makes collectors who fail to comply with any other

section of the subchapter liable for civil damages.              Braud is

liable under that section for filing suit in the wrong court.

     While § 1692i is primarily concerned with ensuring collection

actions are filed in a venue convenient to the debtor, it follows

that filing in a court which is not only not the proper venue but

which is also without jurisdiction over the debtor also violates

that section.   The fact Baton Rouge City Court had no jurisdiction

over the Addisons means by definition Braud filed suit outside the

judicial district or similar legal entity where the debtor resided

or signed the note, violating § 1692i.

     Since   this   issue   is   dispositive   of   the    appeal,   it   is

unnecessary to reach the other arguments raised by the Addisons.

     Judgment is REVERSED, and the case is REMANDED for further

proceedings consistent with this opinion.

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