Castillo v. Duke Capital
2:20-cv-00229
| D. Utah | Sep 23, 2024Background
- In 2019, Duke Capital, LLC sued Sarah Castillo, Viktoria Svensson, and Robin Bean in Utah state court to recover purchased debts, obtaining default judgments against all plaintiffs.
- Duke Capital was not registered with the Utah Division of Corporations and Commercial Code nor bonded as required by the Utah Collection Agency Act (UCAA) during the litigation.
- Plaintiffs filed a putative class action in Utah state court (removed to federal court) alleging violations of the Fair Debt Collection Practices Act (FDCPA), the Utah Consumer Sales Practices Act (UCSPA), and related common law claims.
- Duke Capital moved for summary judgment, arguing claim preclusion, issue preclusion, and that UCAA violations alone could not support UCSPA claims.
- Plaintiffs also moved to amend their complaint to avoid being interpreted as collaterally attacking the state-court judgments.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Claim Preclusion | Collection conduct claims are separate from debt validity; not barred. | Claims arise from same transaction as debt actions—should be precluded. | Not precluded; collection conduct is a separate transaction. |
| UCAA Violations as UCSPA Claims | Violations of UCAA and misrepresenting status support UCSPA claims. | UCAA violations alone cannot support UCSPA claim; no misrepresentation. | UCAA violations alone do not support UCSPA/common law claims. |
| Amendment of Complaint | Amend to remove any collateral attack on state court judgments. | Amendment futile because claims are precluded. | Amend allowed as to FDCPA claims not collaterally attacking judgments; denied as to state law claims. |
Key Cases Cited
- Gillmor v. Family Link, LLC, 284 P.3d 622 (Utah 2012) (claim preclusion doctrine under Utah law)
- Mack v. Utah State Dep’t of Commerce, Div. of Sec., 221 P.3d 194 (Utah 2009) (three-part test for claim preclusion)
- Fell v. Alco Capital Grp. LLC, 538 P.3d 1249 (Utah App. 2023) (UCAA violation alone insufficient for UCSPA claim; UCAA may support FDCPA claim)
- Meneses v. Salander Enters. LLC, 537 P.3d 643 (Utah App. 2023) (UCAA registration violations do not support UCSPA or common-law claims)