Surber v. McCarthy, Burgess & Wolff, Inc.
1:14-cv-00309
S.D. Ala.Dec 30, 2015Background
- Surber sold insurance as an independent contractor for Bankers Life and was paid commissions upfront based on annual premiums, with Bankers Life retaining a contractual right to "charge back" commissions if insureds failed to pay.
- After termination in October 2012, Bankers Life claimed Surber owed $3,954.87 in chargebacks; MB&W, a collection agency, sent a demand letter and was later sued by Surber under the FDCPA.
- The district court, before discovery, ordered the parties to stipulate to facts and allowed MB&W to move for summary judgment on whether Surber’s obligation qualified as a "debt" under the FDCPA.
- The district court granted summary judgment for MB&W, finding the chargeback obligation arose from a commercial transaction and therefore was not a consumer "debt" under 15 U.S.C. § 1692a(5).
- Surber appealed, arguing (1) the obligation could be a loan used for personal purposes and thus a consumer debt, (2) the district court improperly compelled a stipulation under Rule 16(b), and (3) she should have been allowed discovery under Rule 56(d).
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the obligation to Bankers Life is a "debt" under the FDCPA | Surber: obligation may have originated from a loan or was used for personal expenses, so it could be a consumer debt | MB&W: obligation was a commercial chargeback for overpaid commissions tied to a business transaction, not a consumer debt | Held: Not a debt under FDCPA; obligation arose from commercial relationship and chargebacks |
| Whether extrinsic evidence could convert chargeback into a consumer "debt" | Surber: evidence (or discovery) could show Bankers Life loaned her money used for personal purposes | MB&W: undisputed evidence shows chargebacks, not loans; no evidence of loans exists | Held: No evidence of a loan; summary judgment appropriate; plaintiff failed to raise a genuine factual dispute |
| Whether the district court exceeded its authority under Rule 16(b) by ordering stipulation | Surber: district court lacked authority to compel stipulation (raised on appeal) | MB&W: stipulation was timely and used to resolve legal issue; no objection below | Held: Issue forfeited — Surber did not object below, so court will not consider it on appeal |
| Whether Surber was entitled to additional discovery under Rule 56(d) | Surber: should have been allowed discovery to develop evidence that Bankers Life made a loan | MB&W: no Rule 56(d) request made in district court; summary judgment proper | Held: No Rule 56(d) request made; district court did not abuse discretion in deciding summary judgment without further discovery |
Key Cases Cited
- Brown v. Secretary of State of Florida, 668 F.3d 1271 (11th Cir.) (standard of review for summary judgment)
- Hughes v. Kia Motors Corp., 766 F.3d 1317 (11th Cir.) (summary judgment burden and inferences for nonmovant)
- Oppenheim v. I.C. Sys., Inc., 627 F.3d 833 (11th Cir.) (FDCPA requires that money collected qualify as a "debt")
- Hawthorne v. Mac Adjustment, Inc., 140 F.3d 1367 (11th Cir.) (FDCPA applies only when obligation arises out of a specified transaction)
- Rouse v. Greyhound Rent-A-Car, Inc., 506 F.2d 410 (5th Cir.) (interpretation of "arising out of")
- Bonner v. City of Prichard, 661 F.2d 1206 (11th Cir.) (adoption of Fifth Circuit precedent)
- Urquilla-Diaz v. Kaplan University, 780 F.3d 1039 (11th Cir.) (district court’s discretion on summary judgment and discovery)