Roman-Perez v. Operating Partners Co. (In re Roman-Perez)Roman-Perez v. Operating Partners Co. (In re Roman-Perez)
OPINION AND ORDER
This adversary proceeding is before the court upon the Motion Requesting Partial Summary Judgment (the “Motion for Partial Summary Judgment, Docket No. 15) filed by Daniel Román Pérez and Cyn
Factual and Procedural Background
In 2011, Banco Bilbao Vizcaya Argenta-ría Puerto Rico (“BBVA”) filed a Complaint against the Debtors for collection of monies before the Puerto Rico Court of First Instance, Superior Court of Vega Alta, Case No. CD2011-382 (the “PR Court of First Instance”). The claimed debts were comprised of personal and credit cards loans. On February 15, 2012, the PR Court of First Instance entered a judgment against the Debtors.
BBVA transferred to Oriental Bank certain credits, including the Plaintiffs’ credit card and personal loans. On July 10, 2013, Oriental Bank transferred those credits and loans to PR Acquisitions, which subsequently assigned such claims for collection to Operating Partners, a debt collector. See Claims Register Nos. 1-1 and 2-1 and Lead Case Docket Nos. 30 and 32.
On December 30, 2013, the Plaintiffs filed their Chapter 13 bankruptcy petition. See Lead Case Docket No. 1.
On January 3, 2014, PR Acquisitions filed Proof of Claims Nos. 1-1 and 2-1. PR Acquisitions and Operating Partners were included in the Creditor Matrix List on January 27, 2014. See Lead Case Docket No. 12, p. 51-52. PR Acquisitions acknowledges that it was duly notified and knew of the filing of the bankruptcy petition. See Docket No. 25-1, p. 2, ¶ 8.
On January 16, 2014, Operating Partners, as agent of PR Acquisitions, filed a motion to stay the proceedings at the PR Court of First Instance in light of the bankruptcy petition filed by the Plaintiffs. See Docket No. 25-2, p. 1, ¶¶ 1-2. In that same motion, Operating Partners’ attorneys, Rodriguez-Card.e Law . Offices, P.S.C., through Attorney Yarymar Gonzá-lez Carrasquillo, also sought leave to withdraw as legal counsel because their client had so requested it. See Docket No. 25-2, p. 1, ¶ 4.
On January 17, 2014, the Debtors also filed a motion to stay the proceedings before the PR Court of First Instance in light of the filing of their bankruptcy petition. See Docket No. 25-3.
On January 22, 2014, the PR Court of First Instance issued an Order
On February 11, 2014, Operating Partners, as agent of PR Acquisitions, filed before the PR Court of First Instance the following motions: (1) Motion to Request Substitution of Plaintiff informing that it had become the agent of PR Acquisitions to pursue that case; and (2) Motion Soli
On June 23, 2014, the Debtors filed a Com/plaint against Operating Partners that initiated the instant adversary proceeding (Docket No. 1) and on August 13, 2014, Operating Partners filed its Answer to Com/plaint (Docket No. 6).
On October 9, 2014, the Plaintiffs moved for partial summary judgment for the court to determine that Operating Partners violated: (a) the automatic stay in 11 U.S.C. § 362; (b) 15 U.S.C. § 1692f(l) for attempting to collect amounts not permitted by law using unconscionable methods; (c) 15 U.S.C. § 1692(e)(2) and (10) by falsely representing the character amount or legal status of the debt and using false representations or deceptive means to collect or attempt to collect a debt; and (d) 15 U.S.C. § 1692d by using conduct which has the consequence of harassing, oppressing or abusing the consumer since no judgment can be executed while under the protection of the automatic stay. They seek actual and punitive damages and attorneys’ fees.
On October 17, 2014, the court entered an Order for the Defendant to “show cause within twenty one (21) days why partial summary judgment should not be entered in favor of plaintiff[s]” (Docket No. 22).
On November 7, 2014, the Defendant filed an Opposition to Summary Judgment (Docket Nos. 25, 27 and 28)
On November 7, 2014, the Plaintiffs filed a Motion Requesting the Court Takes Judicial Notice of the fact that “Operating Partners did nothing nor filed any motion to amend its illegal request”, referring to the last motions it filed before the PR Court of First Instance (Docket No. 29, p. 2, ¶ g.
On November 10, 2014, Operating Partners filed a Leave to File Unsworn Declaration of Attorney Yarymar González Car-rasquillo, who had represented it before the PR Court of First Instance, attaching the following Unsworn Declaration Under Penalty of Perjury:
I, Yarymar Gonzalez, of legal age, attorney for Operating Partners Co., under penalty of perjury declare as follows:
1. I represented Operating Partners in a collection case against Mr. Daniel Roman Perez and Cynthia Gonzalez, in the Court of First Instance of Vega Baja, Puerto Rico, case no. CD2011 382. This case was originally filed by Oriental Bank against Mr. Roman and Mrs. Gonzalez.
2. Operating Partners acquired the rights to pursue this collection case and I immediately filed a motion on January 14, 2014, informing the court that defendants had filed a bankruptcy petition, reason for which I requested stay of all proceedings. It should be noted that on said motion I did not specify that Operating Partners was a new party to the case nor I requested leave to substitute party.
3. Since the court had no knowledge of Operating Partner’s substitution, I filed a motion on February 11[, 2014] to request and inform of such substitution. However, by clerical mistake on that same day a motion requesting execution of judgment that had already been drafted before my knowledge of the automatic stay, was also filed.
4. The filing of this motion of execution of judgment was not made intentionally since I was fully aware of the automatic stay, considering the fact that I had previously requested: the court weeks before to stay all proceedings. In fact, the Court obliged my request and entered an Order to close the case.
5. I declare that the filing of these subsequent motions had no intention of violating the automatic stay of debtors. These motions were notified directly to Mr. Daniel Roman and not an attorney because Operating Partners was never notified by Mr. Roman’s counsel, Mr. Juan M. Suarez Cobo, when their motions were filed. Please take judicial notice of Mr. Juan M. Suarez Cobo’s motions where [sic ] all were sent to a prior attorney that had requested withdrawal months before and even though such request had been granted by the court.
I, Yarymar Gonzalez Carrasquillo, of legal age, pursuant to 28 U.S.C. § 174 — , declare under penalty of perjury under the laws of the United States of America that the foregoing is true and correct.
Executed on this 10th day of November 2014 in San Juan, Puerto Rico.
Docket No. 30-1 (original bold).
Jurisdiction
The jurisdiction of bankruptcy courts is created and limited by statute. See Celotex Corp. v. Edwards,
Bankruptcy courts have subject matter jurisdiction over proceedings “arising under title 11, or arising in or related to cases under title 11.” 28 U.S.C. § 1334(b). Also see 28 U.S.C. § 157(b)(1). U.S. District Courts may, in turn, refer “any or all proceedings arising under title 11 or arising in or ‘related to’ a case under title 11 ... to the bankruptcy judges for the district.” 28 U.S.C. § 157(a). Section 157 of the U.S. Judicial Code distinguishes between core proceedings and non-core proceedings. “It is the bankruptcy court’s responsibility to determine whether each claim before it is core or non-core.” Executive Benefits Ins. Agency v. Arkison, — U.S. -,
A bankruptcy court may hear and finally determine all core bankruptcy proceedings without the parties’ consent. See 28 U.S.C. § 157(b). In non-core “related to” proceedings “ — ie., proceedings that are ‘not core’ but are otherwise related to a case under title 11 — [28 U.S.C. § 157(c) ] authorizes a bankruptcy court to hear the proceeding, and then submit proposed findings of fact and conclusions of law to the district court. The district court must then review those proposed findings and conclusions de novo and enter any final orders or judgments. There is one statutory exception to this rule: if all parties ‘consent’, the statute permits the bankruptcy judge to hear and determine and to enter appropriate orders and judgments as if the proceeding were core.” Executive
In regards to the claim for violation of the automatic stay, the court has jurisdiction over the instant adversary proceeding pursuant to 28 U.S.C. §§ 157(a) and 1334(b) and Fed. R. Bankr.P. 7001(1). A willful violation claim under 11 U.S.C. § 362 “must be brought in the bankruptcy court, rather than in the district court, which only has appellate jurisdiction over bankruptcy cases.” Eastern Equipment & Services Corp. v. Factory Point National Bank, Bennington,
Notwithstanding, courts are divided as to whether a bankruptcy court may adjudicate claims under the FDCPA. For instance, in Goldstein v. Marine Midland Bank (In re Goldstein),
Other bankruptcy courts, however, have found that there is subject-matter jurisdiction to consider FDCPA violations under the “related to” provision of 28 U.S.C. § 1334(b) in an adversary proceedings for discharge violation damages. For example, in Eastman v. Baker Recovery Servs. (In re Eastman),
In re Eastman, however, has been criticized. In Marshall v. PNC Bank, N.A. (In re Marshall),
[t]he appropriate test to determine whether this Court has “related to” jurisdiction over the Debtor’s FDCPA Claim is whether the outcome of the Debtor’s FDCPA Claim could have any conceivable effect on the Debtor’s bankruptcy estate. See Michigan Emp’t Sec. Comm’n v. Wolverine Radio Co. (In re Wolverine Radio Co.),930 F.2d 1132 , 1144 (6th Cir.1991) (“The usual articulation of the test for determining whether a civil proceeding is related to bankruptcy is whether the outcome of that proceeding could conceivably have any effect on the estate being administered in bankruptcy.” (quoting Pacor, Inc. v. Higgins (In re Pacor),743 F.2d 984 , 994 (3rd Cir.1984) (internal quotation marks omitted)).
In re Marshall,
In re Martinez Arzuaga, supra, also followed In re Pacor, supra, inasmuch as the “FDCPA claim regarding post-discharge conduct that does not impact in any way the bankruptcy estate does not fall under Title ll’s jurisdictional umbrella because any remedies gained under the FDCPA inure to the plaintiff and not to the bankruptcy estate. This is the situation in the case at bar. Plaintiffs’ cause of action under FDCPA would have no effect whatsoever in the bankruptcy estate and, even if they successfully prosecute said claim, any recovery would be for their personal benefit, not their estate’s. No nexus exists between the determination of this controversy and the administration of the estate.” 2012 Bankr.LEXIS 1443 at **13-14,
In the instant case, however, the Plaintiffs’ FDCPA claims stem from the violation. to the automatic stay. In other words, without the Bankruptcy Code, their FDCPA claims would not exist. Moreover, and contrary to In re Martinez Arzuaga, supra, the Debtors in the lead bankruptcy case have not yet been discharged as the payments under the confirmed Chapter 13 Plan have not been completed; and the instant adversary proceeding is for the recovery of damages for a violation of the automatic stay, not a violation of the discharge injunction. Hence, an award for damages in the instant case would benefit the bankruptcy estate pursuant to 11 U.S.C. § 1306(a)(1). See Crouser v. BAC Home Loans Servicing, L.P. (In re Crouser),
The court also considers that the U.S. Courts of Appeals for several circuits have impliedly asserted jurisdiction over the FDCPA in -bankruptcy proceedings and have examined its interaction with the Bankruptcy Code. See e.g. Walls v. Wells Fargo Bank, N.A., infra; Randolph v.
Applicable Law and Analysis
(A) Standard for Partial Summary Judgment
Fed.R.Civ.P. 56 is applicable to adversary proceedings by Fed. R. Bankr.P. 7056, provides that summary judgment should be entered “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 a judgment as a matter of law5’. See also In re Colarusso,
“The summary-judgment procedure authorized by Rule 56 is a method for promptly disposing of actions in which there is no genuine issue as to any material fact or in which only a question of law is involved.” 10A Wright, Miller & Kane, Federal Practice and Procedure 3d § 2712 at 198. “Rule 56 provides the means by which a party may pierce the allegations in the pleadings and obtain relief by introducing outside evidence showing that there are no fact issues that need to be tried.” Id. at 202-203. Summary judgment is not a substitute for a trial of disputed facts; the court may only determine whether there are issues to be tried, and it is improper if the existence of a material fact is uncertain. Id. at 205-206.
Summary judgment is warranted where, after adequate time for discovery and upon motion, a party fails to make a showing sufficient to establish the existence of an element essential to its case and upon which it carries the burden of proof at trial. Celotex Corp. v. Catrett,
For there to be a “genuine” issue, facts which are supported by substantial evidence must be in dispute thereby requiring deference to the finder of fact. Furthermore, the disputed facts must be “material” or determinative of the outcome of the litigation. Hahn v. Sargent,
The moving party invariably bears both the initial as well as the ultimate burden in demonstrating its legal entitlement to summary judgment. See Adickes v. Kress & Co.,
The moving party cannot prevail if any essential element of its claim or defense "requires trial. See Lopez,
The moving party has the burden to establish that it is entitled to summary judgment; no defense is required where an insufficient showing is made. Lopez,
Fed.R.Civ.P. 56 was extensively rewritten in 2010. See 10B Wright, Miller & Krane Federal Practice & Procedure: Civil 3d § 2737. Amended subsection (a) of Fed.R.Civ.P. 56 now includes express authority for judgment on less than the entire case denominating it in its subsection title as “Partial Summary Judgment”, which allows summary judgment “upon all or any part” of a claim or defense by any party.
Pursuant to Fed.R.Civ.P. 56(g), even if summary judgment is not entirely granted, the court has the authority to determine the material facts which are genuinely not in dispute, and establish those facts as undisputed for trial. “The purpose of the rule is twofold: to salvage some of the judicial effort involved in the denial of a motion for summary judgment and to streamline the litigation process by narrowing the triable issues.” D’Iorio v. Winebow, Inc., — F.Supp.3d -, -,
In the instant case, the uncontested facts are supported by the admissions to the pleadings and the uncontested documents in the record.
(B) The Automatic Stay
The automatic stay provision is one of the fundamental debtor protections in the Bankruptcy Code. It gives the debtor a “breathing spell” from creditors and stops all collection efforts, all harassment, and all foreclosure actions. H.R.Rep. No. 95-595, 95th Cong. 1st Sess. 340-342 (1977); S.Rep. No. 989, 95th Cong., 2d Sess. 54-55 (1978), reprinted in 1978 U.S.C.C.A.N. 5787,, 5840, 6296-97. Also see ICC v. Holmes Transp., Inc.,
(C) Violation of the Automatic Stay
“The automatic stay imposes on non-debtor parties an affirmative duty of compliance.” Whitman-Nieves v. P.R. Fed. Credit Union (In re Whitman-Nieves),
In the instant case, Operating Partners acknowledged having due notice of the filing of the Debtor’s bankruptcy petition. See Docket No. 25-1, ¶ 8. Therefore, when Attorney Yarymar González Carrasquillo signed and filed the Motion Soliciting Order before the PR Court of First Instance on February 11, 2014 requesting the execution of the judgment of pre-petition debts on behalf of Operating Reports (Docket No. 16-2, Exhibit 1), the Defendant violated the automatic stay pursuant to 11 U.S.C. § 362(a)(1) and (6). The evidence does not show that when Attorney Yarymar González Carrasquillo signed and filed the Motion Soliciting Order (Docket No. 16-2, Exhibit 1), her request to be withdrawn as Operating Partner’s legal counsel had been granted by the PR Court' of First Instance. Thus, as stated in Otero Rivera v. Lake Berkley Resort Master Ass’ n (In re Rivera),
.“Attorneys act for their clients, and the neglect of an attorney acting within the scope of his or her authority is attributable to the client.” Nansamba v. North Shore Med. Ctr., Inc.,727 F.3d 33 , 38 (1st Cir.2013), citing Thibeault v. Square D Co.,960 F.2d 239 , 246 (1st Cir.1992) (rejecting argument that attorney’s sins should not be visited upon client); Damiani v. R.I. Hosp.,704 F.2d 12 , 16 (1st Cir.1983) (same). “Any other notion would be wholly inconsistent with our system of representative litigation, in which each party is deemed bound by the acts of his lawyer-agent and is considered to have ‘notice of all facts, notice of which can be charged upon the attorney.’ ” Damiani v. R.I. Hosp.,704 F.2d at 16 , quoting Smith v. Ayer,101 U.S. 320 , 326,25 L.Ed. 955 (1880). “[K]eep-ing a suit alive ‘merely because [defendants] should not be penalized for the omissions of [their] own attorney[s] would be visiting the sins of the [defendants’] lawyer upon the [plaintiff].’ ” Damiani v. R.I. Hosp.,704 F.2d at 17 , quoting Link v. Wabash Railroad Co.,370 U.S. 626 , 634 n. 10,82 S.Ct. 1386 ,8 L.Ed.2d 734 (1962). Also see Corchado v. Puerto Rico Marine Management, Inc.,665 F.2d 410 , 413 (1st Cir.1981), cert. denied,459 U.S. 826 ,103 S.Ct. 60 ,74 L.Ed.2d 63 (1982); Pease v. Peters,550 F.2d 698 , 701 (1st Cir.1977).
Ms. González Carasquillo’s statement in her Unsworn Declaration Under Penalty of Perjury that such the filing of such motion “was not made intentionally since she was fully aware of the automatic stay” (Docket No. 30-1, ¶ 4) further supports the violation. “A willful violation does not require a specific intent to violate the automatic stay.” Fleet Mortg. Group v. Kaneb,
(D) Punitive Damages under 11 U.S.C. § 362(h)(1)
Punitive damages are awarded under Section 362(k)(1) for violations of the automatic stay “in appropriate circumstances”. 11 U.S.C. § 862(k)(1). “An award of punitive damages is properly within the discretion of the Bankruptcy Court and is a fact specific determination.” In re Rosa,
Likewise, in confirming the bankruptcy court’s denial of punitive damages under 11 U.S.C. § 362(k)(1), the U.S. Bankruptcy Appellate Panel for the Ninth Circuit in Youssef v. Union Adjustment Co. (In re Youssef), 2011 Bankr.LEXIS 886 at **18-19,
In short, “[p]unitive damages may be awarded where there has been conduct in bad faith. The type of conduct necessary for an award does not require evidence of ill or malice toward the plaintiff, but the act done by the opponent must have been done intentionally and without a
The Plaintiffs in the instant case have not alleged or demonstrated how or to what extent Operating Report’s conduct was intentionally unjustified, egregious, abusive, malicious and/or in bad faith. Although the court can presume the willfulness of the Defendant’s violation of the automatic stay, Fleet Mortgage Group v. Kaneb,
(E) The Bankruptcy Code and the FDCPA
“The United States Bankruptcy Code provides a comprehensive federal system of penalties and protections to govern the orderly conduct of debtors’ affairs and creditors’ rights.” E. Equip. & Servs. Corp. v. Factory Point Nat’l Bank,
The Plaintiffs allege that when Operating Partner requested the execution of the judgment before the PR Court of First Instance, it violated 15 U.S.C. §§ 1692f(l), 1692(d) and 1692(e)(2) and (10), which state as follows:
A debt collector may not use unfair or unconscionable means to collect or attempt to collect any debt. Without limiting the general application of the foregoing, the following conduct is a violation of this section:
(1)The collection of any amount (including any interest, fee, charge, or expense incidental to the principal obligation) unless such amount is expressly authorized by the agreement creating the debt or permitted by law.
15 U.S.C. § 1692f(l).
A debt collector may not engage in any conduct the natural consequence of which is to harass, oppress, or abuse any person in connection with the collection of a debt. Without limiting the general application of the foregoing, the following conduct is a violation of this section:
(1) The use or threat of use of violence or other criminal means to harm the physical person, reputation, or property of any person.
(2) The use of obscene or profane language or language the natural consequence of which is to abuse the hearer or reader.
(3) The publication of a list of consumers who allegedly refuse to pay debts, except to a consumer reporting agency or to persons meeting the requirements of section 603(f) or 604(3)1 of this Act.
(4) The ádvertisement for sale of any debt to coerce payment of the debt.
(5) Causing a telephone to ring or engaging any person in telephone conversation repeatedly or continuously with intent to annoy, abuse, or harass any person at the called number.
(6) Except as provided in section 804, the placement of telephone calls withoutmeaningful disclosure of the caller’s identity.
15 U.S.C. § 1692d.
A debt collector may not use any false, deceptive, or misleading representation or means in connection with the collection of any debt. Without limiting the general application of the foregoing, the following conduct is a violation of this section:
(2) The false representation of—
(A) the character, amount, or legal status of any debt; or
(B) any services rendered or compensation which may be lawfully received by any debt collector for the collection of a debt.
(10) The use of any false representation or deceptive means to collect or attempt to collect any debt or to obtain information concerning a consumer.
11 U.S.C. § 1692e(2), 10.
Section 813 of the FDCPA establishes the following civil liability of any violation thereof:
a) Except as otherwise provided by this section, any debt collector who fails to comply with any provision of this title with respect to any person is liable to such person in an amount equal to the sum of—
(1) any actual damage sustained by such person as a result of such failure;
(2) (A) in the case of any action by an individual, such additional damages as the court may allow, but not exceeding $1,000; or
(B) in the case of a class action, (i) such amount for each named plaintiff as could be recovered under subparagraph (A), and (ii) such amount as the court may allow for all other class members, without regard to a minimum individual recovery, not to exceed the lesser of $500,000 or 1 per centum of the net worth of the debt collector; and
(3) in the case of any successful action to enforce the foregoing liability, the costs of the action, together with a reasonable attorney’s fee as determined by the court. On a finding by the court that an action under this section was brought in bad faith and for the purpose of harassment, the court may award to the defendant attorney’s fees reasonable in relation to the work expended and costs.
(b) In determining the amount of liability in any action under subsection (a), the court shall consider,’ among other relevant factors' — ■
(1) in any individual action under subsection (a)(2)(A), the frequency and persistence of noncompliance by the debt collector, the nature of such noncompliance, and the extent to which such noncompliance was intentional; or
(2) in any class action under subsection (a)(2)(B), the frequency and persistence of noncompliance by the debt collector, the nature of such noncompliance, the resources of the debt collector, the number of persons adversely affected, and the extent to which the debt collector’s noncompliance was intentional.
(c) A debt collector may not be held liable in any-action brought under this title if the debt collector shows by a preponderance of evidence that the violation was not intentional and resulted from a bona fide error notwithstanding the maintenance of procedures reasonably adapted to avoid any such error.
(d) An action to enforce any liability created by this title may be brought in any appropriate United States district court without regard to the amount in controversy, or in any other court of competent jurisdiction, within one yearfrom the date on which the violation occurs.
(e) No provision of this section imposing any liability shall apply to any act done or omitted in good faith in conformity with any advisory opinion of the Commission, notwithstanding that after such act or omission has occurred, such opinion is amended, rescinded, or determined by judicial or other authority to be invalid for any reason.
15 U.S.C. § 16921.
“In order to prevail on an FDCPA claim, plaintiff must prove that (1) she was the object of collection activity arising from consumer debt, (2) defendants are debt collectors as defined by the FDCPA[
The query in the instant case further translates into whether the remedies afforded in the Bankruptcy Code preclude the applicability of the FDCPA when the remedies sought stem from a violation to the former. “Courts that have addressed the issue of preclusion of FDCPA claims based on an alleged violation of the bankruptcy [automatic] stay or discharge injunction are divided.” Garfield v. Ocwen Loan Servicing, LLC,
In Walls v. Wells Fargo Bank, NA.,
The U.S. Court of Appeals for the Second Circuit (the “Second Circuit”) adopted a similar posture: “[t]he FDCPA is designed to protect defenseless debtors and to give them remedies against abuse by creditors ... [t]here is no need to protect debtors who are already under the protection of the bankruptcy court, and there is no need to supplement the remedies afforded by bankruptcy itself’. Simmons v. Roundup Funding, LLC,
Conversely, the U.S. Court of Appeals for the Seventh Circuit (“Seventh Circuit”) has held that a debtor may pursue FDCPA claims based on a creditor’s attempts to collect a debt in violation of the automatic stay or discharge injunction. The Seventh Circuit reasoned that a “demand for immediate payment while a debtor is in bankruptcy (or after the debt’s discharge) is ‘false’ in the sense that it asserts that money is due, although, because of the automatic stay (11 U.S.C. § 362) or the discharge injunction (11 U.S.C. § 524), it is not. A debt collector’s false statement is presumptively wrongful under the Fair Debt Collection Practices Act, see 15 U.S.C. § 1692e(2)(A), even if the speaker is ignorant of the truth; but a debt collector that exercises care to avoid making false statements has a defense under § 1692k(c).” Randolph v. IMBS, Inc.,
In Crawford v. LVNV Funding, LLC,
In Simon v. FIA Card Servs., N.A., supra, a law firm, Weinstein & Riley, P.S. (“Weinstein & Riley”), sent a letter and a notice on behalf of FIA Card Services, N.A. (“FIA”), to the plaintiffs-debtors through their bankruptcy counsel stating that FIA was considering filing an adversary proceeding under 11 U.S.C. § 523 to challenge the dischargeability of the credit-card debt and included an offer to forego an adversary proceeding if the plaintiffs stipulated that the credit-card debt was nondischargeable or if they agreed to pay a reduced amount to settle the debt. The letter also stated that a Fed. R. Bankr.P. 2004 examination to gather information for filing an adversary proceeding had .been scheduled, but that Weinstein & Riley was open to “discussing] with your client whether the matter can be resolved without conducting the examination and/or to reschedule it for an informal telephone conference at a mutually agreeable time prior to the bar date.” Id. at 263. The letter also set out additional information about how to challenge the debt “[i]n the
We will follow the Seventh Circuit’s approach [in Randolph v. IMBS, Inc., supra]. When, as here, FDCPA claims arise from communications a debt collector sends a bankruptcy debtor in a pending bankruptcy proceeding, and the communications are alleged to violate the Bankruptcy Code or Rules, there is no categorical preclusion of the FDCPA claims. When, as is also the case here, the FDCPA claim arises from communications sent in a pending bankruptcy proceeding and there is no allegation that the communications violate the Code or Rules, there is even less reason for categorical preclusion. The proper inquiry for both circumstances is whether the FDCPA claim raises a direct conflict between the Code or Rules and the FDCPA, or whether both can be enforced.
This approach is consistent with [U.S.] Supreme Court precedents recognizing a presumption against the implied repeal of one federal statute by another. “ ‘[W]hen two statutes are capable of coexistence, it is the duty of the courts, absent a clearly expressed congressional intention to the contrary, to regard each as effective.’ ” J.E.M. Ag Supply, Inc. v. Pioneer Hi-Bred Intern., Inc.,534 U.S. 124 , 143-44,122 S.Ct. 593 ,151 L.Ed.2d 508 (2001) (quoting Morton v. Mancan,417 U.S. 535 , 551,94 S.Ct. 2474 ,41 L.Ed.2d 290 (1974)).
Simon v. FIA Card Servs., N.A.,732 F.3d at 274 .
In the instant case, the court finds that remedies under the FDCPA are available in bankruptcy when Debtors have no other remedies for damages under the Bankruptcy Code for the same actions. The court follows the reasoning in Simmons v. Roundup Funding, LLC: “[t]he FDCPA is designed to protect defenseless debtors and to give them remedies against abuse by creditors ... [t]here is no need to protect debtors who are already under the protection of the bankruptcy court, and there is no need to supplement the remedies afforded by bankruptcy itself.”
Conclusion
For the reasons stated above, the court partially grants the Plaintiffs’ Motion for Partial Summary Judgment (Docket No. 15) to determine the Defendant’s liability for the willful violation of the automatic stay under 11 U.S.C. § 362(k)(l) for actual damages and attorneys’ fees. The Plaintiffs’ request to determine the Defendant’s liability for punitive damages and damages under the FDCPA is hereby denied.
SO ORDERED.
Partial judgment will be entered accordingly.
Notes
. The Order was notified to the parties on February 5, 2014. See Docket No. 25-3, p. 1.
. The Defendant also filed a Motion to File Documents in Spanish (Docket No. 26). For the sake of judicial economy the court will consider the documents, but if an appeal should be taken, these documents will have to be offered with a translation.
.In ¶¶ 4-5 of the Complaint (Docket No. 1, p. 3), the Plaintiffs aver the following jurisdictional pleadings:
4. Jurisdiction is invoked under 28 U.S.C. § 157(c)(1) & (2), § 1334 & 1337.[] If this action has any noncore elements, plaintiffs hereby express their consent to the entry of final judgment by a Bankruptcy Judge.
5. This Court has supplemental jurisdiction to hear all state law claims pursuant to Section 1367 of Title 28 of the United States Code. This Court also has jurisdiction to hear the Fair Debt Collection Practices Act violations pursuant to Section 1692 of Title 15 of the United States Code; thus, federal subject matter jurisdiction is properly founded upon Section 1331 of Title 28 of the United States Code.
The Defendant admitted and consented to the foregoing in ¶¶ 4-5 of its Answer to Complaint (Docket No.6, p. 2):
4. Allegation number four (4) is admitted as to the provisions of law.
5. Allegation number five (5) jurisdictional allegations are limitedly admitted, exclusively to “Federal Questions”.
. FDCPA defines "debt collector” as "any person who uses any instrumentality of interstate commerce or the mails in any business the principal 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). The U.S. Supreme Court has held that a "debt collector” includes an attorney who " regularly’ engage[s] in consumer-debt-collection activity, even when that activity consists of litigation.” Heintz v. Jenkins,