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Proescher v. Security Collection Agency

United States District Court, M.D. Florida, Jacksonville Division

June 8, 2018

Tina Proescher, Plaintiff,
v.
Security Collection Agency, Defendant.

          REPORT & RECOMMENDATION

          Patricia D. Barksdale, United States Magistrate Judge

         In this unfair-debt-collection case, Tina Proescher moves for default judgment against Security Collection Agency (“SCA”). Doc. 13. The undersigned conducted an evidentiary hearing on the motion on January 31, 2018. Doc. 12 (minutes); Doc. 14 (transcript).

         I. Background

         A. Complaint and Exhibits

         In the complaint and through two exhibits to the complaint, Proescher alleges these facts.

         Proescher resides in Duval County. Doc. 1 ¶ 4. SCA conducts business in Duval County. Doc. 1 ¶ 5. On May 3, 2016, Proescher was in a car accident, and the City of Jacksonville's Fire and Rescue Department transported her from the accident by ambulance. Doc. 1 ¶ 8. She suffered injuries from the accident and retained counsel. Doc. 1 ¶ 9. After insurance, she owed $135 for the transportation. Doc. 1 ¶ 10. On June 20, 2017, her counsel sent a $135 check on her behalf to the City of Jacksonville. Doc. 1 ¶ 11; Doc. 1-1. The check was cashed. Doc. 1 ¶ 12. Unbeknownst to Proescher, the City of Jacksonville transferred the account to SCA. Doc. 1 ¶ 13. SCA mailed a letter dated August 4, 2017, from its address in Edenton, North Carolina, to Proescher's address in Jacksonville, Florida:

THIS IS YOUR OFFICIAL NOTIFICATION THAT WE ARE REPORTING YOUR DELINQUENT DEBT TO THE NATIONAL CREDIT BUREAUS-EQUIFAX AND TRANS UNION
We have given you ample time to respond to our previous request for payment of your account. Your lack of commitment to settle this account can only lead us to the conclusion that you do not intend to pay this debt.
This is your official notification that we are proceeding with collection efforts against you as permitted by State and Federal regulations. You control the next step in the collection process. Do not ignore this notice. It is in your best interest to pay this bill in full so that we may inform the credit bureaus that your debt is satisfied.
Mail your check or money order for the full amount due to our office in the envelope provided. Write the File Number on your check or money order so that we may credit your account properly. You may also go to our website listed below and pay with a credit or debit card or by electronic check payment. Credit, debit, and electronic check payments will appear on your statement under our corporate name Applied Business Services, Inc.
APPLIED BUSINESS SERVICES
This is an attempt by a debt collector to collect a debt; any information obtained will be used for that purpose.

Doc. 1-2. SCA “is reporting the balance as being owed on [her] credit report.” Doc. 1 ¶ 15. Proescher “suffers from mental and physical distress” because she thought the debt had been paid, she did not understand why she was receiving the statement for a debt for which she was no longer responsible, and she was upset that the debt was reported to credit bureaus. Doc. 1 ¶¶ 19, 28.

         Within approximately a month of receiving the letter, Proescher sued. Doc. 1. She brings two causes of action. In the first, she contends SCA tried to collect a debt previously paid, in violation of the Fair Debt Collection Practices Act (“FDCPA”), 15 U.S.C. §§ 1692-1692p. Doc. 1 ¶¶ 16-20. In the second, she contends SCA claimed, attempted, or threatened to enforce a debt even though it knew or should have known the debt was illegitimate, in violation of the Florida Consumer Collection Practices Act (“FCCPA”), Fla. Stat. §§ 559.55-559.785, Doc. 1 ¶¶ 21-28.

         Proescher demands a trial by jury, statutory damages of $1000 under 15 U.S.C. § 1692k(a)(2)(A), statutory damages of $1000 under Fla. Stat. § 559.77(2), actual damages, costs, attorney's fees, “injunctive and declaratory relief regarding further collection attempts, ” and “all other relief to which [she] is entitled.”[1] Doc. 1 at 5.

         B. Return of Service, Motions for Default and Default Judgment, and Amended Motion for Default Judgment

         On December 13, 2017, Proescher filed a return of service signed by a licensed process server in which he states he served a true copy of the summons, complaint, and exhibits on October 12, 2017, at 2:50 p.m., on Donna Mock as the registered agent for SCA, doing business as Applied Business Services, Inc., and informed her of the contents. Doc. 4.

         With the return of service, Proescher moved for entry of default, Doc. 5, and the clerk entered default, Doc. 6. She then filed a two-page motion for default judgment, Doc. 7, a one-sentence affidavit by counsel stating “the allegations in the Complaint against Defendant are true, ” Doc. 7-1, and a proposed final default judgment stating, “Plaintiff, Tina Proescher, shall recover from Defendant, Security Collection Agency d/b/a Applied Business Services, Inc. in the amount of $20, 725.00 in damages, costs in the amount of $525.24, and attorney's fees of $1, 581.00, for a total of $22, 831.27, which shall bear interest at the rate of 4.97% annum until paid for which let execution issue.” Doc. 7-2.

         The undersigned directed Proescher to file an amended motion that stated the damages and attorney's fees sought and contained a memorandum of law addressing whether service of process was proper, whether the Court has personal jurisdiction over SCA, whether the allegations in the complaint state a claim on which relief may be granted, and the reasonableness of any requested attorney's fees. Doc. 8.

         Proescher filed a two-page amended motion for entry of default judgment, Doc. 9, a proposed final default judgment, Doc. 9-1, and a separate memorandum of law. Doc. 9-2. In the memorandum, she set forth the procedural history and factual allegations; stated SCA had mailed her counsel a letter on November 2, 2017, indicating it would correct its mistakes; and stated her counsel had urged an SCA representative to formally respond to the complaint. Doc. 9-2 ¶¶ 1-14. For the FDCPA cause of action, she contended she “has suffered emotional distress and anxiety because of fear of being sued by Defendant or that her credit would continue to plunge as a result of Defendant's reporting of the debt.” Doc. 9-2 ¶ 20. For the FCCPA cause of action, she contended SCA violated Fla. Stat. § 559.72(9) and “[SCA] is obviously not taking this lawsuit seriously. They sent the undersigned correspondence in November of 2017 acknowledging their mistakes and that they would be correcting them. It was only until this lawsuit was filed did they correct the issues.” Doc. 9-2 ¶¶ 22, 26. For attorney's fees and costs, her counsel stated:

28. The undersigned has been admitted to practice law since 2010.
29. The undersigned works at ¶ 250.00/hourly rate.
30. The undersigned has a paralegal with over 27 years of experience who works at $125.00 an hour.
31. The undersigned has spent a total of 7.3 hours of attorney time in this case.
32. The undersigned's paralegal has spent a total of 1.2 hours of time in this case.
33. The undersigned has incurred costs in the amount of $525.00 in this case.

Doc. 9-2 ¶¶ 28-33. The proposed final judgment states, “Plaintiff, Tina Proescher, shall recover from Defendant, Security Collection Agency d/b/a Applied Business Services, Inc. in the amount of $15, 000 in actual damages, $5, 000.00 in punitive damages, costs in the amount of $525.00, and attorney's fees of $1975.00, for a total of $22, 500.00, which shall bear interest at the rate of 4.97% per annum until paid for which let execution issue.” Doc. 9-1.

         C. Evidentiary Hearing

         The undersigned issued an order stating the Court would “conduct an evidentiary hearing” on the amended motion for default judgment and damages. Doc. 10.

         At the evidentiary hearing, Proescher's counsel pinpointed § 807(2)(A) of the FDCPA, codified at 15 U.S.C. § 1692e(2)(A), as the FDCPA section under which she was proceeding. Doc. 14 at 4. He offered, and the undersigned admitted, seven exhibits. Doc. 14 at 3. They are exhibits to the complaint, the clerk's entry of default, the amended motion for default judgment, two letters from SCA sent after the lawsuit began, and an affidavit by Proescher. Docs. 12-1-12-8. In one letter, dated October 20, 2017, SCA states:

Dear Tina Proescher,
The above referenced account, regarding date of service 5/13/16, is being removed from your credit file. The request has been sent to the credit bureau. It may take the credit bureau up to 60 days to remove the listing. If the account is still being shown on your credit file you may dispute with the credit bureau.
We apologize for any inconvenience this may have caused.
If you have any further questions, please call our Account Service Center ...

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