United States District Court, S.D. Florida
NOEL ZUNIGA and C. CARLIN CASTILLO Plaintiffs,
RUSSELL S. JACOBS, et al., Defendants.
KATHLEEN M. WILLIAMS, UNITED STATES DISTRICT JUDGE
matter .is before the Court on Plaintiffs' motion to
strike (DE 78), Plaintiffs' motion for summary judgment
(DE 57), and Defendants' motion for summary judgment (DE
60). For the reasons below, Plaintiffs' motion to strike
is GRANTED IN PART, Plaintiffs' motion
for summary judgment is DENIED, and
Defendants' motion for summary judgment is
GRANTED IN PART.
action arises out of the Defendants'-the Jacobs Law Group
("Jacobs Law" or "Firm") and its
attorneys Russell Jacobs and Scott Shapiro-attempts to
collect association fees and related costs for the Beach Club
at Fontaine Bleau Park Condominium ("Beach Club")
from Plaintiffs who are unit owners. In 2006, Zuniga
purchased unit F-107 independently and unit F-105 with
Castillo. (DE 58 at ¶¶ 6, 8.) As unit owners,
Plaintiffs were bound by the Beach Club's Declaration of
Condominium ("Declaration"), which required owners
to pay assessment fees for routine maintenance of the common
elements, as well as for damage to the common areas caused by
the "negligence, misuse or neglect of specific Unit
Owners." (Id. at ¶ 1, 2; DE 59-43 at 14.)
first collection activity at issue is Defendants' mailing
of a letter to Zuniga on July 31, 2017 seeking to collect a
balance of $2, 902.94 on F-107's account. (DE 59-16.) It
informed Zuniga that the Beach Club intended to "file a
lien against your property on or after the date which is
thirty days after the date on which this letter has been
delivered to you." Id. The letter explained
that unless Zuniga requested verification of the balance
within thirty days, the debt would be assumed valid.
Id. On August 30, 2017, Zuniga sent Jacobs Law a
letter disputing the debt and requesting verification. (DE 58
at ¶ 22.) When the Firm and the Beach Club did not
respond, Zuniga filed a complaint with Florida's Division
of Business and Professional Regulation ("DBPR").
(Id. at ¶ 27.)
the course of the DBPR investigation, the Beach Club provided
Zuniga ledgers for F-105 and F-107 dated September 26, 2017.
(Id. at ¶ 28.) Unit F-107's ledger
indicated that on July 31, 2017, the amount due was $1,
369.87. (DE 59-20.) Zuniga also discovered that the
association had not posted a payment on April 22, 2016 which
the Beach Club had cashed, causing Zuniga to incur
late fees that should not have been charged. (DE 58
at ¶¶ 33-35.) Zuniga further discovered that eleven
payments posted to the Beach Club's F-107 ledger did not
appear on a separate ledger kept by the Firm. (Id.
at 35.) Defendants relied on the balance in the Firm's
separate ledger in preparing the July 31, 2017 communication.
Id. In February 2018, in a letter addressed to
Shapiro, DBPR informed Shapiro that the Beach Club was
required to post the missed April 22, 2016 payment, remove
the late fee, and provide Plaintiffs with accurate ledgers by
March 2, 2018. (DE 20-13.)
second collection activity at issue is a lawsuit that Scott
Shapiro filed against Castillo in Miami-Dade County Court in
January 2018 to collect $1, 200 for property damage that she
had allegedly caused to parts of the Beach Club's roof
near unit F-105. (Id. at ¶ 46.) Defendants
initiated the action at the request of the Beach Club, who
provided Jacobs Law a copy of an invoice for repair services
for $1, 200. (DE 61 at ¶¶ 13-15.) The September 26,
2017 F-105 ledger indicated that on June 6, 2017, the Beach
Club posted $1, 200 on the account for "damage to Bldg F
roof and repair costs." (DE 59-19 at 4.) Prior to the
posting of this charge, there was a positive balance of
$222.83 on the account. Id. The balance was
automatically applied towards the $1, 200 charge when it
posted, leaving a balance of $977.17. Id.
filed the instant action on June 8, 2018. (DE 1.) In count 1
of the amended complaint, Zuniga asserts that by sending the
July 31, 2017 letter, Jacobs and the Firm violated various
sections of the Fair Debt Collection Practices Act
("FDCPA"). (DE 20-1.) Zuniga alleges that Jacobs
and the Firm violated sections 1692(e) and 1692(e)(2)(A) by
seeking to collect a debt for an incorrect amount; section
1692(d) by "wrongfully and without basis" sending
communication threatening to record a claim of lien against
the property; and section 1692(e)(5) by "threatening to
file a Claim of Lien where they had no legal right to do so,
or never intended to do so at all." (Id. at
¶¶ 86-89.) Zuniga further alleges that they
violated section 1692(f)(1) by attempting to collect
interests on amounts other than overdue assessments, which is
not permitted under the Beach Club's governing documents
or Florida law. (Id. at ¶ 92.)
also asserts claims against Shapiro and
the Firm in count 1. He alleges that they
violated section 1692(f) by "using an unfair or
unconscionable means to collect or attempt to collect a
debt," when they refused to comply with DBPR's
directive to correct F-107's account record and
issue an accurate ledger.
(Id. at ¶ 90.)
Moreover, he alleges that Shapiro and the
Firm violated section 1692(f) by initiating the state court
lawsuit to collect "amounts owed on Unit F105 which had
already been deducted from Zuniga and Castillo's
account." (Id. at ¶ 91.)
Count 2, Castillo alleges that Shapiro and the Firm violated
section 1692(e)(2)(A) by "falsely representing the
character, amount, or legal status of debt in the State Court
lawsuit" by seeking to recover $1, 200 when the Beach
Club had already applied a balance of $222.83. (Id.
at ¶ 96.) Castillo further alleges that they violated
section 1692(f) by using an "unfair or unconscionable
means" to collect debt by "attempting] to collect
amounts owed on Unit F105 which had already been deducted
from Zuniga and Castillo's account." (Id.
at ¶ 97.)
Plaintiffs' Motion to Strike
move to strike Russell Jacob's declaration which is
attached as an exhibit to Defendants' response to
Plaintiffs' statement of material facts. The declaration
enumerates facts in support of the defense that Defendants
cannot be held liable under the FDCPA because they are not
"debt collectors" under the statute. (DE 70-1.) The
facts set forth in the affidavit are based on Jacob's
personal knowledge from his employment at the Firm, as well
as his "review of documents" and the Firm's
"business records." (Id. at ¶ 4.)
Plaintiffs move to strike the declaration under Rule 37 for
noncompliance with Rule 26. They contend that Defendants
failed to disclose the witnesses and documents they intend to
use in support of this defense prior to summary judgment.
Instead, Defendants proffered Jacobs' affidavit, which
identifies Jacobs as a witness and the existence of certain
business records, two months after the close of discovery.
Federal Rules of Civil Procedure provide for required
disclosure of materials that a party will use to support its
claims or defenses." Slater v. Energy Servs. Grp.
Int'l Inc., 441 Fed.Appx. 637, 642 (11th Cir. 2011).
Pursuant to Rule 26(a)(1)(A), parties must provide in their
initial disclosures "the name ... of each individual
likely to have discoverable information-along with the
subjects of that information-that the disclosing party may
use to support its claims or defenses" as well as
"all documents, electronically stored information, and
tangible things that the disclosing party has in its
possession . . . and may use to support its claims or
defenses." Under Rule 26(e)(1)(A), parties have an
ongoing duty to supplement their initial disclosures in a
"timely manner if the party learns that in some material
respect the disclosure or response is incomplete or
incorrect." Rule 37(c)(1) provides for sanctions if a
party fails to make required disclosures:
If a party fails to provide information or identify a witness
as required by Rule 26(a) or (e), the party is not allowed to
use that information or witness to supply evidence on a
motion, at a hearing, or trial, unless that failure was
substantially justified or is harmless.
have asserted the "debt collector" defense for the
first time in their response to Plaintiff's motion for
summary judgment. Moreover, in violation of Rule 26,
Defendants have failed to disclose the witnesses and
documents they intend to rely upon to support their
"debt collector" defense in their initial
disclosures or in any supplemental disclosures under Rule
26(e). Defendants have identified the Firm's corporate
representative, Jacobs, and Shapiro in their Rule
26(a)(1)(A)(i) disclosures, but did not indicate that these
three individuals would have information regarding the
"debt collector" defense. (DE 78-2.) In their Rule
26(a)(1)(A)(ii) disclosures, Defendants have failed to
identify the documents and business records that Jacobs
relied upon in preparing the declaration. Id.
Martinez v. Russell Jacobs, et. al., Case No.
15-23281-CV-KMW (S.D. Fla. Aug. 19, 2016)
("Martinez"), a FDCPA case where
Jacob's Law and Russell Jacobs were also the defendants,
this Court granted the plaintiff's motion to strike under
nearly identical circumstances. In Martinez, the
plaintiff moved to strike the defendants' affidavit that
was signed by Russell Jacobs and filed as an exhibit to their
motion for summary judgment. That affidavit is almost
identical to the one in this case and also purported to
support the "debt collector" defense.
Martinez at 6-8. And like this instant case, the
defendants did not assert the "debt collector" or
disclose the existence of documents or information underlying
it until summary judgment. Id. The Court granted the
plaintiff's motion to strike, explaining:
[P]ursuant to Rule 26, Jacobs Law had a continuing obligation
to produce to Martinez any documents or information it would
use in support of its "debt collector" defense.
Jacobs Law failed to meet this obligation and pursuant to
Rule 37 may not now use undisclosed information to support a
motion. Moreover, litigants in federal court have long known
that "[m]odern instruments of discovery . . . [and]
pretrial procedures make a trial less a game of blind
man's bluff and more a fair contest with the basic issues
and facts disclosed to the fullest practicable extent."
United States v. Procter & Gamble Co. 356 U.S.
677, 682 (1958). Consequently, the Court strikes the portion
of the affidavit regarding Jacob's Law's 'debt
collector' defense and will not consider any statements
of fact or arguments which rely on this portion in deciding
the cross-motions for summary judgment.
Id. at 7-8 (record citations omitted).
reasoning in Martinez applies with equal force here.
Defendants have provided no reason for why their disregard of
Rule 26 is substantially justified. Nor have they provided an
adequate explanation for why their neglect is harmless.
Plaintiffs requested all documents referenced in
Defendants' Rule 26(a)(1)(A)(ii) disclosures in their
first request for production. (DE 59-49 at ¶ 29.) Had
Defendants disclosed the existence of the business records,
these documents would have been produced to Plaintiffs, who
would have had the opportunity to conduct discovery with
regard to them. Accordingly, the Court strikes Jacob's
declaration (DE 70-1) from the record and will not consider
it in deciding the cross motions for summary judgment.
Cross Motions for Summary Judgment
The Legal Standard
judgment is appropriate "if the movant shows that there
is no genuine dispute as to any material fact and the movant
is entitled to judgment as a matter of law."
Fed.R.Civ.P. 56(a). Under this standard, "[o]nly
disputes over facts that might affect the outcome of the suit
under the governing [substantive] law will properly preclude
the entry of summary judgment." Anderson v. Liberty
Lobby, Inc., 477 U.S. 242, 248 (1986). And any such
dispute is "genuine" only "if the evidence is
such that a reasonable jury could return a verdict for the
nonmoving party." Id.
evaluating a motion for summary judgment, the Court considers
the evidence in the record, "including depositions,
documents, electronically stored information, affidavits or
declarations, stipulations ..., admissions, interrogatory
answers, or other materials ... ." Fed.R.Civ.P.
56(c)(1)(A). The Court "must view all the evidence and
all factual inferences reasonably drawn from the evidence in
the light most favorable to the nonmoving party, and must
resolve all reasonable doubts about the facts in favor of the
non-movant." Rioux v. City of Atlanta, 520 F.3d
1269, 1274 (11th Cir. 2008) (quotation marks and citations
omitted). At the summary judgment stage, the Court's task
is not to "weigh the evidence and determine the truth of
the matter but to determine whether there is a genuine issue
for trial." Anderson, 477 U.S. at 249.
issues for which the movant would bear the burden of proof at
trial, the party seeking summary judgment "must show
affirmatively \he absence of a genuine issue of
material fact: it must support its motion with credible
evidence...that would entitle it to a directed verdict if not
controverted at trial. In other words, the moving party must
show that, on all the essential elements of its case on which
it bears the burden of proof at trial, no reasonable jury
could find for the non-moving party. If the moving party
makes such an affirmative showing, it is entitled to summary
judgment unless the non-moving party, in response, come[s]
forward with significant, probative evidence demonstrating
the existence of a triable issue of fact."
Fitzpatrick v. City of Atlanta, 2 F.3d 1112, 1115-16
(11th Cir. 1993) (emphasis in original).
Plaintiffs' Motion for Summary Judgment
move for summary judgment on all of their claims. Because
there is a genuine issue of material fact as to whether
Defendants are "debt collectors" under the FDCPA-an
essential element of Plaintiffs' FDCPA
claims-Plaintiffs' motion for summary judgment is denied.
elements of an FDCPA claim include: (1) the plaintiff has
been the object of collection activity arising from consumer
debt, (2) the defendant is a debtor collector as defined by
the FDCPA, and (3) the defendant has engaged in an act or
omission prohibited by the FDCPA." Pescatrice v.
Orovitz, 539 F.Supp.2d 1375, 1378 (S.D. Fla. 2008)
(citation omitted). The FDCPA defines a debt collector as
"[a]ny 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
attempt to collect, directly or indirectly, debts owed or due
or asserted to be owed or due another." 15 U.S.C. §
establish that an attorney or law firm is a "debt
collector" under the FDCPA, "a plaintiff must show
that the attorney or law firm collects debts as a matter of
course for its clients or for some clients, or collects debts
as a substantial, but not principal, part of his or its
general law practice." Schroyer v. Frankel, 197
F.3d 1170, 1176 (6th Cir. 1999). Courts have considered
several factors in making this determination, including,
"the volume of the attorney's collection activities,
the frequent use of a particular debt collection document or
letter, and whether there exists a steady relationship
between the attorney and the collection agency or creditor he
represented." Id. Courts have also
"maintained that even where debt collection takes up a
minor portion of a law practice, 'debt collector'
liability may lie where the defendant has an 'ongoing
relationship' with a client whose activities
substantially involve debt collection." Id.
have proffered evidence for their claim that the Defendants
are "debt collectors" under the FDCPA. For
instance, they have provided a print out of Jacobs Law's
website showing that the Firm advertises its debt collection
services. (DE 20-3.) They have also provided copies of the
claims of liens that Defendants have filed on behalf of
clients, including those on nearly two dozen units in the
Beach Club and on several other units in other condominiums.
(DE 20-4, 20-5.) Plaintiffs also point to the July 31, 2017
collections letter, which states "[t]his firm is deemed
a debt collector" and that Jacobs Law "is