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Knoerr v. Pinnacle Asset Group, L.L.C.

United States District Court, S.D. Texas, Houston Division

March 30, 2017

Patty Knoerr, Plaintiff,
Pinnacle Asset Group, L.L.C., Defendant.


          Gray H. Miller United States District Judge

         Pending before the court is plaintiff Patty Knoerr's motion for default judgment. Dkt. 9. After considering the complaint, motion, evidentiary record, and applicable law, the court is of the opinion that the motion against defendant Pinnacle Asset Group, L.L.C. (“Pinnacle”) should be GRANTED IN PART and DENIED IN PART.

         I. Background

         This action arises from Pinnacle's alleged violations of the Fair Debt Collection Practices Act (“FDCPA”). Dkt. 1 at 1 (citing 15 U.S.C. § 1692). Patty Knoerr resides in Hempstead, Texas, and is a “consumer” as defined by § 1692a(3). Dkt. 1 at 1. Pinnacle Asset Group is a New York business operating as a collection agency and is a “debt collector” as defined by § 1692a(6). Id.

         Knoerr allegedly incurred a debt to Pro Carpet. Dkt. 1 at 2. The Pro Carpet debt was later purchased, assigned, or transferred to Pinnacle for collection. Id. In October 2015, Pinnacle began calling Knoerr to collect the debt. Id. According to Knoerr, Pinnacle first threatened to turn the debt over to the IRS if she did not pay the debt immediately. Id. Knoerr argues this was a misleading statement because she has not received any communications from the IRS regarding the debt. Id. at 3. Pinnacle later called Knoerr's mother-in-law and told her that there was an emergency and that Knoerr needed to return the call. Id. at 2. Knoerr claims that was false and that the call was an unlawful intimidation tactic. Id. at 2-3. To date, the debt has not been paid. Id.

         On March 7, 2016, Knoerr brought this lawsuit, alleging that Pinnacle violated the FDCPA by unlawfully contacting Knoerr and using false and deceptive means to collect the debt. Dkt. 1. On April 6, 2016, Pinnacle was properly served with process. Dkt. 5. Pinnacle's deadline to answer or otherwise respond was April 27, 2016. See Fed. R. Civ. P. 12(a). Pinnacle was informed of its deadline for responding and Pinnacle has not answered or otherwise responded to this lawsuit. Dkt. 9, Ex. 2 (DeFrancisco Aff.).

         On August 18, 2016, Knoerr moved for entry of default judgment against Pinnacle. Dkt. 9, Ex. 1. Pursuant to the Local Rules of the Southern District of Texas, Knoerr served this motion for default judgment upon Pinnacle via certified mail, with return receipt requested. Dkt. 9 at 3; see also S.D. Tex. L.R. 5.5. Pinnacle failed to respond to the motion for default judgment.

         II. Legal Standard

         Under Federal Rule of Civil Procedure 55(a), “[w]hen a party against whom judgment for affirmative relief is sought has failed to plead or otherwise defend, and that failure is shown by affidavit or otherwise, the clerk must enter the party's default.” Fed.R.Civ.P. 55(a). Under Rule 55(b)(2), a party may apply for the court to enter a default judgment, and the “court may conduct hearings or make referrals-preserving any federal statutory right to a jury trial-when, to enter or effectuate judgment, it needs to: (A) conduct an accounting; (B) determine the amount of damages; (C) establish the truth of any allegation by evidence; or (D) investigate any other matter.” Fed.R.Civ.P. 55(b)(2). Local Rule 5.5 requires that motions for default judgment “be served on the defendant-respondent by certified mail (return receipt requested).” S.D. Tex. L.R. 5.5.

         A default judgment is a “drastic remedy, not favored by the Federal Rules[, ] and resorted to by courts only in extreme situations.” Sun Bank of Ocala v. Pelican Homestead & Sav. Ass'n, 874 F.2d 274, 276 (5th Cir. 1989). “The Federal Rules of Civil Procedure are designed for the just, speedy, and inexpensive disposition of cases on their merits, not for the termination of litigation by procedural maneuver.” Id.

         III. Analysis

         A. Liability Under the FDCPA

         The FDCPA was enacted to “eliminate abusive debt collection practices by debt collectors, to insure that those debt collectors who refrain from using abusive debt collection practices are not competitively disadvantaged, and to promote consistent State action to protect consumers against debt collection abuses.” 15 U.S.C. § 1692. Among other things, the FDCPA prohibits debt collectors from “using any false, deceptive, or misleading representation or means in connection with the collection of any debt.” § 1692e.

         Under the FDCPA, “debt collector” includes “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.” § 1692a(6). A “debt” is defined under the FDCPA as “any obligation or alleged obligation of a consumer to pay money arising out of a transaction in which the money, property, insurance, or services which are the subject of the transaction are primarily for personal, family, or household purposes, whether or not such obligation has been reduced to judgment.” § 1692a(5). “‘[C]onsumer' means any natural person obligated or allegedly obligated to pay any debt.” § 1692a(3). Section 1692 is applicable here because the ...

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