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Powell v. Palisades Acquisition XVI, LLC

United States District Court, Fourth Circuit

January 29, 2014

ALETA POWELL, Plaintiff,



The Plaintiff Aleta Powell asserts claims against the Defendants Palisades Acquisition XVI, LLC, Fulton Friedman & Gullace LLP, and John Does 1-10[1] (collectively, “Defendants”) for violations of the Fair Debt Collection Practices Act, 15 U.S.C. § 1692, et seq. (“FDCPA”) and the Maryland Consumer Protection Act (“MCPA”), Md. Code Ann., Com. Law § 13-301, et seq. via the Maryland Consumer Debt Collection Act (“MCDCA”), Md. Code Ann., Com. Law § 14-201, et seq. Pending before this Court are Plaintiff’s Motion for Partial Summary Judgment on the Issue of Defendant Fulton, Friedman & Gullace, LLP’s Liability (ECF No. 22) and Defendants’ Cross Motion for Summary Judgment (ECF No. 23). The parties’ submissions have been reviewed and no hearing is deemed necessary. See Local Rule 105.6 (D. Md. 2011). For the reasons that follow, Plaintiff’s Motion (ECF No. 22) is DENIED and Defendants’ Motion (ECF No. 23) is GRANTED.


The Plaintiff, Ms. Powell, is a Maryland resident. Am. Compl. ¶ 13, ECF No. 6. Defendant Palisades Acquisition XVI, LLC (“Palisades”) is a debt collector licensed in Maryland. Id. ¶¶ 15-19. Fulton Friedman & Gullace LLP (FF&G) is a law firm retained by Palisades to assist in debt collection. Id. In 1998, Powell opened a credit card account with Direct Merchants Bank. Deposition of Aleta Powell 13, ECF No. 23-3. Powell testified that she opened the credit card to help with moving expenses, and later to make purchases for her apartment. Id. at 13. She was laid off from her job at the National Education Association in 2000, and eventually defaulted on the credit card account. Id. at 14. The Plaintiff testified that from approximately 2002 to 2006, she ran a child care business at least partially out of her home, but cannot recall whether she ever used the Direct Merchants card for that or any other business expenses. Id. 10-15. Direct Merchants charged off the account on January 31, 2001, with an outstanding balance of $8, 205.24. Compl. ¶ 23. Direct Merchants assigned the debt to Platinum Financial Services Corporation, which hired the firm of Wolpoff & Abramson (“W&A”) to collect. Id. ¶ 26. After the filing of a lawsuit in the District Court of Maryland for Baltimore City, Powell entered a settlement agreement with Platinum, through W&A. Id. ¶¶ 26-27. From April 2002 until March 2003, Powell made regular payments on the debt totaling $3, 250.00, but beginning in April 2003, she was unable to make the payments as agreed in the settlement. Compl. ¶ 29. Platinum, through W&A, moved for judgment pursuant to the settlement agreement. See Motion for Judgment, ECF No. 23-11. On June 24, 2003, a consent judgment was entered in favor of Platinum and against Powell in the amount of $8, 205.24, [2] with pre-judgment interest in the amount of $1, 011.19, for a total judgment of $9, 216.43, plus attorneys’ fees of $1, 230.78 and costs of $50.00. Judgment, ECF No. 23-2. The parties agree that as of that date, Powell owed a total of $10, 497.21. Pl.’s Mem. 9, ECF No. 22-1; Defs.’ Mem. 5, ECF No. 23-1.

The Baltimore City District Court also assessed post-judgment interest on the total judgment of $9, 216.43 at the statutory rate of 10%.[3] Md. Rule 3-604(a) (“Any pre-judgment interest awarded shall be separately stated in the decision and included in the judgment.”). Platinum, again through W&A, filed a Request for Garnishment on August 21, 2003, ECF No. 23-13, and in September 2003, Powell agreed to make monthly payments of $150.00, and increase the payments to $250.00 per month in September 2004. See Agreement, District Court of Maryland for Baltimore City Case No. 8968-01, ECF No. 22-6. Powell made eighteen regular $150.00 payments totaling $2, 700.00 until May 2005. Compl. ¶ 30. The payments never increased to the agreed-upon $250.00. Defs.’ Mot. 3, ECF No. 23-1. The Defendants assert that Powell has not made a payment on the debt since May 25, 2005. Id. Powell, for her part, states that she made eighty-five payments to Platinum and W&A, but provides no evidence of the dates or amounts of these payments. Pl.’s Mot., ECF No. 22-1.

On March 5, 2007, Palisades purchased the judgment against Powell from Platinum.[4]Compl. ¶ 32. W&A continued to handle Powell’s account for Palisades until 2008, when W&A merged into Mann Bracken, LLP. Mann Bracken then handled the account until 2010, when it filed for receivership. NCO Financial Systems, the servicing agent for Palisades, subsequently retained the Defendant Fulton, Friedman & Gullace to handle Powell’s account. Defs.’ Mot. 4, ECF No. 23-1. NCO provided FF&G with Powell’s account history as retained by W&A and Mann Bracken. When the account was transferred to FF&G on February 8, 2010, the total opening balance was $10, 526.88. Declaration of Allen B. Friedman, ECF No. 23-18.[5]

On or about June 30, 2010, FF&G notified Powell by letter that it was handling her account. Letter of June 30, 2010, ECF No. 23-19. Although Defendants state that her total outstanding balance on that date was $13, 466.93, the letter mistakenly stated that the total due was $8, 137.81. ECF No. 23-19. Powell maintains that she had never heard of Palisades until the Assignment was filed in Baltimore City District Court. Powell Dep. 19-20, ECF No. 22-4. She mistakenly thought her debt had been paid in full. Id. at 56, ECF No. 22-7. There was no further correspondence between FF&G and Powell until May 29, 2012. Defs.’ Mot. 3, ECF No. 23-1. Interest continued to accrue on Powell’s debt and on that date, the Defendants assert that Powell owed a total of $15, 009.81. Declaration of Scott T. Whiteman, ECF No. 23-2.

On May 29, 2012, Palisades, through FF&G, filed an Assignment of Judgment form in the District Court of Maryland for Baltimore City, a copy of which was received by Powell. Compl. ¶¶ 33, 38; Assignment of Judgment, ECF No. 23-20. The Assignment of Judgment stated that she owed a judgment in the amount of $10, 497.21 plus attorneys’ fees of $1, 230.78, and did not list the $2, 700.00 in payments made pursuant to the settlement from 2003 to 2005. Assignment of Judgment, ECF No. 23-20. The bottom of the Assignment of Judgment states, “This is a communication from a debt collector.” Id.

Powell filed a Motion to Vacate the Assignment on September 5, 2012. In an effort to correct the error on the Assignment, Palisades, filed an Amended Assignment of Judgment on the day of the hearing on the Motion to Vacate. Amended Assignment of Judgment, ECF No. 23-21; Transcript, Case No. 8968-01 at 45-46, ECF No. 23-22. However, the District Court of Maryland for Baltimore City granted the Motion on October 10, 2012. See Transcript, Case No. 8968-01, ECF No. 23-22. The state court vacated the entire June 24, 2003 judgment on the grounds that Palisades did not produce evidence of a valid assignment and had no records of the payments made on the debt by Powell. Id. at 51.

On appeal, the Circuit Court of Baltimore City held a hearing and affirmed the state District Court. Mem. Op. & Order, Case No. 25-C-13-000005, ECF No. 22-11. The Court of Appeals of Maryland denied Palisades’ petition for certiorari on July 5, 2013. Pet. Docket 139, Sept. Term, ECF No. 22-12. Accordingly, Powell avoided any further payment of a debt which was clearly owed.

The Plaintiff filed the subject complaint in the Circuit Court for Baltimore City on December 11, 2012. ECF No. 6. On January 22, 2013, the Defendant removed the case to this Court. The case was originally assigned to Judge Russell of this Court, but after a conflict became apparent, ECF No. 21, the matter was reas Dated: July 20, 2013. Discovery has been completed, and both parties moved for summary judgment.


Rule 56 of the Federal Rules of Civil Procedure provides that a court “shall grant summary judgment 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). A material fact is one that “might affect the outcome of the suit under the governing law.” Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). A genuine issue over a material fact exists “if the evidence is such that a reasonable jury could return a verdict for the nonmoving party.” Id. In considering a motion for summary judgment, a judge’s function is limited to determining whether sufficient evidence exists on a claimed factual dispute to warrant submission of the matter to a jury for resolution at trial. Id. at 249.

When faced with cross-motions for summary judgment, a court “review[s] each motion separately on its own merits to determine whether either of the parties deserves judgment as a matter of law.” Rossignol v. Voorhaar, 316 F.3d 516, 523 (4th Cir. 2003) (internal quotation marks omitted). In undertaking this inquiry as to each individual motion, this Court must consider the facts and all reasonable inferences in the light most favorable to the nonmoving party, id., but only if there is a “genuine” dispute as to those facts. Bouchat v. Baltimore Ravens Football Club, Inc., 346 F.3d 514, 519 (4th Cir. 2003) (quoting Anderson, 477 U.S. at 247-48 (emphasis in original))). This Court must also abide by its affirmative obligation to prevent factually unsupported claims and defenses from going to trial. Drewitt v. Pratt, 999 F.2d 774, 778-79 (4th Cir. 1993). If the evidence presented by the nonmoving party is merely colorable, or is not significantly probative, summary judgment must be granted. Anderson, 477 U.S. at 249-50. A party opposing summary judgment must “do more than simply show that there is some metaphysical doubt as to the material facts.” Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 586 (1986); see also In re Apex Express Corp., 190 F.3d 624, 633 (4th Cir. 1999). This Court has previously explained that a “party cannot create a genuine dispute of material fact through mere speculation or compilation of inferences.” Shin v. Shalala, 166 F.Supp.2d 373, 375 (D. Md. 2001) (citations omitted).


The Plaintiff moves for summary judgment as a matter of law solely as to whether Defendant FF&G’s filing of the Assignment in May 2012 violated the Fair Debt Collection Practices Act as stated in Count I. Defendants move for summary judgment as to both Plaintiff’s federal and state law claims. For the reasons that follow, ...

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