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Bland v. Alco Collections, Inc.

United States District Court, M.D. Louisiana

January 3, 2018

SHENA BLAND
v.
ALCO COLLECTIONS, INC.

          RULING

          SHELLY D. DICK JUDGE

         This matter is before the Court on the Application for Entry of Final Judgment of Default[1] by Plaintiff, Shena Bland (“Bland or Plaintiff”)[2] on behalf of herself and all those similarly situated. Defendant, Alco Collections, Inc., (“Defendant”) has never appeared in this matter nor filed an Opposition to this motion. For the following reasons, the Court finds that Plaintiff's motion should be granted.

         I. BACKGROUND

         On December 6, 2016, Bland filed a Complaint naming Alco Collections, Inc. as the Defendant.[3] In her Complaint, Plaintiff alleged that, while attempting to collect a debt, Defendant violated the Fair Debt Collection Practices Act (“FDCPA”), 15 U.S.C. § 1692 et seq.[4] Defendant was served on December 9, 2016 in accordance with Federal Rule of Civil Procedure 4.[5] Defendant has not filed any responsive pleadings in this proceeding. A preliminary default was entered against the Defendant by the Clerk of Court on February 15, 2017.[6] Plaintiff then filed the current Application for Entry of Final Judgment on May 30, 2017.[7] As of the date of this Ruling, Defendant has never appeared in this case.

         II. LAW AND ANALYSIS

         A. Default Judgment

         The United States Court of Appeals for the Fifth Circuit has outlined a three step process to obtain a default judgment: (1) a defendant's default; (2) a clerk's entry of default; and (3) a plaintiff's application for a default judgment.[8] The service of summons or lawful process triggers the duty to respond to a complaint.[9] A defendant's failure to timely plead or otherwise respond to the complaint triggers a default.[10] Accordingly, Rule 55 provides that the clerk must enter a party's default “[w]hen a party against whom a judgment for affirmative relief is sought has failed to plead or otherwise defend, and that failure is shown by affidavit or otherwise....”[11]

         After the Clerk of Court has found a defendant to be in default, the Court may, upon motion by a plaintiff, enter a default judgment against the defaulting defendant.[12]Default judgments are “generally disfavored in the law” in favor of a trial upon the merits.[13]Indeed, default judgments are considered “a drastic remedy, not favored by the Federal Rules and resorted to by courts only in extreme situations.... [T]hey are ‘available only when the adversary process has been halted because of an essentially unresponsive party.'”[14] Even so, this policy is “counterbalanced by considerations of social goals, justice and expediency, a weighing process [that] lies largely within the domain of the trial judge's discretion.”[15] In accordance with these guidelines, “[a] party is not entitled to a default judgment as a matter of right, even where the defendant is technically in default.”[16]While “the defendant, by his default, admits the plaintiff's well-pleaded allegations of fact, ” the Court retains the obligation to determine whether those facts state a claim upon which relief may be granted.[17]

         Courts have developed a two-part analysis to determine whether a default judgment should be entered against a defendant.[18] First, a court must consider whether the entry of default judgment is appropriate under the circumstances.[19] The factors relevant to this inquiry include: (1) whether material issues of fact are at issue; (2) whether there has been substantial prejudice; (3) whether the grounds for default are clearly established; (4) whether the default was caused by good faith mistake or excusable neglect; (5) the harshness of a default judgment; and (6) whether the court would think itself obliged to set aside the default on the defendant's motion.[20] Second, a court must assess the merits of the plaintiff's claims and find sufficient basis in the pleadings for the judgment.[21]

         B. Entitlement to Default Judgment

         First, the Court must determine whether the entry of default judgment is appropriate under the circumstances by considering the Lindsey factors. As reflected by the record, the Defendant has failed to file an Answer or a motion under Rule 12 in response to the Complaint. As such, there are no material facts in dispute. Second, it is undisputed that Defendant has not responded to any of Plaintiff's or the Court's overtures. Defendant's “failure to respond threatens to bring the adversary process to a halt, effectively prejudicing [Plaintiff's] interests.”[22] Third, the grounds for granting a default judgment against Defendant are clearly established, as evidenced by this action's procedural history and the Clerk's entry of default, outlined above. Fourth, as this Defendant has failed to respond at all to the Plaintiff, the Court has no basis to find that the failure to respond was the result of either good faith mistake or excusable neglect. Fifth, Defendant's failure to file any responsive pleading or motion mitigates the harshness of a default judgment.[23] Finally, the Court is not aware of any facts that would lead it to set aside the default judgment if challenged by the Defendant. Thus, the Court finds that the six Lindsey factors weigh in favor of default.

         The Court must also decide if Plaintiff's pleadings provide a sufficient basis for a default judgment against Defendant. Plaintiff brings this action under the FDCPA. Specifically, 15 U.S.C. § 1692g(a) requires debt collectors to send written notice to a consumer, in connection with the collection of any debt, the following information:

(1) the amount of the debt;
(2) the name of the creditor to whom the debt is owed;
(3) a statement that unless the consumer, within thirty days after receipt of the notice, disputes the validity of the debt, or any portion thereof, the debt will be assumed to be valid by the debt collector;
(4) a statement that if the consumer notifies the debt collector in writing within the thirty-day period that the debt, or any portion thereof, is disputed, the debt collector will obtain verification of the debt or a copy of a judgment against the consumer and a copy of such verification or judgment will be mailed to the consumer by the debt collector; and
(5) a statement that, upon the consumer's written request within the thirty-day period, the debt collector will provide the consumer with the name and address of the original creditor, if different from the current creditor.

         The Court has reviewed the written notice allegedly sent by Defendant attached to Plaintiff's Complaint as exhibit A.[24] The Court finds that Plaintiff has established that the notice failed to comply with 15 U.S.C. 1692(a)(4) and (5) in omitting the “in writing” requirement.[25] Based on the applicable law and the evidence submitted in this matter, the Court finds that Plaintiff's motion for default judgment should be granted, and Plaintiff is entitled to the relief sought.

         C. Damages

         Plaintiff contends that under 15 U.S.C. 1692k(a), she is entitled to statutory damages, attorneys' fees, and costs. 15 U.S.C. 1692k(a) provides as follows:

Except as otherwise provided by this section, any debt collector who fails to comply with any provision of this subchapter 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.

         a. Actual Damage

         After reviewing the evidence and Plaintiff's pleadings, the Court finds that Plaintiff is not entitled to an award for actual damages sustained. Neither Plaintiff's Complaint nor her Application for Entry of Final Judgment specify that Plaintiff sustained any actual ...


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