Opinion
W-21-CV-01113-ADA-DTG
06-05-2023
GARY WILLIAMS, Plaintiff, v. HILLCREST, DAVIDSON AND ASSOCIATES, LLC, Defendant.
HONORABLE ALAN D ALBRIGHT, UNITED STATES DISTRICT JUDGE
REPORT AND RECOMMENDATION OF THE UNITED STATES MAGISTRATE JUDGE
DEREK T. GILLILAND, UNITED STATES MAGISTRATE JUDGE
This Report and Recommendation is submitted to the Court pursuant to 28 U.S.C. § 636(b)(1)(C), Fed.R.Civ.P. 72(b), and Rules 1(f) and 4(b) of Appendix C of the Local Rules of the United States District Court for the Western District of Texas, Local Rules for the Assignment of Duties to United States Magistrate Judges. Before the Court is Plaintiff's Motion for Entry of Default Judgment (ECF No. 7). For the following reasons, the Court RECOMMENDS that Plaintiff's Motion be GRANTED and judgment be entered.
I. FACTUAL BACKGROUND
Plaintiff filed its complaint in the instant case on October 28, 2021, alleging a violation of the Fair Debt Collection Practices Act by Defendant Hillcrest, Davidson and Associates, LLC. ECF No. 1. Plaintiff alleges that Defendant is attempting to collect a consumer debt allegedly owed by Plaintiff, but that Defendant has failed to report the alleged debt as disputed, resulting in economic and emotional damages. ECF No. 7 at 2.
A licensed process server personally served Defendant's COO on December 20, 2021. See ECF No. 4. To date, Defendant has not filed an answer.
Plaintiff filed a Motion for Clerk's Entry of Default (ECF No. 5) on February 5, 2022. The clerk entered default on March 9, 2022. ECF No. 6. Plaintiff now requests that the Court enter a default judgment against Defendant. ECF No. 7.
II. DISCUSSION
Federal Rule of Civil Procedure 55 governs default judgment. Rule 55 sets out a three-step process by which a party obtains default judgment: (1) the defendant's default; (2) the entry of default; and (3) the entry of default judgment. New York Life Ins. Co. v. Brown, 84 F.3d 137, 141 (5th Cir. 1996). After the defendant defaults, the plaintiff must file a motion for entry of default and the clerk enters default. Fed.R.Civ.P. 55(a). Then, upon the plaintiff's motion, the Court may enter a default judgment against the defendant. Fed.R.Civ.P. 55(b). Both Defendants have defaulted and Plaintiff has obtained an entry of default. Therefore, the only remaining issue for determination is whether a default judgment is warranted. Entry of default judgment is within the Court's discretion. Lindsey v. Prive Corp., 161 F.3d 886, 893 (5th Cir. 1998). The Court will not grant default judgment automatically, and must instead analyze whether Plaintiff's claims are well-pled, whether plaintiff's claims are substantively meritorious and default judgment appears appropriate, and whether the requested relief is proper.
a. Plaintiff's claims are substantively meritorious.
The Court must determine whether Plaintiff's claims are well-pled and substantively meritorious. Wooten v. McDonald Transit Assocs., 788 F.3d 490 (5th Cir. 2015). The Court may assume the truth of all well-pled allegations in the plaintiff's complaint because all defaulting defendants functionally admit well-pled allegations of fact. Nishimatsu Constr. Co. v. Hous. Nat'l Bank, 515 F.2d 1200, 1206 (5th Cir. 1975).
Plaintiff alleges that Defendant violated the Fair Debt Collection Practices Act by “reporting credit information which is known to be false, including failure to communicate that a disputed debt is disputed.” ECF No. 1 at 4. Plaintiff asserts that he sent a later to Defendant disputing the alleged debt on or about June 25, 2021, but Defendant continued to report the alleged debt without reporting it as disputed. ECF No. 1 at 3. Plaintiff claims that because of Defendant failing to report that the debt was disputed, Plaintiff's credit score has been damaged and Plaintiff has been denied loans.
The Fair Debt Collection Practices Act prohibits debt collectors from using any “false, deceptive, or misleading representation or means in connection with the collection of any debt.” 15 U.S.C. § 1692(e). “Communicating or threatening to communicate to any person credit information which is known or which should be known to be false, including the failure to communicate that a disputed debt is disputed” is a violation of the Fair Debt Collection Practices Act. 15 U.S.C. § 1692(e)(8). The Court may accept as true Plaintiff's factual allegations that he disputed the debt with Defendant, and that Defendant did not flag the alleged debt as disputed even after Plaintiff notified it of the dispute. The Court therefore finds that Plaintiff's claims are well-pled and substantively meritorious.
b. Default judgment is proper.
Entry of default judgment is appropriate in this case. The record indicates that Plaintiff successfully perfected service of process on Defendant. ECF No. 4. Yet, Defendants have failed to respond to the Complaint, the Motion for Entry of Default, the clerk's entry of default, and the present motion. Defendant's default does not appear to be caused by any good faith mistake or excusable neglect. When the defendant's failure to respond is “plainly willful, as reflected by [the defendant's] failure to respond either to the summons and complaint, the entry of default, or the motion for default,” then grounds for default are clearly established. See Graham v. Coconut LLC, No. 4:16-cv-606, 2017 WL 2600318 at *1 (E.D. Tex. June 15, 2017). Further, the Court has personal jurisdiction over Defendant as it is a Texas limited liability company. See ECF No. 1 at 2. Entry of default judgment is therefore appropriate.
c. Plaintiff's requested relief is appropriate.
Plaintiff's claims and the amount of Plaintiff's damages are supported by the evidence on file with its Motion for Entry of Default Judgment and the testimony offered at the default judgment hearing. See ECF No. 7. Plaintiff seeks a judgment in the amount of $16,000.00, for actual damages and statutory damages. On June 5, 2023, the Court conducted a default judgment hearing via Zoom. Defendant did not appear either personally or through counsel. Plaintiff testified at the hearing. Plaintiff testified that he has been denied multiple loans, including loans to purchase a home, a car loan, and debt consolidation. He attributed these denials at least in part to Defendant's failure to report the alleged debt as disputed and the subsequent harm to his credit. Plaintiff further testified that he has suffered emotional distress, and has been prescribed sleep and anxiety medications. Plaintiff testified that Defendant's actions and the harm to his credit “keeps him up all night.” Plaintiff testified that he is constantly stressed about his credit and the impact it is having on his life.
The Court finds that Plaintiff's requested relief is proper. Emotional distress damages are recoverable under the Fair Debt Collection Practices Act. McCollough v. Johnson, Rodenberg & Launinger, LLC, 637 F.3d 939 (9th Cir. 2011). Plaintiff has requested $16,000 in actual damages and statutory damages. Plaintiff has provided ample evidence to support his claimed damages.
III. RECOMMENDATION
For the above reasons, it is the RECOMMENDATION of the United States Magistrate Judge to the United States District Judge that Plaintiff's Motion for Entry of Default Judgment be GRANTED and final judgment be entered against Defendant in the amount of $16,000.00.
IV. OBJECTIONS
The parties may wish to file objections to this Report and Recommendation. Parties filing objections must specifically identify those findings or recommendations to which they object. The District Court need not consider frivolous, conclusive, or general objections. See Battle v. U.S. Parole Comm'n, 834 F.2d 419, 421 (5th Cir. 1987).
A party's failure to file written objections to the proposed findings and recommendations contained in this Report within fourteen (14) days after the party is served with a copy of the Report shall bar that party from de novo review by the District Court of the proposed findings and recommendations in the Report. See 28 U.S.C. § 636(b)(1)(C); Thomas v Arn, 474 U.S. 140, 15053 (1985); Douglass v. United Servs. Auto. Ass'n, 79 F.3d 1415 (5th Cir. 1996) (en banc). Except upon grounds of plain error, failing to object shall further bar the party from appellate review of unobjected-to proposed factual findings and legal conclusions accepted by the District Court. See 28 U.S.C. § 636(b)(1)(C); Thomas, 474 U.S. at 150-53; Douglass, 79 F.3d at 1415.