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Powell v. Palisades Acquisition XVI, LLC

United States Court of Appeals, Fourth Circuit

December 18, 2014

ALETA POWELL, Plaintiff - Appellant,
v.
PALISADES ACQUISITION XVI, LLC; FULTON FRIEDMAN & GULLACE, LLP; JOHN DOES 1-10, Defendants - Appellees

Argued October 30, 2014

Appeal from the United States District Court for the District of Maryland, at Baltimore. (1:13-cv-00219-RDB). Richard D. Bennett, District Judge.

AFFIRMED IN PART, VACATED IN PART, AND REMANDED.

ARGUED:

Max F. Brauer, THE LAW OFFICES OF E. DAVID HOSKINS, LLC, Baltimore, Maryland, for Appellant.

Megan Elizabeth Gullace, FULTON FRIEDMAN & GULLACE, LLP, Rochester, New York, for Appellees.

ON BRIEF:

 E. David Hoskins, THE LAW OFFICES OF E. DAVID HOSKINS, LLC, Baltimore, Maryland, for Appellant.

Cynthia L. Fulton, FULTON FRIEDMAN & GULLACE, LLP, Rochester, New York, for Appellees.

Before NIEMEYER and GREGORY, Circuit Judges, and DAVIS, Senior Circuit Judge. Judge Niemeyer wrote the opinion, in which Judge Gregory and Senior Judge Davis joined.

OPINION

Page 120

NIEMEYER, Circuit Judge.

Aleta Powell, a credit card debtor, commenced this action against Palisades Acquisition XVI, LLC, and its attorneys, Fulton Friedman & Gullace, LLP, as debt collectors, alleging violations of two provisions of the Fair Debt Collection Practices Act (" FDCPA" ), 15 U.S.C. § 1692e and § 1692f, and related state statutes. She claimed that after Palisades purportedly purchased a judgment that had been entered against her in state court, it filed an Assignment of Judgment in the action that falsely represented its ownership of the judgment and misrepresented the amount she owed.

The district court granted summary judgment to Palisades and Fulton Friedman & Gullace, concluding that the filing of the Assignment of Judgment did not qualify as debt collection activity that implicated the protections of the FDCPA and that, in any event, the misrepresentations made in the document were not material. It also concluded that Powell failed to produce sufficient evidence to support a claim under 15 U.S.C. § 1692f and the related state statutes.

Page 121

On Powell's appeal, we vacate the judgment entered on Powell's FDCPA claim under 15 U.S.C. § 1692e and remand that claim. We conclude (1) that the filing of an assignment of judgment in a debt collection action qualifies as debt collection activity that triggers the protections of the FDCPA; (2) that the Assignment of Judgment that Palisades filed against Powell did not falsely claim Palisades' ownership of the judgment; and (3) that the misrepresentations in the Assignment of Judgment as to the amount of the judgment and the amount of Powell's payments on the judgment were material. We also vacate the court's conditional ruling that the errors made in the Assignment of Judgment did not provide a basis for the " bona fide error defense" found in 15 U.S.C. § 1692k(c). We affirm the judgment entered on Powell's § 1692f claim and her state-law claims.

I

Powell, a resident of Baltimore, Maryland, incurred a credit card debt of $8,205.24, payable to Direct Merchants Bank, N.A., and defaulted on the debt after losing her job in 2000. The Bank assigned the debt to Platinum Financial Services Corp., which filed an action in November 2001 in the District Court of Maryland for Baltimore City (" Baltimore City District Court" ) to collect the debt. In response to the suit, Powell agreed to a payment schedule, subject to the entry of a consent judgment in the event of default. On June 24, 2003, after Powell defaulted again, the Baltimore City District Court entered judgment in favor of Platinum Financial in the amount of $10,497.21, which included $9,216.43 for principal and pre-judgment interest, $1,230.78 in attorney's fees, and $50 in costs, and which provided for post-judgment interest at the statutory rate of 10%. When Platinum Financial began garnishment proceedings to collect on its judgment, Powell again agreed to make payments, and she did so until May 2005, making monthly payments totaling $2,700. She later stated that she stopped making payments because she thought she had paid off the debt.

In March 2007, Platinum Financial sold its judgment against Powell to Palisades Acquisition XV, LLC, which, on the same day, sold it to Palisades Acquisition XVI, LLC (" Palisades" ). Palisades later retained the law firm of Fulton Friedman & Gullace, LLP, to help it collect the debt. Pursuing its collection effort, Fulton Friedman & Gullace entered an appearance in the debt collection action pending in the Baltimore City District Court, prepared an Assignment of Judgment, served a copy of it on Powell, and, on June 29, 2012, filed it in the pending action. The Assignment of Judgment, which included the caption of the action, indicated that it was prepared pursuant to Md. Rule 3-624, which authorizes an assignee who files an assignment of judgment to enforce the judgment in its own name. The Assignment of Judgment that Fulton Friedman & Gullace filed provided in relevant part:

A Judgment in the above case was entered on June 24, 2003 in the amount of $10497.21 plus attorney's fees of $1230.78 and costs of $0.00. Payments totaling $0.00. PLATINUM FINANCIAL SERVICES CORP was the judgment creditor in this case. PLATINUM FINANCIAL SERVICES CORP transferred and assigned all title, rights, and interest in said judgment on or about March 5, 2007 to:
Palisades Acquisition ...

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