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Cascade Capital, LLC v. DRS Processing LLC

United States District Court, W.D. North Carolina, Charlotte Division

October 23, 2019

CASCADE CAPITAL, LLC and CASCADE CAPITAL, LLC - SERIES A, Plaintiffs,
v.
DRS PROCESSING LLC d/b/a MILLER STARK KLEIN & ASSOCIATES, Defendant.

          ORDER AND JUDGMENT

          Robert J. Conrad, Jr., United States District Judge.

         THIS MATTER is before the Court on the plaintiffs Cascade Capital, LLC's and Cascade Capital, LLC - Series A's (“Plaintiffs”), Motion for Enforcement of Contempt Order and Request for Additional Sanctions (Doc. No. 41) and Motion for Determination and Award of Damages and Attorneys' Fees (Doc. No. 43), as well as the defendant DRS Processing LLC's (“Defendant”) Motion for Purging of Contempt (Doc No. 57).

         I. BACKGROUND

         The underlying facts in this matter are set forth in this Court's prior orders (Doc. Nos. 16 and 24) and are incorporated by reference.

         On January 5, 2018, this Court granted Plaintiffs' Motion for Default Judgment, finding that Plaintiffs' well-pleaded complaint sufficiently alleged defendant's liability for tortious interference of contract, unjust enrichment and money had and received, and acts constituting unfair and deceptive trade practices. (Doc. No. 16) (the “Default Judgment Order”). Relevant to these proceedings, the Court determined that in order to ascertain the extent of Plaintiffs' damages, additional information was necessary and a further evidentiary hearing would be held. Accordingly, the Court ordered Defendant to produce certain documents within thirty days. (Doc. No. 16). The Court additionally permanently enjoined Defendant from further communications with any consumer regarding accounts within the Santander Portfolio and from collecting or attempting to collect on accounts from the Santander Portfolio. (Doc. No. 16).

         After Defendant failed to comply with the Court's Default Judgment Order, contempt proceedings were commenced and Defendant and its principal, Darryl Miller (“Miller”), were ordered to appear and show cause why they should not be held in contempt. Ultimately, Defendant and Miller were held in civil contempt for their failure to comply with the Default Judgment Order (Doc. No. 30). Defendant and Miller were provided an opportunity to purge their contempt by, among other things, fully complying with and obeying the Default Judgment Order (Doc. No. 16) and disgorging any monies collected on the Santander Accounts or received from selling Santander Accounts from January 5, 2018 forward (the “Contempt Order”). (Doc. No. 30). The sanctions imposed by the Contempt Order were suspended while Defendant and Miller were given time to purge their contempt.

         Based upon the representations of Defendant and Miller that their collection records regarding the Santander Accounts during the relevant time period were stored in a cloud based software, “Simplicity Collection Software, ” the Court additionally ordered Simplicity Payment Solutions LLC, a third party software provider, to produce access and activity logs during the relevant time period, including any deletions or modifications of the Santander Accounts or the Santander Portfolio. (Doc. No. 32). On November 5, 2018, the deadline for Defendant and Miller to purge their contempt was extended through November 15, 2018 (Doc. No. 38).

         On December 14, 2018, Plaintiffs filed their Motion for Enforcement of Contempt Order and Request for Additional Sanctions (Doc. No. 41) and their Motion for Determination and Award of Damages and Attorneys' Fees (Doc. No. 43). On December 28, 2018, Defendant filed its Motion for Purging of Contempt (Doc. No. 57).

         On September 22, 2019, the parties filed a Joint Stipulation of Damages. (Doc. No. 73). On September 23, 2019, an evidentiary hearing was held with regard to the pending motions. (Doc Nos. 41, 43, and 57).

         II. TESTIMONY AND EVIDENCE

         The parties presented their evidence through affidavits, declarations and exhibits which were submitted with their respective motions and through live testimony at the September 23, 2019 hearing. Based upon the evidence presented, the Court makes the following:

         III. FINDINGS OF FACT

         1. On January 5, 2018, this Court entered an order establishing the liability of Defendant but reserving the issue of damages. The Default Judgment Order additionally permanently enjoined Defendant from communicating with any consumer regarding accounts within the Santander Portfolio and from collecting or attempt to collect on accounts from the Santander Portfolio. (Doc. 16).

         2. Additionally, the Court ordered Defendant to produce the following documentation within thirty (30) days to allow the Court and Plaintiffs sufficient information to ascertain the scope and appropriate amount of damages:

(a) Specific Santander Accounts. Defendants must produce reports identifying all Santander accounts Defendant has acquired or collected on in the past 24 months. These reports should identify each consumer with the following: (1) their last name; (2) the last four digits of their social security number; and (3) their corresponding Santander account number;
(b) Related Documents. Defendants must produce all documents related to their purchase of the Santander Accounts within the past 24 months. These documents include, but are not limited to, correspondence, bills of sale, and purchase documents;
(c) Collection Documents. Defendants must produce all records of their collection activities in respect to Santander Portfolio accounts. These records include, but are not limited to, notes, ...

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