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Barbato v. Greystone Alliance, LLC

United States District Court, M.D. Pennsylvania

March 30, 2017



          William J. Nealon United States District Judge

         On October 7, 2013, Plaintiff, Mary Barbato, brought an action against Defendant Greystone Alliance, LLC ("Greystone") in the Court of Common Pleas of Wayne County, Pennsylvania. (Doc. 2). On November 8, 2013, Greystone removed the action to this Court. (Doc. 1).

         On January 28, 2014, Plaintiff moved to amend her complaint, which was granted on June 13, 2014. (Docs. 11, 20). On that same date, Plaintiff filed an amended complaint against Defendants Greystone; Turning Point Capital, Inc. ("Turning Point"); and Crown Asset Management, LLC ("Crown") alleging violations of the Fair Debt Collection Practices Act, 15 U.S.C. § 1692 et seg. ("FDCPA"). (Doc. 21). In particular, Plaintiff claims that Defendants violated sections 1692e(ll) and 1692g of the FDCPA. (Id. at pp. 4-6). Additionally, Plaintiff advances class allegations as to the section 1692g claim, (Id. at pp. 5-6). To date, Greystone and Turning Point have been dismissed from the action.

(Docs. 66, 99).

         On January 15, 2016, Plaintiff moved to certify the class. (Doc. 64). On April 14, 2016, Plaintiff filed a motion seeking a ruling on her class certification motion prior to ruling on her motion for summary judgment. (Doc. 76). On April 15, 2016, each remaining party, Plaintiff and Crown, moved for summary judgment. (Docs. 77, 78).

         On May 19, 2016, Plaintiff filed a reply in support of her motion seeking a ruling on her class certification motion prior to a ruling on her motion for summary judgment. (Doc. 93). In the reply, Plaintiff stated that she no longer sought "a ruling on Plaintiff's motion for class certification prior to a ruling on Plaintiffs motion for summary judgment on liability." (Id. at p. 2). "With [Crown], " Plaintiff requested "that the Court rule on the parties' cross-motions for summary judgment in advance of Plaintiffs motion for class certification." (Id.). As a result, the Court issued an Order deeming Plaintiffs April 14, 2016 motion for a ruling on her class certification motion prior to ruling on her motion for summary judgment withdrawn. (Doc. 97); see (Doc. 93, p. 2). The Order also states that the Court will defer ruling on, inter alia. Plaintiffs motion for class certification until after disposition of the parties' respective motions for summary judgment. (Doc. 97).

         Each pending summary judgment motion has been fully briefed and, thus, both are ripe for disposition. See (Docs. 79-80, 83-87, 90-91, 94-96). For the reasons stated below, both summary judgment motions will be denied.


         Summary judgment "should be rendered if the pleadings, the discovery and disclosure materials on file, and any affidavits show that there is no genuine issue as to any material fact and that the movant is entitled to judgment as a matter of law." Fed.R.Civ.P. 56(c); Turner v. Schering-Plough Corp.. 901 F.2d 335, 340 (3d Cir. 1990). The party moving for summary judgment bears the burden of showing the absence of a genuine issue as to any material fact. Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986).

         Once this showing has been made, the non-moving party must offer specific facts contradicting those averred by the movant to establish a genuine issue of material fact. Luian v. Nat'l Wildlife Fed'n. 497 U.S. 871, 888 (1990). "[T]he non-movant must go beyond the pleadings, pointing to particular facts that evidence a genuine dispute for trial." Shank v. Experian Info. Solutions. Inc.. 2016 U.S. Dist. LEXIS 2679, at *1 (M.D. Pa. Jan. 11, 2016) (Jones, J.) (citing Guidotti v. Legal Helpers Debt Resolution. L.L.C.. 716 F.3d 762, 773 (3d Cir. 2013)). In particular, for a non-moving party to prevail on a motion for summary judgment, they '"must show specific facts such that a reasonable jury could find in that party's favor, thereby establishing a genuine issue of fact for trial.'" McGlynn v. Reliance Standard Life Ins. Co.. 2015 U.S. Dist. LEXIS 168589, at *9-10 (M.D. Pa. Dec. 17, 2015) (Caputo, J.) (quoting Galli v. N.J, Meadowlands Comm'n. 490 F.3d 265, 270 (3d Cir. 2007)). '"While the evidence that the non-moving party presents may be either direct or circumstantial, and need not be as great as a preponderance, the evidence must be more than a scintilla.'" Galli. 490 F.3d at 270 (quoting Hugh v. Butler Cntv. Family YMCA. 418 F.3d 265, 267 (3d Cir. 2005)).

         All inferences "should be drawn in the light most favorable to the nonmoving party, and where the nonmoving party's evidence contradicts the movant's, then the non-movant's must be taken as true." Pastore v. Bell Tel. Co.. 24 F.3d 508, 512 (3d Cir. 1994) (quoting Big Apple BMW. Inc. v. BMW of N. Am.. Inc.. 974 F.2d 1358, 1363 (3d Cir. 1992), cert, denied. 507 U.S. 912 (1993)). "[T]he non-moving party may not oppose summary judgment simply on the basis of the pleadings, or on conclusory statements that a factual issue exists." Swinka Realty Invs., LLC v. Lackawanna Cntv. Tax Claim Bureau. 2016 U.S. Dist. LEXIS 86328, at *20-21 (M.D. Pa. July 1, 2016) (Mariani, J.) (citing Anderson v. Liberty Lobby. Inc.. 477 U.S. 242, 248 (1986)). Pursuant to Federal Rule of Civil Procedure 56:

A party asserting that a fact cannot be or is genuinely disputed must support the assertion by citing to particular parts of materials in the record... or by showing that the materials cited do not establish the absence or presence of a genuine dispute, or that an adverse party cannot produce admissible evidence to support the fact.

Fed. R. Civ. P. 56(c)(1)(A)-(B). Additionally, "[i]n evaluating whether summary judgment should be granted, '[t]he court need consider only the cited materials, but it may consider other materials in the record.'" Fed.R.Civ.P. 56(c)(3).

         Further, the summary judgment standard "is no different where, " as in this case, "there are cross-motions for summary judgment" Lawrence v. City of Philadelphia. 527 F.3d 299, 310 (3d Cir. 2008). When a court is "'confronted with cross-motions for summary judgment, the court must rule on each party's motion on an individual and separate basis, determining, for each side, whether a judgment may be entered in accordance with the summary judgment standard."' Swinka Realty Invs.. LLC. 2016 U.S. Dist. LEXIS 86328, at *22 (quoting Marciniak v. Prudential Fin. Ins. Co. of Am.. 184 F.App'x 266, 270 (3d Cir. 2006)). According to the United States Court of Appeals for the Third Circuit:

[c]ross-motions are no more than a claim by each side that it alone is entitled to summary judgment, and the making of such inherently contradictory claims does not constitute an agreement that if one is rejected the other is necessarily justified or that the losing party waives judicial consideration and determination whether genuine issues of material fact exist.

Lawrence. 527 F.3d at 310 (quoting Rains v. Cascade Indus.. Inc.. 402 F.2d 241, 245 (3d Cir. 1968)); Holton v. Huff. 2012 U.S. Dist. LEXIS 53185, at *5 (M.D. Pa. Apr. 16, 2012) (Mariani, J.). On cross motions for summary judgment, "[e]ach movant must show that no genuine issue of material fact exists; if both parties fail to carry their respective burdens, the court must deny the motions." Holton. 2012 U.S. Dist. LEXIS 53185, at *5 (citing Facenda v. N.F.L. Films. Inc.. 542 F.3d 1007, 1023 (3d Cir. 2008)). "When reviewing each motion, the court is bound to view the evidence in the light most favorable to the nonmovant." Id. (citing Fed.R.Civ.P. 56; United States v. Hall. 730 F.Supp. 646, 648 (M.D. Pa. 1980) (Nealon, J.)).

         "Where there is no material fact in dispute, the moving party need only establish that it is entitled to judgment as a matter of law." Schwab v. Reamstown Mut. Ins. Co.. 2006 U.S. Dist. LEXIS 82815, at *3 (M.D. Pa. Nov. 14, 2006) (Caputo, J.). However, "[i]f the 'non-moving party fails sufficiently to establish the existence of an essential element of its case on which it bears the burden of proof at trial, there is not a genuine dispute with respect to a material fact and thus the moving party is entitled to judgment as a matter of law."' Mancini v. Northampton Cnty., 836 F.3d 308, 313-14 (3dCir. 2016) (quoting Blunt v. Lower Merion Sch. Dist.. 767 F.3d 247, 265 (3d Cir. 2014)).


         On or about September 7, 2007, Plaintiff obtained a "Care Credit" card which was used for personal, family, or household purposes (the "Account"). (Doc. 80, p. 2); (Doc. 84, p. 2); (Doc. 94, p. 4). On November 15, 2010, Plaintiff made her last payment on the Account to GE Electric Capital Corporation and GE Money Bank (collectively "GE"). (Doc. 84, pp. 2-3); (Doc. 94, pp. 4-5). At that time, Plaintiff had an outstanding balance on her Account. See (Doc. 80, pp. 3-4); (Doc. 84, p. 5); (Doc. 91, p. 5). On June 16, 2011, GE charged off the delinquency balance on Plaintiff's Account. (Doc. 84, p. 3); (Doc. 94, p. 5). On or about July 27, 2011, by agreement dated January 7, 2011, GE sold, transferred, and assigned certain charged-off receivables, including Plaintiffs Account, to Atlantic Credit and Finance Special Finance Unit III, LLC ("Atlantic"). (Id.). On or about October 18, 2011, by agreement dated June 20, 2011, Atlantic sold, transferred, and assigned certain charged-off receivables, including Plaintiffs Account, to Security Credit Services, LLC ("Security Credit"). (Id.). On or about January 30, 2012, Security Credit sold, transferred, and assigned certain charged-off receivables, including Plaintiffs Account, to Brightwater Capital, LLC ("Brightwater"). (Doc. 84, p. 3); (Doc. 94, p. 5). By agreement dated January 30, 2013, Brightwater sold, transferred, and assigned certain charged-off receivables, which included Plaintiff's Account, to Crown. (Doc. 80, p. 3); (Doc. 84, p. 3), (Doc. 94, pp. 5-6).

         Crown is a purchaser of charged-off receivables. (Doc. 80, p. 2); (Doc. 84, p. 2). However, Crown does not directly collect on its charged-off receivables. (Id.). Rather, Crown refers all of its charged-off receivables to third-parties for collection. (Id.). For example, on December 18, 2012, Crown entered into a service agreement (the "Service Agreement") with Turning Point. (Doc. 80, p. 5); (Doc. 84, p. 3). According to the Service Agreement, Crown was seeking "to procure certain collection services from" Turning Point. (Doc. 80-8, p. 2). Additionally, as part of the Service Agreement, Turning Point agreed to the following provisions:

2.1 From time to time and in its sole and absolute discretion, Forwarder may refer to Agency certain Accounts that are in default. Agency agrees to provide the Services described in the Agreement. Except pursuant to Forwarder's express consent, obtained in advance and in writing, Services will be provided exclusively by Agency's employees and the referral of any Account by Agency to a third party, without Forwarder's prior written authorization, is expressly prohibited. In the case of any referral approved by Forwarder, Forwarder will not be obligated to pay compensation in excess of the Fee due to Agency. Forwarder retains the right, in its exclusive discretion, to modify this Agreement at any time in regard to third party referral standards by providing written notice to Agency. Upon receipt by Agency, any such modification will be deemed rally incorporated into the Agreement....
4.1 Performance Standards. Agency shall perform such services as Agency, in its professional judgment, deems appropriate, subject to the terms of the [Service] Agreement and the laws and regulations governing the collections of such Accounts. Agency shall maintain a complete, correct and current record of each Account, which Forwarder may access and review at any time.
4.2 Due Diligence and Lawful Action. Agency agrees to use due diligence and to employ lawful means in its effort to collect on Accounts referred to Agency by Forwarder. In providing services, Agency shall conform to a standard of practice and care that equals or exceeds the standard applicable to other Agencies, which provide similar services in the same state(s) as Agency.
4.3 Settlements. Forwarder grants Agency authority to settle any Account for an amount equal to or greater than the percentages of balances identified in the Settlement Guidelines. Agency will not settle or in any way compromise Accounts for less than the amounts indicated in the Settlement Guidelines unless Agency obtains prior written approval from the Company to settle any Account for a lesser amount... .
7.3 Forwarder, in its sole and exclusive discretion, may instruct Agency to close and return any Account at any time...
8.1 Compliance with Applicable Laws. Agency represents, warrants, and covenants that when performing its obligations under the [Service] Agreement, Agency shall comply with all applicable federal, state, and local laws, statutes, and regulations, including but not limited to the federal Fair Debt Collection Practices Act, Truth in Lending Act, Fair Credit Reporting Act and Gramm-Leach Bliley Act, as amended. Further Agency, while pursuing its duties hereunder with diligence and vigor, shall at all times maintain and protect the good name and reputation of Forwarder....
8.4 Audits, (a) Forwarder, or persons retained by Forwarder, and federal and state regulatory agencies that supervise Forwarder shall have the right to examine and audit Agency's business, operations, security architecture, systems, procedures and practices that relate to the Services and the Agency's obligations under this Agreement. Forwarder may, among other audit tasks, measure or evaluate Agency's performance and professionalism, verify the accounting of all funds, including any trust account, verify the accuracy and propriety of all commissions verify the timeliness of recording and remitting payments, verify the adequacy of cash controls, and verify Agency's overall compliance with this Agreement. Audits may be performed, either on-site or remotely, at Forwarder's discretion. Agency shall grant Forwarder access to its system of record via electronic access to permit remote audits. On-premises audits and inspections will be limited to one initial security audit and one annual audit thereafter. Additional on-premises audits may be conducted at Forwarder's sole discretion upon the occurrence of a Termination Event. Forwarder may delegate the right to audit to any third party auditor or examiner. On-premises audits and inspection shall be conducted at Agency's expense. During Agency's normal business hours, Agency shall provide to the auditor a reasonable workspace and the use of on-site photocopying equipment, computer network, and telephones at no charge to Forwarder. Agency shall allow full and free access to records relating to any Account forwarded and shall provide necessary technical assistance as required to access these records. Forwarder agrees to advise Agency of the exceptions/discrepancies identified in any audit and agrees to allow Agency a reasonable period of time to respond to them. Where Forwarder determines Agency shall take corrective measures, Agency shall submit to Forwarder a corrective action plan that will correct any deficiencies....
8.6 Customer Service and Quality. Agency agrees to forward a copy of any written complaint received from an Account holder in regard to Agency's handling of an Account as well as the response made or action taken by Agency
9.5 Independent Contractor Status. The [Service] Agreement shall not be construed as creating an employee/employer agency, partnership, or joint venture relationship between Agency and Forwarded. Each party shall have the obligation to supervise, manage, contract, direct, procure, perform or cause to be performed, all work to be performed under the [Service] Agreement and shall be liable for all acts or omissions of its employees and agents in performing their respective obligations hereunder.

(Doc. 80-8, pp. 4, 6-7, 10-11, 12); (Doc. 84, p. 4); (Doc. 86-3, pp. 5, 9, 10-11, 12).

         On February 4, 2013, pursuant to the Service Agreement, Crown referred Plaintiffs Account to Turning Point. (Doc. 80, p. 3); (Doc. 84, p. 5). On February 6, 2013, Turning Point issued a letter to Plaintiff, which stated, in relevant part, that:

Our client, Crown Asset Management, LLC has purchased your account and all rights to the debt from GE Sales Finance. There is an outstanding balance due of $2, 483.83. Our client's records indicate that payment has not been received or processed as of the date of this correspondence, and has therefore been listed for collection.
If you are unsure of its validity, you may contact us directly at 1-800-872-9312 to obtain additional information regarding this obligation. Otherwise, you may clear your account from our collection process immediately by sending the bottom portion of this letter with your payment in full using the enclosed envelope. Your account will be properly credited and you will receive no further communication from us on this account.

(Doc. 80, pp. 3-4); (Doc. 84, p. 5); (Doc. 91, p. 5). That letter also contained the ...

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