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Calleja v. Sean Cannon & Cannon Law Firm, PLLC

United States District Court, D. Arizona

January 25, 2017

Philip Calleja, Plaintiff,
Sean Cannon and Cannon Law Firm, PLLC, Defendants.


          Neil V. Wake, Senior United States District Judge

         Before the Court is Plaintiff's Motion for Summary Judgment on FDCPA[1] Claims (Doc. 39).


         A motion for summary judgment tests whether the opposing party has sufficient evidence to merit a trial. Summary judgment should be granted if the evidence reveals no genuine dispute about any material fact and the moving party is entitled to judgment as a matter of law. Fed.R.Civ.P. 56(a). A material fact is one that might affect the outcome of the suit under the governing law, and a factual dispute is genuine “if the evidence is such that a reasonable jury could return a verdict for the nonmoving party.” Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986).

         The movant has the burden of showing the absence of genuine disputes of material fact. Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986). However, once the movant shows an absence of evidence to support the nonmoving party's case, the burden shifts to the party resisting the motion. The party opposing summary judgment must then “set forth specific facts showing that there is a genuine issue for trial” and may not rest upon the pleadings. Anderson, 477 U.S. at 256. If a party fails to properly support an assertion of fact or fails to properly address another party's assertion of fact, the court may consider the fact undisputed for purposes of the motion. Fed.R.Civ.P. 56(e)(2). In deciding a motion for summary judgment, the Court must view the evidence in the light most favorable to the nonmoving party, must not weigh the evidence or assess its credibility, and must draw all justifiable inferences in favor of the nonmoving party. Reeves v. Sanderson Plumbing Prods., Inc., 530 U.S. 133, 150 (2000); Anderson, 477 U.S. at 255.


         FDCPA provides jurisdiction to enforce any liability created by FDCPA “within one year from the date on which the violation occurs.” 15 U.S.C. § 1692k(d). Plaintiff filed this action on June 8, 2015.

         Plaintiff contends that Defendants waived any statute of limitations defense by failing to identify it as an affirmative defense in their Answer. However, Plaintiff raised the issue of the one-year FDCPA limitations period in his Complaint by alleging that Defendants' initial FDCPA violations began more than one year before the commencement of this action but the collections actions were ongoing and continuous in nature and should be considered one continuous FDCPA violation. (Doc. 37 at 6, ¶ 31.) The Complaint further alleges, “Alternatively, Defendants violated the FDCPA by numerous, separate violations within the last year before this action was filed.” (Id.) In their Answer, Defendants denied Plaintiff's allegations regarding the FDCPA limitations period. (Doc. 38 at 3, ¶ 31.) Thus, the statute of limitations defense was adequately pled.

         Plaintiff also contends that the alleged violations predating the one-year limitations period constitute a continuing pattern and course of conduct that continued into the last year before this action was filed. No controlling authority has been cited to establish that a continuing violation theory applies to a claim under FDCPA. Plaintiff cites only Joseph v. J.J. MacInyre Companies, 281 F.Supp.2d 1156 (N.D. Cal. 2003), which applied the continuing violation theory to a FDCPA claim for repeated harassing phone calls from a debt collection agency. The evidence showed more than 200 calls during a nineteenth-month period, approximately 75 of which were within the limitations period. The district court concluded that application of the continuing violation doctrine to these facts was logical and consistent with the FDCPA's broad remedial purpose. Alternatively, the district court concluded that even if the statute of limitations were to bar liability for conduct outside the limitations period, evidence of pre-limitations period calls likely would be admissible to show background and to establish a foundation for other evidence. The decision in Joseph denied summary judgment for the defendant and did not decide whether damages would be based on a single course of conduct or multiple violations.

         Here, Plaintiff claims that Defendants misrepresented the amount of his debt in three separate emails, each demanding payment of, and attempting to collect, a debt he did not owe. Two of those emails were sent within the one-year limitations period. It makes little practical difference whether Defendants' actions are considered a single course of conduct, i.e., one FDCPA violation continuing past June 8, 2014, or two violations within the one-year limitations period. Therefore, evidence of Plaintiff's payments and Defendants' records before June 8, 2014, will be considered in determining whether the two emails sent after June 8, 2014, misrepresented Plaintiff's debt, and Defendants will not be held liable for FDCPA violations that occurred before June 8, 2014.


         Plaintiff Philip Calleja is an owner of a unit within the La Fuente condominium. Defendant Sean Cannon is an Arizona attorney and the owner of Defendant Cannon Law Firm, PLLC.

         La Fuente is a condominium subject to a Declaration of Horizontal Property Regime and Covenants, Conditions, Restrictions and Easements (“Declaration”). The Declaration provides for the formation of an association of the owners of units within La Fuente (“Association”), which is responsible for the maintenance, repairs, administration, and operation of the common elements and assessments for expenses, among other things. By agreeing to the Declaration, owners agree to pay their proportion and share of the expenses of the administration and operation of the common elements “and any other expenses incurred or budgeted, or reserved for future expenses established, in conformance with the Declaration and the Articles and By-Laws.” The Declaration requires the Association to levy against each unit and its owner an assessment for the common expenses, which “together with interest thereon and the cost of collection thereof, including reasonable attorney's fees shall, until paid, be a charge against and a continuing lien” upon the unit and against the owner of such unit.

         The Association operates through a management company, which applies the assessment to a unit's account on the first of each month. Before January 2013, the Association's policy was to assess a late fee of $15.00 if an assessment was not paid by the thirtieth day of the month. Beginning in January 2013, the Association's policy was to assess a late fee of $15.00 if an assessment was not paid by the fifteenth of the month.

         From August 2012 through December 2014, Plaintiff's monthly assessment was $289.19. From January 2015 through December 2015, Plaintiff's monthly assessment was $300.00. From 2012 through 2015, Plaintiff paid his monthly assessments using Chase Bank's online service. Each check was issued by Chase Bank payable to “La Fuente in care of CID Management.” The payment confirmation for each month shows the check number, the amount of the check, and the date the check was sent by Chase Bank to the payee.

         July 2012 - August 2013. The Association's records for Plaintiff's unit show that the account had a balance of $0.00 as of July 27, 2012, but on July 30, 2012, the Association charged a $15.00 late fee for Plaintiff's June payment. On September 17, 2012, the Association charged Plaintiff's account a $45.00 administrative fee because the August 2012 payment was two months late.[2] On September 28, 2012, Plaintiff made a payment of $289.19 and a payment of $304.19. As of September 28, 2012, the Association's records indicate that Plaintiff's account had a balance of $45.00.

         For October 2012 through August 2013, Plaintiff made eleven payments of $289.19 each. Each of these payments was sent by the thirtieth day of the month, but not by the fifteenth. The Association charged Plaintiff a $15.00 late fee for January, February, March, June, and August 2013. On July 1, 2013, the Association credited Plaintiff's account $15.00 as an “expense adjustment.” As of August 29, 2013, the Association's records indicate that Plaintiff's account had a balance of $105.00 (consisting of $60.00 for late fees and $45.00 for the administrative charge).

         September 2013 - September 2014. Plaintiff did not send a payment in September 2013. The Association's records indicate that on October 16, 2013, Plaintiff's account was referred to Defendants for collection (although Plaintiff was not notified until November 22, 2013). Plaintiff sent a payment of $289.19 to the Association on October 25, 2013. Beginning with the October 25, 2013 payment, Plaintiff's checks were deposited into one of Defendants' bank accounts.

         The Association's records show Plaintiff's account balance as $1, 002.57 on November 18, 2013, which consisted of unpaid assessments for September, October, and November 2013; late fees for October and November; and a previous balance of $105.00 for late fees and the administrative charge. The November 18, 2013 balance of $1, 002.57 did not include credit for Plaintiff's October 25, 2013 payment.

         On November 21, 2013, Plaintiff sent another payment of $289.19 to the Association.

         On November 22, 2013, Defendants mailed a letter to Plaintiff stating that the Association had transferred Plaintiff's account to Defendants for collection, and the amount due was $1, 457.57. The letter urged Plaintiff “to resolve this matter rather than cause yourself to incur additional attorney fees in the collection of this secured debt.” Defendants' records show that on November 18, 2013, Plaintiff's account balance was $1, 002.57, the same balance shown in the Association's records. Defendants' records show that on November 20, 2013, a legal fee of $455.00 was added, which increased the account balance to $1, 457.57. Defendants' records show that on November 22, 2013, a legal fee of $70.00 was added, which further increased the account balance to $1, 527.57. A different version of Defendants' records show an account balance of $1, 457.57 on November 22, 2013, and no additional fee of $70.00. Regardless of these inconsistencies, the November 22, 2013 letter demanded an amount that included legal fees and did not include receipt of Plaintiff's October 25, 2013 payment.

         Upon receiving the November 22, 2013 demand letter, Plaintiff disputed the amount of the debt and exchanged correspondence with Defendants regarding Plaintiff's account balance. Among other things, Plaintiff asserted that he had not received notice that the Association's policy had changed in January 2013 from charging a late fee on the thirtieth day of the month to charging a late fee on the fifteenth day of the month. The Association contended that Plaintiff had not provided his current mailing address.

         The November 22, 2013 letter directed Plaintiff to make all checks payable to the Cannon Law Firm and to mail them to the Cannon Law Firm. It stated that the Association would not accept payments on Plaintiff's account and would forward to the Cannon Law Firm any checks it received. Plaintiff continued to send checks to the Association, which forwarded them to Defendants. Defendants sometimes issued a check to the Association ...

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