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Henry v. Allied Interstate, Inc.

United States District Court, N.D. Alabama, Western Division

January 12, 2015

ISRAEL HENRY, Plaintiff,

For Israel Henry, an individual, Plaintiff: John G Watts, M Stan Herring, Jr, WATTS AND HERRING LLC, Birmingham, AL.

For Allied Interstate Inc, a Corporation, Defendant: Neal D Moore, III, LEAD ATTORNEY, L Jackson Young, Jr, FERGUSON FROST & DODSON LLP, Birmingham, AL.



Plaintiff Israel Henry (" Henry") initiated this action in the Circuit Court of Tuscaloosa County, Alabama, against Defendant Allied Interstate, Inc. (" Allied") alleging claims under the Fair Debt Collection Practice Act (" FDCPA"), 15 U.S.C. § 1692 et seq . (Count I) and state law claims for invasion of privacy (Count II); negligent, wanton, and/or intentional hiring, training, and supervision of debt collectors (Count III); and negligent, wanton, and intentional conduct (Count IV). (Doc. 1-1). Allied subsequently removed the action to this Court, (Doc. 1). Allied now moves for partial summary judgment, seeking a judgment on all of Henry's state law claims and on two of Henry's FDCPA claims. (Doc. 27). The motion is fully briefed and ripe for review. (Docs. 28, 33, & 37). For the reasons stated below, the undersigned recommends Allied's motion, (doc. 27), be GRANTED. Because the motion for summary judgment does not address all of Henry's claims, several FDCPA claims remain pending.

I. Standard of Review

Under Rule 56(a) of the Federal Rules of Civil Procedure, summary judgment is proper 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." " Rule 56[] mandates the entry of summary judgment, after adequate time for discovery and upon motion, against a party who fails to make a showing sufficient to establish the existence of an element essential to that party's case, and on which that party will bear the burden of proof at trial." Celotex Corp. v. Catrett, 477 U.S. 317, 322, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986). The moving party bears the initial burden of proving the absence of a genuine issue of material fact. Id. at 323. The burden then shifts to the nonmoving party, who is required to " go beyond the pleadings" to establish there is a " genuine issue for trial." Id. at 324. (citation and internal quotation marks omitted). A dispute about a material fact 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, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986).

The Court must construe the evidence and all reasonable inferences arising from it in the light most favorable to the non-moving party. Adickes v. S.H. Kress & Co., 398 U.S. 144, 157, 90 S.Ct. 1598, 26 L.Ed.2d 142, (1970); see also Anderson, 477 U.S. at 255 (all justifiable inferences must be drawn in the non-moving party's favor). Any factual disputes will be resolved in Plaintiff's favor when sufficient competent evidence supports Plaintiff's version of the disputed facts. See Pace v. Capobianco, 283 F.3d 1275, 1276-78 (11th Cir. 2002) (a Court is not required to resolve disputes in the non-moving party's favor when that party's version of the events is supported by insufficient evidence). However, " mere conclusions and unsupported factual allegations are legally insufficient to defeat a summary judgment motion." Ellis v. England, 432 F.3d 1321, 1326 (11th Cir. 2005) (per curiam) (citing Bald Mtn. Park, Ltd. v. Oliver, 863 F.2d 1560, 1563 (11th Cir. 1989)). Moreover, " [a] mere 'scintilla' of evidence supporting the opposing party's position will not suffice; there must be enough of a showing that the jury could reasonably find for that party." Walker v. Darby, 911 F.2d 1573, 1577 (11th Cir. 1990) (citing Anderson, 477 U.S. at 252).

II. Factual Background

In connection with his studies at ITT Technical Institute, Henry took out two student loans, one in approximately 2002 through Sallie Mae and a Direct Loan in 2006 through the Department of Education (" DOE"). (Doc. 29-1 at 16-17 (59:8-62:21)).[1] Although Henry paid off the 2002 Sallie Mae loan, he only made approximately twelve payments of $400 on the 2006 Direct Loan. (Id.). When Henry stopped making payments (approximately May 2010 because his wife lost her job), he did not contact the DOE regarding his asserted inability to make payments or to make arrangements for reduced payments. (Id. at 17 (63:1-3; 64:5-9)).

On or about July 24, 2011, the DOE retained Allied to attempt to collect the balance Henry owed on the delinquent loan. (Doc. 29-2 at 12 (11:11-19)). Allied is a debt collection agency, and the DOE contracts with Allied to collect defaulted student loans. (Doc. 29-3 at 12 (41:4-6; 43:13-17)). Henry asserts his first contact with anyone regarding the delinquency of his loan came from Allied. (29-1 at 17 (64:10-18)). On Friday, August 26, 2011, Henry received an email from one of his co-workers, George Odom, stating " [j]ust got a call wanting you and it was an 'Unidentified' 877 number so I screened it. When I inquired he said kind of rudely that it was 'personal business.' His name and # is Mike Southerington @877-220-****." (Id. at 18 (66:2-67:20)). Henry agrees Southerington, an Allied collector, handled the call appropriately. (Id. at 19 (69:8-14)). Henry " googled" Southerington's phone number and discovered it belonged to Allied. (Id. at 19 (70:10-15)). Around this time, Henry discussed with this wife the possibility of paying $100 per month on the loan. (Id. at 19-20 (72:19-73:19)).

On Monday, August 29, 2011, Henry called Southerington from his workplace. (Doc. 29-1 at 20 (75:19-76:4)). Henry and Southerington discussed the defaulted loan and payment arrangements. (Id. at 21 (77:1-15)). At this point, Southerington asked for Henry's monthly income and monthly bills and told Henry he needed to make a down payment of " three hundred and something [dollars]" and then make monthly payments of two hundred dollars for ten consecutive months. (Id. at 21 (77:7-78:6)). Henry told Southerington he could not afford to make those payments, and he could only make $100 payments. (Id. at 21 (78:8-17)). Southerington informed Henry that paying only $100 a month was not an option and that the previous option was " what [Allied] could take." (Id. at 21 (78:18-79:2)).

Henry initially testified Southerington then told him " [A]llied would start -- or that they would garnish [his] wages." (Doc. 29-1 at 21 (79:3-10)). Henry continued by testifying " [w]hen I told [Southerington] what I could pay, he said that they would garnish my wages, and then I told him that I couldn't pay that, there was no way, and that's when he said, well, the garnishment process is already started." (Id. at 22 (81:1-6)). It is unclear from Henry's testimony whether he is alleging Southerington said Allied would garnish his wages, Allied had already began garnishing his wages, or both. ( See id. at 22 (80-82)). Henry testified this alleged threat of garnishment got a lot of things " going through [his] head" including losing vehicles. (Id. at 26 (99:8-16). There is no evidence Allied ever garnished Henry's wages.

During this call, Henry asked Southerington whether he had added up his monthly bills, and Southerington replied that he had not. (Doc. 29-1 at 22, 23 (82:20-22; 87:1-21)). Henry told Southerington if he would add up the monthly expenses, he would see a negative cash flow of about $70 per month. (Id. at 23 (87:1-21)). Opposing counsel questioned Henry about this, because, based on the numbers, it appeared Henry had approximately $1, 000 left over each month. (Id. at 23 (87:22-88:4). Henry testified he must have given additional bill amounts to Southerington, but could not specifically identify any at his deposition. (Id.). Later in the deposition, Henry testified he could not remember whether he had given a total amount to Southerington or if he had provided him the amount of each individual bill. (Doc. 29-1 at 22-23 (82-91)). At his deposition, Southerington confirmed the contents of his accounts notes from the August 29, 2011 call (specifically the call at 9:42). (Doc. 29-4 at 44 (171:5-17)). The notes state he " [e]xplained rehab and told him possibility of AWG [administrative wage garnishment], taxes, et cetera. Updated financial information.[2] Told me he only had $160 a month left over. Told me not possible to garnish. Told him his is a federal loan and need to go to court since it's a federal loan. Told him $360 a month first month then $190 a month." (Id.). When asked about Allied's account notes for the August 29, 2011 call, Henry could not recall whether Southerington explained the rehabilitation process, mentioned the possibility of garnishment or the possibility his income tax refund could be seized, or stated that because it was a federal loan, there was no need to go to court to get a garnishment order. (Doc. 29-1 at 30 (113:3-114:19)). Nor could Henry recall whether he told Southerington he only had $160 per month after bills were paid or that it was not possible to for Allied to garnish his wages on this call. (Id.).

Southerington then handed the call to assistant vice-president of operations Jonathan Hannahs, whom Henry described as a " wage garnishment specialist." (Doc. 29-1 at 27 (104:10-15). Hannahs testified Henry refused a rehabilitation of his Direct Loan and stated Allied could not pursue garnishment due to the loan being a " Sallie Mae . . . loan." (Doc. 29-2 at 45 (44:2-12)). Hannahs tried to explain that was incorrect and that he did not want Henry making a decision based on inaccurate information. (Id.). Hannahs also told Henry the only requirement to start wage garnishment on this type of loan would be to send a letter to the employer. (Id. at 27 (104:17-23)). Henry asked whether any check he sent should be made payable to the DOE and stated he would send in what he could, i.e., something less than the amount that would qualify him for a rehabilitation program. (Id. at 45-46 (44:14-45:15)). According to Hannahs, Henry again said Allied could not garnish his wages due to him " making payments." (Doc. 29-2 at 46-47 (45:19-46:16)). Hannah testified he advised Henry that payment arrangements need to be " acceptable, " such as qualifying for a rehabilitation program, and that Hannahs would mark the account as " unable to pay." (Id. at 48 (47:4-22)). The testimony Henry cites in response to Hannahs' testimony does not contradict or dispute it. ( See doc. 33 at 12-13 (citing doc. 29-1 at 27, 28 (104:14-23, 107:10-16)). Regarding this conversation, Henry testified he may have told Hannahs he could not do a rehabilitation and that Allied could not pursue garnishment due to the type of loan at issue. (Doc. 29 at 28 (105:12-106:17)). Henry testified he could not recall whether Hannahs ...

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