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Schwarm v. Craighead

August 5, 2008

KRISTY SCHWARM, PATRICIA FORONDA, AND JOSANN ANCELET, ON BEHALF OF THEMSELVES AND OTHERS SIMILARLY SITUATED, PLAINTIFFS,
v.
HENRY CRAIGHEAD, AN INDIVIDUAL, DISTRICT ATTORNEY TECHNICAL SERVICES, LTD., A NEVADA CORPORATION, DBA COMPUTER SUPPORT SERVICES, AKA CHECK RESTITUTION/PROSECUTION PROGRAM, JOHN Q. LAWSON, AN INDIVIDUAL, MARY A. CHASE, AN INDIVIDUAL, AND DOES 1 THROUGH 20, INCLUSIVE, DEFENDANTS.



MEMORANDUM AND ORDER RE: MOTION FOR SUMMARY JUDGMENT WITH RESPECT TO DAMAGES

Plaintiffs Kristy Schwarm, Patricia Foronda, and Josann Ancelet filed this class action lawsuit against defendants Henry Craighead, District Attorney Technical Services, Ltd. (DATS), John Q. Lawson, and Mary A. Chase based on defendants' collection efforts. On May 5, 2008, the court granted plaintiffs' motion for summary judgment with respect to defendant Henry Craighead's liability under the Fair Debt Collection Practices Act (FDCPA), 15 U.S.C. §§ 1692-1692p. Schwarm v. Craighead, 552 F. Supp. 2d 1056, 1087 (E.D. Cal. 2008). Plaintiffs now move for summary judgment with respect to damages resulting from Craighead's FDCPA violations.

I. Factual and Procedural Background

To avoid repetition and because the factual background remains the same as in its May 5, 2008 Order, the court will limit its discussion to the factual and procedural events that are relevant to the pending motion. See id. at 1063-68 (providing a detailed factual and procedural history of this case).

Craighead is the founder and chief executive officer of DATS, a company that contracted with twenty-five California district attorneys' offices to administer debt collection and diversion programs pursuant to California's Bad Check Diversion Act (BCDA), Cal. Penal Code §§ 1001.60-1001.67. Based on Craighead's role in DATS' operations and the collection letters and procedures utilized, the court entered summary judgment against Craighead for violations of subsections 1692e(2)-(5), (9)-(11), (14), 1692f(1), and 1692g(a) of the FDCPA. Schwarm, 552 F. Supp. 2d at 1087. In the same Order, the court denied plaintiffs' motion for summary judgment with respect to damages and plaintiffs' federal and state procedural due process claims. Id.; see also id. at 1082 (denying plaintiffs' motion for summary judgment with respect to damages due to plaintiffs' failure to submit sufficient evidence). The court also denied Craighead's cross-motion for summary judgment with respect to his personal liability under the FDCPA. Id. at 1087.

The class members in this case include "[a]ll persons who wrote checks in California to whom DATS mailed collection demands concerning dishonored checks, since June 29, 2003" to March 4, 2006. Schwarm v. Craighead, 233 F.R.D. 655, 664 (E.D. Cal. 2006). "The FDCPA class," which the court certified as Subclass 1, is defined as "all members of the umbrella class, from whom DATS attempted to collect, or collected money for checks written for personal, family, or household purposes, since June 29, 2004" to March 4, 2006. Id. at 664-65.*fn1 On May 10, 2006, the court approved plaintiffs' form of class notice, which allowed potential class members to opt-out of the class or remain in the class "[b]y doing nothing." (May 10, 2006 Order Ex. 1 at 2.) When the deadline to withdraw from the class expired on August 7, 2006, "36,407 class members [had] not opted out." (Ables Decl. Oct. 14, 2006 ¶ 3.)

In August 2006, DATS filed Chapter 7 bankruptcy and the proceedings were automatically stayed pursuant to 11 U.S.C. § 362(a). See In re Tucson Estates, Inc., 912 F.2d 1162, 1166 (9th Cir. 1990) ("A bankruptcy filing imposes an automatic stay of all litigation against the debtor.") (citing § 362(a)). Although this court lifted the stay as to Craighead on September 21, 2006, the action against DATS and the remaining defendants remains stayed, thus this Order is neither the law of the case for nor has a preclusive effect against those defendants.

Plaintiffs now move for summary judgment against Craighead with respect to damages pursuant to the FDCPA. Specifically, plaintiffs seek 1) actual damages for the class in the amount of $771,061.03; 2) actual damages in the amount of $85.00 each for named plaintiffs Foronda and Ancelet; 3) statutory damages for the three named plaintiffs in the amount of $1,000.00 each; and 4) prejudgment interest in the amount of $50,854.73.*fn2

II. Discussion

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."

Fed. R. Civ. P. 56(c). A material fact is one that could affect the outcome of the suit, and a genuine issue is one that could permit a reasonable jury to enter a verdict in the non-moving party's favor. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). The party moving for summary judgment bears the initial burden of establishing the absence of a genuine issue of material fact and can satisfy this burden by presenting evidence that negates an essential element of the non-moving party's case.

Celotex Corp. v. Catrett, 477 U.S. 317, 322-23 (1986). Alternatively, the movant can demonstrate that the non-moving party cannot provide evidence to support an essential element upon which it will bear the burden of proof at trial. Id.

Once the moving party meets its initial burden, the non-moving party "may not rely merely on allegations or denials in its own pleading," but must go beyond the pleadings and "by affidavits or as otherwise provided in [Rule 56,] set out specific facts showing a genuine issue for trial." Fed. R. Civ. P. 56(e); Celotex Corp., 477 U.S. at 324; Valandingham v. Bojorquez, 866 F.2d 1135, 1137 (9th Cir. 1989).

In its inquiry, the court must view any inferences drawn from the underlying facts in the light most favorable to the party opposing the motion. Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587 (1986). The court cannot engage in credibility determinations or weigh the evidence ...


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