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Young v. Kelly & Bramwell, P.C.

United States District Court, D. Utah

June 18, 2019

JUDY YOUNG and ROBERT YOUNG, Plaintiffs,
v.
KELLY & BRAMWELL, P.C., JARED BRAMWELL, and NATIONAL WOOD PRODUCTS, INC., Defendants.

          MEMORANDUM DECISION AND ORDER ON PENDING MOTIONS

          Ted Stewart United States District Judge

         District Judge Ted Stewart This matter is before the Court on a Motion for Partial Summary Judgment filed by Plaintiffs Judy and Robert Young, a Motion for Summary Judgment filed by Defendants Kelly & Bramwell, P.C. and Jared Bramwell (collectively, “Defendants”), [1] and a Motion to Vacate Deadlines and Vacate Scheduling Order. For the reasons discussed below, the Court will grant Defendants' Motion as to Plaintiffs' claims under the Fair Debt Collection Practices Act (“FDCPA”), decline to exercise jurisdiction over Plaintiffs' state-law claims, and dismiss those claims without prejudice.

         I. BACKGROUND

         Plaintiffs bring this action against Defendants as a result of Defendants' effort to collect a debt on behalf of National Wood Products, Inc. Plaintiffs assert claims under the FDCPA and the Utah Consumer Sales Practices Act.

         II. SUMMARY JUDGMENT STANDARD

         Summary judgment is appropriate “if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.”[2] In considering whether a genuine dispute of material fact exists, the Court determines whether a reasonable jury could return a verdict for the nonmoving party in the face of all the evidence presented.[3] The Court is required to construe all facts and reasonable inferences in the light most favorable to the nonmoving party.[4]

         III. DISCUSSION

         A. FDCPA

         The FDCPA prohibits certain practices by debt collectors. The Act defines debt collectors, in pertinent part, as “any person who uses any instrumentality of interstate commerce or the mails in any business the principal purpose of which is the collection of any debts, or who regularly collects or attempts to collect, directly or indirectly, debts owed or due or asserted to be owed or due another.”[5] The term “debt” is defined as “any obligation or alleged obligation of a consumer to pay money arising out of a transaction in which the money, property, insurance, or services which are the subject of the transaction are primarily for personal, family, or household purposes, whether or not such obligation has been reduced to judgment.”[6] The Act, by its plain language, distinguishes between consumer debts-debts that are primarily for personal, family, or household purposes-and commercial or business debts.[7]

         “The FDCPA establishes two alternative predicates for ‘debt collector status': 1) engaging in debt collection as the ‘principal purpose' of the entity's business; or 2) engaging in debt collection ‘regularly.'”[8] Plaintiffs bear the burden of proving Defendants' debt collector status.[9]

         There is no evidence that the principal purpose of Defendants' business is debt collection. Rather, the principal purpose of Defendants' business is the practice of law, including representing clients in various civil matters.[10] Thus, the Court must consider whether Defendants regularly engage in debt collection.

         The Tenth Circuit has identified a non-exhaustive list of factors a court “must consider in determining whether an attorney or law firm ‘regularly' engages in debt collection such as to qualify as a ‘debt collector' within the meaning of the FDCPA.”[11] These include:

(1) the absolute number of debt collection communications issued, and/or collection-related litigation matters pursued, over the relevant period(s), (2) the frequency of such communications and/or litigation activity, including whether any patterns of such activity are discernible, (3) whether the entity has personnel specifically assigned to work on debt collection activity, (4) whether the entity has systems or contractors in place to facilitate such activity, and (5) whether the activity is undertaken in connection with ongoing client relationships with entities that have retained the lawyer or firm to assist in the collection of outstanding consumer debt obligations.
Facts relating to the role debt collection work plays in the practice as a whole should also be considered to the extent they bear on the question of regularity of debt collection activity (debt collection constituting 1% of the overall work or revenues of a very large entity may, for instance, suggest regularity, whereas such work constituting 1% of an individual lawyer's practice might not). Whether the law practice seeks debt collection business by marketing itself as having debt collection expertise may also be an indicator of the regularity of collection as a part of the practice.[12]

         Considering these factors, the Court concludes that Defendants are not debt collectors under the FDCPA.

         Defendants have identified a total of five debt collection cases during a five-year period from February 2013 to February 2018.[13] This represents 0.56% of the total number of cases Defendants handled during those years[14] and the amount earned from those cases equaled 0.22% of Defendants' total gross revenue for this time period.[15]

         Defendants also state that they have no personnel specifically assigned to work on debt collection activity and have no systems or contractors in place to facilitate such activity.[16]Further, Defendants state that they do not have clients whose principal purpose involves debt collection activities that are governed by the FDCPA and do not have any clients who regularly engage in collection activities governed by the FDCPA.[17] Further, the action taken here was the first and, to date, only matter Defendants handled for National Wood Products, Inc.[18]

         This evidence fails to demonstrate that Defendants engage in debt collection with any regularity. Rather, Defendants have handled a handful of debt collection cases over the past five years, which made up half of one percent of the total cases and less than a quarter of one percent of gross revenue during this time.[19] “Such debt collection activity is minimal.”[20] Further, Defendants do “not have any system or personnel to assist ...


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