Harvey Duranseau v. Portfolio Recovery Associates ( 2016 )

United States Court of Appeals
For the Eighth Circuit
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No. 15-1551
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Harvey Duranseau
lllllllllllllllllllll Plaintiff - Appellant
v.
Portfolio Recovery Associates, LLC
lllllllllllllllllllll Defendant - Appellee
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No. 15-1604
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Harvey Duranseau
lllllllllllllllllllll Plaintiff - Appellee
v.
Portfolio Recovery Associates, LLC
lllllllllllllllllllll Defendant - Appellant
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Appeals from United States District Court
for the District of Minnesota - St. Paul
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Submitted: November 19, 2015
Filed: April 4, 2016
[Unpublished]
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Before SMITH, BYE, and BENTON, Circuit Judges.
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SMITH, Circuit Judge.
Harvey Duranseau sued Portfolio Recovery Associates, LLC (PRA), alleging
violations of the Fair Debt Collection Practices Act (FDCPA), 15 U.S.C. §§ 1692
et seq., and Minnesota law. The parties filed cross-motions for summary judgment on,
among others, Duranseau's claim under 15 U.S.C. § 1692g of the FDCPA. PRA also
moved for sanctions against Duranseau and his counsel. The district court1 denied the
motions, and Duranseau's remaining claims proceeded to trial. After presenting his
case-in-chief, Duranseau moved for judgment as a matter of law on his claim under
15 U.S.C. § 1692d(5) but not on the § 1692g claim. The court denied the motion. The
jury returned a verdict for PRA on all of Duranseau's claims. In this consolidated
appeal, Duranseau appeals the district court's denial of summary judgment on his
§ 1692g claim, and PRA appeals the district court's denial of its motion for sanctions.
We affirm.
I. Background
Duranseau filed suit against PRA, asserting that it had violated the FDCPA and
Minnesota law. Duranseau alleged that during a phone call at 9:23 a.m. on December
28, 2012, PRA "called [him] a 'N****r' and told [him] to 'Suck our d***s.'" (Bold
omitted.) He also alleged that PRA called him from October 2012 to February 2013
to collect a debt from "Thomas [Duranseau]." PRA answered the complaint and
1
The Honorable Patrick J. Schiltz, United States District Judge for the District
of Minnesota.
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counterclaimed under 15 U.S.C. § 1692k(a)(3) of the FDCPA, alleging that
Duranseau brought his suit in bad faith and for the purpose of harassment.
Duranseau moved for judgment on the pleadings of PRA's counterclaim, and
PRA filed a cross-motion for judgment on the pleadings on all of Duranseau's claims
and PRA's counterclaim. The court dismissed without prejudice PRA's counterclaim,
noting that it was "entirely an academic dismissal" and that PRA would "have every
right to recover [its] fees if, in fact, [it] can later prove the factual predicate."
Additionally, it dismissed all of Duranseau's claims except for (1) a claim that PRA
violated § 1692d and 1692d(5) by repeatedly and continuously calling with the intent
to annoy, abuse, or harass; (2) a claim that PRA violated § 1692d and 1692d(2) and
intentionally inflicted emotional distress by using obscene or profane language during
a phone call on or about December 28, 2012; and (3) a claim that PRA violated
§ 1692g(a) by failing to timely send a validation notice after its first communication
with Duranseau.
Following discovery, PRA moved for summary judgment on all of Duranseau's
remaining claims and moved for sanctions against him and his counsel. Duranseau
filed a cross-motion for summary judgment on his remaining claims. The court denied
both motions. With regard to the § 1692g claim, the court found that the issue was
"whether PRA knew or reasonably should have known that the 'consumer' to whom
it was communicating was Harvey Duranseau, not Thomas Duranseau." The court
explained that "[g]iven the confusion in the record—including confusion about when
PRA initially contacted Harvey Duranseau—the jury will have to determine whether
(and when) PRA knew or reasonably should have known that the 'consumer' with
whom it was communicating was not Thomas Duranseau, but Harvey Duranseau."
Duranseau requested permission to move for reconsideration, which the court denied.
The court also denied with prejudice PRA's motion for sanctions against Duranseau's
counsel and denied without prejudice the motion for sanctions against Duranseau.
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Duranseau's claims under §§ 1692d(2), 1692d(5), and 1692g went to trial.2
After Duranseau presented his case-in-chief, PRA moved under Federal Rule of Civil
Procedure 50 for judgment as a matter of law on Duranseau's § 1692g claim. In
response, Duranseau argued against PRA's Rule 50 motion "[a]nd at the same time
. . . ma[d]e [his] own motion for a directed verdict on the 1692d(5) claim." (Emphasis
added.) Duranseau did not move for a directed verdict on his § 1692g claim. The
district court denied the motions. The jury ultimately returned a verdict in favor of
PRA on all of Duranseau's claims.
II. Discussion
On appeal, Duranseau argues that the district court erred in denying his motion
for summary judgment on his § 1692g claim, and PRA argues that the district court
abused its discretion in denying its motion for sanctions against Duranseau and his
counsel.
A. Section 1692g
Duranseau argues that the district court erred in denying his motion for
summary judgment on his § 1692g claim because it erroneously applied a negligence
standard to § 1692g, which he contends is a strict-liability statute. According to
Duranseau, because PRA failed to send him a validation notice under § 1692g and
waived the bona-fide error defense, he is entitled to judgment as a matter of law on
his § 1692g claim.
Duranseau's appeal of the district court's denial of his motion for summary
judgment on his § 1692g claim is not reviewable. "Even a cursory review of
precedent in this Circuit reveals that we do not review a denial of a
summary-judgment motion after a full trial on the merits." Eaddy v. Yancey, 317 F.3d
2
Duranseau dismissed his emotional-distress claim at the final pretrial
conference.
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914, 916 (8th Cir. 2003) (citing Bakker v. McKinnon, 152 F.3d 1007, 1010 (8th Cir.
1998) ("[T]he denial of summary judgment is interlocutory in nature and not
appealable after a full trial on the merits; judgment after a full trial on the merits
supersedes earlier summary judgment proceedings."); Cowan v. Strafford R-VI Sch.
Dist., 140 F.3d 1153, 1157 (8th Cir. 1998) (same); Metro. Life Ins. Co. v. Golden
Triangle, 121 F.3d 351, 354 (8th Cir. 1997) ("[W]e are unable to review the denied
summary judgment motion because [plaintiff] had a full and fair opportunity to
litigate its position before a jury."); Johnson Int'l Co. v. Jackson Nat'l Life Ins. Co.,
19 F.3d 431, 434 (8th Cir. 1994) ("A ruling by a district court denying summary
judgment is interlocutory in nature and not appealable after a full trial on the
merits."); Bottineau Farmers Elevator v. Woodward-Clyde Consultants, 963 F.2d
1064, 1068 n.5 (8th Cir. 1992) ("Denial of summary judgment is not properly
reviewable on appeal from a final judgment entered after a full trial on the merits.")).
Furthermore, we have rejected the argument that "a denial [of summary
judgment] based on the interpretation of a purely legal question is appealable." Lopez
v. Tyson Foods, Inc., 690 F.3d 869, 875 (8th Cir. 2012). "A denial of summary
judgment is not appealable after a final judgment regardless of whether the issue is
factual or 'purely legal.'" Id. (footnote omitted). "As a general rule, a litigant must
renew summary judgment arguments in Rule 50 motions for judgment as a matter of
law at the close of the plaintiff's case-in-chief and again after the jury's verdict." Keup
v. Hopkins, 596 F.3d 899, 904 (8th Cir. 2010) (citing Eaddy, 317 F.3d at 916); see
also Duban v. Waverly Sales Co., 760 F.3d 832, 835 (8th Cir. 2014) ("Litigants must
renew summary judgment arguments in Rule 50 motions to preserve their arguments
for appeal." (citing Eaddy, 317 F.3d at 916)).
In the present case, Duranseau failed to renew his summary-judgment argument
on his § 1692g claim in a Rule 50 motion after his case-in-chief and after the verdict;
instead, he moved for judgment as a matter of law on his § 1692d(5) claim but not the
§ 1692g claim. As a result, his claim is not reviewable.
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B. Sanctions
On October 20, 2014, PRA moved for sanctions against Duranseau and his
counsel under Federal Rule of Civil Procedure 11, 28 U.S.C. § 1927, and the court's
inherent authority. In its brief in support of the motion, PRA argued that Duranseau
and his counsel violated Rule 11 by filing and continuing to litigate a frivolous
lawsuit lacking any evidentiary basis. According to PRA:
Plaintiff certified that the "factual contentions have evidentiary support"
or after further investigation or discovery "will likely have evidentiary
support." Fed. R. Civ. P. 11(b)(3). Yet, as evidenced by the call
recordings, Call History, Account Notes, and Call Logs, Plaintiff's
allegations are demonstrably false. (See, e.g., Privette Decl. ¶ 37g
(regarding content of December 28, 2012 call.)
***
Had Plaintiff's counsel conducted a reasonable investigation
before—or even during the litigation once presented with evidence
produced by PRA contradicting his claims—Plaintiff's counsel would
have discovered that it was Plaintiff, not PRA, who made inappropriate
and harassing comments. (See Privette Decl. ¶¶ 36–37; see supra at 14–
20 for a discussion on Plaintiff's allegations regarding the December 28,
2012 call.) As demonstrated by the recordings, Plaintiff's counsel had no
factual basis, nor could he have any factual basis, supporting the
allegations he has brought against PRA. Plaintiff's counsel's blind
reliance on his client's allegations does not shield him from liability.
PRA also argued that the district court should sanction Duranseau and his
counsel under § 1927 for unreasonably and vexatiously multiplying the proceedings.
PRA argued:
Plaintiff's counsel has pressed forward with this suit even though PRA
has demonstrated time and again that Plaintiff's claims are meritless.
(See[,] e.g., supra at 2–12) (explaining that (1) Plaintiff continued this
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action even after PRA produced all recordings showing that PRA never
used obscene or profane language; (2) Plaintiff refused to dismiss his
claims after PRA produced the Privette Declaration along with all of
PRA's Account Notes, automated Call History, and Call Logs; (3)
Plaintiff raised new telephone numbers twice after PRA provided all
evidence showing that Plaintiff's claims were meritless; and (4) Plaintiff
brought multiple frivolous motions including a motion to compel
discovery that Magistrate Judge Brisbois emphasized was not relevant
to Plaintiff's remaining claims). Even after PRA gave Plaintiff another
opportunity to withdraw his claims against PRA, in the form of a Safe
Harbor letter, Plaintiff again refused. (Robbins Decl., ¶ 2.)
Finally, PRA asked the court to exercise its inherent authority to sanction
Duranseau and counsel.
The district court denied with prejudice PRA's motion for sanctions against
Duranseau's counsel and denied without prejudice PRA's motion for sanctions against
Duranseau personally, advising that the motion "may be renewed after trial."
After trial, PRA moved for attorneys' fees and costs in the amount of
$261,945.00 based upon Federal Rule of Civil Procedure 54, 15 U.S.C. § 1692k,
28 U.S.C. § 1927, and the inherent powers of the court. In that motion, PRA made
clear that it was not "seeking relief for the conduct at issue in its Motion for Sanctions
involved in PRA's cross-appeal to the Eighth Circuit, nor is PRA attempting to
re-litigate that motion here." Instead, PRA sought "costs, fees, and expenses incurred
after PRA's Motion for Summary Judgment and Sanctions dated October 20, 2014,"
arguing that Duranseau's "pattern of vexatious behavior" continued after that date.
On June 30, 2015, the district court denied PRA's motion for costs and
attorneys' fees, concluding that it could not "find that Duranseau's entire lawsuit was
brought in bad faith. To the contrary, several of Duranseau's claims survived motions
for judgment on the pleadings and for summary judgment, and the surviving claims
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were supported by the testimony of multiple witnesses (in addition to Duranseau)."
The court also expressed its belief that "even after the jury’s verdict, . . . Duranseau's
§ 1692k claim presents close and difficult legal issues." Because the court was unable
to find that Duranseau's entire lawsuit was brought in bad faith and for the purpose
of harassment, it denied PRA's motion for an award of attorneys' fees under
§ 1692k(a)(3).
The court also addressed Duranseau's and PRA's assertions "that the other's
conduct warrants sanctions of fees and costs under various other authorities—namely
28 U.S.C. § 1927, Fed. R. Civ. P. 11, and the inherent power of the Court." The court
found that the "purported misconduct" that each party cited did not warrant sanctions.
The court explained, "To be sure, this lawsuit has been extremely hard fought, and
both sides could have acted to make this litigation more efficient and civil. But, in the
Court’s opinion, neither side has committed sanctionable misconduct."
On appeal, PRA argues that the district court erred in denying its October 20,
2014 motion for sanctions. We review for an abuse of discretion a district court's
denial of sanctions pursuant to Rule 11, 28 U.S.C. § 1927, and the court's inherent
authority. See, e.g., Clark v. United Parcel Serv., Inc., 460 F.3d 1004, 1008 (8th Cir.
2006) ("We review the district court's determinations concerning Rule 11 under the
abuse-of-discretion standard." (citation omitted)); Gibson v. Solideal USA, Inc.,
489 F. App'x 24, 28 (6th Cir. 2012) ("A district court's denial of a motion for
sanctions and attorney's fees—whether made pursuant to Rule 11, Rule 54 (for costs),
28 U.S.C. § 1927, or the court's inherent powers—is reviewed for an abuse of
discretion." (citations omitted)).
Rule 11 provides that "the court may impose an appropriate sanction on any
attorney, law firm, or party that violated the rule or is responsible for the violation."
Fed. R. Civ. P. 11(c)(1).
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Rule 11 sanctions may be warranted when a pleading is "presented for
any improper purpose, such as to harass or to cause unnecessary delay
or needless increase in the cost of litigation," Fed. R. Civ. P. 11(b)(1),
contains allegations or factual contentions that lack evidentiary support,
Fed. R. Civ. P. 11(b)(3), or contains denials of factual contentions that
are not warranted on the evidence. Fed. R. Civ. P. 11(b)(4).
Clark, 460 F.3d at 1008.
Additionally, a court may hold counsel liable for fees and costs for "so
multipl[ying] the proceedings . . . unreasonably and vexatiously." 28 U.S.C. § 1927.
"[T]he statute permits sanctions when an attorney's conduct, viewed objectively,
manifests either intentional or reckless disregard of the attorney's duties to the court."
Clark, 460 F.3d at 1011 (quotations and citations omitted).
Finally, a district court has the inherent authority "to fashion an appropriate
sanction for conduct which abuses the judicial process." Chambers v. NASCO, Inc.,
501 U.S. 32, 44–45 (1991)."Our interpretation of Supreme Court authority concerning
a court's inherent power to sanction counsels that a finding of bad faith is not always
necessary to the court's exercise of its inherent power to impose sanctions." Stevenson
v. Union Pac. R.R. Co., 354 F.3d 739, 745 (8th Cir. 2004) (citations omitted).
We hold that the district court did not abuse its discretion in denying PRA's
October 20, 2014 motion for sanctions. While not at issue in this appeal, the district
court's June 30, 2015 order is informative as to the district court's reasons for its prior
denial of the motion for sanctions under all of the aforementioned standards. As the
court noted in that order, "several of Duranseau's claims survived motions for
judgment on the pleadings and for summary judgment." Moreover, the district court
noted that "both sides could have acted to make this litigation more efficient and
civil" but concluded that neither side's conduct rose to the level of "sanctionable
misconduct." "We give deference to [the] district court's decision [whether] to impose
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sanctions because it is in the best position to 'evaluate the circumstances surrounding
an alleged violation and render an informed judgment.'" Mendez-Aponte v. Bonilla,
645 F.3d 60, 68 (1st Cir. 2011) (quoting McLane, Graf, Raulerson & Middleton, P.A.
v. Rechberger, 280 F.3d 26, 44 (1st Cir. 2002)); see also Blue v. U.S. Dep't of Army,
914 F.2d 525, 538 (4th Cir. 1990) (stating that "[a] district court's decision to impose
sanctions is entitled to substantial deference" because a district court "is in the best
position to review the factual circumstances and render an informed judgment as [it]
is intimately involved with the case, the litigants, and the attorneys on a daily basis"
(alteration in original) (quotation and citations omitted)).
III. Conclusion
Accordingly, we affirm the judgment of the district court.
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