Christopher Brown and Carrie Brown v. Enterprise Recovery Systems, Inc.

COURT OF APPEALS
SECOND DISTRICT OF TEXAS
FORT WORTH
NO. 02-11-00436-CV
CHRISTOPHER BROWN AND APPELLANTS
CARRIE BROWN
V.
ENTERPRISE RECOVERY APPELLEE
SYSTEMS, INC.
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FROM THE 48TH DISTRICT COURT OF TARRANT COUNTY
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MEMORANDUM OPINION 1
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This case arises out of actions taken by Appellee Enterprise Recovery
Systems, Inc. (ERS), a debt collector, to recover the student loan debt of
Appellant Christopher Brown. ERS made repeated calls to a cell phone in the
possession of Christopher’s wife, Appellant Carrie Brown. Based on those calls,
the Browns sued ERS for violations of the federal Fair Debt Collection Practices
1
See Tex. R. App. P. 47.4.
Act (FDCPA), 2 the federal Telephone Consumer Protection Act (TCPA), 3 the
Texas Fair Debt Collection Practices Act, 4 and the Texas Deceptive Trade
Practices Act (DTPA). 5 A visiting judge denied the Browns’ motion for directed
verdict and granted ERS’s motion for directed verdict.
On appeal, the Browns argue in four issues that the visiting judge erred by
failing to recuse himself after they objected to his appointment, by granting
directed verdict for ERS when the presiding judge had denied ERS’s previously
filed summary judgment motion and in light of the evidence supporting the
Browns’ claims, and by denying their motion for directed verdict on their TCPA
claim. Because we hold that the Browns did not timely object to the visiting
judge’s assignment and that the trial court erred by granting a directed verdict on
some but not all of the Browns’ claims, we affirm in part and reverse in part.
Background
The Browns sued ERS alleging that ERS had used an automatic telephone
dialing system to make numerous telephone calls to the Browns’ cell phone in an
attempt to collect a debt. They further alleged that in one phone call, an ERS
employee threatened to place a tax lien on Christopher and that the ERS
2
15 U.S.C.A. §§ 1692–1692k (West 2009 & Supp. 2013).
3
47 U.S.C.A. § 227 (West 2001 & Supp. 2013).
4
Tex. Fin. Code Ann. §§ 392.001–392.404 (West 2006).
5
Tex. Bus. & Com. Code § 17.41–.63 (West 2011 & Supp. 2012).
2
employee who called them did not disclose ERS’s identity, even when requested
to do so. ERS filed a motion for summary judgment, which the trial court denied.
Two weeks before trial, on July 12, 2011, a visiting judge was assigned to
hear the case. No notice of the visiting judge’s appointment was sent to the
parties. On July 25, 2011, the day of trial, the Browns’ attorney learned of the
appointment upon entering the courtroom. He did not initially object to the
appointment because he was “unaware of the procedural requirements” for doing
so. He contacted his office and, while waiting to hear back, participated in a
hearing on some motions. After he heard back from his office, he objected both
orally and in writing to the visiting judge’s appointment. The visiting judge
overruled the objection, and the case proceeded to trial.
At the close of evidence, the Browns filed a motion for directed verdict on
their TCPA claim. ERS filed a motion for directed verdict on all of the Browns’
claims. The visiting judge denied the Browns’ motion, granted ERS’s motion,
and signed a judgment ordering that the Browns take nothing on their claims and
taxing costs against the Browns.
The Browns tendered payment of the court costs to ERS’s attorney and
requested that ERS file a notice of satisfaction of judgment, which ERS did. The
Browns subsequently filed a motion for new trial, which was denied by operation
of law. The Browns then filed this appeal.
3
Analysis
Mootness of the Appeal
We first address ERS’s contention that the Browns’ appeal is moot
because of the voluntary payment rule. On September 6, 2011, ERS filed a
satisfaction of judgment stating that the Browns had paid the court costs
assessed against them and were released from any further obligation to pay any
money judgment resulting from the case. ERS asserts that the Browns paid the
court costs without showing their express intent to appeal, and, thus, under the
voluntary payment rule, the appeal is moot. In response, the Browns argue that
“in a letter dated August 29, 2011, the Browns explicitly communicated to ERS
that they were tendering payment for the exclusive purpose of halting the accrual
of post-judgment interest and that they would continue to pursue appellate
review.”
Under Texas law, voluntary payment of a judgment moots an appeal of
that judgment only if the payment is made without an expressed intent to
continue the appeal. 6 In response to ERS’s argument in its brief, the Browns
filed a reply brief in this court. This reply brief includes an affidavit made by the
Browns’ attorney and a copy of a letter sent to ERS’s counsel before ERS filed
the satisfaction of judgment, both of which we may consider to ascertain factual
6
BMG Direct Mktg., Inc. v. Peake, 178 S.W.3d 763, 770 (Tex. 2005).
4
matters necessary to the proper exercise of this court’s jurisdiction. 7 The letter
states that the Browns “intend to and will appeal the judgment” against them, that
“[t]his letter charges you with notice that excepted from any payment tendered in
satisfaction of [the judgment] is [the Browns’] right to appeal,” and that “we
hereby explicitly reserve [the Browns’] right to appeal.”
In oral argument, ERS asserted that because the letter was sent to ERS
after payment had already been tendered to ERS (but before the satisfaction of
judgment was filed), the expression of intent to appeal came too late. We
disagree. The basis of the voluntary payment rule is “to prevent a party who has
freely decided to pay a judgment from changing his mind and seeking the court’s
aid in recovering the payment.” 8 The rule keeps a party from paying out money
and leading the other party to act as though the matter were closed, “and then be
in the position to change his mind and invoke the aid of the courts to get it back.” 9
ERS knew before it filed its satisfaction of judgment that the Browns intended to
7
See Tex. Gov’t Code Ann. § 22.220 (West Supp. 2012) (“Each court of
appeals may, on affidavit or otherwise, as the court may determine, ascertain the
matters of fact that are necessary to the proper exercise of its jurisdiction.”); Miga
v. Jensen (Miga I), 96 S.W.3d 207, 212 (Tex. 2002).
8
Highland Church of Christ v. Powell, 640 S.W.2d 235, 236 (Tex. 1982)
(stating that “[a] party should not be allowed to mislead his opponent into
believing that the controversy is over and then contest the payment and seek
recovery”).
9
Miga v. Jensen (Miga II), 299 S.W.3d 98, 103 (Tex. 2009).
5
appeal. 10 The facts here do not show that the Browns misled ERS into acting as
though the matter were closed. The voluntary payment rule is not as harsh as
ERS portrays it. 11 We hold that the Browns’ tendering of payment to ERS did not
moot the appeal.
Recusal of the Visiting Judge
In the Browns’ first issue, they argue that the visiting judge erred by failing
to recuse himself after the Browns objected to his assignment under government
code section 74.053. 12 That section provides that when a judge is assigned to a
trial court under that chapter, the judge shall not hear the case if a party timely
objects to the assignment. 13 A party’s timely objection to a judge’s assignment is
10
See Miga I, 96 S.W.3d at 212 (“While Miga may have believed that
Jensen’s payment mooted the appeal, he could not have had any reasonable
doubt that Jensen believed it did not, or that Jensen intended to pursue the
appeal if legally allowed to do so.”).
11
See Miga II, 299 S.W.3d at 103–04 (noting that the voluntary payment
rule was at one time widely used but had diminished in scope and that it had only
been applied by that court twice in the previous forty years); Burns v. Seascape
Owners Ass’n, Inc., No. 01-11-00752-CV, 2012 WL 3776513, at *11 (Tex. App.—
Houston [1st Dist.] Aug. 30, 2012, no pet.) (mem. op.) (observing that payment of
a judgment made involuntarily under duress will not moot an appeal of the
judgment).
12
Tex. Gov’t Code Ann. § 74.053(a), (b) (West 2013).
13
Id.
6
mandatory, and an untimely objection constitutes a waiver of the objection. 14
Notice of assignment is not mandatory under the government code. 15
The government code at one time provided that for an objection to an
assigned judge to be timely, it had to be made before the first hearing or trial,
including pretrial hearings, over which the assigned judge was to preside. 16
Thus, a party could object to the visiting judge’s appointment on the date of trial,
so long as the objection was made before the visiting judge presided over any
part of the trial. 17
The statute has since been amended, and it now provides that the
objection must be made by the earlier of (1) the seventh day after the date on
14
Sweetwater Austin Props., L.L.C. v. SOS Alliance, Inc., 299 S.W.3d 879,
890 (Tex. App.—Austin 2009, pet. denied); Turk v. First Nat’l Bank of W. Univ.
Place, 802 S.W.2d 264, 265 (Tex. App.—Houston [1st Dist.] 1990, writ denied);
see also Horn v. Gibson, 352 S.W.3d 511, 514 (Tex. App.—Fort Worth 2011, pet.
denied) (disqualification of a judge on grounds other than express constitutional
grounds may be waived).
15
Tex. Gov’t Code Ann. § 74.053(a)(2) (providing that the presiding judge
shall give notice of the assignment if it is reasonable and practicable and if time
permits); In re Canales, 52 S.W.3d 698, 702 (Tex. 2001) (orig. proceeding)
(noting that the statute requires notice of assignment “if practicable”).
16
In re Hourani, 20 S.W.3d 819, 822 (Tex. App.—Houston [14th Dist.]
2000, orig. proceeding) (setting out the prior version of the statute).
17
In re Canales, 52 S.W.3d at 702; U. Lawrence Bozé & Assocs., P.C. v.
Harris Cnty. Appraisal Dist., 368 S.W.3d 17, 31 (Tex. App.—Houston [1st Dist.]
2011, no pet.) (“Although Bozé asserts that he did not receive notice of the
assignment of a visiting judge until the day of the hearing . . . , it is undisputed
that he did not object to the assignment at any time before, during, or after the
hearing.”).
7
which the party receives actual notice of the assignment or (2) before the date of
the first hearing. 18 The statute authorizes the presiding judge to extend the time
to file an objection upon a party’s written motion that demonstrates good cause. 19
The Browns argue that they objected at the first opportunity to do so, and their
inability to file their objection any sooner was the result of the trial court’s failure
to provide notice of the assignment. That is, they did not have actual notice until
they arrived at the court on the date of trial, and they could not object before the
date of trial as required by the statute because they did not know of the
assignment until that time. They further argue that their written motion objecting
to the visiting judge’s assignment demonstrated good cause.
Nothing in the language of the statute’s amendment persuades us that the
legislature intended to change the law to allow an objection to a judge’s
assignment after the assigned judge has presided over proceedings in the
case. 20 Thus, even if the Browns’ written motion demonstrated good cause for
not objecting before the date of trial, they waived their objection by not raising it
before the assigned judge presided over pretrial matters.
18
Tex. Gov’t Code Ann. § 74.053(c).
19
Id.
20
See, e.g., In re H.L.F., No. 12-11-00243-CV, 2012 WL 5993726, at *3
(Tex. App.—Tyler Nov. 30, 2012, pet. denied) (mem. op.) (applying the same rule
in a case to which the amended statute applied); Bozé, 368 S.W.3d at 31 (same).
8
We sympathize with the difficult position in which the Browns found
themselves if, as they assert, they did not learn of the assignment until the date
of trial. But the rule does not provide an exception for an attorney ignorant of the
rules of waiver, and the Browns’ failure to object before any pretrial proceedings
constituted a waiver of their objection.
The Browns counter that the visiting judge did not make any rulings on the
merits of the case prior to their objection. But waiver of an objection to a visiting
judge does not depend on whether the judge’s rulings went to the merits of the
case. Waiver occurs when no objection is made before the assigned judge has
presided over any part of the case. 21 The assigned judge ruled on objections to
trial witness subpoenas, a motion for continuance, and both parties’ motions in
limine, all before the Browns filed their written motion. The Browns’ attorney did
orally object at some point during pretrial proceedings, and a conference was
held off the record, but it was on the day of trial. At that point, the Browns had to
file a motion in writing, and they did not do so until after the assigned judge had
ruled on pretrial matters. We overrule the Browns’ first issue.
Law of the Case Doctrine
In the Browns’ second issue, they argue that the visiting judge erred by
granting ERS’s motion for a directed verdict on all claims in light of the presiding
21
See In re Canales, 52 S.W.3d at 704 (disapproving of a court of appeals
case to the extent it could be read to suggest that a party may timely object to a
visiting judge under section 74.053 after the judge has already presided over a
hearing in the case).
9
judge’s earlier ruling denying ERS’s motion for summary judgment. They
contend that the law of the case doctrine provides that the same issue, presented
a second time in the same case, should lead to the same result—a denial of
ERS’s motion for summary judgment. The Browns are mistaken. Even if the law
of the case doctrine applied to trial court rulings, 22 a denial of a motion for
summary judgment is an interlocutory order that may be changed or modified. 23
Furthermore, the evidence presented at trial was not identical to the evidence
submitted in the summary judgment proceedings. Accordingly, the trial court was
required to independently evaluate the evidence presented at trial in reaching its
decision rather than the evidence presented in summary judgment. 24 We
overrule the Browns’ second issue.
22
See Cockrell v. Republic Mortg. Ins. Co., 817 S.W.2d 106, 115–16 (Tex.
App.—Dallas 1991, no writ) (declining to apply the law of the case doctrine when
there had been no prior appellate rulings in the case).
23
See, e.g., R.I.O. Sys., Inc. v. Union Carbide Corp., 780 S.W.2d 489, 492
(Tex. App.—Corpus Christi 1989, writ denied).
24
See, e.g., Milliken v. Skepnek, No. 01-01-00372-CV, 2003 WL 361052, at
*8 (Tex. App.—Houston [1st Dist.] Feb. 20, 2003, pet. denied) (mem. op.)
(holding that the law of the case doctrine did not prevent the trial court from
granting directed verdict when the evidence and legal theories advanced by the
parties at trial were substantially different from that presented at the time of
consideration of the appellees’ motion for summary judgment); Benser v.
Citibank (S.D.), N.A., No. 08-99-00242-CV, 2000 WL 1231386, at *4 (Tex.
App.—El Paso Aug. 31, 2000, no pet.) (mem. op., not designated for publication).
10
Directed Verdict
The Browns argue in their third issue that the trial court erred by granting
ERS’s motion for a directed verdict on all of their claims in light of the evidence
presented at trial in support of the Browns’ claims. In the Browns’ fourth issue,
they argue that the trial court erred by denying their motion for directed verdict on
their TCPA claim in light of the evidence presented at trial in support of that
claim. We consider these issues together.
A directed verdict is proper only under limited circumstances: (1) when the
evidence is insufficient to raise a material fact issue, or (2) when the evidence
conclusively establishes the right of the movant to judgment or negates the right
of the opponent. 25 In reviewing a directed verdict, we follow the standards for
assessing legal sufficiency of the evidence. 26 We review the evidence in the light
most favorable to the person suffering the adverse judgment, and we must credit
favorable evidence if reasonable jurors could and disregard contrary evidence
unless reasonable jurors could not. 27
25
See Prudential Ins. Co. of Am. v. Fin. Review Servs., Inc., 29 S.W.3d 74,
77 (Tex. 2000); Farlow v. Harris Methodist Fort Worth Hosp., 284 S.W.3d 903,
919 (Tex. App.—Fort Worth 2009, pet. denied).
26
See City of Keller v. Wilson, 168 S.W.3d 802, 823 (Tex. 2005).
27
Id. at 827; Exxon Corp. v. Emerald Oil & Gas Co., 348 S.W.3d 194, 215
(Tex. 2011).
11
TCPA Claim
We first consider the part of the Browns’ third issue challenging whether
ERS established its right to a directed verdict on the Brown’s TCPA claim. ERS
asserted numerous grounds for directed verdict, which we will address in turn.
The TCPA makes it unlawful for a person to make a call using any
automatic telephone dialing system or an artificial or prerecorded voice to any
telephone number assigned to a cellular telephone service or any service for
which the called party is charged for the call. 28 The TCPA provides an exception
for calls made for emergency purposes and for calls made “with the prior express
consent of the called party.” 29 The evidence was undisputed that ERS called a
cell phone registered in Christopher’s name, but the parties disputed whether the
TCPA applied to the calls ERS made and whether, if the TCPA did apply, ERS’s
calls were a violation of that law.
As a ground for directed verdict, ERS argued that the TCPA does not
apply to debt collection calls. The statute does not on its face contain that limit.
The Federal Communications Commission—the federal agency tasked by the
TCPA with developing regulations to implement that act’s requirements 30—has
28
47 U.S.C.A. § 227(b)(1).
29
Id.
30
Id. § 227(b)(2).
12
expressly declined to categorically exempt debt collection calls. 31 And we
observe that the case in which the United States Supreme Court held that federal
and state courts have concurrent jurisdiction over private actions under the TCPA
was a suit brought against a debt-collection agency. 32 We cannot agree that the
TCPA does not apply to debt collection calls, and, accordingly, ERS was not
entitled to a directed verdict on this ground.
As a second ground for directed verdict, ERS asserted that the Browns
had failed to plead a cause of action because they did not plead the enabling
statute that made the TCPA enforceable in Texas. ERS asserted in the trial
court and on appeal that the Texas Supreme Court has stated that “the TCPA
alone does not create an immediately enforceable right.” 33 ERS uses this
language from Chair King to assert that a plaintiff bringing a TCPA claim must
specifically plead the Texas enabling statute.
Chair King does not support ERS’s proposition. In Chair King, the Texas
Supreme Court considered whether the passage of the TCPA by the United
States Congress was in and of itself enough to make the TCPA enforceable in all
31
See In re Rules & Regulations Implementing the Tel. Consumer Prot. Act
of 1991 (2008 Rules), 23 FCC Rcd. 559, 564–65 (2008).
32
Mims v. Arrow Fin. Servs., LLC, 132 S. Ct. 740, 745 (2012).
33
See The Chair King, Inc. v. GTE Mobilnet of Houst. Inc., 184 S.W.3d
707, 716 (Tex. 2006).
13
states. 34 The court considered whether the TCPA was an “opt-in” or an “opt-out”
statutory scheme—that is, whether a TCPA claim could be brought in state court
only if a state “opted in” by passing an enabling statute making it applicable in
that state, or whether it applied to a state automatically unless that state
expressly “opted out” of having it apply in that state. 35 It was in that context that
the court used the language quoted by ERS. The court concluded that the TCPA
is an “opt-in” scheme and that by adopting section 35.47(f) of the business and
commerce code (now section 305.053), 36 Texas had opted in. 37 No language in
that opinion suggests that a plaintiff must plead both the TCPA and Texas’s
enabling statute in order to plead a claim under the TCPA. 38 The Browns were
not required to expressly point out section 305.053 in their pleadings in order to
plead a TCPA claim. Under the “fair notice” standard for pleading, ERS could
34
Id. at 714.
35
Id. at 714–18.
36
See Act of May 26, 1999, 76th Leg., R.S., ch. 635, § 2, 1999 Tex. Gen.
Laws 3203, 3203, repealed by Act of May 15, 2007, 80th Leg., R.S., ch. 885,
§ 2.47(1), 2007 Tex. Gen. Laws 1905, 2082.
37
Chair King, 184 S.W.3d at 716; see also MLC Mortg. Corp. v. Sun Am.
Mortg. Co., 2009 OK 37, 212 P.3d 1199, 1205 (observing that of the states that
have considered the issue, Texas is the only state to have adopted the “opt-in”
theory).
38
See Chair King, 184 S.W.3d at 708 (acknowledging that the legislature
amended the business and commerce code to allow parties to bring suit in state
court for TCPA violations); see also Mims, 132 S. Ct. at 751 (“TCPA liability thus
depends on violation of a federal statutory requirement or an FCC regulation . . . ,
not on a violation of any state substantive law.”).
14
ascertain from the Browns’ pleading what claim they were asserting. 39 ERS was
therefore not entitled to a directed verdict on this ground.
ERS asserted as another ground that even if the federal statute applies to
debt collection calls, the Texas version does not apply to such calls. The Texas
statute does not on its face exclude debt collectors. 40 Furthermore, we agree
with the conclusion of the Dallas Court of Appeals in First National Collection
Bureau, Inc. v. Walker 41 that while Texas may adopt more restrictive
requirements than the TCPA, it may not adopt less restrictive requirements for
claims under the TCPA. Because the federal statute applies to debt collecting, 42
we disagree with ERS’s argument that Texas does not protect Texas residents
from debt collectors who violate the TCPA. Directed verdict was not proper on
this ground.
As a fourth ground for directed verdict, ERS argued that section 302.055 of
the business and commerce code 43 exempts educational institutions and that
39
See Horizon/CMS Healthcare Corp. v. Auld, 34 S.W.3d 887, 896 (Tex.
2000) (describing the “fair notice” standard for pleading that “looks to whether the
opposing party can ascertain from the pleading the nature and basic issues of
the controversy and what testimony will be relevant”).
40
See Tex. Bus. & Com. Code Ann. § 305.053 (West Supp. 2012).
41
348 S.W.3d 329, 340 (Tex. App.—Dallas 2011, pet. denied).
42
See 2008 Rules at 565 (“We note that this prohibition applies regardless
of the content of the call, and is not limited only to calls that constitute ‘telephone
solicitations.’”).
43
Tex. Bus. & Com. Code Ann. § 302.055 (West 2009).
15
ERS was acting as an agent of the federal programs for student educations
loans. Section 302.055 exempts educational institutions from the application of
chapter 302. 44 But the Browns did not bring a claim under chapter 302, so
section 302.055 does not apply to their claims, and ERS’s argument is irrelevant.
A directed verdict could not have been properly granted to ERS on this ground.
Another ground asserted by ERS was that Carrie lacked standing because
its calls were intended for her husband and were made to his cell phone. We
disagree. The TCPA provides two types of private actions for a violation of
§ 227(b) or of the regulations prescribed under that subsection: (1) a suit to
enjoin the violation and (2) an action to recover damages of either the actual
monetary loss from the violation or $500 in damages for each violation,
whichever is greater. 45 A party may seek both the injunctive relief and damages.
The TCPA does not expressly provide that only the intended recipient may bring
an action for violation of its provisions; it states only that “a person” may bring an
action for the violation. 46
It is a violation of the TCPA for a person to make a call using any
automatic telephone dialing system to a cell phone or to any service for which the
called party is charged unless the person has consent to do so. We agree with
44
Id.
45
47 U.S.C.A. § 227(b)(3).
46
See id.
16
other courts that have determined that a person has standing even if the person
is not the “intended recipient” of the call and even if the person is not the person
who pays for the cell phone service. 47 Carrie is the primary user of the cell
47
Agne v. Papa John’s Int’l, Inc., 286 F.R.D. 559, 565 (W.D. Wash. 2012)
(holding that the plaintiff had standing to assert a violation of the TCPA for text
messages sent to her cell phone even though her ex-husband was the primary
account holder and paid the bill for the service and noting that it was her privacy
interest that the TCPA was intended to protect); Page v. Regions Bank, 917 F.
Supp. 2d 1214, 1218–19 (N.D. Ala. 2012) (discussing other cases that have
considered who has standing under the TCPA, distinguishing cases holding that
someone other than the “intended recipient” had standing, and holding that the
plaintiff had standing because even though the telephone was registered in his
fiancé’s name, the plaintiff was “the regular user and carrier of the cellular
telephone, as well as the person who needs the telephone line to receive other
calls”); Kane v. Nat’l Action Fin. Servs., Inc., No. 11-CV-11505, 2011 WL
6018403, at *1, *6–7 (E.D. Mich. Nov. 7, 2011) (holding that the plaintiff had
alleged an injury when he alleged that he had received several hundred phone
calls—calls for which he was not the intended recipient—and that the statute
grants standing to any person or entity to bring a claim); D.G. ex rel. Tang v.
William W. Siegel & Assocs., Attorneys at Law, LLC, 791 F. Supp. 2d 622, 625
(N.D. Ill. 2011) (holding that the TCPA grants a cause of action to any person for
violation of the TCPA but that, “[e]ven if the TCPA only affords a right of relief to
the ‘called party,’ . . . Plaintiff was the called party because Siegel intended to call
Plaintiff’s cellular telephone number and Plaintiff is the regular user and carrier of
the phone”); see also Nelson v. Santander Consumer USA, Inc., No. 11-CV-307-
BBC, 2013 WL 1141009, at *6 (W.D. Wis. Mar. 8, 2013) (stating that the TCPA
prohibits the use of automatic dialing to any telephone number assigned to a cell
phone regardless of who answers or receives the call and that the TCPA does
not limit the private right of action to those brought by subscribers or “called
parties”); Swope v. Credit Mgmt., LP, No. 4:12CV832 CDP, 2013 WL 607830, at
*2–3 (E.D. Mo. Feb. 19, 2013) (stating that the TCPA’s plain language grants
standing to “any person,” not just the called party; that the only reference to a
“called party” in that section of the TCPA “appears in one of the affirmative
defenses to enforcement of the statute: a call made with the prior express
consent of the called party”; and that even if the TCPA does limit standing to
“called parties,” a person is a “called party” “if the defendant intended to call the
individual’s number, and that individual was the regular user and carrier of the
phone”); D.G. v. Diversified Adjustment Serv., Inc., No. 11 C 2062, 2011 WL
5506078, at *2–3 (N.D. Ill. Oct. 18, 2011) (noting that nothing in the TCPA limits
17
phone, and it is Carrie’s privacy interest that the TCPA is designed to protect. If
ERS did not have Carrie’s consent and its calls to her were otherwise in violation
of the TCPA, then Carrie has standing to enjoin that violation, to recover
damages, or both. To hold otherwise would contravene the plain language of the
statute and would allow a person to call the cell phone belonging to someone
other than the intended recipient while leaving the phone user with no statutory
basis to stop the calls.
ERS also argued that it could only be liable for calls actually received, that
is, those calls that were answered. The TCPA does not contain such a
limitation. 48 ERS bases its argument on language in Texas’s enabling statute,
which states that “[a] person who receives a communication that violates 47
U.S.C. Section 227 . . . may bring an action in this state.” 49
The Dallas Court of Appeals addressed this argument in First National
Collection Bureau. 50 We agree with that court’s analysis of the issue and its
holding that, “assuming without deciding Texas law was intended to create a right
of action only for calls ‘received,’ such law is preempted by the TCPA” and that
the private right of action to the “called party” and that, even if it did contain that
limitation, “the language and structure of the TCPA indicate that the term ‘called
party’ refers to the actual recipient and not the intended recipient of a call”).
48
See 47 U.S.C.A. § 227(b)(3).
49
Tex. Bus. & Com. Code Ann. § 305.053 (emphasis added).
50
348 S.W.3d at 341.
18
Texas Supreme Court precedent does not preclude this holding. 51 A directed
verdict for ERS was not proper on this ground.
ERS further asserted as a ground for directed verdict that the Browns did
not prove that they were charged for receiving calls. The TCPA states that it
prohibits calls to any telephone number assigned to a cellular telephone service
or to any service for which the called party is charged for the call. On its face,
the TCPA does not appear to apply only to telephone calls made to a service for
which the called party is charged. 52
But assuming that the TCPA only prohibits calls when the called party is
charged for the call, Carrie testified that Christopher had a cell phone plan in his
name and that the cell phone called by ERS was on that plan. Testimony that
the Browns had a phone plan through a third-party provider for cellular phone
services is sufficient to show that they were charged for the calls. 53
51
Id. at 341–42.
52
See In Re Rules & Regulations Implementing the Tel. Consumer Prot.
Act of 1991 (2003 Rules), 18 FCC Rcd. 14014, 14115 (2003) (“We affirm that
under the TCPA, it is unlawful to make any call using an automatic telephone
dialing system or an artificial or prerecorded message to any wireless telephone
number.”); see also Martin v. Leading Edge Recovery Solutions, LLC, No. 11 C
5886, 2012 WL 3292838, at *4 (N.D. Ill. Aug. 10, 2012) (noting that the statute,
read as a whole, supports the conclusion that the phrase “for which the called
party is charged for the call” only modifies the phrase “any service,” and
“therefore the TCPA is violated even if the called party does not incur a charge
that is specifically linked to the automated call”).
53
2003 Rules, 18 FCC Rcd. at 14115 (“The Commission has long
recognized, and the record in this proceeding supports the same conclusion, that
19
Another ground asserted by ERS was that its calls did not violate the
automatic telephone dialing system provision because the telephone dialing
system that ERS uses does not randomly generate telephone numbers. The
statute defines an “automatic telephone dialing system” as equipment with the
capacity (1) “to store or produce telephone numbers to be called, using a random
or sequential number generator” and (2) “to dial such numbers.” 54 Under the
statute, it does not matter whether the caller actually uses the system to
randomly or sequentially generate numbers to call and then calls those
generated numbers; all that matters is that the equipment has the capacity to
generate and dial numbers. 55 Regarding its system’s capacity, ERS argued that
there was no testimony that the system had the capacity to randomly generate
calls.
ERS argued vigorously to keep the operating manual for the system from
being admitted into evidence by the Browns, and the trial court sustained its
wireless customers are charged for incoming calls whether they pay in advance
or after the minutes are used.”).
54
47 U.S.C.A. § 227(a)(1).
55
See Satterfield v. Simon & Schuster, Inc., 569 F.3d 946, 951 (9th Cir.
2009) (stating that “the statute’s clear language mandates that the focus must be
on whether the equipment has the capacity ‘to store or produce telephone
numbers to be called, using a random or sequential number generator’” and that
“a system need not actually store, produce, or call randomly or sequentially
generated telephone numbers, it need only have the capacity to do it”).
20
objection. But ERS representative Michael Kaufman 56 did testify about the
system. He testified that ERS uses a phone system that “houses borrower
accounts” to dial the numbers that its employees call. ERS “develop[s] a report
to select borrowers that [ERS] would like [its] dialing system to call,” resulting in
what it refers to as a “campaign pool.” The system dials a number from that pool.
If a person answers the call but no ERS representative is available to take the
call, then the system will either put the recipient on hold or will terminate the call.
If no person answers the call, the system reschedules the number to be dialed
later. If a person answers the call but hangs up, then the number is generally
rescheduled to be dialed again later. If all of the calls in that day’s pool are not
dialed that day, then “the pool is still there and can be used.”
The FCC has addressed the use of systems such as the one that ERS
uses, referred to as “predictive dialers.” 57 The FCC has explained that “a
predictive dialer is equipment that dials numbers and, when certain computer
software is attached, also assists telemarketers in predicting when a sales agent
will be available to take calls.” 58 The hardware has the capacity to dial those
numbers from a database of numbers. 59 The FCC stated that usually the
56
In the appellate record, the representative’s name is spelled alternately
Kaufman, Kauffman, and Kaufmann.
57
2003 Rules, 18 FCC Rcd. at 14022, 14091 (describing predictive dialers).
58
Id. at 14091.
59
Id.
21
company using the system programs the numbers to be called into the
equipment, “and the dialer calls them at a rate to ensure that when a consumer
answers the phone, a sales person is available to take the call.” 60 The FCC
noted that “[t]he principal feature of predictive dialing software is a timing
function, not number storage or generation.” 61
The FCC has expressly affirmed “that a predictive dialer constitutes an
automatic telephone dialing system and is subject to the TCPA’s restrictions on
the use of autodialers.” 62 The evidence at trial showed that ERS uses a system
that meets the FCC’s description of a predictive dialer. Accordingly, it is
irrelevant that ERS does not use the system to randomly generate telephone
numbers. ERS’s system is regulated by the TCPA because it meets the
definition for automatic telephone dialing system. Accordingly, directed verdict
could not have properly been granted on this ground. We therefore do not
address the Browns’s argument that the trial court should have admitted the
operating manual for ERS’s telephone system.
Next, ERS argued that the Browns consented to the calls. It contended
that Christopher gave his cell phone number to Sallie Mae when he signed his
promissory note, and consent to call a cell phone provided to a creditor is also
60
Id.
61
Id.
62
2008 Rules, 23 FCC Rcd.at 566; 2003 Rules, 18 FCC Rcd. at 14093.
22
consent to the creditor’s agent. But the record does not support ERS’s
argument.
The FCC has said that in some circumstances, a creditor is deemed to
have consent to call a debtor’s cell phone for debt collection purposes. 63 But the
FCC further emphasized that this prior consent “is deemed to be granted only if
the wireless number was provided by the consumer to the creditor, and that such
number was provided during the transaction that resulted in the debt owed.” 64
The FCC has also said that the debt collector has the burden of showing that the
debtor provided prior express consent. 65 Thus, the FCC considers the question
of consent to be an affirmative defense rather an element of a plaintiff’s claim. 66
Under FCC regulations, ERS had the burden to show (1) that Christopher
provided the number to ERS or Sallie Mae and (2) that he did so during the
transaction that resulted in the debt owed.
63
2008 Rules, 23 FCC Rcd.at 564.
64
Id. at 564–65.
65
Id. at 565.
66
See Grant v. Capital Mgmt. Servs., L.P., 449 Fed. Appx. 598, 600 n.1
(9th Cir. 2011) (unpublished op.); Lee v. Credit Mgmt., LP, 846 F. Supp. 2d 716,
730 (S.D. Tex. 2012) (noting that “the longstanding administrative guidance that
has been provided on this issue” views consent as an affirmative defense). But
see Gene & Gene LLC v. BioPay LLC, 541 F.3d 318, 327 (5th Cir. 2008)
(declining to consider whether consent is an element of the cause of action or an
affirmative defense).
23
In its motion for directed verdict, ERS pointed to evidence of Christopher’s
testimony confirming that when he filled out paperwork for rehabilitation of his
loans, he provided a phone number. ERS also pointed out that the Browns did
not have a residential line or landline at which ERS could contact him. ERS
argued that the evidence was enough for consent to be deemed. ERS relied on
Cunningham v. Credit Management, L.P., in which the trial court found that the
evidence made a prima facie showing of consent when the plaintiff refused to
disclaim that he had provided the number to his creditor. 67 In its brief in this
appeal, ERS also points to testimony from ERS’s representative that Sallie Mae
provided ERS with the phone number and that a borrower is required to provide
a telephone number when signing a student loan promissory note.
But no testimony showed from what source Sallie Mae obtained the cell
phone number that it gave to ERS. Kaufman stated that ERS uses the number
provided to it by the client and that “we believe that that’s the number that was
provided to them by the borrower,” but he also stated that “I don’t believe that my
client screens out what type of number this is.” Kaufman’s belief that the number
provided by ERS’s client was provided to that client by the borrower is not
supported by any evidence in the record, and Kaufman did not provide any basis
for that belief. Neither Christopher nor Carrie testified that they ever provided
67
Cunningham v. Credit Mgmt., L.P., No. 3:09-CV-1497-G(BF), 2010 WL
3791104, at *5 (N.D. Tex. Aug. 30, 2010), report and recommendation adopted,
No. 3:09-CV-1497-G(BF), 2010 WL 3791049 (N.D. Tex. Sept. 27, 2010).
24
this cell phone number to Sallie Mae or any lender, either in connection with the
original promissory note or in the paperwork for rehabilitation of the loan. Copies
of the original promissory note were not produced by either side. No party
produced copies of any applications that Christopher completed for rehabilitation
of his loan to take it out of default. Thus, the evidence is not enough for consent
to be deemed.
Even if we agreed with the reasoning in Cunningham, that case is
distinguishable in that Christopher did not evade answering whether he had
provided the cell phone number to ERS or its principal. To the contrary, the only
direct evidence regarding deemed consent was Christopher’s testimony, and he
stated that neither he nor his wife gave ERS permission to call that number and
that he did not provide that number to Sallie Mae or anyone else with his loan
application. The evidence relied on by ERS is not sufficient for consent to be
deemed. ERS produced no other evidence of consent. ERS therefore could not
have obtained a directed verdict on the ground of consent.
Our holding does not change even if we depart from the FCC’s position on
showing consent and put the burden on the Browns as plaintiffs to show a lack of
consent. 68 Both Carrie and Christopher testified that they did not give ERS
permission to call the cell phone. Christopher testified that he did not provide the
number to Sallie Mae or anyone else when he filled out his loan application. This
68
See Gene & Gene LLC, 541 F.3d at 327–28.
25
evidence was sufficient to defeat ERS’s right to a directed verdict on the ground
of consent.
Having reviewed all of the grounds urged by ERS for a directed verdict on
the Browns’ claim for TCPA violations, we hold that the directed verdict cannot
be upheld on any of the grounds urged by ERS. We sustain this part of the
Browns’ third issue.
Lastly with respect to the TCPA claim, we consider the Browns’ fourth
issue and whether they established their right to a directed verdict on their TCPA
claim and their right to treble damages. The evidence at trial was sufficient to
establish as a matter of law that ERS called a cell phone registered to
Christopher and used by Carrie, that it used a predictive dialer, and that it did not
have consent to call the cell phone. The Browns therefore established as a
matter of law that ERS violated the TCPA, and they were entitled to a directed
verdict on their claim. We sustain this part of the Browns’ fourth issue, and we
reverse this part of the trial court’s judgment. We remand this claim to the trial
court for it to determine the question of damages. 69
Regarding the claim for treble damages, the TCPA provides that for a
willful or knowing violation of the TCPA, the trial court may in its discretion
increase the award “to an amount equal to not more than 3 times” the damages
69
See 47 U.S.C.A. § 227(b)(3) (providing that a person bringing a claim for
violations of the TCPA may recover for actual monetary loss or $500 for each
violation, whichever is greater).
26
award. 70 The TCPA does not define “willful” or “knowing.” A different part of the
federal Communications Act of 1934, of which the TCPA is a part, 71 defines the
term “willful” to mean “the conscious and deliberate commission or omission of
such act, irrespective of any intent to violate any provision of this chapter or any
rule or regulation of the Commission authorized by this chapter.” 72 But that
chapter on its face applies to radio communications, not telephone
communications.
Some courts have held that in order to show a willful or knowing violation
of the TCPA, the plaintiff need only show that the defendant willfully or knowingly
committed the act that violated the TCPA, while others have held that the plaintiff
must show that the defendant had reason to know or should have known that the
conduct would violate the TCPA. 73 This court follows the latter rule. 74 It is
undisputed that ERS made calls to the cell phone in question. But to recover
70
Id.
71
See Chair King, 184 S.W.3d at 709 (noting that the TCPA amended the
Communications Act of 1934).
72
47 U.S.C.A. § 312 (West 2001 & Supp. 2013).
73
See Stewart v. Regent Asset Mgmt. Solutions, No. 1:10-CV-2552-CC-
JFK, 2011 WL 1766018, at *6–7 (N.D. Ga. May 4, 2011) (discussing the split of
authority).
74
See Mfrs. Auto Leasing, Inc. v. Autoflex Leasing, Inc., 139 S.W.3d 342,
346 (Tex. App.—Fort Worth 2004, pet. denied) (applying the TCPA subsection
regulating faxes and stating that “the TCPA is willfully or knowingly violated when
the defendant knows of the TCPA’s prohibitions, knows he does not have
permission to send a fax ad to the plaintiff, and sends it anyway”).
27
treble damages, the Browns had to show that ERS knew of the TCPA’s
requirements and that it knew or should have known that its actions violated the
Act. Although ERS records introduced at trial suggested that ERS was aware of
requirements of the FDCPA, no evidence at trial established as a matter of law
that ERS was aware of the TCPA or its requirements. The Browns therefore did
not establish as a matter of law that they were entitled to treble damages under
the TCPA, and they failed to raise a fact issue to defeat ERS’s motion for
directed verdict as to whether they were entitled to treble damages. We overrule
this part of the Browns’ third and fourth issues.
DTPA Claim
Regarding the Browns’ DTPA claim, ERS asserted in its directed verdict
motion that the Browns had failed to produce evidence of damages. The Browns
contend that the finance code provides that a violation of the Texas Fair Debt
Collection Practices Act is a violation of the DTPA. The Browns are correct. 75
But the DTPA requires evidence of damages before a plaintiff may recover.
Section 17.50(a) of the DTPA provides that a consumer may maintain an action
when certain acts of the defendants “constitute a producing cause of economic
damages or damages for mental anguish.” 76 Subsection (h) provides that “if a
75
See Tex. Fin. Code Ann. § 392.404.
76
Tex. Bus. & Com. Code Ann. § 17.50(a); see also Latham v. Castillo, 972
S.W.2d 66, 69 (Tex. 1998) (noting that the prior version of the DTPA provided
that a consumer could maintain an action where the defendant’s acts constituted
a producing cause of actual damages and stating that mental anguish damages
28
claimant is granted the right to bring a cause of action under this subchapter by
another law, the claimant is not limited to recovery of economic damages only,
but may recover any actual damages incurred by the claimant.” 77 Thus, for the
Browns’ DTPA claim based on a violation of the Texas Fair Debt Collection
Practices Act, which would qualify as “another law” under subsection (h), they
were required to provide evidence of damages to prevail on their claims. 78
The Browns produced no evidence of economic damages. The Browns’
claim therefore could have only survived the directed verdict if they provided
legally sufficient evidence of some other form of actual damages, 79 which
includes mental anguish damages.
Evidence of mental anguish damages is legally sufficient “when the
plaintiffs have introduced direct evidence of the nature, duration, and severity of
their mental anguish, thus establishing a substantial disruption in the plaintiffs’
are actual damages); Anderson v. Long, 118 S.W.3d 806, 811 (Tex. App.—Fort
Worth 2003, no pet.) (holding that the trial court properly granted no-evidence
summary judgment on Anderson’s DTPA claim because she presented no
evidence that she suffered any damages from Long’s acts).
77
Tex. Bus. & Com. Code Ann. § 17.50(h); see Arthur Andersen & Co. v.
Perry Equip. Corp., 945 S.W.2d 812, 816 (Tex. 1997) (stating that “[a]ctual
damages are those damages recoverable under common law”).
78
See Tex. Bus. & Com. Code Ann. § 17.50(a), (h).
79
See, e.g., Bentley v. Bunton, 94 S.W.3d 561, 604 (Tex. 2002)
(characterizing damages for loss of character and reputation as actual damages).
29
daily routine.” 80 If no such direct evidence is introduced, we look at “whether the
record reveals any evidence of ‘a high degree of mental pain and distress’ that is
‘more than mere worry, anxiety, vexation, embarrassment, or anger,’” applying
traditional no-evidence standards. 81
Having reviewed the record, we have not found any testimony from Carrie
about the nature, duration, or severity of any mental anguish she may have
suffered as a result of telephone calls from ERS employees. The Browns did not
provide any other evidence that the telephone calls caused Carrie to suffer a high
degree of mental pain and distress to a degree that made it more than mere
worry, anxiety, vexation, embarrassment, or anger. Christopher testified that the
calls made Carrie “really upset” and that the calls affected their relationship in
that they stopped playing games with their children every night and that Carrie
did not want to have sex with him as often. He also stated that “everyday
activities that we would spend doing together became limited” because “she was
beat from . . . dealing with the phone calls.” Carrie agreed with ERS’s attorney
that Christopher’s job loss right before their marriage made things “a little
stressful” at their house. The Browns did not provide any other evidence of
Carrie’s mental state, and this evidence does not show the high degree of mental
pain and distress that would constitute mental anguish. Accordingly, the Browns
80
Parkway Co. v. Woodruff, 901 S.W.2d 434, 444 (Tex. 1995).
81
Id.
30
did not provide sufficient evidence of Carrie’s mental anguish. The Browns
produced no evidence of any other form of actual damages suffered by Carrie,
and therefore the trial court did not err by granting directed verdict for ERS on her
DTPA claim. 82
As to Christopher, ERS asserted in its motion for directed verdict that
Christopher’s only testimony of damages related to loss of consortium. ERS
argued that because loss of consortium damages cannot be recovered absent
proof of physical injury to the spouse and that because the Browns put on no
evidence of physical injury to Carrie, it was also entitled to a directed verdict on
Christopher’s claim.
ERS is correct that Christopher did not testify about the nature, duration, or
severity of any mental anguish he experienced and that nothing in his testimony
would support a finding that he experienced a high degree of mental pain and
distress. He stated that the situation was stressful, that the repeated telephone
calls made him feel “annoyed that it was so excessive,” and that he felt “like less
of a man” because he had put Carrie in the situation by not being able to pay
back his loans. This testimony does not support a finding of mental anguish.
The Browns put on no other evidence of actual damages suffered by
Christopher. Assuming that for purposes of the DTPA, loss of consortium
82
Cf. Brown v. Oaklawn Bank, 718 S.W.2d 678, 680–81 (Tex. 1986)
(holding that there was a fact question on the extent of the plaintiffs’ mental
anguish injuries resulting from debt collection practices).
31
damages constitute actual damages, 83 ERS is correct that Christopher could not
recover for loss of consortium absent proof of physical injury to Carrie. 84 The
Browns did not put on any evidence that Carrie suffered physical injuries
because of ERS’s phone calls. Because the Browns did not produce any
evidence that they suffered actual damages as a result of ERS’s actions, the trial
court did not err by granting directed verdict for ERS on that claim. We therefore
do not examine ERS’s other asserted grounds for directed verdict as to the
Browns’ DTPA claim. We overrule this part of the Browns’ third issue.
FDCPA Claims
We now consider the Browns’ claim that ERS violated the FDCPA, which
prohibits abusive debt collection practices by debt collectors. 85 In its directed
verdict motion, ERS asserted that Christopher’s FDCPA claim was barred by that
act’s one-year statute of limitations. 86 The calls on which the Browns base their
claims ended on November 4, 2009. Christopher was not added as a plaintiff to
83
See Brown v. Am. Transfer & Storage Co., 601 S.W.2d 931, 939 (Tex.
1980) (noting under prior version of DTPA that “[a]ctual damages means those
recoverable at common law”); Whittlesey v. Miller, 572 S.W.2d 665, 669 (Tex.
1978) (stating that recovery for loss of consortium is recognized under the
common law).
84
Browning-Ferris Indus., Inc. v. Lieck, 881 S.W.2d 288, 294 (Tex. 1994).
85
See 15 U.S.C.A. §§ 1692–1692k.
86
See id. § 1692k(d) (stating that a civil action for a violation of the FDCPA
could be brought in any appropriate United States district court within one year
from the date on which the violation occurs).
32
the suit until at least November 8, 2010. 87 As ERS points out, this date is more
than one year from the date of the last call.
On appeal, the Browns contend that the statute of limitations does not bar
Christopher’s claim because the second amended petition relates back to the
date of the original petition under section 16.068 of the civil practice and
remedies code. 88 But that statute addresses adding claims, not parties. With
limited exceptions not applicable here, an amended pleading adding a new party
does not relate back to the original pleading. 89 The Browns cite to Foust 90 for the
proposition that because ERS was not surprised, prejudiced, or disadvantaged
by the addition of Christopher as a plaintiff, the relation-back doctrine applies.
But that case involved misnomer, an exception to the rule that a pleading adding
a new party does not relate back. 91 Foust is therefore inapplicable. Because
87
At ERS’s request, the trial court took judicial notice that the Browns’
second amended petition, which added Christopher as a plaintiff, was filed on
November 8, 2010. The copy of the second amended petition that appears in the
clerk’s record, however, has a file stamp date of November 22, 2010.
88
Tex. Civ. Prac. & Rem. Code Ann. § 16.068 (West 2008); see Univ. of
Tex. Health Sci. Ctr. at San Antonio v. Bailey, 332 S.W.3d 395, 400 (Tex. 2011)
(“The relation-back doctrine does not affect the running of limitations on a cause
of action; rather, it defines what is to be included in ‘the action’ to which
limitations applies.”).
89
Bailey, 332 S.W.3d at 400.
90
Foust v. Estate of Walters ex rel. Walters, 21 S.W.3d 495, 501 (Tex.
App.—San Antonio 2000, pet. denied).
91
Id.; see Bailey, 332 S.W.3d at 400 (listing misnomer and misidentification
as exceptions to this rule).
33
Christopher was not added as a plaintiff until more than one year after the last
telephone call, his FDCPA claim is time-barred. 92
With respect to Carrie’s claims under the FDCPA, she asserted that ERS
breached three provisions of that act: § 1692d(5), § 1692(d)(6), and § 1692e(5).
Section 1692d(5) prohibits a debt collector from “[c]ausing a telephone to ring . . .
repeatedly or continuously with intent to annoy, abuse, or harass any person at
the called number.” 93 The Browns alleged that ERS called 108 times in one
month, once as many times as nine times in one day. At trial, ERS
representative Kaufman testified that ERS records showed that its phone system
called the Browns’ cell phone 108 times. Carrie testified that the calls were
“constant, repetitive, all the time [her] phone ringing.”
In its motion for directed verdict, ERS argued that daily calls,
unaccompanied by other egregious conduct, is insufficient to raise a triable issue
of fact for the jury on whether it violated § 1692d(5). It asserted that most of the
108 calls were either withdrawn (that is, rang two or three times and then hung
up) or “did not leave the building” (that is, the number was selected by the phone
system for dialing but was not actually dialed because all ERS representatives
were busy on other calls). Kaufman did not testify, however, that “most” of the
92
See 15 U.S.C.A. § 1692k.
93
15 U.S.C.A. § 1692(d)(5).
34
calls were withdrawn or were not actually dialed. He only stated that the 108
number shown by ERS records would include hang ups and withdrawn calls.
Whether a debt collector’s repeated or continuous telephone calls were
made with intent to annoy, abuse, or harass is usually a question of fact. 94 But in
some circumstances, courts determine that the facts alleged do not, as a matter
of law, show the requisite intent. 95 In its brief, ERS cites to cases that held that a
high call volume did not indicate the requisite intent. 96 But as one Texas federal
district court has pointed out, “There is no bright line rule as to the specific
amount or pattern of calls sufficient to raise a fact issue regarding the intent to
annoy, abuse, or harass,” and “courts simply disagree on the amount or pattern
of calls needed to raise a triable fact issue.” 97
We hold that the evidence was sufficient to raise a fact issue on whether
ERS violated this section. ERS’s records showed that it selected the Browns’
number to call 108 times in one month. Though it argued that not all of those
94
Jeter v. Credit Bureau, Inc., 760 F.2d 1168, 1179 (11th Cir. 1985);
Stirling v. Genpact Servs., LLC, No. 2:11-CV-06369-JHN-MANx, 2012 WL
952310, at *3–4 (C.D. Cal. Mar. 19, 2012) (noting that “[n]umerous courts
throughout the nation have held that the intent to annoy, abuse, or harass may
be inferred from the nature, pattern, and frequency of debt collection calls”).
95
Harvey v. Great Seneca Fin. Corp., 453 F.3d 324, 330 (6th Cir. 2006).
96
See, e.g., Tucker v. CBE Grp., Inc., 710 F. Supp. 2d 1301, 1305 (M.D.
Fla. 2010).
97
Young v. Asset Acceptance, LLC, No. 3:09-CV-2477-BH, 2011 WL
1766058, at *3 (N.D. Tex. May 10, 2011).
35
calls were actually dialed, it produced no evidence to show how many of the 108
times the number was selected but was not actually dialed. Carrie testified that
she requested the calls to stop but that ERS continued to call. We cannot say as
a matter of law that ERS did not violate § 1692d(5), and therefore directed verdict
on this claim was not proper. We sustain this part of the Browns’ third issue.
Section 1692d(6) prohibits a debt collector from placing telephone calls
“without meaningful disclosure of the caller’s identity.” 98 The Browns alleged that
when an ERS representative called their number the first time, the employee
identified ERS only as “ERS” rather than as “Enterprise Recovery Systems” and
refused to state its full name or the purpose of the call. Carrie testified to that
effect at trial. In ERS’s directed verdict motion, it argued that the statute allows
the use of acronyms, “ERS” is a registered professional name, and Carrie was
able to use the Internet to determine what entity ERS referred to, and therefore
ERS properly disclosed its identity.
Courts of appeals evaluating FDCPA claims use either a “least
sophisticated consumer standard” or an “unsophisticated consumer standard” for
communications under section 1692d. 99 Both standards serve the purpose of
98
15 U.S.C.A. § 1692d(6).
99
Harvey, 453 F.3d at 329–30; see also Taylor v. Perrin, Landry, deLaunay
& Durand, 103 F.3d 1232, 1236 (5th Cir. 1997) (noting that courts have held that
“in determining whether a violation of the FDCPA has occurred, the debt
collector’s representations, notices[,] and communications to the consumer must
be viewed objectively from the standpoint of the ‘least sophisticated consumer’”
36
protecting consumers, “including the inexperienced, the untrained[,] and the
credulous.” 100 Thus, the relevant question is not whether Carrie could figure out
what “ERS” stood for by researching it on the Internet, but whether identifying the
caller as someone from “ERS” would meaningfully disclose the identity of the
caller to an unsophisticated consumer. 101
The FDCPA authorized the Federal Trade Commission (FTC) to enforce
compliance with that act’s provisions. 102 ERS is correct that the FTC has said
that in communicating with a debtor, a debt collector may use its full business
name, the name under which it usually transacts business, or a commonly-used
acronym, as long as the name is one that does not misrepresent the debt
collector’s identity or deceive the consumer. 103 But to comply with the plain
language of the statute, any commonly-used acronym must be one that
meaningfully discloses the entity’s identity. Kaufman testified that ERS
sometimes uses ERS to identify itself to borrowers, that it has “ERS” on its
website by its full name, and that this is a registered acronym. But Kaufman did
and noting that the Seventh Circuit uses a similar “unsophisticated consumer”
standard, which would lead to the same results in most cases).
100
See Taylor, 103 F.3d at 1236.
101
See id.
102
15 U.S.C.A. § 1692l(a).
103
Statements of General Policy or Interpretation Staff Commentary on the
Fair Debt Collection Practices Act, 53 FR 50097-02, 50107 (Dec. 13, 1988).
37
not produce any testimony about where it has registered this acronym or that it
was so commonly-used that it meaningfully discloses its identify. “ERS” is not
one of the commonly-used acronyms known to the general public—like “AT&T”
or “IBM”—the use of which would meaningfully disclose the business’s identity.
That it commonly uses the name “ERS” when talking to borrowers on the
telephone does not demonstrate that ERS is the name under which it usually
transacts business. No evidence at trial indicated that an unsophisticated
consumer would know from the use of the acronym “ERS,” and nothing else, the
identity of the caller. Thus, ERS did not establish as a matter of law that an
unsophisticated consumer would know that “ERS” referred to Enterprise
Recovery Systems, Inc. The fact that Carrie had to resort to Internet research to
discover who had called her cell phone is evidence that in fact ERS did not
meaningfully disclose its identity. We hold that the evidence did not establish as
a matter of law that ERS meaningfully disclosed its identity and therefore directed
verdict for ERS on this ground was improper. We sustain this part of the Browns’
third issue.
Section 1692e(5) prohibits a debt collector from threatening to take an
action that cannot legally be taken or that is not intended to be taken. 104 The
Browns alleged that ERS violated this section of the FDCPA when it threatened
to issue a tax lien or tax offset. The parties referred to both a “tax lien” and an
104
15 U.S.C.A. § 1692e(5).
38
offset of the Browns’ tax refund throughout the record. Taking all of the
testimony and trial court filings in context, it appears that the parties used the
phrase “tax lien” to indicate garnishment of a tax refund to offset the debt. The
Browns do not argue differently on appeal. We therefore consider whether ERS
violated § 1692e(5) by threatening a tax refund offset.
In ERS’s directed verdict motion, it argued with no citation to authority that
the Browns had failed to prove that it had violated this section because the debt
was federal student loan debt, and therefore ERS as the agent of the creditor the
United Student Aid Fund (USAF), was authorized by the Higher Education Act 105
to place a lien on Christopher’s tax return in the form of an offset. For the sake of
accuracy, we note that although ERS claimed its client was USAF, the appellate
record indicates that its direct relationship is with Sallie Mae, who itself was hired
by USAF.
The Browns do not dispute that USAF had the authority to request the IRS
to offset their tax refund (and that it eventually did so). But they argue that
USAF’s authority is irrelevant because ERS threatened that it would take the
offset itself, and ERS did not have any such authority. The testimony at trial
suggests that, technically, ERS threatened to take an action that it could not itself
take. Carrie’s testimony was that the ERS employee told her that ERS would
take a tax offset of Christopher’s refund, not that ERS told her that its client could
105
20 U.S.C.A. §§ 1001–1141 (West 2010 & Supp. 2013).
39
ask the IRS to offset the refund. The FDCPA has been described as a strict
liability statute. 106 It is uncontroverted that ERS does not have the authority to
either directly institute proceedings to take the Browns’ tax refund or to request
the IRS to do so.
The Second Circuit’s holding in Bentley v. Great Lakes Collection
Bureau 107 would seem to support the Browns’ position. In that case, a debt
collector’s letter was held to be misleading because it conveyed to the consumer
that the debt collector was authorized to make the decision to institute legal
action. 108 In fact, the creditor retained the authority to decide whether legal
proceedings would be instituted. 109
106
See LeBlanc v. Unifund CCR Partners, 601 F.3d 1185, 1190 (11th Cir.
2010); Agueros v. Hudson & Keyse, LLC, No. 04-09-00449-CV, 2010 WL
3418286, at *3 (Tex. App.—San Antonio Aug. 31, 2010, no pet.) (mem. op.)
(describing the FDCPA as a strict liability statute); see also 15 U.S.C.A. §
1692k(c) (stating that a debt collector is not liable for a violation of the FDCPA if
the “debt collector shows by a preponderance of evidence that the violation was
not intentional and resulted from a bona fide error notwithstanding the
maintenance of procedures reasonably adapted to avoid any such error”);
Jerman v. Carlisle, McNellie, Rini, Kramer & Ulrich LPA, 559 U.S. 573, 130 S. Ct.
1605, 1624 (2010) (holding that the bona fide error defense does not apply to a
debt collector’s incorrect interpretation of the requirements of the FDCPA).
107
6 F.3d 60, 63 (2d Cir. 1993).
108
Id.
109
Id.
40
But Second Circuit opinions are not binding on this court, 110 and we have
found no other court’s opinion that would support the Browns’ position. ERS was
acting, directly or indirectly, for USAF, and no party disputed that USAF could
obtain an offset of the Browns’ tax refund to pay on the student loan debt.
Because ERS threatened to take an action that its principal legally could take, we
hold that the trial court did not err by granting directed verdict for ERS on this
claim. We overrule this part of the Browns’ third issue.
Texas Fair Debt Collection Practices Act Claim
Regarding the Browns’ Texas Fair Debt Collection Practices Act claim,
ERS asserted in its directed verdict motion that the Browns were required to
prove actual damages but failed to do so. We agree.
Under the Texas Fair Debt Collection Practices Act, a plaintiff may be
awarded actual damages, injunctive relief, or both. 111 Under section 392.403(e),
a plaintiff proving her entitlement to either form of relief for violations of certain
specified sections of the Texas Fair Debt Collection Practices Act is entitled to
damages of not less than $100 for each violation. 112 Thus, if a plaintiff
establishes a right to only injunctive relief or if the plaintiff proves up actual
110
Penrod Drilling Corp. v. Williams, 868 S.W.2d 294, 296 (Tex. 1993)
(stating that Texas courts may draw upon the precedents of other federals courts
but are obligated to follow only higher Texas courts and the United States
Supreme Court).
111
Tex. Fin. Code Ann. § 392.403(a).
112
Id. § 392.403(e).
41
damages that are less than $100, the plaintiff may recover at least $100. We
agree with the Dallas and Austin courts of appeals that, unlike under the
FDCPA, 113 if a plaintiff does not establish either a right to injunctive relief or some
actual damages, the plaintiff is not entitled to the minimum damages set out in
subsection (e). 114 Because the Browns were required to establish either a right
to injunctive relief or actual damages, but they did not plead or prove their right to
injunctive relief and did not prove any actual damages, the trial court did not err
by granting a directed verdict for ERS on the Browns’ Texas Fair Debt Collection
Practices Act claim.
Conclusion
Having overruled the Browns’ first and second issues and overruled in part
their third and fourth issues, we affirm the trial court’s judgment as to the Browns’
DTPA claim, their Texas Fair Debt Collection Practices Act claim, their claim for
treble damages under the TCPA, and their claim for a violation of § 1692e(5) of
113
15 U.S.C.A. § 1692k(a)(1), (a)(2)(A), (a)(3) (allowing a plaintiff under the
FDCPA to recover actual damages plus attorney’s fees and additional statutory
damages); Savino v. Computer Credit, Inc., 164 F.3d 81, 86 (2d Cir. 1998)
(holding that FDCPA statutory damages could be awarded without recovering
actual damages); see also Agueros, 2010 WL 3418286, at *6 (noting that the
“vast majority of cases interpreting this provision of the FDCPA” have concluded
that no award of actual damages is necessary to recover additional damages).
ERS did not seek directed verdict on the issue of additional damages under the
FDCPA.
114
Marauder Corp. v. Beall, 301 S.W.3d 817, 823 (Tex. App.—Dallas 2009,
no pet.); Elston v. Resolution Servs., Inc., 950 S.W.2d 180, 184 (Tex. App.—
Austin 1997, no writ).
42
the FDCPA. Having sustained in part the Browns’ third issue as to their claims
for violations of the TCPA, § 1692d(5) of the FDCPA, and § 1692d(6) of the
FDCPA, we reverse in part. We remand this case to the trial court for further
proceedings consistent with this opinion.
LEE ANN DAUPHINOT
JUSTICE
PANEL: DAUPHINOT, GARDNER, and WALKER, JJ.
DELIVERED: August 22, 2013
43