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Clodfelter v. United Processing

September 12, 2008

KEVIN CLODFELTER, PLAINTIFF,
v.
UNITED PROCESSING, INC., A FLORIDA CORPORATION, LISA WATERS, AND CYNTHIA SWICK, DEFENDANTS.



The opinion of the court was delivered by: Michael P. McCUSKEY Chief U.S. District Judge

OPINION

On August 4, 2008, this court entered an Order (#7) which entered default against Defendants, United Processing, Inc., Lisa Waters and Cynthia Swick. This court allowed Plaintiff, Kevin Clodfelter, fourteen (14) days to file documentation and case law in support of his request for a judgment in this case. On August 18, 2008, Plaintiff filed a Memorandum of Law in Support of Motion for Default Judgment (#8), with attached exhibits. Plaintiff requested a judgment against Defendants in the amount of $1,000,000.00. This court has carefully reviewed all of the documentation presented by Plaintiff. This court concludes that Plaintiff has shown that he is entitled to judgment against Defendants in the total amount of $351,000.00.

BACKGROUND

On June 11, 2008, Plaintiff filed his Complaint (#1) against Defendants. Plaintiff alleged that he is an individual residing in Mattoon, Illinois. He alleged that Defendant United Processing, Inc. is a corporation organized under the laws of Florida with its principal place of business in Jacksonville, Florida. Plaintiff alleged that United Processing is a debt collector as defined by the Fair Debt Collection Practices Act (FDCPA) and was collecting a consumer debt as defined by the FDCPA. Plaintiff alleged that Defendant Lisa Waters is a director, president and registered agent of United Processing and Defendant Cynthia Swick is a director and secretary of United Processing. Plaintiff alleged that Waters and Swick formulated, directed, and controlled the acts of United Processing, including the acts and practices alleged in the Complaint.

Plaintiff made the following factual allegations. He alleged that, in 2004, he borrowed approximately $400 from the Money Place in Mattoon and used the proceeds to pay for consumer goods and services. Plaintiff alleged that he subsequently defaulted on his loan obligations to the Money Place. The Money Place then placed the debt for collection with Defendants. In December 2006, Defendants contacted Plaintiff by telephone in an attempt to collect the debt. Defendants' employee, Thomas, threatened Plaintiff with criminal prosecution and told him he would be arrested at his place of employment if he did not pay $500.00 by Western Union immediately. Plaintiff then sent $500.00 to Defendants via electronic fund transfer. Plaintiff believed that the debt was satisfied.

On May 15, 2008, employees of Defendants named Kimberly Jones and Thomas made numerous telephone calls to Plaintiff's relatives and employer and stated that Plaintiff would be criminally prosecuted or arrested because of his nonpayment of the debt. Plaintiff alleged that Defendants had no legitimate reason to make the debt collection telephone calls. At approximately 4:00 p.m. on May 15, 2008, Plaintiff called the number left by Defendants and spoke to Kimberly Jones. Plaintiff told Jones that he paid the debt in 2006. Jones told him that he still owed $600.00. When Plaintiff said he was not going to pay any additional money, Jones told him "your attitude sucks" and threatened him with criminal prosecution. Jones then ended the conversation. Plaintiff immediately called back and Jones "told him that she was on the other telephone line with the Coles County State's Attorney discussing Plaintiff's case." Plaintiff alleged that Jones then "told him to expect a knock at his door and hung up."

In Count I, Plaintiff alleged that United Processing violated the FDCPA: (1) when one of its employees misrepresented that Plaintiff would be criminally prosecuted; (2) by contacting numerous third parties in an attempt to collect the debt; and (3) by attempting to collect a debt Plaintiff did not owe. Plaintiff sought actual and statutory damages as well as attorney's fees and litigation expenses and costs. In Count II, Plaintiff alleged that all three Defendants violated the Illinois Consumer Fraud and Deceptive Business Practices Act, 815 Ill. Comp. Stat. 505/2, when they threatened that Plaintiff would be criminally prosecuted and contacted third parties and disclosed the false threat of criminal prosecution. Plaintiff alleged that Defendants "made the representations and carried out their scheme knowingly, intentionally, wilfully, maliciously, and in bad faith, or with wanton and reckless disregard for Plaintiff's rights and interests, entitling the plaintiff to recover punitive damages against defendants."

On August 1, 2008, Plaintiff filed a Motion for Default Judgment (#6). Plaintiff stated that the Complaint and summons were served upon all three Defendants and no "motion, answer or responsive pleading has been filed on behalf of the Defendants." Plaintiff asked this court to enter a default judgment in favor of Plaintiff and against United Processing in the amount of $1,000,000.00 for its violation of the FDCPA. Plaintiff also asked this court to enter a default judgment against all three Defendants, jointly and severally, in the amount of $1,000,000.00 for their violation of the Illinois Consumer Fraud and Deceptive Business Practices Act.

On August 4, 2008, this court entered an Order (#7). This court concluded that Plaintiff was entitled to an Order entering default. This court further concluded, however, that Plaintiff had not shown that he was entitled to a judgment against Defendants in the amount of $1,000,000.00. This court therefore entered default against Defendants and allowed Plaintiff fourteen days to file documentation and case law in support of his request for a judgment in this case.

On August 18, 2008, Plaintiff filed his Memorandum of Law in Support of Motion for Default Judgment (#8), with attached documentation. Plaintiff attached his affidavit, dated August 14, 2008. Plaintiff set out the facts regarding the telephone calls made by Defendants' employees to his family members, including calls to his father, his stepmother, his brother, and at least five calls to his mother and stepfather, wherein Defendants' employees stated that Plaintiff would be prosecuted or arrested. Plaintiff also stated that Defendants' employees called the human resources department of R.R. Donnelley in Mattoon, and told them that the sheriff would be arriving at the plant with an "affidavit" for his arrest. Plaintiff stated that he called the number left by Defendants and spoke to Kimberly Jones. Jones threatened him with criminal prosecution, told him she was on the other line with the Coles County State's Attorney, and told him to expect a knock at his door. Plaintiff stated that he called the Coles County State's Attorney and found out he did not have a case pending. Plaintiff stated:

22. Even though I called the State's Attorney, I was still worried that I might be arrested for this debt. The thought of sitting in jail with criminals made me sick.

23. The telephone calls also put a strain on my family. My mom was worried that I might be arrested over these telephone calls. It also was embarrassing for me because now my family knew that I once had trouble paying a debt.

24. I am also embarrassed that people in the community may think that I am a criminal about to be prosecuted. I believe that word spread about the telephone call throughout the R.R. Donnelley plant and I live in a small town.

Plaintiff also attached the affidavit of his mother, Linda Schrock, dated August 8, 2008. Schrock corroborated Plaintiff's statement regarding the telephone calls she and other family members received from Defendants ...


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