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Lorenzo v. Palisades

April 5, 2006

RE: LORENZO
v.
PALISADES, ET AL.



The opinion of the court was delivered by: William J. Martini Judge

MARTIN LUTHER KING JR. FEDERAL BLDG. & U.S. COURTHOUSE 50 WALNUT STREET, P.O. BOX 419 NEWARK, NJ 07101-0419 (973) 645-6340

LETTER OPINION

Dear Litigants:

This Court is in receipt of Plaintiff's motion to strike offer of judgment, Plaintiff's motion for partial summary judgment and Defendants' cross-motion for summary judgment. For the reasons stated below, Defendants' motion is GRANTED, Plaintiff's motions are DENIED, and Plaintiff's complaint is DISMISSED.

Factual and Procedural Background

Pro se Plaintiff Lorenzo has sued Defendants Palisades Collection, LLC ("Palisades") and two of its employees, Donna M. O'Neil and Gilda DiMarco, for violations of the Fair Credit Reporting Act ("FCRA"), 15 U.S.C. § 1681,and the Fair Debt Collection Practices Act ("FDCPA"), 15 U.S.C. § 1692. In July 2005, the Court denied Lorenzo's motion for partial summary judgment as premature. Following further discovery, both parties have now moved for summary judgment.

Because a full recapitulation of the allegations in the Complaint is not necessary for resolution of these motions, the Court will not provide one here. For present purposes, it suffices to say that in or around July 2004, Palisades purchased consumer debt from AT&T, including that of Lorenzo. According to AT&T's records, Lorenzo owed $253.37 for cellular phone service. Upon receiving a collection notice sometime in August 2004, Lorenzo wrote to Palisades in September 2004 demanding validation of the debt. In November 2004, Palisades sent Lorenzo documentation from AT&T identifying the nature and amount of the debt and identifying the debt as belonging to Lorenzo. Notwithstanding this documentation, Lorenzo continued to dispute the debt and, in May 2005, filed this lawsuit against Palisades, O'Neil, and DiMarco.*fn1 By way of summary, Lorenzo alleges that Defendants failed to validate the debt yet continued to report it to consumer reporting agencies. As a result, Lorenzo claims he was unable to secure a car loan except at an exceptionally high interest rate.

On December 16, 2005, Defendants sent Lorenzo an offer of judgment pursuant to Fed. R. Civ. P. 68 for two-thousand dollars plus forgiveness of any sums due under the debt. Lorenzo rejected the offer. Now Defendants move for summary judgment on the grounds that their offer of judgment renders the lawsuit moot. Defendants argue that, even if Lorenzo were to prove liability, Lorenzo cannot recover any more than what they have already offered as a matter of law. Because Defendants have already offered a judgment for two-thousand dollars plus forgiveness of any debt, they claim there is no longer any justiciable issue before the Court. They ask the Court to enter judgment in the amount of the offer and dismiss the claim. Plaintiff has moved to strike the offer of judgment as impermissible under the federal rules.

Standard of Review

Summary judgment is appropriate if there is no genuine issue as to any material fact and the moving party is entitled to a judgment as a matter of law. See Fed. R. Civ. P. 56. Rule 56(e) requires that when a motion for summary judgment is made, the nonmoving party must set forth specific facts showing that there is a genuine issue for trial. See id.; see Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 250 (1986). The mere existence of some alleged factual dispute between the parties will not defeat an otherwise properly supported motion for summary judgment. Only disputes over facts that might affect the outcome of the lawsuit under governing law will preclude the entry of summary judgment. See Anderson, 477 U.S. at 247-48. If the evidence is such that a reasonable fact-finder could find in favor of the nonmoving party, summary judgment should not be granted. See id.; see also Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587 (1986).

FCRA Allegations

Lorenzo alleges Defendants violated the FCRA by failing to notify consumer reporting agencies of the dispute over the debt and failing to correct and update information regarding the debt pursuant to their obligations under 15 U.S.C. § 1681s-2. Lorenzo also alleges Defendants violated § 1681b by obtaining his consumer report for an impermissible purpose. The Court finds that Lorenzo has no cause of action under the FCRA and that all claims under the statute should be dismissed.

Previously, in its letter opinion of July 11, 2005, the Court dismissed those claims brought under ยง 1681s-2(a) because this subsection does not allow for a private cause of action. (See July 11, 2005 Letter Op. 5.) With respect to subsection (b), the Court noted that a private cause of action exists, but only where the furnisher of information receives notice of a dispute directly from a consumer reporting agency, as opposed to from the consumer. (Id.) The Court reserved its decision as to the merits of a claim under this subsection, finding insufficient evidence in the record to determine whether such communication had taken place. The Court now finds Lorenzo has no cause of action under subsection (b), since Lorenzo has failed to put forth any evidence demonstrating that Defendants received a notice of dispute from a consumer reporting agency. Finally, ...


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