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Hector L. Huertas v. Transunion

December 16, 2010


The opinion of the court was delivered by: Simandle, District Judge:



This matter is before the Court on the motion of Plaintiff for the Court to amend its Order of May 5, 2010 pursuant to Rule 59(e), Fed. R. Civ. P. [Docket Item 88], as well as Defendant's cross-motion for attorney's fees as a sanction pursuant to Rule 11 [Docket Item 89].


Plaintiff initially brought this action under the Fair Credit Reporting Act, 15 U.S.C. § 1681 against a number of defendants. Huertas v. Transunion, LLC, Civil No. 08-244 (JBS), 2010 WL 1838410, at *1 (D.N.J. May 6, 2010). The case originally involved the alleged improper use of Plaintiff's credit report. (Compl. ¶¶ 10-12.) But Plaintiff subsequently moved to add allegations and claims regarding the attempted collection of a debt related to a satellite television receiver which Plaintiff alleges he did not owe (because he never received the equipment). [Docket Item 19.] Before this motion to file a Second Amended Complaint was decided, a settlement was reached between the existing parties regarding all claims, including the claims in the proposed Second Amended Complaint. Thus, when Plaintiff filed the Second Amended Complaint, he dismissed the two parties that had reached a settlement with him (Transunion and AFNI), and added Dishnetwork. Huertas, 2010 WL 1838410, at *1. In other words, having dismissed the credit union and the debt collector, Plaintiff sought further relief from the originator of the debt.

Dishnetwork moved for summary judgment based on the settlement agreement, which released AFNI and its "clients." Id. On May 5, 2010, the Court determined that the undisputed facts showed that the settlement agreement also settled Plaintiff's claims against Dishnetwork because Dishnetwork was a client of AFNI. Id. at *2. Plaintiff had argued that Defendant and AFNI were merely co-conspirators, rather than one being the client of the other, because their contract involved the collection of an illegal debt and was therefore void. Id. at *3. The Court rejected this argument because, even assuming for the sake of argument that Plaintiff's contention with respect to the voidness of the contract were true as a matter of contract law, Plaintiff did not adduce any evidence that the debt could not lawfully be collected; the Court also independently rejected the argument because Plaintiff's proposed reading of the term "client" to exclude such a relationship involving collection of the debt in question in the case was illogical, as it would read the term out of the settlement agreement altogether. Id.

Dishnetwork had also sought Rule 11 sanctions against Plaintiff, arguing that adding Defendant to the Second Amended Complaint was frivolous in light of the settlement agreement reached after Plaintiff moved to amend. Id. at *4. The Court found that no sanction was warranted, though it presented a close question. Id. The Opinion stated:

Considering his pro se status, Plaintiff's refusal to withdraw the complaint when presented with Defendant's motion for summary judgment does not amount to pursuing such a patently frivolous claim so as to constitute abuse of the legal system. In the future, however, Plaintiff's assertion of claims for which he has no evidence, or his failure to voluntarily dismiss claims and parties when he is unable to proffer admissible evidence opposing a summary judgment motion, may be found to be abusive, triggering appropriate sanctions under Rule 11 or under 28 U.S.C. § 1927.


Plaintiff has now filed a motion pursuant to Rule 59(e) to amend the Court's May 5, 2010 Order [Docket Item 88]. In it, Plaintiff argues that the Court should have considered the contents of an audio CD attached to his Second Amended Complaint which contained recorded phone calls which he contends prove that the collection of the debt was unlawful. Defendant renews its motion for Rule 11 sanctions [Docket Item 89], arguing that if Plaintiff's previous pursuit of the claim was close to being frivolous, then Plaintiff's continued pursuit of the claim, by way of this Rule 59 motion, is frivolous.


A. Motion to Alter or Amend

In the District of New Jersey, motions for a Court to reconsider a judgment pursuant to Rule 59, Fed. R. Civ. P. are determined according to Local Civil Rule 7.1(i). See Byrne v. Clastro, 2006 U.S. Dist. LEXIS 64054 (D.N.J. Aug. 28, 2006). Absent a change in the law or availability of new evidence (neither of which Plaintiff alleges), to prevail on a motion for reconsideration the movant must show that "dispositive factual matters or controlling decisions of law were brought to the court's attention but not considered." P. Schoenfeld Asset Management LLC v. Cendant Corp., 161 F. Supp. 2d 349, 353 (D.N.J. 2001) (citations omitted). Plaintiff argues that the Court failed to address the content of the audio CD he submitted with his Second Amended Complaint which would show that the debt in question could not lawfully be collected, even though he failed to point to the CD as evidence for his position in his opposition to summary judgment.

Plaintiff's motion is without merit. First, the audio files on the CD do not constitute evidence that the debt was improper. They are a series of conversations between Plaintiff and various customer service representatives in which Plaintiff makes representations regarding the satellite receiver which the representatives attempt to investigate. The audio files end before the listener learns the outcome of the customer service representatives' investigation. Nothing in the seven audio files is evidence that Plaintiff did not receive the equipment for which he was charged. Second, even if the audio files were evidence that the debt was improper, the fact is not material, because Plaintiff does not address the Court's independent finding that there was no support for a definition of "client" in the settlement agreement that would exclude the originator of the false debt. Plaintiff was precluded by ...

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