Boosahda v. Providence Dane LLC

2012 WL 268345; Case No. 10-1933
Grant of Summary Judgment for Defendant affirmed in FDCPA case. Plaintiff failed to show that the debt at issue was “consumer debt."
Procedural context:
Appeal from United States District Court for the Eastern District of Virginia of Summary Judgment for Defendant.
In 2008, Defendant, Providence Dane, LLC, sued Plaintiff, Harold Boosahda, in State Court seeking to collect more than $22,000 on certain credit card accounts assigned to it by Chase Manhattan Bank and First USA Bank. At the trial in the State Court, Boosahda testified that he could not recall having credit accounts with Chase or First USA and did not remember if he had used those cards to make purchases. Providence’s counsel attempted to introduce evidence of credit card billing statements bearing Boosahda’s name and address but the trial court struck the evidence as hearsay and dismissed the claim against Boosahda. Boosahda asserted certain counterclaims based on the Truth and Lending Act which were rejected by the jury. In 2009, Boosahda commenced a suit in the United States District Court in the Eastern District of Virginia alleging violations of the Fair Debt Collection Practices Act based on Providence’s unsuccessful State Court suit against him. In his deposition, Boosahda repeatedly stated that he could not recall obtaining credit cards from either Chase or First USA and that he did not remember using such cards to make purchases. Providence moved for summary judgment on the grounds that Boosahda could not establish that the debt due on the credit card was a “consumer debt” subject to the FDCPA. Boosahda opposed the Motion for Summary Judgment and submitted a declaration in which he stated that he had reviewed the billing statements and concluded that none of those charges on those accounts could have been used for any business purpose and that he had never used any credit cards for any business purpose. The United States District Court granted Providence’s Motion for Summary Judgment on the grounds that Boosahda was unable to carry his burden of showing that the credit card debt at issue was consumer debt. On appeal, Boosahda contended that he had shown that the debt was consumer debt in three ways: 1. That a letter he received from Providence constituted an admission that it was seeking to collect a consumer debt; 2. That the fact that the State Court suit was against Boosahda, personally, established that Providence attempted to collect a consumer debt; and 3. Boosahda’s declaration submitted in the District Court established that he did not make charges on any credit cards for business purposes. The Fourth Circuit rejected each of these contentions. With regard to the first contention, the Fourth Circuit held that the fact that the language required by the FDCPA appears on a collection letter does not automatically trigger the protections of the FDCPA. The Court reasoned that if the inclusion of the FDCPA required disclaimer is sufficient to establish a FDCPA claim, debt collectors would be exposed to liability either for including the disclaimer or for omitting the disclaimer. The Fourth Circuit held that the debt collector should not be penalized for taking the precaution of including a disclaimer within its initial communication in the event the debt may be subject to the FDCPA. With regard to the second issue raised by Boosahda, the Fourth Circuit found that the mere fact than an individual is sued in his personal capacity on a debt does not establish that the debt is a consumer debt because individuals may be sued personally even for business debts. The Fourth Circuit stated that the District Court examined the billing statements at issue and concluded that any or all of those purchases could have been business expenses. The Fourth Circuit cited to cases establishing that the substance of the transaction and the borrower’s purpose in obtaining the loan must be looked at in determining whether the transaction is for business purposes or not. On Boosahda’s third contention, the Fourth Circuit found it troubling that in his declaration, Boosahda was able to state definitively that he had never used the cards at issue for business purposes when in his testimony in the State Court trial and in his deposition, he testified that he did not recall obtaining the credit cards at issue and did not remember making any purchases with the cards. The Fourth Circuit pointed out that there is no “genuine issue of fact” on summary judgment when the only issue of fact is to determine which of two conflicting versions of a party’s testimony are correct. The Fourth Circuit reasserted its holding that it is improper for a party to create an issue of fact after a deposition merely by asserting an affidavit contradicting his own prior testimony. The Fourth Circuit affirmed the District Court’s decision holding that Boosahda had failed to carry his burden of establishing an essential element of his FDCPA claim, namely that the debt incurred was consumer as opposed to business or commercial debt.
Circuit Court Judges Wilkinson, King, and Keenan.

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