10.5.2 Consumer's Confidential Settlement Conference Statement

10.5.2 Consumer’s Confidential Settlement Conference Statement

NORMAN K.K. LAU Attorney At Law A Law Corporation

NORMAN K.K. LAU 1795 820 Mililani Street, Suite 701 Honolulu, Hawaii 96813 Telephone No.: (808) 523-6767 FAX No.: (808) 523-6769 Email: [email protected]

Attorney for Plaintiff

IN THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF HAWAII

PLAINTIFF, ) CIVIL NO. NO. ) Plaintiff, ) PLAINTIFF’S CONFIDENTIAL ) SETTLEMENT CONFERENCE vs. ) STATEMENT; EXHIBITS 1, 4, 12 ) UNIFUND CCR PARTNERS; ) MARVIN S.C DANG; JAE B. PARK; ) Date: DATE STUART MARTINEZ, ) Time: 10:00 a.m. ) Judge: Leslie Kobayashi Defendants. )

PLAINTIFF’S CONFIDENTIAL SETTLEMENT CONFERENCE STATEMENT

A. BRIEF STATEMENT OF THE CASE

This case involves the collection efforts of Defendants against Plaintiff for money and their violations of the FDCPA, H.R.S. Chapter 443B, and § 480-2 in their collection efforts.

On or about May 25, 2005, Defendants contacted Plaintiff’s employer and obtained more than location information. (Exhibit 12). On or about April 25, 2005, Defendant Unifund sent

1 Plaintiff a letter demanding payment of $9,953.18 for a debt it obtained from Citibank. (Exhibit

1). At the time of this collection attempt, Unifund was not a registered collection agency in

Hawaii. Defendant Unifund also failed to provide the appropriate notices required by 15 U.S.C.

§1692g. Defendant Dang then sent a letter on or about April 28, 2005 demanding $9,953.18 payment for an account on behalf of Unifund. Defendants then filed a lawsuit in District Court on or about September 16, 2005 for the debt on the Account. During the course of the District

Court lawsuit, the parties were ordered to mediation, Defendants refused to participate initially, and attempted to continue the trial. The parties were ordered back to mediation. Defendant

Martinez, Defendant Dang’s paralegal, sent an email to Plaintiff which discussed settlement of the alleged debt. Defendant Martinez then emailed Plaintiff promising to send the billing statements to her by January 27, 2006, (Exhibit 4), but Plaintiff never received the billing statements. These email communications were false as Defendant Martinez never sent the promised statements. On or about February 23, 2006, the collection lawsuit was dismissed with prejudice. Plaintiff has incurred expenses in attempting to correct Defendants’ misguided and illegal collection activities. Plaintiff was also confused, angry, and suffered emotional distress and mental anguish as a result of Defendants’ collection efforts.

B. EVALUATION OF CLAIMS AND DEFENSES

Plaintiff has a strong case against Defendant Unifund for failure to comply with the

FDCPA. Exhibit 1 is Unifund’s only letter to Plaintiff. It did not contain the debt validation notice required by the FDCPA and Unifund has admitted it is a debt collector subject to the

FDCPA. Either Unifund or the other Defendants also contacted Plaintiff’s place of employment and obtained more than location information, as allowed by the FDCPA, causing embarrassment

2 for Plaintiff in her employment. Defendant Martinez’s false statements and his liability for same are also imputed to Marvin Dang, as his employer, and to Unifund because Unifund and Dang have admitted to being debt collectors subject to the FDCPA. See Fox v. Citicorp Credit

Services, Inc., 15 F.3d 1507 (9th Cir. 1994). The FDCPA claims are almost guaranteed to be established. Plaintiff also claims that Unifund should have been licensed before it sued her because it was assigned Plaintiff’s debt for collection. Unifund, however, claims it bought the debt and, therefore, is not subject to H.R.S. Chapter 443B, which regulates collection agencies.

This issue has not been ruled upon by any state court but the federal courts that have considered this argument under the FDCPA have ruled that the purchaser of a defaulted debt is still considered a debt collector. See e.g. Brannon v. United Student Aid Funds, Inc., 94 F.3d 1260

(9th Cir. 1996); Holmes v. Telecredit Service Corp., 736 F.Supp. 1289 (D.Del. 1990); Kimber v.

Federal Financial Corp. 668 F.Supp. 1480 (M.D. Ala. 1987); and Pollice v. National Tax

Funding, 225 F.3d 379 (3rd Cir. 2000). This may have a 70% chance of prevailing.

C. SUMMARY OF PROCEEDINGS

Defendants brought suit in Maui District Court and had the case dismissed with prejudice following Defendants’ failure to produce the requested documents establishing the debt was owed by Plaintiff. No motions have been filed in this case and discovery is still ongoing.

D. ESTIMATED TIME FOR FURTHER DISCOVERY, ETC.

Plaintiff has noticed a 30(b)(6) deposition for Unifund for December 6, 2006 and for Dang, Park, and Martinez for December 7, 2006. Counsel for the parties have conferred on objections raised by Defendants to Plaintiff’s discovery requests and some issues were resolved or narrowed. However, it appears a discovery conference or a motion to compel will be necessary. Also, I believe Defendant Unifund will seek some type of relief or an alternative to

3 producing live witnesses in Hawaii for the 30(b)(6) deposition. Plaintiff wants live witnesses and not telephone or video depositions because of the need to assess the witnesses’ credibility, demeanor, etc. in preparing for trial. Also, Defendant has filed over 38 collection lawsuits in

Hawaii and has submitted to doing business in the state and has violated federal and state law in

Hawaii. Also, after this case was filed, Unifund obtained an exempt collection agency license to conduct collection in Hawaii. Since it chose to do business here, Unifund should come here for the deposition.

E. STATEMENT OF DEMANDS AND OFFERS AND PLAINTIFF’S POSITION ON

SETTLEMENT

After the underlying Maui collection suit was dismissed with prejudice, Plaintiff moved for an award of fees and costs in the amount of $2,794.29 per H.R.S. § 607-14 but the actual fees and costs incurred in defending Plaintiff in the Maui collection suit was $7,222.92. Plaintiff was awarded $500 for fees and $84.28 for costs which was paid by Unifund. The $7,222.92 figure forms the basis for Plaintiff’s actual damages in this case, See e.g. Venes v. Professional Service

Bureau, Inc., 353 N.W.2d 671 (1984). It also forms the basis for the treble damages or

$21,668.76 if Unifund is found to be a collection agency under H.R.S. Chapter 443B and § 480-

13(b)(1) not to mention statutory damages of $1,000 per 15 U.S.C. § 1692k(a)(2)(A). Mr.

Dang’s office offered $2,000 on April 26, 2006 and a counterdemand of $15,000 was made the same day. On October 20, 2006, a demand of $20,000 for all Defendant’s or $8,000 for only the

Dang Defendants was made. Defendants made an offer of $5,000 for all claims on October 26,

2006. A counter-demand of $15,000 was made on October 26, 2006. Plaintiff’s attorney’s fees and costs incurred in this case is about $18,500. Given Defendants could end up owing over

4 $50,000 in damages, fees, and costs with a 70% chance of winning the treble damage claim,

Plaintiff is willing to settle this case for $35,000.

DATED: Honolulu, Hawaii. November 9, 2006.

NORMAN K.K. LAU Attorney for Plaintiff

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