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[DO NOT PUBLISH]
IN THE UNITED STATES COURT OF APPEALS
FOR THE ELEVENTH CIRCUIT
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No. 17-11762
Non-Argument Calendar
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D.C. Docket No. 1:14-cv-00515-TWT
ROLAND CARLISLE,
Plaintiff-Appellee,
versus
NATIONAL COMMERCIAL SERVICES, INC.,
Defendant-Appellant.
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Appeal from the United States District Court
for the Northern District of Georgia
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(January 2, 2018)
Before JORDAN, ROSENBAUM and ANDERSON, Circuit Judges.
PER CURIAM:
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Plaintiff-Appellee Roland Carlisle sued Defendant-Appellant National
Commercial Services, Inc. (NCS), claiming that NCS violated the Fair Debt
Collection Practices Act (FDCA), 15 U.S.C. § 1692 et seq., the Fair Credit
Reporting Act (FCRA), 15 U.S.C. § 1681 et seq., and the Georgia Fair Business
Practices Act (GFBPA), O.C.G.A. §§ 10-1-390–407. NCS appeals the district
court’s entry of a default judgment in favor of Carlisle. NCS argues that the district
court erred by failing to grant its motion to set aside the clerk’s entry of default, by
granting Carlisle’s motion for default judgment, and by awarding damages to
Carlisle without holding an evidentiary hearing. As discussed below, we affirm the
judgment of the district court.
I. STANDARD
We review the district court’s denial of a motion to set aside the clerk’s
entry of default and grant of a default judgment for an abuse of discretion.
Sanderford v. Prudential Ins. Co. of Am., 902 F.2d 897, 898 (11th Cir. 1990). “A
district court abuses its discretion when, in reaching a decision, ‘it applies an
incorrect legal standard, follows improper procedures in making the determination,
or makes findings of fact that are clearly erroneous.’” S.E.C. v. Smyth, 420 F.3d
1225, 1230 (11th Cir. 2005) (quoting Martin v. Automobili Lamborghini
Exclusive, Inc., 307 F.3d 1332, 1336 (11th Cir. 2002)).
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II. BACKGROUND
Carlisle alleged that NCS attempted to collect a $1,892.00 debt from him.
Carlisle told NCS representatives over the phone that he disputed the debt in
February 2013 and March 2013. In April 2013, NCS reported to Experian,
Equifax, and Trans Union that Carlisle owed the debt but failed to include that
Carlisle disputed the debt. Carlisle disputed the debt with Equifax and requested
that Equifax verify the debt with NCS. Equifax replied to Carlisle that it had
researched the NCS debt and told Carlisle that NCS had verified that the amount
was correct. About a year later, Carlisle’s counsel sent letters to Experian and
Trans Union disputing the NCS debt. Experian did not respond. Trans Union told
Carlisle that it had investigated the dispute and verified the accuracy of the debt.
Based on these allegations, Carlisle sued NCS, Experian, Equifax, and Trans
Union, claiming in part that NCS violated the FDCA, the FCRA, and the GFBPA.
NCS did not file a responsive pleading and the clerk entered default against NCS
on July 14, 2014. On November 3, 2014, NCS filed a motion to set aside the
default. NCS admitted that the default was due to its counsel’s carelessness in
monitoring the lawsuit but argued that the failure to respond was not willful. NCS
failed to expressly argue that service was improper or file any evidence to that
effect. Carlisle responded in opposition to NCS’s motion, arguing that NCS failed
to show good cause to set aside the default under Federal Rule of Civil Procedure
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55(c). In its reply brief, NCS argued for the first time that the default should be set
aside due to insufficient service of process; it offered the declaration of Zoran
Jovanovski to support its argument. Carlisle moved the strike the declaration as
untimely.
The magistrate judge issued an order granting Carlisle’s motion to strike
Jovanovski’s declaration. NCS did not object to that order. The magistrate also
recommended that the court deny the motion to set aside the default. The
magistrate judge concluded that there was not good cause to set aside the default
under Rule 55(c) because the default was due to NCS’s carelessness. The
magistrate judge also concluded that NCS waived its insufficient service of process
argument by failing to squarely raise the issue in its opening brief. Neither party
objected to the recommendation, which the district court adopted.
Several months later Carlisle filed a motion for default judgment against
NCS, attaching several affidavits to support his claimed damages. The magistrate
judge recommended granting the motion. The magistrate judge concluded that
Carlisle’s allegations supported a finding that NCS violated the FDCA by failing to
provide Carlisle with written notice of the debt within five days of their initial
communication, see 15 U.S.C. § 1692g(a), falsely representing the character,
amount, or legal status of the debt, see 15 U.S.C. § 1692e(2)(A), and failing to
notify Experian, Equifax, and Trans Union that Carlisle disputed the debt, see 15
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U.S.C. § 1692e(8). The magistrate judge recommended the maximum statutory
award of $1,000.00 for these violations. See 15 U.S.C. § 1692k(a)(2)(A). The
magistrate judge further concluded that these acts violate the GFBPA. See
O.C.G.A. § 10-1-393(a); Gilmore v. Account Mgmt., Inc., 357 F. App’x 218, 221
(11th Cir. 2009) (per curiam) (reversing the district court’s determination that
violations of the FDCA did not violate the GFBPA). The court determined that
Carlisle was entitled to $7,000.00 for his emotional distress and, based on the
court’s conclusion that NCS’s noncompliance with the GFBPA was plausibly
willful, awarded Carlisle treble damages under O.C.G.A. § 10-1-399(c).
Finally, the magistrate judge concluded that Carlisle sufficiently alleged that
NCS violated the FCRA by reporting inaccurate information to Experian, Equifax,
and Trans Union and failing to properly investigate the debt after receiving notice
that Carlisle disputed it. See 15 U.S.C. § 1681s-2(a), (b). The magistrate judge
recognized that Carlisle would ordinarily be entitled to damages for his emotional
distress caused by NCS’s violations of the FCRA but observed that it could not
distinguish the mental distress that Carlisle suffered as a result of the FCRA
violations from the mental distress that he suffered as a result of the FDCA and
GFBPA violations. Thus, the magistrate judge recommended that Carlisle receive
no damages for NCS’s violations of the FCRA because such damages would be
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duplicative of Carlisle’s damages for his mental distress under the FDCA and the
GFBPA.
Over NCS’s objection, the district court adopted the magistrate judge’s
report and recommendation, awarding Carlisle $22,000.00 in damages. On appeal,
NCS claims that the district court erred by: (1) striking Jovanovski’s declaration;
(2) denying NCS’s motion to set aside the default; (3) granting Carlisle’s motion
for default judgment; and (4) awarding Carlisle $22,000.00 in damages.
III. MOTION TO STRIKE
NCS waived any objection to the magistrate’s order granting Carlisle’s
motion to strike Jovanovski’s declaration by failing to object to the order. See
Smith v. Sch. Bd. of Orange Cty., 487 F.3d 1361, 1365 (11th Cir. 2007) (per
curiam) (“We have concluded that, where a party fails to timely challenge a
magistrate’s nondispositive order before the district court, the party waived his
right to appeal those orders in this Court.”).
IV. MOTION TO SET ASIDE DEFAULT
NCS argues that the district court abused its discretion by denying the
motion to set aside the default judgment because: (1) service was insufficient; and
(2) the magistrate judge’s report and recommendation applied the Rule 60(b)
standard for setting aside a default judgment instead of the Rule 55(c) “good
cause” standard. Neither argument has merit. First, we note that NCS did not
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object to the magistrate judge’s recommendation that the district court deny the
motion to set aside the default judgment. Thus, NCS has arguably waived its right
to object to the magistrate judge’s recommendation. See 11th Cir. R. 3-1 (“A party
failing to object to a magistrate judge’s findings or recommendations contained in
a report and recommendation in accordance with the provisions of 28 U.S.C.
§ 636(b)(1) waives the right to challenge on appeal the district court’s order based
on unobjected-to factual and legal conclusions if the party was informed of the
time period for objecting and the consequences on appeal for failing to object.”).
Regardless, we find no plain error or abuse of discretion in the decision to
deny the motion to set aside the default. Rather, the court was within its discretion
to conclude that NCS waived its insufficient service of process argument by failing
to assert the argument in its opening brief. See In re Worldwide Web Sys., Inc.,
328 F.3d 1291, 1300 (11th Cir. 2003) (holding that the party waived its insufficient
service of process argument by failing to raise it in its motion to set aside a default
judgment in the bankruptcy court). And the magistrate judge thoroughly reviewed
the Rule 55(c) standard in its report and recommendation. The fact that the
magistrate judge also relied on cases addressing Rule 60(b) motions does not
indicate that the magistrate judge applied the wrong standard. NCS’s argument to
the contrary is without merit.
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V. MOTION FOR DEFAULT JUDGMENT
NCS argues that the district court abused its discretion by granting NCS’s
motion for default judgment as to Carlisle’s FCRA claim based on facts alleged
“on information and belief.” Section 1681s-2(b) requires furnishers of credit
information to investigate the accuracy of the information upon notice from a
credit reporting agency that the consumer disputes the information. NCS claims
that Carlisle fails to sufficiently allege that the credit reporting agencies notified
NCS that Carlisle disputed the debt because Carlisle alleged this fact “upon
information and belief.” But Carlisle also alleges the facts that led him to that
belief; specifically, Carlisle alleges that Equifax responded to his dispute by
informing him that NCS had verified the debt. Thus, the district court did not abuse
its discretion by concluding that Carlisle’s allegations are sufficient to support
violation of § 1681s-2(b) of the FCRA. 1 Moreover, although the court concluded
that Carlisle was entitled to emotional distress damages for this violation, it
declined to award Carlisle those damages because they are duplicative of Carlisle’s
damages under the GFBPA.
1
NCS also argues that the district court abused its discretion by not striking Carlisle’s
motion for default judgment based on Carlisle’s failure to comply with the court’s page limit.
NCS reasons that since the district court struck its untimely declaration, the court was required to
strike Carlisle’s motion. This argument is baseless.
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VI. DAMAGES
NCS argues that the district court erred by awarding Carlisle $1,000.00 in
statutory damages for its violations of the FDCA. The FDCA allows the court to
award up to $1,000.00 in statutory damages for violations of the Act. 15 U.S.C.
§ 1692k(a)(2). To determine the amount of statutory damages, the court must
consider “the frequency and persistence of noncompliance by the debt collector,
the nature of such noncompliance, and the extent to which such noncompliance
was intentional.” 15 U.S.C. § 1692k(b)(1). Here, the district court awarded the
maximum statutory amount based on its conclusion that NCS’s noncompliance
continued despite Carlisle’s multiple disputes of the debt and the fact that NCS’s
noncompliance with the FDCA could have significantly damaged Carlisle’s credit.
NCS argues that the district court abused its discretion by failing to expressly
consider all of the relevant factors. But the statute does not require the district court
to expressly find that each factor is applicable in order to award the maximum
amount of statutory damages. And the district court did not abuse its discretion by
concluding that Carlisle sufficiently alleged that NCS persisted in violating the
FDCA despite Carlisle’s repeated efforts to dispute the debt.
Next, NCS claims that Carlisle is not entitled to damages under the GFBPA.
Under the GFBPA, Carlisle may recover damages for NCS’s violations of the
FDCA. See O.C.G.A. § 10-1-393(a) (“Unfair or deceptive acts or practices in the
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conduct of consumer transactions and consumer acts or practices in trade or
commerce are declared unlawful.”); O.C.G.A. § 10-1-399(a) (providing that
consumers may recover damages for violations of the Act); Gilmore, 357 F. App’x
at 221 (recognizing that violations of the FDCA are within the scope of the
GFBPA). As the magistrate judge recognized, however, Carlisle’s GFBPA claims
based on NCS’s violations of the FCRA are preempted by federal law under 15
U.S.C. § 1681t(b)(1)(F). Thus, Carlisle cannot recover damages under the GFBPA
for NCS’s violations of the FCRA, but Carlisle may recover damages under the
GFBPA for NCS’s violations of the FDCA.
NCS thus argues that Carlisle offered insufficient evidence that the
$7,000.00 in emotional distress damages were caused by NCS’s violations of the
FDCA, rather than the FCRA. But, as the magistrate judge recognized, it is
difficult to distinguish between Carlisle’s mental distress caused by violations of
the FDCA and his mental distress caused by violations of the FCRA. Indeed, some
of NCS’s conduct, such as its initial report of Carlisle’s debt to credit reporting
agencies, violated both Acts. See 15 U.S.C. § 1692e(8); 15 U.S.C. § 1681s-
2(a)(1)(A). Additionally, Carlisle’s declaration supports a finding that NCS’s false
representation of the debt and failure to notify credit reporting agencies that the
debt was disputed caused Carlisle emotional distress. Those acts constitute
violations of the FDCA. See 15 U.S.C. § 1692e(2)(A), (8). Thus, the court did not
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abuse its discretion by concluding that Carlisle was entitled to $7,000.00 in
emotional distress damages for violations of the FDCA that also constitute
violations of the GFBPA. And NCS does not argue that the district court erred by
awarding Carlisle treble damages under the GFBPA.
NCS also claims that Carlisle presented insufficient evidence of emotional
distress damages under the standard used by this Court in Lodge v. Kondaur
Capital Corp., 750 F.3d 1263, 1271 (11th Cir. 2014). But Lodge addressed the
standard for emotional distress damages under 11 U.S.C. § 362(k) of the
Bankruptcy Code, and here the standard for emotional distress damages is
governed by Georgia law. Moreover, the affidavits filed by Carlisle support the
magistrate judge’s finding that Carlisle suffered considerable stress and
aggravation on a regular basis as a result of NCS’s violations of the FDCA. Thus,
the court did not abuse its discretion by awarding Carlisle damages for emotional
distress.
Finally, the district court did not abuse its discretion by failing to hold an
evidentiary hearing to determine the proper amount of damages. NCS did not
request an evidentiary hearing in the district court. And this Court has recognized
that the district court is not required to hold an evidentiary hearing before granting
a default judgment “where all essential evidence is already of record.” Smyth, 420
F.3d at 1232 n.13. Here, Carlisle filed an affidavit regarding his emotional distress
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as a result of NCS’s conduct. Given that NCS did not file any evidence disputing
Carlisle’s emotional distress damages and did not request an evidentiary hearing,
the district court was within its discretion to conclude that a hearing was
unnecessary.
AFFIRMED.
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