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Barry v. Consolidated Asset Recovery Systems, Inc.

United States District Court, D. Minnesota

January 29, 2019

Billie Barry, Plaintiff,
Consolidated Asset Recovery Systems, Inc.; and Advanced Recovery Solution LLC, Defendants.



         Plaintiff Billie Barry sued Consolidated Asset Recovery Systems, Inc. (“CARS”), and Advanced Recovery Solution LLC (“ARS”), alleging violations of the Fair Debt Collection Practices Act, 15 U.S.C. § 1692, et seq. (for engaging in conduct meant to harass or abuse, making false or misleading representations, and engaging in unfair practices when attempting to collect a debt); Minn. Stat. § 336.9-609 (for wrongful repossession); and Minnesota common law (for trespass to chattels/conversion). (Doc. No. 1, Compl. ¶¶ 51-63.) Plaintiff alleges that Defendants participated in the wrongful self-help repossession of Plaintiff's vehicle and did so with deliberate disregard for Plaintiff's statutory and common-law rights. This matter is before the Court on Plaintiff's Motion for Leave to Amend [the] First Amended Complaint to Plead Punitive Damages. (Doc. No. 34.) A hearing was held on Plaintiff's motion on January 23, 2019. For the reasons set forth below, Plaintiff's motion is granted in part and denied in part.


         In 2016, Plaintiff entered into a Retail Installment Sale Contract with a vehicle dealership to purchase a vehicle (the dealership rights were then assigned to Wells Fargo Bank, N.A.); under the contract, she was to make regular, monthly installment payments and the bank then had a security interest in the vehicle to secure payment. (Doc. No. 34-1, Proposed Second Amended Complaint (“PSAC”) ¶¶ 8, 10, 14-15.) After over a year of making regular monthly payments, Plaintiff's payments became irregular, with some payments being late or only partial payments in late 2017. (Id. ¶¶ 16-19.) Sometime thereafter, Wells Fargo hired Defendant CARS (who in turn engaged Defendant ARS), to repossess Plaintiff's vehicle. (Id. ¶¶ 20-25.)

         On January 11, 2018, at approximately 6:00 p.m., Defendant ARS agents Eric Settergren and Blake Koch went to Plaintiff's apartment complex to repossess Plaintiff's vehicle. (Id. ¶ 33; Doc. No. 37, Decl. of Thomas J. Lyons, Jr. (“Lyons Decl.”) ¶¶ 5-6, Ex. 5 (Transcript of 10/2/18 Deposition of Eric Settergren) at 52; Ex. 6 (Transcript of 10/2/18 Deposition of Blake Koch) at 17.) At that time, the vehicle was parked in Plaintiff's garage, out of the agents' view. Mr. Settergren parked a tow truck near Plaintiff's garage and exited while Mr. Koch remained inside the tow truck. (Lyons Decl. ¶¶ 5-6, Ex. 5 at 51-52; Ex. 6 at 18.) Mr. Settergren somehow gained access inside Plaintiff's apartment complex, and began pounding on Plaintiff's apartment door and screaming, “Open the door or I will call the police!” (PSAC ¶¶ 34-35.) Plaintiff did not know who the person was or why they were there. (Lyons Decl. ¶ 3, Ex. 3 (“Barry Decl.”) ¶ 5.) She did not answer the door, but instead hid in her bedroom with her terrified nine-year-old son. (PSAC ¶ 36.) The pounding and yelling continued for approximately twenty minutes. (PSAC ¶ 37.) Shortly thereafter, the agent began pounding on Plaintiff's sliding glass patio door, which further frightened Plaintiff because she remembered that the patio door was unlocked. (PSAC ¶ 39; Barry Decl. ¶ 6.) After approximately ten minutes, it again became quiet. (PSAC ¶ 40.) The agent then walked back to the apartment complex entrance and began incessantly calling Plaintiff on her cellphone using the apartment building's intercom system. (PSAC ¶ 41.)

         Sometime thereafter that evening, Plaintiff contacted her stepmother, Mary Hagen, and told her what was happening. (PSAC ¶ 42.) The next morning on January 12, 2018, the entire past due amount for the vehicle was paid. (PSAC ¶ 45; Lyons Decl. ¶ 4, Ex. 4 (“Hagen Decl.”) ¶ 5.) Plaintiff did not leave her apartment the entire day or night of January 12, 2018. (PSAC ¶ 44-47; Barry Decl. ¶ 10.) According to document invoices (which are referenced in the PSAC), the agents had returned to Plaintiff's apartment complex on January 12, 2018, and repossessed Plaintiff's vehicle. (Lyons Decl. ¶¶ 7-9, Ex. 7 (1/15/18 Invoice); Ex. 8 (2/5/18 Invoice); see also Ex. 9 (I-Repo Notes).) Plaintiff alleges that they did so by breaking into her garage and damaging the garage door and garage door frame in the process. (PSAC ¶ 46-47.) Plaintiff realized that they had repossessed her vehicle on January 13, 2018, when she left her apartment. (PSAC ¶ 47.) Ultimately, her vehicle was returned to her on January 16, 2018. (PSAC ¶ 50.)


         Based on the above alleged facts, Plaintiff seeks to amend her Complaint to assert a claim for punitive damages. She asserts she should be afforded an opportunity to do so pursuant to Federal Rule of Civil Procedure 15.[1] Defendants oppose Plaintiff's motion.

         Except where amendment is permitted as a matter of course, under Federal Rule of Civil Procedure 15, “a party may amend its pleading only with the opposing party's written consent or the court's leave [and] [t]he court should freely give leave when justice so requires.” Fed.R.Civ.P. 15(a)(2). Despite this liberal standard, a party does not have an absolute right to amend. Sherman v. Winco Fireworks, Inc., 532 F.3d 709, 715 (8th Cir. 2008). It is well established that a motion to amend should be denied if “there are compelling reasons such as undue delay, bad faith, or dilatory motive, repeated failure to cure deficiencies by amendments previously allowed, undue prejudice to the non-moving party, or futility of the amendment.” Sec., Inc. v. Comprehensive Software Sys., Inc., 406 F.3d 1052, 1065 (8th Cir. 2005). The determination as to whether to grant leave to amend pursuant to Federal Rule of Civil Procedure 15 is within the sound discretion of the court. See, e.g., Kozlov v. Associated Wholesale Grocers, Inc., 818 F.3d 380, 394 (8th Cir. 2016).

         Although the Federal Rules establish the process for determining whether to grant a motion to amend to add a claim for punitive damages, Minn. Stat. § 549.20 establishes the substantive legal standard for liability for punitive damages under Minnesota law. The statute provides as follows:

(a) Punitive damages shall be allowed in civil actions only upon clear and convincing evidence that the acts of the defendant show deliberate disregard for the rights or safety of others.
(b) A defendant has acted with deliberate disregard for the rights or safety of others if the defendant has knowledge of facts or intentionally disregards facts that create a high probability of injury to the rights or safety of others and:
(1) deliberately proceeds to act in conscious or intentional disregard of the high degree of probability of injury to the rights or safety of others; or
(2) deliberately proceeds to act with indifference to the high probability of injury to the ...

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