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SCOPE OF FAIR DEBT COLLECTION PRACTICES ACT - NEW TRIAL - "GOOD COUNT/BAD COUNT" - COMPLETE CASH HOLDINGS, LLC V. POWELL

Complete Cash Holdings, LLC v. Powell, [Ms. 1150536, Apr. 21, 2017] __ So. 3d __ (Ala. 2017). In this unanimous decision authored by Justice Parker, the Court reverses a jury verdict in favor of Lola Mae Powell against Complete Cash Holdings, LLC arising from repossession of Powell’s vehicle based on a forged title-pawn agreement. Complete Cash is a lender and pawn broker as that term is defined in § 5-19A-2(4), Ala. Code 1975.

Powell’s claims against Complete Cash went to the jury on theories of conversion, wantonness, and breach by Complete Cash of 15 U.S.C. § 1692F(6) of the Fair Debt Collection Practices Act, 15 U.S.C. § 1692, et seq. (“the FDCPA”). In returning the verdict in favor of Powell, the jury answered in the affirmative the following special interrogatory:

1. Is the jury reasonably satisfied from the evidence in this case that the Defendant, Complete Cash, is a debt collector as defined by the Fair Debt Collection Practices Act and took non-judicial action to effect dispossession or disablement of property when there was no present right to possession of the property?

Ms. *11.

In the trial court, Complete Cash argued that it was not a debt collector subject to the FDCPA because “its principal purpose of business is not the collection of debts or the enforcement of security interests and because Complete Cash does not collect debts owed to third part[ies] or enforce security interests held by a third party.” Id. at 15-16. The Court rejected Powell’s argument that Complete Cash had failed to properly preserve its sufficiency of the evidence challenge to the FDCPA claim. The Court reiterated

To preserve its argument, [Complete Cash] was required to follow the mandates of Rule 50, Ala. R. Civ. P., which governs a JML. Contrary to [Powell’s] contention, preservation of [Complete Cash’s] argument does not require following the mandates of Rule 51, Ala. R. Civ. P., which governs objections to jury instructions.” This Court specifically stated in Cook’s that it is not necessary for purposes of preservation for a party seeking to appeal a trial court’s denial of that party’s motion for a JML “to object to the trial court’s jury instructions on the same grounds as set forth in its motion for a JML.”

Ms. *16, n. 7, quoting Cook’s Pest Control, Inc. v. Rebar, 28 So. 3d 716, 722 (Ala. 2009)(internal citations omitted).

The Court concluded on the merits of the FDCPA issue that Complete Cash was not subject to the FDCPA. The Court held “‘unlike debt collectors creditors typically are not subject to the FDCPA. A ‘creditor’ is ‘any person who offers or extends credit creating debt or to whom a debt is owed” [15 U.S.C.] 1692A(4). Ms. *17, quoting Davidson v. Capital One Bank (USA), N.A., 797 F.3d 1309, 1313 (11th Cir. 2015) (internal citation in Davidson omitted).

Having found the evidence was insufficient to sustain the jury’s verdict on the FDCPA claim, the Court reversed the judgment and ordered a new trial on the conversion and wantonness claims. The Court reiterated settled law regarding “good count/bad count”:

When a jury returns a general verdict upon two or more claims as it did here, it is not possible for this Court to determine which of the claims the jury found to be meritorious. Therefore, when the trial court submits to the jury a ‘good count’ – one that is supported by the evidence – and a ‘bad count’ – one that is not supported by the evidence – and the jury returns a general verdict, this Court cannot presume that the verdict was returned on the good count. In such a case, a judgment entered upon the verdict must be reversed.

Ms. *23, quoting Alfa Mutual Insurance Co. v. Roush, 723 So. 2d 1250, 1257 (Ala. 1998).

The Court also noted that although here the verdict for Powell was general, it “included a special interrogatory indicating that the jury specifically found that Complete Cash was a debt collector under the FDCPA.” Ms. *24. The Court concluded based on the jury’s express finding that Complete Cash was a debt collector that the award of compensatory damages was based at least in part on the FDCPA claim. Thus, the Court concluded “there is no question that the jury’s verdict was based on a ‘bad count.’” Ms. *25. The Court further noted that it could safely assume that the jury’s verdict was based in part on the claims of conversion or wantonness because the jury returned an award of punitive damages (and punitive damages are unavailable under the FDCPA). Ibid. The Court went on to hold that “[t]his, however, does not save the jury’s verdict because we know, based on the special interrogatory, that the jury based its general verdict in part on bad count. For this reason, we must reverse the entirety of the compensatory-damages award.” Ibid.

Finally, the Court held that because the compensatory-damages award had to be reversed, the punitive-damages award must also be reversed. “‘[I]n order to be consistent with due process, a jury’s verdict [must] specifically award either compensatory damages or nominal damages in order for an award of punitive damages to be upheld.’” Ms. *25-26, quoting Ex parte Third Generation, Inc., 855 So. 2d 489, 491 (Ala. 2003) (internal quote marks omitted).

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