Steven R. Cunliffe v. Portfolio Recovery Associates, LLC

Aug 19, 2013

OUTCOME: Successful Appeal and Reversal of Unfavorable Trial Order allowing post-judgment discovery regarding attorney fee entitlement in debt defense cases.

Consumer debtor, Steven R. Cunliffe (“Cunliffe”) appealed the lower court's “Order Granting Plaintiff's Motion for Protective Order and Motion to Strike Defendant's Notice of Filing and Denying the Def ... endant's Motion to Conduct Discovery” entered on April 14, 2011. (Debt collectors such as Portfolio fight exceedingly hard to prevent a consumer debtor's attorney from being awarded fees when the attorney is successful in defending the consumer.) Cunliffe entered into a credit card account agreement with Capital One Bank NA (“Capital One”). Cunliffe made charges and payments on the account that was later sold to Portfolio Recovery Associates, LLC, (“Portfolio”). Thereafter, in July 2012, Portfolio filed a Complaint against Cunliffe for account stated seeking damages totaling $3,332.04 plus interest and costs. Among the allegations in the Complaint was that Cunliffe entered into a contract for a revolving credit card account with Capital One and that Portfolio purchased the account. Cunliffe then filed his Answer and Affirmative Defenses and discovery ensued. The subject executed contract was not introduced into evidence by either party during the prejudgment proceedings in the lower court. Thereafter, on October 27, 2010, a non-jury trial was held and Cunliffe moved for an involuntary dismissal of the action. The Trial Court granted the dismissal and on November 5, 2010 entered a judgment in favor of Cunliffe. Cunliffe's attorney sought attorney's fees pursuant to F.S. sec. 57.105(1) and 57.105(7) and filed discovery requests to Portfolio pertaining to the attorney's fees issues including Request for Admissions to which was attached an unsigned Capital One credit card agreement containing the following fee provision: “If you default and we refer your account for collection. . . .you agree to pay reasonable attorneys' fees.” Portfolio filed a Motion for Protective Order arguing that there was no authority for post-judgment discovery other than through FRCP 1.560, which only pertains to discovery in aid of execution and further argued that the requests constituted “annoyance, oppression, and undue burden and expense. Cunliffe filed a Motion to Conduct Discovery Regarding Attorney's Fees and Costs. The Trial Court, in granting Portfolio's Protective Order, stated "[b]ecause this was an account stated, they weren't seeking attorneys' fees, and now you are seeking fees based upon the contract, which has never been produced or put into evidence, but which was referenced in the complaint." Ms. Harwell prepared the appellate briefs for Cunliffe, arguing that the contract may be introduced into evidence for the first time post-judgment and Cunliffe is entitled to post-judgment discovery to establish proof of entitlement to attorney fees as the prevailing party pursuant to section 57.105(7), Florida Statutes, that applies to any action seeking to collect a debt based upon a relevant contract. Portfolio argues that Cunliffe as the prevailing party in an account stated cause of action is not entitled to attorney fees based upon section 57.105(7), Florida Statutes, because attorney fees entitlement via this statute is based upon a breach of contract action.