10.4.

6 Consumer’s Reply Memorandum Regarding Summary

Judgment

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: HREF="mailto:Norm.lau@Verizon.Net"

Attorney for Plaintiff

IN THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF HAWAII

PLAINTIFF, ) CIVIL NO. NO.

)
Plaintiff, ) PLAINTIFF’S MEMORANDUM IN
) OPPOSITION TO DEFENDANTS’
vs. ) CROSS-MOTION FOR SUMMARY
) JUDGMENT AND REPLY
UNIFUND CCR PARTNERS; ) MEMORANDUM IN SUPPORT OF
MARVIN S.C DANG; JAE B. PARK; ) PLAINTIFF’S MOTION FOR PARTIAL
STUART MARTINEZ, ) SUMMARY JUDGMENT;
) CERTIFICATE OF SERVICE
Defendants. )
) Date: DATE
) Time: 10:30 a.m.
Judge: Helen Gillmor

PLAINTIFF’S MEMORANDUM IN OPPOSITION TO DEFENDANTS’

CROSS-MOTION FOR SUMMARY JUDGMENT AND REPLY MEMORANDUM
IN SUPPORT OF PLAINTIFF’S MOTION FOR PARTIAL SUMMARY
JUDGMENT

HRS Chapter 443B actually defines five categories of entities that will qualify as

a collection agency and, therefore, need to be registered pursuant to HRS §443B-3 or

obtain an exemption under HRS §443B-3.5. Plaintiff submits that Unifund qualified as a

collection agency under the first definition. HRS §443B- 1 provides that a:

"Collection agency" means any person, whether located within or outside

this State, who by oneself or through others offers to undertake or holds
oneself out as being able to undertake or does undertake to collect for
another person, claims or money due on accounts or other forms of
indebtedness for a commission, fixed fee, or a portion of the sums so
collected.

Defendants have not argued that they bought the Citibank debts and, therefore,

were not collecting "for another person." Defendants agree that under the FDCPA, a

purchaser of debts is covered. "It does not matter, for purposes of the FDCPA, whether

the debt collector owns the debt at the time it seeks to collect it, and therefore is not

compensated by some other person." (Defendants memo at 3, received on June 18,

2007). Thus, the debt buyers in Holmes v. Telecredit Service Corp., 736 F.Supp. 1289

(D.Del. 1990); Kimber v. Federal Financial Corp., 778 F.Supp 1480 (M.D.Ala. 1987);

Schlosser v. Fairbanks Capital Corporation, 323 F.3d 534 (7th Cir. 2003); and Brannan

v. United Student Aid Funds, Inc., 94 F.3d 1260 (9th Cir. 1996) were considered debt

collectors under the FDCPA although they were collecting for themselves. Defendants

have no quarrel with this fact. Defendants argue, however, that Unifund was not paid a

commission, fixed fee, or a portion of the sums so collected and, therefore, do not meet

this phrase of the first definition of a collection agency. Since Defendants agree that

Unifund can purchase debts, initiate its own collection activities, and still be considered

to be collecting "for another person", it is obvious then that Unifund need not be paid a

"commission, fixed fee, or a portion of the sums so collected" by "another person". It

can pay itself and still be considered a collection agency under the first definition.

Since an assignment is generally defined as the ‘transfer by a party of all of its

rights to some kind of property, usually intangible,’ Black's Law Dictionary, 5th
 Ed., p. 109, any collection of a debt by the assignee would generally be for itself."
Kimber v. Federal Financial Corp., supra, at 1485.

Furthermore, Unifund is actually paid a "commission or portion of the sums so collected"

if it actually collects any money from consumers whose debts were purchased by

Unifund. Paragraph 1.6 of Exhibit 20 to Plaintiff’s Concise Statement of Facts (hereafter

referred to as "Plaintiff’s Facts") confirm that Unifund paid $29,586,416.15 for debts

worth $554,156,511.60 or 5.339 cents on the dollar. For example, Plaintiff was sued by

Unifund in the state court collection suit (Exhibit 39, Plaintiff’s Facts) for $10,407.13.

Assuming Unifund only paid 5.339% of this amount or $555.64, Unifund’s commission

or portion of the amount collected would have been $9851.49. Thus, Unifund should

have registered as a collection agency under this first definition.

Defendants next argue that Unifund is exempt from coverage of Chapter 443B

because it conducted its collection activities through its attorney and cites Worch v.

Wolpoff & Abramson, L.L.P., 477 F.Supp.2d 1015 (E.D.Mo. 2007) as support. First of

all, Worch is inapplicable to liability under Chapter 443B. That case applied to whether

or not a process server was covered by the FDCPA as a debt collector and the court held

it was not because process servers were specifically exempt under the FDCPA and there

was no respondeat superior liability. That case had nothing to do with determining if a
debt purchaser could be considered a collection agency under state law. However, in this

case, Unifund admits it is a debt collector under the FDCPA, and it is liable for FDCPA

violations of Marvin Dang, its attorney, pursuant to Fox v. Citicorp Credit Services, Inc.,

15 F.3d 1507 (9th Cir. 1994). In any event, Plaintiff never made the claim that Unifund

was to be considered a collection agency simply because it hired Marvin Dang’s office to

sue Plaintiff and Plaintiff agrees that Hawaii licensed attorneys are exempt from Chapter

443B coverage. There is no dispute there.

However, Defendants’ argument that the first definition of collection agency

applies to all references to "collection agency" is simply wrong. Defendants argued that
"[w]henever the phrase "collection agency" appears in Chapter 443B, it means the same

thing." (Defendants’ Memo at 7). In short, Defendants argued that an entity must collect

for another person claims or money due and must be paid a commission, fixed fee, or

portion of the amount collected in order to qualify as a collection agency and imputes its

interpretation to all of the subsections which further defines collection agency to include:

(1) Any person using any name other than the person's own in collecting the
person's own claims with the intention of conveying, or which tends to convey the
impression that a third party has been employed;
(2) Any person who, in the conduct of the person's business for a fee, regularly
repossesses any merchandise or chattels for another; and
(3) Any person who regularly accepts the assignment of claims or money due on
accounts or other forms of indebtedness and brings suits upon the assigned claims
or money due on accounts or other forms of indebtedness in the person's own
name; provided that any suits shall be initiated and prosecuted by an attorney who
shall have been appointed by the assignee.

Obviously, Defendants’ interpretation is incorrect. For example, applying

Defendants’ interpretation to subsection 1 would not make any sense. Under this

subsection, a person collecting its own debt but uses another name in its collection

activities is considered a "collection agency." Obviously, this person is not collecting

claims or money due to another and is not being paid a commission, fixed fee, or portion

of the sums collected. This person, in theory, would keep all of the money it collected for

itself and would not pay anything to anyone else. Thus, if Unifund used the name "Debt

Collector" in its collection activities instead of its real name, it would be considered a

"collection agency" under subsection 1. It would be collecting for itself, not for another,

and it would keep all of the money collected. Hence, Defendants ’ interpretation that the

first definition applies to all definitions of "collection agency" is misplaced. If

Defendants’ interpretation was taken as true, there would be no need to further define

other activities that would qualify an entity as a "collection agency."

 Likewise, subsection 2 defines a repossessor of merchandise or chattels as a

"collection agency." The repossessor does not collect claims or money due on accounts

and Defendants’ interpretation is again inapplicable. The only reasonable and obvious

reason for listing the various categories is to define the various entities that can qualify as

a "collection agency" and the first definition is only one of them.

Unifund also qualifies as a "collection agency" under subsection 3. This

subsection clearly applies to Unifund as it "regularly accepts the assignment of claims or

money due on accounts" (See Defendants’ Responsive Concise Statement of Facts, ¶ 8

[hereafter referred to as "Defendants’ Facts"] and Exhibits 19-20 where Unifund was

assigned Citibank accounts and pg. 16 of Exhibit 20-where Unifund was assigned

293,117 accounts). Unifund also "brings suits upon the assigned claims or money due on

accounts or other forms of indebtedness in [Unifund’ s] own name" and the suits were

"initiated and prosecuted by an attorney [Marvin Dang] who [was] appointed by the

assignee." (Defendants’ Facts ¶ 11; and Plaintiff’s Facts, Exhibits 22 and 39 and ¶ 2 of

Declaration of Norman K.K. Lau).

Defendants also mistakenly argue that HRS §443B-3.5 (a) does not apply to

Unifund because of its interpretation that the first definition also applies to this section.

Again, applying Defendants’ interpretation does not make any sense. Obviously, this

section was enacted to regulate out-of-state collection agencies as its title clearly states

and its provisions clearly apply to those entities. Unifund admits it is an out-of-state

collection agency. (Defendants’ Facts, ¶ 7). An out-of-state collection agency can apply

under this section to be exempt from registration under Chapter 443B if it meets certain

criteria. The whole point of this section is to exempt these entities from registering under

§443B-3 and they would only be subject to sections "443B-9, 443B-15, 443B-16,

443B-17, 443B-18, and 443B-19, and all remedies provided by this chapter and by any

other law". HRS §443B-3.5 (f). In other words, an out-of-state collection agency that

wants to conduct collection activities in Hawaii need only comply with §443B-3.5. In
short, if you are an entity that meets any of the definitions in §443B-1, you must register

pursuant to §443B-3. If, however, you are a licensed collection agency in another state,

you have the option to register pursuant to §443B-3 or seek an exemption under

§443B-3.5. Unifund did not register under §443B-3 or seek an exemption under

§443B-3.5 prior to April 24, 2006 (Defendants’ Facts, ¶ 4-5) whereas the collection suit

against Plaintiff was filed on September 16, 2005 in violation of §443B-3.5 (e) which

provides:
An out-of-state collection agency shall not collect or attempt to collect
any money or any other form of indebtedness alleged to be due and owing
from any person who resides or does business in this State without first
registering under this chapter or receiving an exemption pursuant to this
section. (Emphasis added).

Hence, Chapter 443B applies to Unifund in several different ways due to its collection

activities and it violated Chapter 443B by not registering pursuant to §443B-3 or

§443B-3.5.

In the District of Hawaii, Judge Ezra has already ruled on the issue of demanding

an amount due on a date different than the date of the demand letter in Mayes v. Tharp,

Civil No. 01-00128 (D. Hawai‘i March 13, 2002): "The court agrees that so long as the

amount due on May 15, 2000 was the same amount due on April 26, 2000, the fact that

an April 26, 2000 ledger was cited does not violate §1692g." As already explained in

Plaintiff’s memorandum in support of her motion for partial summary judgment at 8-9,

because Unifund added 27% interest to the amount due, the balance owed changes daily

and Unifund should have advised Plaintiff of this fact and not engage in confusion.

Plaintiff had no idea nor could anyone else know what was owed on April 28, 2005.

Defendants have themselves identified the confusion that can occur by giving two dates

without providing the amount due on each date.

In the case of credit card debt, the amount of the debt generally increases
daily. That means that unless the letter is hand-delivered to the debtor, the
amount of the debt could be different when the debtor receives the letter
from when the letter was sent. If someone is confused by a statement of
 the amount of the debt clearly stated to be a few weeks before the date of
the letter, they would be just as easily confused by the fact that the letter is
received in the mail a day or more after it is dated. (Defendants’ Memo at
11-12).

That is exactly the point Plaintiff is making. There is no way to determine what the exact

amount is owed as of April 28, 2005. Furthermore, Defendants stated in Exhibit 2 that

"You should call our office for any updated amount". However, this does not comply

with the safe harbor and more detailed language that the 7th Circuit provided with respect

to the "amount of debt" provision which was:

We hold that the following statement satisfies the debt collector's duty to
state the amount of the debt in cases like this where the amount varies
from day to day: "As of the date of this letter, you owe $___ [the exact
amount due]. Because of interest, late charges, and other charges that
may vary from day to day, the amount due on the day you pay may be
greater. Hence, if you pay the amount shown above, an adjustment may
be necessary after we receive your check, in which event we will inform
you before depositing the check for collection. For further information,
write the undersigned or call 1-800- [phone number]. Miller v. McCalla,
Raymer, Padrick, Cobb, Nichols, and Clark, LLC, 214 F.3d 872, 876 (7th
Cir. 2000).

Defendants knew that 27% interest was added to the amount assigned to it by Citibank

and should have provided the safe harbor language in order to avoid FDCPA liability

under 15 U.S.C. §1692g (a). Merely listing a telephone contact does not suffice as "[t]he

requirement is not satisfied by listing a phone number." Id. at 875.

Additionally, telling Plaintiff to "call our office for an updated amount" violates

§1692g (a) according to the 7th Circuit’s decision in Chuway v. National Action

Financial Services, Inc., 362 F.3d 944 (7th Cir. 2004). In Chuway, the debt collector

identified the creditor and stated the balance due was $367.42 and "Please remit the

balance listed above in the return envelope provided." It also stated "To obtain your most

current balance information please call 1-800-916-9006." Id. at 947. The 7th Circuit held:
So if the letter had stopped after the "Please remit" sentence, the
defendant would be in the clear. But the letter didn't stop there. It went
on to instruct the recipient on how to obtain "your most current
balance information." If this means that the defendant was dunning her
 for something more than $367.42, it's in trouble because the "something
more" is not quantified. Id. (Emphasis added).

In this case, it is undisputed that Defendants were collecting more than the $9,953.18

stated in Exhibit 2 because Unifund compounds interest on a monthly basis. (Defendants’

Facts, ¶ 60 and Exhibit 39 suing for $10,407.13). Thus, Unifund was also collecting

"something more" and did not quantify that amount in violation of §1692g (a) (1).
If the debt collector is trying to collect only the amount due on the date
the letter is sent, then he complies with the Act by stating the "balance"
due, stating that the creditor "has assigned your delinquent account to our
agency for collection," and asking the recipient to remit the balance listed-
and stopping there, without talk of the "current" balance. If, instead, the
debt collector is trying to collect the listed balance plus the interest
running on it or other charges, he should use the safe-harbor
language of Miller: . . . Id. at 949. (Emphasis added).

Since Defendants were collecting interest on the amount demanded in Exhibit 2 and did

not provide the Miller safe harbor language, Defendants violated §1692g (a) (1). Again,

since all Defendants have admitted they are debt collectors as defined under the FDCPA,

Unifund is also liable for violations made by Marvin Dang’s office. Fox v. Citicorp

Credit Services, Inc., supra.

Defendants’ failure in providing the safe harbor language, accruing interest

without informing Plaintiff of the accrual, and failing to provide the amount due on the

date of letter, i.e. April 28, 2005 also violated 15 U.S.C. §1692e(2) and (10). See Dragon

v. I.C. Systems, Inc., 2007 WL 1098686 (D. Conn. 2007). In Dragon, the plaintiff

contended that defendant violated HREF="http://www.westlaw.com/Find/Default.wl?

rs=dfa1.0&vr=2.0&DB=1000546&DocName=15USCAS1692E&FindType=L",and

HREF="http://www.westlaw.com/Find/Default.wl?

rs=dfa1.0&vr=2.0&DB=1000546&DocName=15USCAS1692G&FindType=L" by

"asserting flatly in the notice required by

HREF="http://www.westlaw.com/Find/Default.wl?

rs=dfa1.0&vr=2.0&DB=1000546&DocName=15USCAS1692G&FindType=L" that the

Balance Due was a sum certain ... since defendant was hired to collect a balance that it

knew would increase on a per diem basis, and monthly, by the amount of interest accrued

and late charges." Id. at 3. The court agreed with the plaintiff and held:
this case is nevertheless one where not only did the collection notice not
specifically indicate the date as of which the "BALANCE DUE" amount
was the full amount of the debt, it also was potentially misleading for the
"least sophisticated consumer" who could readily conclude that the total
amount stated as due ($136.64) was due at any time, when in fact it was
not and was subject to adjustment by Dell on a periodic basis.
Accordingly, plaintiff's Motion for Summary Judgment on this violation
will be granted. Id. at 4. (Italics in original).

Similarly, Exhibit 2 does not state the $9953.18 amount due as of April 1, 2005 was the

full amount due of the debt and the least sophisticated consumer could also conclude that

such amount was payable at any time when, in fact, it was not because the amount due

was also subject to monthly interest adjustments by Unifund. Again, the Dragon court

admonished the defendant that use of the Miller safe harbor language would have

complied with the law and any deviation therefrom is risky. These failures also violate

§1692f. Fields v. Wilber Law Firm, P.C., 383 F.3d 562, 566 (7th Cir. 2004).

The April 28, 2005 letter contained more violations because of the false statement

and misrepresentation made therein. The letter states that "The Creditor had given you

prior notice concerning the delinquent account." It is undisputed that Unifund did not

send any notices to Plaintiff prior to the April 28, 2005 letter. (Defendants’ Facts, ¶ 18).

Defendants now argue that "the undifferentiated term "Creditor’ means either the

Original Creditor or the Current Creditor, or both." (Defendants Memo at 13). Taking

this from the point of view of the least sophisticated consumer, Defendants have admitted

that the statement, at issue, is confusing as both creditors did not send her any notices as

Unifund readily admits it did not. Also, if the least sophisticated consumer should

interpret this statement as coming from Unifund, then the statement would be false and

misleading because Unifund did not send her any notices. Obviously, there are several
interpretations that can be made as to who is the correct creditor referred to in the letter as

Defendants admit. Where there is a possibility of several meanings, one of which is

incorrect, then a FDCPA violation is established.

In addition, a collection notice is deceptive when it can be reasonably read to
have two or more different meanings, one of which is inaccurate. (Citation
omitted). The fact that the notice's terminology was vague or uncertain will not
prevent it from being held deceptive under
HREF="http://www.westlaw.com/Find/Default.wl?rs=+++
+1.0&vr=2.0&DB=1000546&DocName=15USCAS1692E&FindType=L" of the
Act. See HREF="http://www.westlaw.com/Find/Default.wl?rs=+++
+1.0&vr=2.0&DB=350&FindType=Y&ReferencePositionType=S&SerialNum=1
989134296&Referen"HREF="http://www.westlaw.com/Find/Default.wl?rs=+++
+1.0&vr=2.0&DB=350&FindType=Y&ReferencePositionType=S&SerialNum=1
989134296&Referen". Because the initial collection notice in the instant case
was reasonably susceptible to an inaccurate reading, it was also deceptive within
the meaning of the Act. Russell v. Equifax A.R.S., 74 F.3d 30, 35 (2d Cir. 1996).

Thus, given Defendants’ interpretation of the word "Creditor" which could refer to the

original creditor, or to Unifund, or to both of them, it is confusing and deceptive.

Additionally, Defendant Park testified that "Creditor" referred only to Unifund and it is

undisputed that Unifund did not send any notices to Plaintiff. Thus, §1692e and §1692f

violations are established. Violations of §1692e and §1692f also establish the violations

of H.R.S. §443B-18, in general, and subsection (5), in particular, as asserted in Count 6.

Defendants agree that a collection lawsuit can be the initial communication under

15 U.S.C. §1692g but argues that the April 28, 2005 letter suffices because Unifund need

not send its own "g" notice or debt validation letter because Marvin Dang’ s office

already did. The court in Turner v. Shenandoah Legal Group, P.C., 2006 WL 1685698

at 11 (E.D.Va. 2006) relied on Thomas v. Law Firm of Simpson & Cybak, 392 F.3d 914

(7th Cir. 2004), Griswold v. J & R Anderson Bus. Servs., 1983 U.S. Dist. LEXIS 20365

(D.Or. Oct. 21, 1983) and on Sutton v. Law Offices of Alexander L. Lawrence, 1992 U.S.

Dist. LEXIS 22761 (D. Del. June 17, 1992), in reaching its conclusion that each debt

collector must provide its own debt validation notice because:

 The debt collector is assumed to be a sophisticated business entity familiar
with the law, whereas the least sophisticated consumer is anything but, by
definition. It is not unreasonable to conclude that the least sophisticated
consumer might well need a reminder of one's rights and/or clarification of
what and who they are dealing with when contact is initiated by a second,
or third, or subsequent entity. To do otherwise, to not require such notice
by a separate entity, would create a loophole, an "end-run around the
validation notice requirement ... [that is] inconsistent with the
drafters' intention of protecting debtors from 'unfair, harassing, and
deceptive' collection tactics,...."
HREF="http://www.westlaw.com/Find/Default.wl?
rs=dfa1.0&vr=2.0&DB=506&FindType=Y&ReferencePositionType=S&
SerialNum=2005804477&Referenc"HREF="http://www.westlaw.com/Fin
d/Default.wl?
rs=dfa1.0&vr=2.0&DB=506&FindType=Y&ReferencePositionType=S&
SerialNum=2005804477&Referenc". (Emphasis in original).

Defendants have admitted that they are 15 U.S.C. §1692a(6) debt collectors and that they

attempted to collect a 15 U.S.C. §1692a(5) debt from Plaintiff. (Defendants’ Facts, ¶

1-2). As such, Unifund is also required to issue its own debt validation notice to Plaintiff

and failed to do so. Furthermore, Defendants’ assertion that "[e]very other court [except

Turner] to consider the issues has concluded that each debt collector attempting to collect

the same debt need not send a separate debt validation notice" is just plain wrong and

misleading. A cursory reading of Turner and even Senftle v. Landau, 390 F.Supp.2d 463

(D.Maryland 2005) that Defendants cited would reveal otherwise. The reasoned opinion

in Turner and the cases cited therein should be adopted by this Court.

The collection suit itself also contained violations of other provisions of the

FDCPA and HRS Chapter 443B. First, Defendants’ Memo at 17 argues that "The

Affidavit of Indebtedness attached to the collection complaint is printed by a document

preparation service, from Unifund’s computer system, utilizing the information received

from Citibank" and cites to Defendants’ Facts, ¶64. ¶ 64, in turn, refers to Mr. Schaffer’s

deposition transcripts, pages 37-38 & 41. Defendants have again misled this Court as

these pages do not confirm that a document preparation service prepared the Affidavit

nor does it confirm that this service prepared it using Unifund’s computer system. In
fact, Ms. Lengade testified that the Affidavit was prepared by an independent company

called Focus One and was sent to her in a box containing about 2000 Affidavits, that she

has no personal knowledge of the contents of the Affidavit, that she never saw the

collection complaint, and that she just signs the Affidavit without reading them or

checking the accuracy of the statements on her computer program because she does not

have enough time. (Defendants’ Facts,¶30-31 & 34-35). She also testified that she does

not know where Focus One is located, does not know what state it is in, has never been to

the offices of Focus One, does not know what kind of computer system it has, and does

not know what kind of documents are given to Focus One. In short, there is no evidence

that Focus One uses Unifund’s computer system and no evidence that it uses information

from Citibank.

Defendants admit that the verification was replaced by Ms. Lengade’s affidavit,

prepared in advance of the collection complaint, that Ms. Lengade did not read or adopt

the complaint, and that the Affidavit did not refer to the allegations in the complaint.

(Defendants’ Memo at 17-18). Defendants then argue that Ms. Lengade’s lack of

participation in the collection process does not violate anything. This particular argument

is confusing to the undersigned as these admissions clearly establish that Defendants have

prepared false statements and establish the verification of the complaint by Ms. Lengade

was false as she did not read the complaint and obviously could not verify anything in it.

Yet, Defendants attached her Affidavit in lieu of a signed verification. This is a clear

case of perjured testimony as the collection complaint clearly states:

DECLARATION
I have read this Complaint, know the contents and verify that the statements are
true to my personal knowledge and belief. I DECLARE UNDER PENALTY
OF PERJURY UNDER THE LAWS OF THE STATE OF HAWAII THAT
THE ABOVE IS TRUE AND CORRECT

Defendants now admit this Declaration is false. Not only is the collection suit false in

this case, it is also a fraud on the court as it appears that Unifund employees verify

collection suits without ever seeing them and submits affidavits not on personal
knowledge as a regular business practice and Marvin Dang’s office processes these types

of suits with knowledge of these false statements also as a regular business practice. "Not

any fraud connected with the presentation of a case amounts to fraud on the court. See

11 C. Wright, A. Miller & M. Kane, Federal Practice and Procedure: Civil 2d § 2870,

at 416 (1995). It must be a ‘direct assault on the integrity of the judicial process.’Id."

Schefke v. Reliable Collection Agency, Ltd., 96 Hawai'i 408, 431, 32 P.3d 52, 75 (2001).

Defendants’ business practices clearly establish this direct assault as the court and anyone

sued by Defendants would not know of the fraud if just the collection pleadings were

read. On its face, the suit does not reveal any wrong doing but discovery in this case

revealed the true and illegal collection activities of Defendants.

Defendants also mentioned that they used a court form complaint which is mandatory

under the District Court Rules as some kind of excuse for their perjured document.

Although the court forms may be mandatory, verification of the complaint is not

mandatory under the rules. Defendants simply could have left the verification box blank

but because Unifund is a collection mill, Unifund "verifies" their complaints with false

affidavits in order to obtain default judgments without having to prove the claims further.

Defendants were not forced to verify the complaint. They had the option to leave it

blank. See District Court Rules of Civil Procedure, Rule 11 which states, in pertinent part,

that "Except when otherwise specifically provided by rule or statute, pleadings need not

be verified or accompanied by affidavit."

Also, Defendants missed the point of HRCP, Rule 56's requirement that affidavits

be made on personal knowledge. Ms. Lengade testified she had no personal knowledge

of the contents of the Affidavit, did not check the information on her computer system,

and just signed the Affidavit along with 2000 affidavits almost on a daily basis. If she

had no such personal knowledge and signed the Affidavit, then all of the statements

contained therein are false regardless of the fact she is authorized to sign such Affidavits.
An authorized representative of a company would still have to have personal knowledge

of the statements made in the affidavit.

Plaintiff repeats and realleges her position on the unlicensed status of Unifund,

supra, which forms the basis of Plaintiff’s claim that the entire collection suit violated

both the FDCPA and Chapter 443B. With respect to the credit card agreement itself that

was attached to the collection complaint, Plaintiff maintains that the two pages she has

and the six pages presented by Defendants do not raise an issue of fact. Plaintiff ’s claim

with respect to the credit card agreement was that it did not provide any information as to

a 27% interest rate and that claim still applies. Defendants’ Exhibit A, the credit card

agreement at page 2 "Variable Annual Percentage Rates for Purchases and Cash

Advances", states that if default occurs the annual percentage rate on all balances may be

increased to a higher rate of "up to 23.99%". The original APR was 19.99%. Nothing in

the credit card agreement says anything about a 27% interest rate. Thus, the 27% figure

contained in Exhibits 40 and 41 are false and deceptive especially considering that

Defendants have agreed that "Exhibits 42-43 were not the complete agreement and there

should be more than the two pages of the credit card agreement and the other pages

would provide the 27% APR." (Defendants’ Facts, ¶37). Defendants have violated 15

U.S.C. §1692e and §1692f. In turn, these are also violations of HRS §480-13 (b). See

Guerrero v. RJM Acquisitions, 2004 U.S. Dist. LEXIS 15416 at 11 (D. Hawai‘i 2004)

where this Court found a violation of 15 U.S.C. §1692e and other "FDCPA violations ...

establish Defendant ’s violation of H.R.S. §480-13(b)." Obviously, if this Court

determines that Unifund is not a collection agency that should have registered under HRS

§443B-3 or §443B-3.5, then there would be no violation of Chapter 443B by Unifund but

liability would still exists for violations of HRS §480-2 by Unifund and all the other

Defendants in submitting false and perjured pleadings etc.

 Discovery is still outstanding on Count One and Plaintiff requests, pursuant to

FRCP, Rule 56 (f) that Defendants’ motion for summary judgment be continued until

such time discovery is completed. In short, Mr. Schaffer testified that Unifund can

produce hard copies of computer screens that were not earlier produced to Plaintiff that

deal with the source of information relating to Plaintiff’s employment data. Plaintiff is

claiming Unifund obtained more information on Plaintiff than is allowable under 15

U.S.C. §1692b and §1692c (b). (Exhibits 12-13). Plaintiff propounded requests for

production of documents to Unifund on this issue on March 12, 2007 and have not had a

response yet. The pertinent request was for hard copies of computer screens in its

original formats from Unifund’s computer programs of all electronically stored

information in compliance with FRCP, Rule 26 (a)(1)(B) of:

(C) documents from which Unifund obtained information about Plaintiff’s
former employer, Audio Visual Services Corporation, which were used to
verify Plaintiff’s employment especially all documents pertaining to the
source of the following statement: "Employer Disclaimer: Please forward
all Wage Garnishment requests to: Audio Visual Services Corporation,
Attn: Ms. Betty Macklin, payroll specialist, 1700 E. Golf Road, Suite 400,
Schaumburg, IL 60173."

Therefore, this Court can postpone ruling on Count 1 until the necessary documents are

produced by Unifund.

First, Defendants have totally misread Plaintiff’s request for statutory damages

under the FDCPA. Plaintiff requested the maximum of $1000, not $3421.27, as

Defendants argued. Plaintiff only converted into 2006 dollars what the $1000 award

would have to be increased to from the date of enactment of the FDCPA in 1977 to the

present. The $3421.27 figure is the 2006 equivalent of $1000 in 1977. Plaintiff only

seeks $1000 as statutory damages under the FDCPA.

Additionally, Plaintiff seeks actual damages under the FDCPA of $7222.92 which

is the amount of fees and costs still owed by Plaintiff to the undersigned’s office for
representation in the collection suit. The total was $7798.50 but Defendants paid $575.58

toward this amount as ordered by Judge Ige in the collection suit. Defendants now argue

that Judge Ige’s ruling should collaterally estopp Plaintiff from seeking the balance and

cites to Judge Ige’s decision as support. (Defendants’ Exhibit C).

Defendants have misled this Court again in stating that Plaintiff sought $7687.45

for fees in the collection suit. On March 9, 2006, Plaintiff filed a motion for fees and

costs in the collection suit as the prevailing party and requested $2710.01 for fees and

$84.28 for costs. Alternatively, Plaintiff requested $6093.71 for fees and $84.28 for costs

pursuant to DCRCP, Rule 37. Eventually, Judge Ige ruled:

A prevailing party" is not entitled to an award of attorney’s fees pursuant
to HRS § 607-14 in seeking an award of attorney’s fees.
. . .
[T]he court determines that Defendant [Plaintiff herein] is entitled to $500
in attorney’s fees from Plaintiff [Unifund] pursuant to HRS §607-14 for
the reasonable and necessary time spent by Defendant’s attorney in
defending Defendant [Plaintiff herein] against claims of Plaintiff
[Unifund] prior to the entry of the Stipulation to Dismiss filed herein.
(Exhibit C, at 9).

Furthermore, Judge Ige did rule that "[t]he court is satisfied that Defendant’s [Plaintiff

herein] attorney has submit [sic] an affidavit stating the amount of time he spent on the

action as required by HRS §607-14." Id. Judge Ige’s ruling only applied to the fees and

costs requested as of the March 9, 2006 motion but Plaintiff incurred more fees and costs

thereafter because Defendants herein filed an opposition memorandum and Plaintiff had

to file a responsive reply memorandum and the total fees and costs for defending Plaintiff

in the collection suit was $7798.50. There was no ruling, nor could they be, that

Plaintiff’s fees and costs incurred therein could not be considered damages under the

FDCPA and/or HRS §480-13. Plaintiff had a duty to mitigate her damages, Malani v.

Clapp, 56 Haw. 507, 542 P.2d 1265 (1975) by filing for the award of fees in the

collection case since Defendants did not volunteer to pay any fees. Thus, collateral

estoppel is not applicable herein and this Court can still award the $1000 statutory
damages under the FDCPA and leave the issue of actual damages for trial if this Court

determines there is a fact question.

Likewise, treble damages under HRS §480-13 of $22,819.92 for violation of HRS

Chapter 443B and/or HRS §480-2 can also be awarded at this stage of the proceedings

unless there is a fact question on the amount of damages which Plaintiff asserts there is

none. Plaintiff incurred $7798.50 in fees and costs and that amount should be used as the

basis to determine her actual damages under §480-13 because she incurred "expenses that

would not otherwise have been incurred." Wiginton v. Pacific Credit Corp., 2 Haw.App.

435, 445, 634 P.2d 111, 119 (1981).

Plaintiff respectfully requests that her motion for partial summary judgment be

granted and Defendants’ cross-motion be denied.

DATED: Honolulu, Hawaii. June 22, 2007.

/s/ NORMAN K.K. LAU

NORMAN K.K. LAU
Attorney for Plaintiff

CERTIFICATE OF SERVICE

I hereby certify that, on this date as allowed by the court and by the method of

service noted below, a true and correct copy of the foregoing was served on the following

at her last known address:

Served Electronically through CM/ECF:

Elizabeth Kane ekanelaw@aloha.net June 22, 2007.

Attorney for Defendants

DATED: Honolulu, Hawaii. June 22, 2007.

/s/ NORMAN K.K. LAU
NORMAN K.K. LAU
Attorney for Plaintiff