          Case: 17-11762   Date Filed: 01/02/2018   Page: 1 of 12



                                                        [DO NOT PUBLISH]

            IN THE UNITED STATES COURT OF APPEALS

                   FOR THE ELEVENTH CIRCUIT
                     ________________________

                            No. 17-11762
                        Non-Argument Calendar
                      ________________________

                  D.C. Docket No. 1:14-cv-00515-TWT

ROLAND CARLISLE,

                                                         Plaintiff-Appellee,

                                  versus

NATIONAL COMMERCIAL SERVICES, INC.,

                                                        Defendant-Appellant.
                      ________________________

               Appeal from the United States District Court
                  for the Northern District of Georgia
                     ________________________

                            (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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