3 IN THE GENERAL DISTRICT COURT OF PRINCE WILLIAM COUNTY

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1 Page 1 2 V I R G I N I A 3 IN THE GENERAL DISTRICT COURT OF PRINCE WILLIAM COUNTY 4 5 * * * * * * * * * * * * * * 6 THIDA WIN, : 7 Plaintiff, : 8 versus, : GV NAVY FEDERAL CREDIT UNION, : 10 Defendant. : 11 * * * * * * * * * * * * * * 12 Manassas, Virginia 13 Wednesday, April 7, The above-entitled action came on to be heard before the 16 Honorable Peter W. Steketee, a Judge for the General District Court of 17 Prince William County, in Courtroom 1, 9311 Lee Avenue, Manassas, 18 Virginia beginning at 12:30 o'clock p.m

2 1 APPEARANCES: Page 2 2 For the Plaintiff: 3 4 JOELLE E. GOTWALS, ESQUIRE 5 Law Offices of Robert R. Weed Sudley Road, Suite Manassas, VA For the Defendant: AMY SANBORN OWEN, ESQUIRE 13 Cochran & Owen Towers Crescent Drive, Suite Vienna, VA

3 1 P R O C E E D I N G S : Page 3 2 THE COURT: All right, this is what, a demurrer? 3 MS. OWENS: This is our demurrer, Your Honor. 4 THE COURT: Let's see what we have first of all. This is a 5 negligence claim, is that correct? 6 MS. GOTWALS: Yes, Your Honor. 7 THE COURT: Failure to prevent employees from committing 8 harassment, violation of Code. 9 And so Navy Federal Credit Union is alleged, has been, at 10 least turned its head from employees who are committing acts of 11 harassment, is that it? All right. So the demurrer is Navy 12 Federal's; I guess I should hear it. 13 MS. OWEN: Thank you, Your Honor. Amy Owen on behalf of 14 Navy Federal Credit Union. This case that was filed I believe is a 15 somewhat of a case of first impression; I certainly have never seen 16 someone allege that the creditor could be liable under criminal 17 statute for its employees who are attempting to collect a debt. 18 This is an interesting argument; however, I think the 19 Court can rule on it pretty easily under the Fair Debt Collection 20 Practices Act, which is a federal act that preempts common law causes 21 of action for activity that is covered under the act and the act as 22 the Court may know covers when you can call someone, how often you can

4 1 call someone, the substance of what you can say, et cetera. Page 4 2 And for that reason, Your Honor, just from the outset I 3 think the Court needs to grant, sustain the demurrer. 4 But looking at it a little bit further, I think the Court 5 can hear the full case and that the Court will never allow a debtor to 6 come back and start claiming negligence on the creditor for allowing 7 its employees to try to collect a debt. It just doesn't make sense. 8 I don't know how there will be ability to prove beyond a reasonable 9 doubt that this statute was in fact violated. 10 I'm not aware of any police report that was filed, that 11 people were charged, convicted. I could go on and on, Your Honor, but 12 it's simply, it is an interesting argument. It's certainly novel and 13 clever, but the Fair Debt Collection Practices Act is in place already 14 on this very issue about THE COURT: But they narrowed this in their warrant in 16 debt, because what they said was that they had violated specifically 17 the provisions of Virginia Code , which is captioned, causing 18 the telephone to ring with the intent to annoy. I must tell you there 19 are times during the evening when the phone rings and whether it's my 20 children or my wife who happens to be at a meeting or something like 21 that, I'm annoyed, not until I pick it up, of course, but I'm annoyed 22 I say, when I pick it up, I'm no longer annoyed, but I've had plenty

5 Page 5 1 of times the phone rings, I'm into something, if I'm reading and I 2 don't want to interrupt, I'm annoyed. 3 MS. OWEN: I understand. I think you've just -- 4 THE COURT: I'm not sure what that means. 5 MS. OWEN: I don't think that debt collectors will be 6 coming after Your Honor but now that you've said that, there may be 7 causes of action when people call to solicit for political 8 contributions or for charities or to change your phone plan. I mean, 9 where does it end. 10 THE COURT: I guess my point there is that there are times 11 when just the ringing of a telephone is an annoying event because 12 you're tied up in something else and I guess we can always turn it 13 off. 14 But having heard what she has said, what is your position 15 with respect to this? Is it your position that just calling 16 constitutes the annoyance? 17 MS. GOTWALS: Well, let me answer that question first. 18 THE COURT: Okay. 19 MS. GOTWALS: And then I'll go directly to what counsel 20 said here. 21 THE COURT: Because I don't know. 22 MS. GOTWALS: Certainly. Our argument is not just the

6 Page 6 1 ringing of the telephone. But if you'll take a look at the bill of 2 particulars -- 3 THE COURT: I haven't. 4 MS. GOTWALS: Two things, one, we have and are able to 5 successfully document if we go to trial, over a period of two weeks, phone calls from the defendants, sometimes 20 to 30 times a day 7 from three to four different individuals identifying themselves as 8 being employed by Navy Federal Credit Union. 9 THE COURT: These are all answered phone calls? 10 MS. GOTWALS: They are not all answered, no, but the phone 11 numbers that are identified, and we have provided by Ms. Win, her 12 phone records that can demonstrate the times that they have called, 13 the numbers that we can associate with Navy Federal should we need to 14 prove that at the trial. 15 So to Your Honor's point of whether or not just the phone 16 ringing is harassment, maybe, maybe not, but in this case it's almost THE COURT: Well, I was being somewhat facetious about 19 that. 20 MS. GOTWALS: Certainly, Your Honor. 21 THE COURT: The harassment, as far as I'm concerned, 22 doesn't begin really until I pick up the phone and find that there's

7 1 someone on the other end that's giving me fits in some fashion or Page 7 2 another and who's been told not to call or who otherwise should know 3 better. 4 MS. GOTWALS: That's correct. I think Your Honor -- 5 THE COURT: But the mere ringing of the phone sometimes, I 6 was saying facetiously was the annoyance. 7 MS. GOTWALS: Right, and, well, Your Honor, in this case we 8 also have, and would be able to prove by Ms. Win's testimony that they 9 were told dozens of times that she was unable to pay the debt and 10 would not be paying the debt, was filing for bankruptcy. In fact, to 11 note, that she had in fact already filed for bankruptcy and to call 12 her bankruptcy counsel, my boss, Bob Weed. 13 THE COURT: Let me ask you MS. GOTWALS: Okay. 15 THE COURT: - is your position going to be that she had 16 initiated a bankruptcy and this was an act that followed that 17 bankruptcy initiation? 18 MS. GOTWALS: No, no, Your Honor, my point is solely that 19 once being informed a dozen or two dozen times by my client that she 20 couldn't pay, wouldn't be paying and would in the near future be 21 filing bankruptcy, the only point of calling her beyond that, after 22 knowledge of that, would be to harass her and annoy her because she

8 Page 8 1 could and would not, was unable to pay and calling her 30 times a day 2 was not going to change that. 3 THE COURT: But if they wanted to make some arrangements 4 for her 5 MS. GOTWALS: Well -- 6 THE COURT: - some compromise 7 MS. GOTWALS: If they called, you know, occasionally, allow 8 enough time for her circumstances to change, to make payment 9 arrangements, that would be sensible to me, but to call 30 times a 10 day, nothing has changed between 12:01 and 12:07 p.m. 11 THE COURT: Do we know what they were intending to say? Do 12 we know what, in other words, is it your position that it's simply the 13 call that constitutes the annoyance and not the message? 14 MS. GOTWALS: Yes, to the extent that the volume of calls 15 and the calls subsequent to knowledge that she was unable and 16 unwilling to pay constituted annoyance and harassment, yes. I meant 17 that's THE COURT: Which is MS. GOTWALS: It's not what they said or what they've not 20 said. It's certainly part of her testimony, the things that they said 21 to her. 22 THE COURT: Then again, they may have been hopeful that

9 Page 9 1 she's gone out and bought a lottery ticket and - her position is that 2 it's the volume of these calls at a time when they knew that things 3 weren't going to get any better. That the message had been 4 communicated. 5 MS. OWEN: Fair Debt Collection Practices Act addresses all 6 these things. But I also want to go back to the statement, which I 7 think is important. I failed to mention in the beginning, Your Honor, 8 Ms. Win just filed bankruptcy a week ago, so I'm not even sure the 9 Court has jurisdiction over this any more, but the plaintiff's counsel 10 insists that the Court does. 11 THE COURT: Is it sanctioned by the trustee? 12 MS. GOTWALS: It hasn't; she hasn't yet had a 341 hearing, 13 Your Honor. She is in the process THE COURT: Does this not constitute an asset of the 15 bankruptcy estate? 16 MS. GOTWALS: It is listed as an asset of the bankruptcy 17 estate. 18 THE COURT: And should not the bankruptcy trustee have some 19 say in this either by saying, gee, I want to command this performance 20 or I'm going to simply wash my hands of it and let you handle it. 21 MS. GOTWALS: Well, and in past circumstances such as 22 these, Your Honor, we've exempted any possible judgment as part of a

10 Page 10 1 personal injury, any of these types of debt cases so we've never had a 2 trustee seeking to go after the interest in any of these lawsuits 3 because we've listed them in the, as an asset, but also, 4 simultaneously listed them as exempt. We've never had a trustee go 5 after it. 6 THE COURT: You brought this under , which is a 7 criminal code section. 8 MS. GOTWALS: Well, we filed it as a negligence action, 9 negligent training and hiring, but it is negligent to allow an 10 employee to break criminal law. 11 THE COURT: So what are the damages that you are going to 12 be seeking? What are the damages that you're seeking? How is that 13 going to be calculated, just the nuisance? 14 MS. GOTWALS: Yes, and the humiliation harassment 15 THE COURT: What's the basis I have for that? 16 MS. GOTWALS: Well, the testimony of Ms. Win, who isn't 17 here today. 18 THE COURT: I mean, what's the basis I have for that? 19 Where are the Bill of Particulars? Is it your position that if you 20 ask that those phone calls cease and they have persisted, your office? 21 MS. GOTWALS: I'm sorry? 22 THE COURT: Did your office ask that those phone calls

11 1 cease yet they persisted after that? Page 11 2 MS. GOTWALS: I can't speak to that today, Your Honor. 3 It's entirely possible, but I certainly just don't know whether or not 4 anyone at my firm spoke to anyone at the defendant's office. 5 THE COURT: So that's not going to be part of your case 6 then I gather? 7 MS. GOTWALS: Not at this time, Your Honor. Though, if I 8 may briefly just address defense counsel's point? 9 THE COURT: So this is set for trial today? 10 MS. GOTWALS: No, no, Your Honor. In fact, we moved the 11 trial to, I believe, May 5th pending the results of the demurrer here 12 today. 13 THE COURT: It looks like it's still on the docket for 14 today. 15 MS. OWEN: It does, Your Honor. Apparently the Court would 16 enter the order today; it came THE COURT: All right. 18 MS. GOTWALS: I believe there was a joint consent order 19 submitted to move the trial. I guess that didn't get removed from 20 today's docket. But if I can briefly respond, Your Honor, to defense 21 counsel's comments regarding the Fair Debt Collection Practices Act. 22 THE COURT: That's what their hat is hanging on right now.

12 1 MS. GOTWALS: I'm sorry? Page 12 2 THE COURT: That is what their hat is hanging on. 3 MS. GOTWALS: Yes, Your Honor. And I guess I would ask the 4 question of defense counsel whether or not they, it's their position 5 that their client is a debt collector within the definition of the 6 statute and therefore their actions are covered by the statute. 7 Because the statute pertains only to the actions of a very 8 limited number of groups, specifically debt collectors who are defined 9 by the statute as those whose principle purpose of which is collecting 10 debts for another person or entity. 11 MS. OWEN: It's not my understanding that they were 12 employees that called. 13 THE COURT: It was not an employee? 14 MS. GOTWALS: Your Honor, it's the plaintiff's position 15 that these were people directly employed by Navy Federal Credit Union. 16 THE COURT: How many witnesses do you anticipate calling? 17 MS. GOTWALS: Myself, probably just Thida Win. 18 THE COURT: And how many do you anticipate? 19 MS. OWEN: Your Honor, this again, when you take the 20 position, I said I was going to file for bankruptcy and then I waited 21 six months to file, somehow that opens the door for this. We could 22 have, do I have to bring every person that ever dialed it?

13 1 THE COURT: I don't know. Page 13 2 MS. OWEN: We would certainly have to get a -- 3 MS. GOTWALS: Your Honor, if I may -- 4 THE COURT: I have some great difficulty with the claim 5 that you have brought personally. At the same time I am not going to 6 the grant the demurrer unless it is so clear cut, certainly at this 7 level, to give you the chance to have your day in court. 8 But I must tell you, this sounds a bit of a reach, not 9 only with respect to the harassment -- if you really felt it was 10 harassment under 429, bring it back as a criminal offense. You know, 11 find out who is doing it and bring that person in, or if you think you 12 can bring in Navy Federal on that basis, bring them in. 13 But if you're going to try to show that there's some 14 damages, at least for my part, I think you've got an extraordinarily 15 difficult task. I'm not going to grant the demurrer. I do so knowing 16 that there's difficulties for the defendant in terms of witnesses. 17 But I am telling the plaintiff right now that I think 18 you've got a terribly rough row to hoe here; I really do. And I'm at 19 this point struggling to find a way of how you're going to accomplish 20 it. 21 I'm not going to grant the demurrer at this point. But at 22 the same time you may want to rethink this because at some point they

14 Page 14 1 may come back with a motion of their own with respect to an action 2 such as this. 3 If they are exempt of the federal law, if you're choosing 4 this just on harassment and she wasn't so harassed, she sought relief 5 under the code section to which you've made reference here, someone 6 may ask, well, why didn't you and then beyond that, somebody may say, 7 well, gee, you know, why are you going after the creditor at this 8 point because I'm assuming those calls have ceased. 9 And I'm not so sure you're not opening the door for your 10 client to some other issue being brought up by the defendant. I don't 11 know. I don't really know. Not today. We'll find out. 12 MS. OWEN: Are you making a finding for a cause of action 13 for a 14 THE COURT: I'm not making any finding. I'm putting this 15 over to May 5 at 1:30 for trial. That may very well be my week. You 16 may be stuck with me. Those are headaches that I think about. They 17 require a bottle of Exedrin in the briefcase just in case. 18 MS. GOTWALS: Thank you, Your Honor. 19 THE COURT: All right. 20 (Whereupon, 12:54 o'clock p.m., the hearing in the 21 above-captioned matter was concluded.) 22

15 1 I, CAROLYN J. TIMKO, a Verbatim Reporter, do hereby Page 15 2 certify that I took the notes of the foregoing hearing by Stenomask 3 and thereafter reduced to typewriting under my direction; that the 4 foregoing is a true record of said hearing to the best of my knowledge 5 and ability; that I am neither related to nor employed by any attorney 6 or counsel employed by the parties thereto; nor financially or 7 otherwise interested in the action CAROLYN J. TIMKO 13 Court Reporter

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