Born v. State Collection Service, Inc., No. 2:2018cv00374 - Document 26 (E.D. Wash. 2019)
Court Description: ORDER GRANTING DEFENDANTS MOTION FOR SUMMARY JUDGMENT. Defendants Motion for Summary Judgment ECF No. 14 is GRANTED. The Court dismisses Plaintiffs FDCPA claims against Defendant with prejudice. The file is CLOSED. Signed by Chief Judge Thomas O. Rice. (LLH, Courtroom Deputy)
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Born v. State Collection Service, Inc. Doc. 26 1 2 3 4 5 UNITED STATES DISTRICT COURT EASTERN DISTRICT OF WASHINGTON 6 7 ROSE BORN, on behalf of herself and all other similarly situated, NO. 2:18-CV-0374-TOR 8 Plaintiff, 9 v. ORDER GRANTING DEFENDANT’S MOTION FOR SUMMARY JUDGMENT 10 11 12 13 STATE COLLECTION SERVICE, INC., a foreign profit corporation, Defendant. BEFORE THE COURT is Defendant State Collection Service, Inc.’s Motion 14 for Summary Judgment (ECF No. 14). This matter was heard with oral argument 15 on June 18, 2019. The Court has reviewed the record and files therein, and is fully 16 informed. For the reasons discussed below, Defendant’s Motion for Summary 17 Judgment (ECF No. 14) is GRANTED. 18 BACKGROUND 19 On November 30, 2018, Plaintiff Rose Born initiated this putative class 20 action against Defendant State Collection Service, Inc. (“State”) under the Fair ORDER GRANTING DEFENDANT’S MOTION FOR SUMMARY JUDGMENT ~ 1 Dockets.Justia.com 1 Debt Collection Practices Act (“FDCPA”), 15 U.S.C. § 1692 et seq., the 2 Washington Collection Agency Act (“WCAA”), RCW 19.16 et seq., and 3 Washington’s Consumer Protection Act (“WCPA”), RCW 19.86 et seq. ECF No. 4 1. Plaintiff primarily alleges that Defendant’s name “State Collection Service” 5 gave the false impression that the debt collection company was in some way 6 associated with the State of Washington in violation of the FDCPA. 7 On April 24, 2019, Defendant State filed a Motion for Summary Judgment, 8 seeking dismissal of Plaintiff’s federal and state law claims. ECF No. 13. Plaintiff 9 filed a response to Defendant’s motion on May 28, 2019. ECF No. 20. In her 10 response, Plaintiff voluntarily withdrew her state law claims under the WCAA and 11 the WCPA. Id. at 12. Accordingly, those state law claims are hereby dismissed. 12 Only Plaintiff’s FDCPA claims remain before the Court. 13 FACTS 14 The following are the undisputed facts unless otherwise noted. Between 15 January 31, 2018, and February 1, 2018, Plaintiff received medical services at 16 MultiCare Deaconess Hospital (“Deaconess Hospital”) in Spokane, Washington. 17 ECF No. 17 at ¶ 9. The charges for Plaintiff’s medical services totaled $16,051.51. 18 Id. 19 20 On August 15, 2018, Plaintiff made a payment of $7,419.00 on her account. ECF No. 17 at ¶ 12. On August 29, 2018, Plaintiff received a write-off of her ORDER GRANTING DEFENDANT’S MOTION FOR SUMMARY JUDGMENT ~ 2 1 balance, totaling $8,200.88, for qualifying charity care from Deaconess Hospital. 2 Id. at ¶ 13. After applying the charity care discount to her account, Plaintiff was 3 left with a balance of $431.63 ($16,051.51 less $8,200.88 less $7,419.00). Id. 4 Deaconess Hospital also gave Plaintiff an additional self-pay discount of $361.16, 5 further reducing Plaintiff’s remaining balance to $70.47. Id. On October 15, 2018, 6 Plaintiff made a $10.00 payment to Deaconess Hospital, which left a balance of 7 $60.47 on her account. Id. at ¶ 15. 8 9 On or about November 2, 2018, Deaconess Hospital sent Plaintiff’s account to collections. Id. at ¶ 16. The account was received by and assigned to Defendant 10 State on November 5, 2018. Id. That same day, Plaintiff called Deaconess 11 Hospital’s “Patient’s Financial Experience Department” to discuss the status of her 12 account. Id. at ¶ 17. Speaking with a Hospital employee, Plaintiff explained that 13 she received a threatening letter informing her that her account was going to be 14 sent to collections. Id. at 3. The Hospital employee confirmed that Plaintiff’s 15 account “did leave the office and go to collections as of last week.” Id. at 4. When 16 Plaintiff asked if she could do anything about the account being sent to collections, 17 the Hospital employee stated that she could “definitely provide [Plaintiff] with the 18 number for the agency” that had been assigned the account. Id. After noting the 19 phone number, Plaintiff asked the Hospital employee to provide “the name of the 20 ORDER GRANTING DEFENDANT’S MOTION FOR SUMMARY JUDGMENT ~ 3 1 collection agency.” Id. The Hospital employee stated that the name of the 2 collection agency was “State Collections.” Id. 3 On November 7, 2018, Defendant State sent its first collection notice to 4 Plaintiff. Id. at ¶ 18; see id. at 22 (Ex. 3). The letter informed Plaintiff that a past 5 due account had been referred to Defendant for debt collection from Deaconess 6 Hospital and confirmed that the account balance was $60.47. Id. The letter was 7 printed on Defendant State’s letterhead, which displayed the name “State 8 Collection Service Inc.” along with an address in Madison, Wisconsin. Id. The 9 following disclosure was included at the bottom of the letter: 10 This communication is from a debt collector. This is an attempt to collect a debt. Any information will be used for that purpose. 11 12 13 14 This collection agency is licensed by the Division of Banking in the Wisconsin Department of Financial Institutions, www.wdfi.org. Id. (emphasis in original). Before the letter was received by Plaintiff, on November 8, 2018, Plaintiff 15 called Defendant State to discuss the status of her account. Id. at ¶ 19. After 16 pulling up Plaintiff’s account and asking Plaintiff to verify her date of birth, an 17 employee of Defendant State made the following disclosure: 18 19 20 I do have to state that I am a debtor collector with State Collections Service and this call is an attempt to collect a debt any information obtained is used for that purpose and It does look like the balance here is with MultiCare Deaconess for $60.47. How are you planning to resolve this ma’am? ORDER GRANTING DEFENDANT’S MOTION FOR SUMMARY JUDGMENT ~ 4 1 Id. Following this disclosure, Plaintiff and Defendant’s employee discussed 2 payment arrangements. Plaintiff stated that she would check her checking account 3 and call back. Id. 4 After the letter was received by Plaintiff and after consulting her attorney, on 5 November 29, 2018, Plaintiff again called Defendant State. Id. at ¶ 20; Counsel’s 6 concession at oral argument. As before, Defendant’s employee stated at the 7 beginning of the call that “[t]his is an attempt to collect a debt and any information 8 obtained will be used for that purpose” and that Plaintiff’s account related to a 9 “balance of $60.47 with MultiCare.” Id. at ¶ 20. Plaintiff confirmed that she was 10 calling to resolve the balance on her account and proceeded to pay the remaining 11 $60.47. Id. The following day, Plaintiff initiated this putative class action against 12 Defendant State. 13 14 DISCUSSION Summary judgment is appropriate when “there is no genuine dispute as to 15 any material fact and the movant is entitled to judgment as a matter of law.” Fed. 16 R. Civ. P. 56(a). In ruling on a motion for summary judgment, the court views the 17 facts, as well as all rational inferences therefrom, in the light most favorable to the 18 non-moving party. Scott v. Harris, 550 U.S. 372, 378 (2007). If the non-moving 19 party lacks support for an essential element of their claim, the moving party is 20 ORDER GRANTING DEFENDANT’S MOTION FOR SUMMARY JUDGMENT ~ 5 1 entitled to judgment as a matter of law regarding that claim. See Celotex Corp. v. 2 Catrett, 477 U.S. 317, 322-23 (1986). 3 At the summary judgment stage, the Court does not weigh the evidence 4 presented, but instead determines whether it supports a necessary element of the 5 claim. See id. To prevail at the summary judgment stage, a party must establish 6 that a fact cannot be genuinely disputed and that the adverse party cannot produce 7 admissible evidence to the contrary. Fed. R. Civ. P. 56(c). Once the moving party 8 has met their burden, the non-moving party must demonstrate that there is 9 probative evidence that would allow a reasonable jury to find in their favor. See 10 Anderson v. Liberty Lobby, 477 U.S. 242, 251 (1986). The Court only considers 11 properly authenticated, admissible evidence in deciding a motion for summary 12 judgment. Orr v. Bank of America, NT & SA, 285 F.3d 764 (9th Cir. 2002). 13 14 I. FDCPA Claims The purpose of the FDCPA is to eliminate abusive debt collection practices 15 by debt collectors. There are three threshold requirements for an FDCPA claim: 16 (1) the plaintiff must be a “consumer”; (2) the defendant must be a “debt 17 collector”; and (3) the defendant must have committed some act or omission in 18 violation of the FDCPA. In the instant motion, Defendant State argues that it is 19 entitled to summary judgment on Plaintiff’s FDCPA claims because Plaintiff has 20 ORDER GRANTING DEFENDANT’S MOTION FOR SUMMARY JUDGMENT ~ 6 1 failed to establish that Defendant violated the FDCPA by using the word “State” in 2 its name. The Court addresses the specific violations asserted by Plaintiff below. 3 1. Violation of 15 U.S.C. § 1692e(1) and (2)(A) 4 Section 1692e of the FDCPA broadly prohibits the use of “any false, 5 deceptive, or misleading representation or means in connection with the collection 6 of any debt.” The Act includes a non-exclusive list of examples of proscribed 7 conduct, including: 8 9 (1) The false representation or implication that a debt collector is vouched for, bonded by, or affiliated with the United States or any State, including the use of any badge, uniform, or facsimile thereof. 10 (2) The false representation of— 11 (A) the character, amount, or legal status of any debt[.] 12 13 14 15 U.S.C. § 1692e. “In this circuit, a debt collector’s liability under § 1692e of the FDCPA is an 15 issue of law.” Gonzales, 660 F.3d at 1061. The analysis is objective and “takes 16 into account whether the ‘least sophisticated debtor would likely be misled by a 17 communication.’” Id. (quoting Donohue v. Quick Collect, Inc., 592 F.3d 1027, 18 1030 (9th Cir. 2010)). “The ‘least sophisticated debtor’ standard is ‘lower than 19 simply examining whether particular language would deceive or mislead a 20 reasonable debtor.’” Id. (quoting Terran v Kaplan, 109 F.3d 1428, 1432 (9th Cir. ORDER GRANTING DEFENDANT’S MOTION FOR SUMMARY JUDGMENT ~ 7 1 1997)). “Most courts agree that although the least sophisticated debtor may be 2 uninformed, naïve, and gullible, nonetheless her interpretation of a collection 3 notice cannot be bizarre or unreasonable.” Evon v. Law Offices of Sidney Mickell, 4 688 F.3d 1015, 1027 (9th Cir. 2012). 5 Additionally, in assessing FDCPA liability, courts “are not concerned with 6 mere technical falsehoods that mislead no one, but instead with genuinely 7 misleading statements that may frustrate a consumer’s ability to intelligently 8 choose his or her response.” Donohue, 592 F.3d at 1034. In other words, a debt 9 collector’s false or misleading representation must be “material” in order for it to 10 be actionable under the FDCPA. Id. at 1033. “The purpose of the FDCPA, ‘to 11 provide information that helps consumers to choose intelligently,’ would not be 12 furthered by creating liability as to immaterial information because ‘by definition 13 immaterial information neither contributes to that objective (if the statement is 14 correct) or undermines it (if the statement is incorrect).’” Id. (quoting Hahn v. 15 Triumph P’ships LLC, 557 F.3d 755, 757-58 (7th Cir. 2009)). Thus, “false but 16 non-material representations are not likely to mislead the least sophisticated 17 consumer and therefore are not actionable under [section] 1692e.” Id. 18 As Plaintiff explains, the “core allegation” in her Complaint is that 19 Defendant State violated the FDCPA “by using the name ‘State Collection Service’ 20 in all of its communications with consumers—thereby potentially giving the false ORDER GRANTING DEFENDANT’S MOTION FOR SUMMARY JUDGMENT ~ 8 1 impression that it is somehow affiliated with a state government . . . .” ECF No. 20 2 at 5. More specifically, Plaintiff alleges that Defendant, through its use of the 3 name “State Collection Service,” (1) misrepresented that it was affiliated with a 4 State, in violation of section 1692e(1), and (2) falsely represented that Plaintiff’s 5 debt had been assigned to the State for collection, in violation of section 6 1692e(2)(A). ECF No. 1 at ¶¶ 7.1-.2. 7 Viewing Defendant’s communications with Plaintiff—i.e., the November 8 7th collection notice, the November 8th phone call, and the November 29th phone 9 call—in the light most favorable to Plaintiff and from the perspective of the least 10 sophisticated consumer, the Court finds that Defendant’s use of the name “State 11 Collection Service” alone does not rise to a violation of section 1692e(1) or 12 (2)(A).1 Regarding the November 8th phone call, the Court does not find the use 13 of the term “State” or the omission of term “Inc.” in Defendant’s name to be 14 deceptive or misleading as a matter of law when Defendant’s employee confirmed 15 16 1 17 consider Plaintiff’s communication with Deaconess Hospital on November 5, 18 2018. Deaconess Hospital is not a debt collector under the FDCPA, nor are the 19 Hospital’s communications with Plaintiff imputable to the Defendant for purposes 20 of liability under section 1692e. In evaluating Defendant’s representations to Plaintiff, the Court does not ORDER GRANTING DEFENDANT’S MOTION FOR SUMMARY JUDGMENT ~ 9 1 that Defendant was a debt collector who was pursuing a debt owed to the original 2 creditor—Deaconess Hospital—and specified the correct balance on the account. 3 ECF No. 17 at ¶ 19. Similarly, the November 7th collection letter was not 4 misleading when it included the proper attributes of Defendant’s corporate name, 5 the correct account balance, and again indicated that the communication was from 6 a debt collector who was pursuing a debt owed to an original creditor. Id. at 22. 7 And as for the November 29th phone call, Plaintiff’s final communication with 8 Defendant State, Defendant’s employee once more confirmed what could only be 9 evident to the least sophisticated debtor in light of these prior communications— 10 Defendant State was a debt collector, the communication with Plaintiff was for the 11 purpose of collecting a debt, and the past due account at issue had been referred to 12 Defendant by Deaconess Hospital with a balance of $60.47. Id. at ¶ 20. For these 13 reasons, Defendant’s collection notice and subsequent communications with 14 Plaintiff did not “falsely represent” that Defendant was “vouched for, bonded by, 15 or affiliated with . . . any State.” 15 U.S.C. § 1692e(1). 16 Moreover, even if Defendant’s use of the term “State” or omission of “Inc.” 17 could be construed as faintly misleading, it was not a material misrepresentation 18 that affected Plaintiff’s ability to “intelligently choose” her response to the 19 collection notice. Tourgeman v. Collins Fin. Servs., 755 F.3d 1109, 1119 (9th Cir. 20 2014). As noted, “false but non-material representations are not likely to mislead ORDER GRANTING DEFENDANT’S MOTION FOR SUMMARY JUDGMENT ~ 10 1 the least sophisticated consumer and therefore are not actionable under [section 2 1692e].” Donohue, 592 F.3d at 1033. Here, Plaintiff contacted Deaconess 3 Hospital and then the Defendant to resolve the outstanding balance on her account. 4 Moreover, all of Defendant’s communications with Plaintiff identified the original 5 creditor and the amount of the debt, containing “no genuinely misleading 6 statements that may frustrate a consumer’s ability to intelligently choose his or her 7 response.” Tourgeman, 755 F.3d at 1119 (quoting Donohue, 592 F.3d at 1034). 8 9 10 11 12 In short, the Court finds that the least sophisticated debtor would not be misled by Defendant’s use of the name “State Collection Service.” Accordingly, the Court dismisses Plaintiff’s claims under 15 U.S.C. § 1692e(1) and (2)(A). 2. Violation of 15 U.S.C. § 1692f Plaintiff also brings a claim under section 1692f of the FDCPA, which states 13 that: “[a] debt collector may not use unfair or unconscionable means to collect or 14 attempt to collect any debt.” 15 U.S.C. § 1692f. In her Complaint, Plaintiff 15 generally asserts that “[a]ll communications from Defendant State to Plaintiff Born 16 and any other Washington consumer, which included in whole or part the name 17 ‘State Collection Service’ were unfair attempts to collect amounts not permitted by 18 law in violation of § 1692f.” ECF No. 1 at ¶ 7.3. 19 20 Because the Court concludes that Defendant’s use of the name “State Collection Service” was not materially false or misleading, the Court also finds ORDER GRANTING DEFENDANT’S MOTION FOR SUMMARY JUDGMENT ~ 11 1 that Defendant’s use of the name was not an unfair attempt to collect a debt under 2 section 1692f. Accordingly, Plaintiff’s claim under section 1692f of the FDCPA is 3 dismissed. 4 ACCORDINGLY, IT IS HEREBY ORDERED: 5 6 7 8 9 10 11 1. Defendant’s Motion for Summary Judgment (ECF No. 14) is GRANTED. 2. The Court dismisses Plaintiff’s FDCPA claims against Defendant with prejudice. The District Court Executive is directed to enter this Order, enter Judgment for the Defendant and furnish copies to counsel. DATED June 18, 2019. 12 13 THOMAS O. RICE Chief United States District Judge 14 15 16 17 18 19 20 ORDER GRANTING DEFENDANT’S MOTION FOR SUMMARY JUDGMENT ~ 12
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