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Hylkema v. Associated Credit Serv. Inc.

UNITED STATES DISTRICT COURT WESTERN DISTRICT OF WASHINGTON AT SEATTLE
Jan 4, 2012
CASE NO. C11-0211-MAT (W.D. Wash. Jan. 4, 2012)

Summary

In Hylkema, Magistrate Judge Theiler found that if a debt is disputed after a debt collector reports the debt to a credit reporting agency, the debt collector does not have an affirmative obligation to notify the agency of the dispute.

Summary of this case from Leapai v. Collection Bureau of Am., Ltd.

Opinion

CASE NO. C11-0211-MAT

01-04-2012

JOSEPH ANDREW HYLKEMA, Plaintiff, v. ASSOCIATED CREDIT SERVICE INC., etc., Defendants.


ORDER RE: PENDING SUMMARY JUDGMENT MOTIONS

INTRODUCTION

Plaintiff Joseph Andrew Hylkema proceeds pro se in this civil matter alleging violations of the Fair Debt Collection Practices Act and the Washington Consumer Protection Act by defendants Associated Credit Service Incorporated (ACS) and Linda and John Doe. Defendants filed a motion for summary judgment. (Dkt. 21.) Plaintiff opposed defendants' motion and filed a cross-motion for partial summary judgment. (Dkt. 25.) Having considered the pending motions, all accompanying documents, and the remainder of the record, the Court concludes that defendants' motion for summary judgment should be GRANTED, plaintiff's cross-motion DENIED, and this matter DISMISSED.

BACKGROUND

This case involves a debt in the amount of $353.99 assigned to plaintiff and owing to Sacred Heart Medical Center. (See Dkt. 23 at 4.) Defendant ACS sent plaintiff a notice of assignment of debt on September 25, 2010 and a subsequent letter on October 25, 2010. (Dkt. 26, ¶¶ 8.1, 8.2 and Ex. C.)

On January 19, 2011, plaintiff telephoned ACS after observing a notation regarding the debt on a credit report. He recorded the ensuing conversation with defendant Linda Doe. Defendants provide a transcript of that conversation to the Court. (Dkt. 23.) Plaintiff orally disputed the debt in his conversation with Doe. (Id.) Among other topics, Doe and plaintiff discussed putting the dispute of the debt in writing and "charity care" at Sacred Heart Medical Center. (Id.)

Following his conversation with Doe, plaintiff checked his credit report through Experian, a national reporting agency, on a number of occasions. Experian credit reports supplied by plaintiff do not reflect plaintiff's dispute of the debt. (Dkt. 26, Ex. A.) Finding no report of his dispute through Experian, plaintiff filed a Complaint in this Court on February 7, 2011. (See Dkt. 1.)

DISCUSSION

Summary judgment is appropriate when a "movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." Fed. R. Civ. P. 56(a). The moving party is entitled to judgment as a matter of law when the nonmoving party fails to make a sufficient showing on an essential element of his case with respect to which he has the burden of proof. Celotex Corp. v. Catrett, 477 U.S. 317, 322-23 (1986). The Court must draw all reasonable inferences in favor of the nonmoving party. Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587 (1986).

The central issue is "whether the evidence presents a sufficient disagreement to require submission to a jury or whether it is so one-sided that one party must prevail as a matter of law." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 251-52 (1986). The moving party bears the initial burden of showing the district court "that there is an absence of evidence to support the nonmoving party's case." Celotex Corp., 477 U.S. at 325. The moving party can carry its initial burden by producing affirmative evidence that negates an essential element of the nonmovant's case, or by establishing that the nonmovant lacks the quantum of evidence needed to satisfy its burden of persuasion at trial. Nissan Fire & Marine Ins. Co., Ltd. v. Fritz Cos., Inc., 210 F.3d 1099, 1102 (9th Cir. 2000). The burden then shifts to the nonmoving party to establish a genuine issue of material fact. Matsushita Elec. Indus. Co., 475 U.S. at 585-87.

In supporting a factual position, a party must "cit[e] to particular parts of materials in the record . . .; or show[] that the materials cited do not establish the absence or presence of a genuine dispute, or that an adverse party cannot produce admissible evidence to support the fact." Fed. R. Civ. P. 56(c)(1). The nonmoving party "must do more than simply show that there is some metaphysical doubt as to the material facts." Matsushita Elec. Indus. Co., 475 U.S. at 585. "[T]he requirement is that there be no genuine issue of material fact. . . . Only disputes over facts that might affect the outcome of the suit under the governing law will properly preclude the entry of summary judgment." Anderson, 477 U.S. at 247-48 (emphasis in original). "The mere existence of a scintilla of evidence in support of the non-moving party's position is not sufficient[]" to defeat summary judgment. Triton Energy Corp. v. Square D Co., 68 F.3d 1216, 1221 (9th Cir. 1995). Nor can the nonmoving party "defeat summary judgment with allegations in the complaint, or with unsupported conjecture or conclusory statements." Hernandez v. Spacelabs Med. Inc., 343 F.3d 1107, 1112 (9th Cir. 2003).

In this case, for the reasons described below, the Court finds defendants entitled to summary judgment. A. Fair Debt Collection Practices Act

Section 1692e of the Fair Debt Collection Practices Act (FDCPA) prohibits a debt collector from using "any false, deceptive, or misleading representation or means in connection with the collection of any debt." 15 U.S.C. § 1692e. Its purpose "is to protect vulnerable and unsophisticated debtors from abuse, harassment, and deceptive collection practices." Guerrero v. RJM Acquisitions LLC, 499 F.3d 926, 938 (9th Cir. 2007).

"[W]hether conduct violates [the FDCPA] requires an objective analysis that considers whether 'the least sophisticated debtor would likely be misled by a communication.'" Donohue v. Quick Collect, Inc., 592 F.3d 1027, 1030 (9th Cir. 2010) (quoting Guerrero, 499 F.3d at 934). This least sophisticated debtor standard "'ensure[s] that the FDCPA protects all consumers, the gullible as well as the shrewd . . . the ignorant, the unthinking and the credulous.'" Clark v. Capital Credit & Collection Servs., Inc., 460 F.3d 1162, 1171 (9th Cir. 2006) (quoting Clomon v. Jackson, 988 F.2d 1314, 1318-19 (2d Cir. 1993)).

The FDCPA is a strict liability statute which should be construed liberally in favor of the consumer. Id. at 1175-76. "[D]ebt collectors generally are liable for violating the FDCPA's requirements without regard to intent, knowledge or willfulness." Hunt v. Check Recovery Sys., Inc., 478 F. Supp. 2d 1157, 1169 (N.D. Cal. 2007). The FDCPA "does not provide an exception allowing the use of otherwise disapproved tactics in response to bad behavior on the part of the consumer." Harper v. Collection Bureau of Walla Walla, Inc., No. C06-1605-JCC, 2007 U.S. Dist. LEXIS 88993 at *14 (W.D. Wash. Dec. 4, 2007). However, the FDCPA does provide a bona fide error defense, 15 U.S.C. § 1692k(c), and allows for an award of attorney's fees to a defendant where a Court concludes an action "was brought in bad faith and for the purpose of harassment," § 1692k(a)(3).

Plaintiff here raises three counts under the FDCPA, alleging violation of §§ 1692e(5), (8), and (10). Defendants move to dismiss all three counts on summary judgment and, alleging plaintiff's bad faith, seek an award of attorney's fees and costs. Plaintiff, in his cross-motion, seeks to establish ACS's liability for violating § 1692e(8) and both defendants' liability for violating § 1692e(10). Plaintiff also requests that the Court dismiss any bona fide error defense raised by defendants.

(1) Section 1692e(5):

Section 1692e(5) of the FDCPA prohibits "[t]he threat to take any action that cannot legally be taken or that is not intended to be taken." Plaintiff alleges defendants violated this section by threatening to sue him "when it did not intend to do so because Plaintiff's account did not meet Defendant's suit criteria." (Dkt. 1, ¶ 5.1.)

Pointing to the transcript of plaintiff's conversation with Doe, defendants deny the existence of any threat. They assert Doe properly told plaintiff it was in his best interest to put his dispute of the debt in writing in order to avoid litigation. As defendants note elsewhere in their motion, the FDCPA requires a consumer to dispute a debt in writing in order to stop further collection activities. 15 U.S.C. § 1692g(b). Defendants deny the existence of the alleged "suit criteria" and aver, despite the absence of any threat, that ASC has and continues to use the court system to collect on accounts.

Plaintiff asserts, "[b]ased on [his] education, training and experience in the debt collection industry," his knowledge that collection agencies "rarely sue consumers to enforce collection of debts." (Dkt. 26, ¶ 9.) He opines that, "in [his] experience, no agency will file suit in the absence of a verified source of garnishable income or, less frequently, real property that a lien can be attached to[,]" and states that, because ACS did not have such information about him, he is "firmly of the belief that it had no intention of suing [him]." (Id.) Plaintiff also notes that defendants moved for summary judgment some eight months prior to the discovery cutoff and suggests the Court defer a ruling on this issue to allow discovery regarding ACS's practices. See Fed. R. Civ. P. 56(d) ("If a nonmovant shows by affidavit or declaration that, for specified reasons, it cannot present facts essential to justify its opposition, the court may: (1) defer considering the motion or deny it; (2) allow time to obtain affidavits or to take discovery; or (3) issue any other appropriate order.")

Plaintiff does not dispute that defendants could take the step of pursuing legal recourse in response to unpaid debts. Instead, he conjectures defendants had no intention of doing so in this case. However, plaintiff does not respond to the contention that defendants never made a threat to take action against him in the first instance. Further, plaintiff sets forth no basis for a continuance to allow discovery in relation to this particular issue or to otherwise dispute that a determination of the issue may be made by reviewing the transcript of his conversation with defendant Doe.

A party requesting a deferral or denial under Rule 56(d) "must show: (1) it has set forth in affidavit form the specific facts it hopes to elicit from further discovery; (2) the facts sought exist; and (3) the sought-after facts are essential to oppose summary judgment." Family Home & Fin. Ctr. v. Fed. Home Loan Mortgage Corp., 525 F.3d 822, 827 (9th Cir. 2008) (cited source omitted). Plaintiff, at most, sets forth a basis for requesting a deferral for discovery in relation to ACS's intention to sue. (See Dkt. 29 at 3.) Because he did not make a showing in relation to any other issue, the Court does not otherwise consider Rule 56(d) in this Order.

Plaintiff and Doe engaged in the following conversation:
MR. HYLKEMA: I don't remember going to the hospital then. I actually dispute this debt.
MS. LINDA ARBUCKLE: Okay. Just make sure you get it in writing for legal purposes. Because if an account is not paid after so many days, it ends up going in for lawsuit. So to avoid that you just want to get that sent in in writing.
...
MR. HYLKEMA: This is on my credit right now. Now that I've told you it's disputed, you have to report it as being disputed.
MS. LINDA ARBUCKLE: Yeah. Once we get it in writing.
MR. HYLKEMA: No. Once I tell you on the phone. Once I place you on notice orally that it's disputed, you have to report it as disputed.
MS. LINDA ARBUCKLE: Okay. But we don't have any reason why you're disputing it. That's why we need it in writing. I can go ahead and mark it, but it can still go in for lawsuit. I'm just trying to help you, not start an argument here.
(Dkt. 23 at 7-8.) (See also id. at 12 (Doe also later stated: "I will note the account, but can you get that in writing for us for legal purposes?")) When plaintiff then asked whether defendants were "going to take [him] to court on this[,]" Doe responded: "No. I'm just saying if you are disputing it and there's no payment and we don't get any dispute in writing, then it could go in for suit. I'm just trying to tell you what could happen." (Id. at 8.) Also, when plaintiff thereafter asked whether there was "a very good chance of that happening[,]" Doe replied: "I wouldn't be able to tell you that." (Id. at 8-9.)

This Court must consider whether the language used by Doe could be read as a threat to take action. In making this determination, the Court considers the language from the perspective of the hypothetical least sophisticated debtor. As discussed below, the Court finds no basis for concluding defendants conveyed a threat to take action against plaintiff.

The transcript reveals that Doe advised plaintiff to put his dispute of the debt in writing in order to avoid the possibility of litigation to collect on the debt. "The Ninth Circuit does not construe threats of litigation so broadly as to include debt collection attempts that are merely prudential reminders of the possible consequences of failure to pay." Abels v. JBC Legal Group, P.C., 428 F. Supp. 2d 1023, 1028-29 (N.D. Cal. 2005). Here, the least sophisticated debtor would understand the statements made as providing "a prudential reminder" that the failure to put the dispute of the debt in writing could lead to litigation. See Wade v. Regional Credit Ass'n, 87 F.3d 1098, 1099-1100 (9th Cir. 1996) (addressing a written notice stating: "'If not paid TODAY, it may STOP YOU FROM OBTAINING credit TOMORROW. PROTECT YOUR CREDIT REPUTATION. SEND PAYMENT TODAY. . . . DO NOT DISREGARD THIS NOTICE. YOUR CREDIT MAY BE ADVERSELY AFFECTED."; finding the language informational, not threatening, "notifying Wade that failure to pay could adversely affect her credit reputation. There was no threat to sue. The least sophisticated debtor would construe the notice as a prudential reminder, not as a threat to take action.") See also Dunlap v. Credit Prot. Ass'n, L.P., 419 F.3d 1011, 1012-13 (9th Cir. 2005) (letter from collection agency warning a debtor it was "'an attempt to collect a debt' and that 'any information obtained will be used for that purpose,'" notifying the debtor that his account was past due, and informing him of his right to dispute the debt, did not violate § 1692e(5); finding the letter "at worst, only vaguely and generally implies that the reader should pay his debt in order to protect his credit rating.") (citing Wade, 87 F.3d at 1099-1100); Hylkema v. Capital Recovery Assoc., Inc., No. C03-3686P, slip op. at 4 (W.D. Wash. Sep. 20, 2004) (Dkt. 15) (a letter stating it served as ten days notice "before any legal action [] was recommended[]" and that no decision had "yet been made to pursue this claim through the courts because that option rests with our client[,]" did not constitute a threat to take unlawful action under § 1692e(5)). Indeed, when asked by plaintiff, Doe explicitly clarified she was informing him merely as to a future possibility in relation to the debt. (Dkt. 23 at 8.)

In sum, defendants establish through the transcript an absence of evidence to support plaintiff's claim of a threat in violation of § 1692e(5). The Court finds no genuine issue of material fact in relation to this claim and plaintiff's first cause of action under the FDCPA subject to dismissal on summary judgment.

(2) Section 1692e(8):

Section 1692e(8) of the FDCPA prohibits "[c]ommunicating or threatening to communicate to any person credit information which is known or which should be known to be false, including the failure to communicate that a disputed debt is disputed." Plaintiff avers in his second FDCPA count that defendant ACS "threatened to communicate and has in fact communicated false credit information, including the failure to communicate that Plaintiff disputed the validity of the Alleged Debt." (Dkt. 1, ¶ 5.2.)

Defendants assert that, following plaintiff's oral dispute of the debt, no further collection activities were taken, the debt was marked as disputed in ACS's computer system, and the dispute was reported to all three national reporting agencies. (Dkt. 22 at 4-5.) Defendants point to its "case summary report", or case notes, as documenting the noted dispute, and aver the absence of any evidence ACS communicated any false credit information or that it failed to communicate the debt as disputed. Defendants state they "have no control over what each reporting agency does or how rapidly they adjust their reports." (Dkt. 21 at 9.)

Plaintiff contends he checked his Experian credit report seven times after his January 19, 2011 conversation with Doe, and that, as late as March 18, 2011, the report failed to show the debt as disputed. (Dkt. 26, ¶4 and Ex. A (credit reports dated December 29, 2011, January 27, 2011, and March 18, 2011).) He contends the case notes confirm that: "Immediately after the call, rather than mark the account as disputed (status DSP), ACS put the account in active collection status (status SNM) and ran a skiptrace search to find new information on Plaintiff, i.e., it did not cease collection of the Alleged Debt[.]" (Id., ¶ 8.4 and Ex. C.) Plaintiff further relies on the case notes as showing that, even after being served with the instant lawsuit on February 7, 2011, ACS did not take any action with respect to credit reporting until March 21, 2011, when the "credit bureau reporting flag (CBR Type) was changed, first from Y (report as undisputed) to C (consumer disputes account information per the Fair Credit Reporting Act), and then from C to Z (delete account entirely)." (Id., ¶ 8.5 and Ex. C.)

Defendants, in response, submitted a supplemental declaration from David Solberg, officer and owner of ACS, disputing plaintiff's interpretation of the case notes. (Dkt. 28.) Solberg states that "SNM" means "send no mail" and "DSP" means "disputed[,]" and avers that ACS did show the account as disputed and ceased further collection efforts. (Id., ¶4.)

Ninth Circuit law is clear that "[o]ral dispute of a debt precludes the debt collector from communicating the debtor's credit information to others without including the fact that the debt is in dispute." Camacho v. Bridgeport Fin. Inc., 430 F.3d 1078, 1082 (9th Cir. 2005). Therefore, a defendant with notice a debt is in dispute violates § 1692e(8) by communicating with a third party about the debt without disclosing the dispute. See Brady v. Credit Recovery Co., Inc., 160 F.3d 64, 67 (1st Cir. 1998) ("§ 1692e(8) merely requires a debt collector who knows or should know that a given debt is disputed to disclose its disputed status to persons inquiring about a consumer's credit history."); Perez v. Telecheck Services, Inc., 208 F. Supp. 2d 1153, 1156 (D. Nev. 2002) (same).

The Court first notes the absence of support for plaintiff's contention that defendants failed to internally mark his debt as disputed. The case notes show fourteen separate entries dated January 19, 2011. (Dkt. 26, Ex. C.) The first entry on that date shows the status of the account as "DSP", which plaintiff concedes means "disputed". (Id., ¶ 8.4 and Ex. C.) The second entry states "Status Chg: SNM to DSP", while another entry states "Dispute Charges" and another indicates plaintiff was advised the account would be noted as disputed. (Id., Ex. C.) While it is unclear why some of the fourteen status entries dated January 19, 2011 reflect the debt status as "SNM", the evidence as a whole clearly establishes that ACS promptly marked the account as disputed.

More importantly, however, plaintiff fails to set forth any factual basis for a contention that defendant ACS at any point violated § 1692e(8) by engaging in a communication with a third party in which it failed to disclose the fact that plaintiff disputed the debt, or otherwise communicated or threatened to communicate any false information. At most, plaintiff contends ACS "ran a skiptrace search to find new information on Plaintiff[.]" (Id., ¶ 8.4.) This assertion does not support a contention that defendants engaged in a communication with a third party regarding plaintiff's debt. Nor does plaintiff point to any other evidence demonstrating the existence of such a communication. In fact, the credit reports submitted by plaintiff appear to reflect no activity regarding the debt after November 2010. (Id., Ex. A.)

Instead of supplying evidence of a communication or threatened communication, plaintiff reads into the FDCPA an affirmative obligation to contact credit reporting agencies with the fact that a debt is disputed. (Id., ¶ 5 ("Satisfied that ACS had no intention of reporting the account as disputed as it was required to do, I commenced my lawsuit on February 7, 2011.")) As noted above, ACS maintains it did report the dispute to the credit agencies, while plaintiff points to the absence of any evidence the credit agencies were aware of the report until on or about March 21, 2011. However, the Court finds no dispute of material fact precluding summary judgment given its conclusion that ACS was not obliged to contact the credit agencies to report the dispute.

In Wilhelm v. Credico, Inc., 519 F.3d 416, 418 (8th Cir. 2008), the Eighth Circuit found no affirmative duty to report the fact that a consumer disputed a debt absent a communication in which that fact should have been reported. Instead, "if a debt collector elects to communicate 'credit information' about a consumer, it must not omit a piece of information that is always material, namely, that the consumer has disputed a particular debt." Id. (emphasis in original). The Court noted Federal Trade Commission (FTC) Staff Commentary to the FDCPA confirming its conclusion:

1. Disputed debt. If a debt collector knows that a debt is disputed by the
consumer . . . and reports it to a credit bureau, he must report it as disputed.
2. Post-report dispute. When a debt collector learns of a dispute after reporting the debt to a credit bureau, the dispute need not also be reported.
Id. (citing FTC Staff Commentary, 53 Fed. Reg. 50097-02, 50106 (Dec. 13, 1988)) (emphasis included in case citation). While the Ninth Circuit has not directly addressed this precise issue, it has implicitly recognized that § 1692e(8) prohibits the omission of information as to a dispute within the context of an actual communication to a third party. See Camacho, 430 F.3d at 1082 ("Oral dispute of a debt precludes the debt collector from communicating the debtor's credit information to others without including the fact that the debt is in dispute.")

Here, there is no indication of a communication or threatened communication in which defendants failed to convey plaintiff's dispute of the debt. Plaintiff, accordingly, sets forth no basis for a violation of § 1692e(8). See, e.g., Wilhelm, 519 F.3d at 418 (summary judgment properly granted where plaintiff presented no evidence of communication of credit information to credit reporting agency after defendant learned of debt dispute). The Court finds plaintiff's cross-motion for summary judgment on his § 1692e(8) claim to lack merit, and defendants entitled to dismissal of this claim on summary judgment.

(3) Section 1692e(10):

Section 1692e(10) prohibits "[t]he use of any false representation or deceptive means to collect or attempt to collect any debt or to obtain information concerning a consumer." Plaintiff alleges defendants attempted to collect the debt through "repeated false, misleading or deceptive representations and means, specifically false statements regarding Plaintiff's oral dispute rights[,]" and "also falsely stated that it intended to sue Plaintiff and that Plaintiff was ineligible to apply for charity care." (Dkt. 1, ¶¶ 5.3, 5.4.)

Defendants point to the transcript as showing Doe repeatedly stated plaintiff's account was being marked as disputed. Defendants assert that Doe properly informed plaintiff the dispute must be in writing to stop further collection activities. 15 U.S.C. § 1692g(b). They again deny the existence of any threat to sue plaintiff, and deny Doe stated plaintiff was ineligible for charity care. Defendants maintain that, in raising these contentions, plaintiff intentionally misstated facts in the Complaint.

Pointing to the transcript and ACS case notes, plaintiff argues defendants informed him his dispute would have to be in writing to be effective "(i.e., for the Alleged Debt to be reported to Experian as disputed)." (Dkt. 26, ¶ 8.3.) He maintains defendants threatened to sue him without having any intention of carrying out a suit. He does not, however, raise any argument in relation to charity care.

Plaintiff's assertion regarding the threat of suit is subject to dismissal for the reasons outlined above. That is, contrary to plaintiff's contention, the transcript cannot reasonably be read, from the perspective of the least sophisticated debtor, to support the conclusion that defendants threatened to sue plaintiff. Likewise, the transcript contradicts plaintiff's contention regarding charity care. The transcript reveals that plaintiff asked whether the hospital had a charity care policy, and Doe replied: "Only if you follow the credit procedures, yes, they do. It looks like that wasn't done." (Dkt. 23 at 9.) When plaintiff asked, "Well, I can still follow those procedures, correct?", Doe responded, "I don't know. This is not the hospital. I said this is Associated Credit, a collection agency for the hospital." (Id.) Considered as a whole, the least sophisticated debtor could not reasonably understand Doe's statements as informing plaintiff he was ineligible to apply for charity care, or that Doe was otherwise using any false representation or deceptive means to collect or attempt to collect a debt.

Nor does plaintiff support his contention as to the statements made regarding putting his dispute in writing. Pursuant to 15 U.S.C. § 1692g(b), "a consumer must dispute a debt in writing, within an initial thirty-day period, in order to trigger a debt validation process." Brady, 160 F.3d at 67 (emphasis in original). Cf. Camacho, 430 F.3d at 1082 (finding oral notification sufficient in relation to § 1692g(a)(3), which pertains to the assumption of validity of a debt). "Once a consumer exercises this right, a debt collector must cease all further debt collection activity until it complies with various verification obligations." Brady, 160 F.3d at 67. "Recognizing the broad consumer power granted by this provision, Congress expressly conditioned its exercise on the submission of written notification within a limited thirty-day window." Id.

The transcript, read in full, shows that Doe told plaintiff numerous times the debt was being marked as disputed, and tied the statements challenged here by plaintiff specifically to the potential for further collection activities and litigation:

. . . Okay. Just make sure you get it in writing for legal purposes. Because if an account is not paid after so many days, it ends up going in for lawsuit. So to avoid that you just want to get that sent in in writing. . . Okay. But we don't have any reason why you're disputing it. That's why we need it in writing. I can go ahead and mark it, but it can still go in for lawsuit. . . . I'm just saying if you are disputing it and there's no payment and we don't get any dispute in writing, then it could go in for suit. I'm just trying to tell you what could happen. . . . I will note the account, but can you get that in writing for us for legal procedures?. . . I will go ahead and note for the account that you are disputing it. . . . I will note in your account that you're disputing. . . . I'm going to note the account like you asked me to. . . . I'm going to go ahead and
note the account.
(Dkt. 23 at 4-5, 12-14.) As reflected above, Doe did at one point state, "Yeah. Once we get it in writing[,]" in response to plaintiff stating, "This is on my credit right now. Now that I've told you it's disputed, you have to report it as being disputed." (Id. at 8.) However, this statement was sandwiched between the other remarks outlined above and cannot reasonably be read in isolation to support the contention that it would be likely to mislead the least sophisticated debtor as to his rights.

The case notes also contradict plaintiff's contention. The case notes clearly show the debt was noted as disputed. (Dkt. 26, Ex. C.) The case notes further mirror the statements in the transcript, reflecting Doe told plaintiff his dispute of the account would be noted, and making a distinction between the noting of plaintiff's account as disputed and the request for a written dispute. (Id. ("SYS HE DISPUTE THIS TOLD HIM WE NEED LTR IN WRITING SYS NO I DNT THINK SO SYS WILL CHCK C/R NXT MNTH N IF STILL ON HERE HE WILL SUE US/TOLD HIM I WOULD NOTE THE FILE..."; "ADV DTR I WILL NOTE U DISPT ACCT[.]"))

In sum, contrary to plaintiff's contention, the evidence does not support the allegation that defendants made a false representation or utilized deceptive means to collect or to attempt to collect a debt. Plaintiff sets forth no genuine issue of material fact and fails to support his motion for summary judgment. This claim is also subject to dismissal on summary judgment. B. Consumer Protection Act

Plaintiff seeks the dismissal of any bona fide error defense on the ground that ACS failed to produce sufficient evidence it maintains the requisite procedures reasonably adapted to avoid such error. See Clark, 460 F.3d at 1176-77 ("[A] debt collector is not liable for its violations of the FDCPA if the violation was not intentional and resulted from a bona fide error notwithstanding the maintenance of procedures reasonably adapted to avoid any such error."); 15 U.S.C. § 1692k(c). However, because the Court finds no FDCPA violation, it need not address this argument.
--------

Plaintiff alleges in his Complaint that defendants violated the Washington Consumer Protection Act (CPA) by engaging in unfair acts or practices injurious to the public interest. He specifically alleges violation of the CPA through a threat to impair his credit rating if the debt in question was not paid. Defendants, pointing to the transcript, aver the absence of any support for such a claim, and contend plaintiff acted in bad faith by intentionally alleging false facts. They note that plaintiff recorded the conversation and had the recording in his possession at the time he filed the Complaint.

Plaintiff does not respond to this argument or otherwise address his CPA claim in his opposition and cross-motion. Plaintiff's failure to respond is considered a concession that defendants' argument has merit. Local Civil Rule 7(b)(2). Moreover, the Court finds an absence of any evidence to support plaintiff's contention that defendants threatened to impair his credit rating if he failed to pay his debt. (See Dkt. 23.) Plaintiff's CPA claim is, accordingly, subject to dismissal on summary judgment. C. Attorney's Fees and Costs

The FDCPA provides for payment of attorney's fees and costs upon "a finding by the court that an action . . . was brought in bad faith and for the purpose of harassment[.]" 15 U.S.C. § 1692k(a)(3). Defendants argue plaintiff initiated phone contact with ACS for the purpose of attempting to create a violation of the FDCPA by goading and prompting defendants. (Dkt. 21 at 10.) They contend plaintiff intentionally misstated facts in the Complaint to create litigation and harass defendants. Defendants note the existence of some twenty cases filed by plaintiff in this Court alleging violations of the FDCPA, and state that the filing of these cases "appears to be for the purpose of increasing the costs to collection agencies and settling to avoid payment of his debts." (Id. at 11.)

Although defendants raise legitimate questions regarding plaintiff's intentions, the Court does not find a sufficient basis upon which to conclude plaintiff filed his complaint in bad faith or for the purpose of harassment. The Court, therefore, declines to exercise its discretion to award attorney's fees and costs to defendants.

CONCLUSION

For the reasons stated above, plaintiff's motion for partial summary judgment (Dkt. 25) is DENIED, defendants' motion for summary judgment (Dkt. 21) is GRANTED, and this matter is DISMISSED with prejudice. The Court finds no basis for an award of attorney's fees and costs.

_________________

Mary Alice Theiler

United States Magistrate Judge


Summaries of

Hylkema v. Associated Credit Serv. Inc.

UNITED STATES DISTRICT COURT WESTERN DISTRICT OF WASHINGTON AT SEATTLE
Jan 4, 2012
CASE NO. C11-0211-MAT (W.D. Wash. Jan. 4, 2012)

In Hylkema, Magistrate Judge Theiler found that if a debt is disputed after a debt collector reports the debt to a credit reporting agency, the debt collector does not have an affirmative obligation to notify the agency of the dispute.

Summary of this case from Leapai v. Collection Bureau of Am., Ltd.
Case details for

Hylkema v. Associated Credit Serv. Inc.

Case Details

Full title:JOSEPH ANDREW HYLKEMA, Plaintiff, v. ASSOCIATED CREDIT SERVICE INC., etc.…

Court:UNITED STATES DISTRICT COURT WESTERN DISTRICT OF WASHINGTON AT SEATTLE

Date published: Jan 4, 2012

Citations

CASE NO. C11-0211-MAT (W.D. Wash. Jan. 4, 2012)

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