JAMES L. ROBART, District Judge.
Before the court are: (1) Defendants Daniel N. Gordon, P.C. ("DNG") and
Also pending before the court is Ms. Moritz's motion for leave to file supplemental authority (Dkt. # 60) in support of her motion for partial summary judgment (Dkt. # 45) and in opposition to Defendants Daniel N. Gordon, P.C. ("DNG") and Daniel N. Gordon's motion for summary judgment (Dkt. # 42). Ms. Moritz seeks to file a contract produced by Defendants in discovery after the parties had submitted their summary judgment motions. Ms. Moritz contends that the contract is relevant to her claim that DNG committed an unfair or deceptive act or practice in violation of the Washington Consumer Protection Act, RCW ch. 19.16. In light of the court's rulings herein, the court DENIES as MOOT Ms. Moritz's motion for leave (Dkt. # 60).
This case involves Ms. Moritz's contacts with DNG while DNG attempted to collect a debt that Ms. Moritz owed its client, CACV of Colorado, LLC ("CACV"). On or about February 27, 2006, DNG mailed certain documents to the Washington State District Court for Whatcom County for filing, including a complaint on behalf of CACV against Ms. Moritz. (1st Radbil Decl. (Dkt. # 58) Ex. A at 2 (2/27/06 Cover Letter).) The cover letter identified DNG as "Attorney and Counselor at Law." (Id.) On or about March 13, 2006, the Whatcom County District Court filed CACV's complaint. (Aylworth Decl. (Dkt. # 44) Ex. 1 (State Ct. Compl.).) The complaint alleged that Ms. Moritz was indebted to CACV in the amount of $3,070.67 from January 12, 2006, plus interest at a rate of 12% per annum, and sought to recover this debt. (Id. Ex. 1 ¶ 4.) Below Mr. Gordon's signature on behalf of DNG, the complaint stated in bold font: "This Communication is from a Debt Collector." (Id. Ex. 1 at 3.)
In April 2006, Ms. Moritz contacted DNG, and the parties set up a payment plan. (Aylworth Decl. ¶ 7; 1st Kraemer Decl. (Dkt. # 43) Ex. 1 (Moritz Dep.) at
On November 15, 2007, DNG mailed a writ of garnishment and a copy of the state court judgment to the Whatcom County District Court for filing. (1st Radbil Decl. Ex. A at 4 (11/15/07 Cover Letter).) In July 2008, DNG issued a garnishment to Talasaea Consultants, Inc. ("Talasaea"), but the company answered that Ms. Moritz had not been employed there since May 23, 2008. (Aylworth Decl. ¶ 9, Ex. 3 (Ans. to Garnishment).)
On March 18, 2009, DNG mailed Ms. Moritz a letter confirming that she owed $5,619.43 and agreeing to accept monthly payments of $50.00. (2d Radbil Decl. (Dkt. # 46) Ex. 9 (3/18/09 Letter); see also 1st Kraemer Decl. Ex. 1 (Moritz Dep.) at 37:21-22.) Ms. Moritz, however, did not make monthly payments as agreed. (Aylworth Decl. ¶ 10.)
On July 1, 2010, Ms. Moritz spoke with DNG about the possibility of a new payment plan and told DNG that she was employed at Talasaea. (Id. ¶ 11.) That same day, DNG contacted Talasaea to verify Ms. Moritz's employment in order to issue garnishment. (Id. ¶ 12.) Also on July 1, 2010, DNG sent Ms. Moritz a letter confirming the payment plan, as well as a $6,384.14 balance on Ms. Moritz's debt owed to CACV. (2d Radbil Decl. Ex. 10 (7/1/10 Letter).)
On August 30, 2010, DNG employee Tasha Pierce called Ms. Moritz and left a voicemail message asking for a return call. (2d Radbil Decl. Ex. 7 (DNG Collection Notes) at GORD00040.) That same day, DNG sent Ms. Moritz a letter in which it agreed to a third payment plan that Ms. Moritz had set up. (Id. Ex. 11 (8/30/10 Letter); Aylworth Decl. ¶ 13.) Ms. Moritz did not make timely payments. (Aylworth Decl. ¶ 13.)
On November 1, 2010, Ms. Pierce called and left a second voicemail message for Ms. Moritz asking Ms. Moritz to call DNG. (2d Radbil Decl. Ex. 7 at GORD00043.) Ms. Pierce left similar voicemail messages for Ms. Moritz on November 29, 2010, and November 30, 2010. (Id.)
In December 2010, Ms. Moritz advised DNG that she was attempting to take out a loan in order to settle the debt to CACV. (Aylworth Decl. ¶ 14; 1st Kraemer Decl. Ex. 1 (Moritz Dep.) at 43:8-15.) On December 29, 2010, DNG sent a letter to Ms. Moritz confirming that it would accept $3,006.05 in full settlement of the debt owed to CACV. (2d Radbil Decl. Ex. 12 (12/29/10 Letter).) On both December 29, 2010, and December 30, 2010, Ms. Pierce left voicemail messages for Ms. Moritz asking for a return call. (Id. Ex. 7 at GORD00045-46.)
In January 2011, Ms. Pierce left four voicemail messages for Ms. Moritz asking Ms. Moritz to contact DNG. (Id. Ex. 7 at GORD00047-48.) On January 10, 2011, DNG mailed Ms. Moritz a letter confirming that it had not received payment and stating that the total amount due was $5,900.54. (Id. Ex. 13 (1/10/11 Letter).) On January 17, 2011, DNG mailed Ms. Moritz another letter in which it agreed to accept $4,581.05 in full settlement if DNG received payment by January 31, 2011. (Id. Ex. 14 (1/17/11 Letter).) Also on January 17, 2011, Ms. Moritz sent DNG a
On June 17, 2011, Ms. Moritz initiated the instant action against Defendants. (Compl. (Dkt. # 1).) In her amended complaint, she alleges that Defendants violated the Fair Debt Collection Practices Act ("FDCPA"), 15 U.S.C. § 1692 et seq., and the Washington Consumer Protection Act ("CPA"), RCW ch. 19.86. (Am. Compl. (Dkt. # 28) ¶ 1.) Ms. Moritz's CPA claim relies on her assertion that DNG violated the Washington Collection Agency Act ("WCAA"), RCW ch. 19.16. (Id.)
Summary judgment is appropriate if the evidence, when viewed in the light most favorable to the non-moving party, demonstrates "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); Celotex Corp. v. Catrett, 477 U.S. 317, 322, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986); Galen v. Cnty. of L.A., 477 F.3d 652, 658 (9th Cir.2007). The moving party bears the initial burden of showing there is no genuine issue of material fact and that he or she is entitled to prevail as a matter of law. Celotex, 477 U.S. at 323, 106 S.Ct. 2548. "Where non-moving party bears the burden of proof at trial, the moving party need only prove that there is an absence of evidence to support the non-moving party's case." In re Oracle Corp. Sec. Litig., 627 F.3d 376, 387 (9th Cir.2010) (international citations omitted). If the moving party meets his or her burden, then the non-moving party "must make a showing sufficient to establish a genuine dispute of material fact regarding the existence of the essential elements of his case that he must prove at trial" in order to withstand summary judgment. Galen, 477 F.3d at 658. In adjudicating cross-motions for summary judgment, the court "evaluate[s] each motion separately, giving the nonmoving party in each instance the benefit of all reasonable inferences." ACLU of Nevada v. City of Las Vegas, 466 F.3d 784, 790-91 (9th Cir. 2006) (citations omitted); see also Friends of Columbia Gorge, Inc. v. Schafer, 624 F.Supp.2d 1253, 1263 (D.Or.2008).
Ms. Moritz's federal claims are based on Defendants' alleged violations of the FDCPA. (See generally Am. Compl.) The FDCPA comprehensively regulates the conduct of debt collectors, imposing affirmative obligations and broadly prohibiting abusive practices. Gonzales v. Arrow Fin. Servs., LLC, 660 F.3d 1055, 1060-61 (9th Cir.2011). Whether conduct violates the FDCPA requires an objective analysis that takes into account the "the least sophisticated debtor" standard. See Donohue v. Quick Collect, Inc., 592 F.3d 1027, 1030 (9th Cir.2010); Guerrero v. RJM Acquisitions LLC, 499 F.3d 926, 934 (9th Cir.2007). The FDCPA is a strict liability statute, which "should be construed liberally in favor of the consumer." Clark v. Capital Credit & Collection Servs., Inc., 460 F.3d 1162, 1175-76 (9th Cir.2006) (quotation omitted).
For the purposes of the FDCPA, a consumer is any person obligated or allegedly obligated to pay a debt. 15 U.S.C. § 1692a(3). Ms. Moritz qualifies as a consumer
Section 1692d of the FDCPA prohibits a debt collector from engaging "in any conduct the natural consequence of which is to harass, oppress, or abuse any person in connection with the collection of a debt." 15 U.S.C. § 1692d. In addition to this general ban on harassing or abusive conduct, § 1692d provides a non-exclusive list of six prohibited acts, including "the placement of telephone calls without meaningful disclosure of the caller's identity." 15 U.S.C. § 1692d(6). The Ninth Circuit has not yet addressed what is required to satisfy the "meaningful disclosure" element of § 1692d(6), however district courts in the Circuit increasingly agree that meaningful disclosure "requires that the caller must state his or her name and capacity, and disclose enough information so as not to mislead the recipient as to the purpose of the call." Hosseinzadeh v. M.R.S. Assoc., Inc., 387 F.Supp.2d 1104, 1112 (C.D.Cal.2005); see also Costa v. Nat'l Action Fin. Serv., 634 F.Supp.2d 1069, 1074 (E.D.Cal.2007); Gordon v. Credit Bureau of Lancaster & Palmdale, No. CV 11-2272(PSG) (PJWx), 2012 WL 1813668, at *2 (C.D.Cal. Apr. 20, 2012) (adopting the standard set forth in Hosseinzadeh); Koby v. ARS Nat. Serv., Inc., No. CIV 09CV0780 JAHJMA, 2010 WL 1438763, at *3 (S.D.Cal. Mar. 29, 2010) (noting increasing consensus). Because these district courts' understanding of "meaningful disclosure" aligns with the remedial nature of the FDCPA, the court adopts their understanding here.
DNG argues that it is entitled to summary judgment on Ms. Moritz's § 1692d(6) claim because its employees made the requisite meaningful disclosures during their communications with Ms. Moritz. (Def. Mot. at 7-8.) Ms. Pierce, the DNG employee Ms. Moritz contends left the improper messages, testified that she left a standard voicemail message that said: "This message is for Martha Moritz. This is Tasha Pierce calling from the debt collection law firm of Daniel N. Gordon, PC. Please return my phone call at 1(800) 311-8566."
The burden thus shifts to Ms. Moritz to create a genuine issue of material fact for trial. To do so, Ms. Moritz presents her own testimony that the voicemail messages left by Ms. Pierce did not disclose that the calls were from a debt collector but only stated: "Hi, this is Tasha Pierce from Attorney Daniel Gordon's office. I need a call back at 1-800." (2d Radbil Decl. Ex. 5 (Moritz Dep.) at 80:18-21.) Ms. Moritz also submits evidence that DNG's policy on voicemail messages instructed employees to disclose only the employee's name and phone number (id. Ex. 8 (DNG Policy)), and that DNG required its employees to leave voicemail messages consistent with its policies and procedures (Ans.(Dkt. # 30) ¶ 46).
Finally, Ms. Moritz relies on DNG's business records to support her contention that Ms. Pierce did not make the required disclosures in her voicemail messages. (Resp. to Def. Mot. (Dkt. # 53) at 5-7.) Ms. Pierce testified that she is required to enter very detailed notes on every communication she has with a consumer into DNG's History Notes software. (1st Kraemer Decl. Ex. 2 (Pierce Dep.) at 21:16-23:12.) She also testified that she is required to note whenever she provides the consumer with a "mini-Miranda" warning, which is DNG's method of informing the customer that an employee is calling about collecting a debt.
DNG nevertheless argues that even if Ms. Pierce left voicemail messages that did not comply with § 1692d(6)'s meaningful disclosure requirement, it is entitled to summary judgment based on the bona fide error defense. (Reply to Def. Mot. (Dkt. # 56) at 4.) "Although the FDCPA is a strict liability statute, it excepts from liability those debt collectors who satisfy the `narrow' bona fide error defense." McCollough v. Johnson, Rodenburg & Lauinger, LLC, 637 F.3d 939, 948 (9th Cir.2011) (citation omitted). The defense provides:
15 U.S.C. § 1692k(c). "The bona fide error defense is an affirmative defense, for which the debt collector has the burden of proof." McCollough, 637 F.3d at 948 (citation omitted). "Thus, to qualify for the bona fide error defense, the defendant must prove that (1) it violated the FDCPA unintentionally; (2) the violation resulted from a bona fide error; and (3) it maintained procedures reasonably adapted to avoid the violation." Id.
DNG argues that the bona fide error defense applies because any messages left in the manner claimed by Ms. Moritz were contradictory to policy and training. (Reply to Def. Mot. at 4.) As discussed above, however, there are genuine issues of material fact regarding DNG's policies regarding the content of voicemail messages. Additionally, there is no evidence in the record regarding Ms. Pierce's intent. Summary judgment, therefore, is improper based on the bona fide error defense. For the foregoing reasons, the court denies DNG's motion for summary judgment with respect to Ms. Moritz's 15 U.S.C. § 1692d(6) claim.
Section 1692e of the 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. The statute provides a non-exhaustive list of conduct that is a violation of § 1692e, including:
15 U.S.C. § 1692e(11). Most courts that have considered the issue have concluded
DNG contends that it is entitled to summary judgment on Ms. Moritz's § 1692e(11) claim for the same reasons it asserted with respect to Ms. Moritz's § 1692d(6) claim. (See Def. Mot. at 7-8; Reply to Def. Mot. at 2-5.) Ms. Moritz also asserts the same arguments and evidence regarding her § 1692e(11) claim as she did on her § 1692d(6) claim. (See Resp. to Def. Mot. at 2-7.) For the reasons explained above, there are genuine issues of material fact regarding the contents of the voicemail messages Ms. Pierce left for Ms. Moritz, particularly whether she disclosed that the call was from a debt collector. Accordingly, the court denies Defendants' motion for summary judgment with respect to Ms. Moritz's 15 U.S.C. § 1692e(11) claim.
Section 1692f prohibits a debt collector from "us[ing] unfair or unconscionable means to collect any debt." 15 U.S.C. § 1692f. Section 1692f enumerates eight specific violations that are not intended to limit the applicability of the statute, id., none of which are implicated in this matter. Rather, Ms. Moritz's complaint alleges that DNG violated § 1692f's general prohibition of "unfair or unconscionable means to collect any debt" by collecting Ms. Moritz's debt "without being licensed pursuant to Washington law, thus avoiding review by state authorities." (Am. Compl. ¶ 90.) There is no dispute that DNG is not licensed under Washington law. (Ans. ¶ 23.)
DNG argues that it is entitled to summary judgment because (1) there is no evidence that that DNG was required to be licensed pursuant to Washington law, and (2) violations of state law are not per se violations of the FDCPA. (Def. Mot. at 8.) For the reasons explained below, the court concludes that, viewing the evidence in Ms. Moritz's favor, no rational jury could find that the alleged violations of Washington law also violated the FDCPA. For purposes of this discussion, the court assumes the truth of Ms. Moritz's assertions that DNG violated Washington law by acting without a license and by sending debt collection letters to Ms. Moritz that did not itemize the amount of the debt as required by Washington law. (See Resp. to Def. Mot. at 11; Moritz Mot. at 7.)
The controlling authority on this issue is Wade v. Regional Credit Association, 87 F.3d 1098 (9th Cir.1996). In Wade, the defendant called the debtor and sent her a collection notice without a permit as required by Idaho law. Id. at 1099. The Ninth Circuit refused to find that the mere violation of the state licensing law constitutes a violation of the FDCPA and held that a debt collection practice in violation of state law is not per se a FDCPA violation. Id. at 1100. Instead, the court analyzed the substance of the allegedly improper communications to determine whether they constituted independent violations of the FDCPA. Id. at 1100. With respect to § 1692f's prohibition against unfair or unconscionable means of collecting, the court concluded that the "notice was relatively innocuous, and not `unconscionable' in either a legal or lay sense." Id. The court also declined to follow district courts that had found that collection agencies violated the FDCPA by engaging in collection activities without the required state licenses, finding them "either inapposite or unpersuasive." Id. at 1100-01, 1101 n. 3.
For example, in disagreeing with the district court's decision in Gaetano v. Payco
Wade, 87 F.3d at 1100-01. In short, the Wade court did not find any import in the defendant's failure to obtain a license in violation of state law and instead focused on the defendant's actions and whether they violated the FDCPA independent of any state-law violation. See Taylor v. Quall, 471 F.Supp.2d 1053, 1062 (C.D.Cal. 2007) (citing Wade for the proposition that instead of finding a state law violation a per se FDCPA violation, "the [c]ourt must determine whether any alleged state-law violation also constitutes a violation of one of the enumerated sections of the FDCPA"); see also Khosroabadi v. N. Shore Agency, 439 F.Supp.2d 1118, 1123-25 (S.D.Cal.2006).
Applying the Wade analysis to the instant dispute, the court concludes that any violation of Washington's licensing requirements does not itself establish a violation of the FDCPA. See Wade, 87 F.3d at 1100-01. Ms. Moritz attempts to distinguish Wade on the basis that it interpreted Idaho regulations of collection agencies, which are different from Washington's corresponding regulations. (Resp. to Def. Mot. at 9.) There is no indication in the Wade opinion, however, that the specific content of the Idaho regulations had any bearing on the court's decision. As such, the court is not persuaded that Wade does not govern here. Ms. Moritz also asserts that courts "routinely" find violations of state laws that mandate licensure by collection agencies to constitute violations of the FDCPA. (Resp. to Def. Mot. at 9-10 (citing a number of district court decisions).) Yet most of the cases Ms. Moritz relies upon are not from the Ninth Circuit, where Wade is binding authority, and the only case from within this Circuit was decided before Wade. Moreover, a number of the cases Ms. Moritz cites were discussed in Wade and found to be unpersuasive, and Ms. Moritz offers no explanation for why the court should follow this authority in light of the Wade court's comments. See Wade, 87 F.3d at 1100 n. 3. Therefore, the court declines to follow the district court decisions relied upon by Ms. Moritz.
Rather, the court must determine whether DNG's actions constitute independent violations of the FDCPA. See Wade, 87 F.3d at 1100-01; Taylor, 471 F.Supp.2d at 1062. Ms. Moritz points to a specific action taken by DNG that may be a violation of Washington law: failing to itemize the amount of Ms. Moritz's debt in its collection letters to her. (See Resp. to Def. Mot. at 11.) Ms. Moritz does not assert, however, that such a failure is an independent violation of the FDCPA, and the court has discerned no such violation based on its review of the statute. See generally 15 U.S.C. §§ 1692a, 1692g; see also 15 U.S.C. § 1692g (setting forth the requirements for the initial written communication with a consumer, which does not include the itemization required by Washington law); Dunlap v. Credit Protection Ass'n, L.P., 419 F.3d 1011, 1012 (9th Cir.2005) (per curiam) (concluding that the notice provisions set forth in 15 U.S.C. § 1692g are sufficient to apprise debtors of their rights). When viewed from the perspective of the least sophisticated debtor and in the light most favorable to Ms. Moritz, no reasonable jury could conclude that the omission from the
The Ninth Circuit has not yet decided the question of whether an individual employee or shareholder, officer, or director of a debt collecting corporation may be held personally liable as a "debt collector" under the FDCPA. See Robinson v. Managed Accounts Receivables Corp., 654 F.Supp.2d 1051, 1061 (C.D.Cal.2009); Schwarm v. Craighead, 552 F.Supp.2d 1056, 1073 (E.D.Cal.2008). There is a split among persuasive authority. The Sixth Circuit and the majority of district courts that have considered the issue have concluded that employees can be held personally liable under the FDCPA. Robinson, 654 F.Supp.2d at 1061 (collecting cases). On the other hand, the Seventh Circuit has held that employees cannot be held personally liable under the FDCPA unless the plaintiff can pierce the corporate veil. Id.
District courts in the Ninth Circuit have followed the Sixth Circuit's approach. See, e.g., Robinson, 654 F.Supp.2d at 1061; Schwarm, 552 F.Supp.2d at 1071-73; Townsend v. Nat'l Arbitration Forum, Inc., No. CV 09-9325-VBF(RNBx), 2012 WL 12736, at *12 (C.D.Cal. Jan. 4, 2012); Smyth v. Merchants Credit Corp., No. C11-1879RSL, 2012 WL 588744, at *2-*3 (W.D.Wash. Feb. 22, 2012). The court agrees with the reasoning in these cases, particularly that articulated in Schwarm. Accordingly, the court concludes that "because the FDCPA imposes personal, not derivative, liability, serving as a shareholder, officer, or director of a debt collecting corporation is not, in itself, sufficient to hold an individual liable as a `debt collector.'" Schwarm, 552 F.Supp.2d at 1073. Rather, the FDCPA "requires that the individual `regularly collect or attempt to collect, directly or indirectly, debts owed or due or asserted to be owed or due another.'" Id. (quoting 15 U.S.C. § 1692a(6)) (alterations in Schwarm.) Based on this standard, courts have found an individual personally liable if "the individual 1) materially participated in collecting the debt at issue; 2) exercised control over the affairs of the business; 3) was personally involved in the collection of the debt at issue; or 4) was regularly engaged, directly and indirectly, in the collection of debts." Id. (internal quotations and citations omitted).
Mr. Gordon asserts that he cannot be held personally liable under the FDCPA because there is no evidence that he was involved in the collection of Ms. Moritz's debt. (Def. Mot. at 5-8.) In response, Ms. Moritz has submitted the following evidence in support of her argument that Mr. Gordon is individually liable under the FDCPA: Mr. Gordon requires all collectors to sign a memo stating that no one would leave a message for a debtor at a place of employment (3d Radbil Decl. Ex. C (Aylworth Dep. from McLain v. Daniel N. Gordon, P.C.) at 114:12-15:6); Mr. Gordon (along with other attorneys at DNG) drafts FDCPA compliance-related materials (id. Ex. D (Aylworth Dep. from Mandelas v. Daniel N. Gordon, P.C.) at 127:23-128:2); Mr. Gordon solicits new clients (2d Radbil Decl. Ex. 4 (Aylworth Dep. from McLain v. Daniel N. Gordon, P.C.) at 42:10-43:9; id. Ex. 2 (Nelson Aff.) ¶ 22); and Mr. Gordon convinces clients that he does not need to be licensed in Washington (id. Ex. 2 ¶ 22).
Viewing the evidence in Ms. Moritz's favor, the court concludes that she has failed to raise a genuine issue of material fact as to Mr. Gordon's liability for any of the alleged FDCPA violations. First, because Ms. Moritz does not allege or present evidence that Mr. Gordon or DNG employees left improper messages for her at her place of employment, the fact that Mr. Gordon drafted a policy forbidding employees from leaving such messages is irrelevant to the instant lawsuit. Second, even if Mr. Gordon drafted FDCPA compliance-related materials, there is no evidence that he drafted any of the policies that led to the alleged FDCPA violations here. Third, Mr. Gordon's solicitation of clients did not cause the allegedly improper voicemails, and is therefore inapplicable to Ms. Moritz's § 1692d and § 1692e claims. Finally, for the same reasons discussed above with respect to Ms. Moritz's § 1692f claim against DNG, her parallel claim against Mr. Gordon fails as a matter of law. For these reasons, the court grants Mr. Gordon's motion for summary judgment on all of Ms. Moritz's FDCPA claims against him.
To prevail on a CPA claim, a plaintiff must establish five distinct elements: "(1) unfair or deceptive act or practice; (2) occurring in trade or commerce; (3) public interest impact; (4) injury to plaintiff in his or her business or property; [and] (5) causation." Hangman Ridge Training Stables, Inc. v. Safeco Title Ins. Co., 105 Wn.2d 778, 719 P.2d 531, 533 (1986). DNG's motion for summary judgment on Ms. Moritz's CPA claim primarily focuses on whether Ms. Moritz has presented evidence of an unfair or deceptive act or practice occurring in trade or commerce. (Def. Mot. at 9-13.) With respect to the remaining elements, DNG also contends that there is no evidence supporting Ms. Moritz's claim. (Id. at 12-13; Reply to Def. Mot. at 7; Resp. to Moritz Mot. (Dkt. # 51) at 7-18.) The court will address the elements of Ms. Moritz's CPA claim below.
A plaintiff may establish an unfair or deceptive act or practice occurring in trade or commerce for purposes of a CPA claim by proving certain violations of the WCAA. RCW 19.16.440; Evergreen Collectors v. Holt, 60 Wn.App. 151, 803 P.2d 10, 12-13 (1991). In particular, the WCAA states:
RCW 19.16.440. Ms. Moritz's CPA claim is premised upon DNG's alleged violation
RCW 19.16.110 provides in relevant part: "No person shall act, assume to act, or advertise as a collection agency or out-of-state collection agency as defined in this chapter, except as authorized by this chapter, without first having applied for and obtained a license from the director." RCW 19.16.110. Here, there is no dispute that DNG is not licensed as a collection agency or out-of-state collection agency. (Ans. ¶ 23.) DNG argues that it is entitled to summary judgment on Ms. Moritz's CPA claim because it is not required to be licensed under RCW 19.16.110. (Def. Mot. at 9-13.) In response, Ms. Moritz contends that DNG qualifies as an out-of-state collection agency or, in the alternative, a collection agency. (Resp. to Def. Mot. at 12-21.)
Under the WCAA, the term "collection agency" includes "[a]ny person directly or indirectly engaged in soliciting claims for collection, or collecting or attempting to collect claims owed or due or asserted to be owed or due another person." RCW 19.16.100(2)(a). Excluded from this definition is an "out-of-state collection agency," which is defined in relevant part as "a person whose activities within this state are limited to collecting debts from debtors located in this state by means of interstate communications, including telephone, mail, or facsimile transmission, from the person's location in another state on behalf of clients located outside of this state...."
Here, the undisputed evidence establishes that DNG operated as an out-of-state collection agency. Both DNG and CACV are located outside of Washington. (2d Radbil Decl. Ex. 6 (DNG Resp. to Req. to Admit) ¶¶ 4, 5.) At all times relevant to this lawsuit, Ms. Moritz resided in Washington. (See, e.g., id. Exs. 9-14 (Letters Addressed to Ms. Moritz in Washington).) Additionally, DNG admits that it attempted to collect a debt from Ms. Moritz (id. Ex. 6 ¶ 4), and the evidence before the court is that all of DNG's actions taken to collect that debt — including initiating the action in Whatcom County, obtaining the state court judgment, conducting garnishment proceedings, and communicating with Ms. Moritz and others — occurred through interstate communications from Oregon to Washington. (See, e.g., 1st Radbil Decl. Ex. A (Interstate Communications Regarding Whatcom County Action); 2d Radbil Decl. Exs. 9-14 (Interstate Letters to Ms. Moritz).) That some of DNG's debt collection activities included litigation does not change the basic fact that all of DNG's activities were taken in an attempt to collect the debt owed to CACV.
DNG makes four arguments in an attempt to avoid the conclusion that it acted as an out-of-state collection agency. First, DNG asserts that it is excluded from the definition of an "out-of-state collection agency" because its "collection activities are carried on in ... its true name and are
Second, DNG argues that it does not fall within the definition of an "out-of-state collection agency" because it is a law firm retained by clients to litigate disputes. (Def. Mot. at 11 n. 6 (citing Aylworth Decl. ¶ 3).) This general claim, however, does not establish that DNG's activities in Washington reach beyond attempting to collect debts or that DNG uses means other than interstate communications to do so. Accordingly, it does not create a genuine issue of fact regarding whether DNG is an out-of-state collection agency for purposes of the WCAA.
Third, DNG asserts that lawyers engaged in the practice of law are not subject to the WCAA because the statute prohibits licensees from "[p]erform[ing] any act or acts, either directly or indirectly, constituting the practice of law." RCW 19.16.250(5). The court has previously rejected this argument because "a plain reading of the narrow exemption [in RCW 19.16.100(3)(c) ] belies that assertion" and "if the legislature had intended such a broad exemption, it could have included it." Mandelas v. Gordon, 785 F.Supp.2d 951, 961 (W.D.Wash.2011) (quoting Lang v. Gordon, No. C10-0819RSL, 2011 WL 62141, at *2 (W.D.Wash. Jan. 6, 2011)) (alteration in Mandelas.)
Finally, DNG contends that it is not an out-of-state collection agency because it "appeared before the Whatcom County District Court in the underlying collection case by filing a complaint and pursuing it to judgment." (Resp. to Moritz Mot. at 8 n. 7.) As such, DNG maintains, it did "much more to collect Ms. Moritz's debt than limiting itself to the means of interstate communications." (Id.) Yet in light of the evidence discussed above that all of DNG's contacts with the Whatcom County District Court were achieved by means of interstate communications via the United States mail, the court is not persuaded that DNG's activities in Washington extended beyond attempting to collect Ms. Moritz's debt by means of interstate communications.
In sum, the court concludes that the undisputed evidence submitted by the parties establishes that DNG acted as an out-of-state collection agency without a license in violation of RCW 19.16.110. This violation establishes per se the first two elements of a CPA claim as articulated in Hangman Ridge, 719 P.2d at 533. See RCW 19.16.440. As such, the court denies DNG's motion for summary judgment on the issue of whether it violated RCW 19.16.110.
As additional grounds for establishing an unfair or deceptive act or practice occurring in trade or commerce, Ms. Moritz alleges that DNG violated RCW 19.16.250(8) and RCW 19.16.260. (Am. Compl. ¶¶ 101, 103, 105.) In support of its motion for summary judgment, DNG contends that RCW 19.16.250(8) is inapplicable because DNG is not a licensee under the WCAA, and there is no evidence in the
First, the plain language of the WCAA provides that RCW 19.16.250 applies to "licensees," not "collection agencies" or "out-of-state collection agencies."
Second, Ms. Moritz makes no response to DNG's argument regarding RCW 19.16.260. (See generally Resp. to Def. Mot.; Moritz Mot.; Reply to Moritz Mot.) As such, she has failed prevent summary judgment on this issue by presenting sufficient evidence to create a genuine issue of material fact for trial. Further, the WCAA does not make a violation of RCW 19.16.260 a per se unfair act or practice or unfair method of competition in the conduct of trade or commerce for the purposes of the CPA. See RCW 19.16.440. Thus even if Ms. Moritz had presented evidence that DNG violated RCW 19.16.260, she has not articulated why such a violation supports her CPA claim. For these reasons, the court grants summary judgment to DNG on the issues of whether it violated RCW 19.16.250 and RCW 19.16.260.
The public interest element of a CPA claim may be satisfied in several ways. See Hangman Ridge, 719 P.2d at 536-39. In certain situations, the public interest element is satisfied per se by a showing of conduct in violation of a statute containing a specific legislative declaration of public interest impact. Id. at 538; Stephens v. Omni Ins. Co., 138 Wn.App. 151, 159 P.3d 10, 24 (2007), aff'd sub nom. Panag v. Farmers Ins. Co. of Wash., 166 Wn.2d 27, 204 P.3d 885 (Wash.2009). The WCAA, however, does not contain the required declaration of public interest impact.
DNG nevertheless contends that it is entitled to summary judgment on Ms. Moritz's CPA claim because she has presented no evidence related to any public interest impact. (Def. Mot. at 12-13; Reply to Def. Mot. at 7; Resp. to Moritz Mot. at 16.) The court disagrees. Where a complaint involves "essentially a private dispute" the following factors are relevant to whether there is a public interest impact:
Stephens, 159 P.3d at 24 (quoting Hangman Ridge, 719 P.2d at 538). "[I]t is the likelihood that additional plaintiffs have been or will be injured in exactly the same fashion that changes a factual pattern from a private dispute to one that affects the public interest." Hangman Ridge, 719 P.2d at 538. Here, Ms. Moritz has directed the court's attention to the matter of Snyder v. Daniel N. Gordon, P.C., No. C 11-1379RAJ, which is currently pending before another court in the Western District of Washington. (Reply to Moritz Mot. at 12.) In Snyder, the court recently denied DNG's motion for summary judgment on the question of whether it violated the WCAA by collecting debts without a license and concluded that DNG had violated the statute. 2012 WL 3643673, at *6-*7 (W.D.Wash. Aug. 24, 2012). Additional evidence in the record further supports a conclusion that that DNG likely attempted to collect debts from other persons in violation of the WCAA. (See, e.g., 2d Radbil Decl. Ex. 15 (Nelson Dep. in McLain v. Daniel N. Gordon, P.C.) at 37:8-10.) This evidence creates a triable fact regarding whether DNG's violation of the WCAA affects the public interest. Accordingly, the court denies DNG's motion for summary judgment on the issue of public interest impact.
The final elements of a CPA claim are that the defendant's conduct caused injury to the plaintiff in his or her business or property. "The injury involved need not be great, but it must be established." Hangman Ridge, 719 P.2d at 539. Because the injury must be to the plaintiff's "business or property," "[p]ersonal injuries are not compensable damages under the CPA." Wash. State Physicians Ins. Exch. & Ass'n v. Fisons Corp., 122 Wn.2d 299, 858 P.2d 1054, 1064 (1993). Specifically, pain and suffering and emotional distress damages are not compensable CPA injuries. White River Estates v. Hiltbruner, 134 Wn.2d 761, 953 P.2d 796, 797 n. 1 (1998). Further, the Washington Supreme Court has explained:
Mason v. Mortgage Am., Inc., 114 Wn.2d 842, 792 P.2d 142, 148 (1990) (internal citations omitted). "To establish the causation element in a CPA claim, a plaintiff must show that, but for the defendant's unfair or deceptive practice, the plaintiff would not have suffered an injury." Carlile v. Harbour Homes, Inc., 147 Wn.App. 193, 194 P.3d 280, 290 (2008) (citing Indoor Billboard/Wash., Inc. v. Integra Telecom of Wash., Inc., 162 Wn.2d 59, 170 P.3d 10, 22 (2007)).
The basis for DNG's summary judgment motion with respect to the elements of injury and causation is that Ms. Moritz has submitted no evidence in support these elements. (Def. Mot. at 12-13; Reply to Def. Mot. at 7.) Ms. Moritz, however, has submitted evidence that she incurred
Ms. Moritz moves for summary judgment on her claims against DNG under § 1692d(6) and § 1692e(11) of the FDCPA. (Moritz Mot. at 9-13.) The parties present the same arguments and evidence as they did in support of and opposition to DNG's motion for summary judgment on these issues. Viewing this evidence in DNG's favor, the court concludes that there are genuine issues of material fact that preclude summary judgment on these claims for the same reasons articulated above with respect to DNG's motion for summary judgment. Accordingly, the court denies Ms. Moritz's motion for partial summary judgment with respect to her FDCPA claims against DNG.
Ms. Moritz also moves for summary judgment on her CPA claim against DNG. (Moritz Mot. at 13-23.) For the same reasons articulated above with respect to DNG's motion for summary judgment, the court concludes that Ms. Moritz has established that DNG violated the WCAA by acting as an unlicensed out-of-state collection agency, but that Ms. Moritz has failed to establish that DNG violated RCW 19.16.250(8). The court further concludes, for the same reasons stated above, that DNG's violation of the WCAA does not impact the public interest per se, but that Ms. Moritz has presented sufficient evidence of an identical injury to others to bring the issue before a trier of fact. Finally, with respect to the injury and causation elements, the court concluded above that Ms. Moritz presented undisputed evidence that she incurred a $7.75 postage fee as a result of DNG's unlicensed collection activities. This conclusion applies equally with respect to Ms. Moritz's motion for partial summary judgment.
The court must address one further issue, however, with respect to Ms. Moritz's alleged injury. She contends that she is entitled to damages in the amount she remitted to DNG in payment of the underlying debt owed to CACV because DNG's collection efforts were unlawful given that it lacked the requisite license. (Moritz Mot. at 22-23; see also Am. Compl. ¶ 108.) Ms. Moritz asserts that she paid DNG $2,250.00 to satisfy the underlying debt, and DNG does not dispute this fact. (Moritz Mot. at 23 (citing 2d Radbil Decl. Ex. 3 (Aylworth Dep.) at 134:10-135:1;
The court has been unable to locate a Washington State CPA case that addresses whether a plaintiff who pays a valid debt in response to unlawful collection activities is injured in the amount paid, nor has Ms. Moritz cited any. Rather, Ms. Moritz relies on the proposition from Mason quoted above that "[a] loss of use of property which is causally related to an unfair or deceptive act or practice is sufficient injury to constitute the fourth element of a [CPA] violation." (Moritz Mot. at 22 (quoting Mason, 792 P.2d at 148).) In Mason, the purchasers of a mobile home brought an action against the seller and lender to recover for breach of contract and violation of the CPA. 792 P.2d at 143. Even though the agreement between the purchasers and the lender provided that the purchasers would grant a deed of trust to secure their obligation to the lender, the lender had them sign over their real property by way of a quitclaim deed. Id. at 144. With respect to the fourth element of a CPA violation, the court reasoned that even setting aside the actual monetary damage caused by the defendants' breaches of their contracts with the purchasers, the purchasers would have been able to establish injury to their property given their loss of title to their real property. Id. at 149. The court consequently concluded that notwithstanding the actual damage award, the purchasers would have been entitled to reasonable attorneys' fees and costs under the CPA. Id.
Although Mason provides guidance regarding when a party may be injured within the meaning of the CPA, it does not establish that loss of use of property results in actual damages under the statute. Indeed, there is no indication in the Mason opinion that the court awarded actual damages for the purchasers' temporary loss of title. Furthermore, even if the court had awarded such damages, Mason does not dictate that the same result is appropriate here because there is no dispute that Ms. Moritz owed CACV the amounts collected, whereas the lender in Mason acquired the purchasers' property in contravention of their agreement. Accordingly, Mason does not support Ms. Moritz's contention that she is entitled to a return of the amounts paid to DNG to settle her debt to CACV.
Ms. Moritz also relies on Hamid v. Stock & Grimes, 876 F.Supp.2d 500, 2012 WL 2740869 (E.D.Pa. Jul. 9, 2012). (Moritz Mot. at 22-23.) In Hamid, the court agreed with the plaintiff that the defendant violated the FDCPA by filing an underlying debt collection action against her when the action was barred by the applicable statute of limitations. Id. at *1. With respect to damages, the plaintiff argued that she should be able to recover as actual damages the amounts she paid to the defendant to settle the state court action. Id. The court denied the defendant's motion in limine and concluded that the plaintiff could present evidence to the jury of the amount she paid to settle the state court action. Id. at *3. The court reasoned: "It is clear from its underlying purpose that debtors may recover for violations of the FDCPA even if they have defaulted on a debt. It follows that debtors may recover the amount paid to settle a debt, if the debt collector violated the FDCPA in making the collection, as occurred here." Id. at *2.
Hamid is distinguishable from the instant dispute because no statute of limitations barred CACV's state court action against Ms. Moritz. Indeed, there is no argument here that CACV could not collect
For the foregoing reasons, the court GRANTS in part and DENIES in part Defendants' motion for summary judgment (Dkt. # 42), GRANTS in part and DENIES in part Ms. Moritz's motion for partial summary judgment (Dkt. # 45), and DENIES as MOOT Ms. Moritz's motion for leave to file supplemental authority (Dkt. # 60).
