Nyberg v. Portfolio Recovery Associates, LLC
OPINION & ORDER: Defendant's Motion for Summary Judgment 49 is Granted and Plaintiff's Motion for Summary Judgment 50 is Denied. Signed on 3/20/17 by Magistrate Judge Paul Papak. (gm)
THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF OREGON
KIRK J. NYBERG,
OPINION AND ORDER
PORTFOLIO RECOVERY ASSOCIATES,
PAPAK, Magistrate Judge:
Plaintiff Kirk J. Nyberg brings this action against Defendant Portfolio Recove1y
Associates, LLC, claiming that Defendant violated the Fair Debt Collection Practices Act
(FDCPA), 15 U.S.C. § 1692, by bringing an action against Plaintiff in state court seeking to
collect $834 allegedly due on Plaintiffs credit card account with Capital One Bank (USA), N.A.
(Capital One). The collection action was later dismissed for failure to prosecute. Here, Plaintiff
claims that Defendant's state court collection action violated the FDCPA by asserting a claim for
account stated rather than a claim for breach of the cardholder agreement between Plaintiff and
OPINION AND ORDER
Both patiies move for summaiy judgment. For the following reasons, I grant Defendant's
motion and deny Plaintiffs motion.
The parties stipulate to the following facts for pmposes of this action only: (1) Defendant
is a debt collector as defined by 15 U.S.C. § 1692a(6); (2) Plaintiff is a consumer as defined by
15 U.S.C. § 1692a(3); (3) the debt at issue is a consumer debt, as defined by 15 U.S.C. §
1692a(5); and (4) Plaintiff received three cardholder agreements while he held an account with
Capital One. Stipulations of Fact, ECF No. 53.
Defendant "is in the business of acquiring delinquent credit accounts for collection."
Eyre Deel. 'if 3, ECF No. 49-1. In December 2012, Defendant agreed to purchase "a p01ifolio of
charged-off credit card accounts" from Capital One through a "Forward Flow Receivable Sale
Agreement." Id. Plaintiffs account with Capital One was included in the sale to Defendant.
When Capital One sold Plaintiffs credit card acc0tmt (the Account) to Defendant, it
provided Plaintiffs billing address, phone number, social security number, date of last payment,
the date that Capital One "charged-off' the Account, and the balance due. Defendant's last
payment was posted July 19, 2010, and the unpaid balance was then $834.25. After charge-off,
Capital One assessed interest of$142.32, so the total balance due was $976.57. Eyre Deel.
Defendant later obtained Plaintiffs monthly account statements from Capital One. Plaintiff did
not dispute the amounts due.
After Defendant acquired Plaintiffs Account, it wrote Plaintiff in an attempt to collect
the amount due, which Defendant set at $977. After its initial collection efforts failed, Defendant
filed the action (the State Court Action) against Plaintiff in Washington County Circuit Cou1i on
OPINION AND ORDER
June 25, 2014. Nordyke Deel. 'if 4, ECF No. 49-2. Defendant's complaint asserted only one
claim, for account stated, seeking $834.25. kl. & Ex. A (copy of complaint in State Court
Action). Dale Nordyke, who works as associate counsel for Defendant, filed the State Comi
Action. Plaintiff was represented by counsel in the State Court Action.
On November 24, 2014, the State Court Action was dismissed without prejudice for
failure to prosecute. Nordyke Deel. 'if 6. It is unclear on this record why Defendant failed to
pursue the State Comi Action, but the reason for the dismissal is not relevant here.
LEGAL STANDARDS FOR SUMMARY JUDGMENT l\'IOTIONS
The court must grant summmy judgment if there are no genuine issues of material fact
and the moving party is entitled to judgment as a matter oflaw. Fed. R. Civ. P. 56(c). If the
moving paiiy shows that there are no genuine issues of material fact, the nonmoving pmiy must
go beyond the pleadings and designate facts showing an issue for trial. Celotex Corp. v. Catrett,
477 U.S. 317, 322-23 (1986).
Plaintiff claims that Defendant's complaint in the State Court Action violated the
FDCPA. It is undisputed that "a complaint served directly on a consumer to facilitate
debt-collection efforts is a communication subject to the requirements of§§ l 692e and 1692f [of
the FDCPA]." Donohue v. Quick Collect, Inc., 592 F.3d 1027, 1031-32 (9th Cir. 2010).
Plaintiffs claim comprises four counts: (1) Defendant falsely asserted a claim for account stated,
(2) Defendant brought the account stated claim to evade the statute of limitations and "other
defenses" that would have been available if Defendant had brought a claim for breach of contract
based on the cardholder agreement between Plaintiff and Capital One, (3) Defendant's account
OPINION AND ORDER
stated claim was barred by the applicable statute of limitations, and (4) Defendant overstated the
debt owed by Plaintiff. Am.
31-34, ECF No. 24.
Here, Defendant's complaint in the State Court Action alleges, "Defendant, by failing to
object or otherwise dispute the stated balance of the account, and by becoming indebted to the
Original Creditor [Capital One] for the total sum stated herein, and by impliedly agreeing to pay
the total sum, but in failing to pay the total sum," has incurred liability for an account stated.
Nordyke Deel., Ex. A,
11, ECF No. 49-2. Plaintiff does not allege that he ever objected to
Capital One's account statements.
Plaintiff argues that Defendant's claim for account stated is defective because Defendant
has not shown that he and Capital One actually agreed on the amount owing based on the
statements sent by Capital One. PL Resp. 3, ECF No. 59 ("[t]here was no evidence that Capital
One and [Plaintiff] intended to create the agreement alleged by" Defendant); see also Pl. Reply 7,
ECF No. 62 (Defendant "had no facts to support its contention that Capital One and plaintiff
intended to foim a new agreement with the statement it relied upon, much less any other
statement"); PL Resp. 20 ("It is particularly deceptive because the actual facts are true but the
assertion that the parties engaged purposely in conduct that stated the account is false."). Under
Oregon law, however, "[a]n agreement suppo1iing an account stated cause of action may be
express or implied from the circumstances. An account stated may be created by failure to object
to a billing within a reasonable time. The thrust of this theory is that an agreement may be
inferred from the failure of the debtor to object to an accounting he receives from a creditor."
Tri-County Ins., Inc. v. ivlarsh, 45 Or. App. 219, 223, 608 P.2d 190, 192 (1980) (citations
omitted); see also Eimco BSP Service Co. v. Valley Inland Pac. Constructors, Inc., 626 F.2d 669,
OPINION AND ORDER
671-72 (9th Cir. 1980) (summarizing Oregon law on claims for account stated). Regardless of
whether Plaintiff intended to agree on the account stated in the Capital One statements,
Plaintiffs failure to respond to the statements implies an agreement under Oregon law,
suppo1iing a claim for account stated.
Although there is apparently no Oregon decision on whether an account stated claim is
available to a debt collector under these precise facts, Defendant cites multiple decisions from
state and federal courts holding that creditors or debt collectors may bring claims for account
stated to recover unpaid credit card obligations. See, e.g., Shubin v. 1Vlidland Credit 1Vlgmt., Inc.,
No. CV 07-8033 AHM (Ex), 2008 WL 5042849, at *5 (C.D. Cal. Nov. 24, 2008) (rejecting
argument that "an action for unpaid credit card debt must be for breach of an original credit card
agreement rather than for an account stated") (applying California law); Carpenter v. lvfonroe
Fin. Recove1y Group, LLC, 119 F. Supp. 3d 623, 632 (E.D. Mich. 2015) (holding that an "action
on an 'account stated' is well established as a valid foim of collection proceeding under
Michigan law"); Def. Mot. 6-10 & nn.4-7, ECF No. 49 (citing more than 20 other decisions
either expressly or implicitly authorizing claims for account stated).
I agree with Defendant that under the alleged facts here, Oregon courts would permit a
debt collector to assert a claim for account stated. As noted, Oregon law provides that an
agreement may be implied by the debtor's failure to object to the creditor's statement of the
amount due. Tri-County Ins., 45 Or. App. at 223, 608 P.2d at 192. I conclude that Defendant's
complaint in the State Couii Action adequately pleads a claim for account stated under Oregon
Plaintiff contends that Defendant brought the account stated claim to "circumvent the
OPINION AND ORDER
applicable statute of limitations and mislead unsuspecting consumers into not contesting the
claims." Pl. Mot. 39-40, ECF No. 50. The FDCPA prohibits debt collectors from using false,
deceptive, or misleading representations or means in collecting a debt. 15 U.S.C. § 1692e. In
evaluating claims under § 1692e, the cou1i uses a "least sophisticated debtor" standard. Wade v.
Reg'/ Credit Ass'n, 87 F.3d 1098, 1100 (9th Cir. 1996). A debt collector violates§ 1692e when
its actions "are likely to deceive or mislead a hypothetical 'least sophisticated debtor."' Id.
Here, I conclude that Defendant's complaint in the State Court Action would not be
misleading to the least sophisticated consumer. It is not misleading for a collection agency to
assert a claim for account stated rather than a claim for breach of contract. The plaintiff is master
of the complaint, and Plaintiff here has not shown that the FDCPA requires a creditor to bring
claims that would be easier for the consumer to defend. See, e.g., Briggs v. }vferck Sharp &
Dahme, 796 F.3d 1038, 1049 (9th Cir. 2015) (district court may not "transform plaintiffs from
masters of their complaints into servants of defendants' litigation strategy").
Plaintiff also argues that Defendant's complaint in the State Court Action was misleading
because it cited the Fair Credit Billing Act, 15 U.S.C. § 1666, in alleging that Plaintiff failed to
object to the account balance within a reasonable time. See Nordyke Deel., Ex. A, Comp!.
("Defendant did not object or otherwise dispute said statements [from Capital One] within the
time prescribed by 15 U.S.C. § 1666."). Because Plaintiff did not ever dispute the Capital One
statements, the complaint's citation to 15 U.S.C. § 1666 1 could not have misled him on whether
Lyon v. Chase Bank USA, N.A., 656 F.3d 877, 880 (9th Cir. 201 l)("Ifa credit-card holder sends
a written notice disputing a charge within sixty days of receiving a bill, the FCBA requires a credit-card
issuer to acknowledge the dispute within thirty days, investigate the matter, and provide a written
explanation of its decision within ninety days.") (citing 15 U.S.C. § 1666(a)).
OPINION AND ORDER
he had timely objected to the account balance. The least sophisticated consumer would
understand that when a creditor sends a credit card statement seeking payment, the consumer
may not ignore the creditor's statement without consequences, up to and including collection
Plaintiff also argues that Defendant had no right to initially asse1i a debt of $977 in letters
sent to Plaintiff before Defendant brought the State Cou1i Action. As Plaintiff notes, in the State
Court Action, Defendant claimed a debt of $834. Under the facts here, however, either amount is
valid. The higher amount includes interest accrued after Capital One cut off Plaintiffs account
before selling the account to Defendant. Defendant was free to seek the lower amount in the
State Court Action. Even if seeking the lower amount could be considered misleading, there is
no violation of the FDCPA because it is not "material." See Donahue, 592 F.3d at 1033-34. In
evaluating a claim under the FDCPA, this court is "not concerned with mere technical falsehoods
that mislead no one, but instead with genuinely misleading statements that may frustrate a
consumer's ability to intelligently choose his or her response." Id. at 1034.
Plaintiff argues that the account stated claim is governed by Virginia law, which has a
three-year statute of limitations for contract claims, rather than Oregon's six-year statute of
limitations. Plaintiff defaulted on his Account with Capital One on July 19, 2010, and
Defendant filed the State Couti Action on June 25, 2014.
I agree with Defendant that the choice of law provision in- the cardholder agreement does
OPINION AND ORDER
not apply to the claim for account stated, which is not based on the cardholder agreement. An
actlon for account stated is independent of the underlying agreement between the parties.
1"1eridianal Co. v. kfoeck, 121 Or. 133, 138, 253 P. 525, 526 (1927). Because Oregon
substantive law applies to the claim for account stated, the Oregon statute oflimitations applies.
See Fields v. Legacy Health Sys., 413 F.3d 943, 951 (9th Cir. 2005) (interpreting Or. Rev. Stat.§
12.430 on choice of law, holding that this court first determines which state's substantive law
applies to the claim at issue, and then applies that state's statute of limitations to the claim).
Plaintiff argues that the complaint in the State Court Action improperly stated that as part
of the cardholder agreement with Capital One, Plaintiff had agreed to pay cost costs incurred in
enforcing the agreement.2 Nordyke Deel., Ex. A, at~ 5 ("As part of the Agreement Defendant
agreed to pay all court costs incurred in enforcing the Agreement."). Plaintiff contends that this
allegation was intended to intimidate consumers into believing court costs were recoverable
without an award by the court. I conclude that under the facts here, the request for costs would
not mislead the least sophisticated debtor because a party may request costs as part of its prayer
for relief, dependent on the court's ultimate ruling. Courts have so held as to attorney's fees
requested by the debt collector in the prayer for relief. See Reyes v. Kenosian & 1\!Jiele, LLP, 619
F. Supp. 2d 796, 808 (N.D. Cal. 2008) ("Given that Defendants were entitled to attorney's fees,
the request for such fees would not be unfair or unconscionable to the least sophisticated
debtor."); id (noting that "many comts that have confronted the question of whether a request for
attorney's fees in a complaint is actionable under the FDCPA have determined that it is not").
Because I conclude that Defendant's complaint in the State Court Action did not violate
! address this theory of liability although Plaintiff did not raise it in his amended complaint.
Page -8- OPINION AND ORDER
FDCP A, I need not address whether Defendant would be protected by the bona enor defense.
See 15 U.S.C. § 1692k(c).
For the reasons provided above, Defendant's Motion for Summaiy Judgment, ECF No.
49, is GRANTED, and Plaintiffs Motion for Summary Judgment, ECF No. 50, is DENIED.
IT IS SO ORDERED.
2 O~ay of March, 2017.
U.S. MAGISTRATE JUDGE
OPINION AND ORDER
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