Hingston v. Quick Collect, Inc. et al
Filing
39
OPINION & ORDER: Plaintiff's motion 17 is GRANTED in part and DENIED in part. See 11-page opinion & order attached. Signed on 7/28/2016 by Judge Marco A. Hernandez. (mr)
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF OREGON
JODI HINGSTON,
No. 3:15-cv-1202-HZ
Plaintiff,
OPINION & ORDER
v.
QUICK COLLECT, INC., &
KENNETH MITCHELL-PHILLIPS, SR.,
individually,
Defendants.
Joshua Trigsted
Trigsted Law Group, P.C.
5200 SW Meadows Rd., Ste. 150
Lake Oswego, OR 97035
Attorney for Plaintiff
Jesse D. Conway
The Law Offices of Jesse D. Conway, PLLC
1014 Franklin St., Ste. 106
Vancouver, WA 98660
Attorney for Defendant Quick Collect, Inc.
1 - OPINION & ORDER
Kenneth S. Mitchell-Phillips, Sr.
The Law Offices of Ken Mitchell-Phillips, P.C.
5500 N.E. 107th Ave.
Vancouver, WA 98662
Attorney for Defendant Kenneth Mitchell-Phillips
HERNÁNDEZ, District Judge:
Plaintiff Jodi Hingston (“Plaintiff”), brings this action against Defendants Quick Collect,
Inc. (“QCI”) and Kenneth Mitchell-Phillips (“Mitchell-Phillips”) alleging violation of the Fair
Debt Collection Practices Act (“FDCPA” or “the Act”), 15 U.S.C. § 1692.
Beginning in December 2013, QCI hired Mitchell-Phillips, an attorney, to help with the
“legal portion” of collecting consumer debts. Dep. of Kenneth Mitchell-Phillips, Sr. at 10:18–21
(Jan. 20, 2016) (“Dep. of Mitchell-Phillips”). On March 10, 2015, Mitchell-Phillips issued a
$250 writ of garnishment to Plaintiff’s employer in an attempt to collect a debt related to a
medical expense. 1 Dep. of Jason Garner at 8:18, 7:15; Dep. of Mitchell-Phillips at 10:4–7.
Plaintiff moves for partial summary judgment on the allegation that Mitchell-Phillips,
individually, and his vicariously liable client QCI, failed to send proper notice to Plaintiff as
required by 15 USC § 1692g(a). Plaintiff’s motion is granted in part, and denied in part. Plaintiff
has not shown that Mitchell-Phillips is a debt collector as a matter of law. However, the record
establishes that QCI is a debt collector under the FDCPA and that both QCI and MitchellPhillips failed to notify Plaintiff of her rights pursuant to § 1692g(a).
STANDARDS
Summary judgment is appropriate if there is no genuine dispute as to any material fact
and the moving party is entitled to judgment as a matter of law. FED. R. CIV. P. 56(a). The
1
Plaintiff’s motion specifies a date of March 2013, but examination of the complaint, answer, and depositions
indicate this to be a typo. The Court assumes the date to be March 2015.
2 - OPINION & ORDER
moving party bears the initial responsibility of informing the court of the basis of its motion, and
identifying those portions of “ ‘the pleadings, depositions, answers to interrogatories, and
admissions on file, together with the affidavits, if any,’ which it believes demonstrate the
absence of a genuine issue of material fact.” Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986)
(quoting FED. R. CIV. P. 56(c)).
Once the moving party meets its initial burden of demonstrating the absence of a genuine
issue of material fact, the burden then shifts to the nonmoving party to present “specific facts”
showing a “genuine issue for trial.” Fed. Trade Comm’n v. Stefanchik, 559 F.3d 924, 927-28
(9th Cir. 2009) (internal quotation marks omitted). The nonmoving party must go beyond the
pleadings and designate facts showing an issue for trial. Bias v. Moynihan, 508 F.3d 1212, 1218
(9th Cir. 2007) (citing Celotex, 477 U.S. at 324).
The substantive law governing a claim determines whether a fact is material. Suever v.
Connell, 579 F.3d 1047, 1056 (9th Cir. 2009). The court draws inferences from the facts in the
light most favorable to the nonmoving party. Earl v. Nielsen Media Research, Inc., 658 F.3d
1108, 1112 (9th Cir. 2011). If the factual context makes the nonmoving party’s claim as to the
existence of a material issue of fact implausible, that party must come forward with more
persuasive evidence to support his claim than would otherwise be necessary. Matsushita Elec.
Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587 (1986).
DISCUSSION
I. Contradicting Prior Deposition Testimony
As a preliminary matter, it is necessary to address Mitchell-Phillips’s claim that he is inhouse counsel for QCI. Def. Resp. at 5, ECF 23; Mitchell-Phillips Decl. ¶6, ECF 23.
3 - OPINION & ORDER
Mitchell-Phillips’s declaration that he is “in house attorney” for QCI directly contradicts
his earlier deposition testimony that “Quick Collect is a client of mine.” 2 Dep. of MitchellPhillips at 5:15–19. When attempting to reconcile the discrepancy, “[t]he general rule in the
Ninth Circuit is that a party cannot create an issue of fact by an affidavit contradicting his prior
deposition testimony.” Van Asdale v. Int’l Game Tech., 577 F.3d 989, at 998 (9th Cir. 2009)
(reasoning that if a party who has been examined at length could raise an issue of fact simply by
contradicting his own prior testimony, the utility of summary judgment as a procedure for
screening out sham issues of fact would be greatly diminished), see also, Cleveland v. Policy
Mgmt. Sys. Corp., 526 U.S. 795, 806–807 (1986) (recognizing that lower courts have virtually
unanimously held that a party cannot survive summary judgment simply by contradicting his or
her own previous sworn statement).
However, Van Asdale recognized that “the sham affidavit rule is in tension with the
principle that a court’s role in deciding a summary judgment is not to make credibility
determinations or weigh conflicting evidence.” Van Asdale, 577 F.3d at 998. Further,
‘[a]ggresive invocation of the rule also threatens to ensnare parties who may have simply been
confused . . . .” Id. To ensure the rule is “applied with caution . . . there are two important
limitations on this Court’s discretion to invoke the sham affidavit rule.” Id. First, there must be a
factual determination that the contradiction is actually a sham, and second, the inconsistency
must be clear and unambiguous. Id. This two-step process is necessary to ensure that the
inconsistency was not the result of “an honest discrepancy, a mistake, or newly discovered
evidence.” Id. at 999.
At step one, the Court finds that, during Mitchell-Phillips’s deposition, he testified no less
than six separate times that Quick Collect is a client of his firm. Dep. of Mitchell-Phillips at
2
Mitchell-Phillips represented QCI in this matter. He has since withdrawn. Jesse D. Conway now represents QCI.
4 - OPINION & ORDER
5:15. 3 In response to Plaintiff’s motion for summary judgment on the matter, Mitchell-Phillips
changed his testimony and now claims, “I am an in-house attorney for QCI . . .” Decl. of Ken
Mitchell-Phillips at 2. The only reasonable inference the Court can draw from such a switch in
testimony is that Mitchell-Philips is seeking to create an issue of fact to survive summary
judgment.
At step two, the Court finds Mitchell-Phillips’s new testimony clearly and
unambiguously contradicts his deposition testimony that QCI is a client of his firm. MitchellPhillips offers no explanation for the discrepancy. There is no evidence that the contradiction
between Mitchell-Phillips’s deposition and his subsequent declaration is the result of a mistake
or confusion. Thus, the Court applies the sham affidavit rule here, and disregards MitchellPhillips’s declaration that he is in house counsel in determining the appropriateness of summary
judgement. See, Van Asdale, 577 F. 3d at 998 (holding it appropriate for a district court to apply
the sham affidavit rule only when both steps in the analysis are satisfied).
II. FDCPA
Plaintiff alleges that Defendants are debt collectors who violated § 1692g(a) of the
FDCPA by failing to provide Plaintiff with the statutorily required notice within five days of the
initial communication with her, the March 10, 2015 writ of garnishment. Mitchell-Phillips
responds that he is in-house counsel for QCI, a position not considered a “debt collector” under
the FDCPA. As such, Mitchell-Phillips claims he was not required to send additional notices to
Plaintiff. QCI argues it sent the required notices to Plaintiff, so it did not violate the FDCPA.
The FDCPA describes a debt collector, in relevant part, as “any person . . . who regularly
collects or attempts to collect, directly or indirectly, debts owed or due or asserted to be owed or
due another.” 15 U.S.C. § 1692a(6).
3
Variations of this same testimony occur at 6:16–17, 8:4–10, 9:9–14, 10:18–20, and 11:1–2.
5 - OPINION & ORDER
The FDCPA requires a debt collector to send notice of debt “[w]ithin five days after the
initial communication with a consumer in connection with the collection of any debt . . .” 15
U.S.C. § 1692g(a).
III. Kenneth Mitchell-Phillips as a Debt Collector
The Court must first determine whether Mitchell-Phillips, an attorney hired by QCI, is a
debt collector under the Act.
As mentioned above, a debt collector is “any person . . . who regularly collects or
attempts to collect, directly or indirectly, debts owed or due or asserted to be owed or due
another.” 15 U.S.C. § 1692a(6). The Supreme Court has held that the FDCPA’s definition of
“debt collector” includes lawyers who regularly, through litigation, attempt to collect consumer
debts. Heintz v. Jenkins, 514 U.S. 291, 292 (1995). A plaintiff in an FDCPA action bears the
burden of proving a defendant’s debt collector status. See, Goldstein v. Hutton, et al., 374 F.3d
56 (2nd Cir. July 1, 2004).
Plaintiff relies on the deposition of QCI’s General Manager Jason Garner, who, when
asked whether “Mr. Mitchell-Phillips regularly does work for [QCI],” answered “[y]es.” Dep. of
Jason Garner at 4:9. Mitchell-Phillips also testified that, “I have a law firm . . . Quick Collect is
one of my clients that collects debts, and I help them with the legal portion of that . . . .” Dep. of
Mitchell-Phillips at 10:18–21. These statements are not enough to prove that Mitchell-Phillips
falls within the definition of a debt collector under the FDCPA.
The Ninth Circuit has addressed this issue of regularity only once, finding without any
meaningful analysis that an attorney whose practice during the period in question included 80
percent debt collection work was a “debt collector” for the purposes of the FDCPA. Fox v.
Citicorp Credit Services, Inc., 15 F. 3d 1507, 1513 (9th Cir. 1994). Later, the Second Circuit
6 - OPINION & ORDER
outlined a number of factors to consider when determining whether an attorney qualifies as a
“debt collector.” Goldstein, 374 F.3d at 62–63. Factors the court considered “illustrative rather
than exclusive” included, among others, the absolute number of debt collection communications
issued over the relevant period, the frequency of such communications, any discernable patterns
of debt collection, whether the law firm has specific personnel assigned to work on debt
collection activity, whether the activity is undertaken in connection with ongoing client
relationships with entities that have retained the lawyer to assist in the collection of consumer
debts, and whether the firm advertises its services for debt collection. Id. In Goldstein, evidence
of an attorney issuing over 140 notices within a 12 month period aided a determination that the
attorney was a debt collector, but the court cautioned that the determination of debt collector
status under the FDCPA should be analyzed on a case-by-case basis. Id.
At present, the record is insufficient to determine that Mitchell-Phillips regularly
attempts to collect consumer debts for QCI. For instance, there is no evidence that MitchellPhillips advertises his firm as one that aids in debt collection, the exact number of debt collection
communications Mitchell-Phillips issued over a particular period of time, or whether MitchellPhillips’s firm has specific personnel assigned to debt collection. The Court cannot determine, on
the present record, that Mitchell-Phillips is a debt collector under § 1692a(6).
Plaintiff’s motion for summary judgement as to Mitchell-Phillips’s liability as a debt
collector is denied.
IV. QCI as a Debt Collector
The parties agree and the record reflects that QCI is “a debt collector as defined by USC
§ 1692a(6).” Def. Resp. to First Req. for Admis. at 3 (Nov. 16, 2015). At this point in the
analysis, it is important for the Court to note that QCI attempted to collect a debt through their
7 - OPINION & ORDER
attorney, Mitchell-Phillips. QCI is vicariously liable for any action (or inaction) of their attorney
Mitchell-Phillips because “Congress intended the actions of an attorney to be imputed to the
client on whose behalf they are taken.” Fox v. Citicorp, 15 F.3d at 1516 (holding a client
vicariously liable for an attorney’s incorrect venue decision), see also, Clark v. Capital Credit &
Collection Service, Inc., 460 F.3d 1162, 1173 (9th Cir. 2006) (adopting a lower court’s holding
that general principles of agency form the basis for vicarious liability under the FDCPA). Thus,
even if Mitchell-Phillips is not a debt collector on his own, the determination of whether QCI or
Mitchell-Phillips sent the proper notice to Plaintiff directly affects QCI’s liability.
The FDCPA requires a debt collector to send notice of debt “[w]ithin five days after the
initial communication with a consumer in connection with the collection of any debt . . .” 15
USC § 1692g(a). A writ of garnishment is an “initial communication” with a consumer. Adams
v. Schumacher, No. 13-cv-02301-AC, 2014 WL 6977695, at *4 (D. Or. Dec. 9, 2014) (broadly
defining “communication” under the FDCPA and holding that correspondence between a lawyer
debt collector and a consumer constituted an initial communication triggering the five day notice
requirement). The required information includes the amount of debt, the name of the creditor to
whom the debt is owed, notice of the right of the consumer to dispute the validity of the debt,
the right to verification of the judgement against the consumer, and the right to the name and
address of the original creditor.
A. Mitchell-Phillips’s Notice
Mitchell-Phillips testifies that his firm does not send out the notices, and instead relies on
QCI to send “those types of letters.” Dep. of Mitchell-Phillips at 8:15–16, 9:9–14. Moreover,
there is no evidence that Plaintiff received any additional notice from Mitchell-Phillips.
Therefore, Mitchell-Phillips failed to meet the notice requirements of § 1692g(a). See, Adams,
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2014 WL 6977695, at *4 (finding that when a debt collection agency’s attorney made the initial
communication with a debtor, the attorney was required to meet the notice requirements of §
1692g(a) of the FDCPA).
B. QCI’s Notice
QCI asserts that it sent proper notice to Plaintiff, and offers a declaration from their clerk,
who states “[o]n or around . . . March 24, 2015, I sent a garnishment letter to Plaintiff’s place of
employment.” Decl. of Hannah Fenimore at 1 (March 1, 2016). This alleged garnishment letter
was not submitted as an exhibit, so there is no way of knowing whether it included the complete
notice required by § 1692g(a). QCI has not demonstrated that it included the required disclosures
with the garnishment letter. Further, even if the March 24th garnishment letter Ms. Fenimore
referenced contained such notice, it was sent fourteen days after the March 10 initial
communication, falling nine days too late to satisfy § 1692g(a). In sum, QCI failed to provide
Plaintiff with notice, and thus violated the FDCPA.
V. Strict Liability
Regarding liability, the FDCPA states “[a] debt collector may not be held liable in any
action . . . if the debt collector shows by a preponderance of evidence that the violation was not
intentional or resulted from a bona fide error . . . .” 15 USC § 1692k(c). Defendants do not claim
that the violation was due to a technical or factual mistake, but rather that there has been no
violation at all. Thus, this bona fide error defense does not apply, and QCI is strictly liable. See,
Clark, 460 F.3d at 1176 (holding that the broad language and remedial nature of the FDCPA
favored strict liability, with knowledge or intentional violation only relevant to the determination
of damages).
//
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VI. Local Rule 7.1
Defendants also urge the Court, even if summary judgment is appropriate, to deny this
motion based on Plaintiff’s failure to confer prior to filing. Defendants claim Plaintiff’s only
attempt to confer consisted of leaving a voicemail message on February 16, 2016 at 7:24 pm, the
same day Plaintiff filed this motion. Def. Opp’n at 6–7. Plaintiff contends she called Defendants
earlier, but confirms that she left the voicemail the same day as filing the motion. Pl. Reply at 3,
ECF 24. The specific time Plaintiff left the voicemail does not change the analysis.
Local Rule 7.1 (“LR 7.1”) requires parties to confer in good faith to resolve a dispute
prior to filing a motion. The court may deny any motion that fails to comply with this rule. In the
present case, Plaintiff thwarted “the purpose of LR 7.1 . . . by waiting until the last minute and
leaving a short message with insufficient time before filing a motion.” Arboireau v. Adidas
Salomon AG, No. CV-01-105-ST, 2002 WL 31466564, at *1 (D. Or. June 14, 2002) (finding the
defendant’s attempts to confer by leaving two voice messages the same day as filing the motion
lacked good faith, violating LR 7.1).
The Court must now decide whether Plaintiff’s failure to confer in good faith is fatal to
this motion. It is not. In Arboireau, the court recognized that “the parties would not have reached
an agreement,” that “conferral would have been futile,” and, “[b]ecause this court does not
require futile acts, [the motion] is not denied for failing to confer.” Id. After reviewing the
parties’ briefs on this matter, it is clear that had Plaintiff conferred with Defendants before filing,
the parties would not have resolved the dispute, particularly in light of Mitchell-Phillips’s
contradictory testimony as to his relationship with QCI.
Because conferral on the present matter would have been futile, the Court recognizes
Plaintiff frustrated the purpose of LR 7.1, but will not deny Plaintiff’s motion as a result.
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CONCLUSION
For the reasons stated, Plaintiff’s motion [17] is GRANTED in part and DENIED in part.
IT IS SO ORDERED.
Dated this
day of July, 2016.
MARCO A. HERNÁNDEZ
United States District Judge
11 - OPINION & ORDER
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