Warner et al v. Ray Klein, Inc.
Filing
21
OPINION AND ORDER. Plaintiffs' motion for partial summary judgment Dkt. # 14 is DENIED, Defendant's motion for summary judgment Dkt. # 11 is GRANTED and this case is dismissed with prejudice. Signed on 4/18/2018 by Magistrate Judge John Jelderks. (jtj)
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF OREGON
DORTHA AND GILBERT WARNER,
Plaintiff,
v.
RAY KLEIN, INC.,
Defendant.
____________________________________
) Civil No.: 3:17-cv-01301-JE
)
) OPINION AND ORDER
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Joshua R. Trigsted
Trigsted Law Group, P.C.
5200 SW Meadows Rd, Ste. 150
Lake Oswego, OR 97035
Attorney for Plaintiff
Wade C. Isbell
Ray Klein, Inc. dba Professional Credit Service
PO Box 7637
Springfield, OR 97475
Attorneys for Defendant
JELDERKS, Magistrate Judge:
Plaintiffs Dortha and Gilbert Warner bring this action against Defendant Ray Klein, Inc.,
alleging violations of the Fair Debt Collection Practices Act (“FDCPA”) 15 U.S.C. §§ 1692 et
OPINION AND ORDER – 1
seq. Plaintiffs claim Defendant violated 15 U.S.C. §1692g(a) by failing to effectively disclose
the identity of the current creditor in a letter it sent to Plaintiffs. Currently before the Court are
Defendant’s motion for summary judgment and Plaintiffs’ motion for partial summary judgment.
For the reasons set forth below, Defendant’s motion is granted, Plaintiffs’ motion is denied and
this case is dismissed.
Background
The parties agree that the following facts are undisputed. The debt being collected is a
“debt” under 15 U.S.C. § 1692a(5). Plaintiffs are “consumers” under 15 U.S.C. § 1692a(3) and
Defendant is a “debt collector” under 15 U.S.C. § 1692a(6). Defendant sent Plaintiff a letter
dated January 23, 2017, that qualified as either an “initial communication” or as correspondence
that was sent within five days of the “initial communication.” The letter, printed on Defendant’s
letterhead, states that “The account(s) listed in this letter has been referred for collection.” (Dkt.
#13, Ex. 1). This statement is followed by the language:
Unless you notify this office within 30 days after receiving this notice that you
dispute the validity of this debt or any portion thereof, this office will assume this
debt is valid. If you notify this office in writing within 30 days from receiving this
notice that you dispute the validity of this debt or any portion thereof, this office
will obtain verification of the debt or obtain a copy of a judgment and mail you a
copy of such judgment or verification. If you request this office in writing within
30 days after receiving this notice this office will provide you with the name and
address of the original creditor(s), if different from the current creditor(s).
Id.
In the center of the page, set off from the above language in table format with headings,
the letter identifies the original creditor as Portland Water Bureau, the original account number,
the “Professional” account number, and the total amount due. Appearing lower on the page is the
OPINION AND ORDER – 2
language “This communication is from a debt collector. This is an attempt to collect a debt and
any information obtained will be used for that purpose.” Id.
According to the Declaration of Mark Hasson in support of Defendant’s motion,
Plaintiffs did not respond to the letter and Defendant filed a small claims lawsuit in Clackamas
County Circuit Court. (Dkt. #12, ¶ 5). Hasson’s Declaration also asserts that the parties reached a
mediated agreement in the small claims action and on or around September 1, 2017, Plaintiffs
paid $4,461.05 to Defendant to resolve the Portland Water Bureau account. Plaintiffs do not
dispute these assertions. Plaintiffs filed the current action with this Court on August 22, 2017.
(Dkt. #1).
Evaluating Motions for Summary Judgment
Federal Rule of Civil Procedure 56(c) authorizes summary judgment if no genuine issue
exists regarding any material fact and the moving party is entitled to judgment as a matter of law.
The moving party must show the absence of an issue of material fact. Celotex Corp. v. Catrett,
477 U.S. 317, 325, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986). The moving party may discharge this
burden by showing that there is an absence of evidence to support the nonmoving party's case.
Id. When the moving party shows the absence of an issue of material fact, the nonmoving party
must go beyond the pleadings and show that there is a genuine issue for trial. Id. at 324, 106 S.
Ct. 2548.
The substantive law governing a claim or defense determines whether a fact is material.
T. W. Elec. Serv., Inc. v. Pacific Elec. Contractors Ass'n, 809 F.2d 626, 630 (9th Cir. 1987).
Reasonable doubts concerning the existence of a factual issue should be resolved against the
moving party. Id. at 630–31. The evidence of the nonmoving party is to be believed, and all
OPINION AND ORDER – 3
justifiable inferences are to be drawn in the nonmoving party's favor. Anderson v. Liberty Lobby,
Inc., 477 U.S. 242, 255, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). No genuine issue for trial exists,
however, where the record as a whole could not lead the trier of fact to find for the nonmoving
party. Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587, 106 S.Ct. 1348, 89
L.Ed.2d 538 (1986).
Where parties file cross-motions for summary judgment, the court “evaluate[s] each
motion separately, giving the non-moving party in each instance the benefit of all reasonable
inferences.” A.C.L.U. of Nev. v. City of Las Vegas (ACLU II), 466 F.3d 784, 790–91 (9th Cir.
2006) (quoting A.C.L.U. of Nev. v. City of Las Vegas (ACLU I), 333 F.3d 1092, 1096–97 (9th
Cir. 2003)).
Discussion
The FDCPA prohibits false or deceptive practices in connection with debt collection. 15
U.S.C. §§ 1692 et seq. When a debt collector sends a consumer an initial communication about a
debt, the FDCPA requires that communication, or any subsequent notice sent within five days of
the initial communication, to contain certain disclosures. 15 U.S.C. § 1692g(a). Section 1692g(a)
provides:
Within five days after the initial communication with a consumer in connection
with the collection of any debt, a debt collector shall, unless the following
information is contained in the initial communication or the consumer has paid
the debt, send the consumer a written notice containing—
(1) the amount of the debt;
(2) the name of the creditor to whom the debt is owed;
(3) a statement that unless the consumer, within thirty days after receipt of the
notice, disputes the validity of the debt, or any portion thereof, the debt will be
assumed to be valid by the debt collector;
OPINION AND ORDER – 4
(4) a statement that if the consumer notifies the debt collector in writing within
the thirty-day period that the debt, or any portion thereof, is disputed, the debt
collector will obtain verification of the debt or a copy of a judgment against the
consumer and a copy of such verification or judgment will be mailed to the
consumer by the debt collector; and
(5) a statement that, upon the consumer's written request within the thirty-day
period, the debt collector will provide the consumer with the name and address of
the original creditor, if different from the current creditor.
15 U.S.C. § 1692g(a). The required notice “must be conveyed effectively to the debtor.”
Swanson v. S. Oregon Credit Serv., Inc., 869 F.2d 1222, 1225 (9th Cir. 1988).
Courts in this circuit evaluate the language alleged to violate §1692g under the “least
sophisticated debtor” standard, which requires an assessment of whether the least sophisticated
debtor “would likely be misled by the notice” given. Swanson, 869 F.2d at 1225 (citing Baker v.
G.C. Services Corp., 677 F.2d 775, 778 (9th Cir.1982)). This standard is “designed to protect
consumers of below average sophistication or intelligence, or those who are uninformed or naïve
. . . .” Gonzales v. Arrow Fin. Servs., LLC, 660 F.3d 1055, 1062 (9th Cir. 2011)(citations and
internal quotation omitted). However, the standard “preserves a quotient of reasonableness and
presumes a basic level of understanding and willingness to read with care.” Id. (internal
quotation and alteration omitted); see also Wahl v. Midland Credit Management, Inc., 556 F.3d
643, 645–46 (7th Cir.2009) (“The [least sophisticated debtor] isn't a dimwit. She may be
uninformed, naive, and trusting, but she has rudimentary knowledge about the financial world
and is capable of making basic logical deductions and inferences.” (citations omitted)). This
standard does not protect debtors from “bizarre, idiosyncratic, or peculiar misinterpretations.”
Gonzales, 660 F.3d at 1062 (internal quotations omitted).
Plaintiffs argue that Defendant’s letter merely identifies Portland Water Bureau as the
“Original Creditor” and states that the “account has been referred for collection,” thereby failing
OPINION AND ORDER – 5
to “disclose or even imply the identity of the current creditor.” Pl.’s Motion at p. 3. I disagree.
At the outset, I note that both parties spend much of their briefing analogizing and
distinguishing the Seventh Circuit case Janetos v. Fulton Friedman & Gullace, LLP, 825 F.3d
317 (7th Cir. 2016) as well as a number of district court cases from this and other circuits. See
Dkt. #14 (citing Sparkman v. Zwicker & Associates, P.C., 374 F. Supp. 2d 293 (E.D.N.Y. 2005);
Dewees v. Legal Servicing, LLC, 506 F. Supp. 2d 128 (E.D.N.Y. 2007); McGinty v. Professional
Claims Bureau, Inc., 2016 WL 6069180 (E.D.N.Y. Oct. 17, 2016); Wright v. Phillips & Cohen
Assocs., Ltd., 2014 WL 4471396 (E.D.N.Y. Sept. 10, 2014); Dix v. Nat'l Credit Sys., Inc., 2017
WL 4865259 (D. Ariz. Oct. 27, 2017); Suellen v. Mercantile Adjustment Bureau, LLC, 2012 WL
2849651 (N.D. Cal. June 12, 2012)); Dkt. #11 (citing Schuerkamp v. Afni, Inc., No. 10-6282-HO,
2011 WL 5825969 (D. Or. Nov. 16, 2011); Santibanez v. Nat'l Credit Sys., Inc., No. 6:16-CV00081-AA, 2017 WL 126111 (D. Or. Jan. 12, 2017); Islam v. Credit Control, LLC, 2017 WL
2788938 (E.D.N.Y. June 27, 2017)). However, a review of these cases reveals that none
completely mirrors the facts of this one. I will not reiterate here the numerous distinctions and
similarities noted by both parties, primarily because although a few of the cases cited are
persuasive to a certain extent, none are binding on this court.
Here, unlike cases relied upon by Plaintiffs, Defendant’s letter identified Portland Water
Bureau as the original creditor along with the original account number in the body of the text, not
merely in a subject line or caption. Also, unlike Plaintiffs’ cited cases, the only other entity
mentioned anywhere in the letter is Defendant, whose name appears on the letterhead. See Dkt.
#13, Ex. 1.
The statute does not discern between “original creditor and “current creditor” except to
the extent that it requires notice that upon the consumer's written request “the debt collector will
OPINION AND ORDER – 6
provide the consumer with the name and address of the original creditor, if different from the
current creditor.” 15 U.S.C. § 1692g(a)(5). Under the statute Defendant’s letter need only
include “the name of the creditor to whom the debt is owed” 15 U.S.C. §1692g(a)(2). Although
the letter did not explicitly state “the name of the creditor to whom the debt is owed is Portland
Water Bureau,” it expressly noted that the letter “is an attempt to collect a debt,” listed only one
creditor – Portland Water Bureau, explained that the account indicated had been referred for
collection, and was sent on Defendant’s letterhead with the statement, “This communication is
from a debt collector.” Plaintiffs’ attempts to persuade the Court to parse out distinctions
between an “original creditor” and a “current creditor” or to find confusing the inclusion of the
debt collector’s account number fail in the face of the facts of this case and border on the
“idiosyncratic, or peculiar misinterpretations” that Gonzales eschews. It is simply not plausible
to conclude that the least sophisticated debtor, reading the letter as a whole, would not
understand that Portland Water Bureau, as the only creditor identified, is the creditor to whom
the debt is owed.
Despite the exacting standard under Gonzales, there is still a requirement for a quotient of
reasonableness and the least sophisticated debtor is nonetheless presumed to have a “basic level
of understanding.” Gonzales, 660 F.3d at 1062 (citation omitted). Under this standard and the
requirements of the statute, a finder of fact could conclude only that Defendant’s letter clearly
and effectively disclosed the identity of the creditor to whom the debt was owed. Therefore,
Defendant’s letter did not violate the provisions of the FDCPA as alleged. Accordingly,
Plaintiffs’ motion for partial summary judgment is denied, Defendants’ motion for summary
judgment is granted and this case is dismissed.
OPINION AND ORDER – 7
Conclusion
For the reasons set forth above, Plaintiffs’ motion for partial summary judgment [Dkt. #
14] is DENIED, Defendant’s motion for summary judgment [Dkt. #11] is GRANTED and this
case is dismissed with prejudice.
DATED this 18th day of April, 2018.
/s/ John Jelderks
John Jelderks
U.S. Magistrate Judge
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