Morrison v. Clear Management Solutions

Filing 47

MEMORANDUM DECISION AND ORDER CERTIFYING CLASS AND GRANTING SUMMARY JUDGMENT-granting 36 Motion for Summary Judgment ; denying 20 Motion for Summary Judgment ; granting 32 Motion to Certify Class. See Order for additional details. Signed by Judge Clark Waddoups on 1/4/19. (jmr)

IN THE UNITED STATES DISTRICT COURT
THE DISTRICT OF UTAH, CENTRAL DIVISION

AIMEE MORRISON,
MEMORANDUM DECISION &
ORDER CERTIFYING CLASS &
GRANTING SUMMARY JUDGMENT

Plaintiff,
v.

Case No. 1:17-cv-51
CLEAR MANAGEMENT SOLUTIONS,
Judge Clark Waddoups
Defendant.

Before the court is Defendant Clear Management Solutions’ Motion for Summary
Judgment (ECF No. 20) and Plaintiff Aimee Morrison’s Motion to Certify Class (ECF No. 32)
and Motion for Summary Judgment (ECF No. 36). Ms. Morrison alleges that she and other
similarly situated individuals received collections letters from Clear Management Solutions
(CMS) that violated the Fair Debt Collection Practices Act and the Utah Consumer Sale
Practices Act. CMS argues that it did not violate the FDCPA because it is not a debt collector
and therefore does not fall under the Act. The court heard oral argument on June 28, 2018. (ECF
No. 43.) For the reasons stated herein, the court CERTIFIES the class, DENIES CMS’s Motion
for Summary Judgment, and GRANTS Ms. Morrison’s Motion for Summary Judgment.
CLASS CERTIFICATION
Ms. Morrison seeks certification of the following classes:

All persons with addresses within Utah; who were sent any
communication which was similar or identical to Plaintiff’s Exhibit
A on behalf of Utah Imaging Associates; to recover a consumer
debt; in which this initial communication failed to provide the
notice required by 15 U.S.C. § 1962g and/or 15 U.S.C.
§ 1692e(11); which were not returned undelivered by the United
States Postal Service; from April 11, 2016 until April 11, 2017.
(Motion to Certify 2, ECF No. 32.) Ms. Morrison also seeks appointment as class representative.
(Id.) Finally Ms. Morrison seeks the appointment of David McGlothlin of Hyde & Swigart and
Ryan McBride of Kazerouni Law Group be appointed as class counsel. (Id.)
Under the Federal Rules of Civil Procedure, “[a]t an early practicable time after a person
sues or is sued as a class representative, the court must determine by order whether to certify the
action as a class action.” Fed. R. Civ. P. 23(c)(1)(A). The order “must define the class and the
class claims, issues, or defenses, and must appoint class counsel under Rule 23(g).” A class may
be certified only if all of the following prerequisites are met:
(1) the class is so numerous that joinder of all members is
impracticable; (2) there are questions of law or fact common to the
class; (3) the claims or defenses of the representative parties are
typical of the claims or defenses of the class; and (4) the
representative parties will fairly and adequately protect the
interests of the class.
Id. 23(a); Shook v. El Paso Cty., 386 F.3d 963, 968, 971 (10th Cir. 2004) (“Rule 23(a) requires
an analysis of four elements which are preconditions to class certification: numerosity,
commonality, typicality, and adequacy of the named parties to represent the class.”). “A party
seeking class certification must show ‘under a strict burden of proof’ that all four requirements
are clearly met.” Trevizo v. Adams, 455 F.3d 1155, 1162 (10th Cir.2006).
Here, the purported class satisfies the numerosity requirement because there are sufficient
potential members “as to make joinder impracticable.” Peterson v. Okla. Housing Auth., 545

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F.2d 1270, 1273 (10th Cir. 1976). The proposed class is made up of individuals to whom CMS
sent the same or similar communications as it sent Ms. Morrison on behalf of the original
creditor Utah Imaging Associates (UIA) within a one-year time span. Based on discovery
responses from UIA, Ms. Morrison estimates that 40,887 people received such a communication.
(Exhibit B ¶ 7, ECF No. 32-5.) Even assuming some of the intended recipients never received or
opened the documents, this class of potential plaintiffs is too large to be accommodated through
joinder.
Commonality is also met. Commonality exists when plaintiffs share a “common
contention . . . that is capable of classwide resolution—which means that determination of its
truth or falsity will resolve an issue that is central to the validity of each one of the claims in one
stroke.” Wal-Mart Stores, Inc. v. Dukes, 564 U.S. 338, 350 (2011). Here CMS has admitted that
all 40,887 prospective class members received the same or nearly the same collections letter,
which did not include the notices that 15 U.S.C. § 1692g and 15 U.S.C. § 1692e(11) require.
(Exhibit C 38: 1–18, ECF No. 32-6.) Therefore, common questions—whether CMS was required
to comply with FDCPA § 1692g and § 1692e(11) and whether the letter was deceptive in
violation of the UCSPA—would resolve plaintiffs’ entitlement to relief. If CMS was required to
comply with the FDCPA and UCSPA, each of the 40,887 notices it sent would be in violation of
the FDCPA, entitling the class members to compensation. Because resolving a single legal issue
would resolve the question of CMS’s liability under each statute to each member of the
purported class, commonality exists.
Typicality is also met. “[L]ike commonality, typicality exists where . . . all class members
are at risk of being subjected to the same harmful practices, regardless of any class member’s

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individual circumstances.” DG ex rel. Stricklin v. Devaughn, 594 F.3d 1188, 1199 (10th Cir.
2010). Courts have concluded that typicality is met where each member of the purported class
received the same communication in violation of the FDCPA. See, e.g., Gold v. Midland Credit
Mgmt., 306 F.R.D. 623, 631–32 (N.D. Cal. 2014) (concluding typicality was met where the
plaintiff “allege[d] that she and each class member were sent an identical and unlawful form
collection letter and therefore subjected to the same violations of the FDCPA”). Because Ms.
Morrison’s harm, receipt of a communication that allegedly violated the FDCPA and UCSPA, is
typical of the harm to the members of the purported class, this element is met.
Finally, class representation is adequate. Class representation is adequate if the named
plaintiff and her counsel (1) do not have “any conflicts of interest with other class members” and
(2) “will . . . prosecute the action vigorously on behalf of the class” and if counsel (3) is
competent. Rutter & Wilbanks Corp. v. Shell Oil Co., 314 F.3d 1180, 1187–88 (10th Cir. 2002).
First, Ms. Morrison’s claims are identical to those of the class and therefore her interests
coincide with theirs. And she declares under penalty of perjury that she has no financial interest
in the outcome aside from any damages to be awarded.1 (Declaration of Aimee Morrison ¶ 9,
ECF No. 32-1.) And there is no known conflict between Ms. Morrison or her counsel and the

CMS argues Ms. Morrison cannot adequately represent the class. It argues, “CMS believes
Plaintiff’s contention that she satisfies Rule 23(a)(4) is misconstrued. Plaintiff is the spouse of a
consumer protection attorney with a working relationship with counsel of record in this case.
This working relationship between Mr. Morrison and counsel of record demonstrates a conflict
of interest for Plaintiff. CMS would also defer to the Court’s discretion in determining whether
Plaintifff satisfies Rule 23(a)(4).” (Defendant’s Objection 10, ECF No. 37.) CMS provides no
further detail about the nature of Mr. Morrison’s relationship with counsel or why that
relationship should preclude Ms. Morrison from serving as class representative. Without some
further discussion of the nature of the conflict, the court cannot conclude that Ms. Morrison’s
representation would be compromised by her husband’s professional relationship with counsel.
1

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class. (Id. ¶¶ 6–7; Declaration of David McGlothlin ¶ 4, ECF No. 32-2; Declaration of Ryan L.
McBride ¶ 7, ECF No. 32-3.)
Second, Ms. Morrison has declared under penalty of perjury that she understands her
responsibilities as class representative, is willing to serve in that capacity, and has hired
competent counsel to represent the class. (Declaration of Aimee Morrison ¶¶ 3–5, 8, ECF No.
32-1.) Third, Ms. Morrison’s counsel are experienced lawyers capable of serving as class
counsel. Their declarations and supporting documents demonstrate they have significant
experience serving as class counsel, including in FDCPA actions. (Declaration of David
McGlothlin ¶¶ 5–17, ECF No. 32-2; Declaration of Ryan L. McBride ¶¶ 8–19, ECF No. 32-3.)
Therefore, each of the elements of Federal Rule of Civil Procedure 23(a) are met.
Having found that the Rule 23(a) prerequisites are met, the court must next “examine
whether the action falls within one of three categories of suits set forth in Rule 23(b).” Adamson
v. Bowen, 855 F.2d 668, 675 (10th Cir. 1988). Here Ms. Morrison alleges her action satisfies
both Rule 23(b)(2) and (b)(3) and asks the court to certify a hybrid class. The two categories
apply when
(2) the party opposing the class has acted or refused to act on
grounds that apply generally to the class, so that final injunctive
relief or corresponding declaratory relief is appropriate respecting
the class as a whole; or (3) the court finds the questions of law or
fact common to class members predominate over any questions
affecting only individual members, and that a class action is
superior to other available methods for fairly and efficiently
adjudicating the controversy. The matters pertinent to these
findings include: (A) the class members’ interests in individually
controlling the prosecution or defense of separate actions; (B) the
extent and nature of any litigation concerning the controversy
already begun by or against class members; (C) the desirability or
undesirability of concentrating the litigation of the claims in the

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particular forum; and (D) the likely difficulties in managing a class
action.
Id. 23(b)(2)–(3). Because she believes this action satisfies the requirements of Rule 23(b)(2) and
(b)(3), Ms. Morrison asks the court to certify a hybrid class, which would entitle the class
members to equitable relief under 23(b)(2) and monetary damages under 23(b)(3). The court first
analyzes whether certification could be proper under either section of subpart (b) and then
addresses the argument for a hybrid class.
Subpart (b)(2) applies if “the remedies the class seeks . . . do not depend on the individual
facts of each case, but apply equally to all cases pending within the class.” Adamson v. Bowen,
855 F.2d 668, 676 (10th Cir. 1988). But “[f]actually different claims of individual class members
‘should not preclude certification under Rule 23(b)(2) of a claim seeking the application of a
common policy.’” Shook, 386 F.3d at 971 (quoting Adamson, 855 F.2d at 676). The court must
examine “the ‘relationship between’ a proposed class, ‘its injuries, and the relief sought.’”
Vallario v. Vandehey, 554 F.3d 1259, (10th Cir. 2009) (quoting Shook v. Bd. of Cty. Comm’rs,
543 F.3d 597, 604 (10th Cir. 2008)). As an initial matter, the court notes that the FDCPA does
not make equitable relief available as a remedy to private litigants. See 15 U.S.C. § 1692k
(specifying damages awards available and factors to be considered by the court when
determining what amount of damages to award); see also Jacobson v. Persolve, Case No. 14-cv735-LHK, 2015 WL 3523696, at *9–*10 (E.D. Cal. June 4, 2015) (“While the Ninth Circuit has
not addressed the issue, every circuit court that has considered this question has concluded that
private litigants may seek damages but not injunctive and declaratory relief under the FDCPA.”).
But because the UCSPA contemplates injunctive relief, Utah Code Ann. § 13-11-19, a 23(b)(2)
class may be proper. See Campo v. Am. Corrective Counseling Serv., 254 F.R.D. 585, 595–96

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(N.D. Cal. 2008) (concluding that state law provided alternative statutory basis for equitable
relief and therefore a basis for certification under Rule 23(b)(2)). And because CMS is alleged to
have sent an identical letter to the potential plaintiffs and equitable relief in which the court
determined the letter was a violation of law would provide the same relief across the class,
Ms. Morrison has satisfied Rule 23(b)(2).
Rule 23(b)(3)’s requirements are also satisfied. A class may be certified under subpart
(b)(3) if questions of law or fact pertaining to the class as a whole predominate over issues
applying to individual class members such that a class action is the superior method of resolving
the case. Amchem Prods, Inc. v. Windsor, 521 U.S. 591, 615 (1997). In evaluating the
predominance and superiority requirements, the court is to consider the following nonexhaustive
factors:
(A) the interest of members of the class in individually controlling
the prosecution or defense of separate actions; (B) the extent and
nature of any litigation concerning the controversy already
commenced by or against members of the class; (C) the desirability
or undesirability of concentrating the litigation of the claims in the
particular forum; (D) the difficulties likely to be encountered in the
management of a class action
Id. at 616 (quoting Fed. R. Civ. P. 23(b)(3)(A)–(D)).
“The Rule 23(b)(3) predominance inquiry tests whether proposed classes are sufficiently
cohesive to warrant adjudication by representation.” Amchem, 521 U.S. at 622–23. “[T]the
predominance prong ‘asks whether the common, aggregation-enabling, issues in the case are
more prevalent or important than the non-common, aggregation-defeating, individual issues.’”
CGC Holding Co., LLC, v. Broad and Cassel, 773 F.3d 1076, (10th Cir. 2014) (quoting
2 William B. Rubenstein et al., Newberg on Class Actions § 4:49, at 195–96 (5th ed. 2012)).

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The legal and factual issues that this case presents are limited and apply equally to all
who received a letter like the one Ms. Morrison received. The court must first determine whether
CMS was a debt collector subject to the FDCPA or a supplier subject to the UCSPA. This
question will be resolved the same way whether there is one plaintiff affected by the conclusion
or 40,887. Next the court must determine whether the letter sent violated either the FDCPA or
the UCSPA. Because the proposed class definition limits the class to only those who received a
letter that “was similar or identical to Plaintiff’s Exhibit A on behalf of Utah Imaging
Associates,” the court need only decide this issue with regard to one set of facts. If the letter Ms.
Morrison received violated the law, so too did the letter that every other member of the class
received. Therefore, common issues of law and fact are more important to resolution of this case
than any potential individualized issues, though at this time the court can foresee no such issues.
The superiority requirement is also met. Superiority is met when a class action will
“achieve economies of time, effort, and expense, and promote uniformity of decision as to
persons similarly situated, without sacrificing procedural fairness or bringing about other
undesirable results.” Amchem, 521 U.S. at 615. CMS argues that superiority is not met here
because of the disparity between individual statutory damages under the FDCPA—$1,000 per
plaintiff plus actual damages and attorney fees—and class damages—not more than the lesser of
$500,000 or 1 percent of the debt collector’s net worth. 15 U.S.C. § 1692k. CMS reasons that,
assuming a 40,000 person class receiving a $500,000 award, each individual plaintiff will
recover $12. (Response to Certification 13, ECF No. 37.) While the court does not dismiss that a
potential plaintiff could recover more by bringing an individual action, any plaintiff who wishes
to do so can opt out of this action and file separately. More likely, however, potential plaintiffs

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may be unaware of their right, or otherwise uninclined, to bring such an action. See Zuniga v.
Bernalillo Cty., 319 F.R.D. 640, 680 (D. N.M. 2016) (“Although claims under [the FDCPA] may
be more lucratively brought as individual actions, courts should assess the real-world likelihood
that class members would bring their own actions, which implicates another factor the court
should consider: the likelihood that proposed class members know they have a claim and
whether they are savvy enough to pursue it.”); Janick v. Cavalry Portfolio Servs., LLC, No. Civ.
06-3104, 2007 WL 1994026, at * 11 (D. Minn. July 3, 2007) (“[T]he truth is that the putative
plaintiffs in this [FDCPA] case are not likely to know their rights and are not likely to pursue
these claims on their own.”). And resolution of the narrow legal and factual questions now
before the court in a single action would otherwise promote economy and fairness. Therefore, a
class action is the superior vehicle for the issues this case presents and certification under Rule
23(b)(3) is proper.
Because the alleged class satisfies both the 23(b)(2) and 23(b)(3) requirement, Ms.
Morrison asks the court to certify a “hybrid class.” (Motion to Certify 15, ECF No. 32.) Some
courts have refused to certify a hybrid class in light of the Supreme Court’s conclusion in WalMart Stores, Inc. v. Dukes, 564 U.S. 338, 360 (2011),2 that a claim for monetary relief cannot be
certified under Rule 23(b)(2) if the monetary relief sought is not incidental to the request for
injunctive relief. See, e.g., Magallon v. Vital Recovery Servs., LLC, 16-cv-02971, 2018 WL
1336291, at *5 (S.D. Cal. March 14, 2018) (determining that Dukes barred a hybrid FDCPA
class action where plaintiff alleged a standardized letter merited declaratory relief and statutory

2

The court notes that the cases upon which Plaintiff relies in requesting a hybrid class predate
Dukes. (Motion to Certify 15, ECF No. 32.)

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damages but failed to address the argument “that his claim is primarily for monetary relief”). But
other courts have permitted such hybrid classes post-Dukes. See 2 William B. Rubenstein et al.,
Newberg on Class Actions § 4.38 (5th ed.). They have done so by certifying a 23(b)(2) class for
the injunctive portion of the case and a 23(b)(3) class for the damages portion, see, e.g.,
Buchanan v. Tata Consultancy Servs., Ltd., 15-cv-1696, 2017 WL 6611653, at *23 (N.D. Cal.,
December 12, 2017). Here Ms. Morrison seeks to prevent CMS from further violating the
FDCPA, making injunctive relief appropriate (Complaint ¶ 43, ECF No. 2), and she seeks
statutory damages under both the FDCPA and the UCSPA (Id. ¶¶ 42, 49.) Therefore, the court
concludes a “hybrid class” comprised of both a (23)(b)(2) class and a 23(b)(3) class is proper.3
Having concluded that the 23(a) and 23(b) requirements are met and exercising its duty
under Rule 23(c)(1)(B), the court hereby defines the class to include
All persons with addresses within Utah; who were sent any
communication which was similar or identical to Plaintiff’s Exhibit
A on behalf of Utah Imaging Associates; to recover a consumer
debt; in which this initial communication failed to provide the
notice required by 15 U.S.C. § 1962g and/or 15 U.S.C.
§ 1692e(11); which were not returned undelivered by the United
States Postal Service; from April 11, 2016 until April 11, 2017.
The class action will resolve whether CMS violated the FDCPA by failing to provide such
notices and whether that its failure to comply with the FDCPA constitutes a violation of the

The court notes that this distinction is significant because 23(b)(2) classes are “opt-in” classes,
while 23(b)(3) classes are “opt-out” classes. Dukes, 564 U.S. at 361–63 (“The Rule provides no
opportunity for (b)(1) or (b)(2) class members to opt out, and does not even oblige the District
Court to afford them notice of the action,” whereas “[i]n the context of a class action
predominantly for money damages we have held that absence of notice and opt-out violates due
process.”). Here, potential class members due process right to $1000 in statutory damages is not
compromised because they will have the right to opt-out of the class award.
3

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UCSPA. Finally the court appoints Ms. Aimee Morrison as class representative, and her counsel,
David McGlothlin of Hyde & Swigart and Ryan McBride of Kazerouni Law Group, as class
counsel.
SUMMARY JUDGMENT
Also pending before the court are cross motions for summary judgment of the FDCPA
and UCSPA claims.4 The parties agree that resolution of the claims turns on whether CMS was a
“debt collector,” as used in the FDCPA, and a “person” or “supplier,” as used in the UCSPA,
when it sent the letters about which Ms. Morrison complains. CMS stipulates that the letters do
not contain the disclosures that the FDCPA §§ 1692e(11) and 1692g require debt collectors to
include. (Defendant’s Motion 1, ECF No. 20.) Ms. Morrison contends that without these
disclosures, the letters CMS sent to Ms. Morrison and others violate the FDCPA and UCSPA.
CMS counters that, because the debt was not in default, it was not acting as a debt collector, is
not regulated by the identified statutory schemes, and was not required to include the disclosures,
which it concedes are absent. (Defendant’s Motion 2, ECF No. 20.)
FACTS
Plaintiff Aimee Morrison’s three children received medical services from Utah Imaging
Associates July 7, 2016. (Defendant’s Motion 4, ECF No. 20; Plaintiff’s Motion 3, ECF No. 36.)
UIA charged her $36.00 per child, but based on UIA standard practice and believing her
insurance would cover them, Ms. Morrison did not pay UIA. (Defendant’s Motion 4, ECF No.
20; Plaintiff’s Opposition Brief 7, ECF No. 35.) No party has provided evidence that Ms.

The issue of damages is not resolved by the court’s disposition of the pending motions and
remains to be litigated.
4

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Morrison entered a contract with UIA,5 leaving the court to conclude that UIA provided the
medical services without an express contract and that no contract exists providing the terms for
payment. (Plaintiff’s Exhibit B, ECF No. 36-3; Plaintiff’s Reply Brief 4–5; ECF No. 42.)
UIA then sent Ms. Morrison a bill for $36 per child on July 17, 2016. (Plaintiff’s
Opposition Brief 6, ECF No. 35.) The bill stated, “You are responsible for payment in full within
20 days.” (Id.; Plaintiff’s Opposition Exhibit E.) Ms. Morrison again did not make a payment,
and UIA sent a second bill to Ms. Morrison on August 21, 2016, bearing the warning, “This is
your FINAL NOTICE. Failure to pay this balance in full within 15 days may result in further
collection action.” (Plaintiff’s Opposition Brief 6–7, ECF No. 35; Plaintiff’s Opposition Exhibit
F.) On October 13, 2016, UIA assigned Ms. Morrison’s three accounts to CMS. (Defendant’s
Motion 5, ECF No. 20; Plaintiff’s Opposition Exhibit C 26:4–11, ECF No. 35-5.) On October
14, 2016, CMS sent Ms. Morrison three identical letters—one for each child’s account—
notifying her that “[UIA] ha[d] contracted with [CMS] to handle [her] account” and asking her to
“[p]lease remit the balance due to” CMS on UIA’s behalf. (Defendant’s Motion 4, ECF No. 20;
Plaintiff’s Exhibit B UIA006, ECF No. 36-3.) The letters indicate that CMS “is a billing
service.” (Plaintiff’s Exhibit B UIA006, ECF No. 36-3.) They also say no interest has accrued
and that accrual can be avoided by “paying your account in full.” (Id.) Although no interest had
accrued at the time the letter was sent to Ms. Morrison, interest began accruing on October 13,
2016. (Plaintiff’s Opposition Exhibit C 26: 7–11.)

It appears Ms. Morrison took her three children to a third-party provider that performed scans,
which scans UIA read. UIA then charged Ms. Morrison for its reading of the scans. But Ms.
Morrison’s relationship was with the third-party provider; she had no direct relationship with
UIA.
5

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After receiving CMS’s letter, Ms. Morrison did not pay. And on November 21, 2016, her
three accounts were assigned to Express Recovery Services (ERS). (Defendant’s Motion 5, ECF
No. 20.) ERS is a debt collector and is licensed as such in the state of Utah. (Id.) The ERS letters
dated November 21, 2016, are not at issue here. Ms. Morrison has since paid off each of the three
accounts. (Plaintiff’s Opposition Exhibit C 31: 9–11, ECF No. 35-5.)
In their respective statements of facts, the parties make competing representations about
the role CMS played in the collection of Ms. Morrison’s debt to UIA. CMS asserts that at the
time of the assignment to CMS, Ms. Morrison’s accounts were not in “default,” based on the
declaration of Patricia Harms, chief executive officer of UIA. (Defendant’s Exhibit A ¶¶1 & 7,
ECF No. 20-1.) Citing Michelle Camp, chief operating officer of ERS, CMS also represents that
it “never collects defaulted accounts” and that it is simply a “billing company,” not a debt
collector. (Defendant’s Exhibit B ¶¶ 5 & 7, ECF No. 20-2.) Ms. Morrison disputes each of these
representations. (Plaintiff’s Opposition Brief 4–5, ECF no. 35.)
But, as Ms. Morrison points out, CMS is in fact ERS doing business as CMS.6 (Plaintiff’s
Opposition Brief 6, ECF No. 35.) There are four CMS employees. (Id. at 8.) ERS pays and
supervises those employees. (Id.) In fact, if there is not enough CMS work, the four CMS
employees work on ERS tasks. (Id.) CMS and ERS also use the same collection software and
programs. (Id. at 9.) And the “transfer” of files from CMS to ERS, at which time CMS contends

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As further evidence that CMS and ERS are legally indistinguishable, the official who CMS
designated Ms. Camp as its Rule 30(b)(6) representative. Ms. Camp’s official title is Chief
Operating Officer for Express Recovery Services. (Plaintiff’s Opposition Exhibit C 7: 7–10.)
And when asked if CMS was a separate legal entity from ERS, Ms. Camp answered, “I don’t
know how it would be defined as a separate legal entity. I mean, it’s registered with the state as
Express Recovery doing business as Clear Management Solutions.” (Id. 9: 10–15.)

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the debts go into default, requires only that an employee to log in to the shared software and
move the file to a different location of the joint server. (Id.) The court addresses the questions of
default, debt collection, and the significance of the relationship between ERS and CMS in its
analysis.
STANDARD
Summary judgment is proper when the moving party demonstrates that there is no
genuine issue of material fact and that it is entitled to judgment as a matter of law. Fed. R. Civ.
P. 56(a). A material fact is one that may affect the outcome of the litigation. See Anderson v.
Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). The moving party bears the initial burden of
showing an absence of evidence to support the nonmoving party's case. Celotex Corp. v. Catrett,
477 U.S. 317, 325 (1986). “Once the moving party meets this burden, the burden shifts to the
nonmoving party to demonstrate a genuine issue for trial on a material matter.” Id. The
nonmoving party may not rest solely on allegations on the pleadings, but must instead designate
“specific facts showing that there is a genuine issue for trial.” Id. at 324. The court must “view
the evidence and draw reasonable inferences therfId.efrom in a light most favorable to the
nonmoving party.” Commercial Union Ins. Co. v. Sea Harvest Seafood Co., 251 F.3d 1294, 1298
(10th Cir. 2001).
ANALYSIS
FDCPA
Ms. Morrison has alleged three FDCPA violations. (Complaint, ECF No. 2.) Congress
enacted the FDCPA “in part, to ‘eliminate abusive debt collection practices by debt collectors.’”
Obduskey v. Wells Fargo, 879 F.3d 1216, 1219 (10th Cir. 2018), cert. granted sub nom.

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Obduskey v. McCarthy & Holthus LLP, 138 S. Ct. 2710 (2018) (quoting 15 U.S.C. § 1692(e)). It
states, in relevant part, that “[a] debt collector may not use any false, deceptive, or misleading
representation or means in connection with the collection of any debt.” 15 U.S.C. § 1692e. It
prohibits debt collectors from engaging in particular types of communications and imposes
certain notice requirements on debt collectors. Id.; 15 U.S.C. § 1692g. It imposes on debt
collectors certain notice and disclosure requirements.
“To prevail under the FDCPA, a plaintiff must prove that the defendant is a ‘debt
collector’ who is trying to collect a ‘debt’ from the plaintiff in violation of some provision of the
FDCPA.” Obduskey, 879 F.3d at 1219. The FDCPA defines debt collector as “any person who
uses any instrumentality of interstate commerce or the mails in any business the principal
purpose of which is the collection of any debts, or who regularly collects or attempts to collect,
directly or indirectly, debts owed or due another.” 15 U.S.C. § 1692a(6). The statute, however,
carves out limited exceptions, including the following: “any person collecting or attempting to
collect any debt owed or due or asserted to be owed or due to another to the extent such activity
. . . concerns a debt which is not in default at the time it was obtained by such person.” Id.
§ 1692a(6)(F)(iii). The act does not define “default.” The court must, therefore, determine
whether CMS was a debt collector or if it was shielded from potential FDCPA liability because
the debt was not in default.
First, CMS satisfies the statutory definition of debt collector. CMS is not a legally distinct
entity from ERS, and ERS admits that it is a debt collector and that its primary purpose is debt
collection. ERS is licensed in the state of Utah as a debt collector. This alone is sufficient to
qualify CMS as a debt collector. CMS argues that CMS and ERS should be viewed as distinct

15

entities and that ERS’s status as a debt collector should not be imputed to CMS, but as a matter
of law that is simply not true. See Sewell v. Xpress Lube, 321 P.3d 1080, 1085 (Utah 2013)
(quoting Fried v. Wellesley Mazda, 2010 Mass.App. Div. 36, 2010 WL 1139322 (Mass. Dist. Ct.
2010)) (“[T]he ‘use of the designation ‘doing business as’ does not create a separate legal entity
that may be made a party defendant.’”); see also Duval Midwest Auto City, Inc., 425 F. Supp.
1381, 1387 (D. Neb. 1977) (“The designation ‘d/b/a’ means ‘doing business as’ but is merely
descriptive of the person or corporation who does business under some other name. Doing
business under another name does not create an entity distinct from the person operating the
business.”).
CMS’s claim that as a matter of fact it is not a debt collector but “a billing service that
assist[s] companies with accounts not paid at the time service is rendered” (Defendant’s Exhibit
B ¶6, ECF No. 20-2) is similarly unavailing.7 The evidence demonstrating what CMS actually
does, in other words what it means that CMS “assists companies,” supports as a matter of law
that CMS is engaged in debt collection activity. CMS “act[s] as an extension of” their clients’
“billing office in-house and make courtesy calls, set up payment plans, payment reminders,
things along those lines, prior to—so there was some patient communication prior to the account
just being written off to bad debt.” (Plaintiff’s Opposition Exhibit C 8: 21–9: 5, ECF No. 35-4.)
And in her deposition Ms. Camp, COO for ERS and 30(b)(6) representative for CMS, agreed

The officers’ statements are conclusory and cannot support summary judgment. And a parties
description of itself is not a basis upon which the court should make the legal conclusion of
whether it must comply with the FDCPA. See Romine v. Diversified Collection Servs., Inc., 155
F.3d 1142, 1149 (9th Cir. 1998). The relevant consideration is not what the defendant titles itself
but how it conducts itself. Id.
7

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that each letter sent to Ms. Morrison was “an attempt to collect $36” from her. (Id. 36: 10–12.)
Because CMS is simply an alternative name for ERS, an acknowledge debt collector, and
because CMS was engaged regularly in seeking payment on debts for another entity, UIA, it was
a debt collector. Nevertheless, it may be excluded from the statutory definition—and therefore
from regulation under the FDCPA—if the debt it was collecting was not in default. See Henson
v. Santander Consumer USA Inc., 137 S.Ct. 1718, 1723 (2017).
The FDCPA does not define default. Alibrandi v. Fin. Outsourcing Servs, Inc., 333 F.3d
82, 86 (2d. Cir. 2003). CMS argues that, in the absence of a statutory definition, the court must
look to the contract governing the relationship of the parties. (Defendant’s Response 12–12, ECF
No. 40.) This is consistent with the approach many cases have taken. See Magee v. AllianceOne,
Ltd., 487 F. Supp. 2d 1024 (S.D. Ind. 2007) (cataloguing cases that stand for the proposition that
“in the absence of a statutory definition of default, the definition (if there is one) contained in the
applicable loan or credit agreement is used to determine if and when the debt is in default” but
declining to adopt that approach under the circumstances before the court). But that approach is
unworkable in this case, because the creditor (UIA) and the debtor (Ms. Morrison) never entered
an express contract and as a result there is no express or implied contractual definition of default
for the court to apply. Where there is an absence of a contractual term between debtor and
creditor, the courts have looked to the plain meaning of the statute. Cf. Romine v. Diversified
Collection Servs., Inc., 155 F.3d 1142, 1145–46 (9th Cir. 1998) (“In the absence of statutory
definition, a statutory term will be accorded its ordinary meaning.”).
The court is unpersuaded by CMS’s argument that it should instead defer to the definition
of default in the contract between CMS and UIA. Permitting the creditor to define default

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without knowledge and input from the debtor, either because the debtor is not a party to the
contract containing the definition or because the definition reserves discretion for the creditor to
decide on a definition at a later date, would controvert the purpose of the FDCPA. Magee, 487 F.
Supp. 2d at 1027–28; see also Hartman v. Meridian Fin. Servs., Inc., 191 F. Supp. 2d 1031
(W.D. Wis. 2002) (“[T]he fact that a creditor or third-party debt collector ‘considers’ a debt to be
in default has no bearing on whether the debt is truly in default.”). Specifically, it would allow
for the creditor to set the date in which a debt goes into default immediately after the transfer to
the debt collector, allowing an entity that would otherwise be governed by the statute to avoid
statutory accountability. Magee, 487 F. Supp. 2d at 1027–28. This is particularly true where, as
here, the debtor had no knowledge of the contract or its definition of default. Therefore, this
court will apply the plain meaning of default.
Webster’s dictionary defines default in the economic context to mean “a failure to pay
financial debts.” https://www.merriam-webster.com/dictionary/default?utm_campaign=sd&
utm_medium=serp&utm_source=jsonld. Alternatively, “default” is the failure “to fulfill a
contract, agreement, or duty: such as . . . to fail to meet a financial obligation.” Black’s Law
Dictionary similarly defines default as “the omission or failure to perform a legal or contractual
duty; esp., the failure to pay a debt when due.” DEFAULT, Black’s Law Dictionary (10th ed.
2014).
These definitions demonstrate that the plain meaning of the term “default” is that a debt
is owing. While adopting a strict definition of default such that a bill only one day late may not
be in consumer’s interest, see Alibrandi, 333 F.3d at 87 (“[A] debtor arguing that his debt was in
default at the earliest possible time . . . has the paradoxical effect of immediately exposing

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debtors to the sort of adverse measures, such as acceleration, repossession, increased interest
rates, and negative reports to credit bureaus.”), the court need not reach such an extreme position
under the circumstances in this case. The parties agree that Ms. Morrison received a second
billing notice from UIA on August 21, 2016, that included the following notice: “This is your
FINAL NOTICE. Failure to pay this balance in full within 15 days may result in further
collection action.” (Plaintiff’s Opposition Brief 6–7, ECF No. 35; Plaintiff’s Opposition Exhibit
F.) The parties also agree that the debt was assigned to CMS on October 13, 2016—over fifteen
days after UIA’s “FINAL NOTICE.” CMS presents no argument that this notice failed to put the
account in default other than the assurance that CMS does not collect debts that are in default
and that the procedure contemplated in the contract between UIA and CMS was for the debt to
be “in default” only when it went to ERS. (Defendant’s Response Brief 13, ECF No. 40.) But
these assurances have no basis in the statute and they place all of the power in the hands of the
creditors and debt collectors from whom the FDCPA protects consumers. Therefore, the court
concludes that the debts were in default by the time CMS obtained them. This conclusion is
further supported by the fact that the debt began accruing interest upon its transfer to CMS. None
of the facts are in dispute, allowing the court to find as a matter of law that the debt was in
default. Because CMS/ERS is otherwise a debt collector, the court concludes its conduct must
comply with the FDCPA, and the failure to do so in this case violated the statute.8 For these
reasons, CMS’s Motion is denied and Ms. Morrisons’s is granted on the issue of an FDCPA
violation.

8

The court need not analyze whether a violation existed as CMS the letter was not compliant
with the FDCPA’s notice requirements. (Defendant’s Motion 1, ECF No. 20.)

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UCSPA
Both parties also move for summary judgment of the Utah Consumer Sales Practices Act
claim. (Defendant’s Motion 8–9, ECF No. 20; Plaintiff’s Motion 18–22, ECF No. 35.) As an
initial matter, each of CMS’s UCSPA arguments can be reduced to the claim that it is not a debt
collector and the debts are not in default, which facts CMS believes preclude it from UCSPA
liability. Without determining whether those facts would preclude UCSPA liability, the court
denies CMS’s motion on the UCSPA claim in light of its disposition and conclusions on the
FDCPA claim.
Whether Ms. Morrison has proven as a matter of law that CMS violated the Act requires
greater attention. She alleges violations of Utah Code sections 13-11-4, and 13-11-5. Section 1311-4 prohibits “deceptive act[s] or practice[s] by a supplier in connection with a consumer
transaction . . . whether it occurs before, during, or after the transaction.” Utah Code § 13-11-4.
Section 13-11-5 similarly prohibits “[a]n unconscionable act or practice by a supplier in
connection with a consumer transaction that violates this act.” Id. § 13-11-5. Therefore, Ms.
Morrison must demonstrate that (1) CMS was a supplier, (2) that CMS committed a deceptive or
unconscionable act, and (3) that act was in connection with a consumer transaction.
A “supplier” is “a seller, lessor, assignor, offeror, broker, or other person who regularly
solicits, engages in, or enforces consumer transactions, whether or not he deals directly with the
consumer.” Id. § 13-11-3(6). A consumer transaction is “a sale, lease, assignment, award by
chance, or other written or oral transfer or disposition of goods, services, or other property, both
tangible and intangible (except securities and insurance),” including “a solicitation.” Id. § 13-113(2). The letter CMS sent Ms. Morrison was a request for payment that satisfies the commercial

20

transaction requirement. It was a solicitation. And CMS was a supplier as its business is to solicit
payment for debts. Therefore, the first and third elements are satisfied.
Ms. Morrison argues that CMS’s conduct was both deceptive because it “knowingly” and
“intentionally omitted the notices required by the FDCPA” and such omission was
unconscionable because it left Ms. Morrison in a position of not knowing “the proper way to
respond based on the information given to” her. (Plaintiff’s Motion 21, ECF No. 36.) The court
agrees the failure to provide the proper notices identifying CMS as a debt collector, as required
by law, was deceptive. CMS knowingly misrepresented the nature of its collections activity by
hiding behind a d/b/a in attempt to avoid registering as a debt collector and providing the
requisite notices; that was a knowing and intentional deceptive act.9 There may, however, be a
factual dispute as to whether CMS’s letter was unconscionable. Generally, unconscionability
requires some “extreme unfairness.” UNCONSCIONABILITY, Black’s Law Dictionary (10th
ed. 2014). While the court agrees that CMS acted deceptively, there is not a factual basis for the
court to conclude as a matter of law that CMS’s misconduct rises to the level of
unconscionability. Rather, she has simply repackaged the CMS’s allegedly deceptive conduct
and called it unconscionable. Nevertheless, because CMS acted deceptively, the court is
persuaded that it violated the UCSPA and Ms. Morrison is entitled to summary judgment on that
question.

CMS’s argument that Ms. Morrison has not proven her UCSPA claim is simply that the debt
was not in default and therefore the failure to include FDCPA required warnings and notices was
neither deceptive or unconscionable. (Defendant’s Objection 15–16, ECF No. 40.) Defendant
makes no other arguments, suggesting that it agrees that a violation of the FDCPA is sufficient to
constitute a violation of the UCSPA.
9

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CONCLUSION
For the reasons stated herein, the court certifies the class proposed by Ms. Morrison (ECF
No. 32), denies CMS’s Motion for Summary Judgment (ECF No. 20) and grants Ms. Morrison’s
Motion for Summary Judgment (ECF No. 36).

DATED this 4th day of January, 2019.
BY THE COURT:

____________________________________
Clark Waddoups
United States District Court Judge

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