Gray v. Suttell & Associates, P.S. et al

Filing 544

ORDER RULING ON MOTION TO STRIKE AND SUMMARY-JUDGMENT MOTIONS REGARDING THE STATUTE OF LIMITATIONS - granting 480 Motion for Summary Judgment; denying 483 Motion for Partial Summary Judgment; granting 495 Motion for Partial Summary Judgment; and granting in part and denying in part 523 Motion to Strike. Signed by Senior Judge Edward F. Shea. (CC, Case Administrator)

1
2
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UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF WASHINGTON

5
6
7

KELLI GRAY and all others similarly
situated,

8
Plaintiffs,

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10
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13
14
15

SUTTELL & ASSOCIATES; MIDLAND
FUNDING, LLC; MARK T. CASE and JANE
DOE CASE, husband and wife; and KAREN
HAMMER and JOHN DOE HAMMER,
Defendants.
EVA LAUBER; DANE SCOTT; SCOTT BOOLEN;
JOEL FINCH; and all others similarly
situated,
Plaintiffs,

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20
21
22
23

ORDER RULING ON MOTION TO
STRIKE
AND
SUMMARY-JUDGMENT
MOTIONS REGARDING THE STATUTE
OF LIMITATIONS

v.

16

18

NO. CV-09-251-EFS

v.
ENCORE CAPITAL GROUP, INC.; MIDLAND
FUNDING, LLC; MIDLAND CREDIT
MANAGEMENT, INC.; SUTTELL & HAMMER,
PS.; MARK T. CASE and JANE DOE CASE,
husband and wife; MALISA L. GURULE
and JOHN DOE GURULE; KAREN HAMMER and
ISAAC HAMMER, wife and husband;
WILLIAM SUTTELL and JANE DOE SUTTELL,
husband and wife;

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Defendants.
25
26

ORDER - 1

[NO. CV-10-5132-EFS]

Before

1

the

Court,

without

oral

argument,

are

the

Suttell

2

Defendants’1 Motion for Summary Judgment Dismissing Plaintiff Gray’s

3

“Statute of Limitations” Claim(s), ECF No. 480, Plaintiffs’2 Motion

4

for Partial Summary Judgment, ECF No. 483, the Midland Defendants’3

5

Motion for Summary Judgment on Plaintiff Gray’s FDCPA Claims, ECF No.

6

495,

7

summary-judgment motions relate to Plaintiffs’ claim that Defendants

8

violated the Fair Debt Collection Practices Act (FDCPA), 15 U.S.C.

9

§ 1692 et seq., by suing Plaintiff Kelli Gray to collect on a debt

and

Plaintiffs’

Motion

to

Strike,

ECF

No.

523.

All

three

10

after the statute of limitations expired.

11

addresses several of the exhibits submitted by the Midland Defendants

12

in support of their summary-judgment motion.

13

pleadings and the file, the Court is fully informed and finds that,

14

although genuine disputes of material fact exist as to the applicable

15

statute

16

Defendants

17

untimely.

of

limitations,
from

liability

the
even

bona

fide

if

their

The motion to strike

error

Having reviewed the

defense

debt-collection

insulates
suit

was

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19
20
21
1

Suttell & Associates PS, Suttell & Hammer PS, Mark Case, Jane Doe

22
Case, Karen Hammer, Isaac Hammer, Malisa Gurule, John Doe Gurule,
23
24

William Suttell, and Jane Doe Suttell.
2
3

Kelli Gray, Eva Lauber, Dane Scott, Scott Boolen, and Joel Finch.
Midland Funding LLC, Midland Credit Management Inc., and Encore

25
Capital Group Inc.
26

ORDER - 2

I.

1

UNDISPUTED FACTS4

In August 2001, Plaintiff Kelli Gray applied for and was issued

2
3

a credit card.

4

as an Account Agreement and periodic statements.

5

credit card to purchase clothing and apparel from Spiegel Brands, Inc.

6

(Spiegel) stores.

7

2003, and made the $40 payment reflected therein in May 2003.

8

Gray made her last payment on the credit card on May 13, 2004.
The

9

June

Ms. Gray received the credit card in the mail, as well

3,

Ms. Gray used the

She received an account statement dated June 3,

2003

statement

that

Ms.

Gray

10

“Spiegel Charge” in large bold letters at the top.

11

received

Ms.

contains

It then contains a

block of text reading,

17

FCNB has increased the late payment charge to $35, unless
you have already rejected the increase. If FCNB does not
receive an amount equal to at least the total minimum
payment due by the payment due date on this statement, a
late payment charge of $35 will be charged to your account.
If you have rejected the increase, please see the reverse
for late payment charge terms. Effective immediately, Eddie
Bauer Stores can no longer accept payments on your FCNB
credit card account. To make payments on your FCNB credit
card account, please follow the payment instructions that
appear on this statement.

18

Next the statement contains an “Account Summary,” reflecting a “Total

19

New Balance” of $1,394.76.

20

follows, showing that a $40 payment was made on May 5, 2003.

21

bottom of the statement is a detachable payment slip with the word

22

“Spiegel,” addressed to:

12
13
14
15
16

A section entitled “Account Activity”
The

23
24

4

The

Court

has

excerpted

these

facts

from

the

parties’

Joint

Statement of Uncontroverted Facts for Purposes of Pending Motions
25
for Summary Judgment, ECF No. 531 & Ex. A.
26

ORDER - 3

2

FCNB Processing Center
9310 SW Gemini Drive
Beaverton, OR 97078-0001.

3

First

1

Consumers

National

Bank

(FCNB)

was

a

Federal

Deposit

4

Insurance Corporation insured, national bank regulated by the Office

5

of the Comptroller of the Currency.

6

On October 27, 2008, the Suttell Law Firm filed an action on

7

behalf of Midland Funding in Spokane County Superior Court against Ms.

8

Gray to collect on the credit card account.

9

with prejudice on March 15, 2011; the dismissal was not based on a

10

statute-of-limitations defense.
II.

11
12

The lawsuit was dismissed

A.

LEGAL STANDARDS

Summary Judgment

13

Summary judgment is appropriate if the record establishes "no

14

genuine dispute as to any material fact and the movant is entitled to

15

judgment as a matter of law.@

16

opposing summary judgment must point to specific facts establishing a

17

genuine dispute of material fact for trial.

18

477 U.S. 317, 324 (1986); Matsushita Elec. Indus. Co. v. Zenith Radio

19

Corp., 475 U.S. 574, 586-87 (1986).

20

must

21

56(c)(1)(a) & 2010 advisory committee’s note.

22

fails to make such a showing for any of the elements essential to its

23

case for which it bears the burden of proof, the trial court should

24

grant the summary-judgment motion.

25
26

be

supported

by

Fed. R. Civ. P. 56(a).

materials

in

The party

Celotex Corp. v. Catrett,

A statement or dispute of fact
the

record.

Fed.

R.

Civ.

P.

If the non-moving party

Celotex Corp., 477 U.S. at 322.

“[W]hen parties submit cross-motions for summary judgment, each
motion must be considered on its own merits.”

ORDER - 4

Fair Housing Council of

1

Riverside Cnty., Inc. v. Riverside Two, 249 F.3d 1132, 1136 (9th Cir.

2

2001)

3

However, the Court must review evidence submitted in support of any of

4

the

5

material fact that precludes summary judgment for the opposing party.

6

Id. at 1135; Las Vegas Sands, LLC v. Nehme, 632 F.3d 526, 532 (9th

7

Cir. 2011).

8

must consider only evidence that could be presented in an admissible

9

form at trial.

Fed. R. Civ. P. 56(c)(2); see Ed Brunet, John Parry &

10

Martin

Summary

11

(2014).

12

B.

(internal

quotations,

cross-motions

to

modifications,

determine

whether

and

it

citations

presents

a

omitted).

dispute

of

In ruling on a motion for summary judgment, the Court

Redish,

Judgment:

Federal

Law

and

Practice

§ 8.6

Fair Debt Collection Practices Act
The FDCPA prohibits debt collectors from engaging in various

13
14

abusive and unfair practices.

Heintz v. Jenkins, 514 U.S. 291, 292-93

15

(1995).

is

16

unconscionable means to collect or attempt to collect debt.”

17

U.S.C.

18

amount is expressly authorized by the agreement creating the debt or

19

permitted by law” is a violation of the FDCPA.

20

Filing a debt-collection lawsuit outside the statute of limitations,

21

without having determined that the limitations period has been or

22

should be tolled, violates the FDCPA.

23

668 F. Supp. 1480, 1487 (M.D. Ala. 1987).

24

C.

A

debt

§ 1692f.

collector

“The

prohibited

collection

of

any

from

using

“unfair

amount . . . unless

or
15

such

15 U.S.C. § 1692f(1).

Id.; Kimber v. Fed. Fin. Corp.,

Bona Fide Error Defense

25

“The bona fide error defense is an affirmative defense that

26

insulates debt collectors from liability even when they have violated

ORDER - 5

1

the FDCPA.”

Johnson v. Riddle, 443 F.3d 723, 727 (10th Cir. 2006).

A

2

defendant may escape liability using the defense if it can prove that

3

the violation was “1) unintentional, 2) a bona fide error, and 3) made

4

despite the maintenance of procedures reasonably adapted to avoid the

5

error.”

6

939, 948 (9th Cir. 2012); 15 U.S.C. § 1692k(c).

7

has the burden of proof on this affirmative defense.

8

Nat’l Credit Sys., Inc., 531 F.3d 1002, 1006 (9th Cir. 2008).

McCollough v. Johnson, Rodenburg & Lauinger, LLC, 637 F.3d
The debt collector
Reichert v.

9

Although the Supreme Court has held that the bona fide error

10

defense in section 1692k(c) does not apply when a debt collector

11

mistakenly

12

explicitly declined to reach the question of whether a bona fide error

13

defense is available when a violation results from a misinterpretation

14

of the legal requirements of a state or federal law, other than the

15

FDCPA.

16

U.S. 573, 580 n.4 (2010).

17

have

18

Flaccus, Fair Debt Collection Practices Act: Lawyers and the Bona Fide

19

Error

20

examination, the cases discussing the bona fide error rule seem in

21

disarray. It is submitted, however, that most can be explained by one

22

simple observation. If the lawyer's actions are taken when the law is

23

reasonably clear that what they are doing they can not do, the bona

24

fide error defense will not apply. If, on the other hand, the law that

25

the attorney is allegedly breaking is not at all clear, the bona fide

interprets

the

legal

requirements

of

the

FDCPA,

it

Jerman v. Carlisle, McNellie, Rini, Kramer & Ulrich LPA, 559

reached

different

Defense,

26

ORDER - 6

2001

The Courts of Appeals and District Courts

conclusions

Ark.

L.

on

Notes

this

95,

question.

96

(2001)

See

(“On

Janet

first

1

error defense is applied.”); Johnson v. Riddle, 305 F.3d 1107, 1120

2

n.14 (10th Cir. 2002) (collecting cases).
More than thirty years ago, the Ninth Circuit stated broadly,

3
4

“[r]eliance

on

advice

of

counsel

or

a

mistake

about

the

law

is

5

insufficient by itself to raise the bona fide error defense.”

6

v. G. C. Servs. Corp., 677 F.2d 775, 779 (9th Cir. 1982).

7

the issue in Baker was whether a debt collector could rely on its

8

attorney’s mistaken interpretation of the FDCPA’s requirements.

9

at 777.

Baker

However,

Id.

Some courts in this circuit have applied Baker broadly and

10

refused to apply the bona fide error defense when the defendant was

11

ignorant or mistaken about the applicable state law.

12

v. Americontinental Collection Corp., 94 F. Supp. 2d 1087, 1101 (D.

13

Or. 2000) (holding bona fide error defense was inapplicable where

14

defendant

15

required a five-day waiting period before collecting a judgment).

was

ignorant

or

mistaken

about

the

law

Van Westrienen

in

Oregon

that

Other courts in this circuit and elsewhere have taken a limited

16
17

view of Baker’s expansive language.

18

57

19

mistaken view of the law that had been approved by state district

20

courts was a bona fide error); Fry v. Bowman, Heintz, Boscia, Vician,

21

P.C., 193 F. Supp. 2d 1070, 1085–86 (S.D. Ind. 2002) (holding that use

22

of an incorrect summons form that was identical to those issued by a

23

number of state courts was a bona fide error); West v. Check Alert

24

Sys., No. 1:00-CV-860, 2001 WL 1699196, at *7 (W.D. Mich. Sept. 7,

25

2001) (holding the bona fide error defense was available because the

26

defendant complied with state law); see also Rosado v. Taylor, 324 F.

F.

Supp.

ORDER - 7

2d

1102,

1107–08

Watkins v. Peterson Enter., Inc.,

(E.D.

Wash.

1999)

(holding

that

a

1

Supp. 2d 917, 932 (N.D. Ind. 2004) (exploring the reasoning behind

2

Baker and of the courts that decline to follow it).

3

In a case presenting an issue similar to that presently before

4

this Court, the Middle District of Florida held that the bona fide

5

error defense was available and appropriate where the defendants filed

6

a collection action outside the applicable statute of limitations

7

(Delaware’s) but had a “weak, at best,” but good faith argument that

8

Florida’s

9

should be tolled.

statute

of

limitations

should

apply

or

that

Delaware’s

McCorriston v. L.W.T., Inc., 536 F. Supp. 2d 1268,

10

1275 (M.D. Fla. 2008).

11

a similar approach.

12

1361, 1365–67 (M.D. Ga. 2007) (finding defendants did not knowingly

13

and

14

controlling or persuasive authority from the state supreme court as to

15

which statute of limitations applied); Simmons v. Miller, 970 F. Supp.

16

661, 664 (S.D. Ind. 1997) (finding no intentional misconduct that

17

would violate the FDCPA where neither the state legislature nor the

18

state

19

limitations).

intentionally

supreme

At least two other district courts have taken

Almand v. Reynolds & Robin, P.C., 485 F. Supp. 2d

file

court

a

had

time-barred

pronounced

suit

the

where

there

applicable

was

statute

no

of

20

The trend in the case law appears to be toward allowing the bona

21

fide error defense where the law is not clear, as stated by Ms.

22

Flaccus and recognized and adopted by the Seventh and Tenth Circuits

23

and the district courts cited above.

24

305 F.3d at 1120 n.14; Jenkins v. Heintz, 124 F.3d 824, 832 & n.7 (7th

25

Cir. 1997); McCorriston, 536 F. Supp. 2d at 1275; Almand, 485 F. Supp.

26

2d at 1365–67; Simmons, 970 F. Supp. at 664.

ORDER - 8

Flaccus, supra at 96; Johnson,

Although the Ninth

1

Circuit has not adopted this approach and has not retreated from its

2

broad statements in Baker, 677 F.2d at 779, Baker addressed a mistake

3

as to the requirements of the FDCPA, not lack of clarity as to the

4

applicable statute of limitations under state law.

5

explicitly declined to reach this issue in Jerman, 559 U.S. at 580

6

n.4.

7

available

8

applicable statute of limitations where the applicable limitations

9

period has not been provided by the state legislature or resolved by

This

Court

in

a

finds

case

10

D.

the

alleging

bona

fide

defendants

error

filed

defense

suit

may

outside

be
the

the state courts.

11

that

The Supreme Court

Applicable Statute of Limitations
Article

12

2

of

the

Uniform

Commercial

Code

(UCC)

governs

13

transactions in goods and provides a four-year statute of limitations

14

for breach of any contract for sale.5

15

Article takes sales contracts out of the general laws limiting the

16

time

17

Comment.

18

receivable

for

commencing

contractual

UCC §§ 2-102 & 2-725.

actions.”

UCC

§ 2-725

“This

Official

In contrast, an action upon a written contract or an account
is

governed

by

a

six-year

statute

of

limitations.6

19
20

5

The

parties

agree

that

it

does

not

matter

whether

Oregon

or

Washington law is applied here because both states have adopted the

21

relevant portions of the UCC.

ECF No. 483 at 8–9; ECF No. 480 at

22
3; RCW 62a.2-725 (codifying UCC § 2-725 in Washington); ORS 72.2070
23
24

(codifying UCC § 2-725 in Oregon).
6

Oregon law provides a six-year statute of limitations for “[a]n
action upon a liability created by statute,” or “[a]n action upon a

25
contract
26

ORDER - 9

or

liability,

express

or

implied.”

ORS

12.080.

1

Although a contract between buyer and seller for the sale of goods is

2

governed

3

characterizing the type of transaction and thus determining whether

4

Article 2’s four-year statute of limitations applies becomes more

5

complicated when the purchase is not paid for outright or if a third

6

party is involved in financing the purchase.

by

Article

2’s

four-year

statute

of

limitations,

7

Where a sales contract creates a secured loan agreement between

8

the seller of a good and the buyer, courts view the contract as a

9

“hybrid agreement, constituting both a contract for sale and a secured

10

transaction” and hold that a suit by the seller for the deficiency is

11

also governed by Article 2’s four-year statute of limitations.

12

v. Ford Motor Credit Co., 345 Md. 251, 255, 257, 258, 262 (1997)

13

(citing Assoc. Discount Corp. v. Palmer, 47 N.J. 183 (1966)); see also

14

Ford, 345 Md. at 258-60 (collecting cases in agreement); Ford Motor

15

Credit Co. v. Arce, 348 N.J. Super. 198, 199 (N.J. Super. Ct. 2002)

16

(holding that retail installment contract entered to finance purchase

17

of car was subject to Article 2’s four-year statute of limitations).

18

Even

19

contract that was originally between buyer and seller and sues to

if

a

bank

subsequently

purchases

a

seller’s

interest

Scott

in

a

20
21

Washington law provides a six-year statute of limitations for “[a]n
action upon a contract in writing, or liability express or implied

22
arising out of a written agreement,” and “[a]n action upon an
23

account receivable.”

24

these motions, it is not necessary to analyze whether Oregon or
Washington

law

RCW 4.16.040.

applies

because

both

For purposes of determining

states

25
statutes of limitations for the relevant conduct.
26

ORDER - 10

provide

the

same

1

enforce

the

contract,

the

suit

is

still

governed

by

Article

2.

2

Citizens Nat’l Bank of Decatur v. Farmer, 77 Ill. App. 3d 56, 59 (Ill.

3

Ct. App. 1977).

4

On the other hand, if the sale of goods is financed according to

5

a separate agreement between the buyer and a bank or even a separate

6

agreement

7

limitations does not apply.

8

loan from a bank that is secured by the vehicle, the transaction

9

between the bank and the buyer is not a sale of goods governed by

10

Article 2 and the bank’s suit to recover the balance due is not

11

subject to a four-year statute of limitations.

12

Freeland, 13 Ohio App. 3d 245, 247 (Ohio Ct. App. 1984).

13

promissory note containing a security agreement that references an

14

underlying

15

action, because the promissory note contains an unconditional promise

16

to pay and is thus a negotiable instrument subject to UCC Article 3,

17

not Article 2.

18

(Wash. Ct. App. 2014); accord O’Neill v. Steppat, 270 N.W. 2d 375,

19

376–77 (S.D. 1978).

between

sales

the

buyer

contract

and

seller,

Article

2’s

statute

of

When an individual buys a vehicle using a

creates

a

BancOhio Nat’l Bank v.

separate,

Similarly, a

distinct

cause

of

Alpacas of Am., LLC v. Groome, 179 Wn. App. 391, 393

20

Courts have long held that a suit to recover money due on a

21

credit card account is not subject to Article 2’s four-year statute of

22

limitations because the cardholder agreement is a written contract,

23

not a contract for the sale of goods.

24

Savings Bank v. McCray, 21 Ill. App. 3d 605, 610 (1974).

25

one of the first and most oft-cited cases to address the statute of

26

limitations applicable to credit card agreements, the credit card was

ORDER - 11

See, e.g., Harris Trust and
In Harris,

1

issued to the defendant by a bank and used to purchase goods from a

2

third-party merchant.

3

rejected

4

breached a contract for the sale of goods when she used her credit

5

card to purchase goods and failed to pay the credit card.

6

07.

7

a tripartite relationship between the issuer bank, the cardholder, and

8

merchants,”

9

between the bank and the cardholder is separate from the agreement

the

Id. at 606.

defendant’s

argument

The Illinois Court of Appeals
that

she

had

entered

into

and

Id. at 606-

The court explained that “[t]he bank credit card system involves

bank

clarified

merchant

debtor-creditor

merchant and the cardholder.

12

the purchase money is advanced by a third party that an action to

13

recover a balance due is removed from Article 2 of the U.C.C.”

14

Co. v. Trusnick, 54 Ohio App. 2d 71, 75 (Ohio Ct. App. 1977) (citing

15

Harris).
tripartite

and

the

relationship

11

the

the

the

between

However,

and

that

10

16

the

and

agreement

Id. at 607-08, 610.

relationship

between

the

“It is only when

described

in

May

Harris

may

17

become blurred when the credit card is obtained from or named for the

18

merchant

19

financed by a third party bank and the buyer’s agreement was with the

20

bank, then courts have held that Article 2 does not apply.

21

Acceptance, LLC v. Witten, No. 90297, 2008 WL 2837304 at *1 n.1, *2

22

n.2 (Ohio Ct. App. July 24, 2008) (stating in dicta that Article 2

23

does not apply “where a bank provides financing, but does not sell the

24

goods.”); Fulk v. LVNV Funding LLC, No. 5:14-125-DCR, 2014 WL 5364807

25

at *3 (E.D. Ky. Oct. 21, 2014) (holding that “[t]he creation of a

26

credit

seller.

card

ORDER - 12

In

leading

that

to

an

circumstance,

underline

if

[sic]

the

debt

credit

is

card

was

Asset

distinct

and

1

independent from the sale of goods” in a case where the buyer obtained

2

the credit card from a merchant when he purchased an all-terrain

3

vehicle (ATV) from that merchant and used the credit card to pay for

4

the ATV but it was clear that the credit card agreement was between

5

the buyer and the bank for an extension of credit).

6

One

court

has

reached

the

opposite

conclusion

from

Asset

7

Acceptance and Fulk.

8

Discount Corporation v. Palmer, the New Jersey Superior Court found

9

that a contract for sale of goods was created and that Article 2’s

10

four-year statute of limitations applied to a credit card account

11

where the plaintiff “signed up” for a Levitz store credit card at the

12

Levitz store and the card could only be used and was only used to buy

13

furniture from the Levitz store.

14

McNamara, No. DC-016572-12, 2014 WL 1057076, at *1 & *4 (N.J. Sup. Ct.

15

Mar. 20, 2014).

16

case whether the buyer entered a credit card agreement with the Levitz

17

store or with a third party bank.

18

In an unpublished decision, citing Associates

New Century Fin. Serv., Inc. v.

However, it is not clear from the opinion in that

Id.

In sum, Article 2’s four-year statute of limitations applies to

19

a transaction between a buyer and a seller for the sale of goods.

20

separate, distinct agreement between buyer and seller to finance the

21

sale or a separate agreement between buyer and a bank leading to a

22

tripartite relationship will not be governed by Article 2.

23

circumstances where a credit card is obtained from a seller or an

24

entity closely related to the seller, rather than a separate third-

25

party bank, and where the credit card can only be used to buy goods

26

ORDER - 13

A

In limited

1

from that seller, the transaction may be deemed a sale of goods such

2

that Article 2 applies.

3

III. SUTTELL DEFENDANTS’ MOTION FOR PARTIAL SUMMARY JUDGMENT, ECF NO.

4

480

5

A.

Additional

Facts

Construed

in

the

Light

Most

Favorable

to

6

Plaintiffs7

7

Ms. Gray obtained the credit card at issue in this case by
Dep. of Kelli Gray Harrington8 at 22 ln.

8

filling out a form online.

9

5–8 (Oct. 5, 2010), ECF No. 481-1.

The card she obtained contained

10

the word “Spiegel” and a number; it did not say “Visa” or “Master

11

Card.”

12

only be used for purchases at the Spiegel website and catalog.

13

30.

14

containing “Spiegel” and the amount and date due.

Id. at 25–26.

Ms. Gray understood that her credit card could
Id. at

She received statements from Spiegel in the mail at her home,
Id. at 32–33.

The

15
7

The Court considers the following additional facts which it gleaned

16
from a thorough review of the record.

When considering this motion

17

and

the

18

undisputed facts and the non-moving party=s evidence, 2) drew all

creating

this

factual

section,

Court

1)

believed

the

justifiable inferences therefrom in the non-moving party=s favor, 3)
19
did not weigh the evidence or assess credibility, and 4) did not
20

accept assertions made by the non-moving party that were flatly

21

contradicted by the record.
477

U.S.

242,

255

(1986);

See Anderson v. Liberty Lobby, Inc.,
Scott

v.

Harris,

550

U.S.

372,

380

22
(2007).
23
24

8

Ms. Gray married Mr. Harrington in July 2009.

Dep. of Kelli Gray

Harrington at 22 ln. 5–8 (Oct. 5, 2010), ECF No. 481-1.

For

clarity, the Court will continue to refer to her herein as “Ms.
25
Gray.”
26

ORDER - 14

1

bill could be paid online, which is generally how Ms. Gray paid her

2

bill, or by sending a check.

3

October 5, 2010 deposition that she had never heard of FCNB and did

4

not know what it was.

5

agreement

6

relationship.

7

12 & n.3; Response, ECF No. 498 at 6 n.1.

with

FCNB

and

Id. at 33–34.

Id. at 54.
disputes

Ms. Gray testified at her

She denies that she had an

the

existence

of

a

tripartite

Motion for Partial Summary Judgment, ECF No. 483 at 11–

8

Mr. Hammer of the Suttell law firm declares that the firm had

9

data indicating Ms. Gray made a payment as late as 2004 and that they

10

concluded a suit filed in 2008 was timely.

Hammer Decl. ¶ 6, ECF No.

11

482.

12

last payment was made on May 13, 2004.

13

Gray’s credit card account was in default on or before July 2004.

14

Mr. Hammer states that the firm had a formal screening process to

15

determine whether a claim might be subject to a statute-of-limitations

16

defense and that they maintained a matrix identifying six years as the

17

applicable limitations period in Washington and Oregon.

18

¶ 6, ECF No. 482.

19

credit card accounts governed by Oregon and Washington law are subject

20

to six year statutes of limitation.”

21

“[w]e do not, and did not, file cases on claims that we believe to be

22

untimely.”

23

B.

The account information provided by Ms. Gray confirms that the
Ex. A, ECF No. 485-1.

Ms.
Id.

Hammer Decl.

He states, “it was and is widely accepted that

Id. ¶ 4.

Mr Hammer declares,

Hammer Decl. ¶ 7, ECF No. 482.

Analysis

24

1.

25

As lawyers who collect debts through litigation, the Suttell

26

Applicability of the FDCPA

Defendants are “debt collectors” under the FDCPA.

ORDER - 15

See McCollough v.

1

Johnson, Rodenburg & Lauinger, LLC, 637 F.3d 939, 951 (9th Cir. 2011)

2

(citing Heintz, 514 U.S. at 294).

3

2.

4

If

Applicable Statute of Limitations
a

four-year

statute

of

limitations

under

UCC

Article

2

5

governs, there appears to be no dispute that the October 2008 debt-

6

collection lawsuit was untimely.

7

as an action upon a contract or account receivable with a six-year

8

statute of limitations, then there appears to be no dispute that the

9

suit was timely and that the Suttell Defendants did not violate the

10

If, however, the action is treated

FDCPA by filing it.

11

The key questions to be answered in determining the applicable

12

statute of limitations are with whom Ms. Gray entered into a credit

13

card agreement.

14

tripartite relationship, as described in Harris, 316 Ill. App. 3d at

15

610.

16

analyzed to confirm whether Ms. Gray’s card could only be used to buy

17

goods from Spiegel.

18

with FCNB, then it will be necessary to determine the relationship

19

between FCNB and Spiegel and consider whether the two companies are

20

functionally the same entity, such that FCNB credit card accounts

21

should be considered to be financed by Spiegel, or whether they are

22

truly separate entities, such that the tripartite relationship is

23

maintained, as in Fulk, 2014 WL 5364807 at *3, and Asset Acceptance,

24

2008 WL 2837304 at *2 n.2.

The terms of the applicable credit card agreement must

be

If Ms. Gray entered into a credit card agreement

Presently, it is clear that Ms. Gray opened the credit card at

25
26

This will determine whether this case presents a

issue

online

ORDER - 16

and

that

the

card

itself

and

account

statements

1

prominently

displayed

the

word

“Spiegel.”

The

account

statement

2

indicated that “FCNB” had increased the late payment fee and directed

3

that payment be mailed to “FCNB Processing Center.”

4

testified she had never heard of FCNB and did not know who or what it

5

was.

6

the relevant credit card agreement in connection with this motion, the

7

Court located a document entitled “FCNB Credit Card Account Agreement”

8

in the record relating to the Suttell Defendants’ 2010 motion to

9

dismiss based on the same arguments.

Yet Ms. Gray

Although neither the Suttell Defendants nor Plaintiffs submitted

Ex. A, ECF No. 34-1.

However,

10

the account agreement is undated and unauthenticated, and contains

11

nothing connecting it to Ms. Gray.9

12

to find that the account agreement is part of the “materials in the

13

record” on this motion, Fed. R. Civ. P. 56(c)(1)(A), the Court would

14

not consider it in ruling on the motion.

Therefore, even if the Court were

Even if the Court were to consider this document and find that

15
16

it

is

the

account

agreement

applicable

to

Ms.

Gray,

the

account

17

agreement alone does nothing to illuminate the relationship between

18

FCNB and Spiegel.10

Indeed, the word “Spiegel” never appears in the

19
20

9

The document also gives new meaning to the term “fine print” in
that the very small writing and poor copy quality make it extremely

21

difficult

to

read.

Additionally,

it

appears

that

it

may

be

22
incomplete, as the parties have quoted portions of the agreement
23

that do not appear in any of the copies examined by the Court.

24

Compare, e.g., ECF No. 526 at 3 with ECF No. 516-3.
10

Plaintiff

cites

to

the

findings

of

an

independent

examiner

25
appointed
26

ORDER - 17

by

the

Northern

District

of

Illinois

regarding

the

1

document, and there are no restrictions regarding the stores at which

2

the card may be used.

3

undisputed information in the record currently before it to determine

4

the applicable statute of limitations.

5

grant summary judgment for the Suttell Defendants on their argument

6

that a six-year statute of limitations applies and cannot find as a

7

matter of law that their suit against Ms. Gray was timely.

In sum, the Court does not have sufficient,

Therefore, the Court will not

8

3.

Bona Fide Error Defense

9

The Suttell Defendants argue that even if the Court determines

10

that a four-year statute of limitations applies, Defendants should not

11

be held liable because their understanding that a six-year statute of

12

limitations applies to credit card debt and decision to file suit

13

within

14

Judgment, ECF No. 480 at 9.

15

argument.

16

ECF

17

Defendants

18

undisputed facts demonstrate that the Suttell Defendants are eligible

19

for the bona fide error defense.

that

No.

period

was

a

bona

fide

error.

Motion

for

Summary

Plaintiffs did not respond to this

See Response, ECF No. 498 (containing no response); Reply,
520

at

only).

8–9

(addressing
Accordingly,

bona
the

fide
Court

error

as

assesses

to

Midland

whether

the

20
21
relationship between FCNB and Spiegel, Sec. and Exch. Comm’n v.
22
Spiegel, Inc., No. Civ.A. 03-C-1685, 2003 WL 22176223, at *6 (N.D.
23

Ill.

24

factual findings of the independent examiner because they are not

Sept.

15,

2003),

but

the

Court

declines

to

consider

the

part of the “materials in the record” before the Court on these
25
motions.
26

ORDER - 18

Fed. R. Civ. P. 56(c)(1)(A).

1

A defendant may escape liability using the defense if it can

2

prove that the violation was “1) unintentional, 2) a bona fide error,

3

and 3) made despite the maintenance of procedures reasonably adapted

4

to avoid the error.”

5

948.

6

FDCPA violation is unintentional, asking whether the debt collector

7

can establish lack of specific intent to violate the FDCPA.

8

443 F.3d at 728.

9

Id. at 729.

15 U.S.C. § 1692k(c); McCollough, 637 F.3d at

Courts employ a subjective approach in determining whether a

Johnson,

The second and third prongs are objective inquiries.

A bona fide error is one that is “made in good faith; a

10

genuine

mistake,

as

opposed

11

Diversified

12

2005).

13

analysis depends on the facts and circumstances of the particular

14

case.

Owen v. I.C. System, Inc., 629 F.3d 1263, 1274 (11th Cir.

15

2011).

A defendant must do more than merely assert the maintenance of

16

procedures

17

declaration and instead must explain the procedures and the manner in

18

which they were adapted.

Collection

Servs.,

to

a

contrived

Inc.,

394

F.3d

mistake.”
530,

538

Kort
(7th

v.

Cir.

The third prong is assessed on a case-by-case basis, and the

reasonably

adapted

to

avoid

error

in

a

conclusory

Reichert, 531 F.3d at 1007.

19

Even if the Suttell Defendants filed suit outside the applicable

20

statute of limitations, the undisputed facts show that this was an

21

unintentional, genuine mistake, made despite the firm’s procedures to

22

prevent the filing of lawsuits with a statute-of-limitations defense.

23

Decl. of Isaac Hammer, ECF No. 482.

24

four-year statute of limitations applies under the facts of this case,

25

this was not clear to the Suttell Defendants at the time they filed

26

suit, and understandably so given that it was not clear to the Court

ORDER - 19

If it is later determined that a

1

in its initial analysis.

2

faith that a six-year statute of limitations applied, id., and nothing

3

in the statutes or case law in Washington, Oregon, or even the case

4

law

5

Defendants that their understanding was incorrect.11

6

the

7

ensure that claims were filed within the statute of limitations.

8

Therefore, the Suttell Defendants are entitled to summary judgment on

9

Plaintiffs’ claim that they violated the FDCPA by filing a debt-

10

collection lawsuit outside the statute of limitations because if the

11

suit was filed outside the limitations period, it was a bona fide

12

error.

in

other

firm

maintained

IV.

13
The

14

states

Court

in

The Suttell Defendants believed in good

2008,

screening

should

have

procedures

and

alerted

the

Suttell

Additionally,

updated

matrices

to
Id.

PLAINTIFFS’ MOTION TO STRIKE, ECF NO. 523
now

addresses

Plaintiffs’

motion

to

strike,

which

15

pertains to exhibits submitted in support of the Midland Defendants’

16

motion for summary judgment.

17

A.

Legal Standard

18

When seeking or opposing summary judgment, a party must support

19

its factual position by “citing to particular parts of materials in

20

the record, including depositions, documents, electronically stored

21
22

11

Indeed the only case to address an issue similar to that presented

23

here before the October 28 debt-collection suit was filed was an

24

unpublished decision of the New Jersey Superior Court in July 2008,
which confirmed the Suttell Defendants’ understanding of the law.

25
See Asset Acceptance, 2008 WL 2837304 at *2 n.2.
26

ORDER - 20

1

information,

2

interrogatory

3

56(c)(1)(A).

4

or

5

admissible in evidence.”

6

is

7

presented or to explain the admissible form that is anticipated.”

8

Fed. R. Civ. P. 56(c)(2) 2010 advisory committee’s note.

dispute

on

the

At

9

affidavits
answers,

or

or

declarations . . . admissions,

other

materials.”

Fed.

R.

Civ.

P.

“A party may object that the material cited to support
a

fact

cannot

proponent

the

be

presented

form

that

to

show

that

the

phase,

evidence’s

material

the

is

Court

contents,

be

“The burden

admissible

focuses

rather

would

than

as

on

the

on

the

10

admissibility

11

admissibility of its form.

12

(9th Cir. 2003).

13

in a form which is admissible at trial, the need for summary judgment

14

materials to be trustworthy and reliable has still been satisfied.”

15

Brunet, Parry & Redish, supra, § 8.6.

16

considered at the summary judgment phase, as long as it could be

17

presented in an admissible form at trial.

18

Fed. App’x 733, 736 (9th Cir. 2014).

19

B.

20

the

a

Fed. R. Civ. P. 56(c)(1)(B)(2).

summary-judgment
of

in

Fraser v. Goodale, 342 F.3d 1032, 1037

“If the movant’s materials are capable of being put

Thus, hearsay evidence may be

Singleton v. Lopez, 577

Analysis
Plaintiffs seek to strike Exhibits A, C, D, G, H, I, J, K, and P

21

attached

to

22

presented in support of the Midland Defendants’ motion for summary

23

judgment because the documents are unauthenticated hearsay and Mr.

24

Munding, the Midland Defendants’ attorney, does not have personal

25

knowledge of their contents and origin.

26

at 2; Reply, ECF No. 530 at 2.

ORDER - 21

the

Declaration

of

John

Munding,

ECF

No.

516,

and

Motion to Strike, ECF No. 523

The Midland Defendants respond that

1

the

documents

are

admissible

2

authenticated at trial.

and

explain

how

each

would

be

Response, ECF No. 529.

3

1.

Exhibit A: Ms. Gray’s 5/7/2003 Credit Report

4

Exhibit A is a copy of Ms. Gray’s credit report from Novastar.

5

ECF No. 514.

Ms. Gray’s credit report is relevant and would be

6

admissible

7

testimony of a records custodian.

8

indicating it belongs to Ms. Gray and its form is typical of credit

9

reports.

at

Id.

trial

if

authenticated

by

her

testimony

or

by

the

It contains personal information

Its heading and footer indicate its origin at Novastar.

10

Id.

Because its present form would be admissible at trial with proper

11

authentication, the Court declines to strike Exhibit A.

12

2.

Exhibit C: FCNB Credit Card Agreement

13

Exhibit C is a copy of FCNB’s credit card agreement.

Decl. of

14

John Munding, ECF No. 516; Ex. C, ECF No. 516-3.

15

that this document is admissible because Plaintiffs have not produced

16

the relevant contract and Ms. Gray’s credit report and bank statements

17

reflect that her credit card account was financed by FCNB.

18

ECF No. 529 at 9.

19

may be relevant to her motion for summary judgment, but it has no

20

bearing

21

Defendants is or will be admissible.

22

on

the

Although

Defendants argue

Response,

Ms. Gray’s failure to produce the relevant contract

question

Exhibit

C

of

is

whether

an

this

example

contract

of

a

FCNB

produced

credit

by

card

23

agreement, there is no indication that this is the agreement that

24

governed

25

information, nor is there any testimony, tying it to Ms. Gray or to

26

Spiegel.

ORDER - 22

Ms.

Gray’s

credit

card,

as

it

does

not

contain

any

There is also no evidence in the record indicating that this

1

was

the

only

credit

card

agreement

in

use

by

FCNB

during

the

2

applicable time period and so therefore must be the agreement that

3

applied to Ms. Gray.

4

that Defendants have not met their burden of showing that its contents

5

are relevant, and thus admissible at trial, nor how this document

6

would be authenticated.

The Court strikes Exhibit C because it finds

7

3.

8

Exhibit D is a Spiegel Charge card statement for Ms. Gray for

9

Exhibit D: 6/3/03 Card Statement

the period closing June 3, 2003.

ECF No. 516-4.

This document is

10

relevant and would be admissible at trial if authenticated by Ms.

11

Gray’s testimony or by the testimony of a records custodian.

12

contains Ms. Gray’s name and address, and the payment information

13

within

14

admissible at trial with proper authentication, the Court declines to

15

strike Exhibit D.

16

could

4.

verified.

Because

its

present

form

would

be

Exhibit G: Bill of Sale and Assignment of Accounts from
Spiegel to Midland

17
18

be

It

Exhibit G is a Bill of Sale and Assignment of Accounts dated

19

December 4, 2007, from Spiegel to Midland.

20

document

was

21

notary.

Id.

22

testimony of Mr. Toland or of a records custodian.

23

to strike Exhibit G at present because it could be admissible at trial

24

after proper authentication.

25

the Court how this document is relevant to the present case, so the

26

ORDER - 23

signed

by

Spiegel

President

ECF No. 516-7.
Marvin

Toland

The

before

a

This document could be authenticated at trial by the
The Court declines

However, it is not immediately clear to

1

Court will consider what weight, if any, to give it when ruling on the

2

Midland Defendants’ summary-judgment motion.

3

5.

Exhibit H: Purchase and Sale Agreement

4

Exhibit H is a Purchase and Sale Agreement between Spiegel and

5

Midland, dated December 4, 2007.

ECF No. 514.

The document is signed

6

and clearly identified as a bill of sale.

7

at trial by one of the signers or by a records custodian.

8

declines to strike Exhibit H at present because it could be admissible

9

at trial after proper authentication.

It could be authenticated
The Court

However, it is not immediately

10

clear to the Court how this document is relevant to the present case,

11

so the Court will consider what weight, if any, to give it when ruling

12

on the Midland Defendants’ summary-judgment motion.

13

6.

Exhibit I: Loan Schedule

14

Exhibit I is “Schedule A” of Ms. Gray’s original August 24, 2001

15

loan.

Decl. of John Munding, ECF No. 516; Ex. I, ECF No. 516-9.

16

document contains Ms. Gray’s name and address, a portion of an account

17

number, and other identifying characteristics that would enable it to

18

be authenticated at trial by Ms. Gray or another appropriate witness.

19

This same document was submitted by Plaintiffs in support of their

20

summary-judgment motion.

21

relevant, and the Court declines to strike Exhibit I because its

22

present form would be admissible at trial with proper authentication.

23

7.

24

Exhibit

Ex. A, ECF No. 485-1.

This document is

Exhibit J: Servicing Agreement
J

is

the

servicing

agreement

entered

into

between

25

Midland Funding and Midland Credit Management.

26

document is signed by the president of each entity and could

ORDER - 24

The

ECF No. 514.

The
be

1

authenticated

2

document is relevant to the relationship between the Defendants and

3

would be admissible at trial with proper authentication, so the Court

4

declines to strike Exhibit J.

5

8.

6

Exhibit

by

him

at

trial

or

by

a

records

custodian.

This

Exhibit K: Collection Agreement
K

is

a

collection

agreement

between

ECF No. 514.

Midland

Credit

7

Management and Suttell & Associates.

This document is

8

signed by both parties, and Defendants represent that it is a record

9

of regularly conducted business activities.

Exhibit K is relevant and

10

could be authenticated at trial by testimony of the signers or a

11

records custodian.

12

would be admissible at trial with proper authentication.

The Court declines to strike Exhibit K because it

13

9.

Exhibit P: Flow Chart

14

Exhibit P contains three flow charts regarding “Estimation of

15

SOL,” “Estimate Start Date,” and “Estimate Date of Occurrence.”

ECF

16

No. 514.

17

Midland

18

limitations.

19

explanation is in concert with their contents.

Though it is not clear

20

that

the

21

records such that he could authenticate them at trial, the Court finds

22

that their contents are relevant and would be admissible at trial if

23

accompanied by appropriate testimony from a qualified witness, which

24

the Midland Defendants state they would be.

25

at 9.

26

would be admissible at trial with proper authentication.

Mr. Munding declares that these flow charts were used by
Credit

Mr.

Management

to

estimate

the

applicable

Decl. of John Munding, ECF No. 516.

Munding

has

personal

knowledge

of

statute

of

Mr. Munding’s

purpose

of

these

See Response, ECF No. 529

Therefore, the Court declines to strike Exhibit P because it

ORDER - 25

1

C.

2

Plaintiffs’ motion to strike is granted as to Exhibit C, the FCNB

3

Credit Card Agreement, and denied as to all other exhibits.
V.

4
5

Conclusion

A.

MIDLAND DEFENDANTS’ MOTION FOR SUMMARY JUDGMENT, ECF NO. 495
Additional

Facts

Construed

in

the

Light

Most

Favorable

to

6

Plaintiffs12

7

On December 4, 2007, Midland Funding, LLC purchased defaulted

8

credit card accounts from Spiegel Acceptance Corporation.

Bill of

9

Sale and Assignment of Accounts, ECF No. 516-7; Purchase and Sale

10

Agreement, ECF No. 516-8.

On the same day, FCNB sold or transferred

11

its right, title, and interest in “certain preferred charge accounts

12

and certain MasterCard and VISA accounts” to CCA Assets LLC, Ex. H,

13

ECF No. 514 at 25, and CCA Assets LLC transferred “certain preferred

14

private label charge accounts . . . that are associated with certain

15

credit card receivables owned by [Spiegel Acceptance Corporation]” to

16

Spiegel Acceptance Corporation, Ex. H, ECF No. 514 at 23.

17

Funding assigned delinquent or deficient consumer obligations to its

Midland

18
19

12

The Court considers the following additional facts which it gleaned

20

from a thorough review of the record.

When considering this motion

21

and

the

creating

this

factual

section,

Court

1)

believed

the

undisputed facts and the non-moving party=s evidence, 2) drew all
22
justifiable inferences therefrom in the non-moving party=s favor, 3)
23

did not weigh the evidence or assess credibility, and 4) did not

24

accept assertions made by the non-moving party that were flatly
contradicted by the record.

25
550 U.S. at 380.
26

ORDER - 26

See Anderson, 477 U.S. at 255; Scott,

1

servicer,

Midland

Credit

Management,

Inc.,

to

pursue

collection

2

efforts.

Servicing Agreement, Ex. J, ECF No. 514.

3

entered into a collection agreement with Suttell & Associates.

4

ECF No. 514.

5

Agreement to Suttell & Hammer.

Midland Credit
Ex. K,

Suttell & Associates later assigned the Collection
Id.

In August 2001, Ms. Gray opened a Spiegel-branded credit card

6
7

online.

8

Plaintiffs’ Statement of Facts, ECF No. 527 ¶ 1.

9

the record whether Ms. Gray’s credit card account was the subject of
of

Midland Defendants’ Statement of Facts, ECF No. 496 ¶¶ 1–2;

the

above-described

sale

and

It is unclear from

10

any

assignment

transactions.

On

11

October 27, 2008, Defendant Mark Case of Suttell & Associates filed a

12

lawsuit against Ms. Gray in Spokane County Superior Court to collect

13

on a credit card account with an alleged unpaid balance of $2,065.22.

14

Superior Court Complaint, Ex. L, ECF No. 516-12.

15

B.

Analysis

16

1.

Applicability of the FDCPA

17

A debt collector is, “any person . . . who regularly collects or

18

attempt to collect, directly or indirectly, debts owed or due or

19

asserted to be owed or due another.”

20

Midland

21

suggesting that they are not debt collectors.

22

finds that the FDCPA applies to the Midland Defendants.

23

Wahl v. Midland Credit Mgmt., Inc., 556 F.3d 643, 643–44 (7th Cir.

24

2009) (assuming that the FDCPA applies to the Midland Defendants);

25

Herkert v. MRC Receivables Corp., 655 F. Supp. 2d 870, 880 (N.D. Ill.

26

2009) (holding that Encore is a debt collector under the FDCPA as a

Defendants

ORDER - 27

have

not

provided

15 U.S.C. § 1692a(6).
any

argument

or

The

evidence

Therefore, the Court
See, e.g.,

1

purchaser of defaulted debts, even though it was not directly involved

2

in collection activities).

3

2.

Applicable Statute of Limitations

4

The

Midland

Defendants

timely because it was filed within the six-year limitations period.

8

Motion for Partial Summary Judgment, ECF No. 495 at 10.

9

argue that the four-year statute of limitations in Article 2 applies

2008

or

of

7

the

contracts

statute

receivable

that

written

six-year

6

and

to

the

limitations

applies

applicable

that

5

10

period

argue

debt-collection

accounts

lawsuit

was

Plaintiffs

and that the 2008 debt-collection lawsuit was not timely.

11

As was the case with the Suttell Defendants’ motion, there are

12

insufficient undisputed facts in the record for the Court to determine

13

the applicable statute of limitations.

14

Credit Card Agreement, Exhibit C, from the record on this motion, but

15

even if the agreement were considered, it does not show that Ms. Gray

16

entered a credit card agreement with FCNB.

Similarly, the Midland

17

Defendants

various

18

delinquent credit card accounts, but these documents do not assist the

19

Court in determining the relationship between FCNB and Spiegel or FCNB

20

and Ms. Gray.

21

Gray’s credit card account at issue here was among those involved in

22

the various transfers.

23

as a matter of law that the six-year statute of limitations governing

24
25
26

ORDER - 28

provided

exhibits

The Court struck the FCNB

documenting

transfers

of

Furthermore, nothing in these documents shows that Ms.

For these reasons, the Court cannot determine

1

written

contracts

applies,

rather

than

the

four-year

2

statute

of

limitations governing contracts for the sale of goods.13

3

The Midland Defendants also argue that the 2008 debt-collection

4

lawsuit was a suit on an account receivable and thus governed by a

5

six-year

6

4.16.050(2); Reply, ECF No. 534 at 3–4.

7

amount due a business on account from a customer who has bought

8

merchandise or received services.”

9

659, 663, 665 (2007).

statute

of

limitations

under

Washington

law.

RCW

An account receivable is “an

Tingey v. Haisch, 159 Wn.2d 652,

An oral contract between a customer and a

10

business for the purchase of merchandise or services and for which

11

performance has been completed meets this definition.

12

The Midland Defendants argue that even if the transaction could be

13

characterized as either a contract for sale of goods or an account

14

receivable,

15

receivable should apply.

16

Co., 650 F.2d 1065, 1072 (9th Cir. 1981).

17

that the relationship at issue here could be viewed as an account

18

receivable, the Court does not presently have sufficient undisputed

19

evidence before it in the record to make this determination.

20

Court cannot find as a matter of law that a six-year statute of

the

longer

limitations

period

Id. at 659–60.

applicable

to

accounts

Reply, ECF No. 534 at 2, 5; Tomlin v. Boeing
Although it is possible

The

21
22
23
24

13

The Midland Defendants’ argument that an implied contract arising
out of a written agreement exists between Ms. Gray and FCNB because
Ms. Gray made payments to FCNB suffers from the same evidentiary

25
deficit.
26

ORDER - 29

Reply, ECF No. 534 at 2.

1

limitations applies and denies the Midland Defendants’ motion for

2

summary judgment on this point.

3

3.

Bona Fide Error Defense

4

The Midland Defendants argue that if the Court determines that a

5

four-year statute of limitations applies, Defendants should not be

6

held liable because their understanding that a six-year statute of

7

limitations applied to credit card debt was a bona fide error.

8

for Partial Summary Judgment, ECF No. 495 at 15.

9

that the bona fide error defense does not apply to mistakes of law,

Motion

Plaintiffs respond

10

citing Jerman.

Reply, ECF No. 520 at 8–9.

11

the

facts

12

eligible for the bona fide error defense, under the standards set

13

forth above in relation to the Suttell Defendants’ motion.

undisputed

demonstrate

that

The Court assesses whether

the

Midland

Defendants

are

14

As an initial matter, Jerman does not hold that the bona fide

15

error defense does not apply to all mistakes of law, as Plaintiffs

16

state; rather, it holds that the bona fide error defense does not

17

apply to incorrect interpretation of the legal requirements of the

18

FDCPA.

19

declined to decide whether the bona fide error defense applies to a

20

misinterpretation of the legal requirements of other federal or state

21

laws.

22

determined that the bona fide error defense is available under the

23

circumstances of this case.

Jerman,

559

U.S.

Id. at 580 n.4.

at

576.

The

Supreme

Court

explicitly

As explained in detail above, this Court

24

Here, even if the debt-collection suit was filed outside the

25

applicable limitations period, there is no evidence suggesting that

26

the Midland Defendants intentionally directed this to occur.

ORDER - 30

Indeed,

1

they believed the applicable statute of limitations to be six years,

2

and there is no evidence that their interpretation of the applicable

3

statute

4

mistake.

5

undertakes an extensive survey of the statutes and case law and cannot

6

easily determine which statute of limitations applies, it will not

7

hold the Defendants liable for failing to determine that a four-year

8

statute

9

determined to be the law.

of

limitations

was

a

contrived,

rather

than

a

genuine,

As a matter of fundamental fairness, when the Court itself

of

limitations

governs,

if

in

fact

that

is

ultimately

10

Finally, Midland Credit had a process in place for determining

11

the statute of limitations and ensuring that untimely debt-collection

12

suits were not filed.

13

No. 516-15.

14

the limitations period, and the applicable statute of limitations

15

using detailed flow charts.

16

updated its flow charts when it became aware of changes to the statute

17

of limitations to be applied in a particular state.

18

Response to Discovery, Ex. O, ECF No. 516-15.

19

under

20

Defendants’ procedures were reasonably adapted to avoid filing suit

21

outside

22

Furthermore, the Court finds that additional procedures or screening

23

would not have avoided the alleged error here because the law was

24

unclear.

25

//

26

/

the

the

ORDER - 31

Supplemental Response to Discovery, Ex. O, ECF

It determined the date of occurrence, the start date for

facts

and

statute

Id.; Flow Charts, Ex. P, ECF No. 514.

circumstances

of

limitations.

of

this

Owen,

It

Supplemental

The Court finds that,
case,

629

the

F.3d

Midland

at

1274.

VI.

1

PLAINTIFFS’ MOTION FOR PARTIAL SUMMARY JUDGMENT, ECF NO. 483
In

2

ruling

on

undisputed

Plaintiffs’
facts

motion,

because

the

Court

Plaintiffs

considered

did

not

the

3

parties’

produce

4

additional evidence that impacts the Court’s ruling on these motions

5

when viewed in the light most favorable to Defendants.

6

of Facts, ECF No. 484.

7

shows Ms. Gray contracted with Spiegel for the sale of goods, and

8

there is a genuine dispute as to whether Plaintiff contracted with

9

Spiegel or FCNB as well as a dearth of evidence as to the relationship

See Statement

Plaintiffs have provided no evidence that

10

between Spiegel and FCNB.

For this reason, the Court cannot find as a

11

matter of law that a four-year statute of limitations applies and

12

denies Plaintiffs’ motion for partial summary judgment.
VII. CONCLUSION

13

The parties disagree as to the nature of Ms. Gray’s debt and the

14
15

applicable statute of limitations.

16

record and the case law, the Court has determined that the statute-of-

17

limitations issue in this case does not present a situation where

18

“there is no genuine dispute as to any material fact and the movant is

19

entitled to judgment as a matter of law,” Fed. R. Civ. P. 56(a).

20

However,

21

limitations to decide these motions.

22

motions for summary-judgment because, even if a four-year statute of

23

limitations applies, Defendants’ good-faith and reasonable belief that

24

a six-year statute of limitations governed was a bona fide error,

25

insulating Defendants from liability under 15 U.S.C. § 1692k(c).

26

/

the

ORDER - 32

Court

need

not

After a thorough review of the

determine

the

applicable

statute

of

The Court grants Defendants’

1

Accordingly, IT IS HEREBY ORDERED:
1.

2

The

Suttell

Defendants’

3

Dismissing

4
5

limitations

6

Summary

2.

against

“Statute

the

of

Judgment

dismissed.

claim

Gray’s

for

Claim(s), ECF No. 480, is GRANTED.

7

Plaintiff

Motion

Limitations”

Plaintiffs’ statute-ofSuttell

Defendants

is

Plaintiffs’ Motion for Partial Summary Judgment, ECF No.
483, is DENIED.

8
3.

9

Plaintiffs’ Motion to Strike, ECF No. 523, is GRANTED IN
PART (Exhibit C) and DENIED IN PART (remainder).

10
4.

11

The

Midland

Defendants’

Motion

for

Summary

Judgment

on

12

Plaintiff Gray’s FDCPA Claims, ECF No. 495, is GRANTED.

13

Plaintiffs’

14

Midland Defendants is dismissed.
5.

15

statute-of-limitations

claim

against

the

By no later than September 16, 2015, Plaintiffs must file a

16

notice

17

presently asserted and against whom each is asserted, and

18

(2) the claims they would assert if permitted to file an

19

amended complaint and against whom.

20

2015 hearing, all counsel shall be prepared to discuss the

21

status of the remaining claims in this case, the status of

22

the related actions in the Northern District of Ohio and

23

the Sixth Circuit, and how best to move this case forward

24

to an efficient resolution.

25

//

26

/

ORDER - 33

succinctly

listing

(1)

the

remaining

claim(s)

At the September 30,

1

IT IS SO ORDERED.

The Clerk’s Office is directed to enter this

2

Order and provide copies to all counsel.

3

DATED this 11th day of August 2015.

4
s/Edward F. Shea
EDWARD F. SHEA
Senior United States District Judge

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Q:\EFS\Civil\2009\0251.msj.SOL.lc2.docx

ORDER - 34