Burr v. Evergreen Professional Recoveries Inc

• Court: District Court, W.D. Washington
• Decided: July 24, 2020
• Docket: 2:19-cv-00949
• Status: Unknown

Opinion

6 UNITED STATES DISTRICT COURT WESTERN DISTRICT OF WASHINGTON 7 AT SEATTLE 8

9 ANGEL BURR, Case No. C19-949RSM

10 Plaintiff, ORDER RE: MOTIONS FOR SUMMARY 11 JUDGMENT v. 12 13 EVERGREEN PROFESSIONAL RECOVERIES, INC., 14 Defendant. 15 16 This matter comes before the Court on the parties’ Motions for Summary Judgment. 17 Dkts. #10 and #11. For the reasons stated below, the Court GRANTS IN PART Plaintiff Angel 18 19 Burr’s Motion for Partial Summary Judgment and GRANTS IN PART AND DENIES IN 20 PART Defendant Evergreen Professional Recoveries, Inc. (“Evergreen”)’s Motion. 21 I. BACKGROUND 22 Defendant Evergreen filed a consumer debt-collection lawsuit in Pierce County District 23 Court against Plaintiff Angel Burr (at that time Angel McClure) for alleged medical debts. 24 25 These debts were recorded in 23 “accounts,” ranging from $9.17 to $1,097.69, for medical 26 services provided by Group Health Cooperative and/or Kaiser Permanente. Dkt. #11-2 at 8-11. 27 28 The parties settled the lawsuit on April 18, 2017, and Defendant Evergreen now admits that the 1 2 underlying debts are no longer owed. See Dkt. #11-2 at 12–14, Dkt. #10-2 at 5–6. 3 In December of 2018, Ms. Burr reviewed her credit reports and discovered that 4 Evergreen was still issuing negative reporting related to these settled debts. Dkt. #10-1 (“Burr 5 Decl.”) at ¶¶ 2–3. Specifically, EPR reported that Ms. Burr owed $690 under account number 6 6007494, and that she owed $667 under account number 6577778. Id. Evergreen reported the 7 8 debts numerous times over the course of nine months. 9 Ms. Burr sent a letter to Evergreen noting that the accounts had been resolved, asking 10 that Evergreen “delete these entries immediately,” attaching the April 2017 settlement 11 agreement as proof for her request. See id. at ¶¶ 5-6; Dkt #11-2 at 35. The letter was dated 12 13 December 27, 2018, but mysteriously postmarked in February of 2019. Dkt. #11-2 at 34–35. 14 Evergreen says its staff “deleted our reporting for the 494 and 778 Accounts” in 15 February in response to Ms. Burr’s letter. Dkt. #11-2 at 4. Evergreen then responded to the 16 letter on March 13, 2019, assuring Ms. Burr that it had corrected the error. Id. at 36. However, 17 two days later Evergreen “erroneously re-reported the 494 and 778 Accounts.” Id. at 5. This 18 19 was because Evergreen “reassigned the 494 and 778 Accounts to a different desk”—Evergreen 20 admits this error. Dkt. #11 at 5. Evergreen continued to report both accounts, affecting Ms. 21 Burr’s credit, for several months. Burr Declaration at ¶ 7; Dkt. #10-2 at 16–17. 22 Evergreen was given notice of this lawsuit on May 14, 2019, ten days before it deleted 23 the false reporting. See Dkt. #10-2 at 16–17 and 21. It was this May contact—including the 24 25 threat of legal action—that finally led Evergreen to correct the reporting, including “cod[ing] 26 these accounts so they could never again be reported to the credit reporting agencies.” Dkt. 27 #11-2 at 5. 28 This lawsuit was filed in King County Superior Court on May 21, 2019, and later 1 2 removed to this Court. Dkt. #1-2. Ms. Burr brings claims against Evergreen under the Fair 3 Debt Collection Practices Act (“FDCPA”) the Washington Collection Agency Act (“WCAA”), 4 Washington’s Consumer Protection Act (“CPA”), and for breach of contract. 5 Ms. Burr’s now moves for partial summary judgment on liability under the FDCPA and 6 WCAA. Dkt. #10. Ms. Burr does not move for the Court to determine damages at this time. 7 8 Evergreen moves for summary judgment dismissal of all of Ms. Burr’s claims, arguing, inter 9 alia, that “its inadvertent inclusion of the 494 and 778 Accounts in its credit reporting was not a 10 material violation of the FDCPA” and that it is entitled to the bona fide error defense. Dkt. #11 11 at 2. Evergreen also argues that it did not violate the WCAA by attempting to collect on the 12 13 debts at issue and that its actions did not breach the 2017 settlement agreement. 14 II. DISCUSSION 15 A. Legal Standard for Summary Judgment 16 Summary judgment is appropriate where “the movant shows that there is no genuine 17 dispute as to any material fact and the movant is entitled to judgment as a matter of law.” Fed. 18 19 R. Civ. P. 56(a); Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247 (1986). Material facts are 20 those which might affect the outcome of the suit under governing law. Anderson, 477 U.S. at 21 248. In ruling on summary judgment, a court does not weigh evidence to determine the truth of 22 the matter, but “only determine[s] whether there is a genuine issue for trial.” Crane v. Conoco, 23 Inc., 41 F.3d 547, 549 (9th Cir. 1994) (citing Federal Deposit Ins. Corp. v. O’Melveny & 24 25 Meyers, 969 F.2d 744, 747 (9th Cir. 1992)). 26 On a motion for summary judgment, the court views the evidence and draws inferences 27 in the light most favorable to the non-moving party. Anderson, 477 U.S. at 255; Sullivan v. U.S. 28 Dep't of the Navy, 365 F.3d 827, 832 (9th Cir. 2004). The Court must draw all reasonable 1 2 inferences in favor of the non-moving party. See O’Melveny & Meyers, 969 F.2d at 747, rev’d 3 on other grounds, 512 U.S. 79 (1994). However, the nonmoving party must make a “sufficient 4 showing on an essential element of her case with respect to which she has the burden of proof” 5 to survive summary judgment. Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986). 6 B. Analysis 7 8 The Fair Debt Collection Practices Act was enacted to protect consumers from improper 9 or abusive debt collection efforts. 15 U.S.C. § 1692. The FDCPA is a strict-liability statute 10 which “makes debt collectors liable for violations that are not knowing or intentional.” Reichert 11 v. Nat’l Credit Sys., Inc., 531 F.3d 1002, 1005 (9th Cir. 2008); see also McCollough v. Johnson, 12 13 Rodenburg & Lauinger, LLC, 637 F.3d 939, 948 (9th Cir. 2011). “A single violation of any 14 provision of the Act is sufficient to establish civil liability under the FDCPA.” Taylor v. Perrin, 15 Landry, deLaunay & Durand, 103 F.3d 1232, 1238 (5th Cir. 1997). The FDCPA is a remedial 16 statute construed liberally in favor of the consumer. Tourgeman v. Collins Fin. Servs, Inc., 755 17 F.3d 1109, 1118 (9th Cir. 2014); Clark v. Capital Credit & Collection Servs., Inc., 460 F.3d 18 19 1162, 1176 (9th Cir. 2006) (“we wish to reinforce that the broad remedial purpose of the 20 FDCPA is concerned primarily with the likely effect of various collection practices on the 21 minds of unsophisticated debtors.”). Section 1692e prohibits the use by a debt collector of “any 22 false, deceptive, or misleading representation or means in connection with the collection of any 23 debt.” Donohue v. Quick Collect, Inc., 592 F.3d 1027, 1030 (9th Cir. 2010). Section 1692e(8) 24 25 prohibits a debt collector from “[c]ommunicating or threatening to communicate to any person 26 credit information which is known or which should be known to be false…” 27 28 There is no meaningful dispute that Evergreen is a debt collector under the FDCPA. See 1 2 15 U.S.C. § 1692a(6); Dkt. #10 at 5; Dkt. #11 at 2. The Court finds that Evergreen’s reporting 3 of Ms. Burr’s debts was connected to its prior attempts to collect on that debt for purposes of 4 satisfying § 1692e. 5 Evergreen’s own admissions show that it erroneously reported a debt known to be false. 6 This alone can lead to liability under § 1692e, and the Court need not consider other sources of 7 8 liability under the FDCPA. The fact that Evergreen continued to report the debt multiple times 9 for months after Ms. Burr sent it a copy of the settlement agreement is significant and makes 10 this a material breach of the FDCPA in the eyes of the Court. See Tourgeman v. Collins Fin. 11 Servs., Inc., 755 F.3d 1109, 1121 (9th Cir. 2014) (materially false statements are those that 12 13 could “cause the least sophisticated debtor to suffer a disadvantage in charting a course of action 14 in response to the collection effort.”). Evergreen argues that the breach was not material 15 because other debts may have also negatively affected Ms. Burr’s credit score and because she 16 has “provided no evidence… that her FICO score would have arisen above a substandard score 17 but for the erroneous reporting of the 494 and 778 accounts.” Dkt. # 11 at 7–8. Ms. Burr’s 18 19 difficulties with other creditors does not reduce the harm caused by Evergreen to her credit 20 score, however small, nor does Evergreen establish that a significant change in credit score is 21 required for materiality. Evergreen’s error disadvantaged Ms. Burr by requiring her to make 22 multiple efforts to correct the reporting. 23 The Court’s analysis thus turns to the bona fide error defense, an affirmative defense 24 25 claimed by Evergreen. Under 15 U.S.C. § 1692k(c), a defendant asserting “bona fide error” 26 bears the burden of establishing that (1) it violated the FDCPA unintentionally; (2) the violation 27 resulted from a bona fide error; and (3) it maintained procedures reasonably adapted to avoid 28 the violation. McCollough, 637 F.3d at 948 (citation omitted). As to the third element: “If the 1 2 bona fide error defense is to have any meaning in the context of a strict liability statute, then a 3 showing of ‘procedures reasonably adapted to avoid any such error’ must require more than a 4 mere assertion to that effect. The procedures themselves must be explained, along with the 5 manner in which they were adapted to avoid the error.” Reichert, 531 F.3d at 1007 (citation 6 omitted). 7 8 The Court has reviewed the briefing of the parties and the declaration of Evergreen 9 president Monica Severtsen and finds there is no evidence for a reasonable juror to conclude 10 that Evergreen maintained a specific procedure adapted to avoid the initial reporting error. 11 Instead, there is only evidence that Evergreen has a system of coding accounts as disputed or 12 13 paid off. See Dkt. #11-1. There is no evidence that Evergreen has procedures to double check 14 coding before it is implemented, or to audit the coding after it has been completed. Evergreen 15 has also failed to present evidence of a procedure adapted to avoid the second error, which 16 occurred when the accounts changed “desks” and were “re-reported.” Accordingly, the Court 17 finds Evergreen liable for violation of the FDCPA. 18 19 Evergreen’s actions did not violate the WCAA. RCW 19.16.250(21) prohibits the 20 collection, or attempted collection, of any amounts not authorized by law. There is no evidence 21 that Evergreen collected or attempted to collect on these debts; only that Evergreen reported the 22 debts to credit agencies. Ms. Burr argues that “false reporting of a debt on a consumer’s credit 23 report may prompt her to pay out of fear or confusion,” Dkt. #13 at 14, but this does not on its 24 25 own transform Evergreen’s erroneous reporting into the more serious error of actively 26 attempting to collect on the debt. Ms. Burr’s CPA claim is based solely on a violation of the 27 28 WCAA. See Dkt. #13 at 15–16. Accordingly, Ms. Burr’s WCAA and CPA claims will be 1 2 dismissed. 3 The Court agrees with Evergreen that its actions did not breach the settlement 4 agreement, which stated that Evergreen would not collect on the debts at issue but made no 5 mention of credit reporting. Dkt. #11-2 at 12–14. This claim too is properly dismissed on 6 summary judgment. 7 8 III. CONCLUSION 9 Having reviewed the relevant briefing and the remainder of the record, the Court hereby 10 finds and ORDERS: 11 1) Plaintiff Burr’s Motion for Partial Summary Judgment, Dkt. #10, is GRANTED IN 12 13 PART. Defendant is liable under the FDCPA as stated above. The amount of 14 damages remains an issue for trial. 15 2) Defendant Evergreen’s Motion for Summary Judgment, Dkt. #11, is GRANTED IN 16 PART AND DENIED IN PART. Plaintiff Burr’s claims under the WCAA, CPA, 17 and for breach of contract are DISMISSED. 18 19 DATED this 24th day of July, 2020. 20 21 A 22 23 RICARDO S. MARTINEZ 24 CHIEF UNITED STATES DISTRICT JUDGE

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