Healey v. Trans Union LLC

WENDY HEALEY, Plaintiff, v. TRANS UNION LLC, et al., Defendants.

CASE NO. C09-0956JLR

UNITED STATES DISTRICT COURT WESTERN DISTRICT OF WASHINGTON AT SEATTLE

Dated May 18, 2011.

ORDER ON MOTION FOR SUMMARY JUDGMENT

This matter comes before the court on Defendant Debt Recovery Solutions, LLC's ("DRS") motion for summary judgment (Dkt. # 55).¹ Plaintiff Wendy Healey opposes DRS's motion. (Dkt. # 59.) Having reviewed the parties' submissions, the balance of the record, and the governing law, and having heard oral argument, the court GRANTS in part and DENIES in part DRS's motion for summary judgment.

I. BACKGROUND

This case arises out of DRS's efforts to collect a debt that it purchased from Embarq (referred to by the parties as the "Sprint/Embarq account").² The debt was based on a delinquent Sprint cellular telephone account that had been opened under the name "Wendy Healey" at a Tallahassee, Florida address in 2004. Plaintiff Wendy Healey asserts that the delinquent account is not hers, that she has never had an account with Sprint or Embarq, and that she has never lived in Tallahassee, Florida. (Healey Decl. (Dkt. # 61) ¶ 1.)

Beginning in 2005, Embarq assigned the debt to two prior collection agencies, both of which attempted to collect the debt on the Sprint/Embarq account from Ms. Healey. (Id. ¶ 2.) Ms. Healey successfully stopped both collection efforts. (Id.) On February 6, 2007, however, Ms. Healey received a letter from a third collection agency, DRS, demanding payment of $902.77 due on the Sprint/Embarq account. (Felton Decl. (Dkt. # 56) Ex. C.) The letter, which was addressed to Ms. Healey in Everett, Washington, stated that DRS had purchased the debt from Embarq and that the letter marked the beginning of its collection process. (Id.) The letter further informed Ms. Healey that DRS would assume the debt was valid unless Ms. Healey notified DRS within 30 days that she disputed the debt; and if DRS received timely notification of a dispute, within 30 days, it would obtain a verification of the debt and mail a copy to Ms. Healey. (Id.) Finally, the letter notified Ms. Healey that a negative credit report had beensubmitted to a credit reporting agency. (Id.) Don Schwartz, chief operating officer of DRS, testified that DRS did not submit the negative credit report—rather, the negative credit report had been submitted by some other entity before DRS purchased the account. (Felton Decl. Ex. B ("Schwartz Dep.") at 24-26.) The record does not reflect who submitted the negative credit report prior to DRS's involvement.

On March 1, 2007, Ms. Healey sent DRS a letter titled "Request for Debt Validation." (Felton Decl. Ex. E at HEALEY 000938.) In her letter, Ms. Healey stated that that she was "disputing this collection account as I have never had an account with Embarq." (Id.) Ms. Healey did not describe her past efforts to delete the Sprint/Embarq account from her credit report or provide any other information about the account. (Id.) Ms. Healey asked DRS to provide proof within 30 days that she was obligated to pay the debt, including the following items:

1. Agreement with your client that grants you the authority to collect this alleged debt.

2. Agreement that bears the signature of the alleged debtor wherein he/she agreed to pay the creditor.

3. A copy of the original application by this debtor—including the source of collateral used to gain this credit.

4. The complete payment history on this account so I have proof that the amount is correct.

(Id.) Ms. Healey's letter included an address in Arlington, Washington, because she had moved from Everett earlier that year. (Id.) On March 7, 2007, DRS noted in its records that the account was in dispute and that it had requested documents to verify the debt. (Felton Decl. Ex. D. ("Collection Notes") at DRS 0001.)

On May 3, 2007, Ms. Healey sent a follow-up letter to DRS in which she stated that she had not received a response within 30 days as requested in her earlier letter. (Felton Decl. Ex. E at HEALEY 000941.) She provided no additional information about the account. (Id.) DRS noted in its records it received the letter, that the account was in dispute, and that it had requested verification documents. (Collection Notes at DRS 0001.)

On July 5, 2007, DRS sent verification documents to Ms. Healey. (Id.) On July 23, 2007, DRS noted in its records that it had received new contact information for Ms. Healey, and the next day, DRS sent copies of the verification documents to the new address. (Id.) Ms. Healey did not receive either set of documents that DRS mailed in July 2007. (See Healey Decl. ¶ 4.) Neither mailing is in the record before the court.

In January 2008, DRS noted in its records that Ms. Healey had not responded to its July 2007 mailings. (Collection Notes at DRS 0002.) DRS reactivated Ms. Healey's collection account, and on January 14, 2008, DRS sent Ms. Healey a second letter demanding payment of the Sprint/Embarq debt. (Id.; Felton Decl. Ex. F.)

On January 21, 2008, Ms. Healey sent another "Request for Debt Validation" letter to DRS. (Felton Decl. Ex. G.) The letter is nearly identical to Ms. Healey's March 2007 letter. Ms. Healey stated that she had never had an Embarq account; noted that she never received the validation documents she requested in March 2007; and asked DRS to send her, within 30 days, the same four items listed in her March 2007 letter. (Id.) On January 25, 2008, DRS again noted in its records that the account was in dispute.(Collection Notes at DRS 0002.) DRS's records reflect that it again sent the verification documents to Ms. Healey. (Id.)

On February 19, 2008, DRS noted in its records that it had received no response from Ms. Healey regarding the verification documents, and it again reactivated Ms. Healey's collection account. (Id.) On February 20, 2008, DRS sent a third letter to Ms. Healey demanding payment. (Id.; Felton Decl. Ex. H.) The letter asked Ms. Healey either to pay the debt or to contact DRS to discuss resolution of the debt. (Id.) In addition, DRS, for the first time, reported Ms. Healey's delinquent account to the credit reporting agencies. (Schwartz Dep. at 27.)

On March 9, 2008, Ms. Healey sent a letter to DRS. (Felton Decl. Ex. I.) Ms. Healey stated that she had received no response to her January 2008 request for validation documents, and warned that she intended to file suit if DRS did not respond within 15 days. (Id.)

On March 18, 2008, DRS again mailed a response to Ms. Healey's request for documents to verify the debt. (Felton Decl. Ex. J; see also Collection Notes at DRS 0003.) DRS's response included invoices and billing statements for a Sprint cellular telephone account in the name of Wendy Healey at an address in Tallahassee, Florida. (Felton Decl. Ex. J.) DRS asked Ms. Healey to "remit payment immediately or call our customer service department... if further information is required." (Id. at HEALEY 000109.)

Although Ms. Healey received DRS's March 18, 2008 mailing, she did not contact DRS or otherwise respond to the mailing. (See Felton Decl. Ex. A ("Healey Dep.") at277.) Having received no response to the verification documents, DRS again reactivated Ms. Healey's account, and, on May 7, 2008, sent Ms. Healey a fourth collection letter. (Felton Decl. Ex. K; see also Collection Notes at DRS 0003.) Ms. Healey did not respond to the collection letter. (Healey Dep. at 268.)

On June 12, 2008, DRS sent a fifth collection letter to Ms. Healey. (Felton Decl. Ex. L at HEALEY 000102.) Again, Ms. Healey did not respond to DRS's letter. (Healey Dep. at 270.)

On July 21, 2008, DRS sent a sixth collection letter to Ms. Healey in which it offered to settle the debt for 85% of the amount owed on the account. (Felton Decl. Ex. L at HEALEY 000099.) The letter included the following language:

A SETTLEMENT OFFER

YOU JUST CANNOT AFFORD TO PASS UP!!

*** 15% OFF YOUR BILL ***

That is right - if you pay just $767.36 of the $902.77 that you currently owe, this account will be considered SETTLED IN FULL. Upon clearance of the funds we will notify the National Credit Reporting Agencies that this account has been settled. To take advantage of this offer, your payment of $767.36 must be received on or before 08/11/08.

(Id.) Ms. Healey did not respond to the letter. (Healey Dep. at 271.)

On August 28, 2008, DRS sent a seventh collection letter to Ms. Healey, again offering to settle the debt for 85% of the amount owed. (Felton Decl. Ex. L at HEALEY 000095.) This letter included the following language:

WE DON'T NEED A LOT OF WORDS

TO MAKE OUR POINT

WE WANT YOUR PAYMENT - NOW

Even though you missed the deadline imposed by our recent settlement offer, we are still convinced that there has never been a better time to put an end to this unpleasant situation.

Call it a good will gesture or just an honest attempt to clear this debt from an inventory of delinquent receivables that are still unpaid. Whatever the reason, our previous offer of settlement that had recently expired is now extended until 09/18/08. If you accept this offer, you will save $135.41 and begin the process of repairing your damaged credit reputation at the same time.

Don't lose this opportunity. Send us your check for $767.36 and upon clearance of funds, your account will be considered settled and the appropriate Credit Reporting Agencies will be instructed to change the status of this account.

(Id.) Ms. Healey did not respond to the letter. (Healey Dep. at 271.)

On October 10, 2008, DRS sent an eighth collection letter to Ms. Healey, this time offering to settle the debt for 75% of the amount owed. (Felton Decl. Ex. L at HEALEY 000091; see also Collection Notes at DRS 0004.) This letter included the following language:

Our last settlement offer was certainly most generous—but apparently we just didn't give you enough time to gather the funds before the offer expired. We also didn't suggest an alternative repayment program—a different way of finally paying down this debt.

IN

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