Heffington v. Gordon, Aylworth & Tami, P.C., Case No. 3:16-cv-02079-AC

BEVERLY HEFFINGTON, Plaintiff, v. GORDON, AYLWORTH AND TAMI, P.C., Defendant.

Case No. 3:16-cv-02079-AC

UNITED STATES DISTRICT COURT DISTRICT OF OREGON PORTLAND DIVISION

December 28, 2017

OPINION AND ORDER

ACOSTA, Magistrate Judge:

Introduction

Plaintiff Beverly Heffington ("Heffington") brings this lawsuit against Defendant Gordon, Aylworth and Tami, P.C. ("GAT"),¹ alleging violations of the Fair Debt Collection Practices Act ("FDCPA"). Heffington claims GAT violated the FDCPA's validation notice provision by failingto make required disclosures during its efforts to collect on her debt. Currently before the court is GAT's Motion for Summary Judgment, ECF No. 9 ("Motion"). For the reasons set forth below, the Motion is granted.²

Background

The facts of the case are undisputed. More than a decade ago, First Resolution Investment Corporation ("First Resolution") enlisted the help of the Defendant law firm, specializing in debt collection and then-named Daniel N. Gordon, P.C. ("Gordon Law"), to assist in collecting debts Heffington owed. (Decl. of Matthew R. Aylworth (ECF No. 10) ("Aylworth Decl."), ¶¶ 2, 4.) Heffington owed First Resolution the balance of two respective bank accounts. (Aylworth Decl. Exs. 2, 3 (collectively, the "2006 Letters").) Gordon Law first communicated with Heffington on June 19, 2006, when it sent her two letters, one for each account. (Id.) The letters detailed the purpose of the communication and the amounts owed. (Id.)

In 2007, a state court awarded First Resolution a combined general judgment against Heffington for the debts, which were then combined into a single judgment account. (Id. ¶¶ 3, 10.) It appears no payment was made on that account.

On June 23, 2016, GAT sent Heffington another letter, again requesting payment on the debt, which by this time had grown significantly due to accrued interest. (Aylworth Decl. Ex. 1 ("2016 Letter").) The 2016 Letter was printed on GAT's letterhead, which depicted GAT's current name and logo. (Aylworth Decl. Ex. 1.) Immediately below GAT's information was printed: "Formerly Daniel N. Gordon, P.C." (Id.) Daniel N. Gordon's name was also listed as an attorney of the lawfirm along the right-hand border of the page. (Id.) The 2016 Letter, in relevant part, read: "This firm has been retained to collect a judgment in the sum of $25,623.94, which is the current balance, and which includes $11,360.91 of post-judgment interest. Interest may continue to accrue in accordance with the judgment until the balance is paid in full." (Id.)

Heffington subsequently filed suit in October 2016. (Compl. ¶ 9.)³

Legal Standard

Summary judgment is appropriate "if the pleadings, the discovery and disclosure materials on file, and any affidavits show that there is no genuine issue as to any material fact and that the movant is entitled to judgment as a matter of law." FED. R. CIV. P. 56(c). Summary judgment is not proper if material factual issues exist for trial. Warren v. City of Carlsbad, 58 F.3d 439, 441 (9th Cir. 1995).

The moving party has the burden of establishing the absence of a genuine issue of material fact. Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986). If the moving party shows the absence of a genuine issue of material fact, the nonmoving party must go beyond the pleadings and identify facts which show a genuine issue for trial. Id. at 324. A nonmoving party cannot defeat summary judgment by relying on the allegations in the complaint, or with unsupported conjecture or conclusory statements. Hernandez v. Spacelabs Med., Inc., 343 F.3d 1107, 1112 (9th Cir. 2003). Thus, summary judgment should be entered against "a party who fails to make a showing sufficient to establish the existence of an element essential to that party's case, and on which that party will bear the burden of proof at trial." Celotex, 477 U.S. at 322.

The court must view the evidence in the light most favorable to the nonmoving party. Bell v. Cameron Meadows Land Co., 669 F.2d 1278, 1284 (9th Cir. 1982). All reasonable doubt as to the existence of a genuine issue of fact should be resolved against the moving party. Hector v. Wiens, 533 F.2d 429, 432 (9th Cir. 1976).

However, deference to the nonmoving party has limits. The nonmoving party must set forth "specific facts showing a genuine issue for trial." FED. R. CIV. P. 56(e) (emphasis added). The "mere existence of a scintilla of evidence in support of the plaintiff's position [is] insufficient." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 252 (1986). Therefore, where "the record taken as a whole could not lead a rational trier of fact to find for the nonmoving party, there is no genuine issue for trial." Matsushita Elec. Indus. Co., Ltd. v. Zenith Radio Corp., 475 U.S. 574, 587 (1986) (internal quotation marks omitted).

Discussion

Heffington sues GAT under § 1692g(a) the FDCPA, alleging GAT's 2016 Letter failed to convey adequately whether interest was continuing to accrue on her debt. GAT moves for summary judgment, arguing first that § 1692g(a) does not apply because the 2016 Letter was not an "initial communication," and second, that even if § 1692g(a) does apply, the 2016 Letter's language complies with the provision's requirements.

The FDCPA prohibits false or deceptive practices in connection with debt collection. 15 U.S.C. §§ 1692 et seq. This "broad remedial statute" is to be construed liberally, "in favor of the consumer in order to effectuate [its] goal of eliminating abuse." Hernandez v. Williams, Zinman & Parham PC, 829 F.3d 1068, 1078 (9th Cir. 2016) (citing Gonzales v. Arrow Fin. Servs., LLC, 660 F.3d 1055, 1060 (9th Cir. 2011)).

When a debt collector sends a consumer an initial communication about a debt, often referred to as a validation notice, the FDCPA requires that communication, or any subsequent notice sent within five days of the initial communication, to contain certain disclosures. 15 U.S.C. § 1692g(a)(1). Section 1692g(a) provides:

Within five days after the initial communication with a consumer in connection with the collection of any debt, a debt collector shall, unless the following information is contained in the initial communication or the consumer has paid the debt, send the consumer a written notice containing —

(1) the amount of the debt;

(2) the name of the creditor to whom the debt is owed;

(3) a statement that unless the consumer, within thirty days after receipt of the notice, disputes the validity of the debt, or any portion thereof, the debt will be assumed to be valid by the debt collector;

(4) a statement that if the consumer notifies the debt collector in writing within the thirty-day period that the debt, or any portion thereof, is disputed, the debt collector will obtain verification of the debt or a copy of a judgment against the consumer and a copy of such verification or judgment will be mailed to the consumer by the debt collector; and

(5) a statement that, upon the consumer's written request within the thirty-day period, the debt collector will provide the consumer with the name and address of the original creditor, if different from the current creditor.

15 U.S.C. § 1692g(a).

In this circuit, "the impact of language alleged to violate section 1692g is judged under the 'least sophisticated debtor' standard," which objectively questions whether a least sophisticated debtor "would likely be misled by the notice" given. Swanson v. S. Oregon Credit Serv., Inc., 869 F.2d 1222, 1225 (9th Cir. 1988) (citing Baker v. G.C. Services Corp., 677 F.2d 775, 778 (9th Cir.1982)). This standard is "designed to protect consumers of below average sophistication or intelligence, or those who are uninformed or naive, particularly when those individuals are targeted by debt collectors." Gonzales, 660 F.3d at 1062 (internal quotation omitted). Still, the standard"preserves a quotient of reasonableness and presumes a basic level of understanding and willingness to read with care." Id. (internal quotation and alteration omitted). Whether a validation notice is likely to mislead a least sophisticated debtor is a question of law. Terran v. Kaplan, 109 F.3d 1428, 1432 (9th Cir. 1997).

I. Initial Communication.

GAT argues § 1692g(a)'s notice requirements do not apply to the 2016 Letter because its "initial communication" with Heffington for purposes of the provision was its 2006 Letters, sent a decade earlier.⁴ Heffington disagrees, contending that because the defendant law firm changed its name from "Daniel N. Gordon. P.C." to "Gordon Aylworth & Tami, P.C." between 2006 and 2016, the 2016 Letter technically constitutes its "initial communication" to Heffington, thus bringing it within § 1692g(a) coverage.

Section 1692g(a)'s notice requirements apply only to a debt collector's "initial communication" with a consumer. 15 U.S.C. § 1692g(a). The Ninth Circuit has interpreted an "initial communication" to describe "the first communication by any debt collector," — not merely the first communication "about a debt." Hernandez, 829 F.3d at 1077-78 (emphasis added). Thus, § 1692g(a) governs each "initial communication" from "each and every" successive debt collector, even if a subsequent debt collector attempts to collect a debt about which another, prior collector already has sent a debtor an initial communication. Id. at 1074, 1081. Any other interpretation would create "loopholes that []would undermine the very protections the statute provides." Id. at 1075. For example, an original debt collector could "pass[] the debt on to a subsequent debtcollector in lieu of responding to [a] verification demand." Id. at 1077. Such a loophole "would, in practice, undermine consumers' efforts to verify their debts . . . ." Id.

GAT cites Dorsey v. David B. Schumacher, P.C., No. 3:14-CV-1190-SI, 2015 WL 569958, at *3 (D. Or. Feb. 11, 2015), in which a debt collector's first letter, sent but never actually received by the debtor, and not a later communication about the same debt, actually received by the debtor, constituted the...