Carlson v. First Revenue Assurance

• Decision Date: 03 March 2004
• Docket Number: No. 03-1772.,03-1772.
• Citation: 359 F.3d 1015
• Parties: Andrew CARLSON, Appellant, v. FIRST REVENUE ASSURANCE, Appellee.
• Court: U.S. Court of Appeals — Eighth Circuit

359 F.3d 1015

Andrew CARLSON, Appellant, v. FIRST REVENUE ASSURANCE, Appellee.

No. 03-1772.

United States Court of Appeals, Eighth Circuit.

Submitted: December 19, 2003.

Filed: March 3, 2004.

John H. Goodsby, argued, Little Canada, MN (Thomas J. Lyons, Jr., and Thomas J. Lyons, Sr., Little Canada, MN, on the brief), for appellant.

Jill N. Brown, argued, Minnetonka, MN (Brian M. Sund, Minnetonka, MN, on the brief), for appellee.

Before MORRIS SHEPPARD ARNOLD, LAY, and RILEY, Circuit Judges.

MORRIS SHEPPARD ARNOLD, Circuit Judge.

Andrew Carlson appeals from a summary judgment entered against him and from the denial of his motion to alter or amend the judgment, see Fed.R.Civ.P. 59(e), in his action against First Revenue Assurance (FRA), a collection agency. We affirm the district court's¹ orders.

I.

This case arises out of FRA's debt collection activities with regard to an alleged debt that Mr. Carlson owed to one of FRA's clients. FRA sent six letters to Mr. Carlson, who it appears did not actually owe the debt, demanding payment. Mr. Carlson asserts that he contacted FRA to notify them of the error, but FRA denies receiving any such information from either Mr. Carlson or FRA's client.

Mr. Carlson filed a civil suit against FRA claiming that FRA's practice of having debt payments sent directly to its unlicensed Seattle, Washington, post office box violated Minn.Code § 332.33, and thus also violated the Fair Debt Collection Practices Act (FDCPA), 15 U.S.C. §§ 1692-1692o. The Minnesota statute requires that a debt collection agency collecting debts in Minnesota be licensed at each location from which it conducts business, and the only Minnesota license that FRA had was for its Denver, Colorado, headquarters. The statute applies to "any person engaged in the business of collection for others." See Minn.Stat. § 332.31.3; see also Minn.Stat. § 332.33.1. The statute does not define the "business of collection," and there is no guidance on that matter from the Minnesota courts.

FRA filed a summary judgment motion arguing that no collection activity occurred at the unlicensed Seattle post office box. In the alternative, FRA maintained that even if collection activity was occurring in Seattle, the violation of Minnesota's collection agency licensing statute did not violate the FDCPA. Mr. Carlson countered that if FRA was not conducting collection activity in Seattle, the use of the Seattle address constituted a false or misleading representation which is a separate violation of the FDCPA. See 15 U.S.C. § 1692e. The district court granted FRA's motion, and Mr. Carlson filed a motion to alter or amend the judgment, see Fed.R.Civ.P. 59(e), which the district court denied.

II.

We begin with a brief description of FRA's debt collection practices. Once an FRA client asks FRA to begin collection, FRA sends letters to the debtor offering varying terms of repayment. These letters include remittance slips that direct the debtor to send payments only to the FRA-owned Seattle post office box and to send all other correspondence to FRA's Denver address. When payments are sent to the Seattle post office box, they are retrieved by U.S. Bank employees who, using an automated process and the remittance slips, credit the payments to FRA's trust account held at the bank. U.S. Bank electronically provides FRA with information every day about which debtors made payments and the amount of those payments. FRA then contacts its clients and informs them about which debts have been satisfied. Meanwhile, U.S. Bank sends all the paperwork that it has collected to FRA's Denver address. If mail other than payments is received at the Seattle post office box, it is immediately forwarded (unopened if possible) to the Denver address. In this way, the Seattle post office box operates as a "lockbox." U.S. Bank provides a similar service to other large customers receiving payments through the mail, such as utility companies, phone companies, department stores, and government agencies.

Mr. Carlson argues that because collecting payments is an inherent part of a collection agency's business, use of the U.S. Bank payment crediting service by a collection agency is different from other companies using a similar service. According to Mr. Carlson, because FRA is in the business of collecting money rather than, for example, providing energy, the processing of FRA's checks by U.S. Bank is tantamount to collection activity by U.S. Bank on behalf of FRA. If Mr. Carlson is correct, however, the Seattle lockbox would have to be licensed even if the debtor's payments were sent directly to the Denver address and forwarded to FRA's bank through the Seattle lockbox. All banks processing payments to a collection agency would in essence become collection agencies and require licenses. This makes scant sense.

We believe that U.S. Bank is engaged in banking, not collecting. U.S. Bank processes the payments received at the Seattle lockbox, but it does not post or collect payments in the sense that a collection agency does. U.S. Bank merely handles the mail. U.S. Bank does not send out collection letters or have any contact with FRA's clients. A collection agency's role, on the other hand, is to contact debtors and secure payment on behalf of its clients....