Nikkel v. Wakefield & Assocs., Inc.
| Decision Date | 15 November 2012 |
| Docket Number | Civil Action No. 10-cv-02411-PAB-CBS |
| Parties | ROSEMARY NIKKEL, Plaintiff, v. WAKEFIELD & ASSOCIATES, INC., Defendant. |
| Court | U.S. District Court — District of Colorado |
ORDER
This matter is before the Court on the Motion for Summary Judgment [Docket No. 36] filed by defendant Wakefield and Associates, Inc. ("Wakefield"). The motion is fully briefed and ripe for disposition.
This case arises out of Wakefield's attempts to collect unpaid medical bills that plaintiff Rosemary Nikkel owed to Children's Hospital ("Children's") in Aurora, Colorado. In her amended complaint, Ms. Nikkel alleges that Wakefield, in its attempt to collect such bills, violated the Fair Debt Collection Practices Act ("FDCPA"), 15 U.S.C. § 1692 et seq. See Docket No. 10. Ms. Nikkel seeks an award of statutory damages and attorneys' fees and costs for Wakefield's alleged violations of the FDCPA.2
Sometime before 2009, Ms. Nikkel incurred an obligation to repay Children's for $1496.00 in unpaid medical bills.3 Docket No. 36-1 at 1, ¶ 5. The medical bills stemmed from in-patient treatment her son received at Children's. Docket No. 36-4 at 8 (Nikkel Dep. 47:11-23). When Ms. Nikkel received Children's bill, she refused to pay. Id. at 9 (Nikkel Dep. 48:16-23); id. at 10 (Nikkel Dep. 54:8-21). On March 17, 2009, Children's assigned the collection of Ms. Nikkel's unpaid medical bills to Wakefield.4 Docket No. 36-1 at 1, ¶ 5. The billing statement Children's provided to Wakefield identified Ms. Nikkel's address as "4613 Estes St., Wheat Ridge, CO 80033" (the "Wheat Ridge address"). Docket No. 36-5.
Ryan Boettcher, vice president of operations at Wakefield, testified as Wakefield's Rule 30(b)(6) witness with respect to Wakefield's collection activities. According to Mr. Boettcher, Wakefield uses a computer system known as the "Cyclone software" to perform its collection activities. Docket No. 36-2 at 3 (Rule 30(b)(6) Dep. 28:3-23). Once a debt is assigned to Wakefield, every action taken on that account is represented in the "account notes" through unique identifiers generated either by theCyclone software or by collection agents.5 See Docket No. 36-3. Each unique identifier represents a specific action taken in connection with the account. Docket No. 36-2 at 2 (Rule 30(b)(6) Dep. 27:12-14).
With respect to the Validation of Debt Notices required by the FDCPA, Mr. Boettcher testified that, once Wakefield is assigned an account, the Cyclone software generates an Initial Demand Letter that contains all of the statutorily required disclosures. Id. at 5-6 (Rule 30(b)(6) Dep. 30:11-31:13). After the Cyclone software generates the Initial Demand Letter, the letter is sent to a third party letter vendor, DANTOM Systems, Inc. ("DANTOM"), located in Dearborn, Michigan. DANTOM then mails the Initial Demand Letter to the consumers and, once it is confirmed that the letters are mailed, the Cyclone software generates a unique identifier indicating the date and time the letter was sent. Id. at 5 (Rule 30(b)(6) Dep. 30:21-25). However, neither DANTOM nor Wakefield keeps paper or electronic copies of the mailed Initial Demand Letters. Id. (Rule 30(b)(6) Dep. 30:2-13); id. at 7 (Rule 30(b)(6) Dep. 33:1-10). The Cyclone system generates unique identifiers signifying if an Initial Demand Letter has been returned as undeliverable. Id. at 9 (Rule 30(b)(6) Dep. 42:1-7).
In this case, Wakefield alleges that it mailed an Initial Demand Letter to Ms. Nikkel's Wheat Ridge address on March 17, 2009. Docket No. 36-2 at 4 (Rule 30(b)(6)Dep. 29:5-15).6 Wakefield claims that the Initial Demand Letter sent to Ms. Nikkel on March 17, 2009 contained all of the disclosures required by the FDCPA, Docket No. 36-1 at 1, ¶ 6, and that the letter was not returned as undeliverable.7 Docket No. 36-2 at 11 (Rule 30(b)(6) Dep. 47:1-4). Wakefield, however, does not have a copy of the letter sent to Ms. Nikkel. Id. at 5 (Rule 30(b)(6) Dep. 30:2-6); id. at 7 (Rule 30(b)(6) Dep. 33:1-6).
In her deposition, Ms. Nikkel alleges that she never received Wakefield's Initial Demand Letter of March 17, 2009, Docket No. 36-4 at 17 (Nikkel Dep. 87:20-23), not having lived at the Wheat Ridge address for several years prior to March 17, 2009. Id. at 2 (Nikkel Dep. 23:23-25).
On March 15, 2010, DANTOM advised Wakefield that Ms. Nikkel had moved from the Wheat Ridge address. Docket No. 38-1 at 2 (Rule 30(b)(6) Dep. 64:9-14). Based on his interpretation of the account notes, Mr. Boettcher alleges that DANTOM told Wakefield's collection agent "JB" that Ms. Nikkel had not lived at the Wheat Ridge address for "three-quarters of a year."8 Id. (Rule 30(b)(6) Dep. 64:22-24); see DocketNo. 36-3 at 2 (note 0609DL). Ms. Nikkel disputes this fact and claims instead that the account note reflects that she did not live at the Wheat Ridge address for three to four years.
On April 1, 2010, after Wakefield learned that Ms. Nikkel did not reside at the Wheat Ridge address, it initiated an action in the County Court for Jefferson County, Colorado, seeking a declaration that it was entitled to a judgment in the amount of $1496.00 in principal and $243.51 in interest as the assignee of the Children's account. Docket No. 36-7 at 4. Wakefield applied an eight percent per annum interest rate to Ms. Nikkel's Children's account allegedly pursuant to Colorado law. Docket No. 36-2 at 23 (Rule 30(b)(6) Dep. 90:1-8); id. at 24 (Rule 30(b)(6) Dep. 91:17-18).
On April 4, 2010, Wakefield served Ms. Nikkel with the state court complaint and summons. Docket No. 36-4 at 18-19 (Nikkel Dep. 95:25-96:5); Docket No. 36-8. The complaint and summons provided were accompanied by a "cover letter" that advised Ms. Nikkel to contact Wakefield "immediately" to avoid further litigation costs. Docket No. 37-3 at 2. Ms. Nikkel's initial appearance for the state court lawsuit was scheduled for May 17, 2010. Docket No. 36-4 at 23 (Nikkel Dep. 103:13-17).
On April 22, 2010, Ms. Nikkel contacted Wakefield and spoke with a collection agent in order to settle the matter and avoid garnishment of her wages. Docket No. 36-4 at 19 (Nikkel Dep. 96:18-23); id. at 20 (Nikkel Dep. 97:7-9). During the April 22, 2010 phone call, Ms. Nikkel discussed a payment plan with collection agent "JB." Docket No. 36-2 at 16 (Rule 30(b)(6) Dep. 72:14-19). JB told Ms. Nikkel that, to avoid litigation, she would have to pay the principal amount on the account in addition to interest and court costs. Id. at 17 (Rule 30(b)(6) Dep. 73:15-22); Docket No. 36-3 at 2 (note 06u89p). JBknew the amount of interest to apply to Ms. Nikkel's account because the Cyclone system has a program that computes applicable interest. Docket No. 36-2 at 21 (Rule 30(b)(6) 88:18-20). Although JB first requested that Ms. Nikkel provide a down payment of $500 and continue with monthly payments of $250 thereafter, Docket No. 36-4 at 27 (Nikkel Dep. 115:8-9), Ms. Nikkel was able to reach an agreement wherein Wakefield would receive a $300 down payment with $100 monthly payments until the debt was satisfied. Id. at 33-34 (Nikkel Dep. 127:25-128:5); Docket No. 36-2 at 16 (Rule 30(b)(6) Dep. 73:19-22).
According to the terms of the agreement discussed on April 22, 2010, Ms. Nikkel would pay $1496.00 in principal, $246.45 in interest, and $153.85 for court costs for a total amount of $1,896.30. See Docket No. 36-10. In addition, the agreement included two clauses9 wherein Ms. Nikkel agreed to waive all legal claims against Wakefield and agreed to an attorneys' fees provision to settle any future disputes. See id.
During the April 22, 2010 phone conversation, JB did not discuss the waiver provision with Ms. Nikkel. Docket No. 37-2 at 3-5 (Rule 30(b)(6) Dep. 106:19-25,109:25-110:11). According to Mr. Boettcher, Wakefield's collection agents cannot counsel consumers on waivers or other legal matters. Id. at 4-5 (Rule 30(b)(6) Dep. 110:19-111:3); id. at 5 (Rule 30(b)(6) Dep. 111:21-25).
On April 26, 2010, Wakefield sent Ms. Nikkel the settlement agreement, Docket No. 36-2 at 18 (Rule 30(b)(6) Dep. 76:8-10), which she received on or around April 28, 2010, approximately two weeks before the scheduled date for her initial appearance in the state court action. Docket No. 36-4 at 35-36 (Nikkel Dep. 129:13-17, 132:21-24). The settlement agreement required Ms. Nikkel to provide Wakefield with a down payment by May 14, 2010. Id. at 41 (Nikkel Dep. 145:22-25).
Ms. Nikkel was not represented by counsel when she signed the settlement agreement and Wakefield did not advise her to contact an attorney before signing the settlement agreement. Docket No. 37-1 at 30 (Nikkel Dep. 312:11-15). Ms. Nikkel stated that her main concern was to avoid going to court and that she would have "signed anything to keep from going [to] court." Docket No. 36-4 at 34 (Nikkel Dep. 128:19-25). She testified that she felt rushed before signing the agreement, Docket No. 37-1 at 34 (Nikkel Dep. 316:13-16), and that, when she signed the waiver, she had never heard of the FDCPA or the Colorado Fair Debt Collection Practice Act. Docket No. 36-4 at 39 (Nikkel Dep. 143:8-10). In addition, she did not know that by signing the waiver she would be forfeiting her rights under the FDCPA, the Colorado Fair Debt Collection Practices Act, and the Federal Fair Credit Reporting Act. Docket No. 37-1 at 28-29 (Nikkel Dep. 310:25-311:5). Given that she had never heard of these statutes, she testified that she was not aware that by signing the settlement agreement she would not be able to bring FDCPA claims in the future. Docket No. 37-1 at 31 (NikkelDep. 313:20-25). Furthermore, Ms. Nikkel testified that she knew if she did not sign the settlement agreement, Wakefield would secure a judgment in the state court action. Docket No. 36-4 at 38 (Nikkel Dep. 139:14-16).
On May 14, 2010, Ms. Nikkel wrote a check for $300 pursuant to the terms of the settlement agreement, Docket No. 36-12; Docket No. 36-4 at 42 (Nikkel ...
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