Spaulding v. Tri-State Adjustments, Inc.
| Decision Date | 03 December 2019 |
| Docket Number | 18-cv-377-wmc,18-cv-826-wmc |
| Parties | JULIE SPAULDING, Plaintiff, v. TRI-STATE ADJUSTMENTS, INC., Defendant. BRYANT SPAULDING, Plaintiff, v. TRI-STATE ADJUSTMENTS, INC., Defendant. |
| Court | U.S. District Court — Western District of Wisconsin |
In these consolidated cases, plaintiffs Julie Spaulding and her husband Bryant Spaulding each allege violations of the Fair Debt Collection Practices Act ("FDCPA"), 15 U.S.C. § 1692 et seq., by defendant Tri-State Adjustments, Inc. In turn, Tri-State counterclaimed, alleging abuse of process by both Julie and Bryant. Plaintiffs have moved for summary judgment on their FDCPA claims, as well as on defendant's counterclaim. Defendant has also moved for partial summary judgment as to one of plaintiffs' FDCPA claims. For the reasons set forth below, the court will deny plaintiffs' motion for summary judgment as to their FDCPA claims, grant plaintiffs' motion for summary judgment as to defendant's counterclaim, and deny defendant's motion for partial summary judgment.
Defendant Tri-State Adjustments, Inc. ("Tri-State") is a debt collection company. Between 2015 and 2017, Radiology Associates of Wausau SC ("Radiology Associates") referred three debt accounts purportedly owed by plaintiffs Julie and Bryant Spaulding to Tri-State for collection.2 The parties dispute whether Tri-State sent the Spauldings a written notice for all three debts, which will be addressed in greater detail below. However, Tri-State spoke with Bryant Spaulding on the phone on October 9, 2017, in an attempt to collect on the Spauldings' debts. During that call, Bryant advised that his wife, Julie, generally takes care of the bills, and she would call Tri-State back later. In fact, Julie did not call Tri-State back.
A few months later, on February 22, 2018, Radiology Associates sent a letter to the Spauldings notifying them of their debts and giving them thirty days to dispute those debts. After the Spauldings failed to dispute the debts as instructed, Radiology Associates filed a small claims complaint against the Spauldings in Marathon County Circuit Court on April 23, 2018. The Spauldings received a formal Summons and Complaint for this action, which noted that the "return date" for the case was set for May 23, 2018.
Between May 4, 2018, and May 17, 2018, Julie then had four follow-up phone conversations with various Tri-State representatives. Each of these phone conversations was recorded and transcribed; neither party disputes the accuracy of the transcripts.
In the first phone call on May 4, 2018, Tri-State called Julie after she had left a voicemail with Radiology Associates. The most relevant part of the conversation is recounted below:
(Addis Decl., Ex. A (dkt. #50-1) 3-9.) On May 8, 2018, Tri-State again called Julie in response to another message she had left with Radiology Associates. During that call, Julie informed Tri-State that she would have her attorney call Tri-State back.
On May 11, 2018, Julie next made a payment of $504.06 directly to Radiology Associates. Later that same date, Julie called Tri-State:
(Addis Decl., Ex. A (dkt. #50-1) 13-28.)
Julie again called Tri-State on May 17, 2018. During that conversation, she asked what the account balance was, and Tri-State again informed her that it was $1,002.11. The Spauldings have never disputed with Tri-State or Radiology Associates that the principal amount of the debts owed plus interest totaled $883.61.
OPINIONSummary judgment shall be granted if "the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law."Fed. R. Civ. P. 56(a). In evaluating the record, the court must construe all evidence in the light most favorable to the party opposing the summary judgment motion. See Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 601 (1986).
In this lawsuit, plaintiffs have alleged that Tri-State violated numerous sections of the FDCPA. Specifically, plaintiffs claim that Tri-State: failed to send notices as required under 15 U.S.C. § 1692g; used unfair and unconscionable means to collect a debt in violation of § 1692f and § 1692f(1); and made false and misleading statements in violation of § 1692e and its subsections. Plaintiffs have moved for summary judgment on all of three of these claims, which defendant opposes, while defendant has cross-moved for summary judgment as to the notice claim under § 1692g only.
As an initial matter, both parties agree that the Spauldings are "consumers" and Tri-State is a "debt collector" within the meaning of the FDCPA. See § 1692a(3), (6). Accordingly, the court will take up the substance of the parties' motions as to each of plaintiffs three claims in order, then turn to defendant's alleged bona fide error defense and abuse of process counterclaim, on which plaintiffs have also moved for summary judgment.
The FDCPA requires debt collectors to send written notices to consumers in connection with attempts to collect on a debt. Specifically, § 1692g provides in relevant part that "[w]ithin five days after the initial communication with a consumer in connectionwith the collection of any debt, a debt collector shall, unless the following information is contained in the initial communication . . . send the consumer a written notice." The notice must contain, inter alia, the amount of the debt owed and a statement that the consumer may contest the debt within thirty days of receiving the notice. § 1692g(a). It therefore follows that, even if a debt collector had previously sent the debtor a validation letter, when a new debt arises a debt collector must send a new validation letter prior to or within five days of any initial communication regarding that new debt.
Here, Radiology Associates referred three debts owed by the Spauldings to Tri-State for collection; the first debt amounted to $271.93, the second $57.85, and the third $504.06. Plaintiffs do not appear to dispute that the Spauldings received validation notices for the first two debts, arguing only that a validation notice was not properly sent for the $504.06 debt. Specifically, plaintiffs argue that Tri-State attempted to collect on the $504.06 debt during the October 9, 2017, phone call with Bryant yet did not send a written debt validation letter before or within five days of the call.
Defendant asserts that it sent a debt validation letter for the $504.06 debt on August 22, 2017 -- well before the October 9 phone call. To support its assertion, defendant points to a Tri-State record entitled "Debtor Profile -- Notices Information," which includes the following chart:
CODE ACCOUNT NUMBER LOC DATE STATUS CAUSE PER AMOUNT CK1 F 06/24/2015 Sent (D) NB $271.93 CK1 F 11/25/2015 Sent (D) NB $57.85 #1ALL F 07/25/2016 Sent (D) NB $419.70 T33 F 07/25/2016 Sent (D) User MEER $344.91 T33 F 08/30/2016 Sent (D) User CHTO $766.30 CK1 F 08/22/2017 Sent (D) NB $504.06 T33 F 11/01/2017 Sent (D) User RAWI $1,316.79 ST1 F 11/21/2017 Sent (D) User KK $874.70 WSUIT F 12/15/2017 Sent (I) User LA $877.44 PR1 F 01/11/2018 Sent (D) User LA $880.53
(Helgeson Dep., Ex. 6 (dkt. #41-1) (highlight added).) 3 Rhonda Helgeson, the president and owner of Tri-State, testified that the code CK1 refers to Tri-State's standard "validation of debt notice." (Helgeson Dep. (dkt. #41) 9.) She further testified that the "date"...
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