A District Court judge in Washington has granted a plaintiff’s motion for partial summary judgment while denying motions for summary judgment filed by the defendants in a Fair Debt Collection Practices Act case, ruling that an informal phone call between the plaintiff and a representative of the defendant was enough to notify the defendant of the plaintiff’s intent to appear in an underlying collection lawsuit, which should have triggered a motion for default judgment that was never sent to the plaintiff.
A copy of the ruling in the case of Sims v. Midland Funding and Gordon Aylworth & Tami can be accessed by clicking here.
The defendant filed a lawsuit against the plaintiff, seeking to recover an unpaid credit card debt. The plaintiff contacted the law firm and the parties agreed to a payment plan and the defendant sent the plaintiff a stipulated judgment form to sign. The law firm sent another letter when the judgment form was not returned, notifying the plaintiff that it had not received the form or any of the payments that were supposed to be made. Three weeks later, the defendants filed a motion for default judgment in the state court action. A default judgment was entered against the plaintiff and the defendants sought to garnish the plaintiff’s wages.
The plaintiff filed suit, alleging the defendants violated Sections 1692e and 1692f of the FDCPA and Washington’s Consumer Protection Act.
State law in Washington requires a party be notified of a potential default judgment if the party has appeared in the action. This case hinged on whether the conversation between the plaintiff and the law firm, where the payment plan was arranged, constituted an intent to appear in the underlying collection lawsuit. Judge Thomas Zilly of the District Court for the Western District of Washington, determined it did. “The transcript of the call makes clear that Plaintiff manifested an intent to settle the pending lawsuit, as Plaintiff stated that he was seeking ‘to pay off this debt’ and ‘to resolve or at least move forward with this summons that [he] received,’ ” Judge Zilly wrote.
After determining that the defendants failed to notify the plaintiff of the default judgment motion, Judge Zilly then turned to whether the lack of notification amounted to a violation of the FDCPA. He didn’t have to look very far. Looking at precedent from two other cases in which a failure to serve a copy of a motion for default judgment constituted a violation of the FDCPA, Judge Zilly followed suit. ‘
Judge Zilly ordered both sides to engage in mediation to resolve the amount of damages and any other issues left unresolved.
