The Supreme Court of Alaska has affirmed rulings in three separate cases against the same defendant that made similar allegations, determining that the defendant, a debt buyer, violated state law because Alaska does not recognize “account stated” causes of action.
The background: Three different plaintiffs fell behind on retail‑credit‑card bills that were charged off and later sold in bulk to the defendant. The defendant filed collection lawsuits against each plaintiff in Alaska state court to collect balances of between $2,200 and $2,600.
- After being served, the plaintiffs filed counterclaims, alleging the defendant violated Alaska’s Unfair Trade Practices and Consumer Protection Act (UTPA). They argued the defendant filed suits without admissible evidence showing it owned the debts, tried to collect interest and fees not authorized by the original card agreements, and relied on an “account stated” theory that Alaskan courts had never adopted.
- Three different state court judges ruled for the consumers, finding at least one UTPA violation in each case, and awarded statutory damages and attorney’s fees to the consumers.
The ruling: Writing for a unanimous court, Chief Justice Peter J. Maassen said the “account stated” doctrine, which is commonly invoked by debt buyers elsewhere, was both inadequately pled and “an unconventional cause of action [that] cannot easily be teased out of the spare assertions” in the complaints.
- The justices agreed that the defendant’s business‑records custodians lacked personal knowledge of the original creditors’ record‑keeping practices. Without trustworthy records, the defendant could not prove either ownership of the accounts or the amounts owed.
- Because the collection suits were filed without competent proof, the Court upheld findings that the defendant’s conduct was unfair and deceptive under the UTPA. In one case, the trial judge called the campaign a “long, drawn‑out crusade” that was “not only disproportionate and unfair, but deceptive.”
- Statutory damages between $500 and $1,000 were affirmed for each plaintiff, and full or substantial attorney‑fee awards were upheld, with emands to correct small errors or provide clearer reasoning.
