Sprinkle v. SBC LTD

Full title: JOE and LAURA SPRINKLE, Plaintiffs, v. SB C LTD, a/k/a Skagit Bonded…

Court: United States District Court, W.D. Washington

Date published: Sep 18, 2006

472 F. Supp. 2d 1235 (W.D. Wash. 2006)

Opinion

Case No. CV05-1898-JPD.

September 18, 2006.

James A. Sturdevant, Bellingham, WA, for Plaintiffs.

Jeffrey I. Hasson, Portland, OR, for Defendants.

ORDER DENYING DEFENDANTS' MOTION FOR SUMMARY JUDGMENT AND GRANTING PLAINTIFFS' MOTION FOR SUMMARY JUDGMENT

DONOHUE, United States Magistrate Judge.

I. INTRODUCTION AND SUMMARY CONCLUSION

This is a civil action brought under the Fair Debt Collection Practices Act (FDCPA), 15 U.S.C. § 1692- 1692o, the Servicemembers Civil Relief Act (SCRA), 50 U.S.C. app. §§ 501-93, the Washington Consumer Protection Act (WCPA), R.C.W. § 19.86 et seq., and the Washington Collection Agency Act (WCAA), R.C.W. § 19.16 et seq. Plaintiffs Joseph and Laura Sprinkle are proceeding against SB C, Ltd., a Washington limited liability company doing business as Skagit Bonded Collectors (SB C), and Joseph Cammock, an attorney for SB C. Plaintiffs allege that defendants violated the FDCPA, the SCRA, the WCPA, and the WCAA when they garnished Mr. Sprinkle's military pay while he was on active military duty. The present matter comes before the Court upon the parties' cross motions for summary judgment. After careful consideration of the motions, supporting materials, governing authorities and balance of the record, the Court ORDERS that the plaintiffs' motion for summary judgment be GRANTED (Dkt. No. 28), and that the defendants' motion for summary judgment be DENIED (Dkt. No. 21).

II. FACTS AND PROCEDURAL HISTORY

The facts of this case are largely undisputed. Plaintiffs Joseph and Laura Sprinkle, a married couple, resided in Blaine, Washington, at all times material to this suit. Dkt. No. 28-5. Mr. Sprinkle is a member of the United States Army and a former National Guardsman. Id. Mrs. Sprinkle cares for the couple's three children and does not work outside the home. Dkt. No. 23-8 at ¶¶ 2-3. In November 2003, Mr. Sprinkle was called to active duty and deployed to Riyadh, Saudi Arabia, in February 2004. Id. ¶ 2. The record reflects that Mr. Sprinkle's active duty term ended on April 20, 2005. Dkt. No. 23-9.

On October 5, 2000, defendant Craig Cammock, a collection attorney acting on behalf of SB C, filed an action in Whatcom County District Court to recover several debts incurred by plaintiffs. Dkt. No. 23 at ¶¶ 4-5, Ex. No. 101. Plaintiffs were served with the complaint but failed to appear, and on December 1, 2000, the state court granted a default judgment. Dkt. No. 23-1 at ¶ 7, Ex. No. 102.

On November 4, 2004, Mr. Cammock filed a writ of garnishment in the Whatcom County District Court against plaintiffs' financial institution, the Industrial Credit Union of Whatcom County ("Industrial"). Dkt. No. 23-1 at ¶ 8, Ex. No. 103. The writ of garnishment forms were served on Industrial by certified mail on November 16, 2004. Dkt. No. 23-1 at ¶ 10. These documents were also served on plaintiffs by certified mail and signed for by Mrs. Sprinkle. Id. ¶ 11, Ex. No. 104.

Upon receiving service of the writ of garnishment, Mrs. Sprinkle contacted SB C to request that the garnishment be released. Dkt. No. 23 at ¶ 12. Mr. Sprinkle was on active military duty in Saudi Arabia at this time and only military pay was included in the Industrial account. Dkt. No. 1 at ¶¶ 6-7. Mrs. Sprinkle communicated this information to SB C, but it refused to release the garnishment. Id. ¶¶ 12-13. Later that day, plaintiffs' attorney, James Sturdevant, called SB C and requested that it release the garnishment because it consisted of military pay. SB C refused to do so. On November 18, 2004, SB C received the answer from Industrial, indicating that the amount sought by the writ, $906.20, was being withheld. Dkt. No. 23-1 at ¶ 15.

On November 22, 2004, plaintiffs' counsel contacted Mr. Cammock and requested that SB C release the garnishment. SB C again refused to do so. Dkt. No. 23-1 at ¶ 15. On November 23, 2004, plaintiff filed a judgment and order to pay amount held by the garnishee, Industrial. Id. ¶ 16. The next day, the district court entered the order and directed the garnishee to pay. Id. ¶ 17, Ex. No. 106. On December 6, 2004, Industrial paid the full amount requested, $906.20. Id. ¶ 19. On December 14, 2004, plaintiffs' counsel filed a formal appearance in the state court proceeding. Dkt. No. 28 at 6, ¶¶ 5-6. SB C filed a satisfaction of judgment on January 17, 2005. Dkt. No. 32-1 at ¶ 21.

On April 13, 2005, plaintiffs filed a motion in Whatcom County District Court to disgorge the funds. Dkt. No. 23-1 at ¶ 22, Ex. No. 107. Plaintiffs insisted that the garnishment was void because the garnished funds consisted of Mr. Sprinkle's military pay and that SB C had failed to file an affidavit in support of the garnishment that showed Mr. Sprinkle was not in the United States Armed Forces, as required by the SCRA ("SCRA Affidavit"), 50 U.S.C. app. § 521(b). Dkt. No. 23-8, at 3, ¶ 4. Additionally, plaintiffs argued that because defendants failed to wait the statutory period for the plaintiffs to respond to the garnishment notice, see R.C.W. § 6.27.160, they were denied the opportunity to claim an exemption or controvert the garnishment. Id. ¶ 5. On May 20, 2005, the district court vacated the judgment of garnishment but not the garnishment writ. Dkt. No. 28-2 at ¶ 5. The court did not address the SCRA Affidavit issue. The record is silent on the reason why; however, it appears that when the district court heard the matter, Mr. Sprinkle was no longer a servicemember. See Dkt. No. 23-9 (noting Mr. Sprinkle's active duty was terminated in April 2005).

On July 6, 2005, plaintiffs filed a claim of exemption in Whatcom County District Court. Dkt. No. 23-1 at ¶ 27, Ex. No. 110; Dkt. No. 23-11. On August 5, 2005, after a hearing, the court denied the claim of exemption and reinstated the garnishment. Id. ¶ 26, Ex. No. 111. Plaintiffs initially appealed the state court's order denying the claim of exemption, but later stipulated to a dismissal with prejudice. Dkt. No. 23-1 at ¶¶ 27-28, Ex. No. 112.

On November 15, 2005, plaintiffs filed this action. Dkt. No. 1. Defendants' answer asserts several affirmative defenses, including issue and claims preclusion, statute of limitations, and bona fide error. Dkt. No. 21.

Plaintiffs have moved for summary judgment on the issue of liability. Dkt. No. 28-1. They argue that defendants violated the FDCPA by failing to file a SCRA Affidavit at any time during these proceedings. They also argue that defendants failed to properly notify them of the judgment and failed to observe the statutory waiting period to allow them to claim an exemption and otherwise respond to the notice of garnishment, both of which they assert violates the WCAA, WCPA, and FDCPA. Id. Plaintiffs' also move to strike certain portions of Mr. Paciotti's declaration in support of the defendants' motion for summary judgment. Dkt. No. 31 at 6.

In their cross motion for summary judgment, defendants argue that they were not obligated to serve defendants with a copy of the writ and that the issues sought to be litigated before this Court are barred by the doctrine of collateral estoppel. In the alternative, they argue that neither defendant violated any of the statutes at issue. Dkt. No. 21. Defendants do not contend that a SCRA Affidavit was ever filed.

III. JURISDICTION

The Court has jurisdiction over this matter pursuant to 15 U.S.C. § 1692k(d) and 28 U.S.C. § 1331 because it constitutes a federal question arising under the FDCPA. Supplemental jurisdiction over plaintiffs' pendant state law claims is proper under 28 U.S.C. § 1367(a). Pursuant to 28 U.S.C. § 636(c), the parties have consented to having this matter heard by the undersigned Magistrate Judge.

IV. SUMMARY JUDGMENT STANDARD

"Claims lacking merit may be dealt with through summary judgment" under Rule 56 of the Federal Rules of Civil Procedure. Swierkiewicz v. Sorema N.A., 534 U.S. 506, 514 (2002). Summary judgment "shall be entered forthwith if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." Fed.R.Civ.P. 56(c). An issue of fact is "genuine" if it constitutes evidence with which "a reasonable jury could return a verdict for the nonmoving party." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). That genuine issue of fact is "material" if it "might effect the outcome of the suit under the governing law." Id.

When applying these standards, the Court must view the evidence and draw reasonable inferences therefrom in the light most favorable to the nonmoving party. United States v. Johnson Controls, Inc., 457 F.3d 1009, 1013 (9th Cir. 2006). The moving party can carry its initial burden by producing affirmative evidence that negates an essential element of the nonmovant's case, or by establishing that the nonmovant lacks the quantum of evidence needed to satisfy its burden of persuasion at trial. Nissan Fire Marine Ins. Co., Ltd. v. Fritz Cos., Inc., 210 F.3d 1099, 1102 (9th Cir. 2000).

Once this has occurred, the procedural burden shifts to the party opposing summary judgment, who must go beyond the pleadings and affirmatively establish a genuine issue on the merits of the case. Fed.R.Civ.P. 56(e). The nonmovant must do more than simply deny the veracity of everything offered or show a mere "metaphysical doubt as to the material facts." Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 586 (1986). The mere existence of a scintilla of evidence is likewise insufficient to create a genuine factual dispute. Anderson, 477 U.S. at 252. To avoid summary judgment, the nonmoving party must, in the words of the Rule, "set forth specific facts showing that there is a genuine issue for trial." Fed.R.Civ.P. 56(e). The nonmoving party's failure of proof "renders all other facts immaterial," creating no genuine issue of fact and thereby entitling the moving party to the summary judgment it sought. Celotex Corp. v. Catrett, 477 U.S. 317, 327 (1986).

V. ANALYSIS

A. The Preclusion Doctrines Do Not Require Dismissal

"Federal courts are required to give full faith and credit to state court judgments under 28 U.S.C. § 1738." Manufactured Home Communities, Inc. v. City of San Jose, 420 F.3d 1022, 1031 (9th Cir. 2005) (citing San Remo Hotel, L.P. v. City County of San Francisco, 545 U.S. 323, (2005)). To determine the preclusive effect of a state court judgment, federal courts must look to the law of the forum state. Id. Washington law recognizes the affirmative defenses of res judicata and collateral estoppel, otherwise known as claim preclusion and issue preclusion. Rains v. State, 100 Wn.2d 660, 663-64, 674 P.2d 165, 168-69 (1983). While claim preclusion and issue preclusion compliment each other, see Restatement (Second) of Judgments, Introductory Note 249 (1982), there is a distinction between the two doctrines. Claim preclusion "bars all grounds for recovery which could have been asserted, whether they were or not, in a prior suit between the same parties on the same cause of action." Clark v. Bear Stearns Co., 966 F.2d 1318, 1320 (9th Cir. 1992). Issue preclusion, on the other hand, bars only those issues actually raised and finally adjudicated in previous litigation between the same parties. Id.; see also Dodd v. Hood River County, 136 F.3d 1219, 1245 (9th Cir. 1998).

Although defendants' motion for summary judgment addresses only the latter doctrine, both defenses were affirmatively pleaded in answer to the plaintiffs' complaint. Defendants argue that the exemption and garnishment procedures issues were fully litigated and finally decided in Whatcom County District Court and as a result, plaintiffs are precluded from relitigating the same in federal court. Dkt. No. 21-1 at 8-9. Plaintiffs disagree, contending that defendants' failure to file a SCRA Affidavit (thus violating FDCPA, WCAA and WCPA), failure to serve plaintiffs with a copy of the judgment and order to pay the amount held by the garnishee, and failure to wait the statutory period under R.C.W. § 6.27.160 for the plaintiffs to respond to the garnishment notice are all claims that can be heard by this Court. For the following reasons, the Court finds that the first argument is not precluded by res judicata or collateral estoppel, but that the second and third issues are.¹

1 Plaintiffs' second and third arguments are also precluded by the Rooker-Feldman doctrine to the extent they seek "appellate" review in federal court of a state court's judgment. See Rooker v. Fidelity Trust Co., 263 U.S. 413 (1923), and District of Columbia Court of Appeals v. Feldman, 460 U.S. 462 (1983) (barring federal court plaintiffs from receiving appellate review of a state court decision); see also Manufactured Home Communities, Inc. v. City of San Jose, 420 F.3d 1022, 1029 (9th Cir. 2005) (" Rooker-Feldman doctrine stands for the proposition that a federal district court does not have subject matter jurisdiction to hear a direct appeal from the final judgment of a state court.") (internal quotation omitted). The same cannot be said for the plaintiffs' first argument, for when a debtor brings action under the FDCPA, the action does not complain of the state court judgment itself. Instead, it challenges the debt collection practices that led to the judgment. Thus it follows that the debtor may prevail without inviting review of the state court judgment. See Todd v. Weltman, Weinberg Reis Co., 434 F.3d 432, 435-36 (6th Cir. 2006); Sanftle v. Landau, 390 F. Supp. 2d 463, 468-69 (D. Md. 2005).

1. Claim Preclusion

Claim preclusion "treats a judgment, once rendered, as the full measure of relief to be accorded between the same parties on the same claim or cause of action." McClain v. Apodaca, 793 F.2d 1031, 1033 (9th Cir. 1986). As such, it bars all grounds of recovery which were or could have been asserted in the previous action. Loveridge v. Fred Meyer, Inc., 125 Wn.2d 759, 763, 887 P.2d 898, 900 (1995). Under Washington law, claim preclusion "occurs when a prior judgment has a concurrence of identity in four respects with a subsequent action. There must be identity of (1) subject matter; (2) cause of action; (3) persons and parties; and (4) the quality of the persons for or against whom the claim is made." Rains, 100 Wn.2d at 663, 674 P.2d at 168.

In the present case, there is little dispute that the parties and general subject matter are the same, apart from the fact that the garnishee, Industrial, is no longer a party and the attorney for SB C is a named defendant. That is, Joseph and Laura Sprinkle are involved in litigation against SB C regarding the validity of the garnishment action instituted by SB C in state court. The critical issue is whether plaintiffs' claims in this case are identical to those brought in the state court action, which concluded with findings of nonexempt status as to former defendants Joseph and Laura Sprinkle and a judgment against garnishee defendant Industrial, upon which a collection was made.²

2 The plaintiffs have now abandoned the claim of exemption from garnishment. See Dkt. No. 31 at 2 ¶ 2. Had they not done so, the Court would find this claim precluded under both doctrines, not to mention the Rooker-Feldman doctrine. See Dkt. No. 23-1 at ¶ 26, Ex. No. 111 (ordering denying claims of exemption after hearing on the matter).

Two claims may be identical for claim preclusion purposes even where the second case contains additional facts or legal theories not asserted in the first. Costantini v. Trans World Airlines, 681 F.2d 1199, 1201 (9th Cir. 1982); see also Clark, 966 F.2d at 1320 (noting that claim preclusion "bars all grounds for recovery which could have been asserted . . . in a prior suit between the same parties on the same cause of action.") (emphasis added). The Ninth Circuit addresses four factors to determine whether two given claims are identical, the fourth of which it has termed "the most important," qualified by the reminder that "[n]o single criterion can decide every res judicata question":

(1) whether rights or interests established in the prior judgment would be destroyed or impaired by prosecution of the second action; (2) whether substantially the same evidence is presented in the two actions; (3) whether the two suits involve infringement of the same right; and (4) whether the two suits arise out of the same transactional nucleus of facts.

Costantini, 681 F.2d at 1201-02 n. 7 (quotation omitted); see also Abramson v. Univ. of Hawaii, 594 F.2d 202, 206 (9th Cir. 1979) (cautioning that identity of causes of action "cannot be determined precisely by mechanistic application of a simple test"); Feminist Women's Health Ctr. v. Codispoti, 63 F.3d 863, 867, 868 (9th Cir. 1995) ("The Washington Supreme Court has acknowledged that there is no simple test for determining whether causes of action are sufficiently identical. . . . The relevant factors are closely related and necessarily overlap.").

The Court finds that the present garnishment procedure claims brought by the plaintiffs are not identical to the claims disposed of by the Whatcom County District Court. Cf. Western Radio Servs. Co. v. Glickman, 123 F.3d 1189, 1192 (9th Cir. 1997) (res judicata applies whenever there is an identity of claims, a final judgment on the merits of those claims, and an identity or privity between parties); Americana Fabrics, Inc. v. L L Textiles, Inc., 754 F.2d 1524, 1529 (9th Cir. 1985) (same). The state court proceeding involved questions of whether military pay was per se exempt from garnishment, as well as whether there was proper service. The court did not consider whether a SCRA Affidavit was a necessary component of the action against the Sprinkles and whether, in its absence, SB C committed a violation of the Fair Debt Collection Practices Act. The plaintiffs' FDCPA arguments were neither raised nor decided by the Whatcom County District Court. The present lawsuit challenges debt collection practices that led to the judgment, not the judgment itself.³

3 According to the complaint, part of the plaintiffs' damages consists of the funds which were garnished. Dkt. No. 1 at 8, ¶ B. Disgorgement of the actual funds garnished would be precluded under the Court's analysis.

The present federal question lawsuit focuses on adjudicative facts completely unaddressed by that court — i.e., claims asserting infringement of different federal and state law rights. In sum, the plaintiffs' FDCPA, WCAA and WCPA arguments (as they relate to the SCRA Affidavit) simply do not involve "a second assertion of the same claim or cause of action." Rains, 100 Wn.2d at 665, 674 P.2d at 169; see also generally RICHARD D. FREER WENDY C. PERDUE, CIVIL PROCEDURE 651 (4th ed. 2005) ("Claim preclusion stands for the proposition that a claimant may only sue on a single claim or `cause of action' once.") (emphasis added). Accordingly, plaintiffs' FDCPA, WCAA and WCPA claims are not precluded by the doctrine of res judicata.

2. Issue Preclusion

Collateral estoppel, or issue preclusion, "prevents a second litigation of issues between the parties, even though a different claim or cause of action is asserted." Christensen v. Grant County Hosp. Dist 1, 152 Wn.2d 299, 306, 96 P.3d 957, 961 (2004) (quoting Rains, 100 Wn.2d at 665, 674 P.2d at 169). It applies when an issue of ultimate fact has been determined by a valid and final judgment. State v. Tili, 148 Wn.2d 350, 360, 60 P.3d 1192, 1197 (2003). Under Washington law, the party asserting the doctrine bears the burden of proving the following: (1) the issue decided in the prior adjudication is identical with the one presented in the current action; (2) the prior adjudication concluded in a final judgment on the merits; (3) the party against whom the plea is asserted was a party or in privity with a party to the prior adjudication; and (4) the application of the doctrine will not work an injustice on the party against whom the doctrine applies. Accord Spahi Southcenter Joint Venture v. Nat'l Democratic Policy Comm., 113 Wn.2d 413, 418, 780 P.2d 1282, 1284 (1989). The "focus [is] on whether the parties to the earlier proceeding had a full and fair hearing on the issue." Hadley v. Maxwell, 144 Wn.2d 306, 311, 27 P.3d 600, 602 (2001).

For reasons similar to those stated above, the doctrine of issue preclusion — as it relates to plaintiffs' argument that failure to file a SCRA Affidavit violates the FDCPA — is likewise unavailing. Having reviewed Judge Matthew S. Elich's November 30, 2004 Judgement and Order to pay the amount held by garnishee, Judge David M. Grant's May 20, 2005 Judgment vacating the November 30 judgment but not the garnishment writ, and Judge Grant's August 5, 2005 Order Denying Defendants' Claim of Exemption, it is clear to this Court that the only issues adjudicated were the judgment of garnishment against Industrial, the garnishee, and the claim of exemption filed by Mr. and Mrs. Sprinkle. See Brown v. Mason, 2006 WL 2167080, *2 (E.D. Wash. 2006) (performing similar review of state court orders to determine precluded issues). The issues being litigated today consist of both law and facts distinct from the issues decided in the prior state court adjudication. See Tili, 60 P.3d at 1197. For example, the plaintiffs' cause of action under the FDCPA stems not from the putative exempt status of the nature of the funds in the account — the arguments made to and decided by the Whatcom County District Court — but rather, from allegations that defendants failed to file the SCRA Affidavit and the effect of that failure. This issue was entirely unaddressed by the state court. Cf. Christensen, 152 Wn.2d at 306, 674 P.2d at 961 ("[C]ollateral estoppel is intended to prevent retrial of one or more of the crucial issues or determinative facts determined in previous litigation.") (emphasis added).

The ultimate issue of fact in the present matter is not the judgment itself, but rather, the debt collection practices that led to that judgment. See supra, n. 3. Thus, no identity of issues exists. See Rains, 100 Wn.2d at 665, 674 P.2d at 169. Furthermore, Defendants have not ushered any facts supporting the contention that the garnishment procedures and unlawful collection arguments made under the FDCPA, WCAA and WCPA were finally adjudicated by the state court.

B. State Garnishment Procedures

Garnishment is a statutory remedy which contemplates the existence of three distinct parties, each performing a distinct role in a prescribed series of events: a writ of garnishment directs a third person, the garnishee, not to deliver money or property of judgment debtor, but to appear and answer the judgment creditor's writ of garnishment. See generally R.C.W. §§ 6.27.005, .060, .070. R.C.W. § 6.27 outlines the procedures for issuance and enforcement of a writ of garnishment.

A creditor who chooses to avail itself of the garnishment process must utilize the methods of enforcement specifically provided by applicable state statutes. Boundary Dam Constructors v. Lawco Contractors, Inc., 9 Wn.App. 21, 25, 510 P.2d 1176, 1179 (1973). In Washington, a creditor seeking a writ of garnishment must submit an affidavit stating: (1) that the creditor has an unsatisfied judgment in the court in which it seeks the writ; (2) the amount alleged due under the judgment; (3) that the creditor believes the garnishee is indebted to the debtor in amounts exceeding those exempted from garnishment by state or federal law, and (4) whether the garnishee is the debtor's employer. R.C.W. § 6.27.060. If the application complies with the statutory requirements, the clerk must docket the case and issue a writ of garnishment commanding the garnishee to answer the writ within twenty days. Id. § 6.27.070. In its answer, the garnishee must provide information about the funds or property of the debtor in its control and the amount it owed the debtor at the time of service of the writ. Id. § 6.27.190. Thereafter, either the creditor or defendant debtor may controvert the garnishee's answer by filing an affidavit, to which the garnishee may respond by affidavit. Id. §§ 6.27.210, .220. Upon the expiration of the time for filing the garnishee's response, any party may note the matter for a hearing to determine if there is an issue for trial. Id. § 6.27.220. If the garnishee was indebted to the debtor in any amount at the time of service of the writ of garnishment, the creditor is entitled to judgment against the garnishee for the amount it owes to the debtor. Id. § 6.27.250(1)(a).

1. Defendants Violated the Servicemembers Civil Relief Act

The Servicemembers Civil Relief Act (SCRA), formerly the Soldiers and Sailors Civil Relief Act of 1940,⁴ "was created to allow for the suspension of civil actions for those persons in the military in order to allow military personnel to devote their entire energy to the defense of the nation." Bernhardt v. Alden Café, 864 A.2d 421, 425 (N.J.Super. App. Div. 2005) (internal quotation omitted); 50 U.S.C. app. § 502. The Act has long been liberally construed to protect those men and women who drop their own affairs to take up the burdens of their country. Boone v. Lightner, 319 U.S. 561, 574 (1943); Conroy v. Aniskoff, 507 U.S. 511, 516 n. 9 (1993). It applies in times of peace and war, protecting the career officer as well as the temporary soldier. Omega Indus., Inc. v. Raffaele, 894 F. Supp. 1425, 1434 (D. Nev. 1995). Both servicemembers and their dependents qualify for protection under the SCRA. 50 U.S.C. app. § 511(4).

4 The Soldiers and Sailors Civil Relief Act of 1940 was substantially amended in 1991 and renamed the Servicemembers Civil Relief Act by the 2003 amendments. See Pub.L. No. 108-189, 117 Stat. 2835 (2003). The 2003 amendments provided that the SCRA applies in any case that is not final before December 19, 2003, the date of reenactment. Id. § 3, Stat. at 2866.

Among the expansive protections provided by the SCRA are §§ 522 and 524, which provide for a stay of proceedings in certain circumstances, and § 521(b)(1), which requires the plaintiff to file an affidavit "stating whether or not the defendant is in military service and showing necessary facts to support the affidavit." 50 U.S.C. app. § 521(b)(1). Such an affidavit is a prerequisite to the entry of judgment for the plaintiff creditor, save in one narrow instance. Id. "A servicemember who applies for a stay under [§ 522] and is unsuccessful may not seek the protections afforded by . . . section 521." Id. § 522(e).

The defendants insist that SCRA § 521 is inapplicable because judgment was taken against the garnishee, Industrial, not against Mr. and Mrs. Sprinkle, the state court defendants. Dkt. No. 37-1 at 9, ¶ 2. The Court disagrees that this renders § 521 inapplicable for two reasons. First, § 521(b)(1) requires a SCRA Affidavit to be filed "before entering judgment for the plaintiff" — here, SB C in Whatcom County District Court — not before entering judgment against a defendant. 50 U.S.C. app. § 521(b)(1) (emphasis added). Because there is no dispute that the Whatcom County District Court entered a judgment for SB C, in its November 23, 2004 order, the SCRA Affidavit requirement is triggered as a matter of law. See Dkt. No. 23-7 at 2 (awarding judgment for plaintiff against defendant garnishee in the amount of $906.20). Second, SB C also recovered a judgment against the Sprinkles by the same judgment and order against the garnishee, for its recoverable costs and accrued interest. See Dkt. No. 23-7 at 2; see also 50 U.S.C. app. § 511(9) (defining "judgment" as "any judgment decree, order, or ruling, final or temporary"). In sum, because the Whatcom County District Court both entered judgment for the plaintiff SB C and took judgment directly against state court defendants Mr. and Mrs. Sprinkle, a SCRA Affidavit analysis was required.

The parties agree that no SCRA § 521(b)(1) affidavit was ever filed by defendants SB C and Mr. Cammock. In addition, there is no dispute that Mr. Sprinkle's entire bank account was garnished while he was deployed oversees. Dkt. No. 23-8 at ¶¶ 2-3; Dkt. No. 28-5 at ¶¶ 3-4 (deposition of Joe Sprinkle) ("I was in Saudi Arabia at the time. I had no knowledge of the garnishment until the day the garnishment took effect."). Next, the defendants concede that an appearance was not made by plaintiffs until after judgment was entered by the Whatcom County District Court, triggering the applicability of § 521. See Dkt. No. 37-1 at 21 n. 5; 50 U.S.C. app. § 521(a) ("This section applies to any civil action or proceeding in which the defendant does not make an appearance."). Finally, the record is devoid of evidence that plaintiffs requested a stay of the garnishment proceedings prior to entry of the judgment, making the narrow exception of § 522(e) inapplicable and the SCRA affidavit mandatory. See 50 U.S.C. app. § 522(e) (noting that a "servicemember who applies for a stay under this section and is unsuccessful may not seek the protections afforded by . . . section 521") (emphasis added).

Accordingly, the Court concludes that there are no genuine issues of material fact that the defendants violated the Servicemembers Civil Relief Act. The question remaining, then, is whether defendants' violation of SCRA § 521(b)(1) constitutes a violation of the Fair Debt Collection Practices Act. The Court finds that in this instance it does.

2. Defendants Violated the Fair Debt Collection Practices Act

"In enacting the FDCPA, Congress sought to counter the abusive, deceptive and unfair debt collection practices sometimes used by debt collectors against consumers." Turner v. Cook, 362 F.3d 1219, 1226 (9th Cir. 2004); 15 U.S.C. § 1692; see also S. Rep. No. 95-382, at 1 (1977), reprinted in 1977 U.S.C.C.A.N. 1695, 1696 (noting purpose of FDCPA is "to protect consumers from a host of unfair, harassing, and deceptive debt collection practices"); Wilson v. Quadramed Corp., 225 F.3d 350, 354 (3d Cir. 2000) (noting FDCPA was enacted "to eliminate abusive debt collection practices which contribute to the number of personal bankruptcies, to marital instability, to the loss of jobs, and to invasions of individual privacy . . . [and] to guarantee that consumers would receive adequate notice of their rights under the law"). Accordingly, the FDCPA broadly enumerates several practices considered contrary to these goals, and forbids debt collectors from taking such action.⁵ The Ninth Circuit recently confirmed that "the FDCPA a strict liability statute." Clark v. Capital Credit Collection Servs., Inc., 463 F.3d 1162, 2006 WL 2441705, *9 (9th Cir. Aug. 24, 2006).

5 Attorneys engaged in the collection of debts are debt collectors subject to liability under the FDCPA. Heintz v. Jenkins, 514 U.S. 291, 299 (1995).

The FDCPA states that "[a] debt collector may not use any false, deceptive, or misleading representation or means in connection with the collection of any debt," 15 U.S.C. § 1692e, and provides a non-exhaustive list of conduct that violates the FDCPA, including "[t]he threat to take any action that cannot legally be taken" and "[t]he use of any false representation or deceptive means to collect or attempt to collect any debt." 15 U.S.C. §§ 1692e(5), e(10). Whether a communication or other conduct violates the FDCPA is determined by analyzing it from the prospective of the "least sophisticated debtor" — that is, would the least sophisticated debtor construe the collector's conduct as a threat to take, or the actual taking of, unlawful action in connection with a debt? Clark, 460 F.3d at 1171, 2006 WL 2441705 at *5; see also Marchant v. U.S. Collections West, Inc., 12 F. Supp. 2d 1001, 1006 (D. Ariz. 1998) (noting that the "least sophisticated debtor" standard is a "low standard"). Because the FDCPA is a remedial statute, it must be construed liberally in favor of the debtor. Clark, 460 F.3d at 1175-76, 2006 WL 2441705 at *9 (citing Johnson v. Riddle, 305 F.3d 1107, 1117 (10th Cir. 2002)). The Act allows aggrieved parties to recover damages, attorney's fees and costs. 15 U.S.C. § 1692k(a).

Defendants have moved for summary adjudication stating that they were in full compliance with the FDCPA, while plaintiffs allege that defendants violated 15 U.S.C. § 1692e(5) and e(10). Although plaintiffs have abandoned their theory that garnishment of military pay constitutes a per se violation of the FDCPA, they contend that state garnishment procedures and federal debt collection practice standards are violated in this circumstance because SB C garnished the Sprinkles' bank account, knowing Mr. Sprinkle was in the military and deployed overseas, and did not file a SCRA Affidavit.

Although few reported cases exist on this topic, some suggest that 15 U.S.C. § 1692e(5) protection encompasses only a "threat" to take action that could not be legally taken, but the not the performance of the illegal act itself. See, e.g., Morgan v. Credit Adjustment Bd., Inc., 999 F. Supp. 803, 807 (E.D. Va. 1998) (collection notice violates § 1692e(5) only if "a debtor would reasonably believe that the notice threatens legal action and . . . the debt collector does not intend to take legal action"). This Court declines to adopt such a myopic definition of § 1692e(5) and instead concurs with those courts which have interpreted this section to include the taking of "action that cannot legally be taken." 15 U.S.C. § 1692e(5); see, e.g., Marchant v. U.S. Collections West, Inc., 12 F. Supp. 2d 1001, 1006 (D. Ariz. 1998). In Marchant, the court confronted the argument that § 1692e(5) is not violated when a debt collection officer performs, rather than merely threatens, unlawful activity under the FDCPA. See Marchant, 12 F. Supp. 2d at 1004 (involving a non-lawyer's unlawful completion of an application for a writ of garnishment). Rejecting this argument, the court found such conduct to constitute a "threat" within the meaning of the Act:

[T]he defendants argue that, even if such action was the unauthorized practice of law, it did not violate § 1692e(5) of the FDCPA. That section prohibits the use of a "threat" to take "action that cannot legally be taken." The defendants assert that they made no threat; they simply took action. I think that such argument elevates form over substance. To argue that a collection agency can avoid the strictures of the FDCPA simply by acting where it has no legal authority, as opposed to threatening to act where it has no legal authority, would defy the very purposes of the section.

Id. (granting summary judgment in the plaintiff's favor on this issue).

Similarly, other courts have recognized the futility of a statutory scheme that would provide more protection to debt collectors who violate the law than to those who merely threaten or pretend to do so. Cf. Poirier v. Alco Collections, Inc., 107 F.3d 347, 350-51 (5th Cir. 1997) (finding "no longer any dispute" that act of filing suit was the taking of an "action that cannot legally be taken," and thus a clear violation of § 1692e(5)). The opposite conclusion would be akin to attaching liability to one who merely threatens a tortious act while absolving one who unabashedly completes it. It is safe to say that such an interpretation veers sharply from the legislative purpose behind the FDCPA.

Strikingly similar to the circumstances in Marchant and Poirer, it is beyond dispute that when defendants continued to advance their garnishment action against plaintiffs and Industrial, knowing full well Mr. Sprinkles's status as a deployed servicemember yet declining to file the requisite SCRA affidavit, defendants took action that could not legally be taken under 15 U.S.C. § 1692e(5).

This Opinion does not mean to suggest that any procedural irregularity in connection with the collection of a debt is automatically converted into a violation of the FDCPA. However, what happened in this case is far more than a mere procedural irregularity.

In response to the increased demands placed on military personnel as a result of the wars in Iraq and Afghanistan, Congress substantially amended the SCRA in 2003. Section § 521(b)(1) was amended to require filing of a SCRA Affidavit before a judgment of any kind could be entered for that party, and § 521(b)(2) was amended to require the court to appoint counsel for any debtor that "appears [to be] in military service." See 50 U.S.C. app. § 521(b). Compare 50 U.S.C. app. § 521(b) (2006), with 50 U.S.C. app. § 520(1) (2002) (obviating the SCRA Affidavit if debtor could "secur[e] an order of court directing [the entry of judgment]," and allowing court, "on application" by a party, to make an appointment of counsel for the debtor) (emphasis added).

Mr. Sprinkle was a member of the military on active duty in the Mideast at all times pertinent, and is exactly the person Congress meant to protect. Mr. Sprinkle heard of the garnishment only after it occurred while he was on duty in Saudi Arabia. Congress certainly was aware of the impact that such actions could have on diverting the attention of service members, as the stated purpose of the SCRA was to "provide for, strengthen, and expedite the national defense through protection . . . to servicemembers of the United States to enable such persons to devote their entire energy to the defense needs of the Nation." 50 U.S.C. app. § 502(1). The defendants were made aware of Mr. Sprinkle's servicemember and deployed status, yet failed to take any ameliorative steps to ensure compliance with the law.

2. Washington Collection Agency Act, Washington Consumer Protection Act

Finally, plaintiffs contend that defendants' failure to file the requisite affidavit under SCRA § 521(b)(1) violates the Washington Collection Agency Act (WCAA) and Washington Consumer Protection Act (WCPA).

The WCAA requires licensing of debt collection agencies and places specific restrictions on debt collection practices. Watkins v. Peterson Enters, Inc., 57 F. Supp. 2d 1102, 1109 (E.D. Wash. 1999). Plaintiffs have brought a WCAA claim against defendant SB C under R.C.W. § 19.16.250(15), which prohibits a licensee or an employee of a licensee from "[t]hreaten[ing] to take any action against the debtor which the licensee cannot legally take at the time the threat is made." Id. § 19.16.250(15).⁶ Noting the similarities between this provision and § 1692e(5) of the FDCPA, the Court finds that, for the reasons stated above, defendant SB C has also violated § 19.16.250(15) of the WCPA. Moreover, because violations of the WCAA constitute per se unfair trade practices under the Washington Consumer Protection Act (WCPA), that statute, too, has been violated. Hansen v. Ticket Track, Inc., 280 F. Supp. 2d 1196, 1202 (W.D. Wash. 2003) (Pechman, J.) ("It is undisputed that violations of RCW 19.16.250 also constitute violations of the Washington Consumer Protection Act, RCW 19.86.20.").

6 Plaintiffs have abandoned their WCAA claim against defendant Cammock, and appear to have attempted to move for a voluntary non-suit under Fed.R.Civ.P. 41(a) as to that claim. See Dkt. No. 31, at 4, ¶ 6.

VI. CONCLUSION

For the foregoing reasons, plaintiffs' motion for summary judgment is GRANTED. Dkt. No. 28. Defendants' motion for summary judgment is DENIED. Dkt. No. 21. As a result of the Court's decision, defendants' motion for sanctions is DENIED, Dkt. No. 33-1, and plaintiffs' motion to strike certain portions of Mr. Paciotti's declaration is DENIED. Dkt. No. 31 at 6.