Roskelley v. Collection Bureau, Inc.

          MEMORANDUM DECISION AND ORDER

          HONORABLE CANDY W. DALE UNITED STATES MAGISTRATE JUDGE.

         INTRODUCTION

         Before the Court are Plaintiff's motion to amend the complaint, Defendants' motion to strike Plaintiff's class allegations, and Defendants' motion for protective order and to stay discovery pending the resolution of the motion to strike. (Dkt. 25, 26, 27.) The parties filed responsive briefing, and all matters are now ripe. The Court inquired about oral argument on the motions during a telephonic status conference conducted on August 5, 2019, and the parties agreed to submit the matter without oral argument. Upon review of the record, the Court finds that the decisional process would not be significantly aided by oral argument, and therefore the motion will be decided on the record before this Court. Dist. Idaho L. Rule 7.1(d). For the reasons that follow, the Court will grant in part and deny in part Plaintiff's motion to amend; deny Defendants' motion to strike; and deny Defendants' motion to stay as moot.

         BACKGROUND

         Keith Roskelley alleges that, on March 19, 2018, Collection Bureau, Inc. filed a complaint against him and his adult daughter, Amanda Roskelley, in Idaho state court, claiming that they owed $5.00 to Primary Health Medical Group, $46.13 to Saltzer Clinics, $200.00 to Idaho Plumbing Company, and $11.55 to Primary Health Medical Clinic. The summons and complaint were delivered to Amanda Roskelley at her residential address in Boise on March 3, 2018. However, Keith Roskelley has resided in, and still resides in, Meridian and never resided with his 28-year-old daughter at her residence in Boise. Roskelley denies he had any responsibility to pay his daughter's medical debts, but that nonetheless, CBI wrongfully sued him together with his daughter in the collection action.^[1]

         Roskelley contends he did not know of the collection complaint filed against him until October of 2018, when Roskelley received notice from his employer that CBI was garnishing his wages. Roskelley asserts the wage garnishment notice was his first notice that a collections complaint had been filed, and judgment had been entered, against him. He retained local attorney Ryan Ballard^[2] for assistance with setting aside the default judgment based upon improper service. According to Roskelley, CBI filed an unopposed motion to set aside the default judgment entered against him, averring that “Mr. Roskelley is not responsible” for the debts. The state court granted the motion.

         Shortly after the collection action was resolved, on December 20, 2018, Roskelley filed the complaint before the Court alleging that Defendants Collection Bureau, Inc., Mark L. Clark, PLLC, and Mark L. Clark (collectively, CBI) are debt collectors who employ policies that cause Defendants to violate the Fair Debt Collection Practices Act (FDCPA) in two ways: (1) by filing lawsuits against debtors who are not responsible to pay each debt at issue; and (2) serving only one defendant before seeking a default judgment, even if the co-defendant resides at a different address. Roskelley claims these violations occur because of CBI's practice of suing people with the same last name, based upon an assumption they are spouses, to collect a debt that only one of the individuals owes.

         Roskelley brings this matter as a potential class action on behalf of the following persons similarly situated:

Each person named as a defendant in a collection action filed by CBI in Idaho courts within one year prior to the filing of this action, who does not appear in the records provided to CBI by the original creditor for each alleged debt as person responsible for the alleged debt.

         The complaint contains two FDCPA claims asserted under 15 U.S.C. § 1692e and 15 U.S.C. § 1692f, which prohibit debt collectors from using false, deceptive or misleading representations or means in connection with the collection of any debt, and from using any unfair or unconscionable means to collect any debt, respectively.

         In support of its motion to strike, CBI submitted the declaration of Mark L. Clark, setting forth facts that establish CBI's decision to link the separate collection accounts of Keith and Amanda Roskelley was a mistake, based upon an incorrect assumption that the two were husband and wife such that community assets were available to satisfy the debts. (Dkt. 25-1 at 12.) This mistake was then perpetuated when CBI served the summons and complaint upon Amanda Roskelley at her residence, because CBI assumed she was Keith Roskelley's spouse and they resided together. Clark stated also that, once the judgment against Keith Roskelley was set aside, Mr. Roskelley acknowledged liability for two of the four CBI accounts described in the collection complaint and he paid CBI the balance due for those two accounts. Mr. Roskelley does not deny these facts, although he objects to the Court's consideration of the Clark Declaration to the extent Clark sets forth his findings related to his review of CBI's business records to locate other instances when CBI sued individuals sharing the same last name together in one collection action.

         The motion to amend complaint seeks to add two plaintiffs, Kevin McGee and John Hennefer, whom Roskelley contends were subject to the same debt collection practices as he was.^[3] Roskelley asserts that CBI sued Mr. McGee and Mr. Hennefer for recovery of debts they did not individually incur. In the case of Mr. McGee, his wife incurred two medical debts which she did not pay. On August 6, 2018, CBI filed a complaint against Mr. and Mrs. McGee seeking recovery of the debts that Mrs. McGee incurred. The McGees settled the matter, and the case was dismissed without prejudice. Proposed First Am. Compl. ¶ 46. (Dkt. 27-2 at 7.)

         Turning to Mr. Hennefer, the proposed amended complaint states that, during the pendency of the couple's divorce proceedings, Ms. Hennefer incurred three medical debts. The Hennefer's divorce was finalized on July 6, 2018, and thereafter, CBI sued Mr. and Mrs. Hennefer in one action to recover the debts. Mr. Hennefer was served at his residence on November 1, 2018, while Mrs. Hennefer was served at her separate residence on November 29, 2018. CBI obtained a default judgment against both of the Hennefers on January 7, 2019.

         Roskelley argues Mr. McGee and Mr. Hennefer fall within the proposed class, because neither “appeared in the records provided to CBI by the creditor for each alleged debt as the person responsible for the alleged debt.” He contends it was improper to sue Mr. McGee and Mr. Hennefer together in the same action as their wife for their wife's consumer debts.

         In opposition to the motion to amend, CBI submitted the second declaration of Mark Clark, which attaches copies of the complaints CBI filed in the state district court in Ada County against the McGees and the Hennefers. Clark, the president and custodian of records of CBI, states that the complaint filed against the McGees sought collection of two debts - one owed by Mr. McGee, and the other owed by Mrs. McGee. Similarly, CBI's complaint against the Hennefers sought recovery of three separate debts - two owed by Mrs. Hennefer, and one owed by Mr. Hennefer. The complaints filed in state court sued the respective defendants “individually, and as husband and wife, ”^[4] in the same manner CBI sued Keith and Amanda Roskelley.

         CBI argues Mr. McGee and Mr. Hennefer were properly sued together with their spouse, because the debts were incurred while the couples were married. CBI contends Mr. McGee and Mr. Hennefer were properly named as defendants together with their spouse to the extent CBI sought to satisfy the debts from community property. Roskelley, on the other hand, argues that a creditor is not permitted to name, and sue, a non-debtor for alleged debts incurred by his or her spouse, and that both Mr. McGee and Mr. Hennefer therefore fall within the proposed class.

         After careful examination, the Court understands Roskelley's class action claim faults CBI for assuming individuals who share the same last name are married and, based upon that assumption, proceeding to name the two individuals as defendants in the same lawsuit even if only one of the individuals incurred the debt. See Pl. Response to Mot. Strike at 7, 14. (Dkt. 30 at 7, 20.) CBI argues it does so because it seeks to satisfy debts owed by one or the other spouse from community property.

         Keith Roskelley and his daughter represent one proposed subset in this group, as they are related (father and daughter) and share the same last name. CBI assumed they were married, and sued them both in the same action, individually and as husband and wife, to recover two debts owed by Keith, and two debts owed by Amanda. Two other (and potentially more) subsets exist in this proposed class - married couples who incurred individual debts, like Mr. and Mrs. McGee; and divorced spouses who incurred individual debts prior to the entry of the divorce decree, like Mr. and Ms. Hennefer, but who were sued together, both individually and as husband and wife, after their divorce was final. In each case, CBI assumed the individual debtors were married, and joined them in the same lawsuit. With ...