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Hargreaves v. Associated Credit Services, Inc.

United States District Court, E.D. Washington

October 20, 2017

ASSOCIATED CREDIT SERVICE, INC., a Washington Corporation, and PAUL J. WASSON AND MONICA WASSON, individually and the marital community, Defendants.



         BEFORE THE COURT is Defendants' Motion to Dismiss for Failure to State a Claim or Alternatively Motion for Partial Summary Judgment. ECF No. 56. This matter was heard with oral argument on October 19, 2017. The Court has reviewed the motion, the record and files herein, and is fully informed. For the reasons discussed below, Defendants' Motion for Partial Summary Judgment (ECF No. 56) is GRANTED.[1]


         This case concerns a claim against Defendant Associated Credit Services, Inc. (Associated), a Washington debt collection agency. ECF No. 56 at 3. On April 1, 2016, Plaintiff Myron Hargreaves filed a putative class action, asserting violations of the Fair Debt Collection Practices Act (FDCPA), 15 U.S.C. § 1692 et seq.; the Washington Consumer Protection Act (WCPA), RCW § 19.86.010 et seq.; and the Washington Collection Agency Act (WCAA), RCW § 19.16.100. See ECF No. 1. On November 16, 2016, Plaintiff Hargreaves, along with Cortney Halvorsen and Bonnie Freeman, filed a First Amended Complaint adding Defendants Paul J. Wasson and Monica Wasson (Wasson Defendants). ECF No. 14.

         In the instant motion, Defendants[2] seek an order dismissing Plaintiffs' “reason to believe claims, ” which refer to Defendants allegedly, falsely certifying that they had reason to believe the assets they were attempting to garnish were not exempt. ECF Nos. 56 at 2; 14 at ¶ 7.13. Alternatively, Defendants request partial summary judgment for failure to state a claim under Federal Rules of Civil Procedure 8(a) and 12(b)(6) and that there are no disputed questions of fact that preclude a finding that Mr. Wasson lawfully executed each application for writ of garnishment. ECF No. 56 at 2. For the reasons discussed below, the Court grants Defendants' Motion for Partial Summary Judgment as there are no disputed material questions of fact.


         Plaintiffs allege that judgment creditor, Associated, and its attorney, Mr. Wasson, misrepresented information in writs of garnishment, which allowed them to unlawfully garnish Plaintiffs' exempt property in violation of the FDCPA. ECF No. 14 at ¶ 7.13. Plaintiffs contend that Associated and Mr. Wasson's conduct also violates the WCPA and the WCAA. Id. at 18.

         All available funds were garnished from Plaintiffs' respective bank accounts to repay consumer debts, pursuant to a writ of garnishment filed by Defendant Associated. ECF No. 14 at ¶¶ 4-6. Mr. Wasson executed declarations on behalf of Associated in support of each writ application and asserted that Associated had “reason to believe” that Plaintiffs' property “was not exempt under Washington or federal law.” Id. at ¶ 1. Plaintiffs contend that Mr. Wasson is the equivalent of a “robo-signer” who signs numerous writ applications without any reason to believe the veracity of the statements he makes. Id. at ¶¶ 4.27, 7.9, 7.11. Defendants allegedly sent notices of exemption rights to Plaintiffs post-garnishment that contained materially false and misleading information concerning Plaintiffs' respective cash exemption rights.[3] Id. at ¶¶ 4.30, 5.12, 6.19-6.20. After Plaintiffs Cortney Halvorsen and Bonnie Freeman confronted Defendants in response to the erroneous exemption claim notice, Defendants released their respective writs of garnishment and paid back some or all of the garnished money. Id. at ¶¶ 5.14, 6.22.

         A recitation of Washington State's garnishment law and procedures is necessary to understand the intricacies of this case. The Washington Legislature declared its intent with respect to garnishment:

The legislature recognizes that a garnishee has no responsibility for the situation leading to the garnishment of a debtor's wages, funds, or other property, but that the garnishment process is necessary for the enforcement of obligations debtors otherwise fail to honor, and that garnishment procedures benefit the state and the business community as creditors. The state should take whatever measures that are reasonably necessary to reduce or offset the administrative burden on the garnishee consistent with the goal of effectively enforcing the debtor's unpaid obligations.

RCW 6.27.005. Judgment creditors who have judgments that are wholly or partially unsatisfied are entitled to seek writs of garnishment. See RCW 6.27.020. Application for a writ of garnishment must be by affidavit stating, inter alia, that a judgment is unsatisfied, the amount due, and that “plaintiff has reason to believe, and does believe that the garnishee, . . . is indebted to the defendant in amounts exceeding those exempted from garnishment by any state or federal law. . .” RCW 6.27.060 (quoting third necessary fact). In the context of the garnishment statutes and this case, plaintiff is the creditor, defendant is the debtor and the garnishee is the bank holding funds belonging to the defendant. Upon proper application, the clerk of the court issues a writ of garnishment to the judgment creditor for service upon the garnishee. See RCW 6.27.070.

         The writ of garnishment shall set forth the amount that the garnishee is required to hold pending the garnishment proceeding. See RCW 6.27.090. This amount is determined by adding together the amounts specifically allowed by statute, which includes the amount of the unsatisfied judgment, interest, attorney fees and taxable costs. Id. Nowhere does the statute require the creditor or the Court to deduct any anticipated exempt property that may later be claimed.

         After service of the writ and notice, a defendant debtor “may claim exemptions from garnishment in the manner specified by the statute that creates the exemption. . .” RCW 6.27.160(1) (emphasis added). A creditor may object to the claimed exemption, in which case the court must hold a hearing where the debtor “bears the burden of proving any claimed exemption”. RCW 6.27.160(2). The creditor is then entitled to a judgment against the garnishee for any amount exceeding the proven exemption, or if no exemption is claimed, the amount the garnishee holds up to the amount due on the unsatisfied ...

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